BMW M3 and M4 Lease Rates (36 months)

[BMWFanatic2008]

Originally Posted by pfl

Just got quoted yesterday:


MSRP: 66K
Markup: 10K
Total price: 76K
36 months, 10K miles per year
Total out of pocket: $5500

Payment:
1400+Tax

Needless to say, as soon as I looked at the numbers, I proceeded to walk out.

Double check with them, maybe they're giving you 2 M3s at this price If yes then it's a fair deal.

[pfl]

Originally Posted by BMWFanatic2008

Double check with them, maybe they're giving you 2 M3s at this price If yes then it's a fair deal.

Lol... You'd think so. I will be checking with them again to give them one last chance.

[JoeyBananas]

Originally Posted by GrussGott

Dude, if you borrow money for a car you still have nothing after 3 years - the bank owns the car until you pay off the note.

The lease is the EXACT SAME - with one key difference, at the end of the lease term you can buy the car for the pre-negotiated price or a new lower price or you can walk. You can't do that with a loan.

Thus a lease is finance-to-own-with-options and a loan is finance-to-own-with-risk

Lease is less risky, but in both cases if you want to own the car you just pay off the note. Not sure why this isn't clear.

Yes however if you lease,then end up buying the car, 9 times out of 10, you'll end up paying more, fair statement?

I don't think I have ever seen a car purchased at the end of a lease for a lower price if one had purchased initially?

When I say lower price,I really mean total money spent

[BMWFanatic2008]

Originally Posted by pfl

Lol... You'd think so. I will be checking with them again to give them one last chance.

I wouldn't bother. They are SOOOOO far off...

[dmk08]

Originally Posted by JoeyBananas

Yes however if you lease,then end up buying the car, 9 times out of 10, you'll end up paying more, fair statement?

I don't think I have ever seen a car purchased at the end of a lease for a lower price if one had purchased initially?

When I say lower price,I really mean total money spent

You definitely pay a little more with a lease. But I guess you could look at that money as insurance. If you wreck the car and/or value drops for some reason you can just turn the car into the dealer.

Anyone have any insight on 'Owners Choice'? This is something they will start offering in GA OCT. 1 as we have bad tax laws on leases like TX and IL. It seems to be a mix between a BMW Select Loan and a Lease.

[NYAWE60]

Originally Posted by GrussGott

Yeah, great point, you have to separate the financing *mechanism* from the financing costs.

a great example is Porsche leases ... not so hot, a loan is usually a much better option due to financing costs.

EDIT: at the risk of getting philosophical ... one shouldn't finance a car until they have at least 10x that amount in the bank. Some people think of "savings" as "not spending" but savings is actually super-charged future spending since you no longer have to save and got the benefit of compound interest in the meantime!

EDIT #2: Let's say you want $50k/yr in income from interest alone without touching the principle; if you save $25,000/yr for 17 years, you'll hit your target. If you start at 25 years old, that means by 42 you could retire on $50k/yr. Want to retire earlier or with a better income? Save more!

EDIT #2 made me want to hand over my income for you to invest

[doug_999]

Originally Posted by JoeyBananas

Yes however if you lease,then end up buying the car, 9 times out of 10, you'll end up paying more, fair statement?

Absolutely not. It all "depends". In addition, often the leasing company will cut you a deal on the car so they don't have to buy it back. So in that case a lease can save you even more money. Ultimately you always need to run the numbers and decide what makes more sense at any given time for any given car.

[WilliCO]

Originally Posted by NYAWE60

EDIT #2 made me want to hand over my income for you to invest

Not sure I'd trust my money with a guy who spells "principal" wrong, though.

[Amgeater2]

Originally Posted by JoeyBananas

Sounds like a horrible deal, lol. It could be a $350,000.00 car but you still end up with nothing after 3 years. I understand if you make a certain amount of money then it really doesn't matter, however I'd imagine $36,000 to the majority of people on here is still a lot of cash. (Sure is to me)

I do agree if someone wants to sell the car within 3 years then it probably makes sense to lease but if I buy a car, I'd plan on keeping it a while.

Somebody posted, "who wants to drive an 8 yr old BMW?", the answer might surprise you. If I bought a CPOS 2-yr old M4 I wouldn't probably keep it that long. Think about, does a 2004 BMW really seem that old?

I don't know, the younger I was and the less money I made I would probably just lease for a grand a month but the older I get and the more money I make, the cheaper I get, hahahahah


I also would never in a million years think I'd want a 4-door but man the M3 is awesome!!!!!!, plenty of room for the kid too, lol

Clearly you are not doing the math...

its better to lease the car, even if you are buying the car at the end and keeping her for 30 years

if you buy this particular car:

Rate 2.92% Includes 7% tax
Net Cap Cost $68,232
$1,106 x 72

Total $79,632

If you lease the car and then take a loan at the end of the lease for 36 months ( so a total of 72 months ) apples with apples...

Net Cap Cost 68232
$33,298.00
$924.96 x 36 = $33,298.00

Loan after the lease $34,934.00 + Taxes and Fees 3,880

Total Finance 38,814 at 2.9 %
Mon Payment $1,108.46
Total at the end $39,904.56 + 33,298.56

Total $73,203.12

Saving $6,428.88 in another note:

I can sell the car at the end of the 36 months since M cars tend to be value more than what BMW is estimating and MAKE MONEY !!

[doug_999]

Originally Posted by JoeyBananas

Sounds like a horrible deal, lol. It could be a $350,000.00 car but you still end up with nothing after 3 years. I understand if you make a certain amount of money then it really doesn't matter, however I'd imagine $36,000 to the majority of people on here is still a lot of cash. (Sure is to me)

I'm sort of at a loss as to what you are saying here. My point was/is

This is a $70,000 car.
If you want to "borrow it" for 3 years, the cost is $36,000.

If you want to own it, the cost is $70,000.

If you fronted $70K and bought it, at the end of 3 years, you still have the car, but you have also spent an additional $34K.

So... yes, $36,000 is a lot of money - but that's not the point, because the M4 is a lot of money!

[dmk08]

Originally Posted by Amgeater2

Clearly you are not doing the math...

its better to lease the car, even if you are buying the car at the end and keeping her for 30 years

if you buy this particular car:

Rate 2.92% Includes 7% tax
Net Cap Cost $68,232
$1,106 x 72

Total $79,632

If you lease the car and then take a loan at the end of the lease for 36 months ( so a total of 72 months ) apples with apples...

Net Cap Cost 68232
$33,298.00
$924.96 x 36 = $33,298.00

Loan after the lease $34,934.00 + Taxes and Fees 3,880

Total Finance 38,814 at 2.9 %
Mon Payment $1,108.46
Total at the end $39,904.56 + 33,298.56

Total $73,203.12

Saving $6,428.88 in another note:

I can sell the car at the end of the 36 months since M cars tend to be value more than what BMW is estimating and MAKE MONEY !!

Yeah putting it up against a 72 month loan with no money down is playing with a stacked deck.

[WilliCO]

Originally Posted by JoeyBananas

Sounds like a horrible deal, lol. It could be a $350,000.00 car but you still end up with nothing after 3 years.

Again, it seems that people on the "own" side of this discussion are setting forth some inherent value to owning the car, relative to leasing it where you never see the title. I don't understand what that value is, other than a strict adherence to a comfortable notion, or maybe a lesson learned from reading a "rich person next door" book written when interest rates were ten times what they are right now.

For me, it's cash outflow required to drive the car I want. And, as I outlined above, in the car class I want, currently a 5 series, leasing two brand-new ones each for 36 months, one after the other, requires almost exactly equal cash out of my bank account as buying a single 2 year-old 5 series as a CPO and keeping it for the same 72 months. Even though, in my analysis, I have paid off the CPO car after 60 months, at which time I "own" it, and at which time it is 8 years old, and worth relatively little.

For those willing to hold a purchased car longer than 6 years, especially having bought that car pre-owned to begin with - there's some money to be saved in buying. For everyone else, though, BMW, quite on purpose, makes it financially advantageous for you to lease a brand new car every three years. Who wouldn't rather do that?

[meauxdogs]

Originally Posted by Amgeater2

Clearly you are not doing the math...

its better to lease the car, even if you are buying the car at the end and keeping her for 30 years

if you buy this particular car:

Rate 2.92% Includes 7% tax
Net Cap Cost $68,232
$1,106 x 72

Total $79,632

If you lease the car and then take a loan at the end of the lease for 36 months ( so a total of 72 months ) apples with apples...

Net Cap Cost 68232
$33,298.00
$924.96 x 36 = $33,298.00

Loan after the lease $34,934.00 + Taxes and Fees 3,880

Total Finance 38,814 at 2.9 %
Mon Payment $1,108.46
Total at the end $39,904.56 + 33,298.56

Total $73,203.12

Saving $6,428.88 in another note:

I can sell the car at the end of the 36 months since M cars tend to be value more than what BMW is estimating and MAKE MONEY !!

Seems like your lease payments need to be about $134 a month higher...cap cost plus $725 acquisition fee plus residual times .00129. Still a little better off under the lease scenario, but much closer to breakeven on cash flow.

[Lloyd_Christmas]

Originally Posted by Amgeater2

Clearly you are not doing the math...

its better to lease the car, even if you are buying the car at the end and keeping her for 30 years

if you buy this particular car:

Rate 2.92% Includes 7% tax
Net Cap Cost $68,232
$1,106 x 72

Total $79,632

If you lease the car and then take a loan at the end of the lease for 36 months ( so a total of 72 months ) apples with apples...

Net Cap Cost 68232
$33,298.00
$924.96 x 36 = $33,298.00

Loan after the lease $34,934.00 + Taxes and Fees 3,880

Total Finance 38,814 at 2.9 %
Mon Payment $1,108.46
Total at the end $39,904.56 + 33,298.56

Total $73,203.12

Saving $6,428.88 in another note:

I can sell the car at the end of the 36 months since M cars tend to be value more than what BMW is estimating and MAKE MONEY !!

It would probably be helpful if you didn't make up numbers in your calculation ...per the OPs post, the residual value is $41934. That is the amount you would need to finance and pay tax on at lease end. There is no way the lease is cheaper than purchasing given that the lease finance rate (3.12% or .00130x2400) is higher than the purchase finance rate of 2.90%. Additionally, to assume that a 2.9% finance rate will still be available in 3 years is an unreasonable assumption.

[GrussGott]

Originally Posted by WillInDenver

Not sure I'd trust my money with a guy who spells "principal" wrong, though.

Will's right. But if you want to advice, Mr Money Mustache and Bogleheads

[stuka]

Originally Posted by JoeyBananas

Yes however if you lease,then end up buying the car, 9 times out of 10, you'll end up paying more, fair statement?

I don't think I have ever seen a car purchased at the end of a lease for a lower price if one had purchased initially?

When I say lower price,I really mean total money spent

Yes, but if you lease the car and someone crashed into it, you just give it back to BMWFS at the end of the term, and BMWFS eats the diminished value, not you.

If you took out a note, and someone ran into you, someone just legally stole thousands to tens of thousand of dollars from your M3/4 equity.

If a lease deal is good enough, leasing is a much safer way to spend your money since BMWFS assumes the risk of diminished value, not you.

[MFNATIK]

Or if the dealer crashes your M3 on a joy ride...

[stuka]

Originally Posted by Lloyd_Christmas

It would probably be helpful if you didn't make up numbers in your calculation ...per the OPs post, the residual value is $41934. That is the amount you would need to finance and pay tax on at lease end. There is no way the lease is cheaper than purchasing given that the lease finance rate (3.12% or .00130x2400) is higher than the purchase finance rate of 2.90%. Additionally, to assume that a 2.9% finance rate will still be available in 3 years is an unreasonable assumption.

Depends on the state.

In TX, they charge you the sales tax on the purchase of the car, at 6%, whether you lease or buy the car.

But if you decides to buy the car at lease end, you don't pay any tax.

In CA, you pay your sales tax on the lease payment for the duration of the lease. And then at the end of the lease, if you choose to buy, you pay the sales tax on the selling price of the car.

More importantly, leasing allows you to exercise the call option if your M3 survives 3 years without being crashed into, or walk away if it was crashed into. And in any metro area of the U.S., chances of a DD car of any kind getting into some sort of accident is not nothing. It's like you are driving around with the equity, and when someone runs into you, they legally stole that money from you, because basically no state nowadays allows the recovery of diminished value.

And believe me, if someone runs into your car, they have just diminished the value of your car. In the case of leasing, BMWFS eats that, In the case of a note, you the guy who took out the note, eats that.

[stuka]

Originally Posted by MFNATIK

Or if the dealer crashes your M3 on a joy ride...

Hard to believe how long it's been since they savaged my M3...

[MFNATIK]

Originally Posted by stuka

Hard to believe how long it's been since they savaged my M3...

And nothing has really changed. That place is a dump no matter who owns it. Don't get me started...lol

[dmk08]

Originally Posted by stuka

Depends on the state.

In TX, they charge you the sales tax on the purchase of the car, at 6%, whether you lease or buy the car.

But if you decides to buy the car at lease end, you don't pay any tax.

In CA, you pay your sales tax on the lease payment for the duration of the lease. And then at the end of the lease, if you choose to buy, you pay the sales tax on the selling price of the car.

More importantly, leasing allows you to exercise the call option if your M3 survives 3 years without being crashed into, or walk away if it was crashed into. And in any metro area of the U.S., chances of a DD car of any kind getting into some sort of accident is not nothing. It's like you are driving around with the equity, and when someone runs into you, they legally stole that money from you, because basically no state nowadays allows the recovery of diminished value.

And believe me, if someone runs into your car, they have just diminished the value of your car. In the case of leasing, BMWFS eats that, In the case of a note, you the guy who took out the note, eats that.

I didnt know some states dont make insurance pay you diminished value. They surely do here in Georgia.

[GrussGott]

Originally Posted by JoeyBananas

Yes however if you lease,then end up buying the car, 9 times out of 10, you'll end up paying more, fair statement?

I don't think I have ever seen a car purchased at the end of a lease for a lower price if one had purchased initially?

When I say lower price,I really mean total money spent

More than what? Let's say we took a poll of loan rates - do you think (a.) they'll be mostly the same, or (b.) they'll be mostly different? And from there if we looked at what people resold their cars for do you think (a.) the prices would be mostly the same or (b.) mostly different? And that's just the tip o' the iceberg of differences ...

Will has the credited answer for all of your questions:

Originally Posted by WillInDenver

... people on the "own" side of this discussion are setting forth some inherent value to owning the car...I don't understand what that value is, other than a strict adherence to a comfortable notion...For me, it's cash outflow required to drive the car I want

It's purely a cash flow discussion for which all of our circumstances are completely different, thus there is no "less" for me vs you.

If "own" is meaningful to you, and you believe loan=own, then you should get as many loans for as many things as you can.