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Old 11-26-2012, 09:53 PM
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dunderhi dunderhi is offline
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Location: MD
 
Join Date: Dec 2006
Posts: 5,998
Mein Auto: '13 X5M, 650xi
Quote:
Originally Posted by boltjaM3s View Post
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.

BJ
Let's check your math using your numbers...

Starting Cash: $53,300

Purchase $50,000 + $3,000 Taxes + $300 Title
Maintenance: $4,500
Trade-in: $3,000
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.
__________________


2013 X5M ........ 2013 650xi ...... 2011 550xi (ret) 2011 335d (ret)

Last edited by dunderhi; 11-26-2012 at 10:41 PM.