[Multimodal]

Originally Posted by barryc365

I'm thinking $30k down makes the payment the same as the lease. That way I'm confident I'd get the $30k back when I sell it in 3 years and clear the balance

Why pay $30K down today for a lower monthly payment when you could pay more later? Time value of money means a dollar tomorrow is less expensive than a dollar today.

I'm not going to put anything down.

[barryc365]

Originally Posted by Mr. Maboomba

Why pay $30K down today for a lower monthly payment when you could pay more later? Time value of money means a dollar tomorrow is less expensive than a dollar today.

I'm not going to put anything down.

Originally Posted by Mr. Maboomba

Why pay $30K down today for a lower monthly payment when you could pay more later? Time value of money means a dollar tomorrow is less expensive than a dollar today.

I'm not going to put anything down.

I hear you, and I could put the money in the market etc but I like the idea of having a decent amount of equity in it. I'll be doing small miles and unsure how long I'll keep it.

Anyone else worried about the AWD being much more in demand come resale? I'm in the North East. I'd like the AWD but want the car for the summer and don't want to wait

[chicagofan00]

Originally Posted by barryc365

I'm in the same boat. Can I ask if you came up with a magic number for a down payment?

I'm thinking $30k down makes the payment the same as the lease. That way I'm confident I'd get the $30k back when I sell it in 3 years and clear the balance

Any thoughts

Great thread and Information OP!

I'm going for $10-12k down with Select financing.

[jonahk]

Originally Posted by barryc365

I'm in the same boat. Can I ask if you came up with a magic number for a down payment?

I'm thinking $30k down makes the payment the same as the lease. That way I'm confident I'd get the $30k back when I sell it in 3 years and clear the balance

Any thoughts

Great thread and Information OP!

For us it was $20k but I also had $10K coming in equity on my F87 trade (which I put $0 down on when I bought it) so you're right in line with our math. I don't have the spreadsheet in front of me, but it was basically comparing gradually increasing down payments with different outputs in the amortization table until we found the inflection point and at what point in time we wanted that to happen. IIRC our target was 24 months.

Also - be prepared now that you've shared that info people are going to say you're stupid for putting that much into a depreciating asset. It will usually be followed up with reddit links and at least 6 rockets emojis to back up "smarter" alternatives

[barryc365]

Originally Posted by jonahk

For us it was $20k but I also had $10K coming in equity on my F87 trade (which I put $0 down on when I bought it) so you're right in line with our math. I don't have the spreadsheet in front of me, but it was basically comparing gradually increasing down payments with different outputs in the amortization table until we found the inflection point and at what point in time we wanted that to happen. IIRC our target was 24 months.

Also - be prepared now that you've shared that info people are going to say you're stupid for putting that much into a depreciating asset. It will usually be followed up with reddit links and at least 6 rockets emojis to back up "smarter" alternatives

Haha, exactly!! Scamcoin to the moon!

I have enough equity exposure and work in the biz so really would probably just leave that money in cash or something very safe anyway.

I'm probably an idiot for over paying my mortgage too but as I'm sure you know, it's a nice feeling not having big debts hanging around

The balloon at the end with lower payments now has piqued my interest though. That's an interesting option I must admit. I can't see the G80 being worth much less than $50k in 3 years especially with the miles I do

[Murf]

Yeah I think it's too hard to pass up what is basically free money with Select. I think I'll put up the 20k I can get from my M235i and call it a day.

[jonahk]

Originally Posted by barryc365

Haha, exactly!! Scamcoin to the moon!

I have enough equity exposure and work in the biz so really would probably just leave that money in cash or something very safe anyway.

I'm probably an idiot for over paying my mortgage too but as I'm sure you know, it's a nice feeling not having big debts hanging around

The balloon at the end with lower payments now has piqued my interest though. That's an interesting option I must admit. I can't see the G80 being worth much less than $50k in 3 years especially with the miles I do

I need to look into BMW select. I've just been going off straight financing through BMW. I can't seem to figure out if it is available in my state (MN).

[Multimodal]

I did a little bit more work comparing my options last night. The options are a bit complicated because the cost of financing varies based on time horizon (not everyone wants to own a car forever) and the available incentives vary depending on your financing choice. You can see my math in the screenshot below. Key impressions:
* BMW's Military Appreciation/PenFed Incentive program (which almost anyone can access by getting a PenFed account) is really compelling right now with a $2500 rebate if you don't finance with BMW and a discounted APR if you use their Car Buying Service. This results in the lowest 3 year ownership cost (marginally better than leasing with max MSDs) and lowest total ownership cost (meaningfully better than BMW financing or leasing).
* If I were planning to own for only three years, given the current interest rates, incentives and residuals, I would go with leasing with max MSDs. This is only $275 more expensive than a 60 month loan with the Military Appreciation incentive but it offers less complexity and lower monthly payments and certainty around depreciation.
* If you think you might want to buy the car, leasing with a plan to buy it out is much more expensive than the other options.
* BMW Select is quite a bit more expensive ($2000 more than the cheapest path and $1000 more than a traditional 60 month loan with BMW) but the lower monthly payment might be worth it.

[KevinGS]

Originally Posted by Mr. Maboomba

I did a little bit more work comparing my options last night. The options are a bit complicated because the cost of financing varies based on time horizon (not everyone wants to own a car forever) and the available incentives vary depending on your financing choice. You can see my math in the screenshot below. Key impressions:
* BMW's Military Appreciation/PenFed Incentive program (which almost anyone can access by getting a PenFed account) is really compelling right now with a $2500 rebate if you don't finance with BMW and a discounted APR if you use their Car Buying Service. This results in the lowest 3 year ownership cost (marginally better than leasing with max MSDs) and lowest total ownership cost (meaningfully better than BMW financing or leasing).
* If I were planning to own for only three years, given the current interest rates, incentives and residuals, I would go with leasing with max MSDs. This is only $275 more expensive than a 60 month loan with the Military Appreciation incentive but it offers less complexity and lower monthly payments and certainty around depreciation.
* If you think you might want to buy the car, leasing with a plan to buy it out is much more expensive than the other options.
* BMW Select is quite a bit more expensive ($2000 more than the cheapest path and $1000 more than a traditional 60 month loan with BMW) but the lower monthly payment might be worth it.

I need to hire you to work through MY options.

A thorough investigation.

[LuvMyE92]

Originally Posted by Mr. Maboomba

I am considering the lease or purchase of a 2021 M3.

Originally Posted by MJO316

I'm so lost right now with whether I'm leasing it or not.

Originally Posted by Mr. Maboomba

I did a little bit more work comparing my options last night.

I have several thoughts to share.

First, thanks Maboomba, for taking the time and effort for such an exhaustive analysis.

B. I like leasing these expensive cars because if it were to get into an accident (diminished value or declared a total loss) I am protected because I don't own the car and won't care about long-term value, and have gap protection. I've only lost one car this way, but one is enough.

And honestly, for me, 3 years is longer than I care to keep a car.

iii. Not all of us qualify for those incentives, but you did mention that.

4. OL is only good for in-stock cars.

And last, and most importantly, there aren't many cars available to buy! And there are few to no discounts available. And most dealers don't have allocations to order one.

But really, I have to add, if I may:

You can agonize for days over all of the financial alternatives and which one saves you the most money. And after all that, you can toss the savings into the wind when you pick an option (like those cool wheels) that you hadn't budgeted for.

Or put another way: I could buy a car off the lot and save $1000 using the OL but if it has options that I don't want (as most of them do) then I'm losing money over ordering exactly and only what I want.

There are really too many decisions. That's what's so great about the Tesla sales model. Only four paint colors. 3 options. No incentives.

I jest of course, because Tesla (although great appliances) are generally not appropriate for automotive enthusiasts. But it sure does simplify the operation.

[acre22f90]

Originally Posted by LuvMyE92

I have several thoughts to share.

First, thanks Maboomba, for taking the time and effort for such an exhaustive analysis.

B. I like leasing these expensive cars because if it were to get into an accident (diminished value or declared a total loss) I am protected because I don't own the car and won't care about long-term value, and have gap protection. I've only lost one car this way, but one is enough.

And honestly, for me, 3 years is longer than I care to keep a car.

iii. Not all of us qualify for those incentives, but you did mention that.

4. OL is only good for in-stock cars.

And last, and most importantly, there aren't many cars available to buy! And there are few to no discounts available. And most dealers don't have allocations to order one.

But really, I have to add, if I may:

You can agonize for days over all of the financial alternatives and which one saves you the most money. And after all that, you can toss the savings into the wind when you pick an option (like those cool wheels) that you hadn't budgeted for.

Or put another way: I could buy a car off the lot and save $1000 using the OL but if it has options that I don't want (as most of them do) then I'm losing money over ordering exactly and only what I want.

There are really too many decisions. That's what's so great about the Tesla sales model. Only four paint colors. 3 options. No incentives.

I jest of course, because Tesla (although great appliances) are generally not appropriate for automotive enthusiasts. But it sure does simplify the operation.

I too am choosing to lease for "accident protection" and ability to transfer out prior to 3 years since BMWFS is so accommodating of this. (Already have done one transfer)

Where Tesla exceeds in purchase, it loses in personality of order IMO. (You already mentioned the difference in buyer for these two types of cars though)

Also, there are confirmed work arounds for OL codes on ordered cars.

[esrt]

I went with BMW select when closing my financing. A very heavily optioned car with a $100K MSRP (frozen color, CCBs, etc) and with my trade in and $2.5K down my payment was $1000 per month. That was with 0.9% and a ~$37K residual. It was a no brainer.... vs a lease or even traditional 60M buyout. The MF on a lease was terrible.

To me watching the F80 market for even 2014 cars it tells me the residual is likely below where values are at that time (particularly if you’re options are desirable). This is the way to go based on current options.

[Multimodal]

I found out today that PenFed's discounted 1.24% for 60 months rate only applies when you buy your vehicle from the dealer that TrueCar refers you to. It's not enough to use the service then go buy elsewhere. So that isn't going to work for me. Their normal rate is 1.99% for 60 months which likely changes the math.

Currently juggling the idea of BMW Select vs. a lease with no MSDs on either a M2C or an M3. I think lease is better for short term ownership (0-3 years) and BMW Select is better for long term ownership (>3 years) based primarily on the fact that in a state like California you don't pay sales tax on the full value when leasing. That is a $6K up-front expense when buying that would make short-term ownership very expensive.

[chicagofan00]

Originally Posted by esrt

I went with BMW select when closing my financing. A very heavily optioned car with a $100K MSRP (frozen color, CCBs, etc) and with my trade in and $2.5K down my payment was $1000 per month. That was with 0.9% and a ~$37K residual. It was a no brainer.... vs a lease or even traditional 60M buyout. The MF on a lease was terrible.

To me watching the F80 market for even 2014 cars it tells me the residual is likely below where values are at that time (particularly if you’re options are desirable). This is the way to go based on current options.

How much equity did you have in your trade-in?

[gohawks23]

OP, it looks to me for your lease calcs you have not included the acq fee...usually it is rolled into cap...looked again and leasehackr puts into cap...so your caps are actually 925 higher than you have in post.

[Multimodal]

Originally Posted by greginchi

OP, it looks to me for your lease calcs you have not included the acq fee...usually it is rolled into cap.

Thanks for making sure I got that! It's in the 8th row of the spreadsheet pictured on this page.

[gohawks23]

Originally Posted by Mr. Maboomba

Thanks for making sure I got that! It's in the 8th row of the spreadsheet pictured on this page.

Is Select interest really 0.9%? For OC in states like IL always used to be many multiples higher than MF rates back in the day.

I haven't looked at this stuff in awhile since here in Chicago I pay cash for cars because tax on leases is about 18% of payment.

With Owners Choice you can just turn car in at term end like a lease...is the same true for Select? Answer is NO.

EDIT: Just saw this on Select...it makes not so attractive as a lease at term end...Owners Choice balloon in states like IL allow a turn in but OC usually didn't make fiscal sense unless you planned on buying car at term end anyway.
-->When the contract is up, you have a flexible end of term options: you are able to refinance the final payment, or you can pay off the car if you prefer.

[Multimodal]

Originally Posted by greginchi

Is Select interest really 0.9%? For OC in states like IL always used to be many multiples higher than MF rates back in the day.

I haven't looked at this stuff in awhile since here in Chicago I pay cash for cars because tax on leases is about 18% of payment.

With Owners Choice you can just turn car in at term end like a lease...is the same true for Select? Answer is NO.

EDIT: Just saw this on Select...it makes not so attractive as a lease at term end...Owners Choice balloon in states like IL allow a turn in but OC usually didn't make fiscal sense unless you planned on buying car at term end anyway.
-->When the contract is up, you have a flexible end of term options: you are able to refinance the final payment, or you can pay off the car if you prefer.

Select APR is the same as financing (0.90% this month) and both are lower than the base money factor (equivalent to 2.23%, which you could reduce to 1.56% with 7 MSDs).

You don't have a "put option" to turn in the car at a pre-set value with Select. I think that's why Select is cheaper than a lease - BMW is transferring the depreciation risk to you. I don't mind that, though, because it's just so damn easy to sell a car these days by getting competitive offers from Carmax, Carvana, Vroom and Shift.

18% tax on leases is pretty lease-unfriendly. California seems to be quite lease-friendly by only taxing you on the monthly lease payment.

[gohawks23]

Originally Posted by Mr. Maboomba

Select APR is the same as financing (0.90% this month) and both are lower than the base money factor (equivalent to 2.23%, which you could reduce to 1.56% with 7 MSDs).

You don't have a "put option" to turn in the car at a pre-set value with Select. I think that's why Select is cheaper than a lease - BMW is transferring the depreciation risk to you. I don't mind that, though, because it's just so damn easy to sell a car these days by getting competitive offers from Carmax, Carvana, Vroom and Shift.

18% tax on leases is pretty lease-unfriendly. California seems to be quite lease-friendly by only taxing you on the monthly lease payment.

Yeah but who knows what used market will be in 3-5 years, so yes your risk. Tax is on monthly lease payment here in IL too but Chicago adds a 9% monthly use tax on payment on top of normal state/county taxation. So effective total around 18% of monthly. Ridiculous.

[barryc365]

Originally Posted by Mr. Maboomba

I did a little bit more work comparing my options last night. The options are a bit complicated because the cost of financing varies based on time horizon (not everyone wants to own a car forever) and the available incentives vary depending on your financing choice. You can see my math in the screenshot below. Key impressions:
* BMW's Military Appreciation/PenFed Incentive program (which almost anyone can access by getting a PenFed account) is really compelling right now with a $2500 rebate if you don't finance with BMW and a discounted APR if you use their Car Buying Service. This results in the lowest 3 year ownership cost (marginally better than leasing with max MSDs) and lowest total ownership cost (meaningfully better than BMW financing or leasing).
* If I were planning to own for only three years, given the current interest rates, incentives and residuals, I would go with leasing with max MSDs. This is only $275 more expensive than a 60 month loan with the Military Appreciation incentive but it offers less complexity and lower monthly payments and certainty around depreciation.
* If you think you might want to buy the car, leasing with a plan to buy it out is much more expensive than the other options.
* BMW Select is quite a bit more expensive ($2000 more than the cheapest path and $1000 more than a traditional 60 month loan with BMW) but the lower monthly payment might be worth it.

Awesome spreadsheet sir!

The select sounds attractive- do we know what the balloon payment would look like?

If I wanted to do select for 2 or 3 years for example? Can I hand it back then and offset the balloon with the value of the car assuming they are in line?

I would be liable for the difference I'm assuming.

Or is it a fixed term thing with select?

Anyone know if it's available in NY? My dealership doesn't seem to be answering my questions on it

[Multimodal]

Originally Posted by barryc365

Awesome spreadsheet sir!

The select sounds attractive- do we know what the balloon payment would look like?

If I wanted to do select for 2 or 3 years for example? Can I hand it back then and offset the balloon with the value of the car assuming they are in line?

I would be liable for the difference I'm assuming.

Or is it a fixed term thing with select?

Anyone know if it's available in NY? My dealership doesn't seem to be answering my questions on it

BMW Select doesn't offer you the opportunity to turn in the car at a pre-set value. You own it and you have to sell it when you want. BMW Select has two risks: (1) because you're paying down your loan slower you are likely to be upside down (loan > car value) for more of the loan term and (2) you will pay more on interest at an equivalent interest rate because you're paying down the loan slower and have a balloon payment to pay or finance for another couple years at the end.

There is another program called Owner's Choice that is like BMW Select (a partial-amortization loan with a balloon payment) plus the opportunity to turn in the car at a pre-set value (very similar to a lease). Owner's Choice is designed to be a lease-by-another-name for lease-unfriendly states, such as states that charge sales tax on the full value of the vehicle at lease origination. The difference is that the vehicle is titled to you in the Owner's Choice program rather than BMW Financial Services. That may be what you're looking for if you don't want the depreciation risk. However I found Owner's Choice to cost way more than a lease or BMW Select in my area.

You can see what programs are available, what the cost would be, and what the balloon payment would be at
https://www.bmwusa.com/financial-ser...estimator.html.

Here's a decent video explaining leasing vs. Owner's Choice: https://www.momentumbmw.net/financin...ers-choice.htm

[OSee]

Originally Posted by MJO316

2018 was post LCI. I looked it up 2017 is rare over 50K. The M4CS 2020s are selling for 78-80K.

The LCI is going to hammer this car because of the new idrive and what potentially could be a huge dashboard and cluster change. Not to mention the M3 is getting a taillight re-design and who knows what else.

Look it up. Idrive 8.

I'm so lost right now with whether I'm leasing it or not.

I bought a 2018 M2 brand new knowing that Artemis (mod) was 100% sure a S55 powered version was on the horizon.

I was sure it would be depreciation disaster but couldn't wait for the car.

I just sold that 3 year old M2 to VROOM for the equivalent of 73% residual. Carvana spammed a week later with another offer that would have brought it to 75%.

I say buy the car now.