They allow me to write off my lease payments as depreciation (business expense, I’m a lawyer, I use my car to see clients) – and thus deduct my lease payment from my income tax.

It gets better.

I put 0% on my leases, meaning I finance the sales tax.

Meaning when I write off my payments, I get to write off my sales tax – from my income tax.

USA
USA
USA!

Oh! Range Rover…

Makes better sense…

Looking at people driving new BMWs it seems to me that it doesn’t make financial sense for many of them. But that’s not the same as saying they can’t afford it. Obviously they can since they must be making the payments if they are driving these cars. So who am I to judge somebody else’s choices in life?

Then there are situations where leasing makes perfect sense. In Canada it makes no sense to buy cars for businesses only lease them.

GM is seriously giving money away on those anyway. I was just looking at a 9-3 convertible and happened to notice that you get employee pricing plus an $8000 rebate right now on the 9-7x.

Seriously, leasing is a bad financial move. If you can’t afford the payment to own it, then don’t buy it. Two of the people I work with are always leasing, even though they swear they love this one and when the lease is up they will buy it. Problem is they never save any money for a down payment so they lease again.

The idea that you should lease a car becuase you “don’t want to own a depreciating asset” is a line a lot of BMW dealers use, but anyone who thinks it through will realize it is bogus.

If you own a car for 3 years or lease it for 3 years, the depreciation is the same. It might even be higher on a leased car, because potential buyers may fear you’ve treated it like a ‘rental’.

The only way a leaser comes out ahead is if the seller has underestimated the car’s depreciation, the problem that has led the domestics to stop or severely curtail leasing.

The buyer comes out ahead because after 3 years, they can elect to keep the vehicle, thereby having lower depreciation than someone gettting back on the 3 year leasing treadmill.

As is repeatedly pointed out, lines like “you don’t want to own a depreciating asset” are used as an excuse by people to get more car than they can afford. If you want to be financially responsible, and you can’t afford the payments on a 5-year purchase, you probably need to look for a used car.

There are worse indignities in life.

kurtamaxxguy: They’re not rich, they just have a good credit score.

Turning in a car every two or three years (or even more often) is only a bad financial move if you can’t afford it or if it doesn’t provide the requisite level of happiness. If driving something new and shiny floats your boat better than a trip to Europe or a spousal trade-in (talk about bad financial moves), more power to you.

That said, leasing can save money (compared to frequent purchases and resales), particularly if you’re in a position to write off the payments, as I suspect are a substantial portion of the lessees of the top ten.

But the real savings are in the massive subsidies companies like BMW, Audi and Lexus provide to their lease customers. Right now BMW is offering 7 series leases to existing customers at a .00115 money factor (that’s 2.76%) and with 54% residuals after 36 mos. For 15000 miles/year.
If you compare that to market interest rates (6% and up) and residuals (32-37%) on leasecompare.com, we’re talking about a more than $20K discount off MSRP.

Obviously, those kinds of Dodge Ram scale discounts aren’t offered on every model, but with rare exceptions (1 series, M3), very substantial discounts are available to lessees across the board.

Subsidized (or subvented if you prefer the industry euphemism) leases have so far worked very well as a way of putting serious cash on the hood without denting brand equity (aka the Schlitz factor). But as the D3 have discovered,
silly monthly payments based on fantasy residuals are just another form of bubble based on the assumption of ever increasing demand. When the bubble bursts, the “slightly lesser evil” is for the evil lessor.

You can lease a vehicle for almost any mileage you want (I would guess 12,00 is more common now). If you go over on the mileage, you’ve over-depreciated the asset and will have the compensate the bank accordingly.

redrum

at best it’s a slightly lesser evil than buying outright every 2-3 years

Agreed (damn I’m agreeing too much), but if you do buy every 2-3 years, take good care of the vehicle, predict your mileage accurately, etc. then you have 50 large sitting someplace bearing interest while you make a $600 a month payment. Not for everybody certainly, but not inherently evil. I’m not advocating it for most people, but an informed buyer should be astute enough to make that decision themselves. The fact that many people do not do their homework is why all the tall buildings downtown have bank names on them.

True, I agree a lot of people are in leases who shouldn’t be, maybe these are the same folks in subprime mortgages

While you are correct, remember that most people are not as finacially savvy as you describe.

The average car buyer cares about one thing: “howmuchamonth?”.

They aren’t investing the “savings” from their lower monthly payment into appreciating assets, they’re probably pissing it away on more shit they don’t need. Its the American way.

Many (most?) people driving around in a leased A6 wouldn’t be willing or able to pay the four digit monthly payment on a 36 month loan.

Here in South Florida, the stripped down no-option 3 series is the poseur lease of choice.

True, it’s a depreciating asset and if you’re the type of person who changes vehicles it makes sense to lease. However, and I have no hard statistics to back it up, I’d be willing to bet more people walk out of a dealership with a lease in hand because they could get lower payments on a more expensive vehicle that way than walk in with intent to lease because “it’s a depreciating asset.”

Though it looks inexpensive compared to the others, I’m not at all surprised at the Audi A4 being on the list. I know a few people here at work who drive them and definitely CANNOT afford them. I’m curious to know where the BMW 3 series falls in terms of percentage leased. It seems to be the poseurmobile of choice in the DC Metro area.

“leasing remains the way a lot of automakers use to put someone into an expensive car they really can’t afford”

I have to questions that assertion just a bit. While certainly not for everybody, many rich people lease cars. It’s a depreciating asset. Do you want to own a depreciating asset in your driveway, or invest that capital into something returning a higher rate than your lease rate? Ask your accountant, that car parked in front of his office, it’s probably leased.

I would say this list shows a lot about consumer impressions of the long term quality of Japanese cars versus European cars. People feel confident enough to actually buy an LS, G, etc.

The only car the really surprises me is the Z4. It’s not a typical business car and, as a likely third car, it’s generally the kind of thing that people hold onto for a while. The high lease rate may be the definitive proof that it is ugly.

Just a thought.