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  #1  
Old 07-28-2002, 04:42 PM
mibadboy mibadboy is offline
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Monthly Lease Payments vs Monthly Ownership Payments

Hi all...I will be getting a 330Ci soon but would like to know how much of a difference is the lease monthly payments vs monthly payments when owning the car. I know it's cheaper to lease but can you post examples? Assuming the same interest, downpayment, etc.

Thanks!
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  #2  
Old 07-28-2002, 06:28 PM
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Technic Technic is offline
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I look at leasing this way:

I currently lease a 330i, downpayment $7000 total out of pocket. Payment $412.00 total/36 months. At the end (2005) I move to a 335i (I hope that is the new one) with more or less the same monthly payment and no down payment.

I have never completed full payment of any car since 1984. All my cars were inmaculate when I sold/trade them in, so the wear and tear is a non issue. I like to change cars every three years, therefore I would say leasing was made for me.

To have this 330i financed, I would need around $25,000 in downpayment to have the same payment for three years at the same interest rate.

I don't think so...
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  #3  
Old 07-29-2002, 02:56 PM
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WILLIA///M WILLIA///M is offline
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Re: Monthly Lease Payments vs Monthly Ownership Payments

Quote:
Originally posted by mibadboy
Hi all...I will be getting a 330Ci soon but would like to know how much of a difference is the lease monthly payments vs monthly payments when owning the car. I know it's cheaper to lease but can you post examples? Assuming the same interest, downpayment, etc.

Thanks!
Just go to www.bmwusa.com and do the "build your 330Ci" option. You can go through all the financing scenarios at the end.
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  #4  
Old 07-30-2002, 07:42 PM
bmwguynj bmwguynj is offline
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Quote:
Originally posted by Technic
I look at leasing this way:

I currently lease a 330i, downpayment $7000 total out of pocket. Payment $412.00 total/36 months. At the end (2005) I move to a 335i (I hope that is the new one) with more or less the same monthly payment and no down payment.

I have never completed full payment of any car since 1984. All my cars were inmaculate when I sold/trade them in, so the wear and tear is a non issue. I like to change cars every three years, therefore I would say leasing was made for me.

To have this 330i financed, I would need around $25,000 in downpayment to have the same payment for three years at the same interest rate.

I don't think so...
Hey Technic, I am thinking about leasing too, but isn't putting down $7,000 a lot of money and reduces the overall advantage of a lease?

I know the more you put down, the less your monthly payment a, but I wonder what is the average people usually utilize as a down payment on a lease. I guess it really depends on what you can afford per month.
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  #5  
Old 07-30-2002, 10:49 PM
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Hercules Hercules is offline
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Quote:
Originally posted by Technic
I look at leasing this way:

I currently lease a 330i, downpayment $7000 total out of pocket. Payment $412.00 total/36 months. At the end (2005) I move to a 335i (I hope that is the new one) with more or less the same monthly payment and no down payment.

I have never completed full payment of any car since 1984. All my cars were inmaculate when I sold/trade them in, so the wear and tear is a non issue. I like to change cars every three years, therefore I would say leasing was made for me.

To have this 330i financed, I would need around $25,000 in downpayment to have the same payment for three years at the same interest rate.

I don't think so...
How do you avoid a down payment on the next car? I'm looking at leasing my next car (the 330Ci in fact), and I am very curious about this!

I mean... how can you continue at the same pricing structure without another down payment on the next car? Also, would that work if perhaps, I wanted to move up in class, to a 5 series or an M?

Let me know, this is of great interest to me
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  #6  
Old 07-31-2002, 06:38 AM
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Technic Technic is offline
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What I have found, and I have always suspected since checking this lease business, is that it does not matter what your residual value is. Of course, the company is not going to tell you that...

I just finished a lease on an Isuzu Trooper. Without even asking, they offer me to sell me the car for $5000 less than the residual value... by phone!. Yes, this vehicle is very poor in resale value, but if you think about it, all vehicles out of a lease are used vehicles. Somebody will buy them, and not necesarily at some sticker price. This price will be negotiated. Therefore, why you would pay the residual value (look at it as a new MSRP) for an used vehicle? I never will pay MSRP for a new vehicle, much less for an used one. But that is what the leasing companies want you to do.

If you check the resale value of any 3 series after three years it fluctuates around 60-65%. The residual value attached to my car is 60%. Although my downpayment is towards cost capitalization and not towards the value of the car, at the end of three years, everything being equal and the car condition being excellent, I should have around $5000 in 'value' for the next car. This is taking into consideration that this residual value will be negotiated.

Although I put a considerable downpayment on this lease, the reality is that I was going to pay more in the long run compared with putting a down payment now. For the $7000 in downpayment that I paid upfront, I saved $500 in the long run in payments. Plus I saved another $455.00 in taxes... In other words, with no downpayment I was going to end up paying almost $8000 in higher monthly payments and taxes.

But remember, certain conditions will have to be met for this to happen to me. I would have to lease another BMW (no brainer), I should stay in the same price bracket and deal with the same dealership among other intangibles. And most important, BMW will want to do business with me again, be this car or a new one. . Most probably I will not be able to achieve all my number goals, but I will be close.

Remember, you are dealing with used cars. No more and, certainly, no less.

Anyway, you should try and see for yourself. Do the math and negotiate.

Good luck.

Last edited by Technic; 07-31-2002 at 06:43 AM.
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  #7  
Old 07-31-2002, 02:16 PM
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Technic, I'm still not understanding how with a big downpayment.. you can achieve NO downpayment on the next car.

I mean.. I have an understanding, but how do you achieve that '$5000 in value' for the next car? And how would you go about applying it to your next vehicle?

Let me know on this, I'm curious because I intend to be a lifetime leaser
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  #8  
Old 07-31-2002, 07:39 PM
DougDogs DougDogs is offline
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If you have some extra money to put down, don't forget to ask your dealer about "multiple security deposits" These will not only lower the effective interest rate of your lease, It will supply you with money for your next lease.

Ask your salesman/women to run the numbers for you......
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  #9  
Old 08-01-2002, 06:10 AM
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Technic Technic is offline
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Hercules

The big downpayment have nothing to do with no downpayment down the road. If my explanation let you think that, I apologize. Any downpayment on a lease goes toward 'cost capitalization', which is legalese for 'less money we have to finance to this guy'. It does not go to any tangible value of the car. Of course, you will end up saving some money, in finance and tax charges but the overall profit goal of the leasing company will be met. My main point is the residual value of the car. This value can be negotiated most of the time. Therefore there will be some 'value' there for you towards your next vehicle.

This $5000 in 'value' is in my exclusive case. Because I can use my car at the end of the lease as trade in for the next one, my intention is to negotiate the residual value and the trade in value of the car plus the regular new car MSRP discount, whichever is possible. And can be possible as long as you are leasing with the same company. Of course, it sounds peachy but I could have done this with my Trooper and get a couple grand off of it.

But I did not ask... .

Good luck.

Last edited by Technic; 08-01-2002 at 06:19 AM.
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  #10  
Old 08-01-2002, 07:03 PM
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Hercules Hercules is offline
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Technic, okay I think I understand..

So, how would I go about approaching my salesperson or manager or whomever to negotiate this out? When would I do it, at the end of my lease, or when I'm starting the lease on the current one?

I just want this so I can continue to lease the BMWs that I so enjoy

Thanks very much!
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  #11  
Old 08-01-2002, 09:47 PM
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Technic Technic is offline
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There is no standard way of dealing with car salesmen. There is so many variable; what works in Florida maybe is impossible in other state, demand on a particular car changes everything, the type of BMW that you are looking for, and so on.

For me is to do my homework before I even see the dealership. I set a limit in the amount of monthly payments that I allow myself, investigate the current market value of my car and talk to the leasing company to discuss end of lease options and any incentive that they have for me to stay with them. Then I would go to several dealers and shop around, specially the original one if posible.

Is up to you, where you live and what kind of car do you like.

Just keep asking and investigate.

Good luck.
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  #12  
Old 08-01-2002, 09:55 PM
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Hercules Hercules is offline
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Quote:
Originally posted by Technic
There is no standard way of dealing with car salesmen. There is so many variable; what works in Florida maybe is impossible in other state, demand on a particular car changes everything, the type of BMW that you are looking for, and so on.

For me is to do my homework before I even see the dealership. I set a limit in the amount of monthly payments that I allow myself, investigate the current market value of my car and talk to the leasing company to discuss end of lease options and any incentive that they have for me to stay with them. Then I would go to several dealers and shop around, specially the original one if posible.

Is up to you, where you live and what kind of car do you like.

Just keep asking and investigate.

Good luck.
So I should call up BMW Financial and see if they cut me any deals at the end of the lease?

I know my monthly payment limit, but we'll see when I have to shopping I know I want a 330Ci (or an '01 M3, if I get it cheap), but I guess I'll have to see with that.

When I'm ready though, I should call BMW Financial? Or should I talk to the dealer?

Thanks man!
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  #13  
Old 08-02-2002, 05:35 AM
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Technic Technic is offline
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Quote:
Originally posted by Hercules

So I should call up BMW Financial and see if they cut me any deals at the end of the lease?

I know my monthly payment limit, but we'll see when I have to shopping I know I want a 330Ci (or an '01 M3, if I get it cheap), but I guess I'll have to see with that.

When I'm ready though, I should call BMW Financial? Or should I talk to the dealer?

Thanks man!
I would call BMW Financial and with the options that they give you then I go to the dealership.

There is nothing to lose, only if you do not ask.

Good luck.
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