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03-17-2010, 04:19 PM | #1 |
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Does this sound right?
European Delivery 2011 E92; 36 month lease; 12 mi./yr.; zero down; MSRP $72,155; Cap cost $64,220:
Residual: 52% Money Factor: .00340 Payment: $1,277.28, including tax Given the lower amount of depreciation versus a domestic purchase, this sounds really high -- even higher than I would expect from a 8.14% interest rate. Anyone know what the payment should be? Thanks. Last edited by dlchasen; 03-17-2010 at 04:20 PM.. Reason: forgot something |
03-17-2010, 05:03 PM | #2 |
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Sorry to post without answering your question, but I have no idea what the payment should be.
Do you prefer leasing? Don't get me wrong, leasing is a fine option for certain cars. But if you can, buy the m3. You will likely end up LOVING the m3. I can only imagine that turning it in after 3yrs would just be heartbreaking! |
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03-17-2010, 05:19 PM | #3 | |
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03-17-2010, 05:24 PM | #4 |
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I can dig it...hopes are you would love it!
At the end of the day it really just depends on your financial situation and what YOU feel like doing. I wasn't trying to force my opinion on you. Apologies if that was how it came off. Best of luck to you in your decision. Either way, hope you get the M! |
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03-17-2010, 06:20 PM | #5 |
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The short answer is, that payment is too high.
Residual rates are generally fixed as they are based upon how well the make holds up on the resale market. The mileage allowance (12k/year) is certainly an adder, as BMW advertises their leases based upon 10k/year. The real cost adder in the numbers you provided appears to be the MF (Money Factor). The MF you quoted is high, at least comparatively speaking. A reasonable MF runs closer to .0025, with an excellent MF being less than .0020. You probably won't get the latter on a premium model like the M3, but, you're paying a very high premium at .0034. Assuming that the monthly payment and residual numbers you provided are correct, you're in affect "borrowing" ~ $26,700, yet your payments (I used $1,175 assuming 8% tax in the $1277 payment) total $42,303. That's a whopping $15,600 or so in "interest" in 3 years! Ouch! Run Forrest Run! By the way, you didn't state how you arrived at the cap cost number. I doubt that's the sell price of the car, so, you had to pay down the number with another chunk of cash. More cash out of pocket. Any way I look at this (as a non-expert), you're payment is way too high. If you can't get a decent MF from BMW, then I suggest you buy the car rather than lease. There are plenty of longer term loan programs that will be as attractive or more so than the lease payment you've been quoted. Even better, you will save big if you buy a lightly used M3 that has already taken the depreciation hit. Not as exciting as buying new with Euro delivery, but, a much, much better scenario than what you've been presented. Good luck with whichever route you choose! -Fred
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03-17-2010, 07:54 PM | #6 |
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Seriously, 1.99 percent interest on a purchase loan for 5 years sounds way better to me. My payment is way less and I'll be able to sell it at at least even money by then. Just a thought...
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03-17-2010, 09:24 PM | #7 |
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I took my exact lease for a 2011 which matches up to BMW's computers to the penny and modified it with your info (residual, mf and cap cost). We're missing some info (money down and drive offs for 1st month's pmt, security, registration and doc fee etc...) so I had to make some assumptions, but if your adjusted cap cost is $65,260 and you were buying in California, where I am, you're payment would be $1229.19. Anything above that and there's some extra beef in there that's being hidden from you. In Florida, there's less tax and associated fees so the payment should actually lower. Probably about $1200, give or take a few. In this scenario, California drive offs would be $3406.83 with no cap reduction.
Truthfully, even though the numbers I gave you are accurate, they're based on a terrible money factor and a residual that's almost as bad. Better credit would get you .0022 on the mf which would make a difference of $138 / month. That's a lot. You're getting killed there. Check out select with your dealer and see how that works out for you. Last edited by buddster; 03-17-2010 at 09:33 PM.. |
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03-17-2010, 09:30 PM | #8 |
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Exactly. You could probably buy it with 0 down for the same money or less and then you could do whatever you want with, not have to worry about mileage. Keep it for three years and then sell fir around what you. Leasing at that payment doesn't make sense IMO.
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03-17-2010, 11:14 PM | #9 |
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that payment is high but i know of much worse.
a good friend of mine has a 2010 e92 with DCT, Tech PKG, and all the goods and is paying ~$1200/month with 5k down
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03-17-2010, 11:46 PM | #10 |
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Guys, thanks for the input.
Fred: The cap cost is the selling price which is $1,000 over ED invoice. Buddster: A .0022 MF would be much more tempting. 5% sounds about right for a new 2011; 8% stinks. I've had leases before with BMWFS (have one now, in fact) and my credit score is excellent. Immiketoo: Are there 1.9% purchase money loans out there on 2011's? In the past I've often gone with leases for the flexibility after three years. I also don't mind losing the diminished value risk in the event of an accident, and the technological risk (like if DCT were to start getting bad long term press). Also, I don't ever get jammed by high mileage. That all said, since everyone thinks the quote is high, perhaps the dealer is jacking up the MF since nothing prevents them from doing that. |
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03-18-2010, 03:57 PM | #11 |
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You're right. It is the money factor that is out of line. I was just quoted a lease yesterday with the phenomenal money factor of .0014 from BMWFS. I am looking at a 2010, so it is most likely some lease deal that I wasn't aware of, but .0034 still sounds very high if your credit is top-tier.
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03-18-2010, 05:52 PM | #12 |
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Does anyone have the official MFs & residuals for the 2011 M3? We don't know if your dealer is charging you a extra MF as profit. Also, you should consider MSD to lower your MF. You can maximize with 7 MSDs to get .00049 reduction in MF.
Oh, don't forget there's a +.0003 adder for ED leases. |
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03-18-2010, 11:58 PM | #13 | |
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Using MSD's and factoring in the ED adder knocks off about 0.46%. On a base of .0022 brings the rate to slightly over 4.8%, which seems more reasonable. Also, if what I read is correct, the lease payment for the second month is waived which saves another $30/mo., approximately -- I'm too tired to translate that into MF terms. |
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03-20-2010, 01:04 PM | #14 | |
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03-28-2010, 06:53 AM | #15 | |
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