[RyanE92]

Originally Posted by homeslice

Ryan

What would suggest my payment be around then for a 36 month lease for a base 335 coupe manual?

Its hard for me to say because I do not have all the numbers that you are using nor do I know right now what MF's and residuals are set at for this vehicle.

If I assume that you are paying MSRP with no cap reduction, that your 2k includes acquisition, first payment and security deposit, and plug in an MF of .00225, residual of 65% and sales tax of 7%, your payment should be around $593. My MF and residual are based on what I understand might be available for '06 325i's. The numbers for your car may be higher because (1) BMWFS is not dealing on 335i leases yet so a good MF and/or residual is not available, or (2) your dealer is marking up the MF.

I probably shouldn't have said you were getting reamed - my thinking when I wrote that is simply that more favorable deals can be had on '06's (negotiation from MSRP and decent MF's). My perspective is different because I just closed a deal on a loaded '06 325i for 36mo/12k miles for $535/month with $1200 down. If it is worth it to you to pay a premium to be the first on the block with the new 335i then feel free to go for it, but make sure you understand what you are paying (take a look at the calculator on leaseguide.com to learn how to manipulate the numbers).

[Gitta]

Wow these payments are wicked. Are the lease deals really bad right now?

[homeslice]

thanks for all your input fellas. Good to know i can come to this forum and get good advice.

[gohawks23]

Originally Posted by phuwok

Homeslice:

To give you an idea of where you stand with your lease number. I live outside Philadelphia. Not sure if these numbers are realistic for the left coast.

I ordered a 335 w/ Monaco/saddle, Nav, Steptronic, heated seats, premium package, Vehicle cost is $48095.00. Delivery some time in October.

I drive 18k miles per year and put 0 down. With tax, my lease payment will be $747.89 pre-tax. Monthly payment tax included is $815.20.

With the extra 3000 miles I will put on the car there is a penalty built into the lease cost of $1350.00 for the 36 months or $37.50 per month. You don't have this issue and are still paying a premium + $2k at the table.

I think you need this guy to sharpen his pencil or shop around to another dealer. Assuming you secured the order with a $500 deposit, you can always put another order in with a new dealer and get the original deposit back. You will likely wait longer for the car, but a lower number is worth the time. You can walk with your deposit up until the time you sign and the dealer knows it. Let him know you're not sure about his numbers and seriously shop it. The competing dealers should work hard to get the business from the other guy. Also, tell them you don't want to put anything down. See what happens. Why should they get the use of your money on an asset they will own and re-sell?

Since you have low miles you are a good candidate for either option. As others have said, you need to run some numbers and compare. I prefer to lease because I kill the miles and buying new would simply cost me too much money in depreciation. Good luck!

Additional miles actually reduce your residual...the formula is (additional term miles) times $0.15...or in your case 9000 times $0.15

Again, don't shop on payment...shop on sales price (cap cost), acquisition fee (dealer cost of 625), MF (dealers can mark up 0.0004) and verify residual.

Make an offer worded like this (you can change the numbers but I think this situation will be most realistic)...and you will come off as knowing exactly what you are doing..."I will pay 2000 over invoice (no money down!) with acquisition fee at cost and MF at 0.0002 over your buy rate". After you have cap (no money down!), acquisiton and MF mark up figures in writing let him know you will be putting down 7 MSD's also to furher reduce your MF.

Lastly, MAKE SURE you know each and every number that makes up your lease....MAKE SURE you can calculate it yourself.

[homeslice]

Originally Posted by greginaz1

Additional miles actually reduce your residual...the formula is (additional term miles) times $0.15...or in your case 9000 times $0.15

Again, don't shop on payment...shop on sales price (cap cost), acquisition fee (dealer cost of 625), MF (dealers can mark up 0.0004) and verify residual.

Make an offer worded like this (you can change the numbers but I think this situation will be most realistic)...and you will come off as knowing exactly what you are doing..."I will pay 2000 over invoice (no money down!) with acquisition fee at cost and MF at 0.0002 over your buy rate". After you have cap (no money down!), acquisiton and MF mark up figures in writing let him know you will be putting down 7 MSD's also to furher reduce your MF.

Lastly, MAKE SURE you know each and every number that makes up your lease....MAKE SURE you can calculate it yourself.

printed this out...gonna do my homework. Thanks again

[gohawks23]

Originally Posted by homeslice

printed this out...gonna do my homework. Thanks again

No problem.

Check these links out too:

http://www.bimmerfest.com/forums/sho...d.php?t=146090
http://www.bimmerfest.com/forums/sho...d.php?t=150794

[Got-BMW?]

Originally Posted by greginaz1

Dude, you just don't get it, this is an ignorant comment with not enough information to determine what is the best way to go...if you pay cash you own it but what is that car worth after three years?...how much did you pay for it?...the difference is how much it cost you and then you have to add the value of the investment $ your cash would have earned if you hadn't have put it into a car...then you can compare that to the lease cost over the same time period...if you get a loan it will have a payoff amount after 3 years just like a lease does...and unlike a lease if the car has tanked in value you are still on the hook because you 'own' it...a lot of auto loans put the 'owner' in negative equity positions...and if by chance your car is worth more at lease end than the residual you can buy it and sell it yourself and pocket that coin...if not you just turn it in and walk away.

If you keep cars for 5-7 years or more cash and loans make more sense than leases.

Making two sentence blanket statements is a lame way to prove your point as numbers need to be run for all situations.

For example, I can pay cash for any car that BMW makes but depending on the lease rate and residuals why would I want to put that cash into owning a depreciating asset if the lease rate is less than what I can get for my money elsewhere and the residual is inflated such that BMW is subsidizing the car cost?

You need to understand leases and obviously you don't...read up on them and post intelligently next time.

Thanks.

Dude,

I have done my homework, read up on them and in this case "which I am posting about, IT IS A BAD DEAL!" On occasion there is a lease deal out there but typically they aren't the best way to go especially in his case.

Originally Posted by greginaz1

if by chance your car is worth more at lease end than the residual you can buy it and sell it yourself and pocket that coin

Mr. Intelligence, show me a lease deal that you have done this with! Hardly ever is this the case and even when it is you are talking pennies. Don't make it out to be $$$$.$$ because it's NOT....

[ckm1515]

Mr. Intelligence, show me a lease deal that you have done this with! Hardly ever is this the case and even when it is you are talking pennies. Don't make it out to be $$$$.$$ because it's NOT.... [/QUOTE]

I actually did this several years back. Wife leased a 1998 323 and barely drove it. When lease matured, vehicle had 15K miles and alloted was 45K. Residual was like $23K and I purchased vehicle and sold privately for almost $26K, so it can be done.

[Got-BMW?]

So you are telling me you sold a 2 or 3 year old 98' 323 for $26k when MSRP NEW was only around $29k.....? Hard to believe esp a 323!

[ckm1515]

Originally Posted by Got-BMW?

So you are telling me you sold a 2 or 3 year old 98' 323 for $26k when MSRP NEW was only around $29k.....? Hard to believe esp a 323!

It was more than that, somewhere in the mid 30's new fully loaded with all the bells and whistles. Person received a 3 year old 'brand' new car with 15K for almost 10K less than what a dealership would charge.

This can be done under the right conditions. Normally, no, as most people use up the alloted mileage, have minor damage, etc.

[gohawks23]

Originally Posted by Got-BMW?

Dude,

I have done my homework, read up on them and in this case "which I am posting about, IT IS A BAD DEAL!" On occasion there is a lease deal out there but typically they aren't the best way to go especially in his case.




Mr. Intelligence, show me a lease deal that you have done this with! Hardly ever is this the case and even when it is you are talking pennies. Don't make it out to be $$$$.$$ because it's NOT....

For BMW's leasing IS typically the way you want to go...for GM products probably not...BMW FS has traditionally offered competitive MF's and very attractive residuals.

I actually did it a couple times...on a mid 90's Mustang GT convertible believe it or not and an early 90's Maxima...truth be told both cars were in mint shape and we had low miles on them.

PS, like it or not your two sentence answer whining about paying $600 a month and not 'owning' anything didn't help the guy out one bit.

[Got-BMW?]

Originally Posted by greginaz1

PS, like it or not your two sentence answer whining about paying $600 a month and not 'owning' anything didn't help the guy out one bit.

I was only stating that he could own it for $10 more a month. Just an FYI for the guy since most people just get caught up in the payment these days and not the big picture....

[gohawks23]

Originally Posted by Got-BMW?

I was only stating that he could own it for $10 more a month. Just an FYI for the guy since most people just get caught up in the payment these days and not the big picture....

Sorry, it is just my pet peeve when I hear 'own'....to me the only way this happens is if you have a zero balance on your car.

People throw this 'own' term around...own what exactly? A depreciating asset? What is so great about that? You might own it if you actually make all the payments over the entire loan term and if you keep it after that you may come out ahead but you may also be liable for more out of warranty stuff too.

Unless you pay cash both leases and loans have payoffs so the bank actually owns the car in each case...leasing is just another variation of financing with a step in the middle either allowing you to return it with no penalties or pay/finance the residual so you can actually own it at some point.

[BK]

Originally Posted by greginaz1

People throw this 'own' term around...own what exactly? A depreciating asset? What is so great about that? You might own it if you actually make all the payments over the entire loan term and if you keep it after that you may come out ahead but you may also be liable for more out of warranty stuff too.

greginaz1 - if you buy it (even financed) then you own it. The lender just has a lien on the title. There is a difference. But I do get your point and you are 100% correct that sometimes a lease is better than a purchase, just as sometimes a purchase is better than a lease. It depends on what deal you get in either case.

As I mentioned before, anyone considering the choice should read up on other threads, where this subject has been beaten to death.

One thing I wanted to mention, though, was the concept of a “depreciating asset.” The fact that cars depreciate rapidly is often thrown out as a good reason to lease and a bad reason to buy. Of course cars depreciate; that doesn’t make it a bad idea to buy them. Whether you lease or buy, you pay for the depreciation. Saying “because a car depreciates, you should lease rather than buy” is a red herring. All that matters is what sort of deal you get. If someone does his research, he can get a good deal either way.

[gohawks23]

Originally Posted by BK

greginaz1 - if you buy it (even financed) then you own it. The lender just has a lien on the title. There is a difference. But I do get your point and you are 100% correct that sometimes a lease is better than a purchase, just as sometimes a purchase is better than a lease. It depends on what deal you get in either case.

As I mentioned before, anyone considering the choice should read up on other threads, where this subject has been beaten to death.

One thing I wanted to mention, though, was the concept of a “depreciating asset.” The fact that cars depreciate rapidly is often thrown out as a good reason to lease and a bad reason to buy. Of course cars depreciate; that doesn’t make it a bad idea to buy them. Whether you lease or buy, you pay for the depreciation. Saying “because a car depreciates, you should lease rather than buy” is a red herring. All that matters is what sort of deal you get. If someone does his research, he can get a good deal either way.

Fair points...I take owning to mean a free/clear title...here in AZ you don't even get the title unless you truly own the car.

A car is all about cost...cash costs vs. loan costs vs. lease costs as applied to your particular situation...and this is why it is relatively complicated and all three scenarios must be compared...there is no easy answer and it can take quite awhile to compile the data needed to do a full analysis.

In my particular case the cost of paying cash is actually slightly less than the lease costs...but I'm not so sure I really want to actually own a first year turbo past warranty.

[RyanE92]

Originally Posted by greginaz1

Unless you pay cash both leases and loans have payoffs so the bank actually owns the car in each case...leasing is just another variation of financing with a step in the middle either allowing you to return it with no penalties or pay/finance the residual so you can actually own it at some point.

Exactly. I am about to enter my first lease and one of the ways I thought about the two types of transactions is as a way of allocating risk. In a lease, the lessor is assuming the risk associated with depreciation (the term risk should be used loosely because it is very calculated and unlikely to end unfavorably to the lessor). In other words, the lessee fixes his cost up front and the lessor wins or loses depending on how fair market value of the vehicle compares to residual at the end of the term.

With a purchase, the buyer assumes the risk of depreciation. The seller gets all of his money up front and the buyer deals with the unknown of the car's resale value in the future. For a cash buyer or one that keeps the car for a long time, this is not a big deal because we all know cars depreciate and its just a matter of how much. But when a vehicle is financed, the risk is complicated by the possibility you will be upside down. A lease allows those of us who turnover our vehicles more quickly to buy our way out of this risk.

[gohawks23]

Originally Posted by RyanE90

Exactly. I am about to enter my first lease and one of the ways I thought about the two types of transactions is as a way of allocating risk. In a lease, the lessor is assuming the risk associated with depreciation (the term risk should be used loosely because it is very calculated and unlikely to end unfavorably to the lessor). In other words, the lessee fixes his cost up front and the lessor wins or loses depending on how fair market value of the vehicle compares to residual at the end of the term.

With a purchase, the buyer assumes the risk of depreciation. The seller gets all of his money up front and the buyer deals with the unknown of the car's resale value in the future. For a cash buyer or one that keeps the car for a long time, this is not a big deal because we all know cars depreciate and its just a matter of how much. But when a vehicle is financed, the risk is complicated by the possibility you will be upside down. A lease allows those of us who turnover our vehicles more quickly to buy our way out of this risk.

Well stated.

Plus, have a warranty for the whole time we have the car...plus not have to pay the entire tax fee up front...personally, I created an Excel spreadsheet (not slick or polished) to compare lease costs vs. cash costs and in the case of my E90 335 using current E92 335 rates with 2% added to residual and .0002 subtracted from MF cash comes out to be the better deal by a little over $1000...this is mostly due to the fact MF's are not as attractive as they were...

EDIT, after messing with the numbers some more and some errors on my spreadsheet cash cost is pretty much equalling lease cost if my MF/residual assumptions above prove valid.