My local dealer in Washington Dc area is mentioning that it will take 60 days from the day I order the car for the car to be ready in Munich to be picked up? Is that normal or should I try another dealer.
Fortunately for him all he needs to do is to read deeper into that discussion and all of his questions should be answered.
I took a couple of months from the TownHall to write a novel a couple of years back, and when I signed back on I was stunned at how many posts that I'd missed.
I am looking to buy a 2007 335i with metallic, sports, auto, premium, heated seats and peddle shifter. I test drove during this week and the dealer offered me approx. $2300 off of msrp (his initial offer). When I asked him about ED, he basically offered the same price and said that he is ready to discount the US price and the ED will also be same as US price (which obviously is not true). How much is the actual savings (approx.) in doing an ED when you also take into account the plane ticket, 1 day hotel room and taxi etc. (If I do ED, then I will come back the same day).
This dealer offered me some 1200 over invoice in his initial offer (even if he doesn't have the car with these options and has to order). So there is more room for negotiations for a car in his lot.
I'd like thoughts on the deal I negotiated at a Chicago area dealer. I ordered a 335i coupe with an MSRP of 44,795 that is due in early January '07. In Illinois we have to pay sales tax on the entire capitalized cost so my capitalized cost is 44,995 (vehicle selling price of 42,650 + 1,725 sales tax). Based on current BMW FS residual of 60% and MF of .00175 the payment is 629/month with only first month payment + $85 doc fee due at signing. I am a returning BMW FS customer so no security deposit is required. Any thoughts? Anyone think there is still wiggle room in the selling price? Thanks.
Well, i think i posted my great deal too soon--my salesman seems to be ignoring me. Don't quite know what to make of that.
However, it may be a good thing. After this unanticipated cool-off period, i'm thinking i'd regret it down the line if i didn't get a wagon--i hate trying to wedge bikes in the trunk, and i'm not a fan of bike racks either. But this complicates things, as there is no 3.0T wagon.
Hm, what to do, what to do...
(and your deal sounds ok, wrightd. Can you put down MSD's?)
I'm curious if anyone has any thoughts on purchasing a new 2006 325i. A scant few are still at dealers, but I have not truly seen any deals on them. I had thought they would be trying to get rid of them, but they don't seem willing to deal. $1700 over invoice doesn't seem right when it will be '07 in a few days! Does BMW ever have dealer incentives beyond leases?
Yeah back in the e46 days you could find the previous year's model oct-dec with huge factory to dealer money (like 3k on the 330i). Not so sure if there's any trunk money on the e90s. Doubt it. By 2009 you can bet on it.
MSRP 52,000 with my options (pretty much everything but the rubber mats ) PP $49,500 12K miles per year
Forget the details...no money down. $715 per month x 24 = $17,160 total.
Deal? Should I pull the trigger? That's the best I've got of 4 quotes....and should I believe they can get it to me before March (its a custom ED...build in late Jan?)
I am negotiating with a dealer to buy a used 2006 BMW 325i with 7500 miles on it. The car has premium package on it. It was imported in MArch 2006 and was sold to first owner right after. Later it was sold in an auction and has been with the dealer for three months. The car is in excellent shape and I have test driven it. Dealer's asking price for the car is $30,300 plus tax. He is taking care of the title and there is no hidden cost other than this. Does this seem to be a reasonable price?. I was planning on going max. to $30,000 since the negotiation started at $31,450.
Hi, What do you guys think of this deal? 2007 328xi coupe Alpine white w/ black leather interior (not the premium package, just leather option) Heated seat option (not the cold weather package) Park distance Steptronic automatic MSRP 41,370 .001 money factor .61 residual 36 month lease w/ 12,000 miles a year 6% Connecticut sales tax for $510 a month including sales tax $0 down payment Dealer originally wanted $530 and I said $510 and he accepted. Does this sound ok? Thanks.
I'm thinking of purchasing a 335i Sedan...white ext./beige int. The MSRP of the vehicle is $48,515. Wihtout asking I've received one dealer who will discount the car $2500. Does anyone know what the true bottom line will be on this vehicle? In other words the best I can expect. Is a $3000 discount or more possible? Thank you for any help you can offer.
Though you're stuck with your local shop for service, there are plenty of dealerships within a 100 mile radius of most SC cities(including in GA and NC). You can use the BMW website to identify them.
What did you decide to do? Buy at that price? Deal further?
I've got a friend in GA (not too far from a number of SC dealerships) who'd be very happy to benefit from your advice on where the "market" price of 328's is right now.
I have been attempting to negotiate the MSRP on a 07 335i coupe 6m. I requested the Montego blue w/cream/beige int. with optional packages as follows: cold weather, sports and premium packages, too include, the comfort access and the parking sensors. I contacted 3 different dealers within my region and it is concurred that the car is pre-sold and needs to be ordered. Between the 3 different dealers, they are not budging from the MSRP of appox. 47k. A dealer did quote a price of appox $650 under MSRP. Another dealer even had the audacity to tell me that this included floor mats and a Teflon paint finish. As I told him that I could care less about the floor mats (appox $125) and the Teflon finish. This dealer also commenced to inform me about lifetime loaner cars and miscellanous extras, which I have no regard for as far as negotiating the MSRP.
:mad:
My first question is: Since a dealer is ordering the car does that not leave room for negotiating the MSRP?
The second question is: How should I begin to get the dealer to start decreasing the MSRP?
If you order the car directly you should be able to fully negotiate MSRP just as you would buying off the lot.
contact internet sales at those dealerships via email. Give them the exact equipment, invoice price and the amount over invoice you will pay.
Also, consider checking areas outside of where you live. If you are within a state or two of CA consider contacting No Cal, AZ and So Cal dealers. They'll deal. BMWs are common commodities and nothing special. They are not sought after and are BMW's equivalent of the Honda Accord - the bread and butt car for the company.
I am sure this topic has been discussed before, but I could not find this in the recent months.
It seems to me that most people lease. Is this because: 1. trade for a new car every 3 years 2. leasing is cheaper overall than paying cash 3. leasing is cheaper overall than financing
I have always paid cash for my cars. I was wondering if it makes more sense to lease if I consider the opportunity cost.
That hinges on a million criteria. Longer you keep the car, the more buying for cash pays off. Buy a 36k car for cash today and immediately you're out 7-8k (lose 10% pretty much immediately and lose the taxes you paid). So you put 40k down but it equals 32-33k instantly. Ouch. If you buy a car for cash and three years later sell it...well that's pretty close to throwing away money. But keep it for 7-8-9 years and save all that time and you will have serious cash to offset your lousy purchase.
Simplest thing...make en excel spreadsheet and try the following 3 scenarios (this assumes you have say 40,000 in cash):
Option 1: Put 40k into an ing or other high yield savings account. On your sheet set up interest compounded monthly and check that $40k at 3, 6, 9 and years. Assume maybe $600 a month for a lease - money you're not saving. Remember at the end of 9 years haven't got any equity in the cars you've leased. It looks like a healthy chunk of cash. Yeah...wait...
Option 2: Start out with 20k in an account (so imagine you financed the car for 20k and put 20k into it). Run different numbers for your monthly deposit into the account. Say you pay $500 a month on the car, so you put $100 into the account until you figure you've paid off the financing. Then bump up to $450 or $400 (figuring the difference goes to pay for maintenance). Your savings numbers will look pretty good eventually. and you have an asset.
Option 3: Start out with 0 in an interest building account and add $600 a month for 3-4 years and then $450 or so thereafter (out of warranty) for 5 more years. Figure at the end of 9 years that 36k car (40k for TTL) is going to be worth maybe 8-9k after that much time.
Options 2 and 3 look far more attractive if you can hold onto a car and just maintain it. Check Edmunds' true cost to own for cars and you'll see estimates on what a vehicle will cost you over time. Really want to see how much you're throwing away by buying or leasing a brand new car? Run the numbers for a 3 year old car of your choice v. a similar car brand new. Egad, those first 3 years of 40-50% depreciation (it really is closer to 50% because of taxes on the car's purchase) make buying new/leasing new just plain bad for saving money.
That said, I've been leasing new for the last 7 years. It's utterly idiotic of me and I'm having a hard time stopping the cycle. At least buying new and holding for a long time (6+ years) would work out better financially than my foolhardy leasing addiction. My fiancee has one car - her daily driver - that's 13 years old. She spends about $500 a year keeping that toyota corolla running. It's brilliant. I can't do that for some reason.
Opportunity cost - I'd assume you mean re-investing the money? Get a decent loan to value ratio and you may end up making money on say rental property. After taxes with a good LtV, you will probably make money or even have positive cash flow. During the housing boom it was possible to buy and resell too for profit but that quick buck opp passed.
In the end you gotta look at how much driving a fancy new car is worth v. having cash on hand v. long term savings/low debt. Cars are a lousy investment...no way around it.
I have worked a deal with a dealership to get an executive demo 330i for $36,500. The car is loaded, has 8400 miles, and the original MSRP was $44495. I am new to the world of BMWs so I don't know if this is a decent deal for the car.
Also, does the car handle relatively well in snow (with snow tires).
I believe you are correct. From what I've read on the order of 60-70% of new BMWs are leased, and the vast majority are turned in at lease end. For BMWs, I think leasing is driven primarily by high prices and a monthly lease payment 1/2 that of bank financing (this is true of most luxury cars). Plus it affords someone making $40,000/year to lease a BMW instead of original intended audience of folks with incomes in excess of $100,000 (which could afford traditional bank financing).
There is of course the argument that buying a pre-owned BMW is a better deal because of depreciation. This is both an economic and personal decision. Some folks want a new car with worrying about how it was previously maintained. The other issue is BMW's "free" non-maintenance plan. A 3-year old BMW will likely have had 2 oil changes and a (very limited) Inspection 1. I have had conventional (read old-style BMW)maintence performed since I plan to keep it. Of course, this extra maintenance is a waste of money if you are turning in at lease end. Future resulting car problems will be someone else's headache.
I have 2004 325i with a 3-year lease about to end. I am buying it at lease end. For me, it's a good deal on a well maintained car with a buyout price about $4,000 less than a similar car for sale at a dealership (because you are essentially purchasing a pre-owned car). However in Texas, after paying sales taxes upfront on the full MSRP, you must pay sales tax again on the buyout price. However, I don't want to lease again and get into that cycle -- just going to pay cash. I only leased because the lease interest rate (money factor) was substantially less than interest rates for traditional financing.
I'm curious to see what the discount off of the MSRP you have been able to get for those of you who purchased or are negotiating for the 335 coupe. I'm in the chicago area and the dealerships seem to start by offering $1,000 discount. I've been able to get an offer for $1,100 off + Red Star Approval Service or $1,500 off without the Red Star Approval Service. Options I choose are: cold/premium/sport/navigation packages. Also since I'll be new to owning a bmw, I wanted to get your feedback on whether selecting more options give us more leverage to bargain. Thanks
How is the buy out price related to the residual value? I often see a residual of 60-63% mentioned. Is this mean a $50k car can be bought out for $30k (60% of 50k)? That seems too good to be true.
I suppose leasing is a nice way to be able to walk away from the car if you end up with a lemon despite the free maintenance. I do wish I had that option with my VW Passat I drive now.
The buyout price and residual value are one-in-the same. The residual value is the expected retail value of the vehicle at lease end. My residual was 63% of MSRP.
So, yes in your example if a $50K (MSRP) car was leased with a contractual residual of 60%, you could buy it for $30K at lease end.
I am negotiating with a dealer to buy a used 2006 BMW 325i with 7500 miles on it. The car has premium package on it. It was imported in MArch 2006 and was sold to first owner right after. Later it was sold in an auction and has been with the dealer for three months. The car is in excellent shape and I have test driven it. Dealer's asking price for the car is $30,300 plus tax. He is taking care of the title and there is no hidden cost other than this. Does this seem to be a reasonable price?. I was planning on going max. to $30,000 since the negotiation started at $31,450.
My next question, is how much can I knock off the MSRP? I have read a few post on this website and some consumers are knocking $1200-1500 off the MSRP (mostly lease consumer). I realize that there is an appox. $3k-3500 markup, how far down can I finagle the dealer?
What do you feel comfortable paying? That's the main thing. So a few people are only getting 1500 off msrp. Pick an amount you would love to pay and a ceiling for how high you'll go. email around with your exact breakdown of the car and what you want to pay. ask for counter offers.
Shopping around pays off! At the last minute, I switched and got a FANTASTIC deal on a fully loaded '06 Black 530i. SCHWEET! A year later, I'm still loving it. The handling is incredible. At first, I didn't want to move up in size, but the 530i is just as aggressive as I am--it rolls with me! Tenafly BMW is the BEST :-D
Have any of you found that the trade-in that you're offered for a current BMW (assuming that you're just looking to trade-up) is SIGNIFICANTLY lower from the BMW dealerships than it is from other luxury brands? I'm consistently getting offered $1500-$2000 less for my 3-series trade at a BMW dealership than I am at Lexus, Acura, and Range Rover. Each dealership claims that their price offered is "the best" they can do, and refuse to negotiate it further. I'm simply trying to trade in my 2002 3-series for a newer model.
Of course not. BMW dealers drive down the price like crazy on trade in's. That is why I try to sell it on my own. A hassle, but better then getting ripped off!
Looking to possibly buy my 2003 330XI at lease end. Residual value is $22,800. I currently have 6 months left on the warranty. Can I negotiate the sales price? Will BMW certify the vehicle. Should I buy an extended warranty? If so, should it be from BMW or an outside source? Who do I negotiate with BMW Financial or should I call the dealer. Also, I paid taxes on the sales price of car at the beginning of the lease. Do I have to pay sales tax all over again? I live in Maryland. Looking to complete this transaction by next week. Either buyout my lease or look for something else. I've found these forums extremely helpful and now in quandry. Thanks :confuse:
I just bought my 325i at lease end. Answers to your questions:
1) BMW will not negotiate buyout prices. The residual is the price you'll pay. Look at KBB.com, Edmunds.com, NADA.com, and dealer listings to see how the prices compares to market. You need to compare to dealer retail price, since you are effectively purchasing a pre-owned car.
2) You can pay BMW roughly $2,200 to certify your vehicle, which extends current warranty to 6 years/100,000 mi. This is really same as buying an extended warranty from BMW called the Original Owners Protection Plan. Certification would really only be useful if you weren't original owner and not otherwise familiar with the vehicle's history.
3) You can buy a much longer warranty, at much lower price, from warrantydirect.com. They have good reviews, and that is what I am planning to do.
4) You can buyout through dealer or BMW Financial. I think it's easier just to deal with BMW Financial (800-578-5000), you can handle everything by phone and mail.
5) I don't know about tax situation. It varies state by state. BMW financial will tell you. Most states charge you tax during the lease only on the payments (financed depreciation), but not on the residual. If that is the case, you would have to pay sales tax on the $22,300 buyout price. You can look at your lease to see what tax you paid. Again, BMW financial will help.
6) You can purchase vehicle with cash or BMW will finance for you as term loan.
Thanks so much for your quick response. I had planned on calling BMW Financial in the AM. Did you find their rates comparable to local rates in your area? I only have 30K miles on my car now, so I may wait un til summer to buy a warranty. Thanks again
You're welcome. BMW's rate was less than rates locally or on the Internet (eloan etc.) for a lease buyout. I got 6.8% on the portion financed. I have 3 years/22 miles on my car, so no hurry for me either on an extended warranty.
Locked this in today 328i w/ heated and power seats. everything else standard. MSRP:$35865 Term:36 month lease Mileage: 12k/year MF=.00190 Down Payment: $2,500 Monthly Payment: $419 per month including 6% tax and aq fee Total Due at signing: $3911
I did the same thing on a 335 coupe - I thought I was getting a good deal by paying what was advertised. I didn't realize the MSRP was negotiable on the advertised lease special. From what I've been seeing on the board, people have been able to get a money knocked off the MSRP, making the monthly payments significantly lower. Please let me know if your dealer allows you re-negotiate after you've already put down your deposit.
Of course you can negotiate the car price! What people tend to forget is that leasing is simply a means of financing the car. ALWAYS negotiate the car price first, and NEVER, EVER disclose up front if you have a trade-in, or if you plan to lease or finance with a term loan. These only relate to how you will pay for the car.
Once you have agreed to a reasonable price for the vehicle, the next step is you how you will finance the purchase -- lease, loan, or cash.
The final step, is to discuss your trade-in (if applicable), which would ONLY relate to your down payment on amount financed.
If a dealer inquires upfront inquires whether you have a trade-in, plan to loan or lease, or montly payment you desire, respond that you have not made any decisions. Further, those items relate solely to financing the vehicle, not price of vehicle which has yet to be discussed.
For myself, I just send a email to the dealership's Internet sales manager with my proposed terms: car color and options, price willing to pay, finance terms including down payment and interest rate, and resulting monthly payment amount. I then ask a simple question -- will you agree to these terms? I only want a yes or no -- not talk with manager or anything else.
This has worked with the purchase of my BMW and wife's Acura.
Okay - so being a little anal when it comes to anything that has anything finance related (maybe the Investment Banker in me) I took a few days off work, or more appropriately got distracted from work, to learn about leasing and get a good deal.
Here's my experience and tips of getting a good lease:
++ First, IGNORE the monthly payment -- that can easily be manipulated. If you harp on a certain number (say under $500/month), the dealer will find a way to get there.
++ Get a printed sheet of the invoice price of the car with options and then go to the dealer. Both of you should be talking the same MSRP number. Do not rub the invoice price into him/her -- personally, I see it as an insult when someone wants something from me at my cost and expect me to give them service. Some cars do sell for under invoice given company rebates. At this time (Jan 2007) I don’t think BMW is offering any known rebates other than volume/target bonuses to dealers.
++ For the 3-series a price $1000-$2000 above invoice or midway between Invoice / MSRP is a good number. A couple of hundred here or there...let the dealer win this round - get them on the next one.
++ Money Factor: Okay so here is where you want to get the best deal. BMW's going money rate for lease specials in 0.0011 with $600 deposit and $625-$900 acquisition fee -- do not capitalize this fee (i.e. add to lease payments) as it will increase the MF. (Also see MF Tip below)
Note: After speaking to 7+ dealers, only 3 dealers had this MF of 0.0011. So ask your dealer what they are using to compute, some charge higher to make more $$$.
++ Residual Value (RV): You can't change this - this is set by the company. It's 58% for the Coupe, 61% for the sedan assuming 15K/3 yrs miles. For 12K add 1% for 10K add 3%. 24 month leases are about 10% higher.
Example: Coupe 10K/2y - 71% (68+3) Coupe 15K/3y - 58%
Unless you go to a private leasing company which may give you a higher RV, this is nearly impossible to change (only do this if you're buying 2 or more - otherwise stick with BMW finance).
++ Money Down - A really bad idea, IMHO. Just incase something happens to the car - gets stolen or totaled chances are you're out the down payment -- this is also how the monthly payment can be manipulated. Instead pay an additional Security Deposit (See MF tip below)
++ Other Stuff - I would highly recommend Tire & Rim insurance if you live in a city (I'm in New York). Hitting pot holes, getting slashed, excessive wear an tear is covered. On a 2 yr lease, it's a toss up. On a 3 year I would lean toward it. Capitalize this amount in the lease payment (again if the car gets stolen you don’t want to have paid this upfront).
1. Know the invoice and MSRP. A price midway is a good point for the 3-series. This is the first of the two important variables you need to negotiate.
2. Get the lowest Money Factor (MF). This is the second and most important variable - you want this to be the lowest you can get.
Tip: BMW has a program whereby paying additional security deposits you can reduce the MF by 0.00007. You can pay 6 additional deposits (+ the required one). This will make the MF 0.00061 (Lowers the monthly payment nicely - SWEET!)
You do get the Security Deposit at the end of the lease.
3. Always go for no cash down expect for the Security deposit(s), Title, registration, acquisition. Tip: I see no reason paying sales tax upfront when I could apply that money towards a deposit and reduce the payment and pay the sales tax monthly. (Folks in Illinois may not have this option)
Hopefully, this gives you a good idea of what factors affect a lease and helps you make an informed decision.
Oh..what did I get:
328xi Coupe with Performance, Cold package, comfort access, steptronic, park distance monitor.
MSRP: 44,185 Invoice: 40,685
Negotiated price (Implied for the lease): $42,235 Tire and Rim warranty: $645 (capitalized) Acquisition: $625 Monthly Payments: $535 with 8.25% tax included.
Comments
My local dealer in Washington Dc area is mentioning that it will take 60 days from the day I order the car for the car to be ready in Munich to be picked up? Is that normal or should I try another dealer.
Regards,
Ron
Anyway, try this ED forum for insane amounts of info:
http://www.bimmerfest.com/forums/forumdisplay.php?f=25
erickpl, "BMW: European Delivery" #1, 5 Sep 2002 7:42 am
Best Regards,
Shipo
I took a couple of months from the TownHall to write a novel a couple of years back, and when I signed back on I was stunned at how many posts that I'd missed.
Best Regards,
Shipo
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I am looking to buy a 2007 335i with metallic, sports, auto, premium, heated seats and peddle shifter. I test drove during this week and the dealer offered me approx. $2300 off of msrp (his initial offer). When I asked him about ED, he basically offered the same price and said that he is ready to discount the US price and the ED will also be same as US price (which obviously is not true). How much is the actual savings (approx.) in doing an ED when you also take into account the plane ticket, 1 day hotel room and taxi etc. (If I do ED, then I will come back the same day).
This dealer offered me some 1200 over invoice in his initial offer (even if he doesn't have the car with these options and has to order). So there is more room for negotiations for a car in his lot.
Thanks,
Fineman
My total drive off was $3999 for 27 months with a monthly payment of $299 plus tax. 10k/year.
Did I do well or pay too much?
However, it may be a good thing. After this unanticipated cool-off period, i'm thinking i'd regret it down the line if i didn't get a wagon--i hate trying to wedge bikes in the trunk, and i'm not a fan of bike racks either. But this complicates things, as there is no 3.0T wagon.
Hm, what to do, what to do...
(and your deal sounds ok, wrightd. Can you put down MSD's?)
Am I off base here!?
msrp: 41,495
offered: 39,320
rate: .0014
terms: 36 months
miles: 20,000k
acq fee 625
govertment fee 261
doc fee 125
security deposit 600
total up front: 3633.55
monthly: 559.55/month
Is this a good deal or not?
PP $49,500
12K miles per year
Forget the details...no money down. $715 per month x 24 = $17,160 total.
Deal? Should I pull the trigger? That's the best I've got of 4 quotes....and should I believe they can get it to me before March (its a custom ED...build in late Jan?)
Monthly payment is 638.60.
Good or not so good?
I am negotiating with a dealer to buy a used 2006 BMW 325i with 7500 miles on it. The car has premium package on it. It was imported in MArch 2006 and was sold to first owner right after. Later it was sold in an auction and has been with the dealer for three months. The car is in excellent shape and I have test driven it. Dealer's asking price for the car is $30,300 plus tax. He is taking care of the title and there is no hidden cost other than this. Does this seem to be a reasonable price?. I was planning on going max. to $30,000 since the negotiation started at $31,450.
Will appreciate your inputs!
Thanks.
What do you guys think of this deal?
2007 328xi coupe
Alpine white w/ black leather interior (not the premium package, just leather option)
Heated seat option (not the cold weather package)
Park distance
Steptronic automatic
MSRP 41,370
.001 money factor
.61 residual
36 month lease w/ 12,000 miles a year
6% Connecticut sales tax
for $510 a month including sales tax
$0 down payment
Dealer originally wanted $530 and I said $510 and he accepted.
Does this sound ok?
Thanks.
What did you decide to do? Buy at that price? Deal further?
I've got a friend in GA (not too far from a number of SC dealerships) who'd be very happy to benefit from your advice on where the "market" price of 328's is right now.
:mad:
My first question is: Since a dealer is ordering the car does that not leave room for negotiating the MSRP?
The second question is: How should I begin to get the dealer to start decreasing the MSRP?
contact internet sales at those dealerships via email. Give them the exact equipment, invoice price and the amount over invoice you will pay.
Also, consider checking areas outside of where you live. If you are within a state or two of CA consider contacting No Cal, AZ and So Cal dealers. They'll deal. BMWs are common commodities and nothing special. They are not sought after and are BMW's equivalent of the Honda Accord - the bread and butt car for the company.
It seems to me that most people lease. Is this because:
1. trade for a new car every 3 years
2. leasing is cheaper overall than paying cash
3. leasing is cheaper overall than financing
I have always paid cash for my cars. I was wondering if it makes more sense to lease if I consider the opportunity cost.
Simplest thing...make en excel spreadsheet and try the following 3 scenarios (this assumes you have say 40,000 in cash):
Option 1: Put 40k into an ing or other high yield savings account. On your sheet set up interest compounded monthly and check that $40k at 3, 6, 9 and years. Assume maybe $600 a month for a lease - money you're not saving. Remember at the end of 9 years haven't got any equity in the cars you've leased. It looks like a healthy chunk of cash. Yeah...wait...
Option 2: Start out with 20k in an account (so imagine you financed the car for 20k and put 20k into it). Run different numbers for your monthly deposit into the account. Say you pay $500 a month on the car, so you put $100 into the account until you figure you've paid off the financing. Then bump up to $450 or $400 (figuring the difference goes to pay for maintenance). Your savings numbers will look pretty good eventually. and you have an asset.
Option 3: Start out with 0 in an interest building account and add $600 a month for 3-4 years and then $450 or so thereafter (out of warranty) for 5 more years. Figure at the end of 9 years that 36k car (40k for TTL) is going to be worth maybe 8-9k after that much time.
Options 2 and 3 look far more attractive if you can hold onto a car and just maintain it. Check Edmunds' true cost to own for cars and you'll see estimates on what a vehicle will cost you over time. Really want to see how much you're throwing away by buying or leasing a brand new car? Run the numbers for a 3 year old car of your choice v. a similar car brand new. Egad, those first 3 years of 40-50% depreciation (it really is closer to 50% because of taxes on the car's purchase) make buying new/leasing new just plain bad for saving money.
That said, I've been leasing new for the last 7 years. It's utterly idiotic of me and I'm having a hard time stopping the cycle. At least buying new and holding for a long time (6+ years) would work out better financially than my foolhardy leasing addiction. My fiancee has one car - her daily driver - that's 13 years old. She spends about $500 a year keeping that toyota corolla running. It's brilliant. I can't do that for some reason.
Opportunity cost - I'd assume you mean re-investing the money? Get a decent loan to value ratio and you may end up making money on say rental property. After taxes with a good LtV, you will probably make money or even have positive cash flow. During the housing boom it was possible to buy and resell too for profit but that quick buck opp passed.
In the end you gotta look at how much driving a fancy new car is worth v. having cash on hand v. long term savings/low debt. Cars are a lousy investment...no way around it.
I suppose I have to consider leasing a new 335i sedan if I figure renting a $50k car for 3 years for about $16k is a good deal.
Also, does the car handle relatively well in snow (with snow tires).
Any thoughts would be greatly appreciated.
There is of course the argument that buying a pre-owned BMW is a better deal because of depreciation. This is both an economic and personal decision. Some folks want a new car with worrying about how it was previously maintained. The other issue is BMW's "free" non-maintenance plan. A 3-year old BMW will likely have had 2 oil changes and a (very limited) Inspection 1. I have had conventional (read old-style BMW)maintence performed since I plan to keep it. Of course, this extra maintenance is a waste of money if you are turning in at lease end. Future resulting car problems will be someone else's headache.
I have 2004 325i with a 3-year lease about to end. I am buying it at lease end. For me, it's a good deal on a well maintained car with a buyout price about $4,000 less than a similar car for sale at a dealership (because you are essentially purchasing a pre-owned car). However in Texas, after paying sales taxes upfront on the full MSRP, you must pay sales tax again on the buyout price. However, I don't want to lease again and get into that cycle -- just going to pay cash. I only leased because the lease interest rate (money factor) was substantially less than interest rates for traditional financing.
I suppose leasing is a nice way to be able to walk away from the car if you end up with a lemon despite the free maintenance. I do wish I had that option with my VW Passat I drive now.
So, yes in your example if a $50K (MSRP) car was leased with a contractual residual of 60%, you could buy it for $30K at lease end.
I am negotiating with a dealer to buy a used 2006 BMW 325i with 7500 miles on it. The car has premium package on it. It was imported in MArch 2006 and was sold to first owner right after. Later it was sold in an auction and has been with the dealer for three months. The car is in excellent shape and I have test driven it. Dealer's asking price for the car is $30,300 plus tax. He is taking care of the title and there is no hidden cost other than this. Does this seem to be a reasonable price?. I was planning on going max. to $30,000 since the negotiation started at $31,450.
Will appreciate your inputs!
Thanks.
Shopping around pays off! At the last minute, I switched and got a FANTASTIC deal on a fully loaded '06 Black 530i. SCHWEET! A year later, I'm still loving it. The handling is incredible. At first, I didn't want to move up in size, but the 530i is just as aggressive as I am--it rolls with me! Tenafly BMW is the BEST :-D
Am I the only one experiencing this phenomenon?
Thanks for any/all help!
von Rauss
1) BMW will not negotiate buyout prices. The residual is the price you'll pay. Look at KBB.com, Edmunds.com, NADA.com, and dealer listings to see how the prices compares to market. You need to compare to dealer retail price, since you are effectively purchasing a pre-owned car.
2) You can pay BMW roughly $2,200 to certify your vehicle, which extends current warranty to 6 years/100,000 mi. This is really same as buying an extended warranty from BMW called the Original Owners Protection Plan. Certification would really only be useful if you weren't original owner and not otherwise familiar with the vehicle's history.
3) You can buy a much longer warranty, at much lower price, from warrantydirect.com. They have good reviews, and that is what I am planning to do.
4) You can buyout through dealer or BMW Financial. I think it's easier just to deal with BMW Financial (800-578-5000), you can handle everything by phone and mail.
5) I don't know about tax situation. It varies state by state. BMW financial will tell you. Most states charge you tax during the lease only on the payments (financed depreciation), but not on the residual. If that is the case, you would have to pay sales tax on the $22,300 buyout price. You can look at your lease to see what tax you paid. Again, BMW financial will help.
6) You can purchase vehicle with cash or BMW will finance for you as term loan.
Thanks again
328i w/ heated and power seats. everything else standard.
MSRP:$35865
Term:36 month lease
Mileage: 12k/year
MF=.00190
Down Payment: $2,500
Monthly Payment: $419 per month including 6% tax and aq fee
Total Due at signing: $3911
Hope this helps any other shopers. Any opinions?
Is it that bad? really? how much better do you think I could have done?
1. You always negotiate the sale price of the car - even on advertised specials. You can usually drop your payments significantly.
2. Negotiate the MF - make sure the dealer is getting only 1 or 2 points over the base. Some profit is fair, naturally.
Once you have agreed to a reasonable price for the vehicle, the next step is you how you will finance the purchase -- lease, loan, or cash.
The final step, is to discuss your trade-in (if applicable), which would ONLY relate to your down payment on amount financed.
If a dealer inquires upfront inquires whether you have a trade-in, plan to loan or lease, or montly payment you desire, respond that you have not made any decisions. Further, those items relate solely to financing the vehicle, not price of vehicle which has yet to be discussed.
For myself, I just send a email to the dealership's Internet sales manager with my proposed terms: car color and options, price willing to pay, finance terms including down payment and interest rate, and resulting monthly payment amount. I then ask a simple question -- will you agree to these terms? I only want a yes or no -- not talk with manager or anything else.
This has worked with the purchase of my BMW and wife's Acura.
Happy Hunting!
Here's my experience and tips of getting a good lease:
++ First, IGNORE the monthly payment -- that can easily be manipulated. If you harp on a certain number (say under $500/month), the dealer will find a way to get there.
++ Get a printed sheet of the invoice price of the car with options and then go to the dealer. Both of you should be talking the same MSRP number. Do not rub the invoice price into him/her -- personally, I see it as an insult when someone wants something from me at my cost and expect me to give them service. Some cars do sell for under invoice given company rebates. At this time (Jan 2007) I don’t think BMW is offering any known rebates other than volume/target bonuses to dealers.
++ For the 3-series a price $1000-$2000 above invoice or midway between Invoice / MSRP is a good number. A couple of hundred here or there...let the dealer win this round - get them on the next one.
++ Money Factor: Okay so here is where you want to get the best deal. BMW's going money rate for lease specials in 0.0011 with $600 deposit and $625-$900 acquisition fee -- do not capitalize this fee (i.e. add to lease payments) as it will increase the MF. (Also see MF Tip below)
Note: After speaking to 7+ dealers, only 3 dealers had this MF of 0.0011. So ask your dealer what they are using to compute, some charge higher to make more $$$.
++ Residual Value (RV): You can't change this - this is set by the company. It's 58% for the Coupe, 61% for the sedan assuming 15K/3 yrs miles. For 12K add 1% for 10K add 3%. 24 month leases are about 10% higher.
Example:
Coupe 10K/2y - 71% (68+3)
Coupe 15K/3y - 58%
Unless you go to a private leasing company which may give you a higher RV, this is nearly impossible to change (only do this if you're buying 2 or more - otherwise stick with BMW finance).
++ Money Down - A really bad idea, IMHO. Just incase something happens to the car - gets stolen or totaled chances are you're out the down payment -- this is also how the monthly payment can be manipulated. Instead pay an additional Security Deposit (See MF tip below)
++ Other Stuff - I would highly recommend Tire & Rim insurance if you live in a city (I'm in New York). Hitting pot holes, getting slashed, excessive wear an tear is covered. On a 2 yr lease, it's a toss up. On a 3 year I would lean toward it. Capitalize this amount in the lease payment (again if the car gets stolen you don’t want to have paid this upfront).
Finally, get a lease calculator and plug in these values. A good lease calculator is:
http://www.leaseguide.com/calc.htm
In summary (and some Tips):
1. Know the invoice and MSRP. A price midway is a good point for the 3-series. This is the first of the two important variables you need to negotiate.
2. Get the lowest Money Factor (MF). This is the second and most important variable - you want this to be the lowest you can get.
Tip: BMW has a program whereby paying additional security deposits you can reduce the MF by 0.00007. You can pay 6 additional deposits (+ the required one). This will make the MF 0.00061 (Lowers the monthly payment nicely - SWEET!)
You do get the Security Deposit at the end of the lease.
3. Always go for no cash down expect for the Security deposit(s), Title, registration, acquisition.
Tip: I see no reason paying sales tax upfront when I could apply that money towards a deposit and reduce the payment and pay the sales tax monthly. (Folks in Illinois may not have this option)
Hopefully, this gives you a good idea of what factors affect a lease and helps you make an informed decision.
Oh..what did I get:
328xi Coupe with Performance, Cold package, comfort access, steptronic, park distance monitor.
MSRP: 44,185
Invoice: 40,685
Negotiated price (Implied for the lease): $42,235
Tire and Rim warranty: $645 (capitalized)
Acquisition: $625
Monthly Payments: $535 with 8.25% tax included.
3yr/30,000 miles