Quote:
Originally Posted by HotSoss
I'm sure this has been discussed at length before here and across the net, but I wanted a fresh take given current circumstances. In another thread you've helped me configure my M3 for Euro Delivery, but the thing I'm having to decide is how best to pay for it.
1) Option one: pay cash- I have the cash for the whole purchase, but I prefer to keep as much cash on hand as possible for emergency use. Paying 100% cash isn't really my favorite option since I'm a believer in keeping cash on hand.
2) Finance: My bank is giving me a decent rate (4.2% for 60 months, 3.9% for 48 months), and this is what I had planned to do, with $15-25K down for about $700-900/month. Very doable but my concern is the uncertain future- higher fuel prices, and a more fuel efficient M3 around the corner (2013?) even though it will be the 6 cylinder, right? I'd like to think I'll own until it dies, but I know myself, and I'll probably want to spring for the next generation. If the new M3 is a hit, I'll take a serious depreciation hit-especially compared to other "regular" cars. If people like the current high revving M3 better, I won't lose as much on the resale, but I'll probably be end up wanting to keep mine in that circumstance. I like the idea of owning my car, but this seems like a risky option.
3) Lease: I was originally going to put the $15K down cut down monthly payments, but I think that is dumb, because I can just put the 15K in a "safe" investment and draw off it to help pay the monthly payments. The downside is the obvious lease finance charges, and the low residual values on the M3- but I think the reason for these is fact that BMW finance probably is banking on poor resale at lease maturation because of planned new models (even more so than usual this time around, I'm guessing). But the thing I like about this option is that even though the residual value is low, it is less risky than losing even more than that if fuel prices skyrocket and M3 resale values plummet.
I don't want to give the impression that finances are tight- I just like to choose the option that makes the most financial sense. I keep going back and forth with buy versus lease. Am I correct that 2013 is the predicted new M3 release date, and is it going to kill the current M3 resale value? If so, I'll probably fill BMW financial coffers by letting them split the risk with me and just lease.
But that leads to my final lease questions- for Euro Delivery- is the dealer supposed to use Euro MSRP and Euro residual, or US MSRP and residual? I'm suspicious that the values used aren't working to my advantage as much as I thought they would. The other thing is that they say they'll pay your second payment, but increase the money factor accordingly, such that the total lease payments over 35 months are higher than what it would have been for 36 months. Sham deal IMHO!
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The sales price or cap cost of the car is based on ED MSRP/invoice or whatever you negotiate. The lease residual is based on the US MSRP with options. If they are calculating the lease residual based on ED MSRP they don't know what they are doing.