To all lease owners: Do you wish you had bought instead?

First off, this has been a great forum for reaffirming my soon to occur purchase of an i3. I'm at the point now where I'm trying to decide between leasing and buying. In two years, the economics clearly work much better for the lease, however, at 5 years, buying outright makes more sense and that's using 25% residual value at 5 years.

I think the main reasons for buying are:
unlimited mileage (what if I like it so much I want to drive it 15k a year instead of 10k)
it's mine, and I own it (no worries about dinging it, etc)

However, on the flip side, I think most concerns revolve around battery life. If right now, the cost to replace the battery is roughly $10-15k, in six years it will probably be sub $5k, so I don't see that as a major issue.

So my question is, if you have been in a lease for a while now, do you wish you had bought?

Thanks for any feedback!

Good Lord no! And I also wish I could have leased my PCs and laptops starting with my first 286, since just like an EV in 2014, they became outmoded a few months after I paid full price for them. The market is changing and innovating so fast that any EV model including Tesla is ancient technology by the time a 3 year lease is up never mind the 5 to 8 year loans people are taking out to buy these things....

As far as being limited to only 15k miles a year: I would rather pay a possible excess mileage charge after 3 years than take the hit to resale value on a 3 year old i3. By late 2017 an EV buyer is going to be spoiled for choice from nearly every manufacturer and every one of them is going to be cheaper and more capable than a 2015 i3. So how do you think that used i3 will fare as a trade-in or on Craigslist.....? Let BMWNA take the risk and lease. Unless BMW have a 200 mile replacement battery upgrade for used i3s your 80 mile (on a good day) 2015 i3 is going to be competing with new 200 mile Chevy Bolts with warranties for under $30k.

Given that BMW Financial Services is offering a $0.16 per mile rate to purchase extra miles on the car, its really, really hard to justify purchasing, even if you plan on keeping the car 6 or more years. Use the following for your analysis:

How many miles are you going to drive in 6 years?

For the lease, use the total cost of lease (total of monthly payments + total money down - tax rebates if you get them) for 3 years, 10K miles/year + overage miles @$0.16/mile. That's your 3-year lease cost. Double it and maybe add 10% (just an assumption that leases will go up over time) and that's your total cost for 6 years. Divide that by the number of miles for 6 years and you have a cost/mile for a lease. You have no asset at the end of the lease, but you got a new car half-way through, and likely never paid a cent for maintenance (brakes, tires, etc.)

For the purchase, use the total cost of purchase (subtract tax credits!) + financing costs, if any, as your basis. Divide by the number of miles and you have a base purchase cost/mile. You have some asset at the end of the 6 years, so estimate what its worth (e.g. guess at a residual value) and divide by the mileage to get a residual cost/mile. Subtract that from the purchase cost/mile and you have a final cost/mile on the purchase.

If you do this, you can work out for yourself whether its better financially to lease or purchase at 6 years. You could do this for any length of time.

With a $0.16/mile overage charge, BMW is basically telling you to lease, as its probably substantially cheaper and you get a new car half-way through.

What's not clear to me is whether there is a cap on the $0.16/mile overage - will they let you do a 8K/year lease and buy 6K or 8K extra miles?

+1 on Leasing.

Our 2015 I3 is like a Mk.1 iPad.
Ground breaking technology but will be rapidly overtaken technologically by its successors.

The potential buyers of 2-3 year old I3s are probably less technically savvy,
thus more fearful of new technology and unlikely to pay top dollar for an off lease car.
The resale prices of 3 year old Leafs and Volts already show this trend.

If we really want to keep our I3 at the end of the Lease, I am sure we can buy it from BMW Financial for less the Lease residual.

If right now, the cost to replace the battery is roughly $10-15k, in six years it will probably be sub $5k, so I don't see that as a major issue.

The i3 has an eight-year battery warranty so replacement before then isn't a cost for you.

You can buy a five-year maintenance-service package for a few hundred pounds.

The difference for lease vs purchase is almost entirely down to residual value for the i3 (that's a bit of an unknown at the moment) and to initial purchase price (for ICE cars the lease company can buy cheaper than you can but I'm not sure that's the case with the i3).

janner said:

If right now, the cost to replace the battery is roughly $10-15k, in six years it will probably be sub $5k, so I don't see that as a major issue.

The i3 has an eight-year battery warranty so replacement before then isn't a cost for you.

You can buy a five-year maintenance-service package for a few hundred pounds.

The difference for lease vs purchase is almost entirely down to residual value for the i3 (that's a bit of an unknown at the moment) and to initial purchase price (for ICE cars the lease company can buy cheaper than you can but I'm not sure that's the case with the i3).

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Lease Lease Lease... In 3 years I can have a look about at all the lovely new electric cars on offer..

Thanks for all the replies, huge help.

I was leaning towards the lease originally, but have always bought cars outright in the past, so I'm new to this. But I totally agree it's better for BMW to take the residual risk than my self.

I'm not going to go with the "total protection" plan they offer, but am wondering about the tire and wheel protection. How much does an actual 20" giga wheel cost?? $600-800? if so, than at $1200-1500, they are banking on at least a bent wheel and 2 blown tires...not worth it.

gte355u124 said:

Thanks for all the replies, huge help.

I was leaning towards the lease originally, but have always bought cars outright in the past, so I'm new to this. But I totally agree it's better for BMW to take the residual risk than my self.

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I know this is late to the game, and I, like you, tend to always buy cars. But the i3 is my first lease for reasons already covered. I took a 24 month lease, and will re-examine the landscape by then. My Leaf did take a very large drop in value (even after taking the federal/state tax credit into account, probably around $10K in 18 months). The resale values of current crop of BEVs will be impacted if the 200 mile BEVs (including Tesla Model 3) are on the market or about to materialize.

There is also one more reason to lease: I believe the 2014/15 i3s are first production revision and have a few "quirks." The 2011/2012 Leafs had the similar issues. The later productions did minor revisions and addressed a lot of these. So it may make sense to wait until a 2016/2017 version of the i3 even if you decide you want to own one outright. Or you may be able to buy a used 2014/15 at a great price then...

Nope - who knows what's out there in 2 years. Maybe a better version with double the miles. Maybe I get sick of driven an EV. Who knows? It was an experiment for me.

gte355u124 said:

Thanks for all the replies, huge help.

I was leaning towards the lease originally, but have always bought cars outright in the past, so I'm new to this. But I totally agree it's better for BMW to take the residual risk than my self.

I'm not going to go with the "total protection" plan they offer, but am wondering about the tire and wheel protection. How much does an actual 20" giga wheel cost?? $600-800? if so, than at $1200-1500, they are banking on at least a bent wheel and 2 blown tires...not worth it.

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If you look closely at your 20" wheels you will see that the metal rim sticks out past the rubber tire and will grind on the curb before the tire touches. What are the odds that after 3 years the curb side wheels will need to be replaced?

WoodlandHills said:

If you look closely at your 20" wheels you will see that the metal rim sticks out past the rubber tire and will grind on the curb before the tire touches. What are the odds that after 3 years the curb side wheels will need to be replaced?

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Do these policies typically cover minor cosmetic damage?

Either way, it's much easier to just avoid scraping your wheels on a curb.

i3atl said:

WoodlandHills said:

If you look closely at your 20" wheels you will see that the metal rim sticks out past the rubber tire and will grind on the curb before the tire touches. What are the odds that after 3 years the curb side wheels will need to be replaced?

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Do these policies typically cover minor cosmetic damage?

Either way, it's much easier to just avoid scraping your wheels on a curb.

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Haven't I read that one of the warning of auto parking system is that it MAY scrap your wheels on the curb? I haven't had a chance to try mine yet.

epirali said:

Haven't I read that one of the warning of auto parking system is that it MAY scrap your wheels on the curb? I haven't had a chance to try mine yet.

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Yes, but if it's getting too close you can stop the procedure at any time.

I'm not defending it - it shouldn't do this, but I wouldn't let it curb one of my wheels.

i3atl said:

epirali said:

Haven't I read that one of the warning of auto parking system is that it MAY scrap your wheels on the curb? I haven't had a chance to try mine yet.

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Yes, but if it's getting too close you can stop the procedure at any time.

I'm not defending it - it shouldn't do this, but I wouldn't let it curb one of my wheels.

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Thanks. I guess its a catch 22: if I can park it myself without hitting the curb I don't need parking assist. But if I need parking assist then I have to be good enough a parker to prevent it from hitting the curb!

:mrgreen:

I share our i3 with SWMBO and we have had to replace two rims on her smart Cabrio....'nuff said?

Its a bit early to ask if anyone wishes they had purchased over leasing, the car is just a few months over a year old.

That said, so far I'm glad I leased, I hope we get lucky like some Leaf owners and get offered another $7,000 off at lease-end to purchase. That would put me in my MSRP $55,850 car for just under $40k. I actually hope they offer way more off. People on the FB forum have been offering theirs up for sale pretty cheap the past few days.

Thanks again for all the feedback, as a result I'm now the proud leasee of a '15 REX! And I can only say I absolutely love it. And the deal I got isn't half bad either:

msrp: 55k (tera, 20s, hk radio, park assist, nav)

$0 down (security deposit of $2500)
$375/month (no sales tax in jersey either!)
10k miles/year
2 year lease

gte355u124 said:

Thanks again for all the feedback, as a result I'm now the proud leasee of a '15 REX! And I can only say I absolutely love it. And the deal I got isn't half bad either:

msrp: 55k (tera, 20s, hk radio, park assist, nav)

$0 down (security deposit of $2500)
$375/month (no sales tax in jersey either!)
10k miles/year
2 year lease

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Many congrats! Curious is this your first BEV?

It is. One of the convincing arguments was I have yet to meet an EV owner who wishes to return to an ICE vehicle. So far (granted it's been 24 hours), it's been a blast. The bmw i3 is just so well thought out in so many aspects and it really shows.