[bmrm396]

So I was at the dealer yesterday quoting out a lease for a 2011 e92. Got a good deal, wont go into specifics but got him to 300 over invoice (about 47k selling price), I beat him around some of the stupid fees and crap and haggled my way down to about 615/mo on 10k yr/36mos. Put down max security deposits (which i love getting back), patted myself on the back and told him he'd hear from me shortly.

Anyway as i got home and started getting excited about what mods to do etc., the girlfriend basically throws me the short stick and says the obvious "why would you spend all that money modding ur car just to give it back in 3yrs?" ... ya ya ya its a question ive debated over and over.

But my rationale is simple - I have always left myself with the option to walk away from a car for whatever reason, period. And its paid off with one previous car being stolen, later recovered and then my current car getting side-swiped and 10k in damage last yr. If i had bought either car ... well that would just have sucked d*ck for me. Glad i leased and now and giving back to BMW, muhaha.

But financially, am i bitting the bullet big time if i decide to buy out a clean car when my lease is up? Compare lease vs BMW Select, NOT vs financing.

Just curious - what are some general figures on this?

[purpl3ish]

u were at 615/month with max SD's?

[bmrm396]

ya, 4550 in MSDs bringin MF down to .00146 if i rem correctly so to clarify im at 614 AFTER my MSDs

the MSDs dont really lower the monthly payment too much, i think i was at 664/mo before hand - i always like brining it down cause i have the cash to do so but am not a fan of down payments at all

my biggest bugger is this frickin 925 acquisition fee??? i dont rem my last lease bein even close to that high ...

[dday]

Originally Posted by bmrm396

ya, 4550 in MSDs bringin MF down to .00146 if i rem correctly so to clarify im at 614 AFTER my MSDs

the MSDs dont really lower the monthly payment too much, i think i was at 664/mo before hand - i always like brining it down cause i have the cash to do so but am not a fan of down payments at all

my biggest bugger is this frickin 925 acquisition fee??? i dont rem my last lease bein even close to that high ...

acquisition from bmw is $725 but the dealer can mark it up by as much as $200 to $925, almost every dealer near me sets it at $925.

[bmrm396]

but can anyone answer my original question ...? ha

[330MX]

You're at ~ $26,650 between your payments and initial costs. Why not buy an '07 335i CPO? You are very close to that price point and after 3 years you OWN the car. Say you sell it for $10K (ABSOLUTE LOW END) after those 3 years. Total cost of those three years will be substantially less than your lease plan. It's not like the car has changed much between '07 and '11 anyway. Sure, some new headlights and revised tails, updated idrive interface, but same power (I know the motor is different - but still uses the same HPFP), and generally the same car.

It's fun to look around at new cars and I do it all the time. You have to ask yourself if the MASSIVE price and value difference is offset by what the '11 offers that the '07 does not.

Remember a low insurance premium as well AND peace of mind not being so paranoid about a car that is a few years old and parking it somewhere.

Good luck to you. Be smart.

[David1]

BMW select is still financing it. You just have a baloon payment at the end of the term you choose. You either need to trade it in at the end or make the last payment. You can't just give the car back.

[purpl3ish]

i was at 539/month with max MSD's..but i was putting taxes and all fees up front..

i still dont think it should be that big of a diff though

[bmrm396]

choyboy - sounds about right. so u mean u basically prepaid all taxes so that monthly # is w/o tax right? cause CA taxes are pretty high, it would take me down to around 560 w/o them ... i also looked back in my emails with the SA and noticed he quoted me a lower priced right off the bat so im going back to him with that number and im going to bring up the acq fee and tell him to make it 725 and its a deal

[purpl3ish]

Originally Posted by bmrm396

choyboy - sounds about right. so u mean u basically prepaid all taxes so that monthly # is w/o tax right? cause CA taxes are pretty high, it would take me down to around 560 w/o them ... i also looked back in my emails with the SA and noticed he quoted me a lower priced right off the bat so im going back to him with that number and im going to bring up the acq fee and tell him to make it 725 and its a deal

yea that # was without taxes; my tax rate here is 8.875% if it helps u figure anything out better

[bmrm396]

so it seems like my deal is pretty good - ill get him back down on that 725 acq fee and be set

[Jalal28]

To get back to your original question... YES, you are biting the bullet to purchase a leased car at the end of the lease, vs doing a straight purchase. The idea of leasing-to-buy vs a straight purchase could (potentially) make financial sense in one situation...

When you know model style will change DURING your lease term, thus accelerating the vehicle's depreciation to such a degree that it allows the lessee additional negotiating leverage at lease-end ... Here's why...

The largest component of a lease payment is the depreciation component. Prior to the actual model change, BMW continues to offer very attractive residuals in order to move final versions of current model off lots/out of production. Once the model change occurs, expected depreciation of the vehicle will accelerate, only you've pre-negotiated that depreciation in the lease (hence the lease payment itself which represents a portion of that pre-negotiated depreciation).

Once the lease end finally comes, the dealer/BMW now has the decision, attempt to sell the car on their own lot for a much reduced price, or offer to original owner at a slightly reduced price (where the owner has all the negotiating leverage).

In other words, leasing allows you the oppportunity to RENEGOTIATE the selling price of the car AFTER you've driven it for 2-3 years. What offer financing option allows you to do that? Funny thing is, you'd actually have MORE leverage if you reach or exceed your allowed mileage, because the car would have actually depreciated even more.

That said, based on my preliminary calc's, model change depreciation would need to be so great, that you're able to sucessfully negotiate 20% off the buy-out residual price in order to make up the difference (this is before tax and interest rate considerations).

Thus, leasing and leasing-to-buy are ALWAYS bad pure financial decisions compared to the pure purchase and keep forever scenarios. The "value" of leasing comes from always being able to drive the newest vehicle out, with the latest gadgets, electronics, etc.

That said, if your choices were leasing vs buying/selling your car every 3-5 years (and prior to loan payoff), leasing is the more attractive financial option there.

[zsqure]

Don't buy out your lease unless you r buried in it by mileage.... You will pay tax on it twice (sales and personal property), you r paying in many cases for GAP insurance..... The leasing co will insure that the car brings a certain value at lease end called "residual" I have heard this from two different end of lease inspectors. It's a racket that is overshadowed by that euphoria of having a shiny new car.

[David1]

Originally Posted by zsqure

Don't buy out your lease unless you r buried in it by mileage.... You will pay tax on it twice (sales and personal property), you r paying in many cases for GAP insurance..... The leasing co will insure that the car brings a certain value at lease end called "residual" I have heard this from two different end of lease inspectors. It's a racket that is overshadowed by that euphoria of having a shiny new car.

Incorrect and it it varies state by state. For example since you are in Ohio, you pay tax on the purchase price on your buyout if you want it. You have already payed the tax on what you paid in payments in Ohio. If you lease with BMFS, than all the sales tax is collected up front and you do not get it back. Also, GAP has nothing to do with residual it is an insurance policy that will cover the loss if you total the car and the payoff is higher than it's value. If you total a leased car you are responsible for all the remaining payments and the residual. If there is a difference between what your insurance company pays and this amount, than GAP covers this. Now if you are talking about residual insurance, than that is something different and is a gamble for the insurance carrier for that and the lessor.