[IS350]

For those who leased without taking a business expense, what was your motive? I like the option to transfer out of a lease early, even with the bad residual, I wonder if a lease assumption may still seem appealing even at $940/month, based on how few M2s are on the lease assumption sites?

[2045]

Originally Posted by IS350

For those who leased without taking a business expense, what was your motive? I like the option to transfer out of a lease early, even with the bad residual, I wonder if a lease assumption may still seem appealing even at $940/month, based on how few M2s are on the lease assumption sites?

Motive is to save paying the whole CA sales tax up front. We don't have tax credit here. buying the car, including financing, means you pay the full tax on 55k. On lease, you pay the tax on monthly base. For a car I want to play in short term I don't want to waste money on paying the full tax. always seems to work for me. Even M2 has bad residual but the real resale value is very predicable & should remain very strong because it's still not easy to get and it doesn't have loads of options. all that indications mean very safe in resale. $940/month isn't a bad deal. U're just paying down the car much faster.

[2045]

Originally Posted by thereisnoSub

The residual is awful for M2...lowest of all in the BMW lineup.

Could it be that they expect most people to drive their M2's hard hard hard and dont want to take them back off-lease?

Simply because they don't need to.

BMW hasn't been building enough of M2 to give them away. no need to subsidize the lease rates now. I don't mind the low residual as long as the car is remaining hot on the market.

[IS350]

Originally Posted by 2045

Motive is to save paying the whole CA sales tax up front. We don't have tax credit here. buying the car, including financing, means you pay the full tax on 55k. On lease, you pay the tax on monthly base. For a car I want to play in short term I don't want to waste money on paying the full tax. always seems to work for me. Even M2 has bad residual but the real resale value is very predicable & should remain very strong because it's still not easy to get and it doesn't have loads of options. all that indications mean very safe in resale. $940/month isn't a bad deal. U're just paying down the car much faster.

Good perspective on the tax.
Agree about paying down the car faster on the lease, but aside from the tax savings, little benefit, if not planning to buy at lease end?

Comparing the tax, vs the money factor and rental/extra fees built into the lease that don't go toward the car buyout, I wonder how vast the tax savings is on a lease vs that tax, divided over the term of a finance?

[doug_999]

Originally Posted by IS350

Good perspective on the tax.
Agree about paying down the car faster on the lease, but aside from the tax savings, little benefit, if not planning to buy at lease end?

Comparing the tax, vs the money factor and rental/extra fees built into the lease that don't go toward the car buyout, I wonder how vast the tax savings is on a lease vs that tax, divided over the term of a finance?

I posted earlier in this thread about why a lease was a bad idea. Here are my numbers
Now back of napkin here everyone, so feel free to correct any glaring mistakes (and there is probably more than one).
If you buy the car for $55,000 and pay 7% sales tax, your total price is $58,850.
You obtain a 5-year loan for 1.9% and your monthly payment is $1,029.
At the 36 month mark, you are out $37,044 in payments.
I am pretty darn sure, engine change be dammed, the M2 will be worth 60% of its value at that point (if not more, but let's go with 60%, which is conservative).
So your car is now worth $33,000 and you still owe $24,212 on the note. You have effectively $8,788 worth of cash at this point. OR you could trade in that car, pocket the $8,788 and save an additional $2,300 in taxes for a total of $11,088.
But for comparison, let's just go with the $8,788

Now.. your 3 year lease payment, 12K miles per year, for a $55,000 (buy rate of .00134*) car PLUS the BMW lease fee of $925, is going to be $945.01 per month. Taxes depend on the state - here in IL, you would also have to pay an additional 7% of your total lease payments (I think many states allow you to just pay that monthly, but not here - that makes the leasing numbers horrific, so I'll just go with the lease payment being $945.01 * 1.07 = $1,011.16 per month. Like I said, it would be a LOT more here in IL cause the taxes are due up front and if you rolled them into the lease... well you get the idea...)

So at the end of 36 months, you have paid $36,401.79 in lease payments - oh but bad news, BMW wants its $350 lease disposition fee. So total out of pocket at the end of 3 years is $36,751.79 or... wait for it... $292 LESS than buying.

[MMMBRAP]

Originally Posted by doug_999

I posted earlier in this thread about why a lease was a bad idea. Here are my numbers
Now back of napkin here everyone, so feel free to correct any glaring mistakes (and there is probably more than one).
If you buy the car for $55,000 and pay 7% sales tax, your total price is $58,850.
You obtain a 5-year loan for 1.9% and your monthly payment is $1,029.
At the 36 month mark, you are out $37,044 in payments.
I am pretty darn sure, engine change be dammed, the M2 will be worth 60% of its value at that point (if not more, but let's go with 60%, which is conservative).
So your car is now worth $33,000 and you still owe $24,212 on the note. You have effectively $8,788 worth of cash at this point. OR you could trade in that car, pocket the $8,788 and save an additional $2,300 in taxes for a total of $11,088.
But for comparison, let's just go with the $8,788

Now.. your 3 year lease payment, 12K miles per year, for a $55,000 (buy rate of .00134*) car PLUS the BMW lease fee of $925, is going to be $945.01 per month. Taxes depend on the state - here in IL, you would also have to pay an additional 7% of your total lease payments (I think many states allow you to just pay that monthly, but not here - that makes the leasing numbers horrific, so I'll just go with the lease payment being $945.01 * 1.07 = $1,011.16 per month. Like I said, it would be a LOT more here in IL cause the taxes are due up front and if you rolled them into the lease... well you get the idea...)

So at the end of 36 months, you have paid $36,401.79 in lease payments - oh but bad news, BMW wants its $350 lease disposition fee. So total out of pocket at the end of 3 years is $36,751.79 or... wait for it... $292 LESS than buying.

Well said.

I personally prefer buying > leasing for your exact reasons.

More importantly, at the end of the lease, you don't own anything.

[2045]

Originally Posted by IS350

Good perspective on the tax.
Agree about paying down the car faster on the lease, but aside from the tax savings, little benefit, if not planning to buy at lease end?

Comparing the tax, vs the money factor and rental/extra fees built into the lease that don't go toward the car buyout, I wonder how vast the tax savings is on a lease vs that tax, divided over the term of a finance?

Buying(including financing) means the ultimate commitment on the car. in any case the full sales tax paid up front is gone. there's no turning back. Yes, there are fees here & there in leasing. Bank fee, rental %, interests just to name few. I usually just look at the bigger picture(terrible at math). I want to try the car out. so I find the best way to minimize the overall ownership cost. My mind was set for not keeping the car for longer than 6 months. so my overall payment for the car is not too far from the tax I would be paying if I outright purchased the car. so having said that, I'm ok with paying the usage on the ownership but not willing to pay for something I consider a waste(tax in this case).

If your intention is to keep the car for a long time. leasing makes no sense unless you somehow write it off. I don't. too complicated for me. Buy the car if you plan to keep it forever. once you're in a lease, either get an new car every terms or get out sooner. never buy it out after the term. just my opinion.

[rich8566]

Originally Posted by VR-Tech

Unlike the M4/M3, I would assume that people that get a hold of the M2 are mainly purchasing. Which is quite different story to the M3/4, those are leased like crazy! Usual M4 leases go from $750-1050 a month. That's pretty nuts when you can just put a decent down on the M2 and pay 600+ a month and it's yours.

That's said, I see that people can lease the M2 for about $900 a month.
Are people here leasing or buying? If you are leasing, what benefits are there when there is no incentives to do so?

I bought my M2.

[IS350]

Originally Posted by doug_999

I posted earlier in this thread about why a lease was a bad idea. Here are my numbers
Now back of napkin here everyone, so feel free to correct any glaring mistakes (and there is probably more than one).
If you buy the car for $55,000 and pay 7% sales tax, your total price is $58,850.
You obtain a 5-year loan for 1.9% and your monthly payment is $1,029.
At the 36 month mark, you are out $37,044 in payments.
I am pretty darn sure, engine change be dammed, the M2 will be worth 60% of its value at that point (if not more, but let's go with 60%, which is conservative).
So your car is now worth $33,000 and you still owe $24,212 on the note. You have effectively $8,788 worth of cash at this point. OR you could trade in that car, pocket the $8,788 and save an additional $2,300 in taxes for a total of $11,088.
But for comparison, let's just go with the $8,788

Now.. your 3 year lease payment, 12K miles per year, for a $55,000 (buy rate of .00134*) car PLUS the BMW lease fee of $925, is going to be $945.01 per month. Taxes depend on the state - here in IL, you would also have to pay an additional 7% of your total lease payments (I think many states allow you to just pay that monthly, but not here - that makes the leasing numbers horrific, so I'll just go with the lease payment being $945.01 * 1.07 = $1,011.16 per month. Like I said, it would be a LOT more here in IL cause the taxes are due up front and if you rolled them into the lease... well you get the idea...)

So at the end of 36 months, you have paid $36,401.79 in lease payments - oh but bad news, BMW wants its $350 lease disposition fee. So total out of pocket at the end of 3 years is $36,751.79 or... wait for it... $292 LESS than buying.

Thanks for crunching the numbers. Of course the tax factor is big. In SC we pay a maximum $300 per vehicle. So leasing gains a bit of a savings there. However, lease or finance, they charge us a property tax/registration annually. About 1 percent of the appraised retail value.

The M2's poor residual is the only caution for a lease. But I still like the idea that on a lease, if the car is slammed by another, you repair it and don't lose the value at lease end, you just turn in the keys. That said, if you're keeping it forever, in a finance, I guess the devalue is only on paper, too.

[jtcsifl]

I have leased most of my cars for the last 15 years or more. I just couldn't buy into the 44% residual (March 2017) knowing that the cars resale value would be significantly higher so I bought it. I'll drive it for 3 years and sell it for more than I owe & move on to something shiny & newer.

[doug_999]

Originally Posted by 2045

Buying(including financing) means the ultimate commitment on the car. in any case the full sales tax paid up front is gone. there's no turning back. Yes, there are fees here & there in leasing. Bank fee, rental %, interests just to name few. I usually just look at the bigger picture(terrible at math). I want to try the car out. so I find the best way to minimize the overall ownership cost. My mind was set for not keeping the car for longer than 6 months. so my overall payment for the car is not too far from the tax I would be paying if I outright purchased the car. so having said that, I'm ok with paying the usage on the ownership but not willing to pay for something I consider a waste(tax in this case).

If your intention is to keep the car for a long time. leasing makes no sense unless you somehow write it off. I don't. too complicated for me. Buy the car if you plan to keep it forever. once you're in a lease, either get an new car every terms or get out sooner. never buy it out after the term. just my opinion.

I disagree - a lease is a true commitment, short of finding someone to take over your lease, getting out of one is serious $$.

Originally Posted by IS350

The M2's poor residual is the only caution for a lease. But I still like the idea that on a lease, if the car is slammed by another, you repair it and don't lose the value at lease end, you just turn in the keys. That said, if you're keeping it forever, in a finance, I guess the devalue is only on paper, too.

The idea of being able to walk away from a car with a CarFax without any downside, is piece of mind - however it is somewhat like an extended warranty that you may or may not use (how often do you get in accidents? How often do you get flat tires? )

Also, as pointed out, you can't easily get out of your lease. So say you do get in major fender bender and end up with a black mark on your CarFax - you are going to be living with that thing (and its pull to the left and flaking paint and/or cracking bumper) for the next 2.5 years. My point is, there is serious give and take here (won't hurt you other than it might annoy the crap out of you for 2.5 years).

As I mentioned earlier in the thread (and my dealer, who is my friend, has pointed out), with a residual on a car this low, that holds its value so well, it just doesn't make sense to lease this one.

[2045]

Originally Posted by doug_999

I disagree - a lease is a true commitment, short of finding someone to take over your lease, getting out of one is serious $$.

Well, it's more complicated than just lease vs buy argument after all. It also involves a good contact at the dealer for getting you the right deal. I've been getting new BMW almost every year for the past 12 years. I can only speak for my experience. I'm not talking about committing to a lease on a, let's say 335i or M6 at full retail price. Yes, if you want to get out early that's some serious money. It's all about shop smartly. In order for someone willing to take over the lease, the lease number needs to be attractive enough. I never have problem getting rid off the cars. All i'm saying is, before you commit, make sure all options are considered.

[2045]

Originally Posted by jtcsifl

I have leased most of my cars for the last 15 years or more. I just couldn't buy into the 44% residual (March 2017) knowing that the cars resale value would be significantly higher so I bought it. I'll drive it for 3 years and sell it for more than I owe & move on to something shiny & newer.

That's exactly my situation now. The sold price is already more that my pay off & that was predicted before I commit. Although I pay more ''rent'' charge in a small percentage but I saved about $4,000 in tax up front. this is a great way to try a car out before the commitment of owning it for the long run.

[IS350]

Originally Posted by 2045

Well, it's more complicated than just lease vs buy argument after all. It also involves a good contact at the dealer for getting you the right deal. I've been getting new BMW almost every year for the past 12 years. I can only speak for my experience. I'm not talking about committing to a lease on a, let's say 335i or M6 at full retail price. Yes, if you want to get out early that's some serious money. It's all about shop smartly. In order for someone willing to take over the lease, the lease number needs to be attractive enough. I never have problem getting rid off the cars. All i'm saying is, before you commit, make sure all options are considered.

I agree. I seek out value in a lease, to have more demand, if I want to flip. Little tricky on the M2, with bad residual and discount.

However, I may rather owe $33k toward a car I may be trying to flip, vs the full retail.

[Semi-Poor]

Bought it, paid cash, free to do as I see fit. Never liked leasing.

[JPizzz]

Hey guys,

Now that we’re on the cusp on the m2 competition, what would you expect a 2018 true resale value to be In 3 years? I never bought a car that may have such a significant “mid cycle” change. Plus it’s a very niche car. Thoughts?

[DrAnzo2.0]

I bought my 2018 M2. I used my 2015 STI as a ~$30k down payment, and financed the other half over 60 months at 0.9% through BMWFS. I think the M2 will hold its value pretty well, even if a variant with the S55 is in the picture.

[JPizzz]

Average car loses 46% after 3 years from what I read. Any thoughts of the m2 will be above or below??

[bobert]

Originally Posted by JPizzz

Average car loses 46% after 3 years from what I read. Any thoughts of the m2 will be above or below??

Lots of folks have given their opinion on M2 depreciation in a number of threads but the truth is no one can predict the future.

[rocke29]

Bought mine, a barely used 2018 with 1700 miles. I had been leasing an i8 which had a $148,000 sticker and was paying $1249/mo for 12k annual miles and only $4k out of pocket. The common sense in me can't fathom paying $800+ lease on an M2 that's $60k vs $1249 on a car worth almost $150k.

[Wilsm2]

Doesn't it all depend on the interest rate at the time ?

In the uk a new m2 is at 3.9% used at 10.9%

If you buy the car out right at 50k and it deprecate 20k, it cost you 20k

If you buy new car on pcp or hp at 50k and it deprecate 20k plus interest, it owes you 23k

If you buy a used car at 42k and it deprecates 15k as it's already a year old and it starts to slow down when it gets older. Car will owe you 15k plus interest 10k = 25k and the car is worth less.

This is a ruff calculation, I priced my new M2 and it worked out 2k more than a year old M2 with 10k on the clock.

If BMW was doing interest free then I would say you are on a winner as you are only paying for the car. Most people can't buy the car out right and the car will always loose, the only way you can save is on the interest, cheape is better .

I could be wrong ?

[bobert]

Originally Posted by Wilsm2

If you buy new car on pcp or hp at 50k and it deprecate 20k plus interest, it owes you 23k

No one should buy a new car on PCP.