*This post was originally in the Ask-A-Dealer section, but I thought I'd place it here too to get opinions from more people. Please feel free to delete this thread if doing so is not allowed. Thanks so much!*


Hi! I was wondering if you guys can give me some advice? I have always purchased my cars outright because I'm just the sort of person who hates any form of debt. But, recently, I've found it hard to ignore all this "buzz" about leasing, and I'm wondering if it's a good idea? So, here's my example: suppose my true intention is ultimately to own, say, a particular E90 (I typically keep my cars for around 7 years, and I do about 12k-15k miles a year), and my options are either to lease it and buy it when the lease is up or to purchase it outright. Here are the main comparative pros-and-cons I see (I'm attempting to compare them point-by-point as they are enumerated below):

A. Purchase Outright

1. Whole amount of money gets tied up and you forego the possibility of earning a return by investing it somewhere else (e.g., stocks, bonds, etc). This is an opportunity cost that acts like an "interest rate".

2. Dealer may be less willing to make you a better deal on your purchase since he doesn't get a commission from the leasing company.

3. If you really hate the car for any reason, you can sell it at any time and that would be the end of it.


B. Lease-and-Buy-Out

1. You have your principal sum (less lease payments, naturally) which you can invest with, but you have to pay the Money Factor/Interest Rate on your lease.

2. Dealer may be more willing to give you a better price on your purchase because he's getting a commission from your lease.

2'. At Lease End, you may be able to negotiate down the Buy Out price from the Residual Value. This is essentially a potential discount on the overall purchase price. That is, if you got the same purchase price in both instances (purchase or lease), then you are better off here.

3. If you hate the car for any reason, you are locked into your lease term. Getting out of your lease term is typically prohibitively expensive.

4. You'll have to pay additional fees for carrying out a lease; e.g., acquisition fees, disposition fees, cost of getting higher coverage insurance, etc.

5.* There is also this other point that if you get into a serious accident or your car is stolen, you may end up with a sizeable shortfall between what your insurance company pays out to you and what you owe the leasing company, but this really is just about the added "depreciation" from the awful event, right? If you wanted to replace your car now with one in the same condition at a point just before the bad event, you'd have to foot the difference anyway, right? I suppose the "disbenefit" in this case is that you do not *have* to do this if you own the car (just get a smaller car or something with the insurance money, say), but you do *have* to come up with the money if you lease. Alternatively, add cost of GAP insurance to point 4. above.

Is this it, basically? Are these points valid? Have I missed anything? Which option would you recommend I choose?

Thank you all so much for your help in advanced!

Cheers!