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G80 BMW M3 and M4 General Topics Pricing, Ordering, Leasing / Purchasing, Delivery

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      12-20-2020, 04:05 PM   #1
ShiftingG82
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BMW Select vs Lease

I need help with deciding between these two. Would like any input or past experience.

I want to get to M4 G82. How I would like it the website told me MSRP as Built: $82,195. I have read that the dealer gives you incentives and discounts so let just say I end up with 80k after the taxes and fees. I put 10k down on both options.

Lease: ~$690 a month, 42 months term, 10,000 miles a year.

BMW Select: ~$660 a month, 60 months term, at a 1.9% APR.

No matter the option I plan to keep the car for the long term 7+ years.

I heard that I could lease the car for 42 months which would be with no interest for these 42 months that I'm paying for my future keeper car. What is the down side for this option for me?

I have not heard anything regarding BMW Select. I even search on the forum and hardly any clear information. From what I read on BMW website I'll financing 50% of the car and at month 60, I'll pay the Ballon amount of 31k. But they said I could finance the ballon amount if I don't have 31k at the moment. Can anyone tell me what are the downsides of this option?

This will be for a 2021 M4 6 speed manual that I will DD.
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      12-21-2020, 02:53 PM   #2
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Couple things about leasing.

First off, it's generally a best practice not put any money down as a cap cost reduction as a lease, that way you protect yourself in the event that the car is totaled.

Second, a lease absolutely carries interest, on the depreciation (and fees/taxes, if you roll those in) that you're paying over the lease term. Right now the base money factor is 0.00082, which is the equivalent of an ~1.96% APR. You can drop this down to ~1.12% by applying Multiple Security Deposits.

Finally, I personally would not lease this early as the residuals are pretty awful right now. I suppose that doesn't matter if you are going to buy the car out at the end of the deal, so that's probably a non-issue for you.

As for BMW Select, if you're planning to keep the car for the long term, this may end up being a wash vs. a lease if you're planning to buy it out at the end of the lease or refinance the baloon payment when that's due.

For what it's worth, I'd consider a long-term loan at some of the stupid-low APRs available right now if you plan on keeping it for a while.
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      12-21-2020, 03:16 PM   #3
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Quote:
Originally Posted by Silber View Post
Couple things about leasing.

First off, it's generally a best practice not put any money down as a cap cost reduction as a lease, that way you protect yourself in the event that the car is totaled.

Second, a lease absolutely carries interest, on the depreciation (and fees/taxes, if you roll those in) that you're paying over the lease term. Right now the base money factor is 0.00082, which is the equivalent of an ~1.96% APR. You can drop this down to ~1.12% by applying Multiple Security Deposits.

Finally, I personally would not lease this early as the residuals are pretty awful right now. I suppose that doesn't matter if you are going to buy the car out at the end of the deal, so that's probably a non-issue for you.

As for BMW Select, if you're planning to keep the car for the long term, this may end up being a wash vs. a lease if you're planning to buy it out at the end of the lease or refinance the baloon payment when that's due.

For what it's worth, I'd consider a long-term loan at some of the stupid-low APRs available right now if you plan on keeping it for a while.
Agreed with all of the above. In addition, having only 10K miles/year on a DD (and a great car to drive as well) would not be ideal. I wouldn't want to be looking at my odometer every time I went out. That being said, if you have a history of under 10K miles/year, it's a moot point.
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      12-24-2020, 09:57 AM   #4
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In certain states, sales tax is paid on the full price of the automobile at the beginning of the lease - Texas (my state) is one of these. If you decide to purchase the vehicle at the end of the lease, the state then taxes you again on the residual purchase price. For this reason, BMW Select is an option for those that don't want the "double taxation" on the residual purchase price. This happened on my M3, and one reason I won't lease another vehicle if there's a chance I will keep it...

PenFed has a program "Payment Saver" that is an option - they take into consideration the estimated residuals on the vehicle, then offer the balloon payment at the end. Their finance rates are usually very competitive, and I'd check them out if you are looking at a longer term purchase.
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      01-02-2021, 01:02 PM   #5
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Quote:
Originally Posted by JeremyDFW View Post
In certain states, sales tax is paid on the full price of the automobile at the beginning of the lease - Texas (my state) is one of these. If you decide to purchase the vehicle at the end of the lease, the state then taxes you again on the residual purchase price. For this reason, BMW Select is an option for those that don't want the "double taxation" on the residual purchase price. This happened on my M3, and one reason I won't lease another vehicle if there's a chance I will keep it...

PenFed has a program "Payment Saver" that is an option - they take into consideration the estimated residuals on the vehicle, then offer the balloon payment at the end. Their finance rates are usually very competitive, and I'd check them out if you are looking at a longer term purchase.
Correct, with the BMW Select/Owners Choice program the car is titled in your name instead of BMWFS. As a result, should you choose to purchase the car after loan term you won't be taxed on the buyout.

The only drawback is that the Select/Owners Choice program does not include gap insurance unlike a standard lease. So if you car were to get totaled during the term and you were in a negative equity situation (you owe more that the insurance payout) you'd be responsible for paying the difference. Your insurance may offer gap coverage.

Quote:
Originally Posted by ShiftingG82 View Post
No matter the option I plan to keep the car for the long term 7+ years.
If you know you're going to keep the car for 7 years, why even consider leasing? Finance rates are lower than lease rates.

Last edited by mischiefbenz; 01-02-2021 at 02:11 PM..
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      01-02-2021, 03:56 PM   #6
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As mentioned, if you're going to own it, money is cheap these days so look for low interest finance off the bat instead of lease that expires to then become finance.

I don't know if money will be this cheap down the road once the initial lease expires and you're searching for low interest loans.
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      01-05-2021, 09:15 PM   #7
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What is unique about the current Select program on the M3/4, both have a 38% balloon factor (elite credit tier).

That means, your final payment on a 60 month Select, would be 38% of the MSRP. That means you will be able to have a payment less than a lease on the M3/4.

Select base interest rate is 1.9%. Dealership can mark up, so be on your game.

You can get GAP insurance on a Select program. The cost can be from 65 to 525, depending on car and term..

Downside on the Select loan, is the high likelihood ( basically guaranteed) negative equity. If you plan on keeping it 7 years, the select will give you a much lower payment. You can pay extra to the loan when you can and at the end of 5 years, refi the balance.

Best of luck!
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      01-10-2021, 03:14 PM   #8
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Quote:
Originally Posted by pgreen822 View Post
Agreed with all of the above. In addition, having only 10K miles/year on a DD (and a great car to drive as well) would not be ideal. I wouldn't want to be looking at my odometer every time I went out. That being said, if you have a history of under 10K miles/year, it's a moot point.
If it's your only car then yea, 10k is likely low. Here in Ohio the car pretty much just sits in my garage January through sometime in March because it won't even get up my 2 degree incline driveway in a light dusting of snow so I never risk taking it out. I've kept getting 12k lease only to end my last one at 23k miles after 3 years. This time I'm finally going with 10k unless I decide to just purchase it.
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