[eninetytwo]

Hello fellow calgarian's!

Im really excited about purchaisng my e92 335i but scared at the same time.
I dont know if I should lease or finance.

I was wondering if you could please tell me what you purchased including options and for how much you purchased it for.

Did you lease or finance? How long? Residual? Downpayment for a lease necessary?

I just want to know how much people are paying a month.
I was quoted $998/month on a 6.9% 3 year lease with $5000 down.

Options: Sport pkg, Premium Package, Auto w/pads, active steering, comfort access and nav.

If you dont feel comfortable posting here just pm me please.

Thanks in advance!

[YYZguy]

Leasing vs Financing

you will find alot of posts that cover the subject, with BMW's high residual values 58-64% after 3 years if you do not intend to keep the car for more than 3 years you are better off leasing, and that is if you do not travel more than 24000kms per year, higher mileage/4 year lease is not worth it

contrary to other manufacturers it's actually more expensive to lease for 4 years rather than 3

do you understand the mechanics of a lease? sale price - residual = amount you pay + interest on the sale price divided 36 months + tax

down payments some say less is better I say it doesn't matter the ONLY drawback to making a large downpayment is if you total the car early on in the lease you may not get yoru downpayment amount back since the insurer will pay the car's depreciated value, and we all know cars lose alot of their value in the 1st year, to counter this most insurers offer a no depreciation insurance, meaning if you total the car they buy you a new one, on my insurance this costs me 150$ per year

I punched your options on the BMW.ca website, and I assume your taking mettalic color (800$)

roll in the 1895 PDI and 250 Admin fee, 998 tx incl (6%) would be 1000$ off MSRP I would say your dealer can go another 1000$ off with all the equipment

active steering do you really need it? most people hate it, that's 1500$ and comfort access well, some like it, but in the end it's useless, how lazy can we get, I mean if pushing a button is too hard to unlock the doors, or if putting your key in the egnition is too hard?
as for Nav I think bmw's version is too expensive (2900$), there are better systems (Garmin) for 1/4 of the price and you can put it in every car you own

anyways I ended up paying MSRP for my car, but no freight and PDI charges

makes it nice and simple 3.3% off MSRP

[CaptChaos]

The general consensus is not to put a down payment (aka capital cost reduction) if you decide to lease.

Instead, you can use multiple security deposits to reduce your interest rate. A single security deposit is equal to your monthly payment rounded up to the next $50 boundary. Each SD reduces your interest rate by 0.1% to a maximum of 9 SD's. So if you were to use 9 SD's your interest rate would drop to 6.0%. At the end of the lease all your SD's will be returned to you.

[eninetytwo]

YYZguy And CaptChaos. You guys are freakin awesome!!! Thanks for taking your time out and replying. I learned alot from these two posts. This forum is so helpful.

[Holeinoneboy]

Originally Posted by CaptChaos

The general consensus is not to put a down payment (aka capital cost reduction) if you decide to lease.

Instead, you can use multiple security deposits to reduce your interest rate. A single security deposit is equal to your monthly payment rounded up to the next $50 boundary. Each SD reduces your interest rate by 0.1% to a maximum of 9 SD's. So if you were to use 9 SD's your interest rate would drop to 6.0%. At the end of the lease all your SD's will be returned to you.

Thanks for the info CaptChaos.

Might I ask what you are doing then?

[CaptChaos]

Originally Posted by Holeinoneboy

Thanks for the info CaptChaos.

Might I ask what you are doing then?

I have always purchased but I will be leasing the 335. My car hasn't arrived yet but I will be doing 0 down with 9 extra security deposits.

There is a ton of information on this forum and other E9x forums about finance vs lease and it took me a while to wade through everything. In my own circumstances, I will be able to write off a portion of my monthly lease for business purposes. There are other attributes of a lease that I like as well.

Keep in mind that alot of the discussion on the forums are from US members and they use the term "money factor." As far as I can tell, this term is not used in Canada. We simply use the interest rate which people are much more familiar with. If you need to convert MF to interest rate, simply multiply by 2400.

[YYZguy]

Audi in canada uses MF

[Holeinoneboy]

Originally Posted by CaptChaos

I have always purchased but I will be leasing the 335. My car hasn't arrived yet but I will be doing 0 down with 9 extra security deposits.

There is a ton of information on this forum and other E9x forums about finance vs lease and it took me a while to wade through everything. In my own circumstances, I will be able to write off a portion of my monthly lease for business purposes. There are other attributes of a lease that I like as well.

Keep in mind that alot of the discussion on the forums are from US members and they use the term "money factor." As far as I can tell, this term is not used in Canada. We simply use the interest rate which people are much more familiar with. If you need to convert MF to interest rate, simply multiply by 2400.

Can I assume that you are going the MSD route because you plan to give the vehicle back or at the very least have that option and getting some of your money back at renewal?

I was told that MSD's are limited to a total of 11. As far as I could tell MSD's just lower the interest rate. The residual remains the same.

[TwinPowerF30]

you get the MSD back at end of lease even if you decide to buyout right?

is using the MSD route better deal than say a $20000 downpayment?

[CaptChaos]

Originally Posted by Holeinoneboy

Can I assume that you are going the MSD route because you plan to give the vehicle back or at the very least have that option and getting some of your money back at renewal?

I was told that MSD's are limited to a total of 11. As far as I could tell MSD's just lower the interest rate. The residual remains the same.

Your MSD's are returned regardless of whether you decide to return the car or do the buyout. All MSD's do is reduce the interest rate. There is also nothing to stop you from doing a down payment AND MSD's.

You are limited to 9 extra MSD's. One security deposit is required even if you do not take advantage of the extra MSDs. In total, you may be in for 10 SD's (1 mandatory and 9 extra). All security deposits are returned to you at the end of the lease assuming you don't have not gone over your mileage limits or have damage to the car. In that case, they will take those charges out of your security deposit.

[Holeinoneboy]

Originally Posted by weiweiwei

you get the MSD back at end of lease even if you decide to buyout right?

is using the MSD route better deal than say a $20000 downpayment?

Yes. MSD's are returned to you (pending any damage) at the end of the lease. MSD's are limited to either 9 or 11 (conflicting informmation on the forum) in total.

A "downpayment" on a lease just buys down the monthly payment with no return of your equity at the end of the lease should you return the vehicle.

The majority of the people on these forums will suggest that a downpayment is not the way to go in a lease UNLESS your cashflow prohibits you from higher payments and you intend to buy out the car at the renewal AND you can deduct a portion of the lease payment against your personal income.

[Holeinoneboy]

Originally Posted by CaptChaos

Your MSD's are returned regardless of whether you decide to return the car or do the buyout. All MSD's do is reduce the interest rate. There is also nothing to stop you from doing a down payment AND MSD's.

You are limited to 9 extra MSD's. One security deposit is required even if you do not take advantage of the extra MSDs. In total, you may be in for 10 SD's (1 mandatory and 9 extra). All security deposits are returned to you at the end of the lease assuming you don't have not gone over your mileage limits or have damage to the car. In that case, they will take those charges out of your security deposit.

OK. so what do you plan to do?

[YYZguy]

Originally Posted by Holeinoneboy

The majority of the people on these forums will suggest that a downpayment is not the way to go in a lease UNLESS your cashflow prohibits you from higher payments and you intend to buy out the car at the renewal AND you can deduct a portion of the lease payment against your personal income.

do you agrea with this statement? if yes explain the reasoning behind it for me please.

as far as I understand the principles of leasing, if you put 5000$ down it reduces your payments by 138.89+interrest based on 36 months

so if you do not put the down payment you end up paying 5000$ more on the life of the lease plus interest, so unless you make more than 6.9% interest on your 5000 thought investment, there is really nothing to gain

as for MSD, at Audi 9 MSD gets you a 2% savings on interest, at BMW that's .9% not really alot to jump at, I would have to fork over 9000$ to save .9% on 58000$ (about 1500$ over 3 years), bear in mind had you put your 9 large at ING direct the interest earned would be close to 1000$, so in the end you saved 500$ by tying up 9000$ for 3 years....wow....

putting money down or not your gonna spend that money one way, either in your monthly payments or on your down, the total cost of the lease doesn't change, the one plus about putting money down is your not paying interest on that amount.

[CaptChaos]

Originally Posted by weiweiwei

you get the MSD back at end of lease even if you decide to buyout right?

is using the MSD route better deal than say a $20000 downpayment?

Yes, all SD's are returned to you at the end of the lease.

As I mentioned, you can do down payments and MSD's simultaneously. The risk with doing a down payment is if something were to happen to the car and it is written off. The insurance company will pay off the owner of the car (BMW Financial Services), the lease gets terminated and your down payment disappears. It is not clear whether BMW FS will accomodate you by working something into the lease of a new car. Gap insurance (provided by BMWFS) or optional replacement cost insurance (provided by your insurance company) don't appear to help in this situation.

Do a search on the forums for further discussion on this. To me, it was safer to use the MSD's to bring down the interest rate. I did run through the numbers and a down payment would only have saved me a small amount ($200-300 over the 3 year term, as I recall).

If you can put down a large down payment like $20k, you should also consider financing to purchase.

[youyou]

Well i have always leased my cars. I'm the type of person that like to change cars often and usually get 24 months or 36 month leases...
On Bmw's 36 months is the way to go.
Here's what i did.
2007 335 coupe Alpine White on Coral Red Dakota Leather.
-Premium Package
-Sport Package
-Navigation
-Comfort Access, PDC, Bmw Assist + Bluetooth
On a 36 month lease 9000$ 770$ tax in a month.
I would rathrer have low monthy payments hence the large down payment...

[CaptChaos]

Originally Posted by Holeinoneboy

OK. so what do you plan to do?

In terms of what I'm going to do at the end of the lease? I haven't decided yet, right now I'm waiting for the car to show up.

If the car ends up being trouble free and I keep the mileage low it may be worth more after 3 years than the residual value from BMWFS. In that case, I would buy it at the residual value. I could then keep it and own it beyond the 4 year warranty period or I could sell it for a profit.

[CaptChaos]

Originally Posted by YYZguy

as for MSD, at Audi 9 MSD gets you a 2% savings on interest, at BMW that's .9% not really alot to jump at, I would have to fork over 9000$ to save .9% on 58000$ (about 1500$ over 3 years), bear in mind had you put your 9 large at ING direct the interest earned would be close to 1000$, so in the end you saved 500$ by tying up 9000$ for 3 years....wow....

Interesting, thanks for the information, that is quite a generous program from Audi.

Keep in mind that you are also paying tax at your marginal rate on that interest from ING while the MSD program is 'tax free'.

[YYZguy]

[QUOTE=CaptChaos]Interesting, thanks for the information, that is quite a generous program from Audi.QUOTE]

yes but they have over 40 Audi A4's sitting on the lot at the stealership I went to

your lucky to find a handfull of 3 series sedan or coupes at a stealership in my area

the only thing that made it more atractive to buy a BMW was it's overly inflated residual value, higher than a Porsche, the A4 was 55% while the e92 was 61% (I ordered 1 day too late and got hit with the 1% drop)

but I got to admit that A4 3.2 with the s-line and titanium package and 50$ less a month (dealer offered cost+1500$), wow very sweet, just not as sweet as an e92

as for residual protection from your insurance company, never happenned to me, but what I get from it is if you total your car they purchase the current model year car with the same options and give it to you.
you continue your current lease obligations and then you can return the newer car to BMW or pay the residual value ( from the original car) and you get a cheap new car!

[Holeinoneboy]

Originally Posted by youyou

Well i have always leased my cars. I'm the type of person that like to change cars often and usually get 24 months or 36 month leases...
On Bmw's 36 months is the way to go.
Here's what i did.
2007 335 coupe Alpine White on Coral Red Dakota Leather.
-Premium Package
-Sport Package
-Navigation
-Comfort Access, PDC, Bmw Assist + Bluetooth
On a 36 month lease 9000$ 770$ tax in a month.
I would rathrer have low monthy payments hence the large down payment...

So if you plan to change your car at the 36 month mark, you do know that you lose your $9,000 - don't you?

[YYZguy]

he loses it either way, if he doesn't put the down payment he is going to pay the SAME amount in his payments over 36 months

[E90T]

Purchased the car straight up, saved $2000 off sticker price.

Don't lease, why would you rent a car? Especially an expensive one.

[youyou]

Originally Posted by Holeinoneboy

So if you plan to change your car at the 36 month mark, you do know that you lose your $9,000 - don't you?

Actually no i don't because if i don't put the money down then my payments would be much higher and i'm actually saving some money by putting the money down.