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  #51  
Old 06-14-2006, 08:56 PM
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schley schley is offline
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I agree with many that say there are many factors to consider and it is like a science project to figure out a magic formula for your to feel like you made the absolute best decision.

I would advocate that for the low mileage driver to lease who doesn't keep the car past 5 years. A couple advantages is that for that same period of 5 years you are in your second fully warranteed, fully free maintained, no resale risk if in accident or damage car. It hasn't been brought up but 2 advantages to leasing is that if you get a car that has been in an accident you don't have to #1 keep it and deal with the lower resale and #2 try and sell it or be less than happy driving it with any flaws it may have.

There really are 3 clearcut reasons NOT to lease.
1. You hang onto your cars, and are happy doing so 6 or more years.
2. You drive more than 18k a year.
3. You are going to or like to add accesories or modify your car.

Now work the numbers and it maybe a couple dollars cheaper or more expensive one way or the other, but buying the car outright has several significant disadvantages

1. Ties up much more money either up front or per month, which could be used for investing or other expenses.

2. You are exposed on resale value when trying to sell it, in particular if it has had any accidents or other flaws.

3. If you keep it past he warranty period you have to not only purchase the extended warranty (which isn't as comprehensive as the original 4/50k) AND purchase the extended maintanence. Add this up on an entry 3 series and you are looking at at least 3-4 grand.

4. The cost of tires I feel is a wash either way as i see it, the only way it screws you to lease is if you have put on new tires during your lease and only get to use 50% of their life span.

5. Having to stay in a vehicle because you are upside on the value of it. When that is depends on many factors but as others have said I think in general the break even point is between 5-6 years.

6. You can upgrade your car in 3 years and get the newest model without having to trade in a purchased vehicle, or feeling trapped because it is just too big of a hit to get our of your purchase to get the newest and newest model.

As I stated before I purchased and the more I think about it I certainly would have been better off leasing. Not that it is for everyone, but the above are my opinions after really much more time analyzing this question of lease vs. buy WAY MORE THAN I SHOULD
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  #52  
Old 06-14-2006, 10:33 PM
epoints epoints is offline
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The more I think about what Schely and BABF said... I think leasing of expensive 550 is way to go...

I came up with some numbers for both ED and US Delivery

ED
MSRP = 66600
CAP = 61100
Term = 24 months
12k miles
MF = .00025 (base) +.0003 (ED) +.0004 (max dealer markup) -.00049 (7 MSD) = .00246
Residual rate = 70% + 2% = 72%
tax rate = 7.75%
MSD = 7

monthly lease payment of $864.29 or total of $21587 over 24 month

US Deliver
MSRP = 70695
CAP = 65695
Term = 24 months
12K miles
MF = .00025 (base) +.0004 (max dealer markup) -.00049 (7 MSD) = .00216
Residual rate = 70% + 2% = 72%
tax rate = 7.75%
MSD = 7

monthly lease payment of $935.58 or total of $23298.87 over 24 month

I also calculated the numbers for 3 years but yearly cost look the same.

Do these numbers look right? I am not sure about the MF, registration fees and other gov fees.
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  #53  
Old 06-15-2006, 10:21 AM
schley's Avatar
schley schley is offline
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Quote:
Originally Posted by epoints
The more I think about what Schely and BABF said... I think leasing of expensive 550 is way to go...

I came up with some numbers for both ED and US Delivery

ED
MSRP = 66600
CAP = 61100
Term = 24 months
12k miles
MF = .00025 (base) +.0003 (ED) +.0004 (max dealer markup) -.00049 (7 MSD) = .00246
Residual rate = 70% + 2% = 72%
tax rate = 7.75%
MSD = 7

monthly lease payment of $864.29 or total of $21587 over 24 month

US Deliver
MSRP = 70695
CAP = 65695
Term = 24 months
12K miles
MF = .00025 (base) +.0004 (max dealer markup) -.00049 (7 MSD) = .00216
Residual rate = 70% + 2% = 72%
tax rate = 7.75%
MSD = 7

monthly lease payment of $935.58 or total of $23298.87 over 24 month

I also calculated the numbers for 3 years but yearly cost look the same.

Do these numbers look right? I am not sure about the MF, registration fees and other gov fees.

hmm i get an 24 month lease price of

ED - 754 a month
US Delivery - 935 a month

both of these are including tax

use leasefinder calculator and triple check but i used your numbers.


For a 3 year lease I get

ED - 814

US delivery - 928

both of these are including tax..... thus you can drive your new 2007 550 for two years 12k a year for 754 a month if you do ED, or 814 if you do three years.

Also keep in mind you have to pay the 625 aquisition fee at inception or roll that in. Dealers can mark this up 200 to 825 so I would think you can get the base if you are paying max markup on the MF. How much over invoice are you offering on this to the dealer btw as I didn't want to figure that out.

Your numbers are off because regardless of whether you take ED or US delivery the residual is ALWAYS factored off of US delivery MSRP, which is why ED is such a screaming deal!

You are the man driving a 70 grand car for 754 a month! That is 75 bucks less a month than my 2006 330 ED purchase payment!

Lease just looks better and better. Also are you a member of bmwcca if you your 550 qualifies you for a 1000 rebate on top of all this! This is regardless of whether you do ED or not, buy or lease.
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Last edited by schley; 06-15-2006 at 10:24 AM.
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  #54  
Old 06-15-2006, 11:14 AM
BayAreaBMWFan BayAreaBMWFan is offline
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Quote:
Originally Posted by schley
Your numbers are off because regardless of whether you take ED or US delivery the residual is ALWAYS factored off of US delivery MSRP, which is why ED is such a screaming deal!

Also are you a member of bmwcca if you your 550 qualifies you for a 1000 rebate on top of all this! This is regardless of whether you do ED or not, buy or lease.
Do keep in mind that you pay for one month and a half extra in ED leases where you do not have use of the car. So the 24 month lease is actually a 21.5 month lease where you make 23 payments (BMWFS makes one). A 36 month lease is actually a 33.5 month lease where you make 35 payments.

This factor can be useful for high-milage drivers since you have a smaller time period to use the allocated miles.

Your DMV registration starts once you pick up the car in the US, which gives you another two months without having to pay for next year's registration.
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  #55  
Old 06-15-2006, 11:16 AM
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JonathanIT JonathanIT is offline
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Quote:
Originally Posted by schley
It hasn't been brought up but 2 advantages to leasing is that if you get a car that has been in an accident you don't have to #1 keep it and deal with the lower resale and #2 try and sell it or be less than happy driving it with any flaws it may have.
This is a big advantage in the whole "lease vs. buy" debate. It was a significant reason I went with leasing... I look at it as "extra insurance" against catastrophic damage. If you're in a major accident ($25K or more in damage, frame repair), the insurance will not total out the car, they will fix it. Who wants the car then? If you financed, you're stuck underwater and then will take a big hit if you try to sell it. With a lease you can turn it in and walk away. Come to think of it, even a minor accident would make me want another car.



--J.
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Last edited by JonathanIT; 06-15-2006 at 11:19 AM.
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  #56  
Old 06-15-2006, 01:03 PM
schley's Avatar
schley schley is offline
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Quote:
Originally Posted by BayAreaBMWFan
Do keep in mind that you pay for one month and a half extra in ED leases where you do not have use of the car. So the 24 month lease is actually a 21.5 month lease where you make 23 payments (BMWFS makes one). A 36 month lease is actually a 33.5 month lease where you make 35 payments.

This factor can be useful for high-milage drivers since you have a smaller time period to use the allocated miles.

Your DMV registration starts once you pick up the car in the US, which gives you another two months without having to pay for next year's registration.
This is certainly correct and payment is due 14 days prior to pickup so depending on how long you drive in europe and when you drop it off, you could be making the 3rd and possibly 4th lease payment before you get the car in the US. This is including the 2nd lease payment that BMW makes for you.
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  #57  
Old 06-15-2006, 10:57 PM
epoints epoints is offline
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I see I have couple mistakes and typos in my numbers..
  1. use ED MSRP instead of US MSRP
  2. Inception fees of 450 instead of 650

But my numbers still do not match up with yours... Please note I changed my option configuration (because not sure if aero kit can be rolled into lease - so I took it out)

ED
MSRP = 67095
Invoice = 57515
CAP = 58595
Term = 24 months
12k miles
MF = .00225 (base) +.0003 (ED) +.0004 (max dealer markup) -.00049 (7 MSD) = .00246
Residual rate = 70% + 2% = 72% or 61% for 36 month
tax rate = 7.75%
MSD = 7

monthly lease payment of $745.19 or total of $18904.58 over 24 month
monthly lease payment of $792.59 or total of $29553.16 over 36 month

US Deliver
MSRP = 70695
Invoice = 62005
CAP = 63095
Term = 24 months
12K miles
MF = .00225 (base) +.0004 (max dealer markup) -.00049 (7 MSD) = .00216
Residual rate = 70% + 2% = 72% or 61% for 36 month
tax rate = 7.75%
MSD = 7

monthly lease payment of $923.14 or total of $23000.35 over 24 month
monthly lease payment of $905.57 or total of $33445.55 over 36 month


Wow! ED does look really good...

Yes. I have to calculate the months on the ship which about 2 months. So, the payment per month is actually $859 for 24 (22) months lease and $869 for 36 (34) month lease. Or should I have divided by 23 and 35 respectively?

I am all excited now... Please REALITY CHECK!!!

Questions:

Is inception fees same as acquisition fees?

Is .0004 MF good number for dealer markup?

If numbers are fairly correct, is it better to take the 2 year or 3 year lease?

Biggest question is - Will these numbers fly when I take it to the dealer????

I did not know financing can be this fun!
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- '07 550i, Silver Gray/BLK/Maple, SMG :: , Sports PKG, Active Steering, Comfort Access, Rear Shade, Rear AirBag, HD Radio; ED - 9/25/06; USD - 11/22/06;

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  #58  
Old 06-15-2006, 11:12 PM
BayAreaBMWFan BayAreaBMWFan is offline
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The maximum markup is limited to 0.0004 (about 1%).

I personally insist on no markup because the dealer is not carrying any risk and not doing anything to finance the car with BMWFS (i.e. shopping around for best rate). In fact from a dealer's perspective getting paid by BMWFS is even better and less work than a cash deal since there is no risk of the check bouncing!

The acquisition fee can be marked up by $200 to $825.

It is easy to do $1500 over ED invoice.

24 month vs 36 months is your choice. How often do you want to tool around the autobahn in your new BMW
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2002 745Li Slate Green Metallic/Beige Retired; Perfect baby-hauler
2006 525 TiAg/Black Retired
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Last edited by BayAreaBMWFan; 06-15-2006 at 11:15 PM.
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  #59  
Old 06-16-2006, 10:36 AM
schley's Avatar
schley schley is offline
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Quote:
Originally Posted by epoints
I see I have couple mistakes and typos in my numbers..
  1. use ED MSRP instead of US MSRP
  2. Inception fees of 450 instead of 650

But my numbers still do not match up with yours... Please note I changed my option configuration (because not sure if aero kit can be rolled into lease - so I took it out)

ED
MSRP = 67095
Invoice = 57515
CAP = 58595
Term = 24 months
12k miles
MF = .00225 (base) +.0003 (ED) +.0004 (max dealer markup) -.00049 (7 MSD) = .00246
Residual rate = 70% + 2% = 72% or 61% for 36 month
tax rate = 7.75%
MSD = 7

monthly lease payment of $745.19 or total of $18904.58 over 24 month
monthly lease payment of $792.59 or total of $29553.16 over 36 month

US Deliver
MSRP = 70695
Invoice = 62005
CAP = 63095
Term = 24 months
12K miles
MF = .00225 (base) +.0004 (max dealer markup) -.00049 (7 MSD) = .00216
Residual rate = 70% + 2% = 72% or 61% for 36 month
tax rate = 7.75%
MSD = 7

monthly lease payment of $923.14 or total of $23000.35 over 24 month
monthly lease payment of $905.57 or total of $33445.55 over 36 month


Wow! ED does look really good...

Yes. I have to calculate the months on the ship which about 2 months. So, the payment per month is actually $859 for 24 (22) months lease and $869 for 36 (34) month lease. Or should I have divided by 23 and 35 respectively?

I am all excited now... Please REALITY CHECK!!!

Questions:

Is inception fees same as acquisition fees?

Is .0004 MF good number for dealer markup?

If numbers are fairly correct, is it better to take the 2 year or 3 year lease?

Biggest question is - Will these numbers fly when I take it to the dealer????

I did not know financing can be this fun!

K your ED payment is still off because again you are using ED MSRP, FORGET ABOUT ED MSRP it doesn't mean a thing! It is a non factor in your lease. The only thing you need is the US MSRP for that is the figure the residual is calculated off of. The 70695 is the msrp for both ED and US delivery. So your payment is wrong for ED again. I'm not sure why your calculations are off for US delivery.

2 year - 635.70
3 year - 732.68

Your US delivery is

2 year - 812.81
3 year - 844.95


again i'm using your figures and new msrp, and the calculator on leaseguide.com

For your new msrp these payments are correct, including tax. Go ahead and double check them and triple check them as it is hard to believe the ED numbers huh?!

As bayarea stated, I wouldn't put ANY markup in the deal! That is strickly extra profit above and beyond your dealer profit above invoice. I would also negotiate the aquisition fee to be the base of 625. If they want to give something to the finance guy take 200 off your dealer profit and agree to the 825 aquisition fee. Or take 200 off your dealer profit and agree to increase the mf by .0002, but giving them the MAX of .0004 I don't think is the best deal you can find.

Another benefit of ED is that they cannot add any fees into this purchase such as maco or training. If you do US delivery they can and probably will insist on this and it is what would make or break a deal IMO for it can add up to 500-700 dollars over your dealer profit. I and many treat these as included in the dealer profit and if that dealership doens't agree then keep searching.
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  #60  
Old 06-16-2006, 02:21 PM
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GBPackerfan1963 GBPackerfan1963 is offline
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Quote:
But my numbers still do not match up with yours... Please note I changed my option configuration (because not sure if aero kit can be rolled into lease - so I took it out)
FYI, you can wrap the aero kit into the lease. I'm doing it.
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  #61  
Old 06-17-2006, 12:15 AM
epoints epoints is offline
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Happy Father's Day

Quote:
Originally Posted by firehire
FYI, you can wrap the aero kit into the lease. I'm doing it.

Thank for the info. How much is Aero kit from dealer?


To all the father's out there..

Happy Father's Day!!! Take your kid(s) out in your 5s and have fun!!!
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- '07 550i, Silver Gray/BLK/Maple, SMG :: , Sports PKG, Active Steering, Comfort Access, Rear Shade, Rear AirBag, HD Radio; ED - 9/25/06; USD - 11/22/06;

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  #62  
Old 06-17-2006, 01:33 AM
chrischeung chrischeung is offline
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My experience

Double Post - sorry
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2012 ActiveHybrid 750i ED

3/12 ED 7 - thread ID 610350
1/11 ED 6 - thread ID 5767556&postcount=175
4/10 ED 5 - thread ID 453501
5/08 ED 4 - thread ID 290679
3/07 ED 3 - thread ID 201013
3/06 ED 2 - thread ID 136454

Last edited by chrischeung; 06-17-2006 at 02:04 AM.
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  #63  
Old 06-17-2006, 02:04 AM
chrischeung chrischeung is offline
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My experience

This is my own personal experience. I just sold my 2003 325i today, for which I paid cash $30,800 plus taxes and fees (before rebates), and just sold today to painlessly to Carmax for $20,000. I was wondering to myself if I would have been better off leasing. I think I might have, which is why my current car is leased.

Assumptions for this 2003 calculation
- Acq of $575, MF of 0.001, 63% resdiual (10K/year), no disposition.
- CA tax rate of 8.25%.
- Opportunity cost rate of return 5% per annum after tax on $27,000 average principle.
- Although I sold my car for $20K (39 months of ownership), I'll assume I could have sold it for $20.5K at 36 months of ownership.
- BMWCCA rebate of $500

Calculations
BUY With CA Tax Excl. CA Tax
List $34,800 $34,800
Neg $30,800 $30,800
Rebate $(500) $(500)
Tax $2,541 $-
Cost $32,841 $30,300
Trade In $20,500 $20,500
3yr ownership $12,341 $9,800

LEASE
List $34,800 $34,800
Neg $30,800 $30,800
Rebate $(500) $(500)
Acq $575 $575
Residual (63%) $21,924 $21,924
Monthly Payment $324 $299
Total Cost $11,738 $10,849

Opportunity Cost
5% after tax return on $27000 (3 yrs) $4,256

Total Cost (Lease) $7,482 $6,593
Total Cost (Buy) $12,341 $9,800

Lease vs Buy $4,859 $3,207 (Leasing better off in both cases)

RESULTS
- I personally would have been better off leasing by around $4,800, including the tax component.
- However, when I sold my car to Carmax, I did so with about $1,500 of "fixes" (my car had the original tires on it (3K of tread left), my wife lost her key, 1 curbed wheel, 1 door ding). If I remember the BMWFS guide, I may be responsible for some tires $800, plus the key $200 = $1,000.


SUMMARY
Leasing seems to be better if you can get a decent rate of return on your cash, can maintain the car well, can turn the car in with just sufficient rubber, and not exceed the mileage, and live in a state which dings you with high sales tax for purchasing.

Buying may be better if you want less hassle managing a car (selling a car to Carmax is basically hassle free), don't know how many miles you will be driving, may keep the car longer or shorter, and live in a low tax state. Also, I figure I may have been able to sell my car privately for about $1,500 more than selling it to Carmax. In which case, leasing is still better than buying in this case.

It comes down to hindsight - we don't have it - make the best decision you can based on what you know of the future. 3 years ago, I was single, lived in a 1 bedroom apartment in Venice, was about to get engaged, and was just becoming cashflow comfortable, and thought I would drive the car for at least 5 years. Now, I'm married with a child, have a different job, Live in the San Francisco Bay Area, am more financially stable, and have come to the honest realization that I need a new car every 2-3 years. So leasing is for me at this point in time - I don't forsee major changes in my life over the next 2 years (famous last words).

But three thing I definitely love about leasing - Firstly, BMW takes the residual risk for you at the end. With year on year record sales, those cars are going to get out in the market in a few years, and with more cars, this should equate to lower residuals. I kind of like BMW eating some of that risk!

Secondly, in California, you only pay tax on the lease payment.

And finally, the freed up money can be made to be a real investment, not put into a pseudo investment called "my car".
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2012 ActiveHybrid 750i ED

3/12 ED 7 - thread ID 610350
1/11 ED 6 - thread ID 5767556&postcount=175
4/10 ED 5 - thread ID 453501
5/08 ED 4 - thread ID 290679
3/07 ED 3 - thread ID 201013
3/06 ED 2 - thread ID 136454

Last edited by chrischeung; 06-17-2006 at 02:13 AM.
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  #64  
Old 06-17-2006, 02:48 AM
BayAreaBMWFan BayAreaBMWFan is offline
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Thanks Chris.

I did not get how you calculated the opportunity cost on a purchase though (5% after tax return on $27000 == 1488). I think it should be higher.
OK you corrected it.

I tried an analysis using future value calculations.
MF of 0.002
Pre-tax rate of return of 4.8%
Income Tax rate of 44.3%

Then leasing and buying were within $300 of each other. The key was that the effective post tax rate of return was 2.67% while the lease MF was equivalent to 4.8%. This highlights the fact that even with the most conservative investment and high income tax rate, leases do as well as purchases. If you could actually have a higher post tax rate of return on your investment (say 8%), you start doing better with the lease.

It also means that the lease money factor is perhaps the key. A lease with high residuals and high MF is not as good as one with lower residuals and lower MF but the same payments, since you are building less equity. Another factor to keep in mind is that unless your lease payments are also tax-deductible, if you assume the same pre-tax ROI as the lease money factors, the gap between leasing and buying narrows significantly since the lease payment is all post-tax compensating for the lower sales tax payments.
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  #65  
Old 06-17-2006, 07:17 AM
chrischeung chrischeung is offline
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This ponders the question

Quote:
Originally Posted by BayAreaBMWFan
Thanks Chris.

I did not get how you calculated the opportunity cost on a purchase though (5% after tax return on $27000 == 1488). I think it should be higher.
OK you corrected it.

I tried an analysis using future value calculations.
MF of 0.002
Pre-tax rate of return of 4.8%
Income Tax rate of 44.3%

Then leasing and buying were within $300 of each other. The key was that the effective post tax rate of return was 2.67% while the lease MF was equivalent to 4.8%. This highlights the fact that even with the most conservative investment and high income tax rate, leases do as well as purchases. If you could actually have a higher post tax rate of return on your investment (say 8%), you start doing better with the lease.

It also means that the lease money factor is perhaps the key. A lease with high residuals and high MF is not as good as one with lower residuals and lower MF but the same payments, since you are building less equity. Another factor to keep in mind is that unless your lease payments are also tax-deductible, if you assume the same pre-tax ROI as the lease money factors, the gap between leasing and buying narrows significantly since the lease payment is all post-tax compensating for the lower sales tax payments.

For those who don't even want to actively invest, how about just putting the money towards their home? Would that be better?
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  #66  
Old 06-17-2006, 07:44 AM
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chuck92103 chuck92103 is offline
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Quote:
Originally Posted by JonathanIT
This is a big advantage in the whole "lease vs. buy" debate. It was a significant reason I went with leasing... I look at it as "extra insurance" against catastrophic damage. If you're in a major accident ($25K or more in damage, frame repair), the insurance will not total out the car, they will fix it. Who wants the car then? If you financed, you're stuck underwater and then will take a big hit if you try to sell it. With a lease you can turn it in and walk away. Come to think of it, even a minor accident would make me want another car.



--J.
You are correct. But no one wants to play the "totalled car" card regardless if they lease or not. Insurance still goes up and you could potentially be cancelled. So yes it is true you are protected to some extent because you lease, however, you are required to have more coverage and just like buying, you are subject to higher rates/cancellation due to claims history. But yes, if you are the type to total your cars, by all means lease.
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Old 06-17-2006, 08:37 AM
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JonathanIT JonathanIT is offline
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Quote:
Originally Posted by chuck92103
But yes, if you are the type to total your cars, by all means lease.
What a lame thing to say. A friend of mine was rear ended by a truck on I-10 not too long after she had bought a brand new RX8. She's an excellent driver, and babied the car... but it was completely demolished from the rear bumper to the axle. It was no where near her fault; in fact it was a multi car pile-up and she managed to avoid the hitting the car in front of her and still got reamed. They fixed the car ($27K damage), but the diminished value has left her stuck.

But I guess you're not the "type" to ever total a car, eh? Heck, why even bother with insurance, it seems like a waste of money for such an excellent driver like yourself... who would never be in an accident.

Besides, my point was that it doesn't even take a "total" accident; many who take special care of their cars would not feel the same even after a fender bender. Even if you start out with the intention of buying a car to keep, leasing offers insurance against any kind of damage for the first few years that would make you not want the car.

Heck, it even offers protection from "buyers remorse." Let's say you've always wanted a convertible so you finally go for it... well who knows, after having had one for a while you might decide it's not for you afterall (you know "the grass is always greener..."), and it's not the car you want to keep.

--J.
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  #68  
Old 06-17-2006, 08:47 AM
sdbrandon sdbrandon is offline
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Quote:
Originally Posted by JonathanIT
What a lame thing to say. A friend of mine was rear ended by a truck on I-10 not too long after she had bought a brand new RX8. She's an excellent driver, and babied the car... but it was completely demolished from the rear bumper to the axle. It was no where near her fault; in fact it was a multi car pile-up and she managed to avoid the hitting the car in front of her and still got reamed. They fixed the car ($27K damage), but the diminished value has left her stuck.

But I guess you're not the "type" to ever total a car, eh? Heck, why even bother with insurance, it seems like a waste of money for such an excellent driver like yourself... who would never be in an accident.

Besides, my point was that it doesn't even take a "total" accident; many who take special care of their cars would not feel the same even after a fender bender. Even if you start out with the intention of buying a car to keep, leasing offers insurance against any kind of damage for the first few years that would make you not want the car.

Heck, it even offers protection from "buyers remorse." Let's say you've always wanted a convertible so you finally go for it... well who knows, after having had one for a while you might decide it's not for you afterall (you know "the grass is always greener..."), and it's not the car you want to keep.

--J.
Dimished value comes into to play when you go to sell. How much less was she quoted for trading in/selling out right? $27k seems like a lot of damage, close to totalled. On an accident involving a rear end, and that much damage, I would have sought legal assistance regardless if I bought or leased.

Regarding buy vs. lease, remember leasing only works if the majority of people buy/finance used and new cars. From a business standpoint, the majority have to buy. So don't beat up too hard on those who buy as they are doing you a favor.
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  #69  
Old 06-17-2006, 08:51 AM
BayAreaBMWFan BayAreaBMWFan is offline
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Quote:
Originally Posted by chuck92103
You are correct. But no one wants to play the "totalled car" card regardless if they lease or not. Insurance still goes up and you could potentially be cancelled. So yes it is true you are protected to some extent because you lease, however, you are required to have more coverage and just like buying, you are subject to higher rates/cancellation due to claims history. But yes, if you are the type to total your cars, by all means lease.
Our cars have been rear-ended four times in the past seven years in three different states. Three times it was a low speed crash (we were stopped at a toll booth and twice at a red-light). The fourth time it was an unlicensed illegal who rammed into our car at 40mph and the car was totalled. The unlicensed illegal was driving behind a delivery truck and did not see the lights turn red. When the truck shifted lanes, she gassed up and hitting us as we were cruising to a stop. The car was totalled.

Our insurance rates HAVE NOT gone up because we were never at fault.

And chuck, I have corrected you multiple times regarding insurance. The coverage required by BMWFS is a maximum of $1000 deductible for the compreshensive and collission. I do not know about you but for newer cars I typically carry a $100 comprehensive and $500 collission deductible. Comprehensive deductibles are cheap, and these claims again do not affect your insurance ratings unless they are excessive (once every few months).
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  #70  
Old 06-17-2006, 08:55 AM
sdbrandon sdbrandon is offline
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Quote:
Originally Posted by BayAreaBMWFan
Our cars have been rear-ended four times in the past seven years in three different states. Three times it was a low speed crash (we were stopped at a toll booth and twice at a red-light). The fourth time it was an unlicensed illegal who rammed into our car at 40mph and the car was totalled. The unlicensed illegal was driving behind a delivery truck and did not see the lights turn red. When the truck shifted lanes, she gassed up and hitting us as we were cruising to a stop. The car was totalled.

Our insurance rates HAVE NOT gone up because we were never at fault.

And chuck, I have corrected you multiple times regarding insurance. The coverage required by BMWFS is a maximum of $1000 deductible for the compreshensive and collission. I do not know about you but for newer cars I typically carry a $100 comprehensive and $500 collission deductible. Comprehensive deductibles are cheap, and these claims again do not affect your insurance ratings unless they are excessive (once every few months).
Wow, you are definately a good lease candidate. rear ended four times.
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  #71  
Old 06-17-2006, 09:19 AM
BayAreaBMWFan BayAreaBMWFan is offline
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Quote:
Originally Posted by chrischeung
For those who don't even want to actively invest, how about just putting the money towards their home? Would that be better?
Chris:

In my calculations I assumed that someone was paying cash. The opportunity cost I used was a CD (4.8%) which got taxed at the marginal income tax rate of (44.3% in CA). Even in this scenario the lease was ahead even though the net post tax rate of return on the cash used for purchase is 2.67%.

If you are financing you are paying interest at post tax income and at the same rate, the lease was $2600 less.

Of course if you can get a better return on investment, leasing becomes better. So if you put the money towards a house the return depends on the appreciation. If instead of putting $32K cash to buy the car, you put it as a 10% downpayment on a $320K home, any appreciation of the home is leveraged. So if the home goes up 15% in three years, your ROI is almost 50% pa! But then the home can go down too. A better comparison would be intermediate bond funds; relatively safer.

However, the strategy of investing in an appreciating asset (like a home) and borrowing for a depreciating asset (a car) is pretty much bullet proof with BMWs even with low return instruments like CDs!
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  #72  
Old 06-17-2006, 09:28 AM
BayAreaBMWFan BayAreaBMWFan is offline
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Quote:
Originally Posted by sdbrandon
Wow, you are definately a good lease candidate. rear ended four times.
Yup. The first three times it was our Pathfinder which got hit. Each time the repair bill was a couple of thousands since they were all low speed crashes. Once it was a toll booth in the NJ turnpike where we were stuck in a 4 mile long backup. It was one car length at a time for an hour and during one such stop and go, the guy behind us put the foot on the gas pedal instead of the brake and rammed us in (it was around 11:00PM and late). The next time, a lady in an Audi chatting on a cell phone did not see the traffric stopped in front of her and rammed into the car behind ours which then hit our car. The third time a medical student who had not slept for 36 hours hit us when we were stopped at a red-light; she started rolling forward too early in anticipation of the light turning green and pickup up too much speed while we were still stopped.

When I traded it in after 63 months, I lost about $1000 due to the CARFAX report showing the accident! And after 63 months and $55K miles I got 34% of MSRP, which was equivalent to 40% of purchase price, and 36% of net price with sales tax.

I bought my first BMW cash after the car was totalled in 2003. I started wondering about how much I would lose if the car was hit, and it was frightening!
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  #73  
Old 06-17-2006, 10:50 AM
sdbrandon sdbrandon is offline
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I lease my 6 series. Prefer something different every few years. I buy a 7 series every 7 years though. Leasing would not work for me on the 7. BMW does a model change every 7-8 years. I can't see leasing the same car twice. So I buy a new one on the second year of every new model year and keep it until the second year of the next model. Works out well for me.

If BMW changed models significantly every couple of years, then I would definately be leasing the 7.
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Old 06-17-2006, 01:11 PM
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GBPackerfan1963 GBPackerfan1963 is offline
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Quote:
Originally Posted by epoints
Thank for the info. How much is Aero kit from dealer?
I want to say around 3900. Not cheap by any stretch of the imagination. There is a thread that tells you where to get it done for less.

http://www.bimmerfest.com/forums/sho...light=aero+kit
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Old 06-17-2006, 03:48 PM
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Quote:
Originally Posted by chuck92103
You are correct. But no one wants to play the "totalled car" card regardless if they lease or not. Insurance still goes up and you could potentially be cancelled. So yes it is true you are protected to some extent because you lease, however, you are required to have more coverage and just like buying, you are subject to higher rates/cancellation due to claims history. But yes, if you are the type to total your cars, by all means lease.

Chuck, no offense but it would have been better to stop after the, "You are correct." It is OK to agree and just leave it at that.
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