[woodswatchco]

Originally Posted by iamdabest1

I really like the m2 and even wanted one for a while , last month I got a 79k m4 for 810 a month / 36 months -12k a year with 2300 total out of pocket including the 1st month .
Seriously , the m2 as a 60k car isn't worth a dime over $650 per month .

Please fill everyone in on what dealer and sales advisor you used to get a $79k M4 for $810 per month with $2300 down. Thanks in advance.

[MSport1223]

Originally Posted by smq42

Does BMW have any restrictions for track use (HPDE) or autocross for leased M cars?

Haven't had an issue with it yet. Normal wear and tear is all it states. Just return it with factory tires on it.

[MSport1223]

Originally Posted by F87LUV

I'm pretty sure the well informed people already knew the numbers would be bad and don't plan on leasing. I don't know why everyone is so surprised. It's a brand new model. Since when does BMW ever set high residuals on those? As far as cars just sitting on the lots to rot, that's ridiculous statement. The only cars available will be ones with market adjustments. The two series isn't a high volume model to begin with.

Exactly. If you're planning on leasing it through a business, or even personal, you knew it was going to be an astronomical lease vs price of the car to begin with.

one of my customers did just that. Put his name on the launch car, and just wrote it off to the business. Didn't matter what the lease payment was. Obviously, that's a rare statement. I, personally, at this juncture would finance the car through an outside lender because BMW's rates aren't even that great.

[Ramos]

Originally Posted by bradleyland

The statement in bold is factually incorrect. Any negotiated reduction in price is realized in the total cost of purchase because your payments over the term of the lease were reduced. Do the math:

Total purchase cost = sum of payments + residual purchase amount

The sum of your payments is the cap cost + finance fees + transaction costs. So your cap cost reduction is realized as savings in that sum. The only thing that changes when you lease vs buy are the finance fees and the transaction costs. The negotiated price is the negotiated price.

Actually we are both partially correct:

Sum of lease payments would be based on the negotiated amount. You are correct but that's only 50% of the purchase price.

The remaining 50% residual ballon would be at a % of the original MSRP

So to my point, we are negating half (or 57-60%) of the initial negotiated savings in the case of a traditional lease of any BMW if you purchase the car at lease end.

If you buy from the beginning, you would fully realize the negotiated savings from MSRP on the entire amount not just the depreciated amount in the lease payments.

[MSport1223]

Originally Posted by woodswatchco

Please fill everyone in on what dealer and sales advisor you used to get a $79k M4 for $810 per month with $2300 down. Thanks in advance.

That can be done on a leftover Spec 8 demo or 2015 that was punched.

[F32Fleet]

Originally Posted by Pparana

My current f type is cheaper than an m2 lease, so was my 991.

They really do not want to lease these.

Ya. I don't think they want to get stuck with a bunch of ragged out track cars which end up causing warranty headaches.

[desertfox73]

Originally Posted by 335BOY

Porsche rates are brutally high.

They really are - and based on what I've found, their maximum residualized MSRP (MRM) for leases is WAY low, so over the course of a lease you wind up actually paying for the full cost of a **lot** of the options you might put on the car. If you buy a stripper, it's better, but you're still bending over.

I looked at a Macan a while back and the MRM was just above base price...and after building the car to a spec I liked, I had added about $15k in options, almost all of which got absorbed in the lease payments.

Clearly Porsche wants a very select clientele to lease their cars, the same people who would buy them.

[bradleyland]

Originally Posted by Ramos

Actually we are both partially correct:

Sum of lease payments would be based on the negotiated amount. You are correct but that's only 50% of the purchase price.

The remaining 50% residual ballon would be at a % of the original MSRP

So to my point, we are negating half (or 57-60%) of the initial negotiated savings in the case of a traditional lease of any BMW if you purchase the car at lease end.

If you buy from the beginning, you would fully realize the negotiated savings from MSRP on the entire amount not just the depreciated amount in the lease payments.

Nope. The financed lease amount is the cap cost minus residual. Let's say your lease looked like this:

50% residual
$53,000 MSRP
$26,500 residual value (50% of MSRP)
$50,000 negotiated price (cap cost)
$23,500 financed amount (negotiated price - residual)

The residual amount doesn't change as you negotiate price, because the residual is always calculated from MSRP. That is a big part of the reason so many people like leasing. Negotiated reductions in cap cost have a bigger impact on payment.

[phoenixbmwlife]

Stop complaining and just buy this car. I doubt you will regret it.

[BEM-S4]

Originally Posted by bradleyland

Nope. The financed lease amount is the cap cost minus residual. Let's say your lease looked like this:

50% residual
$53,000 MSRP
$26,500 residual value (50% of MSRP)
$50,000 negotiated price (cap cost)
$23,500 financed amount (negotiated price - residual)

The residual amount doesn't change as you negotiate price, because the residual is always calculated from MSRP. That is a big part of the reason so many people like leasing. Negotiated reductions in cap cost have a bigger impact on payment.

Just FYI this is why exec demos lease so well. Residual is the same as a new car, it's the purchase price that you can get down so low.

[Aloha Joe]

Originally Posted by desertfox73

If you took what would have been the lump sum payment and invested it, then used a separate bucket of funds to make payments on the car, it could work depending on the lump sum amount. But assuming you only have one chunk of change to invest AND/OR pay for a car, it's a different story.

In that case, you would be drawing down principle each month to cover the finance payment, in which case the investment wouldn't pay too much, even at 5%.

Yes, I totally understood this concept before I posted. Thus I never said it was a huge savings, but something one should consider before jumping into a single payment lease.

Now I have a question which you maybe able to answer, on a single payment lease, what happens if you total the car in the 2nd month of the lease?

[bradleyland]

Originally Posted by Aloha Joe

Yes, I totally understood this concept before I posted. Thus I never said it was a huge savings, but something one should consider before jumping into a single payment lease.

Now I have a question which you maybe able to answer, on a single payment lease, what happens if you total the car in the 2nd month of the lease?

You're out the money.

I'm sure you can insure against that loss, but then you're eating in to whatever you saved on financing. Fortunately, lease money factor makes it really easy to figure out your monthly interest is, so we can get an idea of what kind of room you have to spend on insurance.

# terms
msrp = $53,000 = $53,000.00
fees = $0 = $0.00
discount_pct = 0%
cap_cost = $53,000 - discount_pct + fees = $53,000.00
residual_pct = 50%
residual_value = residual_pct of msrp = $26,500.00
term = 36
money_factor = 0.00138
# calculations
depreciation = (cap_cost – residual_value) / term = $736.11
interest = (cap_cost + residual_value) × money_factor = $109.71
pmt_monthly = depreciation + interest = $845.82
total_interest = term × interest = $3,949.56

The math above doesn't factor in tax, cap cost reductions, acquisition fees, etc. It's just for ballpark numbers. From that, you can figure on around $1,300/year in interest paid on a traditional lease. Almost $4,000 over a 36 month term.

So the questions become:

Would the cost to insure the scheduled (as in depreciation schedule) replacement value of the car exceed the finance charges?

What is the opportunity cost on the cash outlay?

The 0.00138 MF works out to around 3.3% APR. That is not hard to beat in the market, but by how much, and over what term?

At the end of the day, a lot of this analysis becomes wasted time. Relative to the cost of the car, the difference in paying the finance fees vs the opportunity cost of paying cash is a small fraction of the total cost of the car. One option might come out a few hundred dollars ahead of the other.

[Aloha Joe]

Originally Posted by bradleyland

You're out the money.

I'm sure you can insure against that loss, but then you're eating in to whatever you saved on financing. Fortunately, lease money factor makes it really easy to figure out your monthly interest is, so we can get an idea of what kind of room you have to spend on insurance.

bradleyland, Thank you for your first sentence and in depth lease analysis.

Also while it's possible, I've never heard of an insurance policy that reimburses an individual for their prepayment dollars on a lease. Insurance companies require, critical mass, for a specific type of policy to be profitable. I can't imagine that too many people are doing single premium leases, and of those few that do, they then go out and look to purchase an insurance policy to cover their pre payment amount. Gap insurance does not cover this scenario.

While an analysis can be a waste of time, sometimes it's not a waste. Buy our short analysis/discussion here, we have shown that if someone choses to prepay their 3 year lease with say a $30,000 single premium (never cover it with insurance, if it's available), then have their car stolen or totaled in an accident in month 2, they could be basically out the $30k. I personally think that is very a valuable part of an analysis for someone considering a single premium lease.

[bradleyland]

Originally Posted by Aloha Joe

bradleyland, Thank you for your first sentence and in depth lease analysis.

Also while it's possible, I've never heard of an insurance policy that reimburses an individual for their prepayment dollars on a lease. Insurance companies require, critical mass, for a specific type of policy to be profitable. I can't imagine that too many people are doing single premium leases, and of those few that do, they then go out and look to purchase an insurance policy to cover their pre payment amount. Gap insurance does not cover this scenario.

While an analysis can be a waste of time, sometimes it's not a waste. Buy our short analysis/discussion here, we have shown that if someone choses to prepay their 3 year lease with say a $30,000 single premium (never cover it with insurance, if it's available), then have their car stolen or totaled in an accident in month 2, they could be basically out the $30k. I personally think that is very a valuable part of an analysis for someone considering a single premium lease.

You're looking at the insurance requirement a little bit different than how it is sold in the market. They don't insure your out-of-pocket, up-front lease payment. Rather, they insure the total replacement value of the car. For example, Liberty Mutual markets a product under the name Better Car Replacement Coverage (or something like that). This insurance can be purchased on a leased vehicle, and would protect your investment by replacement, rather than cash benefit. The policy buys you a car that is one year newer than your lost vehicle.

The policies are expensive though. We got a quote once and decided to stick with standard gap coverage on our financed vehicle.

[Pparana]

Originally Posted by desertfox73

They really are - and based on what I've found, their maximum residualized MSRP (MRM) for leases is WAY low, so over the course of a lease you wind up actually paying for the full cost of a **lot** of the options you might put on the car. If you buy a stripper, it's better, but you're still bending over.

I looked at a Macan a while back and the MRM was just above base price...and after building the car to a spec I liked, I had added about $15k in options, almost all of which got absorbed in the lease payments.

Clearly Porsche wants a very select clientele to lease their cars, the same people who would buy them.

The residual on my 991 was 81 percent, but pcna is a pain to lease from, you have to be super tier one a. I ended up doing a one pay on that car to get a better mf.

[mad_max]

Originally Posted by LinkF1

FYI for those looking at stripped M2 at MSRP for a $0 down 36mo/10k lease this puts you at roughly $750 before taxes and fees. (Fully loaded roughly $920).

Realistically you are looking at a $1030 payment after taxes and fees fully loaded. Approximately the same as a 60 month payment at the 2.99% BMW FS is offering.

You can lease a stripped ($70k) M3 for about $700/mo including taxes.

[desertfox73]

Originally Posted by Aloha Joe

Yes, I totally understood this concept before I posted. Thus I never said it was a huge savings, but something one should consider before jumping into a single payment lease.

Now I have a question which you maybe able to answer, on a single payment lease, what happens if you total the car in the 2nd month of the lease?

Good question...I asked the same thing of my insurance company. According to my carrier, My policy covers the value of the car. So whatever it's worth, that's what they pay. And since I've more than paid down any possible depreciation that could have happened, there's no need for gap insurance.

[raysspl]

Not surprised to hear about this

[kylejdavidson]

Originally Posted by F87LUV

I'm not sure if it matters or if they based it off of the M3 but penfed is using a 67% residual for 36 and 49% for 60 months.

WHOA...really? On an M3, the calculator is showing me residuals of about 51% on 36 months and 32% for 60 months. What am I doing wrong?

[F87LUV]

Originally Posted by kylejdavidson

WHOA...really? On an M3, the calculator is showing me residuals of about 51% on 36 months and 32% for 60 months. What am I doing wrong?

I have no idea what the difference is but the balloon for a 36 month term was 40k and 60 month was 28k. Not sure what their rhyme or reason was.

[Salespunk]

Originally Posted by bjcarls

I want to know your dealer. I hear stories like this and then the truth comes out that a person had tier 2 pricing with the dealer, car has no options, it was sitting on the lot for 2 years, and they gave a blow job to everyone at the dealership. I couldn't come close to that on an 2016 M5 which is why I'm in a x5 at $900 a month that retailed for $83 and sold for $74. No idea how someone could get a $100k+ car for only be $100 more a month.

This is not hard to do on an M5. Example MSRP of $110K - $12K discount (my local dealer is advertising at $10K off right now) 61% residual and .00139 MF get's you $1087/mo before tax

[kylejdavidson]

Originally Posted by F87LUV

I have no idea what the difference is but the balloon for a 36 month term was 40k and 60 month was 28k. Not sure what their rhyme or reason was.

That's incredible, will take some financial discipline for sure but gives so much flexibility. Thanks for the info!