Quote:
Originally Posted by piloto
This only true is your car is low mileage and your local market is not saturated with similar cars. For instance, as I saod in an earlier post, if 'm putting 20-25K miles/yr, and live in socal, where there are countless M3s, and the majority have much lower miles, it can be very hard to sell the car used. In addition, as you've said, it's a hassle, as not many are going to be paying you cash.
I went through the calcs numerous times before I settled on leasing, and the biggest persuading factor was BMW's low $0.15/mi fee for miles over 15K/yr. That made it a no brainer.
Let's not forget the tax either. Here in CA, TTL is about 10% in total. So, in my car's case, the cap cost was just over $60K. Had I purchased it, it would have been $66K OTD. Let's assume I paid cash and have no interest to be paid.
If I sell it after 3 years, with 60K miles, I'd have to compete, in 2014 no less, when the new F80 is out, with countless other low mileage (<40K miles) M3s, C63s, etc. Realistically, I'm going to sell it at best for the low $30Ks, if not lower.
My lease payments now are $850, with the extra miles. That's with zero down, and includes tax. It does include 7 MSDs however, but that's like getting a great return from your bank. So $850*35 (I did ED)=$29,750. I will have spent a total of $29,750 over 3 years for driving this car, and assume no risk in an accident impacting its depreciated value.
Now, assuming the $66K OTD, I would have to sell my 60K mile car, in 2014 for at least $36,250 to be as the same point as a lease.
This is prior to any additional tax advantages for a small business owner, and doesn't take into account the convenience of just turning the car in and getting something else at lease end.
The fact is, I never went into buying or leasing an M3 because it made financial sense. It's definitely something that I want, and as much as drive, I'm going to want a nice, new daily driver, for as long as I can afford to do so. Leasing, in my case, was a great choice, and BMW's rates and terms/conditions made it a no brainer.
|
I'd like to understand this a bit better, rather than instigate a flame war.
You compared the cost OTD at $66k to your cap cost of $60k. Isn't that apples and oranges? I thought tax alone in CA was 10%, but no matter. If you don't pay the tax upfront on the lease, you role it into your payments. So, you're paying interest on the tax. I forget if you pay the tax only on the amount of the payments, so you still pay $3k in tax. I agree with the MSD's, did it on my X3 with a great return.
Your payment was really only $850, with zero down AND 25k miles a year? That really seems like a phenomenal payment.
I agree, I wouldn't want to try to sell a 75k mile M3 that is 3 years old. I find it pretty amazing you are paying only $10k a year to drive 25k miles. You will actually be paying more than that since you will be out of warranty and need to pay for the 60k service on your own at $1k plus. I'm sure that will be a condition to the lease return. Certainly this is also convenient, but it is simply expensive. Gotta pay to play. If I were driving a car into the ground, I'd probably lease as well. You make an extraordinary case.
To lease a car and return it pristine, well that's fine. You have a fixed return value though, so it is only pride of ownership, which we all have. I have purchased a few lease return cars, now I have the feeling how they were maintained. The minimum. I enjoy the pride of ownership and have gotten top dollar for my cars, mostly privately, but also on trade in.