[nightops]

Originally Posted by itsbrokeagain

+1. I got approved for 3.2% three months ago..however they couldnt find a car for me until last month..and the rate had gone up to 3.8%. I told them I refused to pay that because we had signed the deal 2 months prior when it was lower....and I bugged them with the 'I work for you guys and you can't keep a deal? what the heck...' and the 'I'll go to another dealership or badmouth you'.

Hey it takes what it takes to get a deal. They can be stingy sometimes so I'm just stingy right back at them. They get scared and back off

I leased only because they gave us employees a good program (Im payin $387 a month for a $45.5k car with 15k a year in miles), and Im already over my mileage allotment per month by double (I got 3100 miles on the car already )...and I havent even had the car two months yet. At this rate, if I turn it in, I'll be owing like $4000 in overmileage fees in two years. So I plan to buy it out for a daily driver (I do still plan on getting an older 911 at some point), and at that time, paying 30k for a car should easily be within my budget. If not? Sell it.

thats a really low payment - what did you have to put down? I feel you on the mileage with this car. I've already put 1900mi and I've had it like 3 weeks! ( a trip up the coast accounting for about a thousand, but the car makes me want to take more roadtrips!) hopefull I'll be out of the country for some time and won't be able to rack up too many miles...

[gerbs]

Well, an okay alternative if you are in IL/TX is to just take out a very long loan (read: 72mo) and buy the car. Since the #1 advantage of leasing is that your down payment is minimal, doing this somewhat replicates that.

Still leaves you will the hassles of buying though - without having the luxuries of leasing - but whatever.

[Enkur]

I did owners choice back in Feb and I got a rate of 5.2%. For the same amount of down my payments actually came out to be lower than lease!
I think I came out ahead because for lease there was the ED MF adder, full dealer MF markup of 0.0004 and the $825 acquisition fee.

there is no acq fee in owners choice and you get sales tax credit the next time around when you decide to "sell" the car back to BMWFS and get in to a new one.

Originally Posted by TX Coupe

I have considered that route. You have a higher interest rate (I think 6.5%), so the monthly rate is slightly higher than a lease. I am going into the delivery with a blank check for purchase, and go over all of my options there. I can always fall back on the blank check for purchase at 6.05%

[Crazy Bimmer]

Is there a "base rate" for owners choice like there is for leasing?

Wonder what it is for May

[ATG]

My lease rate is something like 2.4% (with 7 security deposits), I paid 0 down, and my payment is $580 a month for a car with 48k MSRP.

[TX Coupe]

Originally Posted by Enkur

I did owners choice back in Feb and I got a rate of 5.2%. For the same amount of down my payments actually came out to be lower than lease!
I think I came out ahead because for lease there was the ED MF adder, full dealer MF markup of 0.0004 and the $825 acquisition fee.

there is no acq fee in owners choice and you get sales tax credit the next time around when you decide to "sell" the car back to BMWFS and get in to a new one.

That's good to know. I figured the APR for owners choice is probably "adjustable" to a point, at the dealers discretion. I am hoping to do some negotiating at the delivery. I always have my preapproved loan to fall back on if they don't want to negotiate.

My lease rate was too high too(MF Markup of .0004 also)

[Dr_Dirt]

---Leasing Pitfalls---
If you lease make sure you don't put any money down. If you wreck and total the car, BMW gets the insurance money and you will be out of a car and your downpayment. Oh yeah when you lease you need the additional GAP insurance to pay off the lease to the end in the event of a total.
You may not be able to leave the country and some lemon laws don't apply to leased vehicles.

hmmm... "owners choice" is sounding better all the time.

[nightops]

Originally Posted by Dr_Dirt

---Leasing Pitfalls---
If you lease make sure you don't put any money down. If you wreck and total the car, BMW gets the insurance money and you will be out of a car and your downpayment. Oh yeah when you lease you need the additional GAP insurance to pay off the lease to the end in the event of a total.
You may not be able to leave the country and some lemon laws don't apply to leased vehicles.

hmmm... "owners choice" is sounding better all the time.

huh- didn't know that about losing the downpayment thing. The good thing is if you do get into an accident you don't have to keep the car and you can turn it in once the lease is over.

[Enkur]

yes there is no GAP insurance requirement on OC.

one down side to OC is that the payments are not deductable as in the case of leasing for business owners.

Originally Posted by Dr_Dirt

---Leasing Pitfalls---
If you lease make sure you don't put any money down. If you wreck and total the car, BMW gets the insurance money and you will be out of a car and your downpayment. Oh yeah when you lease you need the additional GAP insurance to pay off the lease to the end in the event of a total.
You may not be able to leave the country and some lemon laws don't apply to leased vehicles.

hmmm... "owners choice" is sounding better all the time.

[jbake]

don't forget that you can also roll your lease over into another BMW at the end of your lease for a good deal when the lease is up

[Lassaxi]

Originally Posted by Magna3

May 2007 BMW Money Factor
335 Sedan
36 Month – Residual 61% of MSRP – .00175 Base Rate


MSRP 45,000
Price paid 42,500

Lease
$0 down

Lease payment 537.90 + 44.31 tax (581.40)
Total cost 21,680
Residual 27,450

A 48 month loan for 27,450 @ 7% interest = 657.32 a month / 31,536 total
(used car loans are typically 1% to 2% higher then new car loan rates)

Sales tax on 27,250 @ 8.25% = 2196

Total payments: 84 months (36 @ 581.40, 48 @ 657.32)

Total cost: 55,412

Buy
Price Paid 42,500
72 month loan @ 6%
O Down
Total payments: 72 @ 774.00

Total cost: 55,792 including tax
+ buying now locks in the interest rate, no telling where interest rates will be in three years

Where’s the huge savings?

The point I was making earlier is that the savings comes if you don't finance the residual at the end of the lease, but pay cash instead. If the residual is $27,450, and you invest that up front, you only need to invest something like $25, 000 (roughly) at about 5% interest to buy the car with cash at the end. This way, you've only paid interest on 1/3 of the cost of the car, and made it back by investing the residual up front in something like a CD and collected the interest on that over the course of 3 years.

But if you finance the residual to buy the car after the lease is over, all bets are off.

[uberschnell]

^^^^^^^ Same cost savings would be realized on interest if you put 25K down when you purchased the car, or if you take out a 3 year vs 6 year loan

If you have the where-with-all to put aside and additional 500+ each month for 36 moths in order to pay cash at the end of the term you might as well take out a 3 year loan with a payment of $1274 and end up paying less then 3K in finance charges.

Either way, no big cost savings one way or the other.

+ On the up side of leasing, if the bottom drops out on your car you can always dump it back in the finance company's hand and walk away

[gerbs]

Originally Posted by Magna3

^^^^^^^ Same cost savings would be realized on interest if you put 25K down when you purchased the car, or if you take out a 3 year vs 6 year loan

Yeah. If you have an asset worth x amount (that would be going towards a down payment IF you were to purchase the vehicle at signing), and you want to buy a car worth y amount, and the x asset has the cash ability to earn you z amount of return over 3 years/36 months, leasing is a no-brainer if z is realistic and achievable.

This is why Illinois = poo. And Texas. Bastards. I'll have to check out that Owner's Choice thing.

[sesegal99]

Leasing also allows those who can't afford a huge monthly payment to get into a little more expoensive car than if they would have bought it. I leased my old G35 then bought it out after 3 years and then sold it and made money. I'll be doing the same thing with my 330. It allows me to get into a nice new car every few years.

[uberschnell]

^^^^Big + of leasing a BMW, they tend to hold their value very well

[texasturner]

Bought ones hold their value well too.

[theroyalwe]

Originally Posted by Magna3

Either way, no big cost savings one way or the other.

+ On the up side of leasing, if the bottom drops out on your car you can always dump it back in the finance company's hand and walk away

I think this is the biggest advantage. we've all proven that the numbers are not much... I mean, what's a few hundred when we're talking about a $50,000 car? The reality is that if that car is worth less than the residual at the end of the lease you just turn it in and BMW takes the hit. If it's worth more you buy it out and sell it yourself or keep it. there are many plusses to both schools of thought.

I also have a customer that I talked into leasing a 7 series rather than paying cash. we figured that if he kept getting the return on his investments on the $90k he was going to just pay flat out for the car he would be able to pay about 800/month of the 1200 just in the interest earned. seriously, think about that.

90,000 x 1.09 (he said he's making 12% from his broker, but just going on 9%)
=98100 - this is just the first year's interest
98100 x 1.09 =
106929 - 2nd year, almost 17,000!
106929 x 1.09 =
116552.61 - total after 3 years with compound interest. that's 26,552.61 in interest on money he would otherwise have depreciating

take that 26,552.61 and divide by 36 months and you get 737.57 in just interest. that makes his 1200 lease payment only 462 something a month he's actually paying

over 3 years that means he pays a total of around 16,000 total for the entire lease... if he had financed the car may only be worth 60k after 3 years... so he'd have spent 30,000. chances are though that trade-in would be in the 40's. gotta love how math works out sometimes.

[msimon18]

Consider:

- He has to paytax on the interest. If he can invest that much he is likely in the 35% range
- Past earnings potential does not necessary equal future rate of return so he could just as easily losr 12% of his principle as gain 12% in interest.

The decision of lease vs. buy is different for everyone but ALWAYS consider ALL of the implications before making a decision.

[theroyalwe]

I agree... I'm not saying he's going to make that much in interest nor will he be able to avoid taxes but he told me not to worry about him paying tax on it or not making that much money so that's his call. It's his money, but the numbers do work out to a savings either way. at it's worst a lease will end up costing someone a few thousand more than if they had outright bought the car... but a few grand isn't much to pay extra to be driving a new car every few years if that's what you like.

[msimon18]

Agree but I would rather the "few grand" in my pocket.

I have been leasing for over 30 years - two new cars every 3 years (offset by one year). This time I am going to purchase 1 as the lease / buy calculation for me keeps an additional $4,000 in my pocket (after I consider a reasonable investment return on my down payment) if I sell the E93 after 3 years. That figure is based on selling for projected lease residual value. I am guessing, however that the actual value will be even higher especially in my case driving about 8,000 to 9,000 miles a year. ANywa, this time is a test to see what actually happens.

[Franchise]

Originally Posted by theroyalwe

I also have a customer that I talked into leasing a 7 series rather than paying cash. we figured that if he kept getting the return on his investments on the $90k he was going to just pay flat out for the car he would be able to pay about 800/month of the 1200 just in the interest earned. seriously, think about that.

Well hell, $90k burning a hole in my pocket is pretty high up on my list of problems-i'd-like-to-have. It seems to me that 99.9% of people who lease or finance do so precisely because they don't have that kind of cash just kicking around. Yeah, the numbers work, but is it really a realistic scenario?

[theroyalwe]

Originally Posted by Franchise

Well hell, $90k burning a hole in my pocket is pretty high up on my list of problems-i'd-like-to-have. It seems to me that 99.9% of people who lease or finance do so precisely because they don't have that kind of cash just kicking around. Yeah, the numbers work, but is it really a realistic scenario?

selling BMW's I see a LOT of people that have much more than that before. the same guy's wife handed me a printout of their bank accounts because she didn't feel like filling out the credit app. I made her fill it out anyway, but just one glance and I easily saw more than 5mil. it's just money... I can't worry about anyone else's money but my own