[boosted_coupe]

I'am seeking help from my fellow experienced BMW owners. I'am currently leasing ($0 down+1 month sec. payment) a base model 335 (no sport, no navi, nothing). I have the option to buy left open up until June. The car currently has 7K miles. I plan to buy it. I was leasing it for the first few months just incase I felt I wouldn't like the car. I have quick changes of heart with cars but this is my first BMW and I'm in love. I am planning to go ahead and finance the rest of what I owe. I plan on doing 5 year finance but refinancing with a credit card (at lower apr) in a year or two. I think the buy out is $42,xxx and I've paid now 6 months at $650. Any of you have suggestions? Please help! BMW has bought me out

[scrummie2]

What kind of situation are you in where you have a $45k credit card that would be at lower interest rate than a car loan? In general secured loans (i.e. loans secured by collateral, like cars, which the bank can take if you default) are much lower, on the order of 7-8 pts assuming you have decent credit.

I don't know that I'd want 35k in credit card debt (assuming you pay down a bit in a year) on my credit report. Your credit rating looks more favorably on secured debt vice unsecured...and it could be tough trying to get another credit card to roll over the debt into if you're talking about floating your balance on low-interest teaser rates that go up in a year or two.

My advice is get a standard five year note. And in the future if you want to try out the car for a few months it actually makes more sense to just up and buy it then get into a lease and hope for a buyout...6 months of payments on an actual loan you'd have paid down $2k+ of that principal, not just $650, and you wouldn't still be dealing with a buyout that looks pretty close to MSRP.

Do you have bad credit? This will limit your options/change my advice.

[scottp999]

I would get a car loan. You could get a 6 year loan. This is what I did to have the smallest payment possible in case of an income disruption, but while fully employed I will be sending in massive prepayments each month and hope to have the loan paid off in about 14 months.

[Chi-town330]

Does $42.x k for a 335 with no options and 7k miles sound high?

What am I missing? the car doesn't cost that much new. Unless this includes taxes? Even still, where's the depreciation?

and to the point above - you mention what you have paid so far in LEASE payments ($650 per month for 6 months)....but that is irrelevant.

and what does the credit card re-fi angle in A YEAR OR TWO have to do with your decision? how does that affect it compared to whatever financing terms you are going to use now? How can the credit car possibly be better terms?

What are you asking? I don't even understand the question. the only thing I currently see is possibly overpaying for a used car, regardless of (potentially insane) financing terms.

To be blunt, given what you wrote, have done to date, and are attempting to do now, your finance skills seem to be a bit limited. I don't say this to be insulting, but rather am encouraging you to find someone you trust who is experienced here and ask them to run some numbers. Because honestly, this whole thing looks strange.

[boosted_coupe]

estimated buy out after 3 years, $35,xxx. with like $16,xxx paid in lease. last time i checked it was $42,xxx to buy out. it might be less now. the reason i leased was because i started a new job and i'm only 20. i work full time and go to school. i just wanted to lease incase anything ever went wrong at work or if i had to take a break to finish school. since, you all seem to know more - give me some useful advice.

when i went to buy my 335, i said to the salesman "this is the car i want. this is the way i want it. and this is how much i want to pay" i had the choice of 3 year lease or 5 year finance. as i said before, i chose lease because i know i get tired of cars quick. it is not the case with my 335. i wanna stop leasing and actually buy it.

[scottp999]

Boosted Coupe,

Got your PM. Your PM's are full so I can't reply. I have never leased so I can't help with the early buyout question. All I can say is at each transaction point with a dealer (whether it's cars, stocks, bonds, commodities, real estate) they are going to get their piece of the pie.

Scott

[Jobu]

Hey Boosted Coupe,
Can you give some more deets on your lease? When did you start the lease and what was the term (36 months?)? Was it with BMW FS? The buyout in June, is that the lease end? I haven't heard of a mid-lease buyout, except for the kind where they just total up your remaining lease payments! That's not a buyout to me. Its a giving them free money. DO NOT do that type of buyout. (Why? Well, leasing is like getting a loan where you only finance the depreciation of the car -- plus any add -ons like tax or whatnot -- if you prepay your lease payments it is like paying interest on a loan that you do not owe anymore.)

So, you might as well wait for the end-of-lease buyout. At that point you can finance the car with a car loan, perhaps through BMW FS. BMW likes to manage the number of cars coming off lease in to the market. They may offer you financing themselves. Compare their rate to other rates you can get through internet banks or your local bank. As was mentioned above, "secured" lending by a bank is usually cheaper for you than "unsecured" loans like credit cards. BUT there are good teaser rates out there. Remember, to read the fine print, as there is usually a hefty "service charge" to actually draw on the teaser rate, which makes it much less attractive. Furthermore, you then take the considerable risk of refinancing your teaser rate with something reasonable.

PM me if you don't want to share details publicly.

GOOD LUCK!

[scrummie2]

Hey dude -

Your PM is full. Go with whichever one gives you a lower interest rate/APR.

This is the problem with leases -- you don't really get to get rid of the car early, because the terms are structured at 3 years for a lease. Just because you finance for five years doesn't mean you need to keep the car for five years -- when you buy you may pay a bit more but what you pay takes down the total principal amount of the loan. A lease is more "you don't want to keep the car PAST 3 years for sure".

If you had just bought the car and made 6 months of payments you could probably sell it now and break even at least -- 42K for the buyout on your lease is too much given the cost of the car (the term is "being upside-down" -- the buyout for the lease is more expensive than the car is worth, and the payments you've put in/down payment don't count -- this happens in financing too, but it would be less this soon into the term of the lease/loan).

So assuming you can get a loan for the full amount that isn't 15% (you shouldn't pay more than 10% AT MOST and that's a horrible rate for a car loan -- my car is a 5.49%) it may be better to just keep paying the lease and deciding whether you want a new car when it runs out.

And DO NOT refi your car onto a credit card

Good luck!