Need advice - Get out of lease early to get into an older M4?

[808E90]

Dang I Haven't been on here for a while

I took some time away from modding cars to buy a house. Well, my family and I sold our condo and bought our dream house at the end of 2017. Now I'm getting the itch to build another car now that I have my own garage.

I'm looking to get out of my 2016 Lexus NX lease that ends April of 2019 and looking to trade it in for a 2015 M4. The Lexus is newer and only has 10,000 miles while the M4 is a year older and has 24,000 miles. The dealer is asking $48,000 for the M4 but will work with me. I know its going backwards in a way but I've always wanted a turbo car.

I've had a few BMWs including an E46 and E90 M3, both were modded nicely so I am familiar with the brand but still reading up on the new F82 platform.

I guess my question is, is it worth going into a older car that cost much more? If I don't do the trade now I will need to look for another car when my lease is up anyways.

Thank you in advance

[Moota]

As someone who was in a similar situation 3 years ago I went with a CPO 2012 E92 M3 because I didn’t think I wanted a 2015 M4 payment.

The main issue is that if this car is CPO there is about 3 years of warranty left. And you really don’t want to own this car outside of warranty. If you end up financing a nearly $50k car for 60 months your payment will be close to $1k. And after 3 years when the warranty expires you’ll still have 2 years of payments and will probably still be slightly upside down. My advice to people is always to lease these cars, especially M’s. The payment shouldn’t be THAT much more.

An additional footnote to buying - in this day and age of Carfax... god forbid you get into any kind of accident or fender bender that will follow you around and kill your trade or resale value when you go to sell it.

[gatorfast]

Originally Posted by Moota

As someone who was in a similar situation 3 years ago I went with a CPO 2012 E92 M3 because I didn’t think I wanted a 2015 M4 payment.

The main issue is that if this car is CPO there is about 3 years of warranty left. And you really don’t want to own this car outside of warranty. If you end up financing a nearly $50k car for 60 months your payment will be close to $1k. And after 3 years when the warranty expires you’ll still have 2 years of payments and will probably still be slightly upside down. My advice to people is always to lease these cars, especially M’s. The payment shouldn’t be THAT much more.

An additional footnote to buying - in this day and age of Carfax... god forbid you get into any kind of accident or fender bender that will follow you around and kill your trade or resale value when you go to sell it.

I would definitely agree that CPO or some sort of extended warranty is best to have.

However, your math is faulty as you are focusing on monthly payment and not total cost of ownership (also do people really take out $0 down $50k auto loans? yikes). The overall cost of buying a 2015 M3, keeping it for 3-4 years, and then selling it is likely much less than leasing a new one for 3 years.

[Moota]

Originally Posted by gatorfast

I would definitely agree that CPO or some sort of extended warranty is best to have.

However, your math is faulty as you are focusing on monthly payment and not total cost of ownership (also do people really take out $0 down $50k auto loans? yikes). The overall cost of buying a 2015 M3, keeping it for 3-4 years, and then selling it is likely much less than leasing a new one for 3 years.

If you’re in a CPO car with pre paid maintenance outside of tires your monthly payment should equal total cost of ownership. If you price out adding an extended warranty for just ONE year after CPO expires that’s about $6k. You’re banking on the fact that after 3 years he will have some kind of equity in the car and depending on how much money he puts down that may not be the case. And as far as putting money down - you’re either paying now or you’re paying at the end to buy yourself out of your negative equity as I did.

My best advice would be to price out both options with minimal money down. If you go the CPO route make sure you have gap insurance as well.

[gatorfast]

Originally Posted by Moota

If you’re in a CPO car with pre paid maintenance outside of tires your monthly payment should equal total cost of ownership.

That is not true. Your monthly payments are simply the principal and interest applied towards the note. Your total "cost", ignoring maintenance, will be your initial purchase price less what you receive as trade-in/sales value when you get rid of it.

Originally Posted by Moota

If you price out adding an extended warranty for just ONE year after CPO expires that’s about $6k. You’re banking on the fact that after 3 years he will have some kind of equity in the car and depending on how much money he puts down that may not be the case.

Having equity in the car has nothing to do with what I am saying. I am talking about overall cost of ownership. I also already agreed with you that CPO or some extended warranty is important and should be factored in.

Originally Posted by Moota

And as far as putting money down - you’re either paying now or you’re paying at the end to buy yourself out of your negative equity as I did.

Thats not entirely true as interest is a big factor. The smaller your note the less interest you pay.

Originally Posted by Moota

My best advice would be to price out both options with minimal money down. If you go the CPO route make sure you have gap insurance as well.

My advice would be to never put any money down for a lease, ever. And for financing, unless you get an insanely low rate of less than 1% or something, I would suggest putting as much down as you can to reduce your interest cost.

[Moota]

Originally Posted by gatorfast

My advice would be to never put any money down for a lease, ever. And for financing, unless you get an insanely low rate of less than 1% or something, I would suggest putting as much down as you can to reduce your interest cost.

In my opinion this is poor advice. If he puts down $10k on this car and the car gets totaled next month he is out $10k.

If he puts down the minimal amount, let's say $1k, he would only be out that $1k if the car would be a total loss.

[808E90]

Thank you so much for the advice guys.

I agree with both as far as payment ... The Lexus was my first ever lease and I put minimal down (still low monthly payments) because I knew I would turn the car back in. My old E90 M3 I put a lot down to keep my monthly payments low and I had planned to keep the car for a while.

This M4 will be in the middle ... I put enough “free” money down to keep monthly payments low and enough to keep me from being upside down. When I say free money I mean money that I don’t have to worry about.

I plan to visit the dealer today ... Thank you again.

[gatorfast]

Originally Posted by Moota

In my opinion this is poor advice. If he puts down $10k on this car and the car gets totaled next month he is out $10k.

If he puts down the minimal amount, let's say $1k, he would only be out that $1k if the car would be a total loss.

What are you talking about? If he finances the car he owes the bank the total amount financed regardless if the car is totaled or not. The bank doesn't let you just walk away lol.

[Moota]

Originally Posted by gatorfast

What are you talking about? If he finances the car he owes the bank the total amount financed regardless if the car is totaled or not. The bank doesn't let you just walk away lol.

Which is why I said to make sure to get Gap so he can.....

[gatorfast]

Originally Posted by Moota

Which is why I said to make sure to get Gap so he can.....

Ok I thought we were talking about lease/finance basics here, don't know where gap insurance came in (critical for a lease, circumstantial for finance imo). But to your point, thats just another good reason to put more money down when financing as it increases the likelihood of always having equity and not needing to consider gap insurance. My financial advice above was assuming the OP makes it through his ownership period with the car intact

[808E90]

Thank you guys ... Put down a decent amount and also got GAP and extended warranty.

[Moota]

Pictures or it didn’t happen!

On a serious note - congrats on the new car!