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Prices Paid: Buying & Leasing Experiences BMW X3 Prices Paid and Buying Experience
1544 messages, Last post on Sep 28, 2009 at 3:51 PM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: ckb (Jul 12, 2004 12:48 pm) |
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saw a later post of yours at a higher rate (.00175) than you posted here. have you been able to straightened that out?
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Replying to: kirkd1 (Jul 11, 2004 8:28 am) This really doesn't seem to be that great of a deal.. The only positive thing that I can see is the 62% residual is pretty strong for a 39 month lease, but that is set by BMWFS and the dealer has nothing to do with it. 1) The $2K off MSRP is okay. 2) At $725, the dealer is padding the acq.fee by $200. 3) I don't know what the correct MF is, but since they are padding the acq.fee, then I'm assuming they are padding the MF by the maximum of .0004 (costing you about $25/mo.) 4) I strongly encourage you not to make any cap cost reduction (downpayment) on the lease. Leave your $4300 or $5000 or whatever in the bank. For the minimal amount of interest you will save, you will lose the entire amount if your car is stolen or totaled in an accident. With the deal you are getting, that will move your payment up in the $470 range, but that would be with only first payment and security deposit due at signing. regards, kyfdx
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Replying to: kirkd1 (Jul 17, 2004 5:39 pm) The only thing I haven't really gotten a bead on is how steeply this vehicle is being discounted currently. My price is $1740 off MSRP. |
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Replying to: kyfdx (Jul 18, 2004 7:03 pm) I am not sure about that. I believe you'll get the difference (cost to replace the car at retail price including tax minus the payoff amount). I was sent a check when one of my leased car was totaled. I agree with you that putting as little as possible down is the way to go but you don't lose that much by putting more down.
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Replying to: davidc1 (Jul 19, 2004 5:29 am) "It is definitely not in your best interest to make a down payment when leasing. I always advise consumers against doing so for two main reasons. The first is if your leased vehicle is totaled in an accident or stolen during your lease term, your insurance company pays off the bank that you are leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So this vehicle's purchase price at the end of your lease would be exactly the same, regardless of whether you had put $2,000 down, or had made absolutely no down payment at all."
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Replying to: pipo (Jul 19, 2004 5:39 pm) |
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You lease $30K car this month for 3 years, with an $18K residual. Next January, it is totaled in an accident. The insurance company puts a value of $24K on it. 1) If you put nothing down on it, your lease payment is 429.33 and after 6 months you have a total outlay of $2576 and the balance owed to the bank is $28K. The insurance company pays them the $24K, and the GAP insurance pays them the balance. Total cost: $2576 2) If you put $5K down on the lease, your payment is $280.44 and after six months your total of payments and down payment is $6682 and the balance owed to the bank is $23834. The insurance company pays $24K, which would be $166 over what is owed. Assuming you get the overage back, total cost: $6546 Under this scenario, your $5K downpayment cost you $3970. The amount saved in finance charges assuming you complete the lease is about $360 (assuming MF of .002). For $10 month, I'd rather keep my money in the bank. You can change the numbers and the savings can be more or less.. this was just to illustrate the math behind the advice. regards, kyfdx
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Replying to: kyfdx (Jul 20, 2004 6:36 am) Thanks for the example. I would just argue that the insurance co. will value it much higher than that. A six month old car will actually come out close to the original purchase price. I guess it varies by insurance co. but in my real life experience, the retail + tax + registration, etc.. came up to $4K more than what I thought the car was worth. I was actually surprised (pleasantly of course). I also wonder if the GAP is even utilized much these days. But again, this just my own experience. Since one can't assume all insurance will do the same, I suppose the safe thing is to go with your example as the worst case scenario. |
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Your insurance company may treat you differently, but in most cases, they negotiate with the bank who owns the car. The bank is covered either way.. What the insurance company doesn't cover, the GAP insurance will. They have no stake in helping you recover your downpayment. If the accident is your fault, and you are dealing with your own insurance company, you may have a little leverage with them, but if you are hit by someone else, and have no other loss than the car, you may be left out in the cold by their company. I totaled a car in '02 and was also pleasantly surprised by the payoff, but it was MY car, not the bank's, and I'd been with the same company since '85 with over ten years accident-free. It may not ever happen, but I think it is a good rule of thumb to pay as little up front as possible on a lease. regards, kyfdx
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