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View Poll Results: Did you lease your M3 with the intention of buying it at the end? | |||
Yes, I leased with the intention to buy it! | 25 | 51.02% | |
No, I just leased it just to lease it. | 24 | 48.98% | |
Voters: 49. You may not vote on this poll |
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10-16-2012, 08:35 AM | #23 | |||
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For those of you guys that've figured out the financials, it might not be that much extra money to lease then buyout, so I guess it's all good. Just my $0.02. Last edited by Foodle; 10-16-2012 at 08:42 PM.. |
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10-16-2012, 08:37 AM | #24 |
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I did the math out one day it seems it will cost alot more if you lease then re-finance the buy out in the end.
if you lease it for 3 years... then write a check at lease end , you are only spending a few extra thousand dollars |
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10-16-2012, 08:46 AM | #25 |
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No one so far has said that leasing is cheaper than buying. Many of the people leasing instead of buying cannot afford to buy new. When the lease is up, they can afford to buy used. They spend a little more, probably in the 5% to 10% range, but they get the car they wanted.
Another option to consider is buying a CPO used car. I have leased and bought CPO used (and also bought non CPO used). There are some very nice used cars out there for 2/3 to 3/4 the price of new. After 3 years, you could probably still sell it for half of what you paid for it. |
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10-16-2012, 09:05 AM | #26 | |
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10-16-2012, 09:25 AM | #27 | |
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My wife's 335 had a buy out of $28,500 at the end of the lease. My sales guy (Shaw New Century), bought the car from BMWFS for $23,000 and sold it to me for around $24,250 after an "inspection" that was maybe 30 minutes since the car was fine. He made $1,000, the service people made around $250 and I saved around 4,000. .
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10-16-2012, 08:36 PM | #28 |
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Leasing definitely has its advantages. As has already been mentioned, sometimes in the form of taxes (though other states make it highly DISadvantageous to lease), and yes, it can also provide peace of mind because if the car suffers diminished value due to accidents or just a bad market, that's not your problem. On the other hand, if the car is worth MORE than the residual value when you turn it in, you can often bargain to get some of that cash, or just sell it privately, buy out the car, and pocket the difference.
So, IF (and that's a big "if") the added cost of leasing plus buying out later compared to financing from the beginning is worth those perks to you, then by all means, lease the car. Just don't be fooled by the lower monthly payment into thinking it's actually cheaper. Leasing can also be convenient if you expect to be making a lot more in a few years, e.g. leasing a car right out of college to keep payments down since you're not making much, but expecting to make enough to support financing later -- I did that, but definitely not with an M3. However, be aware of one MAJOR pitfall with a lease. Tempting though it may be to reduce your monthly payment, do NOT put ANY more money down upfront than you absolutely have to. The reason is that if you total a leased car, insurance will only pay the remaining balance on the lease plus the buyout value, NOT fair market value on the car. So if you put $20K down and total it driving off the lot, that's $20K you'll never see again (on top of the drive-off depreciation). The reason it works that way is because on a lease, you don't own the car, so technically it's not your loss that insurance has to cover. Insurance is only obligated to make the owner of the car whole again, i.e. the bank, BMWFS, whatever, so any part of the car's value that the owner has already received as payments from you is just making your insurance's life easier. Another word of advice: Don't trade in a car in which you have equity to lease another one, or if you must, take the trade-in value as a check rather than using it as a cap cost reduction on a lease. That's partly because of the risk I mentioned above; if the trade-in value is used as a cap cost reduction, it works like a down payment, so if you total the leased car, then insurance will get you out of the lease, but you'll have no car and no money from insurance to get another one. But in addition to that, if the trade-in value of your car allowed you to get a lease payment of let's say $800/month for an M3, you might think "Sweet, I can drive an M3 for $800/month", but when the time comes to turn that in, you won't be able to get another car anything like the M3 for that amount since that next time you WON'T have equity in the car you're trading in.
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10-16-2012, 10:39 PM | #29 |
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I haven't seen this mentioned in this thread. If you lease, even if you cannot write off the depreciation portion of your lease payment, in CA, you only pay taxes on your lease payment whereas if you purchase you pay taxes on the entire purchase price. If you plan to hold the car for a short period of time this could have a very large effect.
Additionally, in a lease, the tax payment is made monthly on top of your lease payment as opposed to paid up front so there is a time-value of money savings as well. Becase of the tax incentives of leasing, assuming the cost of money (money factor vs. interest rate) is similar I'm not sure how owning would ever come out ahead? Does anyone know where I can get BMWs most aggressive current lease (money factor, drive off) and finance rates (down payment, interest rate) for the M3? |
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10-16-2012, 10:47 PM | #30 | |||
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Here are additional info on MSD. http://www.m3post.com/forums/showthr...&highlight=msd http://www.m3post.com/forums/showthr...&highlight=msd http://www.m3post.com/forums/showthr...&highlight=msd I hope this helps.
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10-16-2012, 10:49 PM | #31 | |
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I know in the the case where FMV < outstanding balance you would be liable for the delta. This is where GAP insurance comes in. GAP insurance will cover that delta. If FMV > outstanding balance then I thought your insurance should pay you FMV. The lien holder will be primary then anything leftover should go to you. If this isnt the case then I learned something new today. |
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10-17-2012, 02:45 AM | #32 |
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Leasing is cheaper if you own a company, and can write off the lease expense.
Why? Because you are using pre-taxed dollar (more buying power) to pay for the lease. If you are financing, more than likely you are using your taxed income to finance, and that has less buying power. There's a reason 50% of all BMW/Mercedes on the road are leased, because it makes sense for the financially affluent. |
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10-17-2012, 08:21 AM | #33 | |
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Imagine if you were renting an apartment and prepaid several months for some reason, and the apartment burned down one month in. The owner's insurance company isn't going to pay YOU anything in that case. You might be able to get those lost months' rent back from the owner, but I've never heard of that happening with banks or BMWFS on car lease payments.
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10-17-2012, 09:28 AM | #34 |
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My income is "lumpy" so I leased to keep my fixed costs low. Having said that, I will likely be able to pay off the entire balance when the lease is up. It's not really a "what can I afford" issue, but what is more comfortable for me, given the uncertainty of said "lumps."
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11-05-2012, 05:24 PM | #35 | |
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11-05-2012, 05:47 PM | #36 | |
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11-05-2012, 05:51 PM | #37 | |
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11-05-2012, 05:56 PM | #38 | |
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They don't want to be stuck with the car and have to deal with taking it to auction to move the car. As for getting the numbers, you need an honest sales person who will not get too greedy. .
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Let me get this straight... You are swapping out parts designed by some of the top engineers in the world because some guys sponsored by a company told you it's "better??" But when you ask the same guy about tracking, "oh no, I have a kid now" or "I just detailed my car." or "i just got new tires."
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11-05-2012, 09:23 PM | #39 | |
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Or do I start the negotiation with the sales person at the dealership? |
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11-05-2012, 09:28 PM | #40 |
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Residual is a percentage of MSRP. One reason to lease is you get the holiday credit and the loyalty credit ( if you qualify ). If you buy and finance with a credit union you can get 1.49% financing. A lease with max msds is 1.82%. The $2250 offsets the $725 lease fee and a good bit of the interest difference. So for very little extra money you get the right to walk away at the end of the lease or possibly buy the car for less than the residual.
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11-05-2012, 10:14 PM | #41 | |
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Let me get this straight... You are swapping out parts designed by some of the top engineers in the world because some guys sponsored by a company told you it's "better??" But when you ask the same guy about tracking, "oh no, I have a kid now" or "I just detailed my car." or "i just got new tires."
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11-06-2012, 02:39 PM | #42 |
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I voted lease then purchase since I did that with 2 of my company cars. My M cars I purchased since they are my toys
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11-06-2012, 03:11 PM | #43 |
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I wasn't sure if I would want my car (or its payments) for more than 3 years so I'm leasing. I think there is a very high probability I will buy it out in Feb '14.
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