I don't have time to read through all of this but I have read a fair amount and there are some valid points, However the fact remains that buying a car on residual or a "lease deal' isn't a smart move.
Buying a car on Residual using traditional financing is not a smart move, a lease deal only uses a residual to reduce the monthly installment - Unlike traditional financing where irrespective of ANYTHING the residual remains payable, the residual becomes the GFV. The Residual is an entirely moot point even if you write the car off (gap cover is mandatory) - You lease a car because you want a new one in three years, if you lease a car with the intention to get rid of it in two years or keep it forever, then thats outright stupidity. Again, a lease deal is for a specific market.
My issue with a lease deal is that the market has not been educated on the pros and cons - And you have folks flocking to buy cars at better prices with no idea that its a lease deal or that they will struggle if they settle it short of the 36 months.
Firstly your job is never guaranteed, I have been retrenched twice already and so have allot of members on this forum and they can attest to the risk involved in this type of lease deal. Everything is all fine and dandy till you no longer have an income and you have this "lease deal" to now deal with.
1. You shouldn't be buying cars if you know your financial stability could be compromised. Again, traditional financing could end up with you trading the car in after 4 years, or paying it off and keeping it for 10 years, the lease is a fixed term rental agreement. You do it BECAUSE you have a up-front calculated risk and can make an informed decision.
Nobody has ever been retrenched and not known shit was coming months before it happened. If you sign yourself into a three year lease and you even slightly suspect you may not have a secure financial future, then whose fault is that really?
2. How is the lease deal any different to the traditional finance deal when you lose your income? You still have to settle the entirety of the vehicle purchase amount, the only variation will be that your lease deal will have a structured Amortisation Schedule because the costs are calculated up front which means you are likely to settle more of the asset value than the interest value.
If you cannot pay you cannot pay - The lease is called a lease but its still a finance agreement and as with any bank allows payment arrangements, handover and more. Further to that, if you had put the R53k deposit down (as required by the lease) on the car with a traditional finance agreement and it was repossessed you would lose that, with the lease, BMW pays the deposit, its not your risk.
The other point and these things have been mentioned in several "residual deal threads on this forum already" is that by doing this you not only have a new car every 3 years you also REMAIN in debt FOREVER without ever owning a car. Not paying for a car monthly is a beautiful thing.
Again, and I cannot explain this enough times.
Nando's offers three variations of their chicken. BMW offers three ways to buy their vehicles. Each variation suits a specific individual. Again, you are not obligated to purchase another BMW when you give this one back.
You can lease cars for most of your life and then buy a car cash with the savings, you can lease a car because you want a fixed risk agreement while you start a new business and from there buy the next car elsewhere (or at BMW) using traditional finance and keep it for the rest of your life.
Thats like saying if you eat a quarter pounder deluxe meal from McDonald's you will be fat forever.... No you will only be fat forever if you keep coming back for more - As a consumer you remain in complete control of your purchases and financial decisions. I might be happy to not own a car for the next 15 years but when I do want to own one, its my decision, nobody has locked you into a lifetime agreement.
The other thing is that cars keep going up in price every year. a 318 is 530k this year but 3 years from now at our current rate of inflation could be 900k in 3 years time. so unless your salary has doubled your going to be pretty screwed in 3 years time trying to get the same caliber of car which lets be honest is pretty shit to begin with being a 3 cylinder lol of a car in the BMW world. so basically you will need to walk away from financing another BMW and go finance a ford ka or something when you could be selling your "paid off BMW" and buying another one with a massive deposit or just keeping it and looking after it and being debt free.
Again, a moot point. Last year an iPhone cost R15k, now an iPhone X is R25k and we all detested and went on about how ridiculous this was and who would buy such a thing.... And guess what, Apple sold 16 million of the damn things in the first quarter of this year alone! Its their top selling phone for 2018.
The market dictates what sells and what doesn't. You neglected to talk about the countless 1,2,3,4,5,6,7 and X Models that will hit the showroom floor with 60 000km at three years old with full service history, active motorplan of up to 4 years, prime-5 deals with 60% depreciation (thanks to the oke who leased it in the first place allowing the used car market to be regulated by the Manufacturer) that you can climb straight into if you cannot afford a newer model.
Its not completely black and white.
