Hello
At this time I am working with a broker on a deal for a 2020 x5.
MSD was something I never heard of for prior leases over the years.
So we have always done down payments
Pros & Cons of MSD?
Difference in payments if I do MSD And $0 down
We were looking at $3500 down
Like I said I am working with a broker but just wanted more info
Thanks
Down payment you’re pretty much SOL if you total the vehicle, since gap only addresses the delta you have at the time of accident.
MSDs are a good investment vehicle with a defined rate of return over the time period, and usually are a good deal if you’re not planning on transferring the lease, which can sometimes be tougher when you’re asking for a lot upfront.
I’m sure there’s more, but these are just the top things I can think of offhand…
If you use the search function this has been discussed many many times.
TL;DR MSDs 
any upfronts to reduce payment 
(personally I always sign and drive)
I saw posts and I’ve been searching through posts
Just wanted to get the exact answers I was looking for
Thanks I will discuss with my broker
MSDs will save you thousands of dollars. Down payment will not.
MSD all the way.
1000% recommend MSD, you get it back. Downpay nah.
There is not really any cons of MSDs as long as you have the money. You get it back at the end of the lease and with bmw it’s usually at least a 10% return on your money. If you were willing to put 3500 down then you should be willing to do zero down and at least 3500 in msds. All that being said make sure you understand your deal first then add msds.
i’ve read on here that some companies will try harder to claim damage to the car if they know you used MSD, is that not true?
That 10% guaranteed return is quite tasty when compared to the volatility of an investment such as a stock market index fund that historically averages ~7-11%. Keeping in mind though that the MSD’s are not particularly liquid in the event of a significant financial emergency or need for a large amount of cash e.g. down payment on a house.
Yes, you get a high guaranteed rate of return but give up liquidity on that investment, you also give up some liquidity on the car lease since transferring is harder. It is for people who have 3-10k to spare (depending on monthly payment) and can comfortably live without this liquidity for a while. In my opinion, for most people- if you can’t afford to max MSDs on your lease, then the car is probably not a wise financial choice (look for something cheaper / use public transport till you have more savings/ buy a very cheap used car and pray it doesn’t need expensive maintenance)
To the OP, always max MSD and do zero cap cost reduction as a general heuristic
I have seen people speculate that they think that this is done but I have never seen any evidence that suggests it’s actually true
This is brand dependent. On some brands, MSDs make absolutely 0 difference on vehicle liquidity.
If op was going to put a large down payment down anyways isn’t that not liquid either? Yes if you do not already have a reserve fund then do not do msds or lease an 80k car.
A post was merged into an existing topic: Please keep all your “wanted” ads here - Part 2
Some have suggested that there can be some business write offs specific to down payments, for example, if you have a higher tax year you can put money down on the same year to have more expenses for that year. Not something that happens often, and still has the risk that if your car is totaled, you loose the money.
I’ve done BMW msds and both times its cost me roughly $2800,
$1600 on a 7 series and $1200 on a 5 series. I’ll never do msds again…
Interested in hearing what happened.
Care to explain what you mean?
Every business owner is entitled to their own tax strategy (provided it’s legal), but I can prepay all kinds of things in Dec (or your last month of fiscal year) during higher income years where I need more deductions, that aren’t at risk if the lease is totaled. I’d rather switch a few monthly bills to quarterly/semi-annual/annual billing and max out retirement accounts than ever pay upfronts on a lease that aren’t protected/guaranteed.
MSDs on the other hand I max out where possible.