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      12-01-2020, 06:21 PM   #1
amelen
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BMW M8 Buying vs Leasing

I know it makes a lot more sense to lease these cars but did anyone go the purchase route? What was the rationale?
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      12-01-2020, 07:49 PM   #2
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Depreciation on these cars is terrible, unless you plan on owning it a loooong time, lease it.
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      12-01-2020, 08:10 PM   #3
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Quote:
Originally Posted by amelen View Post
I know it makes a lot more sense to lease these cars but did anyone go the purchase route? What was the rationale?
Lease first then if you want to keep it, purchase at end of the lease. Gives you another opportunity to negotiate price at lease end.
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      12-01-2020, 09:49 PM   #4
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Originally Posted by amelen View Post
I know it makes a lot more sense to lease these cars but did anyone go the purchase route? What was the rationale?
I purchased, paid cash in full. I wanted to finance or lease; but I decided to purchase in hopes of appeasing my wife. Didn't work, now I don't give a.

I was okay purchasing because I thought I would keep it a long time, but I'd like to swap the colors. Also I personally don't like paying interest if I can avoid it.

There is an argument that I could have kept it in the bank; however with my stock portfolio margin, I can sell unsecured cash puts 10x my availability cash. Effectively I can use empty fake air margin to "borrow" at 0% interest. So I sell 2x unsecured, knowing that I can get a loan or sell any of my cars or mortgage the house, if I need to cover any margin calls. Everything I own is paid for in full cash.
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      12-01-2020, 09:52 PM   #5
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Originally Posted by 'Cane View Post
Depreciation on these cars is terrible, unless you plan on owning it a loooong time, lease it.
I agree, I would advise anyone to lease a new car. After 3 years you will be about 10-15% difference between lease and buy. After 6 years with 2 back to back leases vs 1 buy car; you will be roughly equal but only one car vs two new. (Including fees, charges, and rates)

If you keep 7 years or more, you will slightly be ahead by purchasing.
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      12-03-2020, 09:24 AM   #6
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Quote:
Originally Posted by Resjudicata View Post
I purchased, paid cash in full. I wanted to finance or lease; but I decided to purchase in hopes of appeasing my wife. Didn't work, now I don't give a.

I was okay purchasing because I thought I would keep it a long time, but I'd like to swap the colors. Also I personally don't like paying interest if I can avoid it.

There is an argument that I could have kept it in the bank; however with my stock portfolio margin, I can sell unsecured cash puts 10x my availability cash. Effectively I can use empty fake air margin to "borrow" at 0% interest. So I sell 2x unsecured, knowing that I can get a loan or sell any of my cars or mortgage the house, if I need to cover any margin calls. Everything I own is paid for in full cash.
WOW. You're trading options on margin and apparently successfully. I salute you. Takes a lot of experience to make money there.

I'm in IPOs - been a good year and it's not over yet. Dec shaping up to be a blockbuster month. IPOs are a risky part of the market but nothing like options especially on margin.

Back to cars. Advice on this forum has been invaluable to me in deciding to lease the MY21 M8 Comp GC due into VPC - New Jersey Dec 8. I making decent money on IPOs but nothing like to encourage me to buy the car rather than lease.
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      12-03-2020, 01:18 PM   #7
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Quote:
Originally Posted by toneil44 View Post
Quote:
Originally Posted by Resjudicata View Post
I purchased, paid cash in full. I wanted to finance or lease; but I decided to purchase in hopes of appeasing my wife. Didn't work, now I don't give a.

I was okay purchasing because I thought I would keep it a long time, but I'd like to swap the colors. Also I personally don't like paying interest if I can avoid it.

There is an argument that I could have kept it in the bank; however with my stock portfolio margin, I can sell unsecured cash puts 10x my availability cash. Effectively I can use empty fake air margin to "borrow" at 0% interest. So I sell 2x unsecured, knowing that I can get a loan or sell any of my cars or mortgage the house, if I need to cover any margin calls. Everything I own is paid for in full cash.
WOW. You're trading options on margin and apparently successfully. I salute you. Takes a lot of experience to make money there.

I'm in IPOs - been a good year and it's not over yet. Dec shaping up to be a blockbuster month. IPOs are a risky part of the market but nothing like options especially on margin.

Back to cars. Advice on this forum has been invaluable to me in deciding to lease the MY21 M8 Comp GC due into VPC - New Jersey Dec 8. I making decent money on IPOs but nothing like to encourage me to buy the car rather than lease.
IPO is risky and I'm considered an insider for insider knowledge, so I sell options. People that buy options lose money 90% of the time. People that sell options either break even or win almost 90%.

I'd say that I make money about 40% of the time, break even 50%, and "lose" 10%. I don't really lose because selling puts is a buy order, so I end up owning the stock and then I sell covered calls. So my positions take longer to close but still win every time.
It's almost bullet proof, and I've been doing it for nearly 40 years.

I'd say it's 50% less risky than just buying and holding any stock. And on average I make about 31.5% profit per year in average over the past 40+ years.

When I was young, 30% of $1000 was $300 per year. Now I get to play with bigger numbers, so you can add a few zeros to that number and see why I retired at 40.

~
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      12-04-2020, 07:42 PM   #8
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      02-01-2024, 06:58 AM   #9
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Leased, it's the only way. If i like the car after 3 years, I'll buy it. The drive off depreciation is too steep to finance.
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      02-01-2024, 01:51 PM   #10
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Leased, it's the only way. If i like the car after 3 years, I'll buy it. The drive off depreciation is too steep to finance.
Yeah, but you're still paying for, and financing the depreciation through your lease payment - the majority, of which, is the depreciation component. The only reason you would want to buy the car (from a purely financial standpoint) at the end of the lease is if it was a garage queen. If you only drive 3,000 miles/year, your car's value will most likely be higher than your residual. If you buy at the residual, boom - Instant equity.

If you drive over the mileage allotment, you pay the fine at lease end and probably not buy it. There is a good chance the value is now below residual. Who would pay 75k for a car worth 68k? So, ya walk.

The depreciation is there in the car whether you lease it (BMW tells you what it is 3 years from now), finance it or buy it. The car does not car how you acquired it. The only known factor is the residual value. The rest is real world pricing based on depreciation and market forces 3 years from now.

It's kind of all the same. I got screaming deals when I leased two F90s. I ended up keeping each for only 17 months. Got out of them with very little, if any, financial damage). I bought my current M850 almost two years ago because I looked out at where we (as a country) were going to be in Dec 2023 when my last F90 lease would have been up. I could see we were heading into an insane inflation spiral and that means only one thing - much higher interest rates. Lease payments are nuts now - on top of price increases. I was going to pay cash, but swung a deal for only 2.74% - a great rate to lock in. I can keep my money invested for a much higher rate of return than that.

So it all depends. Each has their place in the car buying scheme. Some have better timing at various points in the economic cycle. It's hard to predict interest rates, but this was a no brainer in 2022. We were coming off a 40 year decline in rates and inflation was going to 40 year highs.
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      02-01-2024, 02:13 PM   #11
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Quote:
Originally Posted by snowbimmer View Post
Yeah, but you're still paying for, and financing the depreciation through your lease payment - the majority, of which, is the depreciation component. The only reason you would want to buy the car (from a purely financial standpoint) at the end of the lease is if it was a garage queen. If you only drive 3,000 miles/year, your car's value will most likely be higher than your residual. If you buy at the residual, boom - Instant equity.

If you drive over the mileage allotment, you pay the fine at lease end and probably not buy it. There is a good chance the value is now below residual. Who would pay 75k for a car worth 68k? So, ya walk.

The depreciation is there in the car whether you lease it (BMW tells you what it is 3 years from now), finance it or buy it. The car does not car how you acquired it. The only known factor is the residual value. The rest is real world pricing based on depreciation and market forces 3 years from now.

It's kind of all the same. I got screaming deals when I leased two F90s. I ended up keeping each for only 17 months. Got out of them with very little, if any, financial damage). I bought my current M850 almost two years ago because I looked out at where we (as a country) were going to be in Dec 2023 when my last F90 lease would have been up. I could see we were heading into an insane inflation spiral and that means only one thing - much higher interest rates. Lease payments are nuts now - on top of price increases. I was going to pay cash, but swung a deal for only 2.74% - a great rate to lock in. I can keep my money invested for a much higher rate of return than that.

So it all depends. Each has their place in the car buying scheme. Some have better timing at various points in the economic cycle. It's hard to predict interest rates, but this was a no brainer in 2022. We were coming off a 40 year decline in rates and inflation was going to 40 year highs.
We've bought out a couple leases in the past, both under mileage. We get to write off the lease so that's a difference maker. I'd never pay cash, I'd use the money elsewhere but everyone is different.
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      02-01-2024, 02:25 PM   #12
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Used is really the way to go with these cars. You can find many examples of very low mileage M8's for a significant discount from new. I bought 2022 with 600 miles for 109K, it has everything except CCBs.
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      02-01-2024, 02:41 PM   #13
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Originally Posted by monkeyman8 View Post
We've bought out a couple leases in the past, both under mileage. We get to write off the lease so that's a difference maker. I'd never pay cash, I'd use the money elsewhere but everyone is different.
Yup. The tax angle really helps.
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      02-01-2024, 05:50 PM   #14
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Originally Posted by overklok View Post
Used is really the way to go with these cars. You can find many examples of very low mileage M8's for a significant discount from new. I bought 2022 with 600 miles for 109K, it has everything except CCBs.
This. If one is willing to go pre-owned. I’m closing on one tomorrow and did as much due diligence as I could on the car. It’s only got 8k miles on it and it was the manager’s ride at the dealership for break-in period. Plus I negotiated a SWEET deal - and for which I need not worry about the D word.
That said I understand anyone’s reticence toward not having new and to spec. To each his/her own.
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      02-01-2024, 10:58 PM   #15
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I just got a 2024 M8 coupe, only a couple months old with ~500 miles for $30K less than sticker. Prior owner is loaded, ordered 2 cars and decided to keep the other one. Sold the M8 back to the dealership at what I'm assuming was a big loss. Some would argue the M8 is overpriced, but I'd decided that's the car I wanted, and I felt good about not having to take that immediate depreciation hit. So, I would go for a newer, used model.

I had scoured the internet and put a spreadsheet together of all the ones I found for sale across the US two months ago. See attached as a reference point.
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