[dkreidel]

I pick up my 335 vert on in less than 2 weeks, and must complete the financing over the next few days. I had intended to pay cash until the announcement of the $2,500 Holiday Bonus last week, but it's clear I need to take advantage of BMWFS financing/leasing for a short duration to capture the Holiday Bonus. Is there any advantages to leasing vs financing if the intent is to pay the car off within 90 days - probably immediately after the car is re-delivered in January? It seems to be a push, but I may not be considering all of the nuances of the deal. The purchase price is already agreed upon with Phillipe Kahn - XXX over ED invoice - so no issues on that. If it makes any difference, I have my 2008 550 leased through BMW FS.

Any and all recommendations greatly appreciated; thanks in advance.

 

[chrischeung]

Did you ask Phillipe?

You're working with arguably one of the best CAs in America - he will set you straight on what to do.

 

[dkreidel]

Phillipe has been sent the same question, and I will weigh his advice in along with group think here. This is my 7th ED, but first experience with Phillipe...so far it has been stellar.

 

[1985mb]

You intended to buy w/ cash, so buy w/ financing.... am I missing something, or why would anyone lease when their intent is to buy it? Surely the leasing APR is greater than the financing APR, not to mention you'd probably have to register it twice if leasing followed by buyout

 

[dalekressin]

What is your local financing rate/terms?

 

[Newman]

My two cents. I lease and then buy for a couple of reasons -- make sure the car is not a lemon (rare, but it does happen) and just in case someone hits me or the car sustains otherwise unacceptable body damage (even if it is fixed, I would rather turn it in and get another).

~David

 

[move.over]

Probably finance because of the fees involved with leasing.

In addition in some states you will pay double sales tax when buying a leased car. In MD you will pay the sales tax when you lease the car, eventough BMWFS is the owner and you will pay sales tax again when buying out the lease and transfering the tittle in your name.

 

[Andrew*Debbie]

r why would anyone lease when their intent is to buy it? Surely the leasing APR is greater than the financing APR

Sometimes there are large incentives a lease. Back when BMWFS set residuals unrealistically high, you could sometimes buy the end-of-lease car as a CPO for far less then residual. APR is only one of several things you have to look at.

I doubt it will be worth buying out a car 3 months into an ED lease though.

 

[dkreidel]

What is your local financing rate/terms?

4.9% APR for any reasonable term. I didn't pay much attention since it was my intent to pay cash.

 

[SARAFIL]

4.9% APR for any reasonable term. I didn't pay much attention since it was my intent to pay cash.

Financing will be much easier for you. You won't have to worry about stuff like the acquisition fee, and the title/registration process will be much easier. If you lease and buy, you will have to re-title and re-register the car in your name. If you finance and then pay it off, they will just release the lien on the title and you will not have to re-title or re-register the car.

 

[Bart001]

Back when BMWFS set residuals unrealistically high, you could sometimes buy the end-of-lease car as a CPO for far less then residual.

You still can. BMW FS does not use (only the) residual to set the price at which the lessee can buy the car; they use current auction data. The price they gave to my dealer certainly was below residual! That said, with today's 'more realistic' residuals, this may not hold true in the future. It all depends on the "value" of the car to BMW FS at the time.

 

[1985mb]

Sometimes there are large incentives a lease. Back when BMWFS set residuals unrealistically high, you could sometimes buy the end-of-lease car as a CPO for far less then residual. APR is only one of several things you have to look at.

Yes, this happened at one time, but it is impossible to predict the outcome 2+ years from now. Not to mention, the residuals have been adjusted to reflect this unpleasant experience for BMW, so the likelihood of this happening again may be quite low IMO

 

[chrischeung]

I agree. Not to mention the inflationary effect of the USD's devaluation to the Euro, that will likely put pressure on price increases, leading to stronger actual residuals when current leases mature.

 

[1985mb]

The price they gave to my dealer certainly was below residual!

I could be mistaken, but IIRC the best price available to a BMW dealer is not necessarily available to the lessee.

 

[dalekressin]

ok ..is the holiday promotion bonus worth changing from cash deal to lease or finance????? Don't you loose the bonus in fees and interest?

 

[Asteroid]

ok ..is the holiday promotion bonus worth changing from cash deal to lease or finance????? Don't you loose the bonus in fees and interest?

I don't think there are fees with a BMWFS loan, there is a lease acquisition fee for leases though. But if you'd like to lease it to get the bonus, and then pay it off shortly after, then consider paying the MF bump that waives the LAF.

 

[Andrew*Debbie]

Yes, this happened at one time, but it is impossible to predict the outcome 2+ years from now.

Yes. With the current residual values it is unlikely.

When we leased our X3, the residual value was over 80% of our purchase price. But those deals are gone.

then consider paying the MF bump that waives the LAF.

We did just that on the X3. Taking the fee waiver was to our advantage. The finance manager at the dealer said we were his first customers to use the LAF waiver.

OP needs to study this carefully. Like taking the LAF waiver, it isn't something commonly done.

 

[dkreidel]

Thank you - I'm going to the dealer today to lock up the financing as I pick up the car in Munich in one week. It looks like it may be a realtime decision made in the Finance Managers office - not the way I like to do these things. I will report back on my findings and decision.
I wasn't aware it was possible to mitigate the LAF via a MF bump, which in my case is moot. I also believe that BMWFS still makes lease payment #2 since the car is on the water for > 1 month.

Dick

 

[1985mb]

Even with the LAF waiver, you're stuck registering it and titling it twice (once at lease inception; once at buyout). These fees vary state to state, but they seem to be going up across all states as a way to mitigate budget deficits. I also don't know how sales tax works in CA, but tax on lease payments + tax on the buyout could be > tax on the purchase price.

There are many reasons to lease, but I still haven't seen any compelling reasons in this instance (only the free 2nd payment comes close, but it still needs some math as to whether it negates the additional TTL implications). The 4.9% APR may not sound great, but without a prepayment penalty it's almost irrelevant.

 

[dalekressin]

ok guys, I'm still uncertain about the terms. What is MF bump and LAF waiver. I realize the TTL tax, title, licensing Would like more help on the decision cash or Holiday promo now mine is M3 which is only $1500 not $2500 Please PM if at all possible