[Fear-Mongrel]

Originally Posted by Wharf Rat

If you want to lease, do it. Didn't make sense for me.

Right, I understand that, I saw your previous post about possibly modifying the car. It was with your specific post in mind that I wrote:

"The only buyers who should absolutely not lease are those who plan to irreversibly modify the car - they should buy, no debate needed."

[Wharf Rat]

Originally Posted by afwares

Right, I understand that, I saw your previous post about possibly modifying the car. It was with your specific post in mind that I wrote:

"The only buyers who should absolutely not lease are those who plan to irreversibly modify the car - they should buy, no debate needed."

That's not an absolute either. The mods don't have to be irreversible, perhaps just cost prohibitive.

My underlying point is that there exists no universal lease vs buy decision, as individual circumstances will likely dictate the appropriate course.

[Fear-Mongrel]

Originally Posted by Wharf Rat

That's not an absolute either. The mods don't have to be irreversible, perhaps just cost prohibitive.

In my mind that's the same category - "irreversible" to me includes both mods that you literally cannot undo, such as a custom re-paint, to mods that can be removed but would incur such financial damage that they may as well be irreversible. If I'm still missing your point, let me know what you mean, i.e. give me examples so I can learn and understand what you know. I'm the least mechanically-inclined person on this board, so I have to think of "mods" in broad strokes.

Originally Posted by Wharf Rat

My underlying point is that there exists no universal lease vs buy decision, as individual circumstances will likely dictate the appropriate course.

Of course, couldn't agree more. I never said it was universal, never said 100% of people should do it. My position all along has been "overwhelming majority". Of course, there are plenty of people who can't even enter the discussion of "should I or shouldn't I" because they are stuck in a "absolutely cannot" position...maybe their credit score is too low, they've defaulted on previous leases, they're relocating out of country and their logistical situation will prevent timely return, etc. etc. You can come up with 1000 examples of people who CANNOT lease. I'm not talking about those people - they don't enter this discussion. I'm talking about people who have no credit, logistical, or customization obstacles, and are fortunate to have the choice and are in a "should I or shouldn't I" position. For the overwhelming majority of those people, I can make the FINANCIAL case for leasing. I emphasize the word financial because I can't account for emotions, prejudices, motivations, ignorance, etc. Just like you pointed out, one can easily make the case that Cheetos are unhealthy from a biochemical standpoint, but that won't matter to someone who just likes them and doesn't care about their health. There's no point debating people coming from that perspective.

[Wharf Rat]

Originally Posted by afwares

In my mind that's the same category - "irreversible" to me includes both mods that you literally cannot undo, such as a custom re-paint, to mods that can be removed but would incur such financial damage that they may as well be irreversible. If I'm still missing your point, let me know what you mean, i.e. give me examples so I can learn and understand what you know. I'm the least mechanically-inclined person on this board, so I have to think of "mods" in broad strokes.



Of course, couldn't agree more. I never said it was universal, never said 100% of people should do it. My position all along has been "overwhelming majority". Of course, there are plenty of people who can't even enter the discussion of "should I or shouldn't I" because they are stuck in a "absolutely cannot" position...maybe their credit score is too low, they've defaulted on previous leases, they're relocating out of country and their logistical situation will prevent timely return, etc. etc. You can come up with 1000 examples of people who CANNOT lease. I'm not talking about those people - they don't enter this discussion. I'm talking about people who have no credit, logistical, or customization obstacles, and are fortunate to have the choice and are in a "should I or shouldn't I" position. For the overwhelming majority of those people, I can make the FINANCIAL case for leasing. I emphasize the word financial because I can't account for emotions, prejudices, motivations, ignorance, etc. Just like you pointed out, one can easily make the case that Cheetos are unhealthy from a biochemical standpoint, but that won't matter to someone who just likes them and doesn't care about their health. There's no point debating people coming from that perspective.

Yep, we are in agreement... just been foolin' around with the banter.

What color? The city's not that big; maybe I'll see you around. Haven't seen another M2 yet.

[Fear-Mongrel]

Originally Posted by Wharf Rat

Yep, we are in agreement... just been foolin' around with the banter.

What color? The city's not that big; maybe I'll see you around. Haven't seen another M2 yet.

Discussion is a good thing - and I need it more than most, especially as a BMW newbie.

We're going for LBB, but aiming for ED in May, so it won't be roaming Chandler until later this year. I've only seen three M2 total - a white one in Scottsdale that was dented, filthy, and looked neglected, a MG 6MT in Ahwatukee, and a LBB at Cars & Coffee back in November. As incredible as I think they look in photos, the M2 is just stunningly beautiful in person - I genuinely believe it will end up being an automotive classic so we're planning a lease w/purchase after 3 years.

[Wilsm2]

Originally Posted by afwares

Discussion is a good thing - and I need it more than most, especially as a BMW newbie.

We're going for LBB, but aiming for ED in May, so it won't be roaming Chandler until later this year. I've only seen three M2 total - a white one in Scottsdale that was dented, filthy, and looked neglected, a MG 6MT in Ahwatukee, and a LBB at Cars & Coffee back in November. As incredible as I think they look in photos, the M2 is just stunningly beautiful in person - I genuinely believe it will end up being an automotive classic so we're planning a lease w/purchase after 3 years.

Totally agree, we have the same thought.

[Wharf Rat]

Originally Posted by afwares

Discussion is a good thing - and I need it more than most, especially as a BMW newbie.

We're going for LBB, but aiming for ED in May, so it won't be roaming Chandler until later this year. I've only seen three M2 total - a white one in Scottsdale that was dented, filthy, and looked neglected, a MG 6MT in Ahwatukee, and a LBB at Cars & Coffee back in November. As incredible as I think they look in photos, the M2 is just stunningly beautiful in person - I genuinely believe it will end up being an automotive classic so we're planning a lease w/purchase after 3 years.

I no sooner posted that, left for work & rolled up on an AW M2 on the San Tan 202-E. Clean, no dents.
Mine is LBB, BTW

[M3 Adjuster]

Originally Posted by afwares

Discussion is a good thing - and I need it more than most, especially as a BMW newbie.

We're going for LBB, but aiming for ED in May, so it won't be roaming Chandler until later this year. I've only seen three M2 total - a white one in Scottsdale that was dented, filthy, and looked neglected, a MG 6MT in Ahwatukee, and a LBB at Cars & Coffee back in November. As incredible as I think they look in photos, the M2 is just stunningly beautiful in person - I genuinely believe it will end up being an automotive classic so we're planning a lease w/purchase after 3 years.

have you actually looked at M2 lease rates?

[doug_999]

Originally Posted by afwares

....I genuinely believe it will end up being an automotive classic so we're planning a lease w/purchase after 3 years.

ACK! Really? Why would you do that? If you are serious about keeping it, the lease will only cost you more - see my earlier post.

With the M2 and the current residuals, there really is no reason to lease this car. This has nothing to do with leasing/buying - it has everything to do with BMW's residuals on the 2-series.

[stefan]

Originally Posted by bobert

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.

Well given that we are now seeing cars sitting on lots out there.. not a great sign for depreciation. GTS owners can attest to that.

[rich8566]

Originally Posted by pruettfan

I totally disagree that a warranty is a must, the cost of these warranties most often will far exceed the repair costs. That is a statistical and financial fact. We only hear from the small percentage of extended warranty buyers who "won" and their warranty covered the cost of an expensive repair. These businesses are in the business of making money so clearly the odds are in their favor. Its an independent financial decision as to buy an extended warranty or not, it is not a must have. I drove my E90 for 215,000 miles and my repair costs were far less than the cost of a dealer extended warranty over the entire life of the car much less up to 100,000 miles. If you want protection cheaply buy the mechanical breakdown insurance from Geico for about 8 bucks a month, covers everything you just have to have insurance through them, car has to be less than 15,000 miles and 2 years as well as you need to be the original owner. Dealers hate Geico MBI.

While I am generally NOT the type of guy who buys "extra" warranty coverage, when I bought my M2 I also signed up for Geico's mechanical breakdown coverage which is $15 per month on my '17 M2. While the car is under warranty the deductible is reduced considerably for this coverage. In my view, this extra cost is a bad idea while under warranty, but it may turn out to be the cheapest way of getting long term mechanical breakdown protection for an M2.

[rich8566]

Originally Posted by doug_999

Maybe I'm reading between the lines....so let me clarify somethings
1. The comment about the residuals/mf on the M3 thread is simply about the posts that are in that thread (read it, it is awesome). It was not meant to mean that someone leasing only does so because they can't afford to buy.

2. Nothing personal, but even accountants can learn something about the lease vs. buy

I get the concept of why you like leasing - fixed monthly cost (and prior to the most recent maintenance changes), no real money out of pocket except gas, insurance, and tires.

and... as you pointed out, a nice fixed price at the end of the lease.

but/and... there is more...
On a highly optioned car, the lease has even more benefits. That $5,000 frozen paint job? You get 50-60% of that back at the end of the lease vs. basically 0% or maybe even a deduction if you were to trade in the car. Same with the B&O stereo at $3,700, that $10K M Sport package, etc. etc.
and there is more... leasing REALLY starts to get good when you can get a deal on the car - because the residual is based on the MSRP, not the selling price.

Now...let's talk about the M2....
1. You can't highly option this car. There is an exec package and a transmission (and that horrific waste of money, the apple car play). But these are really low cost options and the DCT has value on trade.
2. The residuals, as set by BMW are terrible.
3. The M2, is a low production car today and still going for basically MSRP and it is holding its value decently
(and yes, everything is subject to change)

So you end up with the "perfect storm" for why leasing the M2 is not a smart money choice.

This is exactly why I bought my M2 and why I leased my prior BMW's.

[rich8566]

Originally Posted by LSB --> LBB

As I said I have other qualitative reasons for leasing...but "Not a smart money choice"? Not sure it's that simple...

Scenario: (Let's keep it simple...no taxes, net present value calculations, time value of money, etc.)

We both start with $60K in our bank accounts.

You buy an M2 for 60K and you pay for it in full at time of purchase. So your all in cost is $60K. You own the car and your bank account is $0.

I lease the same car for 4 years. The residual from BMW is low at 45% and the lease rate (or MF) is 4%. This means I will pay $37,348.80 over 4 years. However, I only need to pay 1,556.20 right now (first month lease and damage deposit) I then take the remaining $58,443.80 and put in into a 4 yr fixed payment annuity at moderate risk profile which would easily provide a 6% annual return.

We each enjoy driving our respective M2 and 4 years pass by...

You own an aging depreciating asset with a market value likely at 50% of original purchase price or $30K - which is now "off warranty". You have $0 in your bank account.

I have cash in my bank account of $31,825.82 (remaining value of the annuity)

Option 1 -
Now let's say your premonition is true and the M2 "holds its value decently" and has a market value at the end of 4 years of $40K (which would be unheard of by the way).

You still own an off-warranty aging depreciating asset with a market value of $40K...and $0 in your bank account.

I have cash in my bank of $31.8K (from scenario above). However I now have the option to buy the car for $27K (the 45% residual lease cost). I exercise my right to buy. I now have the same off-warranty aging depreciating asset with a market value of $40K as you. AND I still have $4,825.82 in my bank account.

Option 2 -
The MY2018 M2 get the B58/S55 engine in the LCI and the market value of MY17 and prior M2 drops to $25K after 4 years.

You own an off-warranty aging depreciating asset with a market value of $25K. $0 in your bank account.

I have cash in my bank account of $31,825.82 (remaining value of the annuity). I don't exercise my option to buy and I simply give the car back to the dealer.

My point is there is a lot that can happen and to make a blanket statement that "buying is a smarter money choice" is a bit naive.

If buying was the right choice for you, then that's great.

None of this is meant to create animosity or bad faith toward you or your opinion, I'm just illustrating with data.

We're all here because we like cars. As is so happened I was simply trying to provide the OP with some advice to do what is right for him/her.

Enjoy your car...I still have 10 months wait for mine.

Good points but I have one more to add
- risk mitigation via a lease rather than a purchase. If you lease you eliminate the risk of additional depreciation if your car gets hit or is in an accident. Thanks to readily available info via carfax, accidents will ding you big time in terms of real world market value. With a lease you can simply turn it in at lease end and walk away.

[Wharf Rat]

Originally Posted by stefan

Well given that we are now seeing cars sitting on lots out there.. not a great sign for depreciation. GTS owners can attest to that.

Given the relatively small number of M2s produced & the even smaller number of these cars sitting on lots, I don't think there's any real effect on depreciation.

[Fear-Mongrel]

Originally Posted by M3 Adjuster

have you actually looked at M2 lease rates?

What's an M2?

[M3 Adjuster]

Originally Posted by doug_999

ACK! Really? Why would you do that? If you are serious about keeping it, the lease will only cost you more - see my earlier post.

With the M2 and the current residuals, there really is no reason to lease this car. This has nothing to do with leasing/buying - it has everything to do with BMW's residuals on the 2-series.

I know right ? AGREE with you totally.


@afwares

This isn't a REFERENDUM on leasing vs buying.

As doug_999 explained , for most US buyers - especially ones spending their own money - buying an M2 is the best bet.

If you feel the M2 will be a classic - and I agree with you by the way ... that's all the more reason to buy it because so that you aren't paying for factored in depreciation that likely won't occur.

If the residuals after 3 years on an M2 are 50-52 percent do you really expect it will be only worth $25k-30k in 3 years ?

Look at the current values for M2 on the used market. Has anyone with an 2016 HEA car lost more than maybe 10 percent of the vehicle value in their two years of ownership?


For those that use leasing for " risk mitigation " it may make sense on many vehicles but it makes zero sense when you can look at the first 2 model years and get a really good idea of the rate of depreciation.

M2 values didn't tank at LCI and they won't with the model refresh. The 1995 E36 M3 vs 96 and up as well as the 98-99 vs 01-02 M roadster are two automotive precedents for motor changes on low volume BMW M cars.

For a long while the 95 M3 actually held higher values in the used market however currently there is little difference. The later M roadsters with S52 certainly seem to hold a little more value but the S50 versions never tanked and still retain a lot of value in the used market.

[F87_LCI]

Originally Posted by rich8566

Good points but I have one more to add
? risk mitigation via a lease rather than a purchase. If you lease you eliminate the risk of additional depreciation if your car gets hit or is in an accident. Thanks to readily available info via carfax, accidents will ding you big time in terms of real world residual value. With a lease you simply have the car repaired and turn it in at lease end and walk away.

Agreed. A valid point for sure. (replace "residual" value with "market" value as residual is a fixed number set at the inception of the lease, but I get what you meant)

[rich8566]

Originally Posted by LSB --> LBB

Agreed. A valid point for sure. (replace "residual" value with "market" value as residual is a fixed number set at the inception of the lease, but I get what you meant)

Noted and fixed my post. Thank you.

[Fear-Mongrel]

Originally Posted by M3 Adjuster

M2 values didn't tank at LCI and they won't with the model refresh. The 1995 E36 M3 vs 96 and up as well as the 98-99 vs 01-02 M roadster are two automotive precedents for motor changes on low volume BMW M cars.

For a long while the 95 M3 actually held higher values in the used market however currently there is little difference. The later M roadsters with S52 certainly seem to hold a little more value but the S50 versions never tanked and still retain a lot of value in the used market.

Busy here but wanted to reply quickly so you know that I appreciate the time you spent explaining past value retention trends - that's all good knowledge and I don't gloss over any of it.