[David70]

Originally Posted by Dattebayo

Well for one, it is similar to lease to where your initial capital investment is much less than any down payment on a loan for the car. Also the monthly payment is quite a bit lower, my BMW Select payment is lower than even the lease rate of the car. MY BMW Select is for 5 years with a balloon of about $15000. I have owned 5 BMWs in my lifetime and a 5 year old BMW never has a lower residual than $15000. If anything, I feel the Select Program is better in certain ways as you aren't locked into a term. If you wanted to sell the car the day after you purchase it or a few months or years later, you aren't bound by the lease term.

With a low down payment and 5 year + balloon at the end I am guessing you are under water for 4+ years. Then if you want to have the car for 8 years you will be making payment for 8 years and getting rid of the car in years 1-4 will still require extra money.

I agree if the only goals are low down payment and low monthly payments that this is the way to go and the reason the lease is more expensive is you get a new car every 3-4 years without further money outlay.

[zer0cool]

I think GA does the same... so basically don't lease cars if you live in those states, cause it's a terrible deal...

[Dattebayo]

Originally Posted by David70

With a low down payment and 5 year + balloon at the end I am guessing you are under water for 4+ years. Then if you want to have the car for 8 years you will be making payment for 8 years and getting rid of the car in years 1-4 will still require extra money.

I agree if the only goals are low down payment and low monthly payments that this is the way to go and the reason the lease is more expensive is you get a new car every 3-4 years without further money outlay.

You are probably only under water for the first 2-3 years as that is where the majority of the depreciation of the vehicle takes place. After that, the depreciation slows down significantly. For example, on my 2-series, I got it for about $41K out the door. With $3,000 down and a monthly payment of $455, after 5 years, your balloon is only about $15K. Which at that point, the car can easily be sold for well more than that value. You can get a shorter term BMW Select financing, which will put the payments/down payment very comparable to the leasing prices and terms.

I personally decided to go this route because I work on cruise ships and are out of the country 9 months out of the year, while keeping the miles low on the vehicle, I can maintain the value of the car and the money saved on the monthly payment, I can easily pay out the $16K at the end of the 5 year term.

Even before working on cruise ships though, living in Southern California, it is difficult to stay within the mileage parameters of any lease. All the cars I have lease in the past, I have ended up purchasing and either driving them to the ground or sold private party as it was a wiser financial decision over paying the mileage penalties. I probably drive less than anyone else in my family and I average around 15,000 miles a year, where as the rest of my family easily do 40,000 miles + per year on 6 different vehicles.

The program certainly isn't the best options for every driver out there, but it is a great option for the position I am in.

[new2the3]

If you do the math you end up paying a few thousand more in interest with bmw select compared to a straight finance. The loan balance gets paid down much slower, hence more interest accruing the entire time.

[Dattebayo]

Originally Posted by new2the3

If you do the math you end up paying a few thousand more in interest with bmw select compared to a straight finance. The loan balance gets paid down much slower, hence more interest accruing the entire time.

That is really the biggest downside for sure if you don't pay the balloon payment off at the end of the term. The idea is that the money that is saved via the monthly payment, you could put it towards the balloon. If you pay off the balloon at the end, the interest isn't much more than a straight finance.

[dsad1]

Supposedly in Texas if you do a single pay lease they can waive the sales tax. Might be like that in Maryland too.

[new2the3]

Originally Posted by Dattebayo

That is really the biggest downside for sure if you don't pay the balloon payment off at the end of the term. The idea is that the money that is saved via the monthly payment, you could put it towards the balloon. If you pay off the balloon at the end, the interest isn't much more than a straight finance.

It still is at least 1-2k more. You have interest on your balloon payment accruing for 5 years with zero pay down and interest on the balance as well. If you run the numbers at best case scenario a select is 2k more expensive than a traditional finance but many times its at least 3k

[gtron]

Originally Posted by ProV1

How does Maryland get away with:

1. Charging full 6% sales tax up front on leased cars, not based on the monthly payment

2. Charging 6% tax AGAIN on the same car if you decide to buy it at lease end.


WTF???

chicago was bad too. i don't remember how much but payments were a third more when i lived there.

[David70]

Originally Posted by new2the3

It still is at least 1-2k more. You have interest on your balloon payment accruing for 5 years with zero pay down and interest on the balance as well. If you run the numbers at best case scenario a select is 2k more expensive than a traditional finance but many times its at least 3k

Agree, you are paying more to not pay the money back quicker. If you want the car bad enough to pay more for it and this is the only way to get it I do understand the reasoning behind it.

Also don't agree with the following -

The idea is that the money that is saved via the monthly payment, you could put it towards the balloon. If you pay off the balloon at the end, the interest isn't much more than a straight finance.

If you have the money to save toward the balloon payment at the end you should have just financed it for the 5 years and put this money directly into the payment. Or instead saving the money in an account to pay off the balloon at the end, put this money towards the principle each month (if no penalties for early payoff) and not have the balloon when it comes due (back to paying it off in 5 years). Still assuming the interest rate on the 5 years plus balloon is higher than the straight 5 years.

[dr.roro]

Bumping an old thread, but I was researching on this since my lease is up in 6 months and I'm planning to buy it out. I'm not sure if the law changed in Maryland, but it looks like they do not double tax any more.

http://www.mva.maryland.gov/about-mv.../27300-30T.htm

How do I obtain a title for my leased vehicle after I have purchased it?

In most cases, the dealer will handle the titling and registration of your previously leased vehicle through the MVA. The dealer will provide you with a bill of sale (or sales receipt) and either temporary (cardboard) or permanent (metal) license plates before you drive the vehicle off the lot. The Maryland Certificate of Title will be mailed to you later. If a lien is placed against your title, a Maryland Security Interest Filing (SIF) will be mailed to the lien holder at the same time. In many cases, the vehicle is exempt from any excise tax provided that the lessee(s) identified on the lease agreement is/are the same as the new owner(s).

Can anyone verify this was the case in Maryland?

[48Laws]

Originally Posted by Nitrousbird

I've never understood leasing...it's like having a long term rental car. I like knowing at the end of those payments the car is mine. It's great not having a car payment.

You never pay for the entire price of the vehicle when leasing though. You do when financing. Slightly more expensive, but not much of a liability like financing.