Why Do People Lease BMWs?

Owning and driving a BMW is one of the most sought-after experiences for those in the market for a new car and, thanks to leasing, it’s one very obtainable one. In fact, most of the new BMWs that you see driving next to you, or blowing past you, on the freeway are most likely leased. But if owning a BMW is such a highly coveted experience, then why do people lease BMWs as opposed to buying them?

Leasing a BMW goes beyond being flashy

While it’s easy to think that people lease BMWs solely for the flashiness of the ride and the status symbols that they represent, there is a lot more to it. And while looking like you’re in the upper echelon of society is one thing, practicality is another part of the equation.

Simply put, when you lease a car, you’re theoretically only paying for a portion of the price of the car. Since the typical lease only lasts for around 36 months, you can think of it as only paying for three years out of a five-year loan, after which you can give the car back, trade it in, sell it, or buy it outright.

When it comes to luxury cars in general, people like to lease them so that they have a lower monthly payment and then they can trade it when the lease is up and drive a newer car for another three years.

A white BMW X5 on display
BMW X4 luxury crossover SUV on display at Brussels Expo. | (Photo by Sjoerd van der Wal/Getty Images)

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How low is the monthly payment for a BMW?

Lease prices and terms can fluctuate depending on what area of the country you’re in, however, BMW does have some special national lease offers all year round. For example, you can currently lease a 2021 BMW 330i sedan for $429 per month with $3,999 due at signing or a 2021 BMW X3 for just $30 per month with the same down payment.

That’s a tempting deal considering both of those cars cost around $45,000. If you were to finance either vehicle with a similar down payment amount, then you would be paying around $700 a month for 60 months. So we can see why leasing a BMW is preferable.

a rear shot of a blue 2021 BMW X3
2021 BMW X3 | BMWUSA.com

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Your Auto Advocate has some good insights as to why BMW leases are popular

While a low lease payment is one of the top reasons that anyone leases a BMW, there are even more reasons. Zach and Ray Shefska, from Your Auto Advocate, put together a handy list of other reasons that people lease BMWs:

  • They are depreciating assets: Since you’re paying off the depreciation when you lease a car, it’s far better to lease a BMW as opposed to owning it since it will depreciate very quickly.
  • You have the ability to obtain a more expensive vehicle for a lower monthly payment
  • The bumper-to-bumper warranty for a BMW is 4 years or 50,000 miles and includes maintenance (except for brakes, tires, and windshield wipers)
  • Limited maintenance costs
  • Ability to remain under factory warranty for the duration of the lease
  • Subvented leases: This is when a manufacturer increases the vehicle’s future value, which decreases its predicted depreciation and lowers the monthly payments, according to Autotrader.

On that last point, since BMW subsidized its leases — which is why the aforementioned lease payments are so low – customers keep coming back to the dealership after their lease is up to trade for a new car.

“It’s a great business model for the dealerships because it brings customers back into the marketplace every three years,” Ray Shefska says (in the video below). “BMW and Mercedes are the same in that 55% of them sold are actually leased. Which is the way they want it because they want to bring those customers back.”

Maintenance is also a key component

Lease maturities aren’t the only reasons that customers find their way back to the BMW dealership sales floor, the looming fright of auto repair bills do too.

“The moment that they are out of factory warranty is the moment that something will break and it will be overly expensive to fix it,” Shefska said. “Smart people will say ‘I’m in for three years, I don’t need the aggravation beyond three years if I’m going drive a BMW, or an Audi, or even a Mercedes.’”

As we can see, the notion of leasing any BMW is multi-faceted. However, there are certain parameters that keep BMW lessees return customers (lease prices and maintenance), which go way beyond the panache of that blue and white badge on the front of the car.