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      07-12-2012, 02:56 PM   #1
is300wrx
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2013 M3 Coupe lease help

Hey all. Can you let me know if I am getting a good deal?

2013 M3 Coupe
Selling price $72,695.00 (includes rebates and specials)
MF: .00175 (currently a BMW customer)
Residual: 57%
15,000 miles Per year. 36 months Lease

$979.00 per month (not including sales tax)
Due at signing $2850.00 (no cap cost)

Thanks

Last edited by is300wrx; 07-12-2012 at 04:20 PM.
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      07-12-2012, 03:00 PM   #2
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You are willing to drop $38K+ to rent a car for 3 yrs..never understood that..Good luck
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      07-12-2012, 03:04 PM   #3
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Quote:
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You are willing to drop $38K+ to rent a car for 3 yrs..never understood that..Good luck
I totally agree.
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      07-12-2012, 03:42 PM   #4
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Btw, MSRP is $77,195.00
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      07-13-2012, 01:17 AM   #5
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Quote:
Originally Posted by tibra1 View Post
You are willing to drop $38K+ to rent a car for 3 yrs..never understood that..Good luck
By your logic all the people who lease are idiots. There are benefits to leasing such as lower payments, paying sales tax only on the "rent", tax write off if you own a business, ease of moving into another car if you tend to change a car every few years, and last but not least, not having to deal with a BMW that is out of warranty, which could be a huge money pit.
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      07-13-2012, 02:01 AM   #6
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Quote:
Originally Posted by pharmdphd98 View Post
By your logic all the people who lease are idiots. There are benefits to leasing such as lower payments, paying sales tax only on the "rent", tax write off if you own a business, ease of moving into another car if you tend to change a car every few years, and last but not least, not having to deal with a BMW that is out of warranty, which could be a huge money pit.

You said it.not me

The benefits you mention dont begin to offset the costs involved with this specific car..and you can just as easily buy and have a car every few yrs that is 100% under warranty.

A lease on a car with a low MSRP makes more financial sense, spending more than what a home mortagage costs per month.. on a car, makes little financial sense..and is usually an indication that the car is out of the persons financial reach to begin with

You are essentially paying for 60% of the car's value in 3 yrs..only to give it up or get hit over the head with a giant residual to buy it out
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      07-13-2012, 08:15 AM   #7
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is300wrx, I sent you a PM
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      07-13-2012, 02:38 PM   #8
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First a disclaimer: I do work with finance and am glad to help anyone into navigating through these options. Lease haters, lease lovers, all welcome. Lease, financing or baloon financing (BMW Select) are all feasible financing alternatives. Disclaimer done.

Everybody benefits from an increased number of buyers, which reduces the allocated fixed cost per unit.

Leasing can be bad, but it can also be good. A counter-argument can be made against buying outright and dropping a load of cash into a highly depreciating asset. One can argue this is not a good use of capital (if a limited resource).

If leasing was so bad, it wouldn't be done. The % of leasing buyers is particularly high with BMWs (high residuals reduce monthly payments, thus increasing affordability), I once asked my CA and he said 7-8 in every 10 cars he sold were leased. Few would be able to afford M3s if production were cut to 20-30% of current levels. Even to 50% for that matter…

All financing strategies are valid, including BMW Select. Each provides certain flexibilities and optionalities that are desired and may vary by customer.

Back to OP’s case:

Analyzing his case before tax, he will pay $38.1k ($979*36+$2,850). The asset being leased will depreciate $33.2k (to 57% of $77,195 MSRP – the residual is always based on MSRP). A $5k disadvantage in this case. It seems the lease is overly expensive.

The MF seems a bit high. Last I checked with my dealer MY 2013s were going for a MF of 0.00145 (so 0.00175 is a bit too much). The residual seems 1% higher than what I would expect. I know the 10k is 60%. Historically 12K and 15K should be in 1% decreasing percentages to 59% and 58%, respectively.

I don’t know how much you use your car, but leases tend to make more sense when your normal annual mileage usage is limited to 10k. In this case, a residual of 60% and MF of 0.00145 would yield a $34.5k total cost, much closer to the $33.2 depreciation ($880 per month + ~$2.7k due at signing). In that case, it might be worth the additional $37 per month to have the car you want.

Right now you're looking at $136 per month higher than buying outright.
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      07-13-2012, 02:45 PM   #9
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Quote:
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Btw, MSRP is $77,195.00
How the heck is the MSRP that high? Are you including tax?
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      07-13-2012, 08:49 PM   #10
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Quote:
Originally Posted by ///Machine View Post
First a disclaimer: I do work with finance and am glad to help anyone into navigating through these options. Lease haters, lease lovers, all welcome. Lease, financing or baloon financing (BMW Select) are all feasible financing alternatives. Disclaimer done.

Everybody benefits from an increased number of buyers, which reduces the allocated fixed cost per unit.

Leasing can be bad, but it can also be good. A counter-argument can be made against buying outright and dropping a load of cash into a highly depreciating asset. One can argue this is not a good use of capital (if a limited resource).

If leasing was so bad, it wouldn't be done. The % of leasing buyers is particularly high with BMWs (high residuals reduce monthly payments, thus increasing affordability), I once asked my CA and he said 7-8 in every 10 cars he sold were leased. Few would be able to afford M3s if production were cut to 20-30% of current levels. Even to 50% for that matter…

All financing strategies are valid, including BMW Select. Each provides certain flexibilities and optionalities that are desired and may vary by customer.

Back to OP’s case:

Analyzing his case before tax, he will pay $38.1k ($979*36+$2,850). The asset being leased will depreciate $33.2k (to 57% of $77,195 MSRP – the residual is always based on MSRP). A $5k disadvantage in this case. It seems the lease is overly expensive.

The MF seems a bit high. Last I checked with my dealer MY 2013s were going for a MF of 0.00145 (so 0.00175 is a bit too much). The residual seems 1% higher than what I would expect. I know the 10k is 60%. Historically 12K and 15K should be in 1% decreasing percentages to 59% and 58%, respectively.

I don’t know how much you use your car, but leases tend to make more sense when your normal annual mileage usage is limited to 10k. In this case, a residual of 60% and MF of 0.00145 would yield a $34.5k total cost, much closer to the $33.2 depreciation ($880 per month + ~$2.7k due at signing). In that case, it might be worth the additional $37 per month to have the car you want.

Right now you're looking at $136 per month higher than buying outright.

Back in March of 2012, I specd out a '12 M3 vert. Fully loaded, it had an msrp close to $79g. My due at signing was $1500.00, $887.00 per month before sales tax, 36 month term with 15,000 miles per year. At that time, the mf was .0006 and being a loyal customer they gave a break on the mf. I think thr residual was 60%. Using your formula, this was a great deal and a no brainer deal since the depreciation would have been $47g while I would have only paid $33,432.00 on my end.

Fast forward about a year and half and here I am faced with a Realistic mf and a lower residual...just too bad we can't have those rates back.

Would a dealerahip add on the. 003 to the mf for profit or is this not common? Could they have accidently used thr wrong mf or was this deliberately done to boost bottom line?
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      07-13-2012, 10:22 PM   #11
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Quote:
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Would a dealerahip add on the. 003 to the mf for profit or is this not common? Could they have accidently used thr wrong mf or was this deliberately done to boost bottom line?
Yes. Most seem to mark up the full .004 - negotiate it.
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      07-13-2012, 10:39 PM   #12
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Quote:
Originally Posted by tibra1
Quote:
Originally Posted by pharmdphd98 View Post
By your logic all the people who lease are idiots. There are benefits to leasing such as lower payments, paying sales tax only on the "rent", tax write off if you own a business, ease of moving into another car if you tend to change a car every few years, and last but not least, not having to deal with a BMW that is out of warranty, which could be a huge money pit.

You said it.not me

The benefits you mention dont begin to offset the costs involved with this specific car..and you can just as easily buy and have a car every few yrs that is 100% under warranty.

A lease on a car with a low MSRP makes more financial sense, spending more than what a home mortagage costs per month.. on a car, makes little financial sense..and is usually an indication that the car is out of the persons financial reach to begin with

You are essentially paying for 60% of the car's value in 3 yrs..only to give it up or get hit over the head with a giant residual to buy it out
Incorrect. If the residual is 57% then you pay 43% of its value over three years.

With most cars if you do the calculations the break even point is around 6 years... meaning if you are going to keep the car for more than 6 years then it makes sense to purchase. This is a generality and depends on resale value and a variety of other factors including the number of miles you drive.

I think if you ran the numbers you may think differently. BMWs have excellent lease rates.

A lease is not for everyone but it is most certainly the best option for many. I don't understand why some people think those that lease are not smart. For many it is the smart choice.
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      07-13-2012, 10:41 PM   #13
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OP: Yes this is a decent deal.... as long as it is not a Euro Delivery
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      07-13-2012, 10:43 PM   #14
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Quote:
Originally Posted by dme330i
Quote:
Originally Posted by is300wrx View Post
Would a dealerahip add on the. 003 to the mf for profit or is this not common? Could they have accidently used thr wrong mf or was this deliberately done to boost bottom line?
Yes. Most seem to mark up the full .004 - negotiate it.
+1
Yes, dealers have room to move the MF up and increase their margin. Exactly right, you have to negotiate. Information is the name of the game. Few people know the ongoing rates.

WRX, did you mean march 2011? I also got that deal in feb 2011 for a 2011 vert. Only the residual was 64%, the payment was crazy low. That deal is not around anymore. Try to get .00145 and you should be good.

BMW knows what to do to push certain cars (change residual/MF). I've seen it with M3s, 5 series GTs, 3 series, z4s. All that in the past year.

My guess to what might have happened is that at that time, the European instability had just started. The PIGS countries had no buyers and the rest of the EU was waiting to see what happens. BMW had to unload that production somewhere and keep factories running. Best choice to unload is USA where price elasticity is high and the consumer confidence was just picking up (albeit, the jobs situation was still uncertain).
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      07-14-2012, 12:49 AM   #15
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My post kind of intertwined with Irish Coffee's, but I do agree with all he says about leasing. It's a good valid option.

My only comment is that I would try to reduce that MF a bit further down.
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      07-14-2012, 05:38 AM   #16
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Quote:
Originally Posted by ///Machine View Post
+1
Yes, dealers have room to move the MF up and increase their margin. Exactly right, you have to negotiate. Information is the name of the game. Few people know the ongoing rates.

WRX, did you mean march 2011? I also got that deal in feb 2011 for a 2011 vert. Only the residual was 64%, the payment was crazy low. That deal is not around anymore. Try to get .00145 and you should be good.

BMW knows what to do to push certain cars (change residual/MF). I've seen it with M3s, 5 series GTs, 3 series, z4s. All that in the past year.

My guess to what might have happened is that at that time, the European instability had just started. The PIGS countries had no buyers and the rest of the EU was waiting to see what happens. BMW had to unload that production somewhere and keep factories running. Best choice to unload is USA where price elasticity is high and the consumer confidence was just picking up (albeit, the jobs situation was still uncertain).


Yea, I meant March of last year. It was such a sweet deal!
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      07-14-2012, 05:39 AM   #17
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Quote:
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OP: Yes this is a decent deal.... as long as it is not a Euro Delivery
Not a Euro Delivery
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      07-14-2012, 12:17 PM   #18
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You can also further reduce the MF by putting down refundable MSDs (multiple security deposits).

I believe you can put down up to 7 of them and each one will reduce the MF by. 0007.

Each will be $1000 in your case.

Someone did the math a while back and it turns out that the annual return in the form of savings is around 15% on the money you put down.

There's prob more info around the forum somewhere
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      07-14-2012, 01:53 PM   #19
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Not another buy vs. lease thread! OP, that looks a bit high. I agree try to negotiate the MF. Not sure if there is any room left to negotiate the selling price but that's also an option. Also, can you stay under 12k? If so that would add 2% to the residual which would reduce your payment.
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      07-15-2012, 08:00 AM   #20
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[quote=McLoven;12325375]Not another buy vs. lease thread! OP, that looks a bit high. I agree try to negotiate the MF. Not sure if there is any room left to negotiate the selling price but that's also an option. Also, can you stay under 12k? If so that would add 2% to the residual which would reduce your
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      07-15-2012, 08:01 AM   #21
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$950 per month at .00145mf and that includes oem performance trunk spoiler and black trim kidney grills.
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      11-10-2012, 03:22 PM   #22
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the new shape of 3 series coupe will be out summer of 2013...Don't get the M3
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