[Sedan_Clan]

Originally Posted by Salespunk

You just proved my point. You had to pay $2K in taxes to sell your car where as with a lease you are skipped over for tax purposes during a sale to another party. Assuming you sold the car around the 36 month market that is an extra ~$75/mo. Also, BMW leases are transferrable so if you decide to get rid of the car early it is pretty easy to do via Swapalease. I have done several and the cars are almost always under contract within a few days. Max I have had is 10 days.

You are correct that the $20K would apply to any situation, but BMW includes GAP insurance with their leases if I remember correctly. GAP is not available from all insurers as an aftermarket product and either way is a for cost item.

My point was it was rather insignificant overall. It's not the horror story these posts make it out to be.

[Forever]

Originally Posted by mattssi

Could be tough with that high sales tax.

Why 25k down? Bank that and take advantage of the low rate.

Yeah, Im thinking it might be too difficult, but i could do a variation of this plan. As i understand it I can choose the balloon payment at the end of the term?

25k Down because i have a trade in vehicle that is paid off and worth about that much.

[Forever]

Originally Posted by Sedan_Clan

I doubt you're getting that here. These cars sell above sticker all day, so you'd be fortunate to get MSRP. That OTD price is a unicorn dream right now.

Thank you for brining me back to earth. I appreciate the input. Appears i will have to consider MSRP or potentially slight discount if i shop hard enough. Thank you for the input, much appreciated!

[Sedan_Clan]

Originally Posted by Forever

Thank you for brining me back to earth. I appreciate the input. Appears i will have to consider MSRP or potentially slight discount if i shop hard enough. Thank you for the input, much appreciated!

MSRP is fair in this market where even mini-vans and Civics sell above sticker. Any discount you'd likely receive out of state would mostly be negated by shipping/travel costs, gas and excess mileage you could've avoided.

[Tyga11]

Originally Posted by Salespunk

You just proved my point. You had to pay $2K in taxes to sell your car where as with a lease you are skipped over for tax purposes during a sale to another party. Assuming you sold the car around the 36 month market that is an extra ~$75/mo. Also, BMW leases are transferrable so if you decide to get rid of the car early it is pretty easy to do via Swapalease. I have done several and the cars are almost always under contract within a few days. Max I have had is 10 days.

You are correct that the $20K would apply to any situation, but BMW includes GAP insurance with their leases if I remember correctly. GAP is not available from all insurers as an aftermarket product and either way is a for cost item.

I was quoted $1,000 & $1,500 on GAP from BMW. Not bad. State Farm doesn't offer GAP as you implied

[Sedan_Clan]

Originally Posted by Tyga11

I was quoted $1,000 & $1,500 on GAP from BMW. Not bad. State Farm doesn't offer GAP as you implied

I can't remember what I paid for GAP, but it has proven worth it in the past when one of my bikes was stolen.

[phxF80]

Originally Posted by Sedan_Clan

MSRP is fair in this market where even mini-vans and Civics sell above sticker. Any discount you'd likely receive out of state would mostly be negated by shipping/travel costs, gas and excess mileage you could've avoided.

I agree with this but I think there are some instances where it could make sense. My situation made sense to go out of state. I'm getting about 4% shaved off a new build. And for me to go out of state is about a 50 buck southwest ticket and a tank or two of gas coming back home. And for me the drive back is just to get a little closer to break in period. Plus spending some quality time with the car I have been anticipating for a bit. I think my deal is probably a unicorn deal compared to others though.

[chicagofan00]

Originally Posted by phxF80

I agree with this but I think there are some instances where it could make sense. My situation made sense to go out of state. I'm getting about 4% shaved off a new build. And for me to go out of state is about a 50 buck southwest ticket and a tank or two of gas coming back home. And for me the drive back is just to get a little closer to break in period. Plus spending some quality time with the car I have been anticipating for a bit. I think my deal is probably a unicorn deal compared to others though.

Do you have a vehicle you are replacing with the new M? If so, what is your plan on getting rid of that vehicle? Only reason why I bring it up, is that if you were to buy in state here in AZ at MSRP but have a trade-in, that trade-in would reduce the sales tax due on the new vehicle. Thus that 4% discount you are getting from going out of state may not be fully realized when all is said and done and you are having to pay the full tax bill on the new vehicle.

[phxF80]

Originally Posted by chicagofan00

Do you have a vehicle you are replacing with the new M? If so, what is your plan on getting rid of that vehicle? Only reason why I bring it up, is that if you were to buy in state here in AZ at MSRP but have a trade-in, that trade-in would reduce the sales tax due on the new vehicle. Thus that 4% discount you are getting from going out of state may not be fully realized when all is said and done and you are having to pay the full tax bill on the new vehicle.

Yea, I am aware of the tax savings bit if I did the trade to save some bucks. And I considered that trade off as well. But NS was low balling the hell out of me on my trade. And for what I could sell to carmax or somewhere else was considerably more than the trade savings. I am thinking that in a few months when it comes time to sell that the market won't go completely sideways on me.

[Sedan_Clan]

Originally Posted by phxF80

Yea, I am aware of the tax savings bit if I did the trade to save some bucks. And I considered that trade off as well. But NS was low balling the hell out of me on my trade. And for what I could sell to carmax or somewhere else was considerably more than the trade savings. I am thinking that in a few months when it comes time to sell that the market won't go completely sideways on me.

The market should still be in your favor as a seller. I doubt it will correct itself in the next few months. It's only getting worse for us buyers.

[Multimodal]

Originally Posted by Sedan_Clan

The market should still be in your favor as a seller. I doubt it will correct itself in the next few months. It's only getting worse for us buyers.

And if you project things out a few years, today's new car shortage will translate into a late-model used car shortage in the coming years. I expect used car values will remain strong into the mid-2020s. This isn't to say that a 2018 M3 will not continue to depreciate - they won't stay $60K used cars forever - but I do think a 2021 M3 will have something like 70-80% residual value in three years.

The same thing happened to boats in the mid-2010s. They depreciated very little because many manufacturers idled production or went out of business in 2007-2010. In some cases used boats actually appreciated because of scarce supply and rapidly rising prices for new boats.

[Murf]

Financing in place for car delivery sometime next week (boat arrives Fri).

I chose Select .9%. 20k down - $683/mo all in, 30k balloon on a car with $83.6k sticker. Minor discounts totaling 1k.

I am happy, think there is very little chance I am underwater on the balloon in 5 years and possible I have significant equity above that #.

Now just need the stupid car.

[Sedan_Clan]

Originally Posted by Murf

Financing in place for car delivery sometime next week (boat arrives Fri).

I chose Select .9%. 20k down - $683/mo all in, 30k balloon on a car with $83.6k sticker. Minor discounts totaling 1k.

I am happy, think there is very little chance I am underwater on the balloon in 5 years and possible I have significant equity above that #.

Now just need the stupid car.

Right on! Good job!

[Thescout13]

Originally Posted by Murf

Financing in place for car delivery sometime next week (boat arrives Fri).

I chose Select .9%. 20k down - $683/mo all in, 30k balloon on a car with $83.6k sticker. Minor discounts totaling 1k.

I am happy, think there is very little chance I am underwater on the balloon in 5 years and possible I have significant equity above that #.

Now just need the stupid car.

If there is a way to do select, $20k down is the way to do it to hedge the depreciation risk.

[Forever]

Originally Posted by Murf

Financing in place for car delivery sometime next week (boat arrives Fri).

I chose Select .9%. 20k down - $683/mo all in, 30k balloon on a car with $83.6k sticker. Minor discounts totaling 1k.

I am happy, think there is very little chance I am underwater on the balloon in 5 years and possible I have significant equity above that #.

Now just need the stupid car.

Thank you for sharing! This is essentially what I’m trying to achieve! Appreciate it!

[Salespunk]

I have to jump in here on this talk about down payments as a depreciation hedge. The downpayment is YOUR money. Unless you can't manage your savings, keeping that money in your investment account while paying 0.9% interest is one of the best trade offs you can make. If you assume even a modest 5% annual return you are still 4% net positive. That is an extra $800/yr and ~$2500 over a 3 year period.

Look at it a different way, you are putting your downpayment into a savings account with 0% return. It seems to me that people are stretching to afford the car, but have an aversion to a lease for some reason.

You are much better off with a lease since you have a guaranteed buyout at the end of the period. If the value is higher you can sell it and pocket the difference. If it is lower then hand over the keys and walk away. There is no downside if you aren't planning on keeping the car longer than 36 months. If you are planning on keeping it longer then do regular financing to lock in the 0.9% interest rates.

[Murf]

Couple of things - without a downpayment you would be obligated to get gap insurance in these cases - so add about $1500 for that. Also this is money that was tied up in another car, so I am just applying some of that sale price to a new vehicle.

With the current market environment I am not confident you can pull 5% risk free for 5 years but whatever.

Originally Posted by Salespunk

I have to jump in here on this talk about down payments as a depreciation hedge. The downpayment is YOUR money. Unless you can't manage your savings, keeping that money in your investment account while paying 0.9% interest is one of the best trade offs you can make. If you assume even a modest 5% annual return you are still 4% net positive. That is an extra $800/yr and ~$2500 over a 3 year period.

Look at it a different way, you are putting your downpayment into a savings account with 0% return. It seems to me that people are stretching to afford the car, but have an aversion to a lease for some reason.

You are much better off with a lease since you have a guaranteed buyout at the end of the period. If the value is higher you can sell it and pocket the difference. If it is lower then hand over the keys and walk away. There is no downside if you aren't planning on keeping the car longer than 36 months. If you are planning on keeping it longer then do regular financing to lock in the 0.9% interest rates.

[mattssi]

Originally Posted by Salespunk

I have to jump in here on this talk about down payments as a depreciation hedge. The downpayment is YOUR money. Unless you can't manage your savings, keeping that money in your investment account while paying 0.9% interest is one of the best trade offs you can make. If you assume even a modest 5% annual return you are still 4% net positive. That is an extra $800/yr and ~$2500 over a 3 year period.

Look at it a different way, you are putting your downpayment into a savings account with 0% return. It seems to me that people are stretching to afford the car, but have an aversion to a lease for some reason.

You are much better off with a lease since you have a guaranteed buyout at the end of the period. If the value is higher you can sell it and pocket the difference. If it is lower then hand over the keys and walk away. There is no downside if you aren't planning on keeping the car longer than 36 months. If you are planning on keeping it longer then do regular financing to lock in the 0.9% interest rates.

I agree totally on the down payment piece. Why?!? If you get in an accident, and you're "upside down", then use that 20k you put aside to be right-side up again.

And you are not obligated to buy GAP insurance. Plus the dealer charges something stupid for it anyway. Just go to your insurance company and get their "replacement value" added to your insurance. I probably won't do it, but its only $25 every 6 months.

[myfirstm]

Couldn't agree more. I just don't see how putting 20k down makes any sense financially. I wish I could see the look on the finance managers face again when I told him I wanted my $2000 deposit back and that I was putting nothing down at signing. Also when I declined the "must" have $3600 wheel and tire policy.

Originally Posted by Salespunk

I have to jump in here on this talk about down payments as a depreciation hedge. The downpayment is YOUR money. Unless you can't manage your savings, keeping that money in your investment account while paying 0.9% interest is one of the best trade offs you can make. If you assume even a modest 5% annual return you are still 4% net positive. That is an extra $800/yr and ~$2500 over a 3 year period.

Look at it a different way, you are putting your downpayment into a savings account with 0% return. It seems to me that people are stretching to afford the car, but have an aversion to a lease for some reason.

You are much better off with a lease since you have a guaranteed buyout at the end of the period. If the value is higher you can sell it and pocket the difference. If it is lower then hand over the keys and walk away. There is no downside if you aren't planning on keeping the car longer than 36 months. If you are planning on keeping it longer then do regular financing to lock in the 0.9% interest rates.

[KevinGS]

At .9%, I simply decided to purchase the car and not lease it. For me, it makes sense, since I plan to drive this car all over the place (plenty of trips, maybe even across country), so then I don't have to worry about the miles. And if I love it, I'll keep it beyond 3 years, which at this point seems likely. I'm not the kind of person who simply buys an LCI version because of some extra HP or some revised tail lights and interior options.

I have ordered the car I want, with all the options I want, and I want RWD, so I'm going all in on this one. The LCI would have to be amazing to get me to upgrade. In the F8X, going from the 2015 opening year model to the 2020 CS for like $25,000 more was out of the question. The CS was definitely not enough of an upgrade for me to have made the switch, even with a much better suspension setup.

So if the G8X is indeed well built, it may be enough for me for 4+ years, especially with tunes becoming available at some point, and plenty of aftermarket mods headed our way over the next 24 months as G8Xs hit the road.

Haven't had a car payment in a while since I sold my F82 and have loved my 2013 E93, and I look forward in the future at some point not having a car payment again. When leasing, car payments often become perpetual, which I don't love. All the money I've saved in car payments the last 4 years have done quite well in the market.

[Thescout13]

Originally Posted by Salespunk

I have to jump in here on this talk about down payments as a depreciation hedge. The downpayment is YOUR money. Unless you can't manage your savings, keeping that money in your investment account while paying 0.9% interest is one of the best trade offs you can make. If you assume even a modest 5% annual return you are still 4% net positive. That is an extra $800/yr and ~$2500 over a 3 year period.

Look at it a different way, you are putting your downpayment into a savings account with 0% return. It seems to me that people are stretching to afford the car, but have an aversion to a lease for some reason.

You are much better off with a lease since you have a guaranteed buyout at the end of the period. If the value is higher you can sell it and pocket the difference. If it is lower then hand over the keys and walk away. There is no downside if you aren't planning on keeping the car longer than 36 months. If you are planning on keeping it longer then do regular financing to lock in the 0.9% interest rates.

To be fair, some people purposefully work on tight budgets month to month and like to free up monthly cash flow that having a much larger payment doesn't help with (also I am talking about a select or finance scenario not a lease scenario). I think you are assuming that such individual can both afford the larger payment and invest the down payment money and not worry about it because they have other liquidity laying around to cover depreciation when they want (or need) to get out (and assuming that, if they don't have the extra liquidity, that they are okay taking the capital gains hit cashing out of investments to cover the depreciation if they want/need to get out).

Also, some people like the calm of thought that if they needed to liquidate the car immediately they won't be under on the car (which if you are in a situation that you need to liquidate quickly you probably don't have the luxury to pay $10k-$20k out of pocket at that time).

Lastly, it's wild to me how different people view this topic here vs the Porsche forums. Over there, if you finance without a HUGE down payment or lease at all, you are basically an idiot financially speaking as everything should be bought in cash. Over here, it seems to be the opposite.

At the end of the day, I'm not meaning to start an argument or a fight over this, I truly don't care that much, and let's be real, with a depreciating asset like an M car, neither option (cash vs select vs lease vs finance) is a smart decision. They are all variables of the same crap, the only differences being flexibility and at most 1-4% of the cars value in finance charges. It's not like we are talking about half a million dollar cars here where this shit can really matter $$ wise. We are literally talking about maybe a couple grand net loss choosing one way over the other, so let's let people choose the option that works best for their situation and gives them the most comfort.

Also, I never understood the gap argument for not putting a big down payment down, especially for modern cars. The average person will have 2-3 accidents in their lifetime, and for late model modern cars if you have an accident there is less than a 5% chance the car is a total loss (Look at the CCCIS study data on this). If you put those two together you have a very small chance of totaling your car. Maybe what, 1% at the max? How many things do we do in our normal lives that have a 1% chance of going really really bad for us financially?

When you take that into account, doesn't seem that crazy that someone would want to increase monthly cash flow and have the flexibility to liquidate fast without being under if they are comfortable taking the 1% risk of not getting their down payment back in the event of a total loss.

I've always been of the mantra that if it's not my money to spend, meh.

[chicagofan00]

For me personally, I'm looking to out $10-15k down via select financing for the sole purpose of reducing my monthly commitment to a car payment. This way if shit goes a bit sideways for sometime (wife or I are out of work, etc.) it may be more feasible to maintain that lower monthly payment without being forced to dip into savings or end up having to dump it entirely in order to get by each month.

As others have said, no matter which way you look at it, we are all dumping our money into a heavily depreciating asset so do what fits best for your finances and lifestyle. So long as you can truly afford the car and aren't stretching yourself way too thin just have one.