Doesn't Anyone Buy Anymore?

Hi all,
New to the forums and had some questions on purchasing a brand new 2012 bmw 328i.

some background info: I'm from canada and already have fully payed off my 2007 acura csx.

I'm still up in the air on if I should be financing vs leasing. One thing I havn't seen anyone talk about is this owner's choice financing.

OwnersChoice- A great alternative to Standard Financing. Reduce your payments by deferring a flexible balloon amount - due at the end of your term

The dealer was basically saying this was just another way of reducing your payments with 5k down its going to cost me about $733/month over 4 years. Do you guys think this is a good idea to go with? basically he said at the end of the 4th year you can either pay the balloon amount or refinance it OR you can use it as a trade-in for another bmw after 4 years and that it would be worth the balloon amount (on the payment calculator it shows as $20,540) to me this sounds like the best of both works im still building some equity on this vehicle and at the same time putting in 20k+ downpayment on a new car would help keep those monthly payments down(I still think I prefer to get a new car every 4-5 years). There has to be some sort of catch or something I'm missing so hopefully someone can shed some light on this. I was also planning to trade in my acura when buying this new bmw so that should lower my monthly payments as well.

Originally Posted by rs123

Hi all,
New to the forums and had some questions on purchasing a brand new 2012 bmw 328i.

some background info: I'm from canada and already have fully payed off my 2007 acura csx.

I'm still up in the air on if I should be financing vs leasing. One thing I havn't seen anyone talk about is this owner's choice financing.

OwnersChoice- A great alternative to Standard Financing. Reduce your payments by deferring a flexible balloon amount - due at the end of your term

The dealer was basically saying this was just another way of reducing your payments with 5k down its going to cost me about $733/month over 4 years. Do you guys think this is a good idea to go with? basically he said at the end of the 4th year you can either pay the balloon amount or refinance it OR you can use it as a trade-in for another bmw after 4 years and that it would be worth the balloon amount (on the payment calculator it shows as $20,540) to me this sounds like the best of both works im still building some equity on this vehicle and at the same time putting in 20k+ downpayment on a new car would help keep those monthly payments down(I still think I prefer to get a new car every 4-5 years). There has to be some sort of catch or something I'm missing so hopefully someone can shed some light on this. I was also planning to trade in my acura when buying this new bmw so that should lower my monthly payments as well.

Your gonna have to run some numbers...if you are planning on turning it in in 4 years, might as well get a lease, put 2K down and prob have a monthly payment cheaper than $700

Also, i had no clue them made a civic/acura...thats pretty cool. What kind of engine does that thing have?

Originally Posted by justinnum1

Your gonna have to run some numbers...if you are planning on turning it in in 4 years, might as well get a lease, put 2K down and prob have a monthly payment cheaper than $700

Also, i had no clue them made a civic/acura...thats pretty cool. What kind of engine does that thing have?

I tried the leasing numbers, with 2k down over 4 years at 20,000km per year it shows 696 /month if I use that 9 security deposits or 727/month if I don't. I think I read on this form that 36 months was the sweet spot when it came to leasing-not sure why? The other thing is if I trade in my car I feel like I'm just loosing equity because if I'm leasing the next car at the end of the 4 years I have 0 equity where as with the 4 years I already have had with my csx its prob worth 13,000, I guess on the other hand my monthly payments should be really low because if I trade in this car for say 13k isn't that basically like putting 13k down payment on the lease?

As for the csx, it has a 2.0L L4 DOHC 16-valve engine with 155 hp

Owner's choice is just a balloon payment form of car loan structured to offer the economics, more or less, of a lease. In the past it was only used in states where the legal environment or local tax law disfavored leasing somehow.

Don't trade your car. Sell it for cash. Or use the trade value for MSD payments that you get back at the end of the lease. Money down on a lease is a bad idea because it is all at risk of loss if you crash or have to terminate early.

Originally Posted by raleedy

Don't trade your car. Sell it for cash. Or use the trade value for MSD payments that you get back at the end of the lease. Money down on a lease is a bad idea because it is all at risk of loss if you crash or have to terminate early.

Sorry what are MSD payments I'm not familiar with leasing terms in general yet.

Originally Posted by rs123

As for the csx, it has a 2.0L L4 DOHC 16-valve engine with 155 hp

The Civic-based Acura has been available in Canada for a long time. It is coming to the US this year as an Acura ILX. There will be 2 engine choices -- 150 HP (based on, but slightly more powerful than the regular Civic) and 201 HP (Civic Si). They both get worse gas mileage than the BMW 328i!
http://www.caranddriver.com/news/201...-and-info-news

Originally Posted by rs123

Sorry what are MSD payments I'm not familiar with leasing terms in general yet.

MSD= Multiple Security Deposits. This is a program that gets you are reduced money factor (interest rate). You get your security deposits back at the end of the lease term.

Originally Posted by rs123

I tried the leasing numbers, with 2k down over 4 years at 20,000km per year it shows 696 /month if I use that 9 security deposits or 727/month if I don't. I think I read on this form that 36 months was the sweet spot when it came to leasing-not sure why? The other thing is if I trade in my car I feel like I'm just loosing equity because if I'm leasing the next car at the end of the 4 years I have 0 equity where as with the 4 years I already have had with my csx its prob worth 13,000, I guess on the other hand my monthly payments should be really low because if I trade in this car for say 13k isn't that basically like putting 13k down payment on the lease?

As for the csx, it has a 2.0L L4 DOHC 16-valve engine with 155 hp

IN this case, raleedy has a good idea of selling the car private for cash, and using some of that cash for security deposits. Do not trade in the car to the dealer and let them just put that towards the lease. Dealers can be shady, especially with hidden #'s...i try to keep the transactions seperate, used car deal, then new car deal. Good luck

Has anyone thought about purchasing F30 versus leasing? Since this is a fairly new model & I don't think a significant amount of used F30 will be available until 2015 (3 year old lease return), hence the depreciation won't be too bad.

I posted earlier how my 335d purchase equate to $365 monthly cost = $7,300 / 20 months. I think it might have to do with BMW releasing it only in 2009 & there just aren't that many oil burners available for sales. If you have tier 1 credit & you have the capability to make additional monthly payment (apply to principal), then this shall be the route.

Originally Posted by bayoucity

Has anyone thought about purchasing F30 versus leasing? Since this is a fairly new model & I don't think a significant amount of used F30 will be available until 2015 (3 year old lease return), hence the depreciation won't be too bad.

I posted earlier how my 335d purchase equate to $365 monthly cost = $7,300 / 20 months. I think it might have to do with BMW releasing it only in 2009 & there just aren't that many oil burners available for sales. If you have tier 1 credit & you have the capability to make additional monthly payment (apply to principal), then this shall be the route.

3 series is a well known model. There's no reason to assume the depreciation will be different from the e90/e46. By this time next year there will be over 80k copies of the new Fx models on US roads.

I would buy instead of lease, I never could work out the benefit of leasing? Where will you take delivery, I have stayed at the movenpick hotel in munich near the airport, and there is a BMW delivery point right next door!

Originally Posted by NewZee

I would buy instead of lease, I never could work out the benefit of leasing? Where will you take delivery, I have stayed at the movenpick hotel in munich near the airport, and there is a BMW delivery point right next door!

AFAIK, the airport location is 3rd-party drop off point only.

The only pickup location is the Welt in Munich.

Originally Posted by pcbrew

AFAIK, the airport location is 3rd-party drop off point only.

The only pickup location is the Welt in Munich.

MUC location is Loginout for ED drop off only.

Originally Posted by Michael Schott

MSD= Multiple Security Deposits. This is a program that gets you are reduced money factor (interest rate). You get your security deposits back at the end of the lease term.

okay thanks for the info.

My other question is, if I decide to do the owners choice way lets say after 4 years I decide I don't want the car anymore, do I have to stay with bmw to get the balloon amount put in as a down payment? or could I switch to a different dealership (MB/audi/lexus) etc - and use the same balloon payment as a down payment on one of those cars?

I have been analyzing the lease vs own argument for a year. I 'bought' my last 325cic 04 convertible (USED) with 18k miles from private owner. I then sold it at 65k miles few years later. The amount of money I lost in depreciation, I could have added a little more money and leased a NEW coupe. But if I had kept it and drove it till 120k + miles, it would have been the most bang for my buck.

If you want to make the MOST of your money and really stretch it, get the LEAST expensive car, try to finance it as low as 2% from credit union, and plan to drive it for 7 + years and to 100k miles. Heck if your car is running with no problems, you can then do a DINAN mod down the road, even track it and continue to keep as long as it lasts.

Lease is a great win win option, ONLY and IF the lease terms are 'FINANCIALLY SOUND' meaning it makes sense. What do I mean you ask ? Say a F30 328i customer configured costs 36k. Now your dealer is telling you that you can give 3k down, with $600 lease for 15k miles for 3 years. You would pay 21k total in 3 years, and won't have a car at the end. Whereas for 15k + interest% more you could have owned the car. Also would your car depreciate 21k in 3 years ? I don't thinks so.

Now if the same dealer offered you a lease payment of $400 with 3k down. It would amount to 17,400. Would your 35k car depreciate $17,400 with 45k miles in 3 years if you owned the car ? Chances are yes. So even if you had bought it, you would be out the same amount of $ if you decided to sell it 36th month.

Reality is that most likely after 3 - 4 years of driving the same car you will have an itch to get another one. If you get a low enough lease, where it almost equates to actual depreciation of your car had you owned it, it would be a great option, since if you decide to keep it, you can finance your residual. You will have low payments all along, and you will stretch your $.

My conclusion for me, get the lowest lease possible, which is why I am doing ED with 15k miles per year. At the end of the lease I will re evaluate my financial situation, I may just finance my residual or get a different car.

Originally Posted by NewZee

I would buy instead of lease, I never could work out the benefit of leasing? Where will you take delivery, I have stayed at the movenpick hotel in munich near the airport, and there is a BMW delivery point right next door!

I'm unsure if I misunderstand your point. FYI. BMW allows lessees to do ED.

Originally Posted by rs123

okay thanks for the info.

My other question is, if I decide to do the owners choice way lets say after 4 years I decide I don't want the car anymore, do I have to stay with bmw to get the balloon amount put in as a down payment? or could I switch to a different dealership (MB/audi/lexus) etc - and use the same balloon payment as a down payment on one of those cars?

Not sure if you understand the concept. OC will likely be for 3 years, as most leases. After 3 years of relatively low payments similar to lease, you have the option of a) returning the car to BMW or b) purchasing the car for the agreed on residual amount. The latter is the balloon portion, you have no equity in the car after 3 years unless, for some reason, you could sell it for more than the agreed to residual.

The only benefit to OC is that, in states like IL & TX, you have to pay sales tax up front on the entire purchase price and, with OC, you don't have to pay taxes again on a lease sale if you keep the car.

I buy cars simply because I don't want a car for exactly 1095 days. I may want it for 1200 or 600 or 1500 days. I want a new car when I see it, not when some contract is up. Otherwise you might end up driving the 2nd best car on the road. That's why half of this forum still has 335i and the other half was able to get an S4.

Originally Posted by pcbrew

Not sure if you understand the concept. OC will likely be for 3 years, as most leases. After 3 years of relatively low payments similar to lease, you have the option of a) returning the car to BMW or b) purchasing the car for the agreed on residual amount. The latter is the balloon portion, you have no equity in the car after 3 years unless, for some reason, you could sell it for more than the agreed to residual.

The only benefit to OC is that, in states like IL & TX, you have to pay sales tax up front on the entire purchase price and, with OC, you don't have to pay taxes again on a lease sale if you keep the car.

hmm okay that makes sense, So what did the dealer mean that after 4 years if I decided I wanted a new car that the 20k balloon payment that's left would be used as a trade-in value for a new car? That's the part I dont understand because if I have no equity in the car how can I use it as a down payment?

Originally Posted by westwest888

I buy cars simply because I don't want a car for exactly 1095 days. I may want it for 1200 or 600 or 1500 days. I want a new car when I see it, not when some contract is up. Otherwise you might end up driving the 2nd best car on the road. That's why half of this forum still has 335i and the other half was able to get an S4.

Always finding a way to bring up the S4

Originally Posted by westwest888

I buy cars simply because I don't want a car for exactly 1095 days. I may want it for 1200 or 600 or 1500 days. I want a new car when I see it, not when some contract is up. Otherwise you might end up driving the 2nd best car on the road. That's why half of this forum still has 335i and the other half was able to get an S4.

Um... swapalease. Easy way to dump a lease you do not want. I had no trouble off-loading my 2006 330i.

also could some explain with 36 months is the best for leasing I was always planning to go with 48 months and get a lower payment

I think car manufacturers incentivize shorter leases for several reasons: 1) the lease residual is easier to predict on earlier lease returns (and are therefore subject to less risk of uncertainty), 2) it helps the dealers' used car divisions by giving them more newer cars to sell, and 3) it reduces the average age of the leasing fleet.

Originally Posted by rs123

also could some explain with 36 months is the best for leasing I was always planning to go with 48 months and get a lower payment

Originally Posted by BobBigMan

Never leased in my life and reasons are simple, once you start to add options the rates go sky high. Well at least that's how it is here.

Lucky you on the Audi S6, we don't see them till end of year.