View Single Post
      02-28-2008, 01:01 PM   #148

Drives: very fast
Join Date: Jul 2007
Location: Toronto

iTrader: (0)

Originally Posted by Ronno111 View Post
Hey guys, I posted this before but think its appropriate to repost it here as an alternative to these crazy lease numbers:

Best way to go, if you can, is a home equity line of credit (no cost, no closing fees). I am taking one for $62k of the $75k cost of the M3(total cost with tax, tags, gas guzz out the door).

The loan is interest only based stretched over 20 years variable rate of prime minus .5 (now 5.5%), but you can lock the rate to fixed anytime. Meaning, my interest payments alone will be appx. $285/mo. I can apply as much or as little over the $285/mo toward the principle balance of $62k. So, if I make a $750/mo payment for 3 years, I am putting $465 toward principle (which actually increases slightly every month I pay down the principle a little more as there is less money accumulating interest).

In 3 years, I will have paid about $18,000 off of the $62k loan... Therefore, I need to only get about $45k for the car in 3 years to repay my remaining loan balance ($75k - $18,000 - $13,000 deposit = $44,000 OWED to bank). Since M3's are rated about #5 of the top 10 resale value for cars, and my research showing the car has about 28% max depreciation in 36 months time with 45k miles,,, a dealer or private person should offer me $43-$45k for the car (having a $68k sticker w/options). Factor in the $3,200 tax savings I get off a new BMW for the trade in---- makes buying this car a cost effective no brainer.... The interest paid on the loan for 3 years is also 100% tax deductible!!!

Everyone follow my logic???? The M3 should cost me about the same as a 36 month lease on an 08 335xi with $6k on mods I was going to do....

Just some food for thought for those guys that don't wanna get stuck with a $1,200/mo car payment
I've thought about doing this as well, but you can end up in an unpleasant spot if you're wrong about the depreciation. I'd tend to be a bit less agressive and use the same depreciation values as BMW. You're monthly payment will be higher, but the chance of being upside down when you want to sell the car are much lower.

With a lease in the US, do you not have the option to buy out the lease for the residual value at the end of the lease?