[ResIpsaLoquitur]

Originally Posted by MackSea70

I wanted to come back to this thread. After I wrote it I got to thinking - maybe those who are saying leasing is bad are talking about total out of pocket cash. One conclusion that is absolutely certain, leasing today DOES mitigate upward / downward risk three years into the future. If the market has crashed (and our cars are worth substantially less than the residual on the lease) - we hand the keys back to BMW at the end. On the other side, if the market is hot - say as it was a year ago, we buy the car out at the end of the lease or otherwise cash in the equity we have in the car.

However. When looking at my specific situation, I ran a number of scenarios that looked at total cash out of pocket, when I'm equity positive in the car, and net cash out of pocket (total cash - equity at disposal). It was a pretty enlightening activity and if anyone would like my spreadsheet PM me and I'll send it to you (it's messy right now).

It's too much data to paste here and gets messy so I'll try to explain.

My MSRP is 147k
MF is .00200
RV is 57%

3 year lease / 10k per year. Pmt is 2324 with sales tax. Total out of pocket over 3 years = 83,686. Equity in car = 183. Net cash out = 83k

5 year traditional finance (4.29 APR, 10k down). Pmt = 2675. Cash out = 96,351. Equity at 3 year mark = 22k. Net cash out = 73k

5 year select (4.29, 10k down, 44k balloon). Pmt = 1854. Cash out = 76,772. Equity at 3 year mark = -2,112 <--- note here we are in almost same shape as a lease - but have put out 7k less cash over the same period. On amortization this goes positive at month 41. Net cash out = 78k

3 year select (4.29, 10k down, 72k balloon. Pmt = 2,136. Cash out = 86,918. Equity at 3 year mark = 12k. Net cash out = 74k

So the best deal in terms of least amount of cash is to straight up buy the car. 73k. Next is the 3 year select at 74k, then the 5 year select at 78k followed by leasing at 83k.

However. All of this is predicated on historical depreciation rates. For example, I'm straight line depreciating the car at 1.52 percent per month. That means at 36 months the car is worth about 84k and at 60 months about 60k. This could be wildly off depending on what happens in the US and global economy over the coming years and for that reason alone, it may be worth paying a 7k premium over 3 years to insulate yourself from that risk.

Personally, I'm leaning towards doing a 3 year select deal - the payment is acceptable to me, I'm potentially cash positive at year 3. I'd like to say I'm buying this F90 as my last hurrah to the gasoline powered super sedan - and so at year three I can either pony up the balloon, finance the balloon, or trade for the G90 and have 12k to put down. Of course this is all predicated on the econ not totally being in the sh!tter.

Hope this helps you guys as you think about current finance options

Thank you for putting in the legwork and providing us with an extremely useful and cogent post. This is perfectly done!

[anthemavm]

Originally Posted by ResIpsaLoquitur

Thank you for putting in the legwork and providing us with an extremely useful and cogent post. This is perfectly done!

Agree this was very interesting.

Thanks

[Alan l.]

great post. lots of use are on the same boat that bought or leased a car back in 2020 and now trying to decide what is the best course of action.

6 months ago i was 99% sure i was going to buy out my leased 2020 X5M but the last few months the used car prices are dropping back to normal so the decision isn't so easy anymore especially when you factor in the need to purchase extended warranty on a car like this.

[Jaro75]

Originally Posted by Alan l.

great post. lots of use are on the same boat that bought or leased a car back in 2020 and now trying to decide what is the best course of action.

6 months ago i was 99% sure i was going to buy out my leased 2020 X5M but the last few months the used car prices are dropping back to normal so the decision isn't so easy anymore especially when you factor in the need to purchase extended warranty on a car like this.

I had a 2020 X5M Comp and last August I was offered $92k as a trade (my car had over 30k miles and the buyout was around $81k) on an M5... the M5 deal wasn't great so I passed. Fast forward to the end of September / early October and I ordered an M5 comp from a different dealer and got $80k for my trade! Values have continued to drop rather quickly since then. My car didn't come in until last week so I was lucky that I sold them back the X5 back in October when I was able to make $1k on it.

[Alan l.]

That's what I'm afraid of. My buy out in June is 69K for my 2020 X5M and I don't see it being worth more than that by that time to safely say its worth it for me to to buy it out. I lease because i don't want ever want to worry about what my car is worth at any point in time.