At buy rate on the MF, your rate of return for anything not rolled into the lease is about 2.2%, or about 3.5 times the best APY I’m getting on liquid savings right now.
Someone will be along shortly to tell you that anything you pay up front may be at risk if you total the car, which statistically is nearly impossible on a 2-3 year lease. 
Here I am!
I do actually look at the MF first, but since mine is currently an effective 0.74% interest (and my cash equivalents do earn more than that), I rolled everything in (like I always do). If I somehow end these lease even 1 payment early, I win. If not, only cost me about $30 in rent and tax on the rent.
You always have to do the math, but as someone who had 3 lemons and was rear-ended in 2 leases, I always roll everything in.
Yes, the math on the cost, and then I would also advise looking at the probability of the feared outcome.
The fact that something doesn’t cost much doesn’t automatically make it worthwhile. 
For example, I wouldn’t pay $7 a year more to add $1 billion in optional alien abduction coverage to our homeowners policy.
interesting, both scenarios make sense, actually, hence the exchange of ideas. the MF (e.g. interest rate) seems to be a key player here though.
Of course, keeping in mind that we’re talking about an N of 1. The feared outcome here is not just the car getting totaled, I’m hedging on whether the car will be sold/traded/totaled before disposition.
The probability for any given event (eg totaled in temp tags) is-what-it-is, but I’ve also exited (so far) 1/3 of my leases before disposition. That is what I’m hedging by rolling everything in.
I would need actuarial tables to make a call on this.
That they do. It’s not necessarily right or wrong (unless you are putting money down just to lower your payment, irrespective of any variables).
I don’t think people are wrong for paying tax up front or reducing fees: I appreciate that @trism finds a way to pay the absolute least finance charges and fees.
You’re in NJ , so regardless the taxes have to be paid upfront. Either by you or the captive (BMW)
The biggest reason I steer people away from putting money down is for whatever reason, a lot of people don’t factor money up front into their costs (even more so if it’s in the form of trade equity)
People will look at $300/mo and $3500 das and see $300/mo, but cringe at $400/mo with $0 das
Hi.
Interesting. I’m planning to get a 36mo lease. But I do see myself trying to get out of it after 24mo.
Under this scenario, would it make more sense to have little to zero drive off money and roll taxe fees into the monthly payments?
Thanks!
What does the math tell you?
To advertise a lease transfer with the same effective monthly payment: It’s slightly better to have a higher payment and offer an incentive vs having a lower payment & asking for cash back
There’s no guarantee any of the two main exit strategies (A. Transfer the lease or B. Sell it to a third party dealer without excessive negative equity) will be available in 2 years
hi all,
I live in NJ and thinking of visiting a dealership in Manhattan since they have a car I’m interested in.
the NY dealership says that I can lease a car from them, but what I don’t have clear is if I have to pay NJ or NY taxes? NJ tax rate is 6.625% and NYC is about. 8.875%. and, DMV fees?
thanks!!
NJ tax and fees. You’d pay NY doc fee but loose the ability to do MSDs due to a NY located dealer. Depending on the brand you’ll be subject to different zip incentives but rarely matters since they’re usually in the same region.
You pay the taxes according to where you live.
Also work out your target deal and get it out together before you set foot inside that door.
yes.
thanks! - NY’s doc fee ($75) is way cheaper that NJs ($699) so I think I’ll be saving some money there.
hi!
yes! that’s precisely why I’m asking, I wanted to make sure I’m running my numbers with the correct tax rate.
thank you!
That is if you don’t want to do MSDs.
It doesn’t necessarily work out that way. Selling price and/or MF markup can sometimes be way more more expensive, destroying all the doc fee “savings”.
TBH if you can’t beat Manhattan/BK pricing in the burbs, you’re probably doing something wrong.
Yeah but if it nets out that’s where it’s at. Right now everything is on crack.
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