Is it stupid to pay a huge downpayment?

[gatorfast]

Have you considered buying preowned? You can save a considerable amount of money and still get the car of your dreams with a much lower monthly payment.

Also, do you have a friend or family member who can help you with this? We can all chime in here but talking to someone knowledgeable about how car purchasing works and who has your best interest in mind is probably best. I'm a pretty conservative guy financially and I just get a bad feeling based on your posts that you are about to make a big mistake on this car purchase.

[Takumi587]

You could always lease the vehicle and after 6, 12, 18 months etc. just buy out the car. You do not have to wait till the end of the lease to buy it. However, just remember that the rebates will go away if you buy it out too fast which is the reason I mentioned 6, 14 or 18 months later.*

If you are 100% confident that you want to keep this car for a very long time then go right ahead and buy it. However, you could play it safe and lease first then buy when you are absolutely certain you want to keep the car.

Personally I never put money down on a lease because I would rather have my cash working for me in an investment account instead of just getting dumped into a depreciating asset. Just my .02 cents.

[ando]

Go for it. I think you are ready to buy or order a M4. You sound like you already have discipline to save for a down payment so put down as much as you feel comfortable to get the payment you want. Make sure you get a low interest rate and bring a buddy to help you say no to everything at the last step in the finance office. My 2015 M3 was my dream car and still is. I financed it with a bank and paid it off early February. First time I've ever had a car title without any liens.

[Hachima]

Depending on what financing you qualify for, you might not have an option of not putting down any money.

Personally I put 0 down and invested the money which has a good chance of beating the low interest rate I was able to get. There is risk to it but to me it is an acceptable risk.

Also don't forget to factor in insurance and get a quote ahead of time. Plug in a vin for any new car you may be interested in to get an idea on what your insurance cost will be before actually adding the insurance.

['Cane]

Do NOT put a large sum of money into a lease.

[kerkiraios00]

To get your payment down to 400-500 range is tough might have to put 50% down.. My car was 76k but down 25k my monthly payments are $835 month and that's a decent down payment..

[DFW_M]

First, those saying not to put any money in the lease, obviously did not listen that your plan is to use the lease option as the bridge between now and finance option 3 years from now.

However, to you and to the "I love to own all of my assets" NC guy, some assets appreciate (properties, over time, gold, etc...), some depreciate, and some depreciate fast - cars.

What happens if you decide 12 or 24 months from now that this car is NOT for you and you want to get rid of it / swap the lease. Then, your down payment will be partially lost.
Here is an example, my monthly lease is $950 with $0 down.
your 24k (earning you potentially some interest) spread over 36 months would mean $670/month "assistance" to your monthly payment
your monthly payment ends up as 950 - 660 = $300 additional per month.
After 3 years, your payoff (residual) will be around $45k and you have the option to finance it then or go for the next big thing...

[RickFLM4]

The common logic applicable to not putting money down on a lease (losing it in the event of totaling the car) is equally applicable to financing a purchase (or paying cash) unless your insurance provides for new / better car replacement. Every time a thread like this pops up a handful of people jump in to say never put money down on a lease, but seem to ignore what happens when you total a car in a purchase scenario.

Now that doesn’t mean I am saying never put money down in either scenario. Just understand the benefits and risks of doing so. Cash down upfront in either scenario is just a mechanism to save interest / finance cost, which reduces monthly payments. It doesn’t change the price of the car, just finance cost. Does it save you enough interest to offset the risk? That depends on MF / interest rate and accident risk as pointed out earlier, and is really up to each person to decide for themselves.

As others suggested, there are other threads and websites about leasing basics. I also suggest starting with those resources. Edmunds forums also have good information on pricing. You should clearly understand all the variables in leases and key considerations in lease vs. buy decisions and figure out your priorities before proceeding to a deal. If you are focused on monthly payment as primary driver of buying a car without really thinking through the entire economics of the decision as a whole, let me suggest that is not the place to be.

[cwhands]

I would avoid a down payment, especially one that significant, if you lease.

Not to be throwing negativity out there. There's always a "what if?" - In this case, if the car got totaled and you put 24k down on a lease, you just lost 24k. As the one above me said, risk applies to a finance as well.

[Flacht3]

Preowned prices are plummeting right now. Do yourself a financial favor and try to find a CPO and skip buying new.

Also not sure the logic of putting a large amount down so you have lower monthly payments is a solid one. If you hold onto that money then your out of pocket costs are basically the same...lower monthly payments may seem more attractive but net net it's the same whether you give them that money up front or if you hold onto it use it for your higher monthly payments. As long as your rate of return on investments is higher than your finance rate, you should skip putting any money down, but I won't get into an investment return debate right now.

However if putting a larger amount down can get your interest rate substantially lower (at least one full point or more) then it may be worthwhile.

[paliknight]

Originally Posted by ItIsChrisM

Preowned prices are plummeting right now. Do yourself a financial favor and try to find a CPO and skip buying new.

Also not sure the logic of putting a large amount down so you have lower monthly payments is a solid one. If you hold onto that money then your out of pocket costs are basically the same...lower monthly payments may seem more attractive but net net it's the same whether you give them that money up front or if you hold onto it use it for your higher monthly payments. As long as your rate of return on investments is higher than your finance rate, you should skip putting any money down, but I won't get into an investment return debate right now.

However if putting a larger amount down can get your interest rate substantially lower (at least one full point or more) then it may be worthwhile.

Well if he's financing and puts that money down he'll save money on interest.


But I would probably recommend a 340i or something and invest the rest of the money since these cars aren't meant for people that need to save up for them.

[TS29849228]

THANK YOU all for your input. I joined this forum only two weeks ago, but I have learned more than I ever did these past 10 years.

I am going to continue working things out with my company, the plan is to pay off the majority of the car (50k or so) and then work the rest out thru monthly payments.

Eventually, Ill post some photos or see some of you guys on the road.

Thanks, all love to you guys.

[slackergirl]

If you belong to a credit union check with them on finance options. At the very least it will give you an idea of what kind of interest you can get before talking to the dealer.

Happy shopping. New or CPO I'm sure you will love your new car.

[Nikolas]

Originally Posted by vip

You should not be putting any money down for a lease period!!!

That is money you will never see again, especially if you get into an accident [total the car] or turn the car in after 3 years.

Technically, that only applies to a total, not turn in, since the increased down decreases your payment. If you complete the terms, there is no loss. The risk on the down payment diminishes each month you successfully don't total your car.

But yes, don't put money down on a lease.

[chriszach1]

I am putting down 20k on mine. I paid 67k for it and my plan is to have it paid off in 2 years. I also plan to keep the car for a while (especially since I live in Germany and can really enjoy it here)!

[TS29849228]

I have gone back and forth with a few dealerships, and as of now I have found out what type of deal I am looking for. I have also realized now that there are a ton of M3/4s around. I don't need the car today or this week..

I've found 2 used 2018 m3's for a considerable markdown, both with less than 8k miles on them. Currently I am trying to get the car price down to 57 or 58k. Plus tax and all the others, final price will be close to 64k. With 15k down, I hope to pay low to mid 800s for 60 months.

I will take my time and keep searching. I was almost ripped off HARD at Monrovia last weekend.

Again, thank you all for the input. I cant wait to join the M family (I did have an e46 10 years ago though)

[TS29849228]

Originally Posted by ItIsChrisM

Preowned prices are plummeting right now. Do yourself a financial favor and try to find a CPO and skip buying new.

Also not sure the logic of putting a large amount down so you have lower monthly payments is a solid one. If you hold onto that money then your out of pocket costs are basically the same...lower monthly payments may seem more attractive but net net it's the same whether you give them that money up front or if you hold onto it use it for your higher monthly payments. As long as your rate of return on investments is higher than your finance rate, you should skip putting any money down, but I won't get into an investment return debate right now.

However if putting a larger amount down can get your interest rate substantially lower (at least one full point or more) then it may be worthwhile.

Advice taken.

[TS29849228]

Originally Posted by gatorfast

Have you considered buying preowned? You can save a considerable amount of money and still get the car of your dreams with a much lower monthly payment.

Also, do you have a friend or family member who can help you with this? We can all chime in here but talking to someone knowledgeable about how car purchasing works and who has your best interest in mind is probably best. I'm a pretty conservative guy financially and I just get a bad feeling based on your posts that you are about to make a big mistake on this car purchase.

Advice taken, thank you.

[nicknaz]

On a lease, yes it is definitely stupid.

On a financed purchase, I don't think it is stupid (I mean, a cash payment is basically putting 100% downpayment) but the related question on whether this is the right price car for you is something you should honestly ask yourself.

Are you selling your e46? If it is 6MT, coupe and no sunroof, please PM me

[RickFLM4]

Originally Posted by nicknaz

On a lease, yes it is definitely stupid.

On a financed purchase, I don't think it is stupid (I mean, a cash payment is basically putting 100% downpayment) but the related question on whether this is the right price car for you is something you should honestly ask yourself.

Are you selling your e46? If it is 6MT, coupe and no sunroof, please PM me

You realize there is an equal risk of loss unless you have new car replacement, right? Or are you referring to something else?

[nicknaz]

Originally Posted by RickFLM4

You realize there is an equal risk of loss unless you have new car replacement, right? Or are you referring to something else?

as others have pointed out previously, if you pre-pay the rent on a lease (e.g. capitalized cost reduction (but used interchangeably as 'downpayment' in my previous post)), you lose the amount of the pre-payment since your insurance (including your gap insurance) only covers the car that's owned BMW FS, not your pre-paid rent.

[RickFLM4]

Originally Posted by nicknaz

as others have pointed out previously, if you pre-pay the rent on a lease (e.g. capitalized cost reduction (but used interchangeably as 'downpayment' in my previous post)), you lose the amount of the pre-payment since your insurance (including your gap insurance) only covers the car that's owned BMW FS, not your pre-paid rent.

How is that different than putting money down on a purchase without new car replacement coverage? Insurance pays the value of the car and if the value is less than loan balance + cash upfront (which it will be), you lose money. If you total a car (leased, financed or paid for upfront), you are at risk of losing cash when you put it down upfront unless specifically insured otherwise.