I’m familiar with the advantages of leasing. My intent was to learn more about BMW Select, which I have, and I appreciate the feedback.
In the 100k lease vs balloon example, if the car was worth 10k less than payoff it would technically be about a break-even because paying $300 more per month on a 36mo lease equals about $10k in 3 years. A 3-year-old M3 should under any reasonable circumstance be worth $45k. I don’t believe there are any incentives, other than loyalty?
Maybe a better question is the Select better or worse than traditional financing? If I intended to keep the car long-term I assume financing makes more sense.
It’s all about interest, how much interest are you paying over 36 months and the Balloon value at the end?
How much will you pay if you buy the car traditionally?
Select is 0.9% where the broker is located, but 3.9% in the state where I live, so not sure which rate I’d get? My CU is offering rates as low as 1.99-2.74% based on term. MSRP is around $73k, and 3yr balloon would be +/- $46k.
That payment of 200 less suspiciously sounds like 0.9%. You might want to double check that is what you really will pay. because a 3% variance is a lot of cash, over a $100 month diff I believe.
Do you pay based on the state the vehicle is registered in, not sold in? If it went up $100/mo then I’d be out, $975/mo, while not taking any food off the table so to say, is beyond my threshold of what I’m willing to pay. broker is supposed to get back to me regarding the actual rate by Monday.
Balloons like Select are good for people with a lot more liquidity who can pay off the last payment without pulling from 401k’s and such.
Traditional financing is better in the sense that it forces the borrower to pay down the loan in a linear fashion, most likely break even earlier, and not have to shop around for financing again to make the last payment.
It also forces people to accept the reality that some cars are not right for them.
Yes, you can do 60mo, but I’d want a shorter term. Although I guess if the value is there, I could always sell early. I was asking about Select because BMW doesn’t offer Choice in MI.
On an M3 I think a balloon makes sense. I’m actually surprised this is the first time it’s been posted about because I was thinking about doing one myself through BMW select.
As long as you don’t rack up the miles on it or a severe accident happens you should be fine but those are risks you may want to consider.
I would say biggest risk would be getting in an accident
I feel the M340 will depreciate faster than a M3. Besides, it will not provide the driving experience, and performance of a true M-car. The M3 has always been a car I admired. Many years ago I leased a 2004 E46 M3 Cabriolet, at the time I thought it was expensive at $640/mo! LOL.
I’ve received quotes on new M340’s and with $0 down except Drive off’s they are mid $900’s, seems like way too much for a normal 3-series! My 2018 340i M-Sport is $698/mo, but times were different then.
The M3 is the only car I’d consider the Select on, the only car worthy of the risk, even if it is (hopefully) small. An M340 would be a lease-only option, no desire to own long-term. But I’m sure you could finance one cheaper than leasing given the current $2500 purchase rebate.
As a broker you would know more than I do, but do you really think the LCI will just tank the value of a pre-LCI car? I thought the LCI was supposed to get iDrive8 and those stupids huge screens, I hear a lot of complaints about them already (of course from people who don’t have them). I can imagine a slight drop, but to just lose a huge part of its value? A quick look on Autotrader comparing 2015 to 2016 (16 was the F80 LCI right?) and there does appear to be about a $5-8k price difference on average.
I like to have fun on backroads, but drive basically like a decent human during normal times in traffic. Depending which insurance policy I put the car under I can do agreed value, kind of like gap insurance if the car were totaled or stolen.
