Ultimate Lease Guide thread

[DnA Diesel]

Gooday, new to the site (I posted to the E90 INTROs but can't post the link yet), but not to BMW's, or diesels (just not together). I'm about to get a 335d (Space Grey, Black int, Sport and Prem Pkgs) and will be leasing the car.

I was reading through this thread and came upon the bit about multiple security deposits vice down payment to reduce the monthly payment. My quick assessment is that, while an option, when the money factor is already low (.00120 at the moment -- the 2.9% incentive), putting seven security deposits down doesn't notably improve monthly pmt (in fact it worsens the situation.)

Am I missing something?

Here's my situation. Cap cost is 51,800 CDN (all in, including freight and a/c tax) Residual is 23k and change, the 42% of the list 55,700.
With my intended down payment, the Depreciation Expense is $421/mo and Interest Expense (at .00120) is $76/mo.

If I reduce my down payment by re-directing a portion to multiple security deposits (the 7 max) then my Interest Expense does go down (MF now .00071 [the orig .00120 - 7 x .00007 = .00049]) to $48.96/mo (from $76), but redirecting a portion of the down payment increases the Depreciation Expense from $421/mo to $510/mo. So I'm down $28/mo on interest and up $120/mo on dep cost. Hmmm.

I would see a case where when money was more expensive to borrow (the 6.9/7.9/8.9% world) that mult security deposits could help, but since I have a larger down payment, the slight reduction in monthly (approx $28 less) doesn't seem worth it...my dep exp went up 120/mo so I'm actually 90/mo higher net with the mult SDs.

When I look at the value of the return of the multiple SD at end term, while a nice chunk of cash, the slimmer monthly payment is more appealing for a number of reasons ( a big strategic one being it's then less than my wife's payment on her Jeep).

More thinking out loud, but has anybody done the multiple security deposit thing recently, and if so, how did you situation favour such a choice?

Any feedback is appreciated, thanks!

Cheers
Duey

[flyboylr45]

New to the forum and my second BMW. My first was a 1984 320i that my dad bought me as a first car for $2500. I can sympathize about the wife and payments. I just got an 09 335i coupe and had to lease to keep a low payment. I would have bought the car and financed it for 5 years through BMW @ their 1.9% financing rate. O well, at least I still get to enjoy it and look forward to a new one in 3 years!!!!

[Thameth]

New to the forum and my second BMW. My first was a 1984 320i that my dad bought me as a first car for $2500. I can sympathize about the wife and payments. I just got an 09 335i coupe and had to lease to keep a low payment. I would have bought the car and financed it for 5 years through BMW @ their 1.9% financing rate. O well, at least I still get to enjoy it and look forward to a new one in 3 years!!!!

Flyboy, would you be willing to share the details of your lease deal?

[Gumgardner]

If the current lease and finance payments per month are pretty much the same ($2500 down, 3 year lease or 6 year finance)...does it make any difference which way you go, even if you paln on only keeping the car for about 3 years? The reason I ask is the finance per month of an M3 is less then the lease per month. If I can save some money....

[mryakan]

If the current lease and finance payments per month are pretty much the same ($2500 down, 3 year lease or 6 year finance)...does it make any difference which way you go, even if you paln on only keeping the car for about 3 years? The reason I ask is the finance per month of an M3 is less then the lease per month. If I can save some money....

You need to consider the depreciation risk, which varies by model, model year, production date and economic circumstances. It is not an easy question to answer, and you have to do the math to find out. I always suggest a TCO (Total Cost of Ownership) analysis, where you calculate how much a car costs you out of pocket (including taxes, fees, financing/leasing extras, etc) until the time you buy it outright or sell it. The only difficult part here is predicting the depreciation, which can vary.

[PeterC4]

If the current lease and finance payments per month are pretty much the same ($2500 down, 3 year lease or 6 year finance)...does it make any difference which way you go, even if you paln on only keeping the car for about 3 years? The reason I ask is the finance per month of an M3 is less then the lease per month. If I can save some money....

Consistent with mryaken's comments it's all about the residual risk. What's the car worth at the end of the lease term and...can you get away with paying the least amount of money during the lease term and then turn it in with no penalty?

The lease payments being higher is an indicator. Leases have moved towards having the consumer pay more principal during the lease term leaving a smaller principal balance at the end, reducing the residual risk for the manufacturers. In some cases, I've heard that consumers have to guarantee the residual value, that is, if there is $29,000 left unamortized after after 36 months, you're on the hook if the wholesale price indicates that is not achievable.

At the end of the day, get yourself a well optioned car that will be easier to sell later on, take care of it, and don't worry about it too much. If the cost of money is cheaper on a loan, that may be the way to go. Good luck.

[mryakan]

If you have an iPhone, download a free application called "BuyLease". I used it when signing at the dealer to make sure all the numbers were accurate, and they were to the decimal point.
You can also use it to get numbers if you want to do traditional financing.

[Rennsport1]

Is there a certain time of year when it's better to lease ? Like for buying, December is usually a good time it seems, or are they usually both best at the same time of year ?

[mryakan]

Is there a certain time of year when it's better to lease ? Like for buying, December is usually a good time it seems, or are they usually both best at the same time of year ?

I don't think there is a specific time, it all depends on what BMW has for special offers on leasing. That being said, whether doing traditional financing or leasing, the same car buying advice applies. If you noticed, we always advise people to negotiate the price of the car before going into financing options or details, they are really 2 independent steps. BMWs don't necessarily follow the same cycles are other cars in terms of price fluctuation since they usually have a different release cycle, so the December comment is not necessarily accurate. It may also depend on locale.

As far as leasing rates go, as you get closer to the release date of the newer MY, you will notice the MF decrease (lower APR), but that is somewhat offset by a lower residual. From time to time, BMW offers special APR rates for leasing certain, so that is usually the best time to lease. Now is a great time to get into a e9x if you do not mind the fact that the next model will be available in less than a year. The rates and rebates now are pretty good.

[Rennsport1]

Thank you mryakan. I went the CPO route this last time earlier this year with a very low APR, so I won't be getting another car for at least 22 months or so, but I may look at the lease options next time, good thread. I love the current E92 body style, so it will be tempting to go CPO again on an '11 335IS

[pcoaew]

Is the lease pmt calculator on bmwusa fairly accurate in the ball park? Obviously credit has to do with it....

[mryakan]

It is accurate to the dot (assuming the factors have been updated which I believe is usually the case). No credit has nothing to do with it. The lease rates are fixed regardless of your credit. Rarely, you may be able to negotiate a lower MF, but very very rare. Most likely, multiple security deposits are the only way to bring it down.
Don't forget to play with the downpayment, esp. if you can negotiate a lower purchase price (equivalent to reducing the payments by putting a downpayment).

[Macbest]

Has anyone bought a car that they leased? I know that sounds crazy. I leased a 2010 335i vert with M package (and basically every other option). This was my first BMW and I wasn't sure how I would like it and partly because I wanted to drive a new car every 3 years.

Well with a year left on the lease I can't imagine turning it in, especially since I'm not fond of the new 3 series (and that stupid nav system sitting on the dash like an aftermarket nav! What were they thinking?). This car is incredible, hands down the most fun and technologically advanced I have ever driven.

So my dilemma is, buy it after lease (seems silly financially, but..) or find something else. Problem is I can't find anther hard top vert out there with the technology and performance of the BMW, and I don't think I can do a new 3 series.

[mryakan]

Has anyone bought a car that they leased? I know that sounds crazy. I leased a 2010 335i vert with M package (and basically every other option). This was my first BMW and I wasn't sure how I would like it and partly because I wanted to drive a new car every 3 years.

Well with a year left on the lease I can't imagine turning it in, especially since I'm not fond of the new 3 series (and that stupid nav system sitting on the dash like an aftermarket nav! What were they thinking?). This car is incredible, hands down the most fun and technologically advanced I have ever driven.

So my dilemma is, buy it after lease (seems silly financially, but..) or find something else. Problem is I can't find anther hard top vert out there with the technology and performance of the BMW, and I don't think I can do a new 3 series.

I did for my e36 and no it is not crazy. The buyout price was several thousands below the market price in my case. That's doesn't always work out that way though, some times they depreciate more than what BMW expected so the buyout price may not be in your favor. You can try to negotiate reducing the buyout price if that is the case, although it is tough, BMW doesn't negotiate much on that. Alternately, you can get your dealer to pick it off the auction and sell it to you for a reasonable profit.
I'd say it all depends on how the #s work out.

Before bashing the new 3 series, go try it out if you haven't. But looks are subjective.

[Macbest]

Before bashing the new 3 series, go try it out if you haven't. But looks are subjective.

You are right; the new 3 series looks good on the outside, it is just that crazy GPS sitting on the dash that looks so aftermarket.

Since my lease ends in April 2013, I was thinking of an M3 (and possibly the vert) but hear that won't come out until summer 2013 at least...

[bestcardealsnow]

This site aggregates dealership lease offers and is a useful resource for comparing who has the most competitive discounts any given time.

http://www.bestcardealsnow.com/s?pla...is_model=false