Tim1988

It's not a coincidence that BMW Sales went up with the explosion of car leasing as an option. You are driving it for 2-3 years, everything's covered by warranty. No reliability concerns.

If Leasing never existed, how would this effect the BMW-Lexus sales competition?

nabbun

It could. However, Lexus also leases quite a few of their vehicles as well.

In the long run I think it would definitely, at the very least, even the game again.

tex2670

I don't think that the reliability aspect would make a huge impact. A non-enthusiast with the money to spend is, for the most part, going to get what they want. And the fact that the lease covers the warranty period isn't as much of a selling point to me--it's still a hassle to have to make extra trips to the dealer, regardless of whether you are paying for the repair or not--although, the loaner vehicle definitely helps that aspect.

Hoovey689

iTrader: (16)

That's a tough question because even though BMW reliability and other German makes are more questionable than Lexus (for the most part) you still have to factor in that BMW despite it's flaws has something Lexus and Cadillac for that matter are seeking: Brand Image. Lexus is still young and shaking off the LS400 image of grandpas refined boat. BMW is genius with the 320i. A car that really doesn't have much going for it other than the price and the badge you're getting on the hood - and people are eating it up. But if leasing never existed? I imagine the reliability factor would help Lexus achieve more parity with BMW sales, but I'd still give the nod to BMW because they have more models and more global recognition. My $0.02

mmarshall

No, not IMO. While it is true that leasing takes out a lot of the notorious BMW reliability concerns (and BMW traditionally offers some good lease deals because of their generally low depreciation), BMW's popularity goes way beyond that....even with the Chris Bangle cars. The 3 and 5-series, particularly, have such a long-standing record (though somewhat outdated now) of winning enthusiast-magazine comparison tests that the marque has developed a large and virtually cult-like following. People buy or lease these cars simply because of the blue-and-white propeller on the hood, though the brand's recent switch to electric power steering may (eventually) cut into one of what was one of its most popular selling points.....the superb, virtually flawless hydraulic power-steering system on the older cars.

I think you're giving leasing too much credit. Most BMW owners are as addicted to that blue and white badge on the hood as they are to any lease-deals they get, though there's no denying that BMW's generally low depreciation does make low monthly lease-payments possible

dmvp29

I don't know about that but if leasing never existed it'd go a long way towards solving our "lack of savings" epidemic

mmarshall

Leasing, aside from the initial money-down issue, actually keeps monthly payments down, and if the car is used for buisness (according to the IRS definition), then lease-payments can also be tax-deducted. The flip side, of course, is that you never actually own what you're paying for (it's a glorified rental-charge), you're subject to the mileage and wear/tear restrictions (it pays to read that lease-contract carefully), and, of course, you have to keep re-negotiating for a new lease every few years.

tex2670

Isn't this what it all comes down to? People think, "For $XXX per month, I can drive an Accord or a [FILL IN THE BLANK LUX BRAND]." Add in people who had a tendency to buy a new car in 3-5 years anyway. And, to your point, those that lease as a tax write off for their biz.

Maybe it's just me, and maybe it's because I don't live in the same area as I grew up in, but it seems to me that today, many, many, many more people have an expensive car. And I'm not talking about an A4, IS, ATS, G37 or C-Class either. I can think of one kid in high school whose dad had a BMW 7-Series. Now, in my kid's school lot, there are many--plus Range Rovers, Jags, Escalades, A8s, etc. It seems like I see multiple A7s every day. I feel like I make a comfortable living, and yet, I'm constantly surrounded by people driving cars that cost 2x what mine costs.

BMW is not the only make to substantially benefit from leasing.

spwolf

Lexus can offer leasing as well, it has nothing to do with it. BMW sales went up as Lexus had recalls and tsunami + BMW started offering a lot more models, they added X1, 320i, 528i, etc, etc, etc.

It is pretty affordable to get into BMW these days.

Tim1988

This is a well thought out post. I will like to add to this though.
BMW might not be the 'only' Luxury Brand that benefits from this, but they benefit the most in regards to the 3 Series.

Keep in mind the 3 Series is the bread and butter of BMW in America, now what kind of people generally love to 'buy' into the 3 Series Price Range? The 33k-41k Range? Younger people. I'm just going to take my University as an example. I have 3 friends that all convinced their parents to lease a BMW 3 Series. I have 2 friends who actually own a G37 and a Lexus IS.

I asked the 2 friends who owned the G37 and Lexus IS.. what was your first choice? They said BMW 3 Series. I asked them why their parents won't agree to this and they told me 'reliability and cause of maintenance'. They said the parents trusted Lexus and Infiniti more.
The 2 girls and one guy who leased the 3 Series all admitted they might not have 'brought a 3 Series' but they for sure would lease one.

This is just a tiny sample size but it does matter. Most people buying into the 3 Series range are not rich people. They are simply Middle Class/Upper Middle Class (money wise) people.
They can afford a 37,000 dollar car, no problem. BUT they are not rich enough to switch cars every 2 years within that price range. Leasing solves this issue. If there were no leases, a HUGE number of 3 Series buyers will be thinking twice, because quite frankly most of the 3 Series buyers do not have the financial ability to swap cars every 2-3 years in terms of actual purchase.
Now a lease? Sure, no problem. You can lease this even without a good job.

A person who leases a 40,000 dollar car might not actually have the ability to indicate that he or she is of that status. A person who BUYS a 40,000 car is different. If there were no leases, people will be thinking a lot more about 'which car' to get next.

Tim1988

I don't mean to sound snobbish here, but I am not in favor of leasing. I am actually in favor of paying cars off in a one time purchase. This way your financial ranking is actually what you drive.

This also directly impact the evil BMW Brand because they will have to up their reliability or die.
BMW is Hitler's car in my opinion and it is a blatant stain on the glorious auto industry.

spwolf

what in the world?

Tim1988

BMW has been a stain for years. My family works in the Auto Industry.. the things BMW/Mercedes does is pure evil. They are just pushing out their brand and doing jack **** to earn it.

People are so ignorant of this. I have zero respect for BMW. The 3 Series is the equivalent of a Blonde Prostitute with a lot of make up and silicone breasts.

Hoovey689

iTrader: (16)

Didn't see that coming

LexBob2

Huh??