Doesn't Anyone Buy Anymore?

Originally Posted by bmw_or_audi

Your point is well taken, and I know these are just numbers thrown for illustration, but I don't think the average family spends $500/mo on gas and electric I don't think we spend more than on average $100-120/mo on those things. Granted, we have no toddlers at home anymore, so everyone is at work or school. Our house is not huge, but still a decent 2600+sqft. And we do use the AC and heating before it gets uncomfortable. But I do live in Southern California, and have decent windows and reasonably efficient furnace/AC. Is heating really that expensive in the Northeast or is this the result of you living in an old poorly insulated gigantic mansion?

$365 in cigarettes? How much is a pack nowadays, $5, or have we reached $10?

$300/mo on cell phones? Actually that sounds about right (we use a mere $50) and apparently this has had a noticeable impact on retail spending.

Cable/line/internet is about $130-140/mo for me. How many lines and channels do you get to reach $600? Are things that much more in Bergen county?

But unfortunately, while your numbers may be a little made up, or perhaps simply specific to your clearly non-average situation, your point remains valid, and I kind of hate you for it because it makes me aware of my hangups. For instance, my two kids' extracurricular activities cost me about $650/mo, without even counting fundraisers and banquets and such. I could probably be driving a decently optioned 535i, or maybe even a 550i for that kind of payment. Let the little rat-brats do some less costly things My internal conflicts continue ...

Yeah, those prices are all valid. I don't smoke, but $11 a pack is pretty typical in Manhattan. $300 a month takes care of 4 iPhones for my family, we can share the minutes and the texts but the dataplans are a different story.

Sorry about your hangups, but we've all got them. I've spent an M3 trying to make my kid a better football and baseball player with all the equipment, lessons, travel teams, winter ball, you name it.

My car is one of my least expensive monthly utilities. Just how it goes.

BJ

Originally Posted by bmw_or_audi

I was not referring to your friends' situation in particular (the rules can be found here: http://www.consultingmentor.com/Article.asp?101).

Just that many people who claim deductions of this sort often do not qualify and could get burned if audited.

Grrrrrrrr, another pet peeve of mine.

No, the proof is NOT in the pudding! WTF does that mean?

The proof of the pudding is in the eating!!!!!

How can we accept accounting advice from someone who gets an adage wrong?

Originally Posted by lacarnut

Like I have stated, I will find out whether that is a fact or fiction. Plus, do you have State Farm or a Mickey Mouse insurance company. Another fact is that if the car is totaled in a wreck I will have some type of injury. You can book on that if it is the other person fault.

You can be insured by Lloyd's of London. The *best* is that they make the car owner (BMWNA) whole on the remaining value of the car. Worst they just give the owner (BMWNA) what they think the car is worth and the remainder is your problem. But with the most amazing insurance in the world they won't care you already paid down $5k of your rental ahead of schedule. That's all a cap-cost reduction is. An insurance company looking at the totaled car won't even be interested that you paid this. They are only going to give BMWNA the value of their car. The difference in good or bad insurance will be how that is calculated - market value of the vehicle at time of loss or BMWs calculated value (almost certainly the bigger number). In the former you are going to be on the hook for the difference (and still lose the $5k). I get you have great insurance. Pre-paying the rental of the car (what the lease is, a rental) has nothing to do with insuring the replacement value of the vehicle.

Originally Posted by Kamdog

Grrrrrrrr, another pet peeve of mine.

No, the proof is NOT in the pudding! WTF does that mean?

The proof of the pudding is in the eating!!!!!

How can we accept accounting advice from someone who gets an adage wrong?

Just an American bastardization

Originally Posted by akaMomo

You can be insured by Lloyd's of London. The *best* is that they make the car owner (BMWNA) whole on the remaining value of the car. Worst they just give the owner (BMWNA) what they think the car is worth and the remainder is your problem. But with the most amazing insurance in the world they won't care you already paid down $5k of your rental ahead of schedule. That's all a cap-cost reduction is. An insurance company looking at the totaled car won't even be interested that you paid this. They are only going to give BMWNA the value of their car. The difference in good or bad insurance will be how that is calculated - market value of the vehicle at time of loss or BMWs calculated value (almost certainly the bigger number). In the former you are going to be on the hook for the difference (and still lose the $5k). I get you have great insurance. Pre-paying the rental of the car (what the lease is, a rental) has nothing to do with insuring the replacement value of the vehicle.

well, hence the fact that people 'in the know' don't do cap cost reductions, or if they do so they do it with the understanding that they are risking it. And on the downside if the insurance value is less than payoff, there is nothing to worry about as BMW FS includes GAP in all of their leases at no charge.

Originally Posted by SARAFIL

well, hence the fact that people 'in the know' don't do cap cost reductions, or if they do so they do it with the understanding that they are risking it. And on the downside if the insurance value is less than payoff, there is nothing to worry about as BMW FS includes GAP in all of their leases at no charge.

Thank you for clarifying that. So the caliber of ones insurance seems even less critical, at least in this one respect with BMWFS covering their rear (and the lessee by association).

After a bad accident with someone poorly insured the one thing I am careful is to have a high limit for uninsured motorist (which also covers "underinsured" motorist).

Originally Posted by bmw_or_audi

I was not referring to your friends' situation in particular (the rules can be found here: http://www.consultingmentor.com/Article.asp?101).

Just that many people who claim deductions of this sort often do not qualify and could get burned if audited.

Thanks for the info. will ckeck that book out. I bought a beach condo as an investment this year and have done quite well with it. May buy another one next year. I have a good handle on mileage but there are some other tricks I am not aware of.

Being retired, I do not want to get in trouble with the IRS. It is just not worth it. My 2011 Infiniti G37 only has 10k miles on it and it is paid for. I like driving a new car every couple of years and could care less what some dude does with his 10 year old beater to save money. When you are making a lot more than you are spending who cares. Not my style. I will lease the 335I coupe and turn it back in at the lease end. Might go with a Jag the next time around.

Originally Posted by bmw_or_audi

Japanese cars don't have any less electronics. They too have ECUs, various electronic sensors, complex emission systems, etc. These things don't go wrong too often. I think that nowadays the perceived reliability differences are far bigger than they are in reality. Take Honda: paint problems, brake problems, and transmission problems are not uncommon.

They have on my BMW. That's been the problem. BMW seems to be inclined to make things needlessly complicated with minimal if any incremental benefit in performance.

But that's not what I've seen on any of our Japanese cars. Honda isn't marketing their cars as semi-luxury, semi-sporting "Ultimate Driving Machine" cars either, just as basic bread and butter transportation. We did need to replace a Honda transmission at about 90k miles, but Honda stepped up to the plate and did it for free. I'd give Honda more leeway than BMW -- except they don't need it.

Originally Posted by The Wall Street Journal

The BMW 7 Series, for example, has more than 120 electric motors, including 38 just for the front seats.

Originally Posted by bmw_or_audi

I was not referring to your friends' situation in particular (the rules can be found here: http://www.consultingmentor.com/Article.asp?101).

Just that many people who claim deductions of this sort often do not qualify and could get burned if audited.

All the more reason for tax reform.

Originally Posted by Chris90

All the more reason for tax reform.

Tax reform is great, and everyone is for it until you start to talk specifics, and people realize you will have to touch one of the sacred cow deductions (home mortgage, capital gains, insurance premium pre-tax deduction) and all of a sudden a middle upper person is going to have to kick in some more and that's when the howling usually starts.

Originally Posted by voip-ninja

Tax reform is great, and everyone is for it until you start to talk specifics, and people realize you will have to touch one of the sacred cow deductions (home mortgage, capital gains, insurance premium pre-tax deduction) and all of a sudden a middle upper person is going to have to kick in some more and that's when the howling usually starts.

Not if they lower rates to compensate like under Ryan's plan. Theoretically we could simplify without hurting anyone, except tax cheats and the IRS payroll.

Originally Posted by akaMomo

If you think that money is safe nothing I say will change that. If your lawsuit recovers money you'd still net more after settlement if your cap-cost reduction was less. The ultimate total cost of the lease is same and to drop $5k in up front only makes it feel cheaper when you write your check each month. Cost is ultimately virtually the same. Fine.

For the rest, you'll find a heavily optioned car isn't much more than a lightly optioned one. The cap-cost only goes up by invoice amount if you make a decent deal and residuals for BMW are high. For the extra $50/mo or so get what you want on the car. The difference for a 328 to a 335 was not much more than that. This is where leases shine.

It looks like you guys were right. After checking with Edmunds and other sites, I conclude putting the least amount down is the best way to lease a car. This is my first lease;so, even an old dog like me can learn new tricks. Thanks for everyone's input.

Originally Posted by akaMomo

The ultimate total cost of the lease is same and to drop $5k in up front only makes it feel cheaper when you write your check each month. Cost is ultimately virtually the same.

If one does a $5k cost reduction, then one does not pay interest costs (money factor) on that $5k. Cap cost reduction not only reduces the monthly payment, it reduces the total cost of the lease. The lowest overall cost for a lease is to have a single payment lease. With this type of lease there are risks and most likely better investment alternatives, but it doesn't change the fact the cap cost reduction reduces the total lease cost.

Now I have question for the lease gurus. If one makes 7 MSDs to lower their money factor and one totals his car, does one forfeit the security deposits?

Originally Posted by dunderhi

If one does a $5k cost reduction, then one does not pay interest costs (money factor) on that $5k. Cap cost reduction not only reduces the monthly payment, it reduces the total cost of the lease. The lowest overall cost for a lease is to have a single payment lease. With this type of lease there are risks and most likely better investment alternatives, but it doesn't change the fact the cap cost reduction reduces the total lease cost.

Now I have question for the lease gurus. If one makes 7 MSDs to lower their money factor and one totals his car, does one forfeit the security deposits?

Makes sense. It would be interesting to run the numbers on something like a $5k cap reduction - enough to be a risk, wonder what savings is. (Or maybe who cares.)

Not sure I qualify as a guru but I have to think you get the security back after your insurance settles the loss. You've satisfied the lease after all at that point.

Originally Posted by lacarnut

It looks like you guys were right. After checking with Edmunds and other sites, I conclude putting the least amount down is the best way to lease a car. This is my first lease;so, even an old dog like me can learn new tricks. Thanks for everyone's input.

Tnx & glad to help.

Originally Posted by Chris90

Not if they lower rates to compensate like under Ryan's plan. Theoretically we could simplify without hurting anyone, except tax cheats and the IRS payroll.

What is Ryan's plan again? AFAIK, it's reduce taxes and then make up for it by closing unspecified loopholes that will magically generate gazillion dollars. Yeah, it's some hand waving BS and this guy is being taken seriously by the press when he is nothing by a BSer at best and I'll skip what he might be at worst.

Originally Posted by bmw_or_audi

What is Ryan's plan again? AFAIK, it's reduce taxes and then make up for it by closing unspecified loopholes that will magically generate gazillion dollars. Yeah, it's some hand waving BS and this guy is being taken seriously by the press when he is nothing by a BSer at best and I'll skip what he might be at worst.

hahahahha. You succumbed to the urge to reply to the brainwashed political comment.

Originally Posted by dunderhi

If one does a $5k cost reduction, then one does not pay interest costs (money factor) on that $5k. Cap cost reduction not only reduces the monthly payment, it reduces the total cost of the lease. The lowest overall cost for a lease is to have a single payment lease. With this type of lease there are risks and most likely better investment alternatives, but it doesn't change the fact the cap cost reduction reduces the total lease cost.

Now I have question for the lease gurus. If one makes 7 MSDs to lower their money factor and one totals his car, does one forfeit the security deposits?

Since I am a lease guru I can answer this question. The answer is NO. If the car is totalled BMW will take the insurance payoff and separate out the MSD's. The gap insurance covers the difference between insurance payoff and balance on the lease and you get refunded all 7 MSD's. MSD's are a fool proof way to save money on the lease and I only do these. I never do cap cost reduction because MSD's will save you the about the same amount of money, but you get it back at lease end. Make sure your dealer/salesperson is familiar with MSD's (I have found many dealers don't have a clue) and that they use the appropriate MSD paperwork which reflects the MSD policies and rules.

Originally Posted by bmw_or_audi

What is Ryan's plan again? AFAIK, it's reduce taxes and then make up for it by closing unspecified loopholes that will magically generate gazillion dollars. Yeah, it's some hand waving BS and this guy is being taken seriously by the press when he is nothing by a BSer at best and I'll skip what he might be at worst.

Ryan's plan is $25k standard deduction, 10% rate up to $100k, 25% rate above $100k. No other deductions of any kind.

Not that it matters now.

Originally Posted by Chris90

Ryan's plan is $25k standard deduction, 10% rate up to $100k, 25% rate above $100k. No other deductions of any kind.

That's what a reasonable person would assume based on what has been said in the media. But the truth is, he has never ever said no other deductions of any kind. He has simply not specified anything whatsoever.

Did you hear an uproar about a loss of mortgage interest deduction? How about charitable contribution deductions? How about state income tax deduction? I didn't think so.

And if "no one gets hurt" as you say, i.e. everything evens out, how can that change the deficit in any way? It can't. But Ryan's plan is supposed to be the magic bullet to fix the deficit.

Here is what republicans want to do: eliminate benefits such as SS, medicare, etc. There is nothing wrong about wanting that. But they can't just come out an say it, because ironically their own constituency won't go for it.

Sorry I am getting off topic here. I won't go further down this road.

Originally Posted by Alpine300ZHP

Since I am a lease guru I can answer this question. The answer is NO. If the car is totalled BMW will take the insurance payoff and separate out the MSD's. The gap insurance covers the difference between insurance payoff and balance on the lease and you get refunded all 7 MSD's. MSD's are a fool proof way to save money on the lease and I only do these. I never do cap cost reduction because MSD's will save you the about the same amount of money, but you get it back at lease end. Make sure your dealer/salesperson is familiar with MSD's (I have found many dealers don't have a clue) and that they use the appropriate MSD paperwork which reflects the MSD policies and rules.

Fools can be very inventive, so I wouldn't rest on the assumption that anything is fool proof.

Originally Posted by Chris90

Ryan's plan is $25k standard deduction, 10% rate up to $100k, 25% rate above $100k. No other deductions of any kind.

Not that it matters now.

link?

Originally Posted by Kamdog

Fools can be very inventive, so I wouldn't rest on the assumption that anything is fool proof.

Not an assumption. I have done MSD's and am very familiar with the program. Ask any fest sponsor and they will tell you the same thing.

anyone buy their bmw lately? these threads are hard to find.

Originally Posted by mr29

anyone buy their bmw lately? these threads are hard to find.

I bought mine in March.