How much equity do you have?
Around $4700, but I planned on keeping the two deals separate from one another.
since the msrp is 51430 what is the sales price? Like are they coming down from msrp?
Yes MSRP is lower but I havenāt gotten a clear answer on yet. Using the LeaseHackr Calculator with the other variables, Iām assuming around 48500? I have a call scheduled with the finance department tomorrow to nail down the numbers.
ohhh im not saying a lower msrp. Iām saying like how much discount are you getting off the sticker price of the car. Like if the sticker says 51,430 are they giving it to you for like 48,716?
Sorry I wasnāt clear there. Yes, theyāre going off a presumed lower msrp, but I havenāt gathered a hard number from them yet. Iām guessing itās about 48500ā¦around 5.5% off msrp sticker
At lease end of the Audi, I will have paid $24, 442.16 including DAS (otd was 42,143 before gross cap cost ā¦ that made it $38,850.55). DAS was $4550 at the time.
BMW rate at stated above will be $29, 452.00 at end of 36 months including DAS of $3100. msrp being $51,340 and otd being $47,747.
If I can squeak out the $4700 in equity from the Audi, it will put me at total cost of $24,721.26 for BMW thatās msrp is ~$8k more (not directly adding the $4700 equity towards the lease, but thinking of it as a ābonusā for buying out and selling the Audi).
Kind of a weird way to justify it, I know. I mostly am annoyed at $732 a month. I pay $550 a month for the Audi. Itās not that I canāt afford it, but seeing $550 a month for 36 months obviously feels better than $732, but itās stupid to put more down for the sake of a lower monthly in the event of totaling.
I think Iām spinning myself in circles now to justify this.
I donāt understand hackers that ignore the huge equity we have in our current leased cars. The equity is there because of the hot market. When the market cools down so will you equity. So you will end up at the same place overall.
Because people treat it like it isnt real money and allow it to cloud their judgement and decision making.
Unless you are willing to sell your car, get the equity and wait, it isnāt real money as it will almost certainly be lower if you wait for the market to cool down. Moreover, from my experience, the equity dealers are willing to give you for your trade when you are not trading is much lower than when you are actually trading it, so part of the equity is actually a hidden discount (as an example, I could not get more than $3,500 for my current lease car in a standalone deal where trading it as part of a new lease seems to be netting around $5K. So if you are doing your homework, maximize the discount on the new lease, maximize the equity on your existing and then add the numbers you are doing it in sound judgement.
Which is what doesnt happen. People see the big equity carrot and shortcircuit their brain. They then do silly things like sign a $600/mo lease on a $30k car because after the equity is applied, its only $400, lighting money on fire because it was a horrible lease option that āfeltā ok because of the equity application.
You also get a lot of people that see the equity and feel like they have to take advantage of it, getting into a much worse deal than theyre currently in.
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Yes but I suspect your expectation to see lease terms getting back to 2019 in the next year or two will not materialize. Interest rates are much higher and only increasing, making financing pretty expensive as an alternative. Inflation caused MSRP to increase across the board even if supply and demand issues will be solved. Unicorns will always be there but I think that the times of seeing a 50K SUV for under $500 with first month only DAS have passed for the foreseeable future. People with a substantial equity in their current cars who are used to replace them every three years or so and not taking advantage of this equity are taking a risk as well.
How are you discussing deals without knowing your discount? You need to reset. Stay away from payment based negotiations and focus on the MSRP.
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set a reasonable goal that you want the price of the car to be. Like if it is 51,430 how much % off are you looking for at the minimum
Who said anything about me expecting lease terms to get back to 2019?
The issue here is you have vehicles like this X3 that have no business being leased. The programs are so bad that leasing simply isnāt a reasonable option, no matter the quality of the deal. If one were to evaluate it as a stand alone deal, the conclusion one should come to is āif I want this, it should be purchasedā. Then perhaps it makes sense to apply the equity. But if one instead looks at this deal after mentally factoring in the equity, they find themselves making a poor financial choice.
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Care to analyze the difference for him between financing and leasing given the same discount from MSRP? The main issue I see is the MF, resulting in 5.5% interest which is much higher than what he can get from his local bank.
OP doesnāt know how much the discount is. Itās āpresumedā
Much higher interest, additional acquisition fee, additional disposition fee, etc.
You really have three potential scenarios when looking at leasing vs buying:
- The total cost of ownership to lease is less than the total cost of ownership to buy
- The total cost of ownership to lease is higher than the total cost of ownership to buy, but the cost premium is justified by the risk offset leasing provides
- The total cost of ownership to lease is higher than the total cost of ownership to buy and the cost premium is too great to be justified by the risk offset
Generally, leases live somewhere in region 2. There are cases where leasing is by far cheaper and itās a no-brainer. In those situations, purchasing is a foolish decision. With the current market, the cost premium has shot through the roof and the risk offset has been reduced due to restrictive buyout policies.
The issue here is that this all requires looking at the actual numbers and making an educated decision. When people start rolling in numbers that make situation 3 look like situation 1 and donāt do the due diligence, they end up making poor choices.
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Iām starting to warm up to leasing an x5 vs buying it with the 1750 loyalty lease credit. The interest rate after MSDs is not much worse than the financing rate. Thereās a 1500 credit on the x3 if you had a bmw in the last 12 months.
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Exactly what I did with the dealer and dropped at the 11th hour because the dealer had a sour attitude towards me when I repeatedly asked for the agreed capital cost and he kept deflecting. Would much rather give my business to a broker.