72/mo at $796/mo: better to lease?

[RaidersFan]

Hi,

Posting on behalf of a friend: he is looking at a used M3 at at dealership, 16k miles, 6MT, fairly standard $71k build. It has 18k miles. His payment (after 3k down) is coming it at $796/mo for 72 months. It has 2.5 years of warranty left and is very, very clean.

How does this compare to a typical well-negotiated lease deal? I figured after 3 years of owning the used M3, he would have some equity, whereas the new one would be basically a rental. He hasn't talked to a dealer (nobody around here sells RWD cars anymore, everyone has done a great job scaring people away, nobody will even sell a 235i Vert that isn't X-drive. Don't get me started!). Our local dealer typically low-balls on everything, so I told him not to bother unless he wants to work with other dealers out of the area.

I figured I would post here first; I know almost nothing about leasing.

[Skid123]

Originally Posted by RaidersFan

Hi,

Posting on behalf of a friend: he is looking at a used M3 at at dealership, 16k miles, 6MT, fairly standard $71k build. It has 18k miles. His payment (after 3k down) is coming it at $796/mo for 72 months. It has 2.5 years of warranty left and is very, very clean.

How does this compare to a typical well-negotiated lease deal? I figured after 3 years of owning the used M3, he would have some equity, whereas the new one would be basically a rental. He hasn't talked to a dealer (nobody around here sells RWD cars anymore, everyone has done a great job scaring people away, nobody will even sell a 235i Vert that isn't X-drive. Don't get me started!). Our local dealer typically low-balls on everything, so I told him not to bother unless he wants to work with other dealers out of the area.

I figured I would post here first; I know almost nothing about leasing.

The total cost adds up to 60k for a used car. I am not sure that is a good value to start with... stripper new one is only several thousands more at MSRP. And few people pay MSRP these days.

A good non-ED deal for a 70k car is 700-800 before tax I think.

[voodoojar]

I think he should keep looking. If he want's a pre-owned there are a bunch coming off lease right about now. When I was picking up my car at the dealer last week they had a just off lease loaded, (every option) 2015 M4 with CCB with only 6k miles the advertised price was $53,000. My CPO 2016 M3 w/ 12k miles, only options leather and Adaptive Suspension had an advertised price of $52,500.

[///M4ster Yoda]

Your friend can do better. Keep looking

[knepsterd]

The used car market as well as overall auto market is starting to soften and crater a bit. Heed advice a lot coming off lease and prices will no doubt be a buyers market for a while

[HPIA4v2]

Originally Posted by RaidersFan

Hi,

Posting on behalf of a friend: he is looking at a used M3 at at dealership, 16k miles, 6MT, fairly standard $71k build. It has 18k miles. His payment (after 3k down) is coming it at $796/mo for 72 months. It has 2.5 years of warranty left and is very, very clean.

How does this compare to a typical well-negotiated lease deal? I figured after 3 years of owning the used M3, he would have some equity, whereas the new one would be basically a rental. He hasn't talked to a dealer (nobody around here sells RWD cars anymore, everyone has done a great job scaring people away, nobody will even sell a 235i Vert that isn't X-drive. Don't get me started!). Our local dealer typically low-balls on everything, so I told him not to bother unless he wants to work with other dealers out of the area.

I figured I would post here first; I know almost nothing about leasing.

BECU credit union has 2015(and newer) used car as new car loan rate 2.09%.

I was looking at M6 recently, most used car lot and BMW dealer pricing is rather inelastic though.
Found a couple of M6 myself for ok price, clean car fax, single owner both had doors painted. Never leave home shopping used car without my Defelsko paint gauge
Just be careful out there and have fun hunting

[RaidersFan]

Originally Posted by voodoojar

I think he should keep looking. If he want's a pre-owned there are a bunch coming off lease right about now. When I was picking up my car at the dealer last week they had a just off lease loaded, (every option) 2015 M4 with CCB with only 6k miles the advertised price was $53,000. My CPO 2016 M3 w/ 12k miles, only options leather and Adaptive Suspension had an advertised price of $52,500.

Where are you seeing these? Ran a search on Cars.com, I didn't see anything really under $54k, and anything cheaper had a lot of miles. BMW CPO search had 2 cars under $55k. I didn't see anything posted like that in the forums either; if that were retail, cars on here would be selling for $50k with low mileage (which I haven't seen). From another thread, a used car manager said these are low to mid 50's wholesale with low miles, high 40's for higher mileage examples.

Do you have any links to recommended cars that I can send him to?

[instantexpert]

IMHO, I'd consider a 6 year loan on 2 year old high performance car to be very, very risky. With 2.5years left on warranty, it hasn't even been CPOd. Your friend is setting themselves up for huge maintenance and repair bills. And, if they're considering a 72 month loan, they cannot afford those bills. Run, do not walk, away.

If used is the right path, Owner's Choice (or equivalent, since they don't lease used cars, right?) or a 48 month loan would be the most risk I'd take.

Then again, I said I'd never do a 72 month loan and I just got one on my '17...

[dkhm3]

to be honest, i don't think 72 month loans r smart on a depreciating asset.

there are little to no used inventory for m3's in my area- (so cal) that are dealer sold or cpo.

they usually get snatched up very quickly, i've been looking for months for shits and giggles. the cars that sit are ones that are stripped or strangely optioned- i.e. no parking sensors or backup camera.

[afadeev]

Originally Posted by RaidersFan

Posting on behalf of a friend: he is looking at a used M3 at at dealership, 16k miles, 6MT, fairly standard $71k build. It has 18k miles. His payment (after 3k down) is coming it at $796/mo for 72 months. It has 2.5 years of warranty left and is very, very clean.

How does this compare to a typical well-negotiated lease deal?

Are you serious?
You are asking to compare a used car purchase to a brand new lease?
Can these choices be any more different?

If the only reason you are looking at the used cars is that the cash flow constraint is forcing you into sub $800/month payment, you/your friend really need to get your priorities straight and not over-extend on a car purchase.

Everything else you cited looks even more problematic:
- lousy used car price ($71K for a 1.5 year old car - the price for those is usually in $5x K range)
- 72 months used car loan, with $3K down, that is all but guaranteed to keep you under water for the duration
- owning a car outside of warranty window, while you are on a cash-constrained lifestyle

Originally Posted by RaidersFan

I figured I would post here first; I know almost nothing about leasing.

Read up here:
http://f80.bimmerpost.com/forums/sho....php?t=1084623

a

[BimmerBahn]

Hmm, so it's apples and oranges.

I echo what others have said... I'd pass on it. For that $$ I'd get a new one....lease it, then in 36 mos if you want to keep it, you can buy it off the dealer. Keep in mind that we're ~1-2 MY's out from a refresh so value will plummet once the G-whatever launches.

Personally, I wouldn't buy unless I planned on keeping for a while (i.e. garage queen/weekend fun car). 72 mos loan you won't have much equity on an M3 either....we're not talking a classic, yet.

Good luck with the hunt.

Cheers,

[RaidersFan]

Originally Posted by BimmerBahn

Hmm, so it's apples and oranges.

I echo what others have said... I'd pass on it. For that $$ I'd get a new one....lease it, then in 36 mos if you want to keep it, you can buy it off the dealer. Keep in mind that we're ~1-2 MY's out from a refresh so value will plummet once the G-whatever launches.

Personally, I wouldn't buy unless I planned on keeping for a while (i.e. garage queen/weekend fun car). 72 mos loan you won't have much equity on an M3 either....we're not talking a classic, yet.

Good luck with the hunt.

Cheers,

OK, thanks! If he didn't need 4 doors, I would just sell him mine! Then again, I would agree, he probably better off leasing as well.

[clutchdj]

Term is too long for used unless the car is really desirable and/you're expensing the car on a P&L. Factor in having to buy an extended warranty in the future.
Imho it does not sound like a very good deal.
It make senses to lease or finance up front (assuming residuals stay good) b/c in the end you would have more options:
Buy out/sell privately/ or lease return and walk away.

How much cash is being put down? Edit:never mind that is a bad deal shop elsewhere