What is your monthly car leasing cost, car brand and saving rate?

I have been really frugal all my life but at the same time I really would like to have a BMW. I bought my first and only car so far (Mazda 2) 12 years ago for ~15K EUR with a yearly salary of ~12K EUR net after my studies. During this time I lived in 3 different countries carrying the car (3 different plates already), I got married, became a father (2 kids) and my salary increased to +100K CHF net per year and 50%-55% saving rate. I am still driving the Mazda 2, my kids and wife complain all the time, especially during the weekend short trips.

I think to change the car quite often, but at the end I just don’t do nothing because If I buy the car I like most probably I will regret after few months. But I also think I will regret if I die without pleasing me with the car I like. I don’t feel ready to buy a second hand car (maybe due to ignorance) or a Japanese/Korean car once again. And I also don’t feel ready yet for a EV because we travel once or twice a year making around 2-2.5K km for which I use to rent a car in Singen (500 EUR to 800 EUR depending on the days we took in each trip). Probably in a few years everything will be easier with the EV and I would feel ready then but not for the moment

So I asked for a BMW offer and negotiated it a bit until the point it’s not possible to reduce it more according to them…: 83K CHF cost including VAT – 15K CHF discounts (Swiss Bonus -4K, my company discount -8K and -3K personal discount) for a total final cost of 68K CHF including winter wheels. The leasing conditions are: 12.5K pay down, 48 months, 15K km/year and 28.3K CHF residual value = monthly leasing of ~600 CHF (0.9 %). The car is fully equipped with 302 HP

Majority of my close family members and friends have nice cars (Tesla, Mercedes, BMW, etc) and some others in the same period of time like me had already 3 or even 4 mid-class cars, but they are not frugal like me, like us!!

So this is why I ask you in a frugal forum what is your monthly car leasing cost, car brand and saving rate? Reading some older posts it looks some of you have Tesla and some others leasing of above 5k CHF year (Pants down: yearly spending!), so maybe your answer will help me to don’t feel guilty if I finally buy this car… I think the midlife crisis caught me

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Hey,

My leasing: BMW Serie 320d Mpower touring Xdrive from 12/2017.
Contract started in April 2019 with 3’000 .- upfront and a monthly cost of 465.-, 15’000 km a year, 36 months (got that leasing before I got financially educated, one of the biggest mistakes of my life)
Insurance: 2350.- yearly
Plate taxes in GE: 594

As I said in the other thread I’m swapping this for a frugal 2000’s Honda Jazz to save 630+ chf a month… will raise my saving rate from 38% to 51%.

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I think one of the most important points in terms of money is that one spends money consciously. Don’t buy something because all others have it and don’t buy something in affect. Make a conscious decision. In the end, you don’t owe anything to anyone and it doesn’t matter what other people think. Nobody forces you to live frugal and nobody forces you to buy an expensive car. It’s your decision you just have to set priorities and think about what is important for you in life. It doesn’t help to live frugal all live and be unhappy and then take all the gold bars into your grave.

I noticed that lots of things I want are just a mood (that includes buying a BMW or Mercedes btw). What I usually do is when I want to buy something expensive, I research it and the price etc., then I put it on a list where it sits for 1-3 months depending on the price. Review the list regularly. If after that time I still want it, then I buy it. Otherwise I saved a lot of money, and actually I saved a lot of money like that compared to my earlier life where I just bought everything I wanted on the first impulse (that’s why I had basically no savings up to my late 20s).

In my case, the BMW (or Mercedes) so far never made it past a few weeks on the list because other priorities came to mind such as increasing my investments, retire earlier, buy a flat, work 80% later on, travel more, or something like that. Or I just thought, yes it would be really nice, but it’s maybe not worth to spend all that money on it. So I removed it again from the list.

But your situation may be different, if you really want it and it makes you happy, then go ahead and buy it. You only live once :slight_smile:

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One way to decide these big spends is to put the cost of the 2 options side by side in a spreadsheet:

Option 1) Spend 40k in this car over 4 years, after which nothing is left

Option 2) buy a reliable and comfortable car for (say) 15k and invest 25k in shares. At 7% long term return you could expect on average to have ~50k after 10 years and ~100k after 20 years.

If you have an FI figure you can calculate by how many years impact Option 1) delays your FI date, and ask yourself if you are you preapred to work x more years for this?

Think also that with option 1) after 4 years your are probably going to find it difficult to downgrade cars

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This is what I think will happen to me but also if I don’t buy it I most probably will feel bad for not having a good car ever… so not sure what regret is better

@Patron I fully agree your comments. I don’t care what other have and I am frugal by nature. I just thought that talk or ask for advice to my friends and family members doesn’t make sense since they spend all what they have and better ask in a frugal forum.

I simulated the purchase in my budget and it scares me but at the same time I want it. Not sure if it will make me happy, probably the first weeks and later probably not. As you said, we live once so I am debating myself what it’s better when the day come: regret of the purchase or regret for not having done it

@Barto Yes, I should lay aside the emotional aspect and just take option 2, but I am having issues with that

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Goyero, facepunch! 68k for a depreciating asset, on a retire-early forum?? Get a nice 5 year old car instead with 50k km and drive it for years.

To your question, our car is 10+ years old, but in great condition, all options, nice engine. We bought it used 6 years old and 50k km for 1/3 of the new price. Most important, we are happy with it and buying more car would not make us happier. Now worth about 15k chf, depreciating only about 2-3k per year now. Oh, and our household income is +1million chf. Saving rate over 80 pct. Actually over 100 if you add return of investments (FI, yeah!!)

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I understand. I once bought a new 60k car then sold it after 18 months. I hardly used it and was constantly stressed by the worry of parking scratches. So I guess I learned the hard way.

Since then I have proudly driven moderate, 2nd hand cars. Disclaimer is that I have never needed a car to drive to work

ps 10k CHF a year invested for 30 years at 7% = 945k CHF. Just saying…

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In regards to the question asked:

Current car: Dacia Duster dci 2018, cost new around 22K (AWD and high ground clearance needed for work).
Lease: 500.-/month (no downpayment, 48 months, 1K residual value (I’m planning to buy it when the lease ends).
Savings rate: 30% (single, no dependants).

As for the questions that were not asked (but I’m the meddling kind):

Only you (and your family) can define your goals and allocate your resources in order to reach them. Maybe driving a BMW in the short term is your main goal, maybe you could upgrade in a lower price range and still have a nice car, maybe there are other goals you are pursuing that would be worth more to you past the short term rush of finally driving your dream car and looking good in your neighbourhood.

I’d revise my IPS and set aside a “car fund” that could either:

  • have its funding be accounted for as expenses (that is, budgeting for the car, buying it when it fits your budget and savings goal, which might be now, later or never).
    OR
  • give it an allocation inside my asset allocation, i.e., making it a wealth target (I can afford a Dacia Sandero at 100K NW, a Skoda Octavia at 300K NW and my dream BMW at 500K). One thing I like with that option is that it encourages me to save more in order to get there quicker, and I can watch my wealth grow while I get closer to my target.

One thing that bugs me with my current lease is the lack of freedom that comes with the lease itself. In retrospect I think I would have enjoyed a car loan more, even at a slightly higher cost.

I can understand giving in to the rush of driving a nice car but I’d keep in mind that peace of mind comes at the cost of not caring what other people have (or rather what they display, really) and how we look in their eyes (except for the people we really care for, and on a personal level rather than wealth).

Also this:

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and what about license plate cost (canton tax)+ insurance? That will add easily a couple of hundreds buck per month.

Current car: Tesla Model 3, 5k downpayment, 600 CHF/month with 30k km/year leasing, 60 months, 0.9%
Only you can answer to the question… if you really want it go for it, just consider that the wow effect might (will) disappear in some months / 1 year and if you want to sell you’ll probably take a hit… iI think what is important is to take an informed decision without lying to yourself.
Had mostly anti-mustachian cars in my life (with one exception), I think it is worth it if you do long trips, otherwise for short commutes not really.
My 2 cts.

(edit) with that salary and saving rate you can afford it, it will move your RE target by a couple of years maybe. Only you know how much of an issue is that

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Not everyone is interested in retiring early on the forum, I for example care more for the financial independence part. Most probably I will not retire early even if I will have the money for it. I may not work for my current employer, maybe I become self-employed or start my own company and do what I want. We will see.

Furthermore, yes buying such an expensive car might be irrational but many people do irrational things on this forum. For example, why do people buy real estate with an average return of around 2% when they can get stocks with higher returns for the same money? Buying real estate in most cases is also an irrational decision but still people do it because it’s one of their dreams and there we speak about much more money than around 40k. And even if, why do people need a house if they could buy a small flat? Also, a convenience decision.

The same applies to a car, or an expensive watch, or some another expensive thing that rationally doesn’t make a lot of sense. There is no point to live frugal all life and die rich, but there is a point in living frugal and spend the money on things you really care about. And if for him this is driving a BMW, then I don’t see why he shouldn’t buy a BMW.

We’re talking about 40k and even if we consider, if not the BMW, then he might need another car for maybe 10k or so, so the difference is probably around 30k CHF. Yes, it’s quite some money and yes there is a chance that he will regret it but even if, he’s not going to end up poor because of it. You need to make decisions in life, sometimes they are right, sometimes they are wrong, but even if wrong decisions you get some experience out of it. So not a big deal. A Tesla is also not cheap, many things are not cheap but we also need enjoy life.

As I mentioned, we should spend money consciously and set priorities in life. But if you really want something and it’s more worth to you than having 30k more on your bank account, then I don’t see a reason why one should not go for it.

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That´s right, cannot ask it in a BMW forum and either to close family & friends because they will tell me what I want to hear. The opposite happen here.

I also asked here because I think it´s really difficult to be 100% frugal, like you for example are frugal with cars but not with the rent (4k/month) and travel (2k/month) according to previous post. Dont take me wrong, no criticism, it´s your money, you are already FI (congratulations!) and of course do what ever you want. So in the same way you are frugal with some things and not with others, I would like to know how many of us in the forum are mainly frugal with ¨weakness¨ in cars

This I like since I am almost at 500K NW= BMW :stuck_out_tongue:

No idea about the canton tax, insurance would be 150 CHF/month with the BMW Allianz insurance

Indeed, it would impact a couple of years

Hello Goyero,

Do you really need the car to be new, knowing that a significant part of its value will be lost once you turn the key for the first time?

With your salary and saving rate, wouldn’t it make sense to wait to have the cash needed to avoid the restrictive conditions of the leasing and the interests?

I would go for your favorite car, but maybe with 5-20 kkm and pay in cash. A 10 kkm car will feel almost as new as a new car if it was taken car of.

Best regards,

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Why is that? :sweat_smile:

I believe if you try them out today, you will find the current Mazdas (a bit less so Hyundais or Kias) way up there with at least mid, if not even some “premium” products of the Germans. :slight_smile:
I am also a bit biased on the other hand (see below :slight_smile:).

But if you believe you will enjoy it, go for it.
(Not to show off to your social circle though, that’s a wrong reason)


Back to answer your question:
I was leasing until past February, then bought it off.

Data were:

  • Mazda 3 hatch, 2015 make, Revolution (highest) trim
  • Leasing started in 2018 @ 50k km
    • Initial price 16k CHF
    • Downpayment 3k CHF (IIRC)
    • Lease period 3y @ 15k km
    • Monthly lease rate 267 CHF (IIRC ~4.9%)
    • Residual value 4.8k CHF (hilarious for a great car at 6y and 100k km, now you see why I bought it off; on autoscout they run for min 11k CHF)
  • Savings rate during that period: ~35% pre-tax, ~45% after tax
  • Note: living alone, early 30s

One other option - which worked great for a friend of mine (with AMAG; and she really wanted that specific model).

Find a (big) dealer.
They have new cars with 100ish km on it (used around the showroom or whatever).
They already give you a 20-25% discount on the original price (as it’s not “brand” new).
On the other hand, regarding leasing, they treat it as “new” and apply the ultra-low leasing rate (of 0.9% or so).
That way you skip the biggest loss of initial depreciation, but reap the low lease rate.

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Discount seems fair (generally between 15-20%, depending on the brand/model).

Go for it, don’t listen to the noise. There will always be people trying to spin the narrative in every possible ways but truth is that you only live once.

Give all the rest of your money to the guy who said you will average an annual 7% return over the next 30 years cuz apparently he can predict the future.

Indeed, and that means it’s all about experiences, being the best person you can be. Best, here, being left to define by each of us individually: we can be wisened old (wo)men or reckless rogues, doesn’t matter, but we should enjoy the experience and feel right within it, even the darkest parts.

Living only once isn’t about giving in to all of our desires like there’s no consequences to it (no tomorrow), it’s about being able to choose freely whether we want to or not, being the master of our own life.

Doesn’t mean that leasing the BMW isn’t the right thing to do, just that we make our choices and live with the consequences. Sometimes, there is a tomorrow.

To put it simply: don’t lease a BMW just to keep up with appearances, that’s stupid. But if you’re passionate about cars and want a better driving experience for your family and yourself, splurge! Living in the present, that’s what life and money are about (of course to the extent you can afford it, other things being equal).

What’s tomorrow? Will you be part of it? Will petrol engines still exist? Will driving still be allowed?

Being smarter about personal finances doesn’t necessarily have to mean competing to become the wealthiest zombie…

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If you want honesty, if I see an expensive BMW/Porsche/Mercedes suv style car going around, i will immediately think:

  • the owner has a shallow personality
  • he is probably compensating something, not necessarily what you may think of.

And again, I’m not saying my line of thinking is correct. It’s prejudicial, and even bad thinking, but come instinctively. I don’t even think is jealousy because well I could afford it without even blinking. It’s probably because I was brought up with the idea that cars were simply machines to do something - neither a measure of wealth nor a status symbol. So anything more than transporting, makes me raise my eyebrows.

Just don’t buy it for apparences - lots of people will end up envious, you may paint a target on yourself for thiefs and burglars, and some will end up thinking you are materialistic and shallow.

I’m not sure how many will end up respecting you more or admiring you in a good way.

That’s because there is a lot of framing around cars. Climate fanatics tell you don’t buy an SUV because it’s terribly bad and those people are anyways all [insert several negative personality traits here]. Others tell you don’t buy a BMW because all the people with bad images drive BMWs. If you hear such BS again and again then people start to believe it even if it’s unconsciously. This framing is simply about smearing on people to push through a political agenda.

I drive an SUV because it’s just way more comfortable for me to sit a bit higher and have more room and a better view, than driving in a small egg box of a car. I don’t do it because of others and I don’t care what others think and I neither have a shallow personality nor do I have to compensate anything. I do it because of the comfort, the nice driving style, the better view, the better safety, and not because of others. For some people a small car is perfectly fine, others prefer an SUV.

At the moment SUV’s are very popular as it seems. Almost every second new car sold in Switzerland is an SUV now in 2021. This is not because all of those people have a shallow personality and need to compensate something. Don’t believe it? Go and test drive an SUV :slight_smile:

On one side, people need to stop caring about what others tell and others think about us. Important in the end is what you want and what is our choice, we are the owners of our own life. On the other hand, people should also stop judging others just because they or their behaviours don’t fit into your personal agenda (that’s in fact what I would consider shallow personalities). Just letting people live how they want and minding ones own business, that’s the way to go.

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It would mean a bit more than a year just saving money and not investing, the 0.9% interest is quite good. For a +/-10kkm the interest is normally 2.5%-5%

Nothing against, the Mazda 2 was a great choice. 12 years old without any single issue following the Mazda revisions and changing the pieces when recommended. But after all this years I really don’t want again a Mazda or any other Japanese/Korean car, I am just tired and want something different

@Slutmachine @Wolverine @Grog Believe me I don’t care the appearance, measure of wealth or status. I just like BMW… when I travel I always try to rent them. I like how they look outside and inside, the engines, the driving experience and so on. I am sorry if I gave the impression the apparencies are important for me… I can store all my personal belongings in 3 suitcases and my clothes have an average of more than 5 years old, just as example

The problem is that I fully agree all of you, both on one side and on the other: that the cost is huge and for FIRE there are plenty of better choices and that we just live once

My saving rate would go from ~52% to ~47%, not a big deal but I am still unsure

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