Advice on 4X4 lease and types.
 

Okay I have done some research and homework on this myself, but I thought people who have been there and done it may be able to shed some light on this topic, and also offer some reasonable advice.

Having read through this forum I gather majority of posters have unequivocal and unreserved dislike for SUVs, so if you are one of them and have nothing meaningful to contribute please just don't post even if you are itching to.

I am moving to Canada in 6 weeks on a 3 years TWP. I currently own a 5 year old BMW X5 in the UK and have been looking at the X6. A few dealers in Canada are willing to offer me 0% lease on this, as I am willing to deposit 25%. I was wondering if anyone who have had similar experience (own an X6 or leased car/SUV on TWP/PR ) could shed some light on the following:


What are the implications of leasing a car/SUV? i.e. Am I always at a disadvantage? Am I better financing one or getting a car loan after few months?

What should I be wary of in the lease T & C, agreement etc?

Will the running cost be similar to UK?

Do you have problems with parking and car parks because of the size?

Any cheaper American make options that I may not know of? A 3 year old X6 is currently going for around $40k -$45k mark?


Thoughts would be appreciated.

Re: Advice on 4X4 lease and types.
 

Only thing i dont like about leasing is that you are tied into 3 years..they dont seem to do short term leases..id prefer to do a finance or loan with a balloon payment option then you can choose what kind of terms 12months upwards..dont like the fact BMWs are very expensive here though..i would stick with an AWD 3 series or maybe the X1.

Re: Advice on 4X4 lease and types.
 

This is more of a crossover vehicle than the SUV 3 or 5 type series.

Obvious questions where will you be living?
What will you be using the vehicle for?
Does it have to be a BMW as there are other similar style vehicles without the BMW price tag.
Chances are your insurance premium will be higher than the UK.
Gas (petrol) will be cheaper over here.
Current lease rate on BMW Canada website is 4.9%
Obviously if you can afford it and you love BMWs then go for it.

Re: Advice on 4X4 lease and types.
 

Saskatoon
Commuting to work and weekends away to Alberta and Manitoba
Similar style
A local dealer in Saskatchewan has offered me 0% lease

Re: Advice on 4X4 lease and types.
 

Don't worry about car park spaces. Many with much larger vehicles cope perfectly well.

Re: Advice on 4X4 lease and types.
 

In Saskatchewan you must get SGI so no hunting around for companies with different rates as vehicle insurance is governed by the Province.
I suggest bringing a letter from companies you have been insured with that shows you have a good driving history.
Other than that the vehicle seems to fit your needs even though IMO BMWs are overpriced here.
http://www.sgi.sk.ca

Probably looking at about $1700 a year to insure it.

Re: Advice on 4X4 lease and types.
 

Received wisdom is that a personal lease is not a particularly financially efficient way of getting in a new vehicle here. If you run a business and can lease the car through the business, the tax efficiencies are more apparent. It may well be worth talking to the dealership about purchase finance options too.

Having said that, we leased when we first arrived a few years ago - similar situation to yours, on a TWP, significant downpayment and much better terms than the posted rate - to help build up Canadian credit history quickly. We then bought the car off-lease after some very, um, "interesting" negotiations over the end-of-lease valuation.

Different choice of vehicle, though... I still don't get what it is that an X6 does for you that isn't done better by any number of vehicles without the design compromises inherent in a large crossover, but as you say, this is not the thread for yet another of those discussions :p. If it doesn't have to be a Beemer, take a look at the Audi Q-series or stuff in the Infiniti (FX/JX) or Lexus (RX) ranges, which may offer you more for your money.

Re: Advice on 4X4 lease and types.
 

Thanks former Lancastrian. What do SGI do specifically? is this like a insurance or finance regulatory body?

Yes I will be getting that from my present insurer.

I know a lot of people have this feeling that BMW is just a tag, but I think ultimately you get the value for your money. I am open to other similar vehicles though, so suggestions are welcome. Thanks

Re: Advice on 4X4 lease and types.
 

Thanks Oakvillian. its great to hear from someone who has had similar experience. The Audi Q series is one I am also considering, but the price difference to a BMW equivalent in the UK is not that great. Are they much cheaper in Candada? I am not a fan of brand new cars due to their drastic value loss after 2 years, so I am looking for a 2 - 3yrs old car really.

Re: Advice on 4X4 lease and types.
 

If you're leasing, the majority of your monthly payment is the cost of the vehicle's depreciation, so that aspect is moot. You're effectively just renting a car every month.

Re: Advice on 4X4 lease and types.
 

SGI is the Saskatchewan Government Agency that is responsible for the issuance of motor vehicle insurance. Unlike Ontario you cannot shop around for vehicle insurance by different companies/brokers.
Asking about vehicles is like asking someone to recommend a good red wine:lol:
The European imports such as BMW, Audi, Mercedes seem to carry a higher price tag in Canada than the UK or the USA. Why because they can and people will pay.
The big Japanese companies like Toyota, Mazda, Honda and Nissan have built up a strong reputation over here.
Ford, GM and Chrysler have struggled but still do ok.
The new Ford SUVs such as the Escape, Edge and Explorer are common and have improved from several years ago.
Hyundai and Kia are now producing decent quality vehicles.
Acura, Lexus and Infinity are the upmarket versions of Honda, Nissan and Toyota and their prices reflect this.
When you arrive hit all the dealers and take them for a test drive and then choose based on your needs. You might be both surprised or disappointed.

Re: Advice on 4X4 lease and types.
 

You have a dealer willing to lease you a 2-3 year-old car at 0%? That sounds almost too good to be true. As R I C H implies, if the cost of the first couple of years' depreciation is taken out of the equation and you're putting down a chunk of deposit money, your monthly payments should be comparatively minuscule. But make sure you're not financing depreciation at the same rate as for a new car, though!

Re: Advice on 4X4 lease and types.
 

Many of what you call European imports are actually manufactured in North America. The comparative cost to purchase is dependent on whatever exchange rate you're using, which has little relevance - the cost to buy/lease in relation to your disposable income is more appropriate.

I purchased a European SUV a few years ago and at the exchange rates of the time it was considerably less expensive than the UK price.

Re: Advice on 4X4 lease and types.
 

So, am I best getting a loan after a few months of building up my canadian credit history, and buy out rightly or just finance it? which one is more fianacially viable? thanks

Re: Advice on 4X4 lease and types.
 

Audi dont have a plant in the USA, Mercedes manufacture the M R & GL class in Alabama, BMW manufacture the X series in South Carolina and VW are in Tennessee.
So dependent on the type of vehicle you are looking at you may be able to get it from a US plant otherwise it will be imported.

Re: Advice on 4X4 lease and types.
 

Canadian depreciation is not a dramatic as it is in the UK..Correct me if im wrong in this?

Re: Advice on 4X4 lease and types.
 

was at the Calgary Auto Show a couple of weeks back and i preferred the X5 to the X6...the way the X6 slopes at the back leaves less headroom for rear passengers and looks to have far less luggage space!

Loved the Toyota Sequoia and the Nissan Armada though...but those are full sized 7-seaters, might be a little big for what you're after. Something tells me they were more expensive than the X5 aswell :lol:

Re: Advice on 4X4 lease and types.
 

It depends on the vehicle and the province.

Re: Advice on 4X4 lease and types.
 

Depends on the interest rate you can get.

Low dealer interest or cash discount are on offer from time to time. Financing options would be low interest rate from the manufacturer (some are 0%) or get
a personal loan from the bank and take the cash discount. Outright cash purchase is the cheapest.

Which is best for you depends on your circumstances and what's on offer at the time you go to buy.

Even when I can afford to buy outright, I still finance if I am better off doing so, then I can earn interest on my money.

Leasing for individuals is good for the leasing company, not the individual. It is nothing more than a long term rental with mileage restrictions.

Depreciation on a domestic made vehicle is higher than an import manufacturer (in most cases, not all).

Re: Advice on 4X4 lease and types.
 

How do you earn interest on your money from financing? educate me

Re: Advice on 4X4 lease and types.
 

For most people, leasing is just a way to get a car they can't really afford.

Re: Advice on 4X4 lease and types.
 

Car costs $50k. I have $50k in the bank, earning 2% a year. I leave it there, take the dealer offer of 0% finance. A (diminishing) proportion of my $50k stays in the bank, earning interest, while I'm driving around in my $50k car for a few hundred $ per month. Simples.

Re: Advice on 4X4 lease and types.
 

Putting in a large deposit on a lease makes no sense to me if you have no business to offset the costs against. Are you only planning on being here for the length of your TWP? I'd buy outright if possible, or finance (though that might be difficult or comparatively expensive without credit history initially), then at least you'll have some equity in the vehicle rather than throwing rent at one every month.

Re: Advice on 4X4 lease and types.
 

He means he can get a better return on the cash than the interest rate for the loan.

It's what I did. But then I got finance at 0% so it wasn't a difficult choice to make. I'm not sure if such deals are possible now though.

Re: Advice on 4X4 lease and types.
 

Well the plan is to see my TWP out and maybe get a PR, depending if I am able to find a role in the BC or Calgary offices.

I have been told I will struggle to get a 0% finance without at least 6 months credit history. From your tips, I don't see myself leasing one now, but I am reluctant to invest all that cash on a car as Aviator has rightly pointed out in his earlier post.

Re: Advice on 4X4 lease and types.
 

As a new immigrant you have to make compromises. Spend your lump sum on a vehicle that will see you through for a while until your credit history improves, or future prospects in the country are more certain.

Re: Advice on 4X4 lease and types.
 

Personally i would not touch an X5 or X3..compared to the 3 or 5 series they are a dogs dinner and definitely not worth the price tag:thumbdown:

Re: Advice on 4X4 lease and types.
 

We got a CX5 on finance after putting a big deposit down on it - about 40% within 2 weeks of landing.

We are also on a TWP and the dealer said if for whatever reason we had to hand it back (ie we didn't get PR) they would buy it back off us.

Hope that helps :)

Re: Advice on 4X4 lease and types.
 

Thanks. It helps, but would appreciate if you elaborate on:

What was the interest rate?

Was this from Mazda or an independent dealer?

Was 40% the minimum required due to your lack of credit history and if you don't mind what was the car worth at the time?

Thanks

Re: Advice on 4X4 lease and types.
 

i would certainly have an X5M, but it would have to be Estoril Blue with cream leather and look something like this:

http://blog.platinummotorsport.com/w...5M-2-of-22.jpg

otherwise i'd agree with you and stick to the sedan/coupe offerings such as the 3, 4 and 5-series :thumbup:

Re: Advice on 4X4 lease and types.
 

Anyone that believes they are getting a good deal with 0% finance are just being fooled. 0% finance just means you pay an inflated sale price. If you offered to buy the car with the cash you would get it for way less money. 0% finance is just a gimmick ;)

Re: Advice on 4X4 lease and types.
 

It depends on how the dealer is incentivised doesn't it. I was offered a bigger discount for taking 0% finance than they were willing to give for cash. I actually wanted to pay cash, but it didn't make any sense to do so. This was a while ago now though and the credit environment is different today.

Re: Advice on 4X4 lease and types.
 

I borrow the money from the manufacturer at 0% and invest my money that I would have used to pay cash for the vehicle. If I can get 2.5% return on my money (which I can right now), even after tax I am ahead of the game.

Re: Advice on 4X4 lease and types.
 

I have managed to get both a discount and dealer financing at 0%. It is all about the math and each individual, some make it work, some don't. Some even pay the ridiculous 'documentation fees' charged by a dealer.

Re: Advice on 4X4 lease and types.
 

But your vehicle is depreciating rapidly so either way you are losing money as a vehicle is just a rapidly depreciating asset. Take the 50K, spend 5K cash on a half decent used vehicle and bank the 45K and then bank the monthly payments that you would have been paying - wouldnt that be the best way to go?

Re: Advice on 4X4 lease and types.
 

Now you're just being silly :p. I doubt there are many people for whom our hypothetical $50k car is a seriously-contemplated option would be happy stepping into a $5k beater for a year or two. Sure, a new car depreciates. For some people that's a financial burden worth bearing to be seen driving a brand new car. For others it's more about the warranty/servicing/reliability of a new car. For most it's probably a bit of both.

Re: Advice on 4X4 lease and types.
 

It is less about the depreciation and more the cost of ownership. I buy decent new or dealer demo, keep them for 15 years, do all the regular maintenance, do low mileage. My cost of ownership is likely less than someone buying an older car every couple of years. I seriously doubt you would get a half decent vehicle for $5k, more likely something needing money spent on it from the beginning.

A half decent used vehicle is closer to $10k.

Someone changing new cars every three years is sinking money into a hole. I have an old VW, cost me $10k new, excluding running costs, which occur whatever, it has cost me around $500 a year so far.

My pick up is newer, but I will hang on to it for as long as it is going.

Re: Advice on 4X4 lease and types.
 

What people choose to buy or do with their money shouldn't be really your cup of tea Jossie. I came on here to seek advice on the most viable way to finance a car I believe I can afford, not advice on how to spend my well earned money. Thanks

Re: Advice on 4X4 lease and types.
 

From Mazda.

No it's what we wanted to put down because we wanted the payments under $500 a month.

I would have to look at the paperwork but it was worth the sale price of a brand new CX5. He got a ton of stuff thrown in - that stuff the paint under your car to stop corrosion, to come back and get winter tires at trade price and a brilliant warranty which living in Alberta we wanted peace of mind. You can't be doing with your car breaking down in minus 30!

Re: Advice on 4X4 lease and types.
 

My apologies, i thought you came on here to let everyone know that you are buying a BMW that you cant afford. If you can afford it then why are you financing it ?? Was just trying to offer some advice. Even the founder of Ikea runs around in an old Volvo.