[Joonsup]

I need some help guys. Here's my situation. My car is Here's my situation. I initially had about 15k to put down on the down payment on the car and had planned on leasing it to keep my monthly payments to a little under $400. I used at least 5 different online lease calculators/excel spreadsheet calculators and each one spit out a different amount, but all came out to a little under $400. I know I'm going to get burned by a lot of you guys for even thinking of putting down 15k on a lease. I know it'll be wasted if I end returning it after 3 years, but I am still up in the air of whether or not I want to keep it for more than 3 years and like the idea that I have the option NOT to after 3 years while having small payments each month. The 15k is not my hard earned money, and let's just say it had planned on being a gift to me.

However, now there's a chance I won't see any of that 15k, but I pretty much made up my mind that I will take delivery of the car once it arrives in a couple weeks. I have nowhere near that amount of money to put down as a down payment on a car, so I'm going to throw out the idea of "financing" out the window. I think with a small down payment the monthly on a lease came out to around 750-800/month assuming the MF is .00235, California tax of 8.25%, 58% residual for 15kmiles, Cap Cost of 51875 (including destination fee and options I picked.)

I plan on putting down 5K as my down payment, and I need your guys' advice of whether that's enough to lease, whether I should go another route, or say forget it and wait until I have enough money on the side to be ABLE to throw down 15k on a car whether it be financing or lease. I have a decent job, but I'm not making a six figure salary. Any advice would be greatly appreciated. Thanks in advance and sorry for the long post. I'm stressin out

[extmtnbkr]

IMO, even 5k is way too much to put down on a lease. When leasing I prefer to put no more than $1k down. I'd put 1k down, save the 5 you have to make some payments with and enjoy your new ride.

[Dr_Dirt]

The trouble with the downpayment on a lease is if you happen to total the car in an accident.
The insurance company will pay the lease company and you are left to to find another car. Of course, you will not be credited for your downpayment. You will be starting from scratch again.

[forza1976]

I gotta second that.

I understand the desire to have a lower monthly payment but by putting money down all you are doing is just paying BMW up front for a portion of the monthly payments.

Why give BMW that money when you can just put it in a savings account or some bonds to pull back 5+% on your money and just pay the higher monthly payments each month. Effectively you will do the same if you pay all that cash up front.

I would just invest that money in a fund you can easily withdrawl from to make the additional monthly dollars on the monthly payment. On a side note, I got yelled at by a member of this board on a previous post a couple weeks ago about investing and why everyone always expects a return on investing. Simiple, that's the point of investing. I reckon that person wasn't very good at investing in the first place so that is why they had such a bad attitude towards my point of view.

But it all comes down to what you want to do. Either way you are paying the money up front or in larger monthly installments, simple as that.

[jtmccabe]

If you were to put the $15k down on the lease, you'd get lower payments but you'd also be unnecessarily putting the $15k at risk (if you total the car, it's gone). You'd be a lot better off putting the $15k in a ~5% savings account and drawing from it to make your monthly payments. But I'm sure you've heard all that before.

If you don't get the $15k then you have to find the cheapest (per month) way to get the car, whether that's leasing or financing. So run the numbers and see what gives you the lowest payments, and decide if you can live with those payments. There are banks out there that will give you a 7-year loan, so that may be the cheapest option.

[BavDom]

joon,

what car are you getting? 15K down on a lease and still paying as much as $400 is way too much. My MSRP was 49K, I gave $3K due at signing and pay $510.

I'm going to get a 335i soon and I already negotiated it, fully loaded with $1000 down I'm paying $570.

Your giving 15K, that payment should be completely on the floor. Like in the $100-$200 mark.

However, do consider what the guys are saying about losing it if you crash, your insurance will not cover it. That's what is called a GAP, however, you can purchase GAP coverage at your insurance company or at the BMW once you purchase your car. This will eliminate that threat

[Joonsup]

All very helpful information. I appreciate it. Hopefully more to come. The more I read posts on leasing since I joined these forums, the more reluctant I was to putting a big deposit down on a lease. In the end it seems like I'll be forced to put a smaller down payment at signing, but it seems like that's what 99 percent of you guys would prefer anyway.

[Joonsup]

Originally Posted by BavDom

joon,

what car are you getting? 15K down on a lease and still paying as much as $400 is way too much. My MSRP was 49K, I gave $3K due at signing and pay $510.

I'm going to get a 335i soon and I already negotiated it, fully loaded with $1000 down I'm paying $570.

Your giving 15K, that payment should be completely on the floor. Like in the $100-$200 mark.

However, do consider what the guys are saying about losing it if you crash, your insurance will not cover it. That's what is called a GAP, however, you can purchase GAP coverage at your insurance company or at the BMW once you purchase your car. This will eliminate that threat

I orderd 08 335i coupe. With all the options i picked it comes out to 51100. I agreed to pay MSRP when I first ordered (before i joined this site). Then there's the destination charge of $775. So total is 51875. Not sure if I put that number in the formula when figuring out the residual value or if I use the amount excluding the destination fee. Tax is 8.25%, MF is .00235 (5.64%), Residual value is 58% (15k/year). Did I miss anything? But yeah I think when calculated it comes out to 375 or something/month.

[jtmccabe]

Originally Posted by BavDom

However, do consider what the guys are saying about losing it if you crash, your insurance will not cover it. That's what is called a GAP, however, you can purchase GAP coverage at your insurance company or at the BMW once you purchase your car. This will eliminate that threat

So gap coverage would give him back his $15k in prepayments? I thought it would just cover the difference between the payoff value and the actual value of the car. If the payoff value is $15k less than for a normal lease, would gap coverage even apply?

[phantom330]

why not just do multiple SD if you really want to savor your money? It'll come back to you after the lease, and it'll go to lower your MF. Money down on a lease is not a good idea.

[jtmccabe]

Originally Posted by phantom330

why not just do multiple SD if you really want to savor your money? It'll come back to you after the lease, and it'll go to lower your MF. Money down on a lease is not a good idea.

Agreed.

Still curious about whether gap insurance would cover $15k in cap cost reduction. It would be a waste to pay to insure money that shouldn't need insuring, but I do wonder how this works.

[Joonsup]

Originally Posted by phantom330

why not just do multiple SD if you really want to savor your money? It'll come back to you after the lease, and it'll go to lower your MF. Money down on a lease is not a good idea.

I heard about the multiple SD's, but not sure exactly how much that would affect my monthly. And what are the amounts per SD?

[Joonsup]

Originally Posted by jtmccabe

Agreed.

Still curious about whether gap insurance would cover $15k in cap cost reduction. It would be a waste to pay to insure money that shouldn't need insuring, but I do wonder how this works.

Yeah i always thought it covered the difference between actual and payoff value, meaning you lose whatever down payment you put down?

[BMWE90]

Seriously, you should do European Delivery.

[Joonsup]

Originally Posted by BMWE90

Seriously, you should do European Delivery.

I might have considered that if I knew about it earlier, but I ordered "my car" August 9th and it's due at the dealership in the next couple of weeks. I don't think i can wait much longer. Oh and I found the answer to the multiple SD questions after doing some of this

[Queenskid24]

if you want low pymts in the 400s, you need AT MOST 2-3 down plus fees upfront, save the rest of your $ man.

[Joonsup]

Originally Posted by Queenskid24

if you want low pymts in the 400s, you need AT MOST 2-3 down plus fees upfront, save the rest of your $ man.

But according to all the lease calculators, in order to get a monthly of 400, I'd need about 14k down. If i put down 2 or 3, then payments will be around 700ish.

[2manycars1]

If you are going to put a lot of cash down, why not finance? With 15K down and a long (60 or maybe even 72 months) you can get a low payment. If you decide not to keep your car for any reason, you have no lease obligations (responsible for all payments etc.) and at some point you will at least have an asset, albeit a deprciating one, unlike a lease where you have nothing.

The finance are good, though yur payment wil be higher than the $400.00 you should be able to keep it under $600.00.

[Joonsup]

Originally Posted by 2manycars1

If you are going to put a lot of cash down, why not finance? With 15K down and a long (60 or maybe even 72 months) you can get a low payment. If you decide not to keep your car for any reason, you have no lease obligations (responsible for all payments etc.) and at some point you will at least have an asset, albeit a deprciating one, unlike a lease where you have nothing.

The finance are good, though yur payment wil be higher than the $400.00 you should be able to keep it under $600.00.

Yes that was an option after doing some research, but the situation is that I probably will not have access to put that big of a down payment. Realistically I'll probably be able to put down 5k. If I finance with putting that little down, the monthly will be very high.

[valdeztke]

A) pick a car with GOOD rates - high residual and low MF.

B) Demand the MF buy rate

C) Ask for 500 over invoice

D) MSD's - lower your rate even more so

E) Liquid equity should NEVER be put into a car...PERIOD


Cap cost reduction is a baaaaaaad idea.

[valdeztke]

Originally Posted by joonsup

But according to all the lease calculators, in order to get a monthly of 400, I'd need about 14k down. If i put down 2 or 3, then payments will be around 700ish.

Where the bleep are you getting this info?

Email me at juan.barnett@gmail.com I'll help ya out man.