Critique My Lease Offer!

Well, sure, if tying up $4K-$5K is a big deal then maybe it makes sense, but if liquidity is not needed then there is no arguing that it is one of the best "risk free investments" one can make. You are effectively loaning BMW money and getting something like a 25-35% return on it after 3 short years.

Originally Posted by CE750Jockey

Hey JustinTJ, I know you're really up on the leasing of these things, I thought I read that you said the lease rates for the '13 MY are out, but I just saw someone say that they're not out yet. Can you clarify for me, and what they are? Thanks, man.

There was a bulletin suggesting that the rates would stay the same in May, but nothing official until July 1st.

Originally Posted by pcmike

I've done research on it in the past. Not much research is really needed to be honest. You just need to look at the difference in interest rates over the lease term and compare it against what you're getting back. If that value is <1K, I'd rather have the money on hand. In this case it looks like it's good for a savings of ~$1400 or so? I guess it's worth it.. it's all a matter of perspective I think, it's not a hard and fast rule.

The return is better than most risk free investments, if you don't mind putting the money down.

Originally Posted by voip-ninja

Well, sure, if tying up $4K-$5K is a big deal then maybe it makes sense, but if liquidity is not needed then there is no arguing that it is one of the best "risk free investments" one can make. You are effectively loaning BMW money and getting something like a 25-35% return on it after 3 short years.

True, some folks are more liquid than others. It makes all the difference. Beats the hell out of a CD.

Originally Posted by voip-ninja

Having your lease paid for up front using cash (your trade) seems like an exceptionally bad idea. It's basically cap cost reduction. What would happen in the event that the car is totaled? I expect you would be out the entire balance of your lease without reimbursement.

You had me questioning myself for a minute so I called the dealer and they guaranteed that if my car were to get stolen or totaled then I would be put into another lease of the same value car I have now with no out of pocket expense.
I also called my Progressive agent and added gap insurance for three dollars a year. That way BMW will be reimbursed the total new value of the car and not it's value at the time of a claim.

So I'm all good.

Originally Posted by voip-ninja

Well, sure, if tying up $4K-$5K is a big deal then maybe it makes sense, but if liquidity is not needed then there is no arguing that it is one of the best "risk free investments" one can make. You are effectively loaning BMW money and getting something like a 25-35% return on it after 3 short years.

Totally disagree. Current inflation rate, the real one is running at least 9%. With the European crisis at hand who the heck knows how much money the Fed will print in the next 3 years to "help" banks out. Personally every liquid penny I have goes into PMs, mostly 80% silver 20% gold. in fact I am happy to lease a 335i just the way I want it for 570 per month because I am fairly certain every payment I make will be with depreciating dollars.

No way would I give cash for BMW to hold when the dollar is being trashed like this. But to each its own.

Originally Posted by windsor027

Totally disagree. Current inflation rate, the real one is running at least 9%. With the European crisis at hand who the heck knows how much money the Fed will print in the next 3 years to "help" banks out. Personally every liquid penny I have goes into PMs, mostly 80% silver 20% gold. in fact I am happy to lease a 335i just the way I want it for 570 per month because I am fairly certain every payment I make will be with depreciating dollars.

No way would I give cash for BMW to hold when the dollar is being trashed like this. But to each its own.

I also hold gold, but I believe in being diversified and would never even consider pouring all of my liquid assets into precious metals.

There's far too much volatility in any commodity, including gold, which is why the USD is no longer based on gold value.

Anyways, to each their own.

Originally Posted by voip-ninja

I also hold gold, but I believe in being diversified and would never even consider pouring all of my liquid assets into precious metals.

There's far too much volatility in any commodity, including gold, which is why the USD is no longer based on gold value.

Anyways, to each their own.

The USD is not backed by gold because of volatility? That I have not heard before, but hey whatever turns you on. Its a free country or so some want us to believe.

Have you heard this? Commodities are volatile because the USD is being trashed by the FED. Anyway 3K, 5k we are talking about peanuts here. If people feel better with a lower payment why not do it. But then I would question why get a 45K car.

you are in California. shouldn't you be dealing with Jon at SB auto group, the dude that founded and runs this forum? dude is a surfer, so I'm sure he'll be cool to deal with.

Originally Posted by chill535ix

you are in California. shouldn't you be dealing with Jon at SB auto group, the dude that founded and runs this forum? dude is a surfer, so I'm sure he'll be cool to deal with.

I'm not near Santa Barbara. Plus, I negotiated with my dealership yesterday for maybe 2-3 hours before we arrived at the current numbers. I'm happy with what I got I don't want bad karma, man. I did it with my last lease, and got screwed because the car kept breaking down every 2-3 months and I got last it through competing offers. The numbers work with my situation, so I'm happy

Originally Posted by voip-ninja

I also hold gold, but I believe in being diversified and would never even consider pouring all of my liquid assets into precious metals.

There's far too much volatility in any commodity, including gold, which is why the USD is no longer based on gold value.

Anyways, to each their own.

Diversified is the way to go. Over the last 50 years, the average return on investments (stock market) has been 8%. After my number crunching, my return over the next three years would be ~13%. I do have a diversified portfolio (that I started just last year) and my return has been around 5-6%

Originally Posted by windsor027

The USD is not backed by gold because of volatility? That I have not heard before, but hey whatever turns you on. Its a free country or so some want us to believe.

Have you heard this? Commodities are volatile because the USD is being trashed by the FED. Anyway 3K, 5k we are talking about peanuts here. If people feel better with a lower payment why not do it. But then I would question why get a 45K car.

I wanted 500 because that fit my budget. I did have money that I wasn't using and instead of tying it into investments I decided to put it away risk free. It made sense in my head, at least.

Regarding the USD: neither you, nor I know what'll happen in the future. We can guess the hell out of it, but in the end, we'll just end up with headaches . I graduated with a degree in econ and, to be honest, most of the stuff we learned was based on real world not being a factor. It was theory based and some real world applications. It's best to be happy with what you got. At least in my opinion. If you want to tie up 80% of your money in gold, go for it. I would rather have it all over the place, haha

Originally Posted by krazyfalcon

Diversified is the way to go. Over the last 50 years, the average return on investments (stock market) has been 8%. After my number crunching, my return over the next three years would be ~13%. I do have a diversified portfolio (that I started just last year) and my return has been around 5-6%



I wanted 500 because that fit my budget. I did have money that I wasn't using and instead of tying it into investments I decided to put it away risk free. It made sense in my head, at least.

Regarding the USD: neither you, nor I know what'll happen in the future. We can guess the hell out of it, but in the end, we'll just end up with headaches . I graduated with a degree in econ and, to be honest, most of the stuff we learned was based on real world not being a factor. It was theory based and some real world applications. It's best to be happy with what you got. At least in my opinion. If you want to tie up 80% of your money in gold, go for it. I would rather have it all over the place, haha

i actually said 80% silver and 20% gold and believe me I also have stocks. My allocation is probably 70% dividend paying stocks and 30% precious metals. One lesson I learned very early is minimize leverage, others will tell you different. My way got me 3 paid off properties, a paid off house, zero debt and the only monthly payment other than utilities is the two car leases.

No one knows what will happen in the future that is true but because I have been studying the market and interest rates now for over 20 years I think I have a decent idea. Hard times are coming for those that think this dog and pony show we call government will somehow get out of the debt bubble we are in. Remember it took 230 years for us to get to 6 trillion dollar debt and just 7 years (2013) to go to go over 16 trillion with the biggest segment of the population getting into retirement age ready to demand what was promised to them.

Anyway this is a car forum, enjoy your new ride and you can bet I will do the same.

Originally Posted by windsor027

Anyway this is a car forum, enjoy your new ride and you can bet I will do the same.

amen!

Originally Posted by pcmike

I've done research on it in the past. Not much research is really needed to be honest. You just need to look at the difference in interest rates over the lease term and compare it against what you're getting back. If that value is <1K, I'd rather have the money on hand. In this case it looks like it's good for a savings of ~$1400 or so? I guess it's worth it.. it's all a matter of perspective I think, it's not a hard and fast rule.

Apparently your research has been inadequate. The ROI is generally 7% - 10%.

I know what the ROI for MSDs is, that's not the point as someone else has already pointed out.

Originally Posted by tturedraider

Apparently your research has been inadequate. The ROI is generally 7% - 10%.