Which is Less Expensive to Own A BMW or Toyota? The Answer May Surprise You

It is sort of slow news day today, so I figured I would toy with some numbers and see what the true deals may surface.

My first target was BMW. I scanned the deals and found I can have a base 328i for just $401.00 a month on a 3 year lease, sounds pretty fair but just how does that stack up? I wandered around for a bit on other sites and soon I found myself at Toyota.com. Just for giggles I ran a base Camry XLS for the same lease and it came in at $488.00 a month. How can that be? I double checked the figures and found they were correct, so then my wheels got turning.

What if a BMW was cheaper to own than a Toyota? After all Toyota has always been known as the value leader and BMW was known for being expensive. Of course there is more to it than just a payment; there are other factors to consider.

So out came my trusty pen and this is what I found taking a 36 month lease with $2,500 down and 15,000 miles a year:

Round 1: MSRP – Toyota

$28,695 Toyota Camry XLE V6
$33,175 BMW 328i

Round 2: Fuel Cost- Toyota

$5094 over 3 years using regular gas @ $3.00 a gallon averaging 26.5 mpg – Camry XLE
$6429 over 3 years using premium gas @ $3.50 a gallon averaging 24.5 mpg – 328i

Round 3: Insurance – Toyota

$4341 over 3 years - Camry XLE
$5578 over 3 years - 328i

Round 4: Maintenance - BMW

$ 0 (all maintenance is included for 4 years) - 328i
$ 979 Over 3 years - Camry XLE

Round 5: Repairs - BMW

$ 0 – (all repairs are included for 4 years) 328i
$ 141 – Over 3 years Camry XLE

Round 6: Total Expenditure over 3 years – BMW

$28,942.57 (payments + maintenance + repairs + insurance) 328i

$30,623.34 (payments + maintenance + repairs + insurance) Camry XLE

Basically this scenario probably can be done with several makers but in this case the 328i came in with an annual cost of $9647 per year while the Camry totaled to $10,207. A difference of $560 annually.

I know the Toyota fans will correctly point out that the Camry is more reliable, but in this case Toyota ranked 1.79 issues per vehicle while BMW came in with a 2.12 issue rate in the latest JD Power rankings. So in the worse case the BMW may visit the dealer 1 more time over the 3 year span.

I don’t know about you, but considering a savings of almost $1681 over 3 years, I can sit in the waiting room of a BMW dealership for an hour watching their plasma TV, while sipping my complimentary Starbucks, investing that extra cash all on their dime.

Sources:
Lease payments: www.bmwusa.com and www.toyota.com
Round 1: MSRP: www.bmwusa.com and www.toyota.com
Round 2: Fuel cost calculated using EPA estimates
Round 3: Yahoo automobiles
Round 4: Yahoo automobiles
Round 5: Yahoo automobile
Round 6: Totals of round 1 through 6 plus monthly lease payment times 36 months

Agent009 - 4/13/2007 4:11:24 PM

0 Boost

As many of you may remember I posted this article a few days ago and frankly…uh.. I made a mistake. Hard to believe, but it happens. I simply had too many figures and transposed some things. So this time I double checked the figures drank a bit less coffee and changed the names to protect the innocent. (Basically used the correct BMW the 328i instead of the 328Xi)

EnnNorak - 4/13/2007 4:24:16 PM

+3 Boost

I've been leasing for the last several years so as to always have a new car fully covered by warranty. I never found Toyota or Mercedes to have competitive lease rates. I leased my currrent Audi A6 Quattro with a lease rate under 1%. Mercedes continues to pretend that its cars don't depreciate much so they make up for it by using high residual values. When leasing, always work out the math before you see the dealer so they can't play math tricks on you.

Agent009 - 4/13/2007 4:28:18 PM

+1 Boost

Really on the lease, the residual theoretically should be the resale at the term of the lease. so IF they think it is higher than you do, it is their problem because the higher the residual the less the payment.

You are correct to know as much as possible before walking into a dealership.

Remember they are in it to make money, and the only person looking out for you is you.

Designer1 - 4/13/2007 6:31:51 PM

+5 Boost

I just built both cars with red color on their company's website. Built the base 328i, without any options but only color change, and filled the camry XLE V6 with options. The 328i price was $34,625 and the Camry's $31,474. The 328i least was $421, and camry with $2500 down and 1% APR just like the BMW came to $487. However, financing the car for 60 months, the 328i price was $549, and the Camry's $495, both with $2500 down and 1% APR.

So the lease would mean only that BMW has special lease, but the real story lies on financing the car since there is no special there. And the numbers are correct i.e. compared to the price of the car.

So is BMW cost less to own than a Toyota? Not really, and if the lease is considered, remember that you're not owning the car, you'll pay extra if driven over its miles limit, and at the end of the least if you decide to buy the car then you'll need to add those numbers too. And of course what brings the 328i lease payment is its special deal, if that wasn't in the equation, then payment would've higher.

At the end of the day, what you pay is the actual purchase price of the car + interest, so you do the math. :-)

Agent009 - 4/13/2007 10:20:33 PM

+3 Boost

The exercise shows that a premium/luxury car be owned for a typical period of time and cost less than a mainstream car. There are man ways to go about it.

Many consumers drive a car until it is paid off and trade it in, others drive them till the wheels fall off. Others know they are going to get a new car every three to fours years. Those that do a lease may be a favorable option.

Yes you NEVER fully own the car, but if you are going to swap it out anyway, does it really matter if at some point in time the title is yours? To many the answer is no, because it is a paper game.

I actually do both. The wife wants a new one every 3 years max. To own simply is an extra burden for no reason. I tend to hold on my vehicles much longer, and these are the cars we own.

WickedRabbit - 4/13/2007 7:40:56 PM

+5 Boost

What is this "$0" maintenance on BMW's for all 4 years? I know several people that own BMW's and about every 2 years they go into the dealership, give them their car for about 2-4 hours and pay about $1000 for what I was told is "regular service maintenance" (checking everything inside and out on the car).

Also, since when is leasing considered 'owning?'. I'm not surprised the BMW is cheaper to 'lease' than the Toyota because I would also assume that the percentage of people leasing a Toyota is a lot lower than people leasing a BMW for the sake of 'showing off'.

As nice as BMW's are (aside from the cheap interiors unless you get a 7-series), the majority of people that own them don't actually own them becuase of their ride quality, etc. They own them because it's a BMW and it's a statement car (as is Mercedes, Audi, etc.). So I'd be pretty certain that leasing is a lot heavier for these cars because - in order to keep ones image in tact - they need to have a BMW and even more importantly, they need to have a NEW bmw... hence a better leasing rate than the actual monthly rate to own the car.

I'd bet all the other luxury cars are the same way (better lease rates than their finance rates) because people want to continue posing so they constantly upgrade every 2-3 years.

Agent009 - 4/13/2007 10:22:24 PM

+1 Boost

From the BMW Site:

BMW Ultimate Service is a collection of services that is included with the purchase of a new BMW at no cost. It’s been designed to keep maintenance costs down, add to your ownership value and provide peace of mind. It includes:

* BMW Maintenance Program: It’s one of the most comprehensive maintenance programs in its class. It covers all factory-recommended maintenance, oil service and fluid service, as well as items that need replacement due to normal wear and tear – such as brake pads, brake rotors and wiper blade inserts – for four years or 50,000 miles, whichever comes first.
* Unlimited-Mileage Roadside Assistance: You can receive Roadside Assistance 24 hours a day, 365 days a year for the first four years of ownership, without any mileage limitation.
* New Vehicle Limited Warranty: Your warranty covers defects in materials or workmanship for the first four years or 50,000 miles, whichever comes first, so you can be confident that your BMW will always perform as expected.

mmmpowr - 4/13/2007 10:26:38 PM

+2 Boost

With all new BMW's, you get free maintenance for 4 years or 50k miles in addition to the 4 years or 50k bumper to bumper warranty. After 4 years is when they stick it to you.

Agent009 - 4/13/2007 10:27:01 PM

+1 Boost

As far as owning goes, a lease is in your name and considered a liability.

It is no different than if you buy a car and trade it in one year early. In either case the bank has the note, and you never get the title until the note is paid in full. which in the both cases before mentioned never happens.

mkk21 - 4/13/2007 7:54:07 PM

+2 Boost

Too bad you can only choose from white, red, or black, but I guess black wouldn't be so bad.

1970toyotamarc - 4/13/2007 8:00:15 PM

+3 Boost

First of all , I appreciate that you had the cajones to admit your mistake.

However....

A BASE Camry XLS V-6 (even though it is hardly base at that trim level) is $412 a month, not $488, on a 3 year lease with 2500 down. And that includes destination charge. Therefore, the 3 year ownership costs (including the rest of your figures) would be 27887, a savings of $1055 over the cheapest, most stripped BMW.

Maybe you're not navigating Toyota.com very well. (As I am sure you can imagine, I am quite familiar with the site.) If you go to the bottom of the website's mainpage, and choose "request a quote", instead of choosing "Build Your Own" Camry, you dont get the base model, you get a model with options, not the base. However doing that , I still dont get 488, but it is definitely higher.

Go back, choose Build Your Own Camry, choose excellent credit (which is presumably what BMW.com is calculating), choose no options, and you will get aorund $412 a month (there may be slight regional differences).

I hope this is the last I have to post on this, tho I doubt it. :)

Agent009 - 4/13/2007 10:34:31 PM

+3 Boost

That is why I provided screen shots as proof (note they include the IP address for Toyota as well as the figures), I selected the base XLE and 328i went directly to the finance page.

No options were considered. The rates are what pre-populated which typically are the best for the state or residence, The only adjustments were $2500 down and 36 month term.

Your state may have different rates and programs. An example may be a better rate in Michigan than California due to the fact the Toyota penetrates Michigan to a far lesser degree than California.

Agent009 - 4/13/2007 10:47:17 PM

+3 Boost

Interesting I still get $488. I went to build the car and selected the Camry XLE V6 @ $26875, went directly to calculator and changed the down payment to $2500. I get $488.00, The figures are loaded from my options chosen, which were $0 plus tax title and license. This is the capitalized cost.

1970toyotamarc - 4/14/2007 3:23:51 AM

+2 Boost

Well, I definitely got your $401 from BMW, even putting in my LA zipcode, so my methdology is not suspect. Now, interestingly, when I used a TX zipcode on Toyota.com, I got directed to a mini-site that was clearly local. I couldnt even get a quote without putting in personal information, which I was not willing to do. So I exited out of my browser, and re-entered, using a NY zipcode (10009), and I got the same $412 as my LA (90069) zip. Maybe Toyota has dfferent residuals due to a lower popularity in fly-over states.

It would have been useful if, amnongst your screen capped images, you had shown your Toyota result. What I do see is that over 5 years, the Bimmer will cost you more than $7000 more. But your claim was not based on 5 years of ownership, so that is not a knock on you (this time :) )

So, as I see it, leasing a Camry on the coasts is clearly cheaper, but for me, the jury is still out in the middle states. Which is not to say that, with more evidence, I cannot be convinced. It's certainly not your job to convince me, but in the interest of fairness, I sure would love to see what calculator got such a high figure for the Toyota.

Can't wait to see where this goes..........

S4cabriofoxone - 4/15/2007 12:18:38 AM

0 Boost

I live in Chicago, and put your theory to the test...

For both cars, it was $2500 down, 36 mo. lease, and 10K mi per year. NO OPTIONS.

328i: $384/mo.

Camry: $398/mo.

Hmm. I guess BMW is more aggressive with its lease rates in my area. More posers in Chicago, I guess.

S4cabriofoxone - 4/15/2007 12:19:08 AM

0 Boost

Sorry, I meant 12K miles per year. You couldn't get 10K per year on the Camry, so I adjusted them both.

WickedRabbit - 4/13/2007 11:15:47 PM

+3 Boost

ok so for the first 4 years you're covered, but if you actually "own" the car (and not trade it in for a new one) you get hosed after that pretty bad. $1000 even if it is about every 2 years still ain't cheap and even regular maintenance on a BMW after that is expensive.

so basically, the trick with a BMW is to just continually trade in your car every 3-4 years to avoid the expenditures of actually having to pay for the vehicle. haha... call me crazy but I like to keep my cars longer than that typically

1970toyotamarc - 4/14/2007 3:33:26 AM

+3 Boost

If anything, that is what is most to be learned from this post. 3 series are leased to hell and back, that's one of the reasons they are so ubiquitous. Who wouldnt want a Bimmer, when it can be leased so cheaply, and with no maintenance charges. And then just give it back in 3 years, before the warranty expires. It's been one of BMW's brilliant marketing strategies for the past decade.

txbmw - 4/14/2007 11:59:52 AM

+2 Boost

I would like to clarify something....Yes while ALOT of "new" BMW's are leased many are still purchased, especially on the Pre-Owned side. And my point is on the 4 yr/50,000 mile maintenance - especially for those who like to keep thier vehicles for a long time. ALL you pay for is GAS and TIRES - BMW pays for Brakes, Rotors, Oil Changes, Service Inspections, Belts, Wipers, Hoses, Brake/Coolant Flush, etc.... But wait... ANY BMW owner - as long as the BMW Ultimate Service is STILL VALID - can extend this service to 100,000 miles - for a 1 time charge - from $1300 to $1700 depending on the model. Considering most BMW's (if you do ALL services BMW recommends) you will spend $3500 to $4500 from 50,000 miles to 100,000 miles. So if you want to look at "long-term" investments - the BMW is STILL the better choice.

DieselRules - 4/14/2007 1:04:03 PM

+1 Boost

CANADIAN PRICES (Go Canucks!)

from BMW.CA
BMW 328i: $41,000
web-site automatically shows lease payments of $395/month based on 36 months with $6,150 down on 36-months, with 20,000 kms/year
That's about US$350/month with 12,400 miles.
Dropping the DP to C$3000 (roughly US$2500) the price jumps to C$489/month

Toyota.ca
when I click "Customize my Camry" it reports that I need more plug-ins. what a lame site.
Will see what I can update and complete the Camry comparo later.

XYZZ - 4/16/2007 9:01:42 AM

+1 Boost

...

XYZZ - 4/16/2007 9:20:59 AM

+1 Boost

txbmw:

"Considering most BMW's (if you do ALL services BMW recommends) you will spend $3500 to $4500 from 50,000 miles to 100,000 miles. So if you want to look at "long-term" investments - the BMW is STILL the better choice."


hmm, quite a racket those beemer dealers have.

with but ONE exception, i have NEVER spent more than $500 for 50,000 miles of service on ANY of the 5 toyotas i have owned and currently own. and that's TOTAL, not per year.

even after the warranties expired, no repair ever cost over $100. i'll grant, i also never paid dealer rates.

the exception was for the first one, which i rolled in a moment of indiscretion. (it's engine, with only 70k miles on it, was transplanted into another 'yota and lived on for an additional 8 years.)

rocker - 4/16/2007 11:49:39 AM

+2 Boost

Nice effort and good article. Making people think and investigate is always a good thing.

scottst - 4/20/2007 3:50:24 PM

+2 Boost

Funny thing, I always considered the 5 series the Camry fighter in 5 adult transportation. 3 Series competes with Corolla in the 4 adult category.

If this test is done with 5 series, the Camry comes out cheaper I bet.

So I checked out the specs today:

Camry - 3 Series - 5 Series - Statistic
38.8 - 37.4 - 37.7 Head Room Front inches
37.8 - 37.1 - 37.9 Head Room Rear inches
41.6 - 41.5 - 41.5 Leg Room Front inches
38.3 - 34.6 - 36.0 Leg Room Rear inches
101.4 - 93.0 - 99.1 Total Passenger Room cu ft
10.6 - 12.0 - 14.0 Trunk Room cu ft

Data is from internetautoguide dot com

All I can say is wow, the Camry trunk is small!

XYZZ - 4/21/2007 7:35:29 AM

+1 Boost

LOL! so the camry IS REALLY MORE COMPARABLE to the 5-series! and the 3'er more to the corolla!

now no one will dispute the beemers still have the magic feel advantage.

but it is also indisputable that dimensionally, the Camry is right there with the 5. and except for the v8 sometimes stuffed in the 5, the engine sizes are also comparable.

isn't there a 1.8 base engine in the 3-series? SAME capacity as the standard corolla engine!

XYZZ - 4/26/2007 4:47:06 AM

+1 Boost

this ALMOST tempts me to give my corolla the Fast and Furious treatment and go out and embarass all the 3-series drivers! ;)

it ALREADY has leapfrogged my previous Focus in handling, with the mere addition of oversize tires.

on the other hand, relying ONLY on my driving skill (cf. my appropriate screen name), i DON'T have to do anything more to my car. i ALREADY embarrass many drivers of "faster" machinery going cross town.