Quote:
Originally Posted by bmw
It is called a OnePay lease, and actually, to certain customers, it makes a bunch of sense.
Basically, you are paying basically a fraction of the intrest that you normally would. From my experience, on a typical 328i lease, it will save you almost 2k over the course of the lease. For people that have the cash (and have the self confidence that they wont be in an at-fault accident over the term) it is the way to go.
Personally, I would do a one pay myself.
Let me know if you have anymore questions.
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You seem to know quite a bit about this, wouldn't mind learning more
Quote:
Originally Posted by jopa489
I have to agree with most of the above posts, this is a bad idea. Not only are you risking your entire investment with the possibility of an accident, but you're forgoing 3 years worth of interest if that money was invested elsewhere. The earnings on that should well exceed the $2k savings. Time value of money. |
How is a car (let alone a leased car) any way an investment..? it's a depreciation liability with no investment value whatsoever..
Just using the numbers in this thread: if the 3 year lease payments are $16k, and you save $2k total, that's ~4% interest.
While you can easily make more than 4% in a decently-high paying dividend stock or bond, you can't really make nearly that much having your money sit in a bank.
My CitiGold barely yields me 1%, let alone my Chase which leads me .01%!.
Bonds/stocks can easily lose value... so even if it's at over 4%, if the value of the security drops more than what the dividend paid, you lose money (yes yes I know, risk vs reward).
You can look at it as a 3 year CD earnign 4%/year. Not bad at today's rates.
On my M3, I did 7 MSDs (multiple security deposits) and $900 drive off for the lease. The MSDs were $6k, but IIRC, my payments drop about $50/month due to the lower MF (money factor). on a $83k car, a drop in MF is quite meaningful.
Assuming one doesn't get in an at-fault accident, then there aren't any negative aspects (that I can see anyways) to a OnePay lease.
Telling the op to put that $16k down and then make payments is a bit... ubsurd in my opinion
cause then instead of taking a $16k liability, he is taking a 40-50k liability (whatever the car costs)
And then he's still making payments after putting $16k out upfront...
If the op plans to keep the car, different story (I know he got a CPO, just saying)
Quote:
Originally Posted by smashhell
Gap insurance is just so you don't 'owe' the bank more money of you totaled the car. If you owe more than the car is worth, the gap insurance covers the 'gap'.
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This is true
IIRC though, depending on your insurance and your coverage, you may be entitled to your lease payments minus depreciation. Though I'm not in insurance and am rather ignorant in this area, I could be completely mistaken. I will ask my insurance agent later as I'm curious to know..