This is for a lease of around 700$ for a 50k vehicle.
Comes out to roughly 900$ savings on a 36mo lease. Roughly around 6% ROI per year.
No it isn’t. Msd are basically worthless in this environment, with certain exceptions based on brand.
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I’d look at in the context of what else would you be doing with that same $4900 if you didn’t do MSD’s.
What would the speculative return be in an equivalent “guaranteed” return. The savings from MSD’s also wouldnt have any tax implications where as a savings account, cd, bond most likely would. Depends on how many layers you want to analyze.
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I wouldn’t, personally. Up to you though.
At least BMW MSD’s are 5bps per now though like they were a couple years ago.
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$25x12 = $300 / $4900 = 6.1% in risk-free, after-tax income for 3 years. Unless you need the cash, it’s a great deal compared to investment alternatives available today.
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Not a good way to look at situation or the correct application of time value of money
Keep the cash buy an I bond…MSD’s in this market forgetaboutit…
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I bonds limited to 10k. What after that?
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That website though, almost hard to believe it’s legit lol.
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How would you look at it?
All depends on how much someone has in their bank account. If there is excessive funds then this is a risk free 6% return.
S&p 500 is down almost 20% YTD, up 5% in the past month.
Not seeing a downside to a guaranteed 6% return per year.
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I recently read if you have extra withholding, you can use that payment for an IBond, effectively up to another $5K, giving $15K overall.
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Good catch
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1 for me, 1 for my wife, 1 gifted from me to my wife for next year, 1 gifted from my wife to me for next year. Bam, $40k
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Maybe another one for your trust.
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This is relevant for I bonds. I bond interest is taxed as income. Obviously depends on household. For mine, a 9.62% return taxed as income isn’t much different than 6.1% return tax free.
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The speculation around MSD seems trivial compared to the question of spending $25,000+ to lease a $50k car for 3 years.
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the OP had “4900” in MSD’s buy two I bonds 
3 years of liquidity is one downside.
It’s really like 5.5% annualized as well. Investments compound. Need to compare like terms.
You’re locking up money for 3 years based on recent rather than expected future performance of the market which is an inherently flawed notion.
MSDs are pretty gigantically overrated for most companies but especially BMW. Either the liquidity matters to you ( typically lower wealth people ) or you can probably find better places to park the cash.
They will also hurt your ability to swap out of the lease if should ever be required. Equivalent deals with MSDs necessary sit significantly longer than comparable without from a swap perspective.
A final addition would be dependent on your views of inflation. If you think inflation is going to continue, wouldn’t you want some sort of inflation protected investment rather than tying up money for 3 years that may have its purchasing power significantly decimated?
Yup. I did the same. But what you if still have money left?
Ok. Name me an inflation protected investment that is risk free? Yes i bonds but there is a low max on that.
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