02-07-2015, 06:25 PM | #1 |
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Financing vs. Leasing
Featured on BIMMERPOST.com I'm quite set on getting an M2 in 2016 and I've still on the fence as to whether I should finance or lease. I plan on keeping the car for quite a long time as this would be my first serious car. I've been playing around with the Canadian M235i configurator to get an idea about the price on the options. My picks: Melbourne Red Stock Wheels Stock Interior Sat-Nav HK System 8AT I'd imagine that the Sat-Nav and possibly the HK will become standard equipment on the M2 in Canada if we look at the M4. I prefer the DCT so I added the 8AT to get a better price estimate. My build came out to 57.3k, so I reckon that a similar build on the M2 will be around 65-68k CAD. Now comes the tricky bit. My understanding is that if I plan on keeping the car for the long term it's better to finance. However, even with a 30k deposit on the finance, I always end up paying more than giving a similar down payment for the lease and buy the car after 3 years for example. Just to give you some numbers, if I do a 25k downpayment for the lease and have a 200 monthly payment, the total cost comes down to 61.9k. If I do a 30k down payment and take a 5 year finance approach, I end up paying 69.4k. That's a wooping 7.5k difference. Obviously, these numbers will change for the M2, but even with a finance plan from BMW for the residual value I'll still pay less for the car by going down the lease route. I guess what I wanted to ask is what have you guys done on previous M purchases since to me the lease make a lot more sense. Cheers |
02-07-2015, 07:54 PM | #3 |
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DO NOT put money down on a lease.
As far as leasing vs. financing, I'll echo the generalization that has already been made. Long term ownership? Finance. Short term? Lease. I've done both and prefer leasing, especially since BMW has one of the most attractive leasing programs in the segment.
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02-07-2015, 08:02 PM | #4 |
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02-07-2015, 08:06 PM | #5 |
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I don't think there is a general rule like that about long term vs short term. It depends very much on the specific car and the specific deal that is being given by BMW at the time. I think the original poster is doing the right thing in looking at overall cost. For example, if BMW is setting in unrealistic residual and is giving a much higher money factor as compared to financing, then the lease may not make sense even if you only intend to keep the car short-term. On the flipside, in California we only have to pay tax on the portion of the car that is leased, so that can offer some savings as well.
That said, putting $30k down on a lease is very risky to me. My advice is to wait until BMW releases information on the M2 lease. Or you could run the numbers on a base M4 to get an idea. |
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02-08-2015, 12:28 AM | #6 |
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Definitely load up on multiple security deposits to lower the lease rates as much as you can. With new car models, BMW will likely use a high ~52+% residual rate but also use a high interest rate as well (~5.9%). That's what makes leasing expensive compared to financing through your bank (which may give a better interest rate than BMW FS financing).
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02-08-2015, 08:00 AM | #7 | |
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02-08-2015, 01:28 PM | #8 | |
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It will be interesting to see where BMW positions this car (M2) from that standpoint.
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02-08-2015, 06:27 PM | #10 | |
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02-08-2015, 06:35 PM | #11 | |
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02-08-2015, 08:47 PM | #12 | |
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Totally agree - they get close to 60% and the MF is reasonable (which you can always "buy" down w/MSDs), then it might be worth it to lease. Although, if the car is as good as we are all hoping, well then keeping it forever is definitely the better option.
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02-08-2015, 09:36 PM | #14 | |
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Although, if we go coupe to coupe comparison, the M2 could slide in at 54 since the 235 starts at 44 and the M4 starts at 64...the Germans might like how well that lines up to be honest. I really think it depends on where they make the cuts so to speak to save money - what will it not have that the M3/4 have standard? The more that's cut, the less it should cost. We shall see...
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02-08-2015, 09:53 PM | #15 | |
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02-09-2015, 12:22 AM | #17 |
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If I were your big brother giving you advise on this, I'd say cash ONLY. If you can't buy it cash yet, save first. I'm not trying to be a dick.
Now, if you've already made up your mind between either, PLEASE DO NOT lease. =)
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02-09-2015, 04:29 AM | #18 | |
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02-09-2015, 06:25 AM | #19 | |
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and it costs $1500 as a replacement part. i'd hope they make cuts in things like , not to mention the different electronics to charge a lithium battery etc. im guessing the cuts will be, CF stuff, lithium battery and just a tuned n55, not a S engine. and we'll get everything else . i don't think DCT will be super expensive for them to fit to a n55, since well... the z4 sdrive35is has the same DCT with an n55 that puts out 335hp (it is also only a $500 option too, i'd love it if DCT was only $500 extra on the F87) |
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02-09-2015, 07:28 AM | #20 | |
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Will Bimmerpost offer a prize for the M2 fan nearest to weight and price estimates?!
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02-09-2015, 08:19 AM | #21 |
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NEVER PUT MONEY DOWN ON A LEASE. Say you put down 10K on a lease, you leave the dealer lot and a truck comes and totals your car. You are out that 10K immediately. I know that is a grim scenario but it is reality.
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02-09-2015, 08:38 AM | #22 | |
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Does it make sense to take $55,000 out of the market where it is earning 8-10% when you can leave it there and pay BMW +/-4% on a lease and have all of your costs fixed for the time you have the car? Leasing isnt for everyone but it makes a lot of sense for a lot of people. |
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