M4 Depreciation - Lease or Buy?

[Abran_tasrif]

Hey there, Currently Im financing a 2015 535i. Im going to "trade it in" for a 2018 M4. The car has 42,000 miles, My estimated Loan payout is $43,000. The car is valued at $28,000 @trade in

43-28 = $15,000 Loss

Now the past is past, I didnt make a good descion for over paying for a 5 series, However I have that $15,000 cash to pay the loss and get rid of the loan.

My question is, should I finance the new M4 after getting rid of my 5 series loan, or I should just lease it. Im going to keep the M4 for max 2 years. Im comfortable with financing more because I plan to do mods such as:

- Ecu Tune/Jb4
- Catless downpipe
- Aftermarket Charge pipes
- After Market exhaust system
- Carbon fibre spoiler and Back diffuser
- Carbon fibre front lip
- Carbon fibre accents interior wise

What do you guys think? If the m4 depreciates $4000-5000 in 2 years I wouldnt mind paying extra to get rid of the loan, but anything more than 10k is gonna hurt the bank, especially 15k, that really hurts the bank.

[Abran_tasrif]

Originally Posted by Abran_tasrif

Hey there, Currently Im financing a 2015 535i. Im going to "trade it in" for a 2018 M4. The car has 42,000 miles, My estimated Loan payout is $43,000. The car is valued at $28,000 @trade in

43-28 = $15,000 Loss

Now the past is past, I didnt make a good descion for over paying for a 5 series, However I have that $15,000 cash to pay the loss and get rid of the loan.

My question is, should I finance the new M4 after getting rid of my 5 series loan, or I should just lease it. Im going to keep the M4 for max 2 years. Im comfortable with financing more because I plan to do mods such as:

- Ecu Tune/Jb4
- Catless downpipe
- Aftermarket Charge pipes
- After Market exhaust system
- Carbon fibre spoiler and Back diffuser
- Carbon fibre front lip
- Carbon fibre accents interior wise

What do you guys think? If the m4 depreciates $4000-5000 in 2 years I wouldnt mind paying extra to get rid of the loan, but anything more than 10k is gonna hurt the bank, especially 15k, that really hurts the bank.

If the m4 depreciates to a point where I have to add $4000-5000 to get rid of the loan when i sell it in 2 years *****

Little correction^

[Ryan_F80]

Why not just keep the 535? Why take the risk on the M4? At least that's how I look at it.

[Thescout13]

If you are asking whether a $80,000 car will depreciated by more than $5,000 in two years the answer is a resounding yes. I would say yes for even $10,000 in two years. Ms hold their value well, but with a new M3 hitting the market by then and then M4 being out of production, I doubt the car will only depreciate 12%. That's my take. Unless you plan to put a huge downpayment on top of the 15k you are under, I would stick it out another year or so in your current 535 and get the M4 next year, when you aren't as under. Just my two cents.

With the short runway of two years, a lease could work in that you can do a lease transfer in two years (hopefully you have a stomachable payment for the next guy) and you can be free and clear.

But if you finance and sell (trade in) or lease and sell (or trade in (not lease transfer)) you are going to take a wash.

[instarand]

Originally Posted by Abran_tasrif

Hey there, Currently Im financing a 2015 535i. Im going to "trade it in" for a 2018 M4. The car has 42,000 miles, My estimated Loan payout is $43,000. The car is valued at $28,000 @trade in

43-28 = $15,000 Loss

Now the past is past, I didnt make a good descion for over paying for a 5 series, However I have that $15,000 cash to pay the loss and get rid of the loan.

My question is, should I finance the new M4 after getting rid of my 5 series loan, or I should just lease it. Im going to keep the M4 for max 2 years. Im comfortable with financing more because I plan to do mods such as:

- Ecu Tune/Jb4
- Catless downpipe
- Aftermarket Charge pipes
- After Market exhaust system
- Carbon fibre spoiler and Back diffuser
- Carbon fibre front lip
- Carbon fibre accents interior wise

What do you guys think? If the m4 depreciates $4000-5000 in 2 years I wouldnt mind paying extra to get rid of the loan, but anything more than 10k is gonna hurt the bank, especially 15k, that really hurts the bank.

Have you considered selling privately? Sites like autotrader and cargurus make it quite easy these days to get the ad out to lots of people. I've sold many cars privately and I've had a lot of luck doing it this way. Without knowing your specific local market, it looks like you may be able to get upwards of $35k for your car. And if so, that cuts your loan debt in half. New car depreciation PLUS trade in hit makes the cost of ownership on the very bad end of the already bad financial curve for car ownership. Selling privately has always been a way I manage the cost of auto ownership.

[Abran_tasrif]

Originally Posted by instarand

Have you considered selling privately? Sites like autotrader and cargurus make it quite easy these days to get the ad out to lots of people. I've sold many cars privately and I've had a lot of luck doing it this way. Without knowing your specific local market, it looks like you may be able to get upwards of $35k for your car. And if so, that cuts your loan debt in half. New car depreciation PLUS trade in hit makes the cost of ownership on the very bad end of the already bad financial curve for car ownership. Selling privately has always been a way I manage the cost of auto ownership.

I actually came to the states 2 years ago I know little to nothing! Do you know where I could sell privately!? Its a really fresh car, 1 owner car fax no accident not even a scarcth. I got that $28,000 offer from kelley blue book bmw trade in offer

[Abran_tasrif]

Originally Posted by instarand

Have you considered selling privately? Sites like autotrader and cargurus make it quite easy these days to get the ad out to lots of people. I've sold many cars privately and I've had a lot of luck doing it this way. Without knowing your specific local market, it looks like you may be able to get upwards of $35k for your car. And if so, that cuts your loan debt in half. New car depreciation PLUS trade in hit makes the cost of ownership on the very bad end of the already bad financial curve for car ownership. Selling privately has always been a way I manage the cost of auto ownership.

Do you know where I could sell privately? Craigslist? What about all the loan fuss and everything how would that work out, also me adding money after the buyer adds money to my loan, I dont get it. All the offers i wrote were from bmw Trade in and kelly blue book cash offer,

I actually came to the states 2 years ago so I know little to nothing

[instarand]

Originally Posted by Abran_tasrif

I actually came to the states 2 years ago I know little to nothing! Do you know where I could sell privately!? Its a really fresh car, 1 owner car fax no accident not even a scarcth. I got that $28,000 offer from kelley blue book bmw trade in offer

My opinion: List the car on ALL of the following sites for maximum exposure:

Autotrader.com
Cargurus.com
Cars.com
eBay.com

Find a BMW dealer that is selling a similar car to yours. And take note of their pictures that they post (usually 25+ pictures). Try to replicate their pictures on your car the best you can. Make a good description: clean, one owner, no accidents, great bmw, etc., etc. BUT lots of high resolution, clear pictures is the best way to attract buyers. Get all the angles. Lots of pics!

And use those websites to search for other 2015 bmw 535's within a 50 mile radius of your location, and that have similar miles. See what they are all being listed for. That'll give you an idea of how much to list yours for. Since yours is super clean, one owner, etc., I suggest listing is near the high end of what you find. If the nice ones are being listed for $35,995 I would list it at $35,495. Don't want to be the most expensive. But near the top. You can always reduce price slowly every week or two weeks (or however much of a rush you're in) if you don't get many bites.

Also: you're going to get ALOT of scam emails and calls and texts. Some doctor or military person overseas will offer to bank wire the money immediately and send a truck to pick up. The scams are getting quite creative. Text messages especially!!!! Only deal in person and only deal locally. When somebody contacts you by phone or text or email, minimize the amount of interaction using those methods and simply say, "if you're interested come look at the car and we will talk more then." Use your instinct, lots of scams out there!!!

[instarand]

Originally Posted by Abran_tasrif

Do you know where I could sell privately? Craigslist? What about all the loan fuss and everything how would that work out, also me adding money after the buyer adds money to my loan, I dont get it. All the offers i wrote were from bmw Trade in and kelly blue book cash offer,

I actually came to the states 2 years ago so I know little to nothing

You'd pay off the loan first if possible and receive the clean title, then list for sale. If you cannot pay off the loan first, it'll be harder to find a buyer willing to give you cash (or pay your loan directly) and then wait for title. Though it can be done if you find the right buyer.

[FC]

Originally Posted by instarand

You'd pay off the loan first if possible and receive the clean title, then list for sale. If you cannot pay off the loan first, it'll be harder to find a buyer willing to give you cash (or pay your loan directly) and then wait for title. Though it can be done if you find the right buyer.

Agreed. I've never traded in a car. I've sold them all (10+) myself. Every time I put my car up for sale I had a clear title on hand. It is a real pain to buy/sell a car with a lien.

It can work the other way too. Beware of people with a lot of interest that still need to get financing in order or people who offer small deposits.

I've learned to be completely clear up front. First person with a verified bank's check that clears (or cash) takes it.

You might also get a guy (like I did) who wanted to take my car 30 miles away for an inspection. When I sold my 997TT, I had the dealer inspect it and posted the inspection results.

[HPIA4v2]

If OP wants only to keep the M4 for two years, I'd say keep the 535xi as far as good FINANCIAL advice. Car regardless M or non-M falls like rock in value

Though, If OP been dreaming to get to an M-car, only him can answer it cause no financial reason needs to weigh in on a "want". No one NEEDs and M4

trade in at dealer is always about $6K to $7K less than private sale, advantage of trade in is sales tax credit (could be as much as $2500 on that 535xi)

[Abran_tasrif]

Originally Posted by instarand

You'd pay off the loan first if possible and receive the clean title, then list for sale. If you cannot pay off the loan first, it'll be harder to find a buyer willing to give you cash (or pay your loan directly) and then wait for title. Though it can be done if you find the right buyer.

I do not have the cash to clear the loan and get clean title so I guess I have to try selling w the loan and if not I ll just trade it in, As I saved up $22,000 to pay for the depreciation of my current car and the downpayment for the next car. I guess i ll be putting 5-8k down on the new car

[mnikhil]

Originally Posted by Abran_tasrif

I do not have the cash to clear the loan and get clean title so I guess I have to try selling w the loan and if not I ll just trade it in, As I saved up $22,000 to pay for the depreciation of my current car and the downpayment for the next car. I guess i ll be putting 5-8k down on the new car

You could use the $22,000 saved to clear the $15,000 left on the loan to get the clean title. That leaves you with a decent down payment if you wanted to buy. However if you were to lease your next car most if not all of us would say you SHOULD NOT put any money down towards cap cost reduction when leasing. So in theory as long as you have good credit and cash for closing fees/costs you should be fine.

Have you also considered buying CPO or used m4? They have already taken the bath in depreciation and if you were only going to keep for two years it may be worth it. Especially if you were to mod the car since you would be voiding the warranty. Also they can be found between like $50-70 pretty optioned out.


Best of luck!

[Abran_tasrif]

Originally Posted by mnikhil

You could use the $22,000 saved to clear the $15,000 left on the loan to get the clean title. That leaves you with a decent down payment if you wanted to buy. However if you were to lease your next car most if not all of us would say you SHOULD NOT put any money down towards cap cost reduction when leasing. So in theory as long as you have good credit and $2-3k for closing fees for an m4.

Have you also considered buying CPO or used m4? They have already taken the bath in depreciation and if you were only going to keep for two years it may be worth it. Especially if you were to mod the car since you would be voiding the warranty. Also they can be found between like $50-70 pretty optioned out.


Best of luck!

Thanks! Yes buying CPO only I never buy brand new cars

[jmg]

Originally Posted by Abran_tasrif

Im going to keep the M4 for max 2 years. Im comfortable with financing more because I plan to do mods such as:

- Ecu Tune/Jb4
- Catless downpipe
- Aftermarket Charge pipes
- After Market exhaust system
- Carbon fibre spoiler and Back diffuser
- Carbon fibre front lip
- Carbon fibre accents interior wise

What do you guys think? If the m4 depreciates $4000-5000 in 2 years I wouldnt mind paying extra to get rid of the loan, but anything more than 10k is gonna hurt the bank, especially 15k, that really hurts the bank.

Your bank is already hurt, friend. If you only want to keep the car 2 years your best bet is to to take over a lease that ends in 2 years or lease a new one and swap it in 2 years.

Lease or purchase, those mods will void parts of your warranty, so it doesn't really matter. You can certainly do those mods while leasing so long as you return it to stock when you turn it in. It's that simple. Install and uninstall expenses can be mitigated by what you save by leasing rather than owning. It's really up to you. One thing great about leasing is your depreciation is preset, so you won't have any surprises in 2 years. If you purchase, you are at the whim of the market.

[Abran_tasrif]

Originally Posted by jmg

Your bank is already hurt, friend. If you only want to keep the car 2 years your best bet is to to take over a lease that ends in 2 years or lease a new one and swap it in 2 years.

Lease or purchase, those mods will void parts of your warranty, so it doesn't really matter. You can certainly do those mods while leasing so long as you return it to stock when you turn it in. It's that simple. Install and uninstall expenses can be mitigated by what you save by leasing rather than owning. It's really up to you. One thing great about leasing is your depreciation is preset, so you won't have any surprises in 2 years. If you purchase, you are at the whim of the market.

What about servicing days? Will the dealer report me? Or should i unhook the Jb4 tune everytime I go to service

[jmg]

Originally Posted by Abran_tasrif

What about servicing days? Will the dealer report me? Or should i unhook the Jb4 tune everytime I go to service

If the part has affected a component that needs warranty work, they will deny the warranty coverage... purchased or financed. You are risking the same thing. That being said, some people would unplug the JB4 before visiting the dealership.

[Flacht3]

I may have missed it (skimmed the thread) but why are you planning on keeping the M4 for "2 years max"?

2 years will go super quick. I think there's a better end-game for you here if you're open to other options and are patient but curious what's driving that timing?

[Abran_tasrif]

Originally Posted by ItIsChrisM

I may have missed it (skimmed the thread) but why are you planning on keeping the M4 for "2 years max"?

2 years will go super quick. I think there's a better end-game for you here if you're open to other options and are patient but curious what's driving that timing?

Usual habits, changed 3 cars in past 5 years thats why.

[Flacht3]

Originally Posted by Abran_tasrif

Usual habits, changed 3 cars in past 5 years thats why.

Do you have a second car or only the 5 series? I'd take the 5 to Carmax and see what they offer (they should beat the dealer's trade-in)...then keep an eye on F82 prices over the next few months. With the G series fast approaching, F8X prices could dip even further before end of this year. Last thing I would want is getting in right before another substantial depreciation drop. That would be my approach but it's all speculative...YMMV