[akashmehrotra]

thank you everyone. It seems the current prevailing MF in my state just went up even further to .000182 and 54% RV. I'd like to lease, but WA state has a high demand for luxury cars and dealers are outright rude to deal with.

[Crimsonboz]

Originally Posted by akashmehrotra

thank you everyone. It seems the current prevailing MF in my state just went up even further to .000182 and 54% RV. I'd like to lease, but WA state has a high demand for luxury cars and dealers are outright rude to deal with.

Buy out of state and no dealership is beyond negotiations in the MF department.

[Resjudicata]

Originally Posted by Crimsonboz

Buy out of state and no dealership is beyond negotiations in the MF department.

I agree. I have to go to TN to buy a car and Chicago for another and Florida for my wife's. Most now offer free shipping to you. But even if you get transportation it's less than $1k usually. Or you could fly or drive to get a new one.

It's worth asking dealership outside your area. Go to Bmw.com and find a list of dealership in 500 miles and send them all an email with what you're looking for and get their prices.

Trust me 3 days of phones calls and emails can save you THOUSANDS.

[Wild Blue]

Originally Posted by Resjudicata

I agree. I have to go to TN to buy a car and Chicago for another and Florida for my wife's. Most now offer free shipping to you. But even if you get transportation it's less than $1k usually. Or you could fly or drive to get a new one.

It's worth asking dealership outside your area. Go to Bmw.com and find a list of dealership in 500 miles and send them all an email with what you're looking for and get their prices.

Trust me 3 days of phones calls and emails can save you THOUSANDS.

Interesting, Resjudicata as one of the best BMW dealers we've found for % off MSRP is literally next door to you.

[Resjudicata]

Originally Posted by Wild Blue

Interesting, Resjudicata as one of the best BMW dealers we've found for % off MSRP is literally next door to you.

@wild blue nope, for example when I bought my most recent bmw m850i the closest local dealership wanted $150k, the next closest wanted $140k; I went 200 miles and found one identical for $120k.

I then went back to my 2nd closest dealer because I liked the salesman, and while he didn't go under, he matched the price of the other dealership.

So I bought my most recent from the 2nd closet dealership only because they price matched and even then it was a nightmare because it was a battle to get them to match exactly and with all the same extras (like all weather mats, charging cable, kits, floating hubs, etc). And honestly at the end of the day I still think there is one or two little extras that I didn't get, although I got neck warmers - so I call it a wash.

[Resjudicata]

Originally Posted by Wild Blue

Interesting, Resjudicata as one of the best BMW dealers we've found for % off MSRP is literally next door to you.

Originally Posted by Wild Blue

Interesting, Resjudicata as one of the best BMW dealers we've found for % off MSRP is literally next door to you.

Just got a quote a new x7 vs my old x7, and my local dealership wanted almost $11,000 more than I paid for the same car new vs new one. Although 2019 vs 2020.

[Lanoyolar]

I respect your decision, and I think it is the best option for you. I decided to take a mortgage two years ago, and I really had no idea how the whole process worked; and I kept hearing stories about people who got fooled, which really creeped me out. That is why I decided to go on the internet and look for a solution. After some searching I found Mortgage Advice Lincoln and they were able to give me all the pieces of advice I needed. They kept on advising me till the end, and the deal was made.

[FCX5]

Originally Posted by akashmehrotra

Hi

My heart is set on a X7 and I currently own a X5 35d which I absolutely still love.

I was reaching out to seek help on buy vs lease decision. I feel this is a bad time to buy an expensive car like an x7.

While I understand the benefits of buy (I have never ever leased a car), one of the big cons as I see on buying is that I will be stuck with the car for atleast 5+ years. The car technology is changing so quickly that in 2-3 years BMW will have an answer to electric and autopilot + more innovation.

I feel if I lease, I will be in a much better position to upgrade in 3 years to something more advanced and innovative vs try to sell the X7 at a pretty bad price - considering there will be much advanced options available and the car would have devalued significantly owing to that.

Appreciate any guidance - am I thinking this right.

Also on my most recent X7 3yr/36k lease I am getting a MF of .0177 and a residual of 54%.

The MF seems high. Any idea what's the prevailing MF on 2020 X7 leases.

thanks

This is just my personal opinion. In my case buying has always been a better decision whether I have kept a car for 3 or 5 or 7 or 9 years. If you are determined to keep a car for 3 years only then the financial decision is about the same whether you buy or lease. However, I like the freedom of being able to make that decision. Also, when one leases it is a bit like paying with a credit card. It is much easier to extend oneself. Most people I know that lease, do so because they can drive a more expensive car than they could afford otherwise. So in a nutshell, it just boils down to what you can afford and what you'd like to drive. Leasing is basically borrowing the car from BMW for 3 years.

[FCX5]

Originally Posted by jcarlilesiu

Opposing point of view. The most expensive way to drive a car is leasing.

We have always bought and even driving the car for 4 years and trading it, we got $18,000 towards the X7 from our Yukon Denali.

Granted technology will advance and we will do without the latest and greatest for a couple of years before we trade, but we will have some value there.

Plus we live in a rural area so we put a lot of miles on vehicles.

I agree. But I don't think that is what most people want to hear. LOL.

[FCX5]

Originally Posted by toddwalton

Yes and no. My investment consultant insists we lease and what he was able to do with our money this year I don't even want to say, it's an embarrassingly big number. Better to have $70,000 invested and making money than having it tied up in a depreciating asset like a luxury car.

But since you were likely paying $800 more per month having bought the car than leasing the car, that's just semantics. I didn't have $18,000 in equity off of my X5 lease when returning it for the X7 but I didn't spend that $18,000 so its a win for me from that perspective.

Now that's the big one, if you can't manage 12K miles per year then leasing is not a win. Where we live here in the NYC metro area, 12K is where we are right on the nose, so it works out very well for us.

We view a lease as just another monthly payment, just another utility. You have a heating bill, you have a phone bill, you have a car payment. We get as much car as we can for our monthly budget, and we pay it. Like heat, food, or phone, there is no ROI. Transportation is something you need just like electricity or internet, it costs money, you pay it, it doesn't pay you back anything. Not sure why people think a car is like a mortgage. It's just another utility.

The interest rate to borrow is lower than leasing as far as I know. So it makes sense to borrow and invest. I however, doubt most people who do personal leases are actually thinking about the alternative cost of putting the money in the bank. They are doing it because the monthly payment is lower to lease than to finance…

[toddwalton]

Originally Posted by FCX5

The interest rate to borrow is lower than leasing as far as I know. So it makes sense to borrow and invest. I however, doubt most people who do personal leases are actually thinking about the alternative cost of putting the money in the bank. They are doing it because the monthly payment is lower to lease than to finance…

Perhaps for people who live month-to-month that's the case, but I doubt it applies to owners of $90K+ BMW's.

In my case, it's just for the sake of convenience at this point.

[mitch57]

Originally Posted by toddwalton

Perhaps for people who live month-to-month that's the case, but I doubt it applies to owners of $90K+ BMW's.

In my case, it's just for the sake of convenience at this point.

I think you would be surprised how many people live beyond their means just to be able to get something they want. Probably about 90% of the US population will not have enough money to live on in retirement because they live for the day instead of for the future.

[Angelo_GraysonMiniBMW]

Originally Posted by FCX5

The interest rate to borrow is lower than leasing as far as I know. So it makes sense to borrow and invest. I however, doubt most people who do personal leases are actually thinking about the alternative cost of putting the money in the bank. They are doing it because the monthly payment is lower to lease than to finance…

I have gone back and forth whether to buy or lease. I’m currently setup to lease before my X7 arrives. I was able to get MF .00093 but I could finance it for 1.89%. The rates are very close either way. The lease makes more sense as I will probably hit around 10-11k miles max per year and nothing out of pocket up front. I bet most people will buy the extended warranty if they keep it past warranty and that’s another $6k+ for the best ones. Also, I don’t have to spend money on PPF and ceramic coats, another $2k+. I certainly am not leasing for a lower payment. I invest in the market and would rather borrow cheap money then use my own and allow it to work for me. Believe me, I really don’t want to lease as I never have in the past but it just seems like I am taking less deprecation risk by leasing it. Especially since I’m not getting a break on the MSRP, except for the $3250 I would get for military discount. The crazy thing that swayed me to leasing, was not getting the HK sound system. Not crazy about owning an suv with a crappy base system ����

[NVRfollo]

Originally Posted by Angelo1

I have gone back and forth whether to buy or lease. I'm currently setup to lease before my X7 arrives. I was able to get MF .00093 but I could finance it for 1.89%. The rates are very close either way. The lease makes more sense as I will probably hit around 10-11k miles max per year and nothing out of pocket up front. I bet most people will buy the extended warranty if they keep it past warranty and that's another $6k+ for the best ones. Also, I don't have to spend money on PPF and ceramic coats, another $2k+. I certainly am not leasing for a lower payment. I invest in the market and would rather borrow cheap money then use my own and allow it to work for me. Believe me, I really don't want to lease as I never have in the past but it just seems like I am taking less deprecation risk by leasing it. Especially since I'm not getting a break on the MSRP, except for the $3250 I would get for military discount. The crazy thing that swayed me to leasing, was not getting the HK sound system. Not crazy about owning an suv with a crappy base system ����

If you are a BMWCCA or PenFed member, you get additional rebates. Both require you to be a member for a certain period of time before you qualify for the rebate. BMWCCA is $1000 and Penfed is $500 on leases. BMWCCA is after the sale and Penfed is part of the cap reduction

[MystroX5]

What a completely different automotive market from when this thread started. It went from bad to worse to catastrophic with automotive manufacturing. Members rushing to buy out their 2019 and 2020 lease. Now 2021-2023 vehicle highly compromised with lack of standard and optional features might have some leasing vehicles they know they won’t want to keep.

[rich5741]

A lot of people are conflating the financial structure (is lease or buy a better financial decision) with the general financial (is it better to keep a car more than 3 years). Of course its always a better decision to keep the car as long as you can or until the maintenance gets too expensive.

But for those that have decided they want to keep a car only a short period of time (irrespective of financial wherewithal to do it), leasing makes a ton of sense; so the real question is whether you want to take the risk on trade in value. Also if you get a lot of more uncommon or lower demand options, you may get more value out of leasing because they apply a fixed residual to the entire price, meaning you get full credit for those options that may not be worth much on a trade.

The “interest rate” on the lease will be similar to financing - within 50bps, which over the term is only about $200 total — rounding error compared to variance in trade in value.

Also I think there is less flexibility to make modifications on a lease - to the extent that’s of interest to you.

There are also state differences - some states charge you sales tax on the entire purchase price over the term of the lease, some states just charge the difference between purchase and residual, some will charge on the lease payment (e.g. sales tax on the “interest”). Then some states will give you credit for sales tax on your trade in, others will not.

[Angelo_GraysonMiniBMW]

Originally Posted by rich5741

A lot of people are conflating the financial structure (is lease or buy a better financial decision) with the general financial (is it better to keep a car more than 3 years). Of course its always a better decision to keep the car as long as you can or until the maintenance gets too expensive.

But for those that have decided they want to keep a car only a short period of time (irrespective of financial wherewithal to do it), leasing makes a ton of sense; so the real question is whether you want to take the risk on trade in value. Also if you get a lot of more uncommon or lower demand options, you may get more value out of leasing because they apply a fixed residual to the entire price, meaning you get full credit for those options that may not be worth much on a trade.

The “interest rate” on the lease will be similar to financing - within 50bps, which over the term is only about $200 total — rounding error compared to variance in trade in value.

Also I think there is less flexibility to make modifications on a lease - to the extent that’s of interest to you.

There are also state differences - some states charge you sales tax on the entire purchase price over the term of the lease, some states just charge the difference between purchase and residual, some will charge on the lease payment (e.g. sales tax on the “interest”). Then some states will give you credit for sales tax on your trade in, others will not.

The sales tax here in TN is based on the monthly payment as it should be.

[dmanb2b]

Anyone that is currently in a lease and is looking to trade in soon needs to seriously consider selling the vehicle to the dealer, Carvana, vroom or private party.

[toddwalton]

Originally Posted by dmanb2b

Anyone that is currently in a lease and is looking to trade in soon needs to seriously consider selling the vehicle to the dealer, Carvana, vroom or private party.

So my X7 lease is up in April 2022. I'll need another X7 to replace it as my wife loves it. Any advice?

[AVZ12345]

I never quite understand this debate. Variables like mileage etc in my opinion are a bit of a red herring when thinking through this. As long as a lease gives you the (free) option to buy at anytime the only thing you need to look at is what the interest rate would be for the lease and what it would be to finance (and if you pay cash then you could also do a one pay lease). If the lease interest rate / MF is significantly higher than finance rate then yes you may want to finance but you need to compare that against the probability you think you get in a reportable accident which would mean the car takes a huge hit in value which if you finance you carry that loss vs if you lease it’s the bank’s loss. You can buy the car at any time (if you put too many miles on it / if the car market value is very high and you want sell / if you just want to drive the car into the ground). The trade off again mainly is the interest rate, the acquisition fee you pay with a lease, and any tax implications in the subsequent buy and potential sale of the car). Leasing gives you plenty of flexibility to get out - you can buy and sell the car, you can transfer the lease (with Bmw at least). It has always made the most sense to me at least but would certainly like to hear where others disagree and why (maybe I’m missing something else).

[dmanb2b]

Originally Posted by toddwalton

So my X7 lease is up in April 2022. I'll need another X7 to replace it as my wife loves it. Any advice?

If you can build the spec you want and are ok leasing, sell your current vehicle vs. turning it in. The current FM value is most likely above what you owe on the vehicle

[dmanb2b]

Originally Posted by AVZ12345

I never quite understand this debate. Variables like mileage etc in my opinion are a bit of a red herring when thinking through this. As long as a lease gives you the (free) option to buy at anytime the only thing you need to look at is what the interest rate would be for the lease and what it would be to finance (and if you pay cash then you could also do a one pay lease). If the lease interest rate / MF is significantly higher than finance rate then yes you may want to finance but you need to compare that against the probability you think you get in a reportable accident which would mean the car takes a huge hit in value which if you finance you carry that loss vs if you lease it’s the bank’s loss. You can buy the car at any time (if you put too many miles on it / if the car market value is very high and you want sell / if you just want to drive the car into the ground). The trade off again mainly is the interest rate, the acquisition fee you pay with a lease, and any tax implications in the subsequent buy and potential sale of the car). Leasing gives you plenty of flexibility to get out - you can buy and sell the car, you can transfer the lease (with Bmw at least). It has always made the most sense to me at least but would certainly like to hear where others disagree and why (maybe I’m missing something else).

Outside of the past year, getting out of a lease early by purchasing it mid-lease ends up in the customer overpaying for a used car they have already rented, plus the buyout requires your to pay full sales tax, even if your intent is to flip it (unless you have a dealer buy it...although some state tax laws vary on this). Also, with a one pay lease, if you total the vehicle mid-contract, you lose any money you prepaid or put down. Don't get me wrong, I lease cars too, but only zero down and only if I am absolutely sure I want to keep the car for the full contract period.

Another example..let's say you are in a lease and god forbid sustain significant damage, but not enough to total the car, you are stuck riding out the lease, even if you no longer want the car.