Just got back from local dealer in Southern CA, looking to leasing a BMW X5 and wanted to get some feedback. Here are the details of the deal I’ve been offered so far:
This is a loaner car and 2024 model
MSRP: $77,895
Discount: $14,428 (~18.5% off)
Sale Price: $63,467
Mileage: 6,422
Drive-Off Amount: $2,700
Monthly Payment: $900 (including tax)
Term: 36 months / 10k miles per year
Looking for any insights on whether this seems like a good deal or if there are areas I could improve on. I was aiming for something a bit lower on the monthly payment but not sure how much wiggle room there is. I’ve also reached out to a couple of brokers but the best deal is around 10% for 2025 models.
Any feedback is appreciated, especially if there are any red flags I should be aware of or if I’m missing something here. Thanks in advance!
The residual is $39,024.90, based on 52% and mileage adjustment.
Money factor (MF) is 0.0018.
The price already includes loyalty discounts, and the incentives total around $1,000.
MSD is not an option.
Did @nyctolaws transfer his X5 in SoCal? I feel like that’d be a car to explore. It’s super-duper optioned up and not much more $ than what you’re seeing in this loaner offer.
Everyone has a different definition of a good deal. Some people think that if you can just maximize the discount and the rebates, then you’re good to go. But those are just line items on a piece of paper. What’s the amount of money that’s leaving your bank account over the course of the lease.
You’re at $2,700 + 35x$900 = $34,200
By definition the lease would end yet you’d need another car. 99.9% guaranteed you’d have no equity at lease end and start from scratch. If you repeated a similar lease, probably 36k with inflation, you’d have spent $70,000+ over six years. And yet again you’d be starting over with no equity.
How do you benefit from that arrangement?
Overspending to rent/lease relative to the purchase price of the asset doesn’t make sense whether it’s a Hyundai Elantra or a Ferrari supercar. That’s the opposite of hacking.
Depends on your needs for a vehicle. And for the math on an X5, I am not sure how much more sense it makes to purchase and lock in a high interest rate for 72 months for instance.
Honestly, I would prefer to never own a BMW out of warranty because I like knowing my costs are fixed. I hear BMWs are more reliable these days, but I like that first 36k miles maintenance is covered and unlikely to need anything major.
Sample math-
$64k purchase price
Taxes (9.25% for LA county) - 6080
Interest rate 6.5% (also rough estimate)
DAS- $2700
Monthly- $1,131 x 72 mos
$81,854 total paid over 6 years
Maintenance- Not sure, based on a website caredge- I waived all maintenance for first 3 years- $5305 for years 4-6.
Total paid over 6 years: $87,159
According to KBB, 2018 BMW X5 with 60 k miles in very good condition- $19,974
Leasing approximately $70k over 6 years…rough math $2700 ahead with financing @ 6 years.
If you are willing to drive the vehicle longer than 6 years I am sure that you would come out ahead. 5 years or less, I think you come out ahead leasing. At 6 years, I think its kind of a tossup.
But leasing you never had an older than 3 year old car and your monthly was $975 effective vs $1168 effective. Plus you don’t have to deal with a trade-in, but I guess I am just lazy.
If you want to be smarter, probably need to move over to toyota/lexus or honda/acura to depreciate a bit less.
When someone makes monthly loan payments, they pay for principal and interest. That means the monthly payment is higher than a lease, and that extra payment is locked up as equity in a depreciating asset. If you instead save the monthly payment differential into an interest bearing account, you could recoup some of that opportunity cost of capital.
Very good points. As always any analysis depends on the core assumptions one is making.
Some quick ones off the top of my head that may change the conclusion:
I know BMW is now offering 3.99% APR for 60 months on the MY25s, haven’t researched on what the MY24 APR special was.
Maintenance estimate on the purchase seems high in itself. And the delta is even smaller when you add all the consumables the lease requires the lessee to replace and isn’t covered under the free plan (tires, brakes, etc).
Ownership doesn’t require owning for six years. We can compare annualized costs of ownership cycles vs lease cycles. The best time to trade in is at 4 or 5 years when depreciation has slowed but these cars are still desirable to dealers to flip as CPOs. A 2019 X5 with 50k miles is worth ~$30k at trade-in and with the tax break on the next one that’s worth almost $33k in any other state.
Lease repetition assumes lease payments don’t go up much more than inflation but that’s actually a generous outlook. X5 payments are ~50% higher than they were 3 years ago. Where will they be in another 3 years? We don’t know. $1,200/m sounds ludicrous now but it’s a smaller % jump than the $600->$900 jump that actually happened (same ~3k DAS).
Chip shortages and all the externalities have long been over, so why do payments keep increasing this much?. Short answer: they charge it because they can. In other words, because people pay. So as long as people are paying then payments will keep increasing—possibly by a lot.
I don’t want to put too much cash down to buy out my old lease since it was a bad deal with a high residual. Plus, I wouldn’t buy out this one either at the end since it’s a loaner car. With rate cuts on the horizon, I’m trying to get the lowest rent charge for this lease.
So I’m trying to see if there’s still room to negotiate with the dealer.
