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      10-16-2011, 12:23 PM   #1
Hurricane
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2012 E92 M3  [5.00]
What deal would you choose?

I recently ordered a 2012 E92 M3.

The car has everything except cold weather and performance exhaust.

Buy Deal:

$10,000 down

60 month term

$1192/month

Lease Deal:

$2000 T.O.P.

36 month term

15,000 miles per year

977.12 / Month, Residual is 60%

I want to buy the car but I am concerned about the F80. I'm not concerned about buying the F80 but more so on my resale of the car after 5 years. I searched the forums and the internet and read that the E92 really hurt the resale of the E46. What do you think?
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      10-16-2011, 12:32 PM   #2
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what's MSRP on the car?
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      10-16-2011, 12:32 PM   #3
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Originally Posted by Darth One View Post
what's MSRP on the car?
$72,548
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      10-16-2011, 01:01 PM   #4
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Your residual is not accurate. That is not something your dealer can change/negotiate and the 36 month lease residual on the e92 is 56 percent, not 60.
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      10-16-2011, 01:21 PM   #5
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There's no universal right answer, but here's my advice. If you're planning to keep the car at least as long as the loan, in the end buying will likely prove cheaper than making lease payments and then financing the buyout -- plus you won't have to worry about mileage penalties after a few years. On the other hand, if you can take advantage of tax breaks for leasing, that might shift the equation somewhat. Leasing is also a convenient insurance policy if you get into a serious accident because then you don't have to eat the diminished value at resale; that becomes the lessor's problem. Or if you're the type that likes to get a new car relatively frequently, leasing CAN be a way to get the same amount of car for less per month, but just understand that "serial leasing" in the longer term is definitely NOT cheaper than financing and keeping one car; you're ultimately paying more for the benefit of always being in a new car under warranty.

However, please avoid the all too common kneejerk reaction of thinking "I get the same car for a lower payment, leasing's gotta be the better option." That's how dealers get people into leases, and the customer usually doesn't realize their mistake until they want to get another car and realize they have no value on their trade-in or possibly even a negative value if they try to get out of a lease early and (wisely) didn't put a lot of money down.

I leased the car I had before this, bought it out early and a few months later ended up trading it in for my M3, which I financed. For about 2 minutes I couldn't believe how much lower the lease payment would be, but then I realized that that was because I would be using the positive equity in my trade-in as a huge down payment for a strategy that would leave me with no equity at the end of the lease, so that super cheap payment wouldn't be possible the next time -- plus if I'd totaled my M3 on lease, insurance would just pay off the remaining balance on the lease, so the equity from my trade-in would've evaporated. It later did occur to me that maybe if I wanted the next M3 later it might have made more sense to lease after all (I could have averted the risk of totaling by taking cash on the trade-in rather than using it as a down payment), but between the fun I'm having now and being skeptical of the next M3, I'm thinking I just might keep this car for a while. But who knows, people were skeptical of a V8 M3 and we've seen what people think now.
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Last edited by jphughan; 10-16-2011 at 01:39 PM.
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      10-16-2011, 03:27 PM   #6
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Quote:
Originally Posted by jphughan View Post

plus if I'd totaled my M3 on lease, insurance would just pay off the remaining balance on the lease, so the equity from my trade-in would've evaporated.
Generally a good post, but I think you're in error on this point. Insurance pays you for what the car is worth not what you owe on the lease balance. Gap insurance covers you when the lease balance is greater than the value, but the same rule doesn't apply when the car's value exceeds the lease. See single payment lease contracts for a clear example. You really never lose more than if you paid cash for the car.

Last edited by BigHat; 10-16-2011 at 03:41 PM.
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      10-16-2011, 03:47 PM   #7
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I was in the same boat and I went with the leasing option as I own my own business and my CPA said I can recover about $20k of the $32k lease over 3 years in tax savings. Hence, leasing was a better option due to the tax savings. If you were to buy the car, your interests would likely be lower (1.9% via BWW or Pen Fed). If leasing with 7 MSD, you're looking at about 3.5%. I worked out the numbers and with no tax savings, you're going to pay about $3,500 more on a 3 year lease vs. 3 year finance. Don't put anything down but do put down max on the MSD if you can (which will lower your lease interest rate by 1.2% from 4.7% to 3.5%)
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      10-16-2011, 03:54 PM   #8
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Quote:
Originally Posted by Hurricane View Post
$72,548
the 'buy' deal feels a little high. given that you can get around $500 over invoice from the board sponsors, the monthly payment should be much lower if you're getting that kind of a price and putting 10 g's down...assuming you are getting a good (1.9 - 2.9%) interest rate.
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      10-16-2011, 05:55 PM   #9
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Quote:
Originally Posted by BigHat View Post
Generally a good post, but I think you're in error on this point. Insurance pays you for what the car is worth not what you owe on the lease balance. Gap insurance covers you when the lease balance is greater than the value, but the same rule doesn't apply when the car's value exceeds the lease. See single payment lease contracts for a clear example. You really never lose more than if you paid cash for the car.
Single payment leases are a special case, but having researched this more after your comment to see how it's handled on conventional leases, the more I read the more I see advice that you should not put a lot of cash down on a lease because you won't get it back from insurance or anyone else if the car is totaled. The reason is that you don't own the car, so you're not entitled to receiving the full cash value since it wasn't technically your loss. The lessor who DOES own the car doesn't care about the full cash value, just the remaining balance on the lease, which is why that's all insurance will pay for even if the car was worth more.

Come to think of it though, I guess this same risk exists for financing. Let's say you're buying a $70K car and you put down $20K. Let's say the drive-off depreciation makes the car only worth $60K after it leaves the lot and you total it 2 blocks away. Insurance would only pay you $60K, which would be enough to pay off your loan and pocket $10K, but you still lost that other $10K, whereas if you'd put very little down then the insurance payout plus gap insurance would have ensured the loan was paid off even if you owed more than the car was worth, and you wouldn't have lost that down payment cash. Same idea applies if you paid cash for the car upfront. I guess the moral of the story is don't total your car in the early days.
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Last edited by jphughan; 10-16-2011 at 06:38 PM.
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      10-16-2011, 06:46 PM   #10
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Quote:
Originally Posted by Darth One View Post
the 'buy' deal feels a little high. given that you can get around $500 over invoice from the board sponsors, the monthly payment should be much lower if you're getting that kind of a price and putting 10 g's down...assuming you are getting a good (1.9 - 2.9%) interest rate.
I don't think that's the purchase price, other asked what's the MSRP. OP, what is the purchase price? Like Darth One said many of the board sponsors will get you a great deal. Steve Thomas BMW in So Cal offered me $600 over invoice. Ask for Ryan Amico there, he was very helpful. I wanted to buy from them but E90's are all but gone and the one they had didn't have the right options for me.

GLWP
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      10-16-2011, 08:23 PM   #11
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Quote:
Originally Posted by dagolfpro View Post
I don't think that's the purchase price, other asked what's the MSRP. OP, what is the purchase price? Like Darth One said many of the board sponsors will get you a great deal. Steve Thomas BMW in So Cal offered me $600 over invoice. Ask for Ryan Amico there, he was very helpful. I wanted to buy from them but E90's are all but gone and the one they had didn't have the right options for me.

GLWP
you're right, i should have been more clear. i bought a E90 that was about $1.5k less MSRP than the OP's, and was given $600 over invoice. $2k down and 1.9% financing, and my monthly payment is slightly less than his.

that's why i feel his deal is a bit too high, since he's putting down 10 g's. my guess is either they are giving him a high interest rate, or not coming down enough from MSRP...
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      10-22-2011, 12:27 AM   #12
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I would go for the buy deal. What you should be concerned is about the automobile insurance quotes for the M3. It will add to the $1192/month and its going to cost you a lot.
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      10-22-2011, 01:06 PM   #13
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Quote:
Originally Posted by Ateam View Post
Your residual is not accurate. That is not something your dealer can change/negotiate and the 36 month lease residual on the e92 is 56 percent, not 60.
+1 residual is 56% which changes the payment.
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      10-22-2011, 01:07 PM   #14
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Quote:
Originally Posted by BigHat View Post
Quote:
Originally Posted by jphughan View Post

plus if I'd totaled my M3 on lease, insurance would just pay off the remaining balance on the lease, so the equity from my trade-in would've evaporated.
Generally a good post, but I think you're in error on this point. Insurance pays you for what the car is worth not what you owe on the lease balance. Gap insurance covers you when the lease balance is greater than the value, but the same rule doesn't apply when the car's value exceeds the lease. See single payment lease contracts for a clear example. You really never lose more than if you paid cash for the car.
You're absolutely right
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      10-22-2011, 01:15 PM   #15
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Good info to say the least.
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      10-22-2011, 01:20 PM   #16
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Quote:
Originally Posted by Hurricane View Post
I recently ordered a 2012 E92 M3.

The car has everything except cold weather and performance exhaust.

Buy Deal:

$10,000 down

60 month term

$1192/month

Lease Deal:

$2000 T.O.P.

36 month term

15,000 miles per year

977.12 / Month, Residual is 60%

I want to buy the car but I am concerned about the F80. I'm not concerned about buying the F80 but more so on my resale of the car after 5 years. I searched the forums and the internet and read that the E92 really hurt the resale of the E46. What do you think?
Residual at 15,000 miles/year is 56%.
Residual at 12,000 miles/year is 57%.
Residual at 10,000 miles/year is 59%.
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      10-22-2011, 01:40 PM   #17
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Quote:
Originally Posted by athenaemerson View Post
I would go for the buy deal. What you should be concerned is about the automobile insurance quotes for the M3. It will add to the $1192/month and its going to cost you a lot.
Depends on your driving record. The quote for a 2012 M3 e92 was only about $15 more a month than what I was paying for my 2008 328i e93.
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      01-05-2012, 11:38 PM   #18
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Buy the car and try to get as close to invoice as you can.
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