Re: New 98 M3 on a lease!

[John Fulford-Brown <john@xxxxxxxxxxxxxxxx>]

> From: dtuten@domain.elided (Daniel Tuten)
> Subject: New 98 M3 on a lease!
>
> Howdy Folks -
>
> Talked to my salesguy at the local BMW lot - sounds like I can get a
> great deal on a 98 M3 of my choice through a *lease* (they have several
> in stock of 2 and 4 doors).
>
> Looking at a touch under $600/mo, with $1200 due at signing.
> Considering my car habit of trading every 3 years (and losing $$$), this
> seems like the best way to go.  I only put about 9-10K miles on a car a
> year, so the mileage works in my favor.
>
> I'm still going to abuse the car at the track (what they don't know
> won't hurt them :^)
>
> Heheh, the salesguy actually called while I was composing this mail, he
> has the Cosmo Black/Grey 5-speed M3/2 like I wanted.  Payments right
> around $580.  Sounds good - I may be driving a new M3 to work tomorrow
> :^)
>
> Any comments on a lease would be appreciated - I know it doesn't
> generate equity like a purchase/loan, but heck, my current car
> effectively has little equity anyway.  BTW, they are giving me about
> $3000 over my balance on the Vette, so I'll have $1800 to pocket.

Daniel, my last three cars were leased.  If you plan to get a new vehicle every
3 - 4 years, I do believe it's the best way to go.  You get more car for the
money in terms of monthly payments because you are paying for the depreciation
of the vehicle over the period of the lease, rather than buying the vehicle over
say 5 years.
As far as not generating equity.  You will get some equity if you take care of
the vehicle and you have a decent lease.  My last car was an Acura Vigor.  After
a four year lease, the buyout was around $13,500 (RELAX folks, this is Canadian
dollars.  $1 US = $1.40 CDN).  I had maintained the car perfectly and was able
to sell it for $17,500 (my asking price) thereby generating around $4,000 cash
into my pocket.  This I plunked down at the BMW dealership as a down payment on
a new 325 (this was 1995), thereby reducing my monthly payments (actually it
allowed to me get a car with more groovy options).  Now the 42 month lease is
coming up on my 325, the buyout is $18,300, again CDN $ (this was a $50K when
new).  Again the car is in perfect shape and similar vehicles are selling for
around $28 - 30K.  So I could take around 10K in equity.  But as my accountant
pointed out to me, I'm better off buying the car and keeping it since I have so
much equity in it.  So I'll keep it and next spring I may lease again.  This
time a summer runabout, perhaps a M Roadster?, perhaps a Boxster (oh shit, now
I've done it, I said the P word, I'm gonna hear it now).  So leasing can work
very well for you.  BMW often has very good lease deals when they are clearing
out certain models.  Cars in high demand are often not offered at such an
attractive lease.  But you can shop around too.  You don't have to lease it from
BMW.  My Acura was leased from GE Capital who are one of, if not the largest
finance and leasing company in North America.  Beware of lease deals with really
low monthly payments.  Read the fine print.  How much is the down payment?  What
is the annual mileage allowance?  What is the buyout?  Make sure it's a walk
away lease. In other words you have no commitments at the lease end, no
additional payments due etc.  Good luck.

John.

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