Buy v Lease (a different angle)

[baardya]

It's always been my opinion, whichever car I buy, that I should lease it, if I plan to use it for 2 years, which I am. I am sure I am going to use the car for 2 years and then sell (in case I buy) or end the lease.
So (all this hypothetically), I have decided on going for a 2008 328xi. Now with the 0.9% APR (let's say I qualify for that), what would my best options be? Lease, buy?

As you may have noticed I am an amateur in this field. This is actually my first new car purchase/lease and so I am very fresh. I have been reading through this forum and making some decisions. But before I go to an actual dealer and start the process I would like to know all the information related to my question. And yes, also about the 0.9% APR. The pros, cons and fine print.

Any help will be much appreciated.

Thanks.

[tturedraider]

There's no real fine print to the 0.9% financing other than it is scheduled to end 2 September.

That financing rate makes buying very attractive, but the risk you bear with that is what resale will be in two years if that's as long as you'll keep it. From a purely fiscal point of view you're better off keeping a car longer. Is there a particular reason you plan only to keep it for two years?

Run the numbers for a two years lease and for a purchase loan with approximately the same payment and see how close the payoff on the loan is after two years to the residual value of the lease after two years. If it's close or possibly better, then purchasing might be a better way to go.

Of course, leasing also provides you with some protection if something were to happen to the car (not very likely) and you wanted to not keep it. With the lease you just turn it in and get another one.

Here's a good lease calculator - http://www.autoleaseadvisers.com/calc/calc.php , and here's a good loan calculator where you can easily see the amortization - http://www.ljbank.com/calcloanpmt.html

[baardya]

Is there a particular reason you plan only to keep it for two years?
http://www.ljbank.com/calcloanpmt.html

yes actually there is. i am working now. but in say 2 years i'll be leaving this job to go for an mba. and then i won't afford the car... :)

i still think leasing is a better option, but the 0.9% figure looks appealing (bmw advertising success)

[tturedraider]

I ran a quick calculation. If you leased a car with a $37,000 MSRP and financed (whether through leasing or purchasing) $34,500 (that's the purchase price I assumed) the payment is close to the same (about $590) and the 66% residual is $24,420 and the payoff on the loan after 24 months (on a 60 month loan) is $20,900. So, you potentially could be better off with the purchase. I included a 6% use tax in the lease calculation and used a MF of .0016, but didn't bother figuring sales tax into the equation with the purchase.

edit: Adding $2000 worth of taxes to the purchase, therefore financing $36,500 increases the payment by $24/month and yields a payoff after 24 months of $22,100.

[baardya]

hmm....thanks...that changes things.
any other opinions too???

[baardya]

i ran a rough estimate on bmwusa.com

well...here are the details....for a 2008 328xi....

Lease:
Down -- $0
Term -- 24 months
Mileage -- 15,000

comes to $525

Buy:
Down -- $2500
Term -- 60 months
APR -- 0.9% (this is correct right?)

comes to $525


now to look at this after 2 yrs.....i pay the same amount....what would be better?

[tturedraider]

If you have cash you can "put down" be sure to consider Multiple Security deposits which reduce the MF by .00007 for each one. It's kind of like putting money in a saving account earning 8% - 10%.

There's a sticky all about MSD's at the top of this forum.

[tturedraider]

i ran a rough estimate on bmwusa.com

well...here are the details....for a 2008 328xi....

Lease:
Down -- $0
Term -- 24 months
Mileage -- 15,000

comes to $525

Buy:
Down -- $2500
Term -- 60 months
APR -- 0.9% (this is correct right?)

comes to $525


now to look at this after 2 yrs.....i pay the same amount....what would be better?

Depends on how much is financed.

It looks like it's going to be very close either way. With the purchase you have the possibility of an upside that the car could be worth more than the payoff, IF the current residual projection holds. With the lease you're protected if the current residual projection is off. But, with the purchase you have the option of still having a car after 24 months, if you find you need it, that is financed at a very attractive rate. With the lease you have to make other transportation arrangements after 24 months no matter what.

[baardya]

thanks for all the info. but i have a few more Qs.

This is what edmunds.com says...
the lease and the buy is almost the same. but the important thing to know is that i plan to get rid of the car after 2 years no matter what. so i am in a dilemma.
this is what edmunds does not know and if i plan to keep the car for 5 yrs...i will buy it for sure...but that isnt the case.

another thing is...i have read that a down payment on a lease is not recommended. but if i put down say 2000, then the lease comes down by almost 100 bucks a month.

toughie, aint it?

[tturedraider]

thanks for all the info. but i have a few more Qs.

This is what edmunds.com says...
the lease and the buy is almost the same. but the important thing to know is that i plan to get rid of the car after 2 years no matter what. so i am in a dilemma.
this is what edmunds does not know and if i plan to keep the car for 5 yrs...i will buy it for sure...but that isnt the case.

another thing is...i have read that a down payment on a lease is not recommended. but if i put down say 2000, then the lease comes down by almost 100 bucks a month.

toughie, aint it?

Yeah. If you did four additional security deposits at $600 each, totaling $2400 it would only lower your payment by about $18/month, but you get that money back and it actually saves you $432 over two years which is an 8.3% return. This is using a MF of .0016 - .00028 (4 x .00007) = .00132

[Z4luvr]

thanks for all the info. but i have a few more Qs.

This is what edmunds.com says...
the lease and the buy is almost the same. but the important thing to know is that i plan to get rid of the car after 2 years no matter what. so i am in a dilemma.
this is what edmunds does not know and if i plan to keep the car for 5 yrs...i will buy it for sure...but that isnt the case.

another thing is...i have read that a down payment on a lease is not recommended. but if i put down say 2000, then the lease comes down by almost 100 bucks a month.

toughie, aint it?Not really. Your overriding factor is your anticipated payments (which may be the same?) and your tolerance for risk. If you lease, you risk nothing on the value of the car. You know you will turn it in 2 years from now. If you buy, you bear the risk of selling your car when you go to grad school. Historically, people can't sell a 2 year old car for the residual value. That may have changed since BMW lowered residuals earlier this year. Depending on what state you are in, there could be more tax effects (for example, Illinois and Texas are very different.) Good luck

The answer isn't always the same. For example, I bought my 535 (which I intend to keep for many years and rack up huge miles), but leased my Z4.

[baardya]

Not really. Your overriding factor is your anticipated payments (which may be the same?) and your tolerance for risk. If you lease, you risk nothing on the value of the car. You know you will turn it in 2 years from now. If you buy, you bear the risk of selling your car when you go to grad school. Historically, people can't sell a 2 year old car for the residual value. That may have changed since BMW lowered residuals earlier this year. Depending on what state you are in, there could be more tax effects (for example, Illinois and Texas are very different.) Good luck

The answer isn't always the same. For example, I bought my 535 (which I intend to keep for many years and rack up huge miles), but leased my Z4.

hmmm...interesting(er)....

i am in michigan...so .... :dunno:
that was my concern...selling the car after 2 years...a lease is safer i presume...but thats just me and thats y i am here... :)
lease is safer...meaning...i dont have to bang my head to sell a 2 yr bmw...with the things i will be busy with then!


Yeah. If you did four additional security deposits at $600 each, totaling $2400 it would only lower your payment by about $18/month, but you get that money back and it actually saves you $432 over two years which is an 8.3% return. This is using a MF of .0016 - .00028 (4 x .00007) = .00132

can u explain...the MF concept is really confusing to me...and the math that u just did is even more....
also...what do u mean multiple security deposits?

[Z4luvr]

hmmm...interesting(er)....

.i dont have to bang my head to sell a 2 yr bmw...with the things i will be busy with then!

Exactly - that's why I think leasing is for you.


can u explain...the MF concept is really confusing to me...and the math that u just did is even more....
also...what do u mean multiple security deposits?Do a search for more information or go to Edmunds.com for more buy VS lease information. There is a ton of information on this site and first timers really should read up to make sure they are getting a good deal.

Security Deposit - If you have never leased a car with BMWFS you will have to pay a security deposit equal to one payment. It will be returned to you at lease end (partially offset by the $350 disposition fee if you don't buy the car at lease end). If you decide to make MULTIPLE security deposits (which you will get back at lease end unlike a down payment or in leasespeak, cap cost reduction) BMWFS will reduce your money factor by .00007 for each one. The money factor is used to calculate the interest you are paying (or rent in leasespeak)

There are three components to a lease payment:
1) depreciation 2) rent 3) taxes I don't know how the taxes work in Michigan, so I won't go into that.

Depreciation is the price you pay for the vehicle (cap cost) minus the residual value (residual percentage times MSRP). Divide depreciation by the number of months in your lease and that's the depreciation portion of your payment.

Rent is the money factor times the sum of the Cap cost and residual value. Divide that by the number of payments and that is the portion of your payment attributed to rent :thumbup:

[b-y]

i ran a rough estimate on bmwusa.com

well...here are the details....for a 2008 328xi....

Lease:
Down -- $0
Term -- 24 months
Mileage -- 15,000

comes to $525

Buy:
Down -- $2500
Term -- 60 months
APR -- 0.9% (this is correct right?)


now to look at this after 2 yrs.....i pay the same amount....what would be better?

Look...there is no one answer here that is correct in every situation. (This is an economist speaking.) The main differences are what you have not addressed:

The time pattern of the cash flows out will be different once you compare like final situations. Whether you keep the car at the end or don't, you have to include the final cash flows that makes one situation comparable to the other. In your comparison you have different time periods and different final conditions. Under the lease, you own nothing after 2 years; with the financed pruchase you at least have a 5-year-old car at the end (but have made more than twice the number of payments).
How willing are you to bear the risk of the value 2 or more years out. (Think about the people who purchased F-150s and now want to sell them vs. the person who leased one and can walk away from it at the end of a lease without taking a hit on the value.)
The costs of dealing with an financial emergency can also be very different. With 48 or 60-month financing, you typically owe more than the car is worth for a long period in the middle of those years. But there are also costs of getting out from under a lease. That is why you are supposed to disclose leases as "contingent liabilities" if you give a mortgage company a financial statement.

[omszz]

One other thing to note. In in my home state (Washington), when you purchase you pay sales tax on the full purchase price of the car. When you sell a car after two years, none of that original tax amount is redeemed on the resale. With lease on the other hand, sales tax only applies to the amount paid over the course of the lease. For an expensive car, this can be a very large difference in taxes paid.

The other thing to worry about when purchasing is that selling after 2yrs, it might be difficult for you to recoup the remaining balance on your loan. So not only are you $2500 in the hole with the downpayment, but you may end up upside down on your loan payoff. It just depends on how much the car depreciates.

If you are sure you want to only have the car for 2 yrs, leasing gives more piece of mind in my opinion. Purchase would be more financially beneficial if you planned to keep the car a bit longer.

[baardya]

Security Deposit - If you have never leased a car with BMWFS you will have to pay a security deposit equal to one payment. It will be returned to you at lease end (partially offset by the $350 disposition fee if you don't buy the car at lease end). If you decide to make MULTIPLE security deposits (which you will get back at lease end unlike a down payment or in leasespeak, cap cost reduction) BMWFS will reduce your money factor by .00007 for each one. The money factor is used to calculate the interest you are paying (or rent in leasespeak)

There are three components to a lease payment:
1) depreciation 2) rent 3) taxes I don't know how the taxes work in Michigan, so I won't go into that.

Depreciation is the price you pay for the vehicle (cap cost) minus the residual value (residual percentage times MSRP). Divide depreciation by the number of months in your lease and that's the depreciation portion of your payment.

Rent is the money factor times the sum of the Cap cost and residual value. Divide that by the number of payments and that is the portion of your payment attributed to rent

Wow, thanks. That helps.


Look...there is no one answer here that is correct in every situation. (This is an economist speaking.) The main differences are what you have not addressed:

The time pattern of the cash flows out will be different once you compare like final situations. Whether you keep the car at the end or don't, you have to include the final cash flows that makes one situation comparable to the other. In your comparison you have different time periods and different final conditions. Under the lease, you own nothing after 2 years; with the financed pruchase you at least have a 5-year-old car at the end (but have made more than twice the number of payments).
How willing are you to bear the risk of the value 2 or more years out. (Think about the people who purchased F-150s and now want to sell them vs. the person who leased one and can walk away from it at the end of a lease without taking a hit on the value.)

As you say, I would rather walk out on the car as I am sure, I won't keep the car after 2 years. It seems also that selling will be a hassle.


The costs of dealing with an financial emergency can also be very different. With 48 or 60-month financing, you typically owe more than the car is worth for a long period in the middle of those years. But there are also costs of getting out from under a lease. That is why you are supposed to disclose leases as "contingent liabilities" if you give a mortgage company a financial statement.

Financial emergencies, it is really a case of when I go to grad school after, say, 2 years, i am sure there is no way i would want to have this monkey on my back.



One other thing to note. In in my home state (Washington), when you purchase you pay sales tax on the full purchase price of the car. When you sell a car after two years, none of that original tax amount is redeemed on the resale. With lease on the other hand, sales tax only applies to the amount paid over the course of the lease. For an expensive car, this can be a very large difference in taxes paid.

The other thing to worry about when purchasing is that selling after 2yrs, it might be difficult for you to recoup the remaining balance on your loan. So not only are you $2500 in the hole with the downpayment, but you may end up upside down on your loan payoff. It just depends on how much the car depreciates.

If you are sure you want to only have the car for 2 yrs, leasing gives more piece of mind in my opinion. Purchase would be more financially beneficial if you planned to keep the car a bit longer.

My thoughts (initial) exactly. But I just wanted to be sure you know. And all this talk is in the hypothetical case of me getting approved for the 0.9% APR which I am sure is not going to happen.



The above comments all suggest that I should lease rather than buy. :angel:

Now the questions that arise:

Do I make multiple security payments? Will that actually help me? Or will it lead to a very large sum to be payed "up front"? :dunno:

How about down payments? From the forum I get that down payment for a lease is a no-no. But that is the case when something (god forbid) happens to the car. How likely is that? If a down payment can reduce my monthly payments drastically, then should I consider it? (keeping in mind the short duration I plan to lease the car for) :bawling:

Edmunds.com gives a great read about negotiations and stuff. But what are the specific points I can negotiate on with respect to a lease? Like Money Factor, Price,.... :rolleyes:

And last, but not least. If I lease a 328xi, do I still have the Performance Center Delivery option? :bigpimp:

[bmwKbiker]

yes actually there is. i am working now. but in say 2 years i'll be leaving this job to go for an mba. and then i won't afford the car... :)


If you are really sure that you want to dump the car in 24 months then leasing makes a lot of sense. Essentially you are putting all the depreciation risk on BMW and will know up front what you cost over the 2yrs is going to be. Removing this risk is worth more than a few hundred bucks.

If this this just hypothetical, then it is a very gray area.
Leasing is a good deal for anyone who knows they will turn the car over every 24/36 months.
However, the cost of ownership for vehicles is in general is lower the longer you hold on to the vehicle.
And hence the longer you will (might) hold onto the vehicle the more attractive long term (& low rate) financing becomes.

[tturedraider]

The above comments all suggest that I should lease rather than buy. :angel:
Now the questions that arise:

1) Do I make multiple security payments? Will that actually help me? Or will it lead to a very large sum to be payed "up front"? :dunno:

You can do it either way. Whichever makes you feel best.

2) How about down payments? From the forum I get that down payment for a lease is a no-no. But that is the case when something (god forbid) happens to the car. How likely is that? If a down payment can reduce my monthly payments drastically, then should I consider it? (keeping in mind the short duration I plan to lease the car for) :bawling:

Generally no down payment is better. BMWFS leases come with GAP protection, so if somehow the car gets totaled any difference between the lease payoff amount and the value of the car is covered and you don't have to worry about it. People will tell you if you wreck the car you'll lose all your down payment. That is not necessarily true. If the insurance payout is greater than the payoff on the lease, which will be lower due to having put down a down payment, BMWFS will cut a check back to you for the difference. But, if the insurance payout is less than the payoff, you will get nothing back. Say the insurance pays $500 less than the payoff, rather than the $2500 it would be if you had not put money down; well that means that you lose that $2000 difference. In effect you've made it so there is less "gap" for the GAP insurance to cover.

3)Edmunds.com gives a great read about negotiations and stuff. But what are the specific points I can negotiate on with respect to a lease? Like Money Factor, Price,.... :rolleyes:

Don't talk about how you're buying the car until after you have negotiated the price. Negotiate the price up from invoice, not down from MSRP. After you've negotiated the price, tell them you want to lease and that you know the MF is x.xxxx and the lease acquisition fee is $625. Don't agree to a mark up of more than .0002 of the MF (that's half what's allowed) or $100 on the acquisition fee (again, half what's allowed).

4) And last, but not least. If I lease a 328xi, do I still have the Performance Center Delivery option? :bigpimp:

Yes, you do!!! You should definitely do it!!! :thumbup:


^

Actually, if you go in with all your math done you won't have to negotiate much. Say you've figured out the invoice price, including the $180 Training fee and $400 (roughly) MACO/advertising fee, is $36,000. Then take off the transmission credit (assuming you're looking at an automatic) of $1200 (roughly), for a net of $34,800. Then start with how much profit you want to allow. You could start at $200 if there are lots of 328's on the lot. At this time of the year and month they'll most likely be willing to make a deal at not more than $500 over invoice, but don't get too hung up on one or two hundred dollars.

"I know invoice is $36,000, less the transmission credit of $1200 gives a net dealer cost of $34,800. I'm willing to pay $35,000 and I'll make a deal right now." Then go from there. After you've made that deal make it clear to your CA that you know the leasing MF, residual percentage and acquisition fee.

Here's an idea a lady who's getting ready to deal has - "If and when I agree on a price with the CA/sales manager, I am going to persoanlly write down MF=.xxxx and lease acquistion = $625 or no deal and have him sign off on it before I go to the finance department."

Good luck.

[BMWFanboy]

The difficulty in doing this buy vs lease analysis correctly is that you have to consider the time value of money. If you put differing amounts of money down or there is a difference in the monthly payments then you need to consider the return you would earn on this money in a savings account, CD, or whatever over the period during which you keep the car. Unfortunately very few people seem to know how to set this up correctly so I myself was never able to model this in a spreadsheet. There is a good calculator here (http://www.dinkytown.net/java/BuyvsLease.html) but it is still not configurable enough.

[kyfdx]

Easy answer:

If you know you only want the car for two years, then lease... The deals are still decent right now... Even with the 0.9% finance, you'll be better off..

Also, if you lease, you don't have to worry about a weird color combo, or strange option list that might hurt resale.. Fixed costs..

[baardya]

If this this just hypothetical, then it is a very gray area.
Leasing is a good deal for anyone who knows they will turn the car over every 24/36 months.


So, let's get rid of the gray area. I am going to get rid of the car after 2 years. So the lease is ON.

^

Actually, if you go in with all your math done you won't have to negotiate much. Say you've figured out the invoice price, including the $180 Training fee and $400 (roughly) MACO/advertising fee, is $36,000. Then take off the transmission credit (assuming you're looking at an automatic) of $1200 (roughly), for a net of $34,800. Then start with how much profit you want to allow. You could start at $200 if there are lots of 328's on the lot. At this time of the year and month they'll most likely be willing to make a deal at not more than $500 over invoice, but don't get too hung up on one or two hundred dollars.

I am looking at a manual (of course) and so the transmission credit (whatever that is, I actually don't know) is off.

"I know invoice is $36,000, less the transmission credit of $1200 gives a net dealer cost of $34,800. I'm willing to pay $35,000 and I'll make a deal right now." Then go from there. After you've made that deal make it clear to your CA that you know the leasing MF, residual percentage and acquisition fee.

How am I supposed to know the MF? Is it a standard for a car/company/state?

Here's an idea a lady who's getting ready to deal has - "If and when I agree on a price with the CA/sales manager, I am going to persoanlly write down MF=.xxxx and lease acquistion = $625 or no deal and have him sign off on it before I go to the finance department."

Good luck.

U GUYS ROCK!

:bow:

[baardya]

OK. So I think the rates are given at
BMW Lease Rates - August 2008 (http://www.bimmerfest.com/forums/showthread.php?t=302967)

so...
2008 BMW 328xi Sedan
24 Month ***8211; Residual 66% of MSRP ***8211; .00125 Base Rate

[tturedraider]

OK. So I think the rates are given at
BMW Lease Rates - August 2008 (http://www.bimmerfest.com/forums/showthread.php?t=302967)

so...
2008 BMW 328xi Sedan
24 Month ***8211; Residual 66% of MSRP ***8211; .00125 Base Rate

Bingo!

Regarding calculating the price, there was a small price increase in June that's not reflected in the invoice price sheets here on bimmerfest. Go to www.edmunds.com (http://www.edmunds.com) and they have the new invoice prices that reflect the price increase.

If the particular car you're looking at happens to have been produced prior to the price increase then it won't apply. The price increase was not retroactive.

The dealer is allowed by BMWFS to mark up the MF by .0004 and the acquisition fee by $200 and they'll most likely try to do that. You may find they're not willing to give you the base rates, but don't let them mark them up all the way. Go for a max mark up on the MF of .0002 and $100 on the acquisition fee if they're absolutely insistent on marking them up.

Time to go shopping!! :thumbup:

[baardya]

Time to go shopping!! :thumbup:

ya i have been tracking edmunds from the start.

nyways...i appreciate all ur help...i am off to a dealership today...and i will be updating the this thread with whatever info i get...so i can make others aware too and also avoid any mistakes....

i have a trade-in...so things will get a little complicated there...but well...i plan to be driving my new car soon...be it a bmw (hopefully) or any other...!

[tturedraider]

ya i have been tracking edmunds from the start.

nyways...i appreciate all ur help...i am off to a dealership today...and i will be updating the this thread with whatever info i get...so i can make others aware too and also avoid any mistakes....

i have a trade-in...so things will get a little complicated there...but well...i plan to be driving my new car soon...be it a bmw (hopefully) or any other...!

Make the trade-in a "separate" deal. It's better not to tell them you have a trade-in until after the price is set on the new car. Then you'll get an offer on the true value they'll give you on your trade-in. Of course, you've probably already learned this from reading Edmunds. :)

Good luck.

[baardya]

Make the trade in a "separate" deal. It's better not to tell them you have a trade in until after the price is set on the new car. Then you'll get an offer on the true value they'll give you on your trade in. Of course, you've probably already learned this from reading Edmunds. :)

Good luck.

hmmm interesting...actually i didnt come across this on edmunds.....is there a reason to stall...?
if the trade in thing is the first thing is say...would they actually inherit the trade in value in the negotiations? (seems about right)

[tturedraider]

hmmm interesting...actually i didnt come across this on edmunds.....is there a reason to stall...?
if the trade in thing is the first thing is say...would they actually inherit the trade in value in the negotiations? (seems about right)

If you include the trade-in in the beginning of the negotiations you'll never know accurately at what price they sold the new car to you. They will over-value your trade to make it look like their giving your a really good deal on the new car.

e.g. - New car MSRP = $36,000. We'll give you $10,000 for your trade and the difference is $26,000. Ok, that was more than I was expecting for my trade; sounds good.

as opposed to - Invoice price on the car is $32,500. I'll give you $33,000. I have a car I want to trade. How much will you give me for it? We can give you $8,000 for it. $33,000 - $8,000 = $25,000

As a matter of fact, if the value they give you for your trade-in is more than you want to use as a down payment, you can have them give you a check for the difference. From the above example - I only want to put down $2000. Please give me a check for the $6000 difference.

[baardya]

wow....ok...cool...

will get back to u as soon as i am back from the battlefield!

[Z4luvr]

I just wanted to back up my Red Raider friend on this one. Until you have a deal on your new car, you do not want to talk trade in at all. It's just another way they can cofuse into paying more. Before you go to your dealer, take your trade in to Carmax, they will make you a frim offer that you can use as a basis for comparison.

[sdbrandon]

It's always been my opinion, whichever car I buy, that I should lease it, if I plan to use it for 2 years, which I am. I am sure I am going to use the car for 2 years and then sell (in case I buy) or end the lease.
So (all this hypothetically), I have decided on going for a 2008 328xi. Now with the 0.9% APR (let's say I qualify for that), what would my best options be? Lease, buy?

As you may have noticed I am an amateur in this field. This is actually my first new car purchase/lease and so I am very fresh. I have been reading through this forum and making some decisions. But before I go to an actual dealer and start the process I would like to know all the information related to my question. And yes, also about the 0.9% APR. The pros, cons and fine print.

Any help will be much appreciated.

Thanks.

For a short term vehicle always lease.

[tturedraider]

For a short term vehicle always lease.

haha, I read your initial post and was about to ask if you had read the whole thread. Obviously, you went back and did that. :)

[sdbrandon]

haha, I read your initial post and was about to ask if you had read the whole thread. Obviously, you went back and did that. :)

:rofl: Yeah I read your post twice to understand exactly what you were saying.

Too much coffee today. :eek:

[baardya]

so...

I went to a dealer today, and then to my surprise (?), there were no 08 328xi out there in the US (read this dealer's contacts). I mean there were some, but they were packed with options and I don't want those. There is one, but I have to make a decision to buy and complete the negotiations by Saturday which is impossible and so I have to let it go. If I take too long, this car will be off to another state and I may end up paying the trucking fees for its transportation to Michigan. And as they are not building any 08 models now (true?), ....
So now the only thing I can do is "build" an 09 model. So, all my calculations with respect to an 08 model will go for a toss. Coz there is no info about the residual, MF, etc for the 09 and that will be higher. Won't also my negotiation power go down a notch or 2 because they may not try and get "rid" of the 09, like the 08?

HELP!!

[baardya]

Also, a car which is already in the inventory here (at any dealers) would rob me off the Performance Center Delivery option. :cry:

[bmwKbiker]

so...
Won't also my negotiation power go down a notch or 2 because they may not try and get "rid" of the 09, like the 08?

HELP!!

Yup,
Don't expect aggressive dealer discounting until they have unfilled build allocation slots.
If the dealership has only a couple of remaining build slots until (say) Decemeber, why would the take a low margin sale and risk not having a slot for the walkin that thinks 2K off of MSRP is a good deal.

[baardya]

Well, tomorrow I am off to another dealership. Let's see what they have in stock. I did find a 328xi there, but haven't made sure it's a manual.

Will keep you posted.

[tturedraider]

so...

I went to a dealer today, and then to my surprise (?), there were no 08 328xi out there in the US (read this dealer's contacts). I mean there were some, but they were packed with options and I don't want those. There is one, but I have to make a decision to buy and complete the negotiations by Saturday which is impossible and so I have to let it go. If I take too long, this car will be off to another state and I may end up paying the trucking fees for its transportation to Michigan. And as they are not building any 08 models now (true?), ....
So now the only thing I can do is "build" an 09 model. So, all my calculations with respect to an 08 model will go for a toss. Coz there is no info about the residual, MF, etc for the 09 and that will be higher. Won't also my negotiation power go down a notch or 2 because they may not try and get "rid" of the 09, like the 08?

HELP!!

Given that you are only leasing for two years and are wanting to make a financially advantageous deal, I recommend you strongly consider finding a way to make it possible to make a deal on this car if it suits your needs.

You are in an area of the country where "x" models are in high demand and you are at the very end of the model year. You will encounter low supply of x-models at this point. And, your requirement of a manual transmission makes the supply even smaller.

Yes, it is true that '08 models are no longer in production.


Also, a car which is already in the inventory here (at any dealers) would rob me off the Performance Center Delivery option. :cry:

I'm about 98.9999% sure you can still do Performance Center "Delivery" even if you take actual delivery at your local dealer. I think you have up to a year to make a trip down to the PCD and take advantage of the driving instruction that you would get if you did the actual delivery there. Check the PCD forum to confirm. I have a very strong recollection of reading about this just within the last month or so.


Well, tomorrow I am off to another dealership. Let's see what they have in stock. I did find a 328xi there, but haven't made sure it's a manual.

Will keep you posted.

Of course, it would be a good idea to call ahead and make sure it's a manual.


Adrian, is it possible (do you have time) for you to do a check of the supply of 328xi's with manual transmission and PM baardya?

[carnuts3]

Lots of good info here. But IMO, if you are definitely, I emphasize - definitely, not going to keep the car at the end of 24 mos, I would lease the car - easier to dispose of and don't have to worry about resale values, etc. However, the one proviso is that you will take care of the car so that at lease end you aren't charged for excessive wear. This is the only potential risk that I see with leasing in this case.

[baardya]

Adrian, is it possible (do you have time) for you to do a check of the supply of 328xi's with manual transmission and PM baardya?

Wow...thanks man, I'd appreciate that!

[tturedraider]

I'm about 98.9999% sure you can still do Performance Center "Delivery" even if you take actual delivery at your local dealer. I think you have up to a year to make a trip down to the PCD and take advantage of the driving instruction that you would get if you did the actual delivery there. Check the PCD forum to confirm. I have a very strong recollection of reading about this just within the last month or so.


Oops, 1.0001% won this one. PCD is only available on ordered cars.


edit: Whoa, hold the phone. Apparently this question is not definitively answered yet.

[Jake C]

Yes PCD can be done with a car on the lot. Jonathan just confirmed it. But it may cost the dealer some money.

- J

[baardya]

so i checked out another dealership and have found the right BMW 328xi...08 model.
now the price quoted for that is around $35,900 which is below the price that is quoted on bmwusa.com for the same features.
i plan to visit another dealership next week, but if i go ahead with this vehicle, and i start talking numbers, and of this happens in say september, how much change would there be in the MF?

and now that i have a figure in mind, i have read that the overall price should be negotiated and not the monthly payments. so, what factors do i start with? ask him the MF he is applying and give him my number?

and also....please someone explain to me (again) how the "multiple security deposits" works and how i present it to the dealer during the numbers game?

[BMWFanboy]

Seriously, take a few minutes to read the stickies right at the top of this forum. There is a sticky about MSDs and it is pretty easy to understand. In exchange for putting down a security deposit you receive a reduction in the money factor. You start by negotiating the sale price of the vehicle just as if you were going to buy the car, then start talking about the money factor to see if he is marking it up from the buy rate. Finally, you can mention you want to do MSDs since the dealer shouldn't care about this

[Mister Mayor]

so i checked out another dealership and have found the right BMW 328xi...08 model.
now the price quoted for that is around $35,900 which is below the price that is quoted on bmwusa.com for the same features.

So whats the story? did u make a deal or no? :eeps:

[baardya]

not yet...and i think thats never gonna happen....
the main reason....my wife...she's getting on my back....shhhh.... :)

[BMWFanboy]

not yet...and i think thats never gonna happen....
the main reason....my wife...she's getting on my back....shhhh.... :)

That's unacceptable - get your priorities straight ;).

[SteveinBelAir]

One other thing to note. In in my home state (Washington), when you purchase you pay sales tax on the full purchase price of the car. When you sell a car after two years, none of that original tax amount is redeemed on the resale. With lease on the other hand, sales tax only applies to the amount paid over the course of the lease. For an expensive car, this can be a very large difference in taxes paid.



That may be th case in Washington State however in MD, VA, TX, IL and several others, you will pay the full tax even on a lease.

It sucks but you can't get around it. You pay it all and then, if you buy the car at the end of the lease, you pay it again on the buy out price.

For the OP, I think Michigan tags it onto the payment.

Like anything in leasing, you have to know this stuff up front before you go walking into the dealership.

[baardya]

That's unacceptable - get your priorities straight ;).

apparently...she said the same to me...:dunno: :)

[tturedraider]

apparently...she said the same to me...:dunno: :)

Have you taken her to drive a bimmer?

[baardya]

Have you taken her to drive a bimmer?

yes...and she complained like there was no tomorrow...i think i have to delay it...but i will get one...