Lease vs Finance

Ask the Hackrs Buy/Finance
1

I am in the process of getting a 2021 BMW X3M with msrp $75995 and have 2 separate deals and need help knowing when a purchase or lease is better option. I am in Indianapolis if that makes a difference. I have never leased a vehicle before so please forgive my ignorance. I initially was planning on leasing but the deal isn’t the best and most every dealer within a few hours that have vehicles are all marking up mf.

I have a trade in vehicle that I am receiving $12500 for net.

Lease: 36/10k. Doc fee 199, acquisition fee $925. The dealer is willing to take total $2500 off msrp (the total is including bmw incentives though). They won’t come down off max mf at 0.00133 and I believe the rv is 57%. If include the 12.5k from trade in into the deal ends up with net cap of $61119 and payment $700 a month.

Finance: Doc fee $199. They will reduce price from msrp by 3k. Total taxes due $3254.58 for total sale price $76448.58. With 2k incentive and 12.5k trade equity have total price $61948.58. If I do 72 month loan at 2.29% it is monthly payment $922 a month or 60 month at 1.89% and $1083 a month.

I know the mf markup is around $1500 over the life of the lease and I realize you can’t know exactly what the vehicle would be worth as trade in at 36 months. In terms of pure money difference at 36 months I will have paid an additional $7992 dollars out of pocket with the loan compared to lease. With the 57% RV being $43320 would there be more than 8k in additional equity in the vehicle making the loan better to do.

My question I cant figure out is with the not great lease terms at what point in this deal would the lease or loan be better at lets say the same time frame at 36 months?

2

You’re going to put 12.5k down on a lease? Ouch…

3

I mean I don’t have to that is just what the equity is in my car now.

4

Don’t put the 12.5k down. Have you looked at brokers? @AutoCompanion is advertising 6% off a X3M build. That’s 4,560 off your msrp. I have to think you’re getting taken for a ride pun intended here and the GM of that dealer is sitting smoking a nice cuban right now.

5

Rough math, it needs to sell for $40k by the end of lease to worth the loan, which can be a stretch for M cars.

Someone with Manheim database might be able to show you the typical X3M depreciation curve in normal years but my gut feeling is that you are going to lose. You are buying at peak pricing and in 3 years the entire car market will have shifted dramatically. Remember we are highly likely passing peak cars even without the pandemic, plus EVs are taking the market share. In 3 years a vanilla X3M isn’t much noteworthy in terms of holding value.

6

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