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2Addicts | BMW 2-Series forum BMW 2 Series (F22) Forum 2 Series Pricing, Ordering, European Delivery Another lease end question - buyout or lease again?

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      02-16-2017, 08:53 AM   #1
Uridian
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Another lease end question - buyout or lease again?

I'm really having a problem deciding what I want to do at lease end here. I know what most of my options are, and admittedly, there is a lot of subjectivity in this kind of decision. I was hoping to use you guys as sort of a sounding board.

My lease is ending on a 2014 228i M Sport - 6MT, Lighting, and Cold Weather packages (3/14 build). My residual is right around $23700. Seems a little bit high, but not unreasonable, and until a couple of days ago, I was almost certainly going to buy it out. I love this car to pieces.

I was planning on putting some more money down when buying out so I could keep my payment as close as possible between my current lease payment and buying out.

A couple of days ago, though, for shits and giggles, I ran some lease numbers on a 230i equipped exactly the same and as if I had negotiated to what I think is a realistic price to expect.

If I take the money I'd put toward buying out my 2014 228i and instead put that into down payment and fees/taxes for leasing a new 2017 228i, I get almost exactly the same monthly payment. This has me in a tail spin, really. I was gung ho about buying my car out, doing some more modding, etc. But, this car does have a couple of very small acorn dents and the front bumper has moderate winter sandblasting. It would be nice to start fresh again and do better with babying it from the start. It would also be nice to own it outright and do whatever the hell I want with it.

TL;DR - If I take down payment money I would use to buy out my '14 228i and instead put that into a new lease on a '17 230i, I would have the same payment. Which option would you take and why?

Thanks so much!
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      02-16-2017, 09:20 AM   #2
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Do not put cash down on a lease unless you are talking MSD.
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      02-16-2017, 09:27 AM   #3
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I understand the risk if the car is totaled but is there any other reason to avoid it? We're primarily a "monthly expense" sort of household, so we're happy to put extra money up front to keep monthly expenses low. Can MSD have as much an impact on the payment as a down payment?

***edit***

Some quick googling tells me that I don't have the option for MSD in New York anyway.
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      02-16-2017, 10:11 AM   #4
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Quote:
Originally Posted by Uridian
I understand the risk if the car is totaled but is there any other reason to avoid it? We're primarily a "monthly expense" sort of household, so we're happy to put extra money up front to keep monthly expenses low. Can MSD have as much an impact on the payment as a down payment?

***edit***

Some quick googling tells me that I don't have the option for MSD in New York anyway.
It's still dumb no matter what your rationale. That said it's your money whatever helps you sleep at night.
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      02-16-2017, 11:25 AM   #5
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Oh, I'm not arguing with you, I'm just curious what other reasons there are to avoid putting money down on a lease.
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      02-16-2017, 02:49 PM   #6
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Just Google "why not to put money down on a lease". The biggest negative is if the car is totalled or stolen you are SOL on the money you put down. The other issues are minor but things like using up cash that could be invested, reducing liquid assets you might need for something else and a few others. There are positives if you simply want a lower payment but if you kept the cash that would offset it by having more money. With interest rates low it really doesn't make a lot of sense unless puting money down gets you a lower money factor with the dealer. I have never put money down on a lease but I understand why you it makes you feel good to not have that bigger payment each month.
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      02-16-2017, 05:44 PM   #7
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Simple answer is that if you want to keep making payments on a car or like a new car every few years then yes, lease a 2017. Otherwise, after you've paid off your 2014, you will have no more car payments. I think that part is very appealing.
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      02-16-2017, 09:23 PM   #8
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Glad everyone is helping OP with his decision. I'm facing the same issue w/ my 235, leaning towards buying it out too. As great as that new car feel and excitement is I'd have a hard time getting essentially the same car on a new lease. The car is awesome and its one of the highest rated cars ever so hoping the residual value will stay high long term.
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      02-16-2017, 11:09 PM   #9
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I've been back and forth on if I will finance or lease my M240i. I'm starting to lean more towards buying it with all of this buyout talk.
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      02-17-2017, 12:05 PM   #10
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Well, had I known I would love the car this much, I might have bought it from the start.

So, considering that, I think I'm back to leaning toward just buying out my car. In another few years the new lease would likely be in the same condition as mine is now anyway. Thanks for lending an eye to my dilemma!
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      02-17-2017, 02:15 PM   #11
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By the way, you can get the acorn dings out cheap by using paintless dent repair. I had a really crazy dent by my wheel wheel on the crease whick looked impossible to fix and it cost $50. You might be able to get them all taken out for around $100. The process is amazing, pretty fast and pretty cheap using suction to pull them out.
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      02-17-2017, 02:24 PM   #12
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Quote:
Originally Posted by BEM-S4 View Post
Do not put cash down on a lease unless you are talking MSD.
no msd in NY.
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      02-17-2017, 02:31 PM   #13
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Quote:
Originally Posted by Pparana View Post
no msd in NY.
Well in that case I reiterate my initial statement about no money down - more specifically no cap cost reduction.

Back in the day rather than a car stipend my father's business used to actually pay his lease and it had to be under a certain amount, let's say $500 for shits and giggles. He'd throw a few grand at a car to get it to $500 but he wasn't paying for the car anyway so if he lost the few grand that was CDB for an office-paid car.

Aside from some very rare situation like that cap cost reduction makes literally no financial sense and is only helpful for some psychological lie to yourself bullshit.
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      02-17-2017, 03:03 PM   #14
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Quote:
Originally Posted by Lucky13 View Post
By the way, you can get the acorn dings out cheap by using paintless dent repair. I had a really crazy dent by my wheel wheel on the crease whick looked impossible to fix and it cost $50. You might be able to get them all taken out for around $100. The process is amazing, pretty fast and pretty cheap using suction to pull them out.
Paintless dent repair is definitely on my radar. I'm going to at least get a quote before I finalize my lease end decision, but then wait until warmer weather to actually have the work done.
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      02-17-2017, 04:33 PM   #15
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One of the things I have considered is buying/finance the M240, when it's paid off in 5 years, keep it as my fun garage car and then start leasing a commuter.

Just a thought, sorry about the thread jack...

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      02-17-2017, 05:33 PM   #16
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Quote:
Originally Posted by SCCThree View Post
One of the things I have considered is buying/finance the M240, when it's paid off in 5 years, keep it as my fun garage car and then start leasing a commuter.

Just a thought, sorry about the thread jack...

Test drove a GTI for a friend the other day. That wouldn't be a bad DD at all. Tough to beat for $20k.
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      02-18-2017, 11:43 AM   #17
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Quote:
Originally Posted by BEM-S4 View Post
Well in that case I reiterate my initial statement about no money down - more specifically no cap cost reduction.

Back in the day rather than a car stipend my father's business used to actually pay his lease and it had to be under a certain amount, let's say $500 for shits and giggles. He'd throw a few grand at a car to get it to $500 but he wasn't paying for the car anyway so if he lost the few grand that was CDB for an office-paid car.

Aside from some very rare situation like that cap cost reduction makes literally no financial sense and is only helpful for some psychological lie to yourself bullshit.

NY is also strange in that all taxes and fees need to be paid upfront, even though they only tax the lease portion, most states do this monthly but NY does it in one shot, so that's about all you want to pay, taxes, plates, doc fees. Never ever put money down on the lease. Unless it is a one pay for a really good MF, but MF are low on most cars for tier 1A really not an issue. We did 10 MSD on my wife's lexus in FL, had to go to 3 dealers to get one who would do it. Equated to $50 a month in savings, MF on that car now is less than a 1/4%.

If your leasing any car that lets you do msds, you should max them no question. Rate of return (in your savings on lease) is higher than any savings account, CD, ext.
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      02-19-2017, 10:35 AM   #18
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Quote:
Originally Posted by Pparana
Quote:
Originally Posted by BEM-S4 View Post
Well in that case I reiterate my initial statement about no money down - more specifically no cap cost reduction.

Back in the day rather than a car stipend my father's business used to actually pay his lease and it had to be under a certain amount, let's say $500 for shits and giggles. He'd throw a few grand at a car to get it to $500 but he wasn't paying for the car anyway so if he lost the few grand that was CDB for an office-paid car.

Aside from some very rare situation like that cap cost reduction makes literally no financial sense and is only helpful for some psychological lie to yourself bullshit.

NY is also strange in that all taxes and fees need to be paid upfront, even though they only tax the lease portion, most states do this monthly but NY does it in one shot, so that's about all you want to pay, taxes, plates, doc fees. Never ever put money down on the lease. Unless it is a one pay for a really good MF, but MF are low on most cars for tier 1A really not an issue. We did 10 MSD on my wife's lexus in FL, had to go to 3 dealers to get one who would do it. Equated to $50 a month in savings, MF on that car now is less than a 1/4%.

If your leasing any car that lets you do msds, you should max them no question. Rate of return (in your savings on lease) is higher than any savings account, CD, ext.
So I guess theoretically I'm better off in PA with monthly tax vs NY. If something happens to your car 2 months into a 36 month lease do you lose all the tax money?
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      02-19-2017, 01:02 PM   #19
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Every state is so different on taxes we are never comparing apples to apples. In South Carolina the sales tax is only $300 whether the car is $10K or $80K. Each year they get you with property tax pretty good like about $900 a year on my 2014 but it drops each year. It doesn't matter if its a lease or purchase, sales tax and property tax are the are either way.
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      02-19-2017, 03:20 PM   #20
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Quote:
Originally Posted by BEM-S4 View Post
So I guess theoretically I'm better off in PA with monthly tax vs NY. If something happens to your car 2 months into a 36 month lease do you lose all the tax money?
NY does not require taxes paid up front. The smartest way to lease is to structure a sign and drive lease with no money down, tax in the monthly payment and coming in at delivery with just first month charge and DMV fees.
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      02-20-2017, 08:08 AM   #21
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Quote:
Originally Posted by BEM-S4 View Post
So I guess theoretically I'm better off in PA with monthly tax vs NY. If something happens to your car 2 months into a 36 month lease do you lose all the tax money?
Yes that is correct. But you get hit for a 3% lease tax, on top of regular tax. The northeast is very tax happy. But you can do msds so would be better. I lease and register my parents cars in FL under my name, saves a lot. Do not get me going on TX (6.25% on whole car price, not deprecation).


Limitations on
refunds and credits
of sales tax paid on
motor vehicle leases

Once a lease has been entered into and the customer has paid the tax due at
the inception of the lease, no refund or credit of tax paid is allowed to either
the dealer or the customer if the lease is terminated early, even if the lease is terminated because the vehicle is
destroyed in an accident. PUB 893

Last edited by Pparana; 02-20-2017 at 08:25 AM..
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      02-20-2017, 08:09 AM   #22
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NY does not require taxes paid up front. The smartest way to lease is to structure a sign and drive lease with no money down, tax in the monthly payment and coming in at delivery with just first month charge and DMV fees.
The taxes are paid up front, they may roll them into your payments as part of the loan, but NY gets their money up front.

The total sales tax due must be paid by and collected from the lessee on the date the first lease payment is due or the date the vehicle is registered with the New York State Department of Motor Vehicles (DMV), whichever is earlier. PUB 893
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