12-02-2013, 07:40 AM | #67 | |
Lieutenant Colonel
307
Rep 1,806
Posts
Drives: 2016 X5 35d | 2019 X3 30i
Join Date: May 2011
Location: Toronto
|
Quote:
I sold my X3 $5,000 above market value (around $8,000 above trade-in price) and also saved $6,000 on X5's tax savings...That's around $14,000k added value right there... |
|
Appreciate
0
|
12-02-2013, 07:43 AM | #68 | |
Brigadier General
547
Rep 3,307
Posts |
Quote:
|
|
Appreciate
0
|
12-02-2013, 08:26 AM | #70 |
Brigadier General
547
Rep 3,307
Posts |
I used to be against putting cash down on a lease, but it's really just personal preference. "pay me now or pay me later..." Doesn't change the overall equation, just gives you a smaller payment, I can see the value in that, flexibility etc. putting 15k down he got a tiny payment and his buyout will be lower than trade-in value every day of his lease. Still better than buying if he doesn't plan to keep the car longer than 3 years or so.
|
Appreciate
0
|
12-02-2013, 10:35 AM | #71 |
Lieutenant
119
Rep 402
Posts |
One disadvantage to putting money down, is if the car is totaled, you don't get that money back. With no down payment, you don't risk losing that money.
|
Appreciate
0
|
12-02-2013, 10:51 AM | #72 | |
Brigadier General
547
Rep 3,307
Posts |
Quote:
|
|
Appreciate
0
|
12-02-2013, 11:56 AM | #73 |
Lieutenant
119
Rep 402
Posts |
Not sure what you mean by "buyout". Money down reduces the capitalized cost. For most of the lease, the owner is "upside down" so that the value of the vehicle is less than what is owed. You will lose some if not all of the money you put down.
|
Appreciate
0
|
12-02-2013, 12:07 PM | #74 | |
Brigadier General
547
Rep 3,307
Posts |
Quote:
The overall math doesn't completely change whether you pay it up front or in the end. The only variable is the gap insurance. If you put zero down you'll end up owing when you total the car (like you said, you're upside down, at least for the first half or 2/3 of the lease). Gap insurance avoids or helps avoid that, but that's not free either. Long winded response when all I really needed to say was putting money down is exactly what keeps you from being upside down. If you owe less than its worth, that's where you get the money back. It doesn't just disappear. |
|
Appreciate
0
|
12-02-2013, 12:27 PM | #75 |
Lieutenant
119
Rep 402
Posts |
Say, for the sake of argument, you drive a $50,000 car off the lot and total it within the first month. Let's say the value of the car when it it totaled is $45k. If you have put no money down, the gap insurance (which BTW is included on all BMWFS leases) would cover the shortfall. If you put $5k down, most or all of that money will be gone.
I'm not saying that you should never put money down on a lease, but it's one thing to keep in mind. I'd rather put MSDs down and lower the interest rate. You will get that money back if the car is totaled. |
Appreciate
0
|
12-02-2013, 12:43 PM | #76 |
Brigadier General
547
Rep 3,307
Posts |
That's the variable I mentioned. I've (foolishly) never looked enough into the gap insurance to know how much it would or wouldn't cover, or what it costs (i've assumed it is included in my policy given the coverage package I have, but have been lazy and haven't confirmed).. but if that covers the full gap, of course that can save you thousands that you would have otherwise had to put out of pocket. If it does, of course it's better to let the gap insurance eat that cost than to have put it out yourself up front and have no gap to begin with (if you actually total the car of course).
I can't imagine a gap ever being big enough to eat up the 15k in ChiefMike's example though. But I don't think most people go that far. Don't get me wrong, I'm not arguing one way or the other either, I've never done more than the tax and inception fees, and usually not even the tax. Just saying I can see why some people do it. And I agree on the MSD's, but (as I'm told at least), NY doesn't allow those.. not sure what other stays do or do not. More importantly, you're saying BMW FS themselves provides the gap insurance in every lease? Last edited by chrisny; 12-02-2013 at 12:50 PM.. |
Appreciate
0
|
12-02-2013, 12:51 PM | #77 |
Lieutenant
119
Rep 402
Posts |
|
Appreciate
0
|
12-02-2013, 01:13 PM | #78 | |
Brigadier General
547
Rep 3,307
Posts |
Quote:
|
|
Appreciate
0
|
09-06-2014, 08:52 AM | #79 |
Private First Class
6
Rep 161
Posts |
|
Appreciate
0
|
09-16-2014, 06:34 AM | #81 | |
Second Lieutenant
74
Rep 210
Posts |
Quote:
If you buy a 50K car and total it in the first month, you'll be lucky to get 40K in the settlement. And new cars are the most often stolen/never recovered vehicles, particularly trucks like this that cost 50-100K. The beauty of a lease is that all that stuff is someone else's problem. Car totaled? Your out, at most, one payment. If you buy or lease with a big downpayment, you could be out 10K or more. MSDs (multiple security deposits) are a much better deal than putting more money down on an X5 (and likely all BMW) lease. No risk (other than BMWFS going out of business) and good impact on the money factor. When leasing it's pretty simple. Never put anything down (no capital cost reduction) unless money just doesn't matter. |
|
Appreciate
0
|
09-16-2014, 06:35 AM | #82 |
Second Lieutenant
74
Rep 210
Posts |
Gap insurance is in every lease I've ever done (a lot of them) in the US. Another reason not to put money down, you're paying for the gap insurance but if you put 15K down, you're getting no value at all from it. Insurance is there for a reason, let them take the risk, not you.
|
Appreciate
0
|
Post Reply |
Bookmarks |
|
|