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      02-27-2008, 07:18 PM   #133
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Thanks. Will do.
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      02-27-2008, 07:55 PM   #134
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Thanks. Will do.
here you go
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      02-27-2008, 09:32 PM   #135
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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
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Last edited by Ronno111; 02-27-2008 at 09:49 PM. Reason: add info
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      02-27-2008, 10:16 PM   #136
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Quote:
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
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      02-27-2008, 10:29 PM   #137
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AMT?
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      02-27-2008, 10:31 PM   #138
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AMT?
And you live in NY as well. You are the poster child for the AMT.

http://en.wikipedia.org/wiki/Alternative_Minimum_Tax
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      02-28-2008, 02:02 AM   #139
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Everyone follow my logic????
No.

Buying a car by leveraging your home with a HELOC in this kind of market is silly.

But then I am a grumpy old fashioned stick-in-the-mud and don't know the rest of your story.
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      02-28-2008, 02:16 AM   #140
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I am not sure how the AMT comes into play here. I use the vehicle as a business deduction, always have and always will. AMT should not play into this scenario if you have the income to handle the deductions.

Hans, if you do it right and know what you are doing, you are not taking a risk. The HELOC rates are far superior to BMWFS. Why get roped into a 7.9% rate over 3 years when I can better that by 3 points and use the cars equity to settle the loan in 3 years. I'm not moving or selling my home any time soon. As the fed lowers the rate to spark the economy, I will enjoy the low rate and my M3 a little bit more
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      02-28-2008, 02:18 AM   #141
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I am not sure how the AMT comes into play here. I use the vehicle as a business deduction, always have and always will. AMT should not play into this scenario if you have the income to handle the deductions.

Hans, if you do it right and know what you are doing, you are not taking a risk. The HELOC rates are far superior to BMWFS. Why get roped into a 7.9% rate over 3 years when I can better that by 3 points and use the cars equity to settle the loan in 3 years. I'm not moving or selling my home any time soon. As the fed lowers the rate to spark the economy, I will enjoy the low rate and my M3 a little bit more
I hope that none of you get hit by the AMT. It was just a consideration for someone who lives in a high local and state tax location with an eye for added interest deductions.
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      02-28-2008, 03:17 AM   #142
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fuck dude!!!! i always miss 1/2 of every thread coz pictures arent attached! i didnt see the sheet in the first post.

that's more comforting, if anything i can do a 42 month lease. not ideal, but the only way i can afford the fucking car. im a bit more relieved

P.S. please try to attach all your pictures. Photobucket and image sharing sites are usually blocked by most firewalls at any work
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      02-28-2008, 07:46 AM   #143
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fuck dude!!!! i always miss 1/2 of every thread coz pictures arent attached! i didnt see the sheet in the first post.

that's more comforting, if anything i can do a 42 month lease. not ideal, but the only way i can afford the fucking car. im a bit more relieved

P.S. please try to attach all your pictures. Photobucket and image sharing sites are usually blocked by most firewalls at any work

Really stretching your finances to have a car isn't the best idea...
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      02-28-2008, 08:49 AM   #144
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Lets just say you were able to get the price of the car for below MSRP (I know highly unlikely), how dramatically does this effect the lease price? The residual is the same, I assume. Also, if the car is more optioned out would the lease payments be dispropotionatly higher as the these options devaulate more quickly. Additionally, is there a simple way to estimate a payment by multiplying the # of thousands of dollars (cost of the car) by a particular coeficient? If so does anyone have that coeficient for the M3? Thanks and sorry if these are novice questions, but I am curious.

To answer your first questions, the answer is YES, it matters a lot. This is because the residual is based on the MSRP, NOT the negotiated value. Here is an example.... 2007 M6s had a pretty good lease deal going on, I believe it was a 72% residual for a 24 month lease (I could be wrong, but it doesn't change my point). Now, let us say that the MSRP of the car was exactly 100,000k. So, if you got the car at MSRP, you would, over 24 months pay (1-.72)*100,000 + interest, which is 28 grand + interest. Now, lets say that they offer a 10k discount on MSRP. The way the bank calculates the residual is the same thing (.72)*(MSRP), which in this case is 72,000. But now, instead of paying the difference between 100,000 and 72,000, you now pay the difference between 90,000 and 72,000 (+ interest of course), which is only 18 grand (+ interest) over 24 months. Therefore, a 10% difference in MSRP, created a 36% decrease in the lease payments. So, getting a discount off MSRP, even a little, helps decrease your payments by a lot.

To answer your second question, no, a car's lease payments won't be disproportionately higher with options than with no options. So, what BMW does, is they take into account that the average M3 will have $X,XXX amount of options, and then they use that total figure to guess what the residual should be. So basically, if you were to graph the lease numbers, with MSRP of the car on the X axis, and monthly payment on the Y axis, then the line will be positive, and linear (meaning the line is straight, which basically tells use that at no matter what price point the car is, a $1000.00 increase in MSRP, will always increase the monthly payment by a fixed number.)
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      02-28-2008, 11:25 AM   #145
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Quote:
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Really stretching your finances to have a car isn't the best idea...
+1. im looking into alternatives right now. I dont want to do it, but if at least it's a relief to know i got options, even if they're bad options
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      02-28-2008, 11:37 AM   #146
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Really stretching your finances to have a car isn't the best idea...
Amen...
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      02-28-2008, 11:53 AM   #147
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Really stretching your finances to have a car isn't the best idea...
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Originally Posted by carnuts3 View Post
Amen...
as i said im looking into options. i basically put aside 1300 for a car every month, but that includes mod money and every related to a car. maybe except gas. as long as i stay within that budget im alright.

the other thing is i switch cars too quick, so it doesnt matter if i have a 36 or 48 or 42 month lease. im going to get rid of it in like 2 years. so i prefer the lower payment
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      02-28-2008, 12:01 PM   #148
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Quote:
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
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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?
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      02-28-2008, 12:43 PM   #149
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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?
yes you do
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      02-28-2008, 04:45 PM   #150
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Yes, you can buy the car at the end of the lease, but they frown on it as no warranty exists unless you buy one. Also, BMW does not want to negotiate the end of lease price, as many others do. BMW would rather taket the car back and re-lease it for another 3/4 years including a 100k mile "certified preowned warranty"

I did think about my scenario falling through with a worse depreciation than expected. Assuming you are correct, and the car depreciates unexpectedy I will have to come up with cash to get rid of it. However, a straight lease of $8,550 down and $998/month (as quoted by my dealer) leaves me spending $44,478 for 3 years usage. My scenario I spend $750/mo with appx $12,500 out of pocket = appx $40,000 spent over 3 years.

Therefore, I have to be wrong by more than $4,478 for this to work out worse than a lease. Moreover, I will save 8.65% (NYS tax rate) with the trade in value toward a new car. This gives me an additional some odd $3,500 in my pocket when I get a new car in 11. I don't think my numbers will be off by $8k. If they are off by $8k- then there was not advantage to purchasing in this car.
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      02-28-2008, 07:29 PM   #151
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I will preach for a bit and get off the soap box:

After reading this thread and a few others, I think some of you younger guys need to pass on the M3. The reason being is that if you buy a house now and save; with the release of the next great BMW you will be in a wonderful financial situation where you can buy anything you want, anyway you want with out having to finance for 84 months or leasing for 48.
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      02-28-2008, 07:33 PM   #152
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$68,000 M3 E90 - 10,000 Miles/Year

24 months $1195 plus taxes
30 months $1124 plus taxes
36 months $1089 plus taxes


Now I just wonder what a C63 lease would come out to be....if it's less, I will get that.
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      02-28-2008, 07:37 PM   #153
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I will preach for a bit and get off the soap box:

After reading this thread and a few others, I think some of you younger guys need to pass on the M3. The reason being is that if you buy a house now and save; with the release of the next great BMW you will be in a wonderful financial situation where you can buy anything you want, anyway you want with out having to finance for 84 months or leasing for 48.
+1, Way too many posts of people in here stretching their finances to the limit for a car. Not smart.
I guess that is California though, for alot of posters here. People more concerned with what they drive and appearances than making the financially smart decision.

I was renting a townhouse 2 years ago and really wanted to buy a car then. I understood that buying a house first was the better move, however unpopular that was with my car-wanting attitude. Now, two years later I can go after a car with a sizeable downpayment and be completely comfortable.
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      02-28-2008, 07:48 PM   #154
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$68,000 M3 E90 - 10,000 Miles/Year

24 months $1195 plus taxes
30 months $1124 plus taxes
36 months $1089 plus taxes


Now I just wonder what a C63 lease would come out to be....if it's less, I will get that.
That is without tax though, which makes a big difference.
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