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      02-04-2019, 12:20 PM   #1
Fireblade1000
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Depreciation on the M5

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Does it concern you?

Seems to be a big thing in the UK with no end of people waiting to see if big discounts come over next year or so, my thoughts are life's to short to have that way of thinking

I achieved over 20K discount on my incoming and am more than happy with the deal, will obviously take a hit further down the line but at least will be in it and enjoying the beast
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      02-04-2019, 02:30 PM   #2
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I lease and forget about it ....
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      02-04-2019, 04:14 PM   #3
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If you lease, that's basically all you're paying for. Eliminates the unknowns.
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      02-04-2019, 04:24 PM   #4
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      02-06-2019, 08:20 AM   #5
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Depreciation is only a concern if you sell it. Don't ever sell it and your good!
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      02-06-2019, 08:52 AM   #6
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Quote:
Originally Posted by windtendo View Post
If you lease, that's basically all you're paying for. Eliminates the unknowns.
I see this statement all the time on this board. My math says that a 3 year lease will cost you about $60,000.00 plus any lease end penalties they hit you with. I paid 115k cash for my 135k M5 comp, 2016 M5s are selling for mid 60s, the F90 should hold its value better than the older version.
Let's say it's worth 70,000.00 with 20 to 30k miles. My cost of ownership is 45k )115k- 70k) over the 3 years. Even if I am off by 10k paying cash is still cheaper and I am not stuck in the car for 3 years.
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      02-06-2019, 09:01 AM   #7
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Quote:
Originally Posted by jeffscott1 View Post
I see this statement all the time on this board. My math says that a 3 year lease will cost you about $60,000.00 plus any lease end penalties they hit you with. I paid 115k cash for my 135k M5 comp, 2016 M5s are selling for mid 60s, the F90 should hold its value better than the older version.
Let's say it's worth 70,000.00 with 20 to 30k miles. My cost of ownership is 45k )115k- 70k) over the 3 years. Even if I am off by 10k paying cash is still cheaper and I am not stuck in the car for 3 years.
Im doing something very similar, going to pay for the car, which ive never done before. So there will be no charges whatsoever, from leases, pcp or other financial tie ups. Ive also got a great discount from the start, so im good, and happy to go.
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      02-06-2019, 09:14 AM   #8
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I tried to wheel and deal for months via a lease. Then a 2018 used one popped up locally with 2k miles on it. Purchased for $21k under sticker and really hope it was a good purchase....financially
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      02-06-2019, 09:21 AM   #9
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Depreciation is inevitable, as others have said life is too short - buy it and then enjoy it is my view... You'll get a reasonable amount back when you come to sell/trade in but it's all relative. What I try to do is haggle hard on the initial purchase and then the lessens the immediate depreciation hit.
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      02-06-2019, 09:49 AM   #10
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The other option is buying a used car around the same price as the new F90 m5 that has already depreciated.....example a Rolls Royce ghost or G63 amg?

BMW's lose way too much value but again....there is no better 4 door sedan!
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      02-06-2019, 10:28 AM   #11
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Quote:
Originally Posted by Steeve19M5CP View Post
The other option is buying a used car around the same price as the new F90 m5 that has already depreciated.....example a Rolls Royce ghost or G63 amg?

BMW's lose way too much value but again....there is no better 4 door sedan!
I totally agree, I paid 120k for my 2014 Flying Spur V12 last year it had an MSRP of 270k and it had 5500 miles on it
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      02-06-2019, 12:14 PM   #12
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Totally agree on the cash buy scenarios, have had exactly the same debate on another forum, most people can't get there head around buying cash, majority prefer PCP, can't weigh up why as the depreciation is still the same but you just pay it monthly with interest on top, at least with a cash purchase you are not tied into some financial giants figures if you want to sell before end of term, pay no interest and have a lump sum to come back as and if you want to sell


Not against renting the car btw just not sure why you would if you have the upfront cash and it isn't needed for anything else

Not going to achieve much sat in UK banks that's for sure
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      02-06-2019, 12:16 PM   #13
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Quote:
Originally Posted by Simon H View Post
Im doing something very similar, going to pay for the car, which ive never done before. So there will be no charges whatsoever, from leases, pcp or other financial tie ups. Ive also got a great discount from the start, so im good, and happy to go.
You kept that quiet Simon, was it me that swayed you ?
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      02-06-2019, 12:17 PM   #14
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Quote:
Originally Posted by jeffscott1 View Post
I see this statement all the time on this board. My math says that a 3 year lease will cost you about $60,000.00 plus any lease end penalties they hit you with. I paid 115k cash for my 135k M5 comp, 2016 M5s are selling for mid 60s, the F90 should hold its value better than the older version.
Let's say it's worth 70,000.00 with 20 to 30k miles. My cost of ownership is 45k )115k- 70k) over the 3 years. Even if I am off by 10k paying cash is still cheaper and I am not stuck in the car for 3 years.
100% this
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      02-06-2019, 12:32 PM   #15
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No doubt that buying may make sense for some folks and there's a "possibility" that it may cost less to own versus lease in some scenarios.

The picture becomes more muddled when you factor the cost of tying up capital, tax benefits of leasing and the "what if" scenarios that can diminish value on a car you own (accident, major repairs etc.).

There's no right answer here since every owner really evaluates what works best for him or her.

I choose to lease because when I factor in some of the points mentioned above, the true price of ownership is substantially less than buying and it removes the "what ifs" from the equation.

With that said, do whatever the f*ck makes you happy LOL.
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      02-06-2019, 12:39 PM   #16
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Quote:
Originally Posted by Fireblade1000 View Post
You kept that quiet Simon, was it me that swayed you ?
It was the tight Scotsman in me, that doesnt like paying a penny more than needed, a la interest charges.
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      02-06-2019, 01:23 PM   #17
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Quote:
Originally Posted by josec70 View Post
No doubt that buying may make sense for some folks and there's a "possibility" that it may cost less to own versus lease in some scenarios.

The picture becomes more muddled when you factor the cost of tying up capital, tax benefits of leasing and the "what if" scenarios that can diminish value on a car you own (accident, major repairs etc.).

There's no right answer here since every owner really evaluates what works best for him or her.

I choose to lease because when I factor in some of the points mentioned above, the true price of ownership is substantially less than buying and it removes the "what ifs" from the equation.

With that said, do whatever the f*ck makes you happy LOL.
Even without the tax benefits, you will have to factor in the cost of capital in buy vs lease. For example, the $115k you paid up front comes with an opportunity cost as you can invest it in safe investment and earn 4%-6% easily. I would say the savings would be marginal.

That being said I chose to buy the car simply because I like owning my car and not worry about the dealership. Not for financial reason per se.
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      02-06-2019, 01:35 PM   #18
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Quote:
Originally Posted by neohh View Post
Quote:
Originally Posted by josec70 View Post
No doubt that buying may make sense for some folks and there's a "possibility" that it may cost less to own versus lease in some scenarios.

The picture becomes more muddled when you factor the cost of tying up capital, tax benefits of leasing and the "what if" scenarios that can diminish value on a car you own (accident, major repairs etc.).

There's no right answer here since every owner really evaluates what works best for him or her.

I choose to lease because when I factor in some of the points mentioned above, the true price of ownership is substantially less than buying and it removes the "what ifs" from the equation.

With that said, do whatever the f*ck makes you happy LOL.
Even without the tax benefits, you will have to factor in the cost of capital in buy vs lease. For example, the $115k you paid up front comes with an opportunity cost as you can invest it in safe investment and earn 4%-6% easily. I would say the savings would be marginal.

That being said I chose to buy the car simply because I like owning my car and not worry about the dealership. Not for financial reason per se.
No right or wrong answers here ... it simply is about what works best for each person.
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      02-06-2019, 01:47 PM   #19
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Quote:
Originally Posted by neohh View Post
Even without the tax benefits, you will have to factor in the cost of capital in buy vs lease. For example, the $115k you paid up front comes with an opportunity cost as you can invest it in safe investment and earn 4%-6% easily. I would say the savings would be marginal.

That being said I chose to buy the car simply because I like owning my car and not worry about the dealership. Not for financial reason per se.
4-6% wow, I'd be lucky to find 2% over here
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      02-06-2019, 01:50 PM   #20
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Quote:
Originally Posted by neohh View Post
Quote:
Originally Posted by josec70 View Post
No doubt that buying may make sense for some folks and there's a "possibility" that it may cost less to own versus lease in some scenarios.

The picture becomes more muddled when you factor the cost of tying up capital, tax benefits of leasing and the "what if" scenarios that can diminish value on a car you own (accident, major repairs etc.).

There's no right answer here since every owner really evaluates what works best for him or her.

I choose to lease because when I factor in some of the points mentioned above, the true price of ownership is substantially less than buying and it removes the "what ifs" from the equation.

With that said, do whatever the f*ck makes you happy LOL.
Even without the tax benefits, you will have to factor in the cost of capital in buy vs lease. For example, the $115k you paid up front comes with an opportunity cost as you can invest it in safe investment and earn 4%-6% easily. I would say the savings would be marginal.

That being said I chose to buy the car simply because I like owning my car and not worry about the dealership. Not for financial reason per se.
Next thing you know we will be adding IRR in to the calculation. The interest loss will be similar when you consider you are 15k more out of pocket not counting the 5 to 10k down you need to put to get to a reasonable payment.

If the car is damaged or in an accident you are responsible for the loss of value to the lease company at the end of the lease.

The primary reason why people lease a car like this is because it is the only way they can afford it.
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      02-06-2019, 01:51 PM   #21
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Quote:
Originally Posted by neohh View Post
Quote:
Originally Posted by josec70 View Post
No doubt that buying may make sense for some folks and there's a "possibility" that it may cost less to own versus lease in some scenarios.

The picture becomes more muddled when you factor the cost of tying up capital, tax benefits of leasing and the "what if" scenarios that can diminish value on a car you own (accident, major repairs etc.).

There's no right answer here since every owner really evaluates what works best for him or her.

I choose to lease because when I factor in some of the points mentioned above, the true price of ownership is substantially less than buying and it removes the "what ifs" from the equation.

With that said, do whatever the f*ck makes you happy LOL.
Even without the tax benefits, you will have to factor in the cost of capital in buy vs lease. For example, the $115k you paid up front comes with an opportunity cost as you can invest it in safe investment and earn 4%-6% easily. I would say the savings would be marginal.

That being said I chose to buy the car simply because I like owning my car and not worry about the dealership. Not for financial reason per se.
Next thing you know we will be adding IRR in to the calculation. The interest loss will be similar when you consider you are 15k more out of pocket not counting the 5 to 10k down you need to put to get to a reasonable payment.

If the car is damaged or in an accident you are responsible for the loss of value to the lease company at the end of the lease.

The primary reason why people lease a car like this is because it is the only way they can afford it.
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      02-06-2019, 01:55 PM   #22
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Quote:
Originally Posted by Fireblade1000 View Post
4-6% wow, I'd be lucky to find 2% over here
2% is probably risk free bonds, but the average return in FTSE 100 is probably 8% to 10% per annum.
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