2021 BMW X3 30i...that was (too) easy?

Ask the Hackrs
,
1

My wife’s 2018 Acura RDX lease is wrapping at the end of the month. We got a very solid deal at the time: $329/month, 0 down.

Three years later, we both hate the car, even at a great price. So, we both decided to forget about unicorn deals, and try to get the best deal on a car she really liked. Lucky for me, her tastes were not too extravagant, she chose the BMW X3 30i.

Research time! Unlucky for me, lease cash went down this month from last ($1250 from $1750), and I have no loyalty or viable OL code. Grrr. Quick research on LH indicates most brokers are offering 11-12%, so I make 12% my goal, and get ready to start the long process of hunting around. My Dad recommends the salesman he bought his BMW from. I check the website, and they do have a few in the color combo my wife wants, so I figure, why not, I’ll give this guy a shot first.

We talk over the phone a few times very cordially, and after some back and forth, he makes me the following offer:

MSRP: $50,785
Selling price: $45,198 (11% off)
Taxed incentives: $1,250
RV: 56%
MF: .00086 (This is base)
No MSDs available, dealership is in NYS
$0 down
$493.06 per month

Tax: $1,675.02 (8.375%)
Inspection fee: $10
Tire fee: $12.50
Bank fee: $925
1st month: $493.06

Total out the door: $3480.58

I pressed him, but he absolutely refused to come up any more.

Taking the offer at face value for the moment, I view it as pretty decent. No BS on the MF, and the 11% seems to be the low end at what some brokers are offering. I figure there’s maybe $500 or so to potentially cut, which would bring me up to my 12% goal.

Could I do better than this? Perhaps. I figure I could likely find a dealership in NJ or CT that might be willing to go to 12%, and would let me do the MSDs. All that being said, I’m not even sure it’s worth the effort to get there. The MSDs would lower the payment by $20 a month. Hardly a great ROI. The different between 11% and 12% is a total of $504 over three years, or $14 a month.

Am I nuts for wanting to accept the 11% here and calling it a day?

2

20% (going by your calculation at $20/month) is not great?

3

Well if I took the $3,150 and applied to the principal on my mortgage instead, I’d save $4,300 in interest. So, no.

4

The doc fee increase in NJ (not sure about CT) will minimize or may even cost you more than the 1% additional discount.

5

$3,500. And in 3 years?

6

This is already very solid. With no broker and low NY dealer fee, you’ll still be saving money over going to PA and NJ unless you get even above 12%.

CT will do the same unfortunately as much as I’ve seen in Greenwich (may not be representative as that is $$$ town).

:chocolate_bar:

7

You know, if you put the money towards msds now and then apply it to you mortgage when you get it back, I bet you turn that $4300 into $5k with no effort at all.

8

Does she like anything else?

9

What is this math based on? Staying in a 30 year mortgage for 30 years, which basically nobody does? IMO shorter term mortgages or paying ahead on mortgages is a huge fallacy.

By this logic just put the money under your mattress, it’ll be worth far more than that due to inflation in 30 years.

10

Trying to compare ROI for a depreciating asset against saving that money over a 30 year mortgage is a very bad comparison if you’re actually calculating ROI.

$720 ROI over 3 years is good as long as you don’t have to eat the MSDs swapping out of the lease in 18 months.

11

Exactly, you save $4300 over the life of loan which is probably a lot longer than 3 years, the actual savings are less in today’s (or 3 years) dollar. I know the MSD return is lower now but 7% CAGR with almost no risk is still pretty good.

12

if thats where you are at, when are you picking the new ride up?

From seeing fellow member deals, seems like the NY dealerships balance their bigger discounting frenemies in NJ, CT by having lesser dealer fees.

So hypothetically speaking NJ and CT might offer 10% before fees/8% after while NY might go max 8.5% before/8% after to even things out.

13

All fair criticism. It’s not an apple-to-apples comparison at all.

Trying to be a bit more objective, if I try to annualize the ROI, I get the following:

$720/$3,150 = 0.2285
Annualized ROI = [ (1+ROI) 1/n power − 1] × 100%, n = years for which the investment is held
[(1+0.2285) 1/3 power - 1] x 100% = 7.10%

So obviously, 7.10% is certainly a good annualized return, far better than a “safe” investment like a CD. Of course, if I hypothetically invested in something else, like a mutual fund, I would get the benefit of compounding interest, so I wouldn’t have to hit 7% to make more money. And of course, there’s always higher risk and no guaranteed return.

It would be based on a re-amortizing of my mortgage balance. Let’s just agree to disagree whether “basically no one” stays in a 30 year mortgage, or whether paying ahead is a fallacy.

No, it’s the X3 or bust. She did not like the Q5, Volvo, or Infiniti. She’s not a speed demon, so no need for a Porsche. Refused to consider the Stelvio, lol.

Yup, on further consideration, locking in the 11% seems like the right move here. Getting another $500 off (or using MSDs out of state and lowering the outlay by $720 over 3 years) isn’t worth it if the savings get eaten up by other fees.

Thanks all!

14

Didn’t realize you’re in New York, would be a little bit more work to do MSD, please post pics if you decide to get the car, looks like a solid deal with such little incentives to work with.

15

Personally I think someone would be crazy not to take an 11% deal, lol. Especially with an NYS limited doc fee.

16

Can you share the dealer? Im looking for the same car for a relative.

17

leasehackr has a pre-negotiated offer that you might want to look into

18

I saw that but its missing a few options my mom wants and need more miles. Will they let me change that? Thanks.

19

I’d ask and see what you get