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      08-26-2010, 12:59 AM   #1
m3rocks
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Lease Question/down payment etc

Question:

1) I want to put trade in two cars, and possibly cash to establish a good size down payment. How does this work in terms of GAP with BMW leases? I don't want a big car payment, the advantage to this lease is I can have a smaller payment than buying by far.

Last edited by m3rocks; 08-26-2010 at 01:53 AM.
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      08-26-2010, 05:14 AM   #2
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Let me get this straight...you are trading in two cars for a lease?
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      08-27-2010, 01:22 PM   #3
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I'm curious what it would cost to get an M3 sedan payment down to 350-400 a month on a 36 month 10k a year lease. Just wondering if anyone here has taken this approach and how it worked out. Im aware of the whole sign and drive thing with leases and taking 800-900 a month, but id rather put money up front (and before anyone says that whole buy thing, to get a 65k car down to 400 a month would require like 40k or more)
Also on a lease do you get hit with car tax every year in car tax states?

Last edited by m3rocks; 08-27-2010 at 01:27 PM.
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      08-27-2010, 01:57 PM   #4
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It of course will depend on your option selection. If the MSRP is $70k, invoice is about $64,500, so your purchase price say with a $1,000 over invoice deal is $65,500. BMWFS lease residual for 3yr/10k on the sedan is 55%, and their money factor is .0018 so your monthly lease payment with nothing down except for fees would be $939.60. As a general rule, for a 3 yr lease, each $1,000 down payment reduces your monthly payment by $30. So to get to $400/month would require $939.6 - $400 / $30 = $17,987.00 down payment. However if the car is totaled while you are leasing it, all of that downpayment will almost for sure be wiped out. GAP insurance covers the difference between market value and your lease balance, if you put money down, you don't get it back in the event the car is destroyed. As an alternative you can use multiple security deposits ("MSD"s) to help a little bit via reduction in the money factor. I wouldn't recommend putting a lot down on a lease. If you need to finance the car, consider teh BMWFS loans. They have 60-month 1.9% deals right now. I'm betting your monthly payment will be about the same as a lease and you "own" the car so if you want to put money down to reduce the payment, in theory you get it back in teh event the car is destroyed (minus depreciation of course).
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      08-27-2010, 02:02 PM   #5
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great information, exactly what I was looking to find out. I didn't realize GAP protection wasn't a full 100% protection of your down payment. At worst I'd have my old car to trade which is 5k....that wouldn't be out of pocket, just the used car. 17 is a lot to risk, but buying brand new and driving off the lot is a huge loss day 1 im sure too.
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      08-27-2010, 02:48 PM   #6
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I would put multiple security deposits. Then the difference put it towards the downpayment. WHy? security deposits are refundable; provided you take care of the car when you return it.
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      08-27-2010, 03:31 PM   #7
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Quote:
Originally Posted by eatrach73 View Post
I would put multiple security deposits. Then the difference put it towards the downpayment. WHy? security deposits are refundable; provided you take care of the car when you return it.
The only thing is if you want to get out of lease early and have someone take over your lease, I don't think you get you'er MSDs back. Not sure how thats works out. I was gonna do MSDs but changed my mind, I think .
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      08-27-2010, 04:36 PM   #8
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Quote:
Originally Posted by ring007 View Post
It of course will depend on your option selection. If the MSRP is $70k, invoice is about $64,500, so your purchase price say with a $1,000 over invoice deal is $65,500. BMWFS lease residual for 3yr/10k on the sedan is 55%, and their money factor is .0018 so your monthly lease payment with nothing down except for fees would be $939.60. As a general rule, for a 3 yr lease, each $1,000 down payment reduces your monthly payment by $30. So to get to $400/month would require $939.6 - $400 / $30 = $17,987.00 down payment. However if the car is totaled while you are leasing it, all of that downpayment will almost for sure be wiped out. GAP insurance covers the difference between market value and your lease balance, if you put money down, you don't get it back in the event the car is destroyed. As an alternative you can use multiple security deposits ("MSD"s) to help a little bit via reduction in the money factor. I wouldn't recommend putting a lot down on a lease. If you need to finance the car, consider teh BMWFS loans. They have 60-month 1.9% deals right now. I'm betting your monthly payment will be about the same as a lease and you "own" the car so if you want to put money down to reduce the payment, in theory you get it back in teh event the car is destroyed (minus depreciation of course).

+1
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      08-27-2010, 05:05 PM   #9
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Why not sell you're cars you will get more then dealer will give you. Also on a lease putting down money other then fees is a no no. Whatever you get on your cars divide it by 36 and that's the amount you can put towards lease. If you got 10 k for both cars you have $277 towards you're lease, if you got a loaded vert for about $850 you have $575 to go you said you want to pay $400 ,leaves 175 to go on a coupe it will cost more. If you are strapped maybe a M3 you are not ready for yet. If you put MSDs it may bring y down 75 bucks. Leaving you with 1ben to go. You are looking at 800 plus a month depending on options vert is cheaper on a lease.
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      08-27-2010, 05:14 PM   #10
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Best option is apparently to put both cars in as trade value which should be around 10k nothing out of pocket and take the payment for 36 months 10k per month. This way im in the M3 sedan fairly well equipped with no money out of pocket. The pain in the back side will be in 3 years when I need another car and have no trade..but I bought without a trade twice already, so I guess I'll have to either re-lease something else, or buy something reasonable.
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      08-27-2010, 05:36 PM   #11
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Putting 10k on lease is not a good move,and that will in no way bring payment anywhere near 400. I don't think you are ready for a M right now jmho. Why would you give dealer 10 k to borrow a car and God forbid its stolen or totaled while parked. That's ten k out the window. I think you should rethink ,only my opinion.
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      08-27-2010, 09:39 PM   #12
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Quote:
Originally Posted by Dice13 View Post
The only thing is if you want to get out of lease early and have someone take over your lease, I don't think you get you'er MSDs back. Not sure how thats works out. I was gonna do MSDs but changed my mind, I think .
true. But he didn't mention his long term plan. I wouldn't get out of the lease early.
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      08-28-2010, 09:40 AM   #13
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Quote:
Originally Posted by Dice13 View Post
The only thing is if you want to get out of lease early and have someone take over your lease, I don't think you get you'er MSDs back. Not sure how thats works out. I was gonna do MSDs but changed my mind, I think .
Correct, if you want out of your lease early via transfer you would have to negotiate the MSD repayment from the person assuming the lease.

Quote:
Originally Posted by Dice13 View Post
Why not sell you're cars you will get more then dealer will give you. Also on a lease putting down money other then fees is a no no. Whatever you get on your cars divide it by 36 and that's the amount you can put towards lease. If you got 10 k for both cars you have $277 towards you're lease, if you got a loaded vert for about $850 you have $575 to go you said you want to pay $400 ,leaves 175 to go on a coupe it will cost more. If you are strapped maybe a M3 you are not ready for yet. If you put MSDs it may bring y down 75 bucks. Leaving you with 1ben to go. You are looking at 800 plus a month depending on options vert is cheaper on a lease.
He is correct, the BMWFS lease residual and money factor are a LOT more attractive for the convert.
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      08-31-2010, 11:31 AM   #14
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From what I understand, leasing a car (especially a BMW) is good simply because how bad the depreciation is once the warranty is over. The only model that I would consider owning would be an ///M edition considering the marque.

Regarding the benefits of a lease: You'll be driving a brand new BMW with warranty/full maintenance for 3 years plus leasing eliminates your liability in the event the car is totalled or damaged given GAP insurance is built in to your monthly payment.

As time goes by, it doesn't make a whole lot of sense to own considering the present value of money i.e. driving a car with only $2,000 down (towards fees and security deposit) as opposed to $10,000 (if financed) is smart. You can gain interest (even if its a measly 1%) on your hard earned money sitting in the bank.

We can all agree that buying a car is dead money unlike a house which has a chance of appreciating.
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      08-31-2010, 12:29 PM   #15
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With that kind of money down on a lease it would be cheaper to do a 2 year vs. 3 year.
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