Quote:
Originally Posted by Cosa Nostra
I'm not convinced that using MSDs to lower your lease costs is the way to go or not. I think I'd rather keep the money and invest it myself, rather than give BMW yet more multiple security deposits (essentially a laon over course of the lease) so they can invest it. I'd be interested in how u came-up w an 8% return in more detail perhapsm but I think I'd still rather invest the money.  |
Cosa,
I recently ordered a m235i and I've been trying to figure out if using the MSDs is beneficial as well. I figured out how you come up with a 8% or more rate of return.
First I used the lease guide calculator below with the MF of .0013 and found the my total lease cost was about 21700.
Then I plugged in a MF of .00081 (7 MSDs lowers MF by .00049) and total lease cost is about 20400.
The amount saved is $1300 by doing 7 MSDs.
7 MSDs for me = $4200
So an investment of $4200 nets me $4200 (return of deposit) + $1300 (amount saved) or a total of $5500 after 3 years
Using the internal rate of return calculator below, my rate of return is 9.4%.
For me this is definitely a good investment.
My only concern was that if the car is totaled they might not return the MSDs, but as far as I have read since the BMW leases include gap insurance you would get back the MSDs. If someone knows differently please reply.
http://www.leaseguide.com/calc.htm
https://www.dinkytown.net/java/IRRReturn.html