11-26-2012, 09:53 PM
Next car: '18 AMG GT Vert
Join Date: Dec 2006
Mein Auto: 13 X5M, 15 M6, 15 328dxt
Let's check your math using your numbers...
Originally Posted by boltjaM3s
The 1M is an exception, a rare car that'll hold its value. Let's look at a typical $50,000 BMW 3 Series. Buy it for cash, keep it for 10 years.
That's $50,000 out-of-pocket in 2002, $5,000 a year, or $417.00 per month.
The car will be out of warranty for 7 years, assume that you'll need $4,500 worth of maintenance and repairs on the car during that span.
At the end of 10 years, you'll have a used car with high mileage worth $3,000 on private sale if you're lucky.
Purchase 1 car: Total out of pocket net resale value is: $51,500 or $5,150 per year, or $429.00 per month.
If you leased a series of $50,000 cars instead, paid it off slowly at $539.00 per month, took the remainder of the $50,000 and invested it, you'd make approximately $10,000 on that money over the 10 year period at a minimum.
Lease 4 cars: Total out of pocket net investment revenue is: $54,680 or $5,468 per year, or $455.00 per month.
So for an extra $25 a month you could have been in 4 brand new BMW's under warranty instead of being in 1 old BMW that's out of warranty for 7 years. And if the repair costs are lower and/or the investment revenue is lower, we're still only talking about a few dollars a month here, the cost of a typical lunch at a decent restaurant on a single day.
Philosophy and "pride" are nice, but the math sets you free.
Starting Cash: $53,300
Purchase $50,000 + $3,000 Taxes + $300 Title
Monthly Investment $539
Investment Total: $64,680
Investment Income: $6,468
Taxes on Income: $1,940
Net Income: $4,528
Purchase Ending Cash: $67,700
Net Change: $14,400
One time Investment: $50,000
Investment Income: $10,000
Taxes on Income: $3,000
Net Income: $7,000
Lease payment: $539
Total Lease Payments: $64,680
Lease1: $1,500 Taxes + $300 Title + $725 Acquisition Fee + $500 Security Deposit
Lease2: $1,500 Taxes + $300 Title + $725 Acquisition Fee
Lease3: $1,500 Taxes + $300 Title + $725 Acquisition Fee
Lease4: $1,500 Taxes + $300 Title + $725 Acquisition Fee
Additional Lease Costs: $9,400
Lease Ending Cash: $50,900
Net Change: -$2,400
Net difference: $16,800 or $140/mo
Math may set you free, but understanding it could save you money.
Last edited by dunderhi; 11-26-2012 at 10:41 PM.