[JmanND]

If this isn't the correct forum for this, sorry mods.
I can't take credit for this, nor can I confirm or deny the calculations are correct. Credit goes to muniala over on http://slickdeals.net/forums/showthr...3126&t=2173432

I thought this would be of interest to people on here considering a new 3 series or just want to see somebody who has crunched a lot of numbers for the age old buy vs lease dilemma.

Here it goes

2011 BMW 328 sedan lease (well equipped) - $399 + tax - zero down
I posted this deal yesterday but deleted it as it got way off topic. I'm going to try this again as I got requests for it.

I hope it is seen for the deal it is. It is not for everyone and meant for

1) Someone who is looking to lease a or buy a 3-series, Audi A4, Mercedes C Class, Infiniti G37, Lexus IS, Cadillac CTS or comparable sedan

2) Someone looking to lease a sedan in a lower category like a Volkswagen Passat or GTI, Acura TSX, Subaru WRX (non-sti), Mazda 6, Honda Accord V6, Nissan Maxima and who finds the BMW 3 series appealing - can look at this lease and realize that it is cheaper or very close to leasing one of those cars

3) Someone looking to learn about and understand leasing

I hope the thread can stay on topic and not whirl off into the merits of one car v/s another, of buying v/s leasing and especially not into insults and thread crapping.

I certainly am not saying that BMWs and/or the 328 is the car for you, that is for you to decide on your preferences and research. But if you do come to the conclusion that the 328 is one of the cars you would consider and are looking for financing options on it then I hope this post is useful for you.

Here is the deal

BMW Financial Services has a really good lease program for August 2010. This program is valid from Aug 4 - Sep 2nd

2011 BMW 328i Sedan for 12K miles/yr
24 Month – Residual 68% of MSRP – Money Factor 0.00130 Base Rate
36 Month – Residual 63% of MSRP – Money Factor 0.00130 Base Rate


For a car with Premium Package, Value Package and Automatic with MSRP 38,050, a 3 year lease with 12000 miles per year

MSRP: 38050
Selling price: 35850
Money Factor :0.00130
Residual: 63%
Bank Fee: $725 (This is rolled into your lease payment)
Monthly payment = $429 + sales tax rate for your state
Driveoff : First months payment + DMV fee + Misc fees (not to exceed $50) - This is essentially a zero down lease.

BMW allows you to lower the money factor by putting down security deposits which are refunded to you at the end of the lease. If you put down 7 security deposits (the maximum allowed) your monthly payment would be $399+ tax and the lease would look like this.

MSRP: 38050
Selling price: 35850
Money Factor :0.00081 (0.00130 - 7*0.00007)
Residual: 63%
Bank Fee: $725 (This is rolled into your lease payment)
Monthly payment = $399 + sales tax rate for your state
Driveoff : First months payment + DMV fee + Misc fees (not to exceed $50) - This is essentially a zero down lease.
Fully Refundable security deposit = $3150 (7*450)


FYI - BMW has free scheduled maintenance which includes wear and tear items like brakes etc [bmwusa.com] on all its cars for 4 years/50000 miles

Why is this lease a good deal ?

1) It has a very good residual at 63%. The true residual of the car would be around 52% which means BMW is subsidizing this lease by around 11% i.e. $4186 (.11 * 38050)

2) It has a low interest rate at 3.12% or 1.9% if you put down the security deposit

3) This lease is considerably cheaper than any of the competing cars like Audi A4, Mercedes C Class, Infiniti G37, Lexus IS, Cadillac CTS

4) When a lease is priced like this, it is cheaper to lease it than buying it even you consider owning the car for a long time.

Consider the math on this. Ill use California tax rate for example.

Say you lease this car for 3 years then re-lease a brand new one for years 4 through 6 and another brand new one for years 7 through 9

Monthly payment with 9.75% tax = $438
Over nine years total cost = 438 * 12 * 9 = $47304
Maintenance Cost
Tires = $700 * 3 (assuming one set of tires lasts 20000 miles)

Total lease cost over 9 years = 47304 + 2100 = $49404


If you buy

Total cost with tax = $39345 (=35850 * 1.0975)
If you finance at 4% over 5 years, Monthly payment = $725

cost including financing = $43500

Tires over nine years = $700 * 5 = $3500

Maintenance Cost of years 5 through 9 = $5000 ( @ $1000/yr - This is conservative as BMW prices are higher)

Repair Costs - Year 5 -9 . Assume extended warranty contract for year 4-7 @ $3000 + $3000 repair cost for years 8 and 9 and for repairs not covered under the extended warranty
Total Repair Costs = $6000

Assume car is sold for $4500 at end of 9 years - (this is rather generous considering car has 108K miles )

IF buying - Total Cost of ownership for 9 years = 43500 + 3500 + 5000 + 6000 - 4500 = $ 53500

-------------
Comparing the two
Total cost of leasing over 9 years = $49400 and you're driving a new car under warranty all the time

Total cost of owning over 9 years = $53500 and you're driving a old beat up car. for half the time along with the risk of something major breaking down and costing you even more

[mjsbmw]

I agree with your analysis. Only one items surprises me. Doc fees ( you define it as misc fees) of $50. In the NY Metro area, the Doc fees are several hundred with a few at $399.

Tell me more about Doc fees in your analysis.


Mark

[alex2364]

@ the guy comparing a Mustang GT to a 335i.

[JmanND]

Originally Posted by mjsbmw

I agree with your analysis. Only one items surprises me. Doc fees ( you define it as misc fees) of $50. In the NY Metro area, the Doc fees are several hundred with a few at $399.

Tell me more about Doc fees in your analysis.


Mark

As I said, it is not my analysis - this actually surprised me too. Judging by the tax he used, he is in California. A quick google brought this up (it is outdated, but it looks like one thing CA gets right).
http://www.consumer-action.org/alert...cles/doc_fees/

[jferrell]

Some states have doc fees capped at 50 bucks or 75 bucks, it's typically just reflected in the price of the car instead.

[Michael Schott]

If you don't mind me asking, where did you get a residual of 63% for a 2011 e90 328i? I thought the August residual is 61%.