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Discussion Starter #1
I'm a real estate agent and can write off 75% of my car lease payments. So, if i'm looking at used 03's with 15-25K miles and can get a good lease payment does it make sense to lease?

Or is this just a wacky idea? Thanks.
 

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greer said:
I'm a real estate agent and can write off 75% of my car lease payments. So, if i'm looking at used 03's with 15-25K miles and can get a good lease payment does it make sense to lease?

Or is this just a wacky idea? Thanks.
Dear Greer:

It's not a wacky idea. In certain situations it does make sense. Having said that I'll also say that in most cases it is usually better to buy a used car than to lease one.

You might start by looking at websites that put together the people who want to get out of leases with people who want to get into leases. If, however, you find a great car that you really like that is slightly used then it can work to your advantage that that someone else has already taken the initial depreciation hit on it. You just have to be careful in negotiating the lease deal.

Make sure you understand exactly how leases work and then make sure you get all the different details of the proposed lease. What is the money factor (interest X 24) what is the residual (value of vehicle at end of lease) capitalized cost (the amount the leasing company should be buying the car for) what is the MSRP for the exact car you're looking at - this is part of the leasing equation, too. How many miles a year are you going to drive 10,000? 15,000? and how many months should you lease the car for 24? 36? 39? 48?

Armed with this knowledge then go and talk to several independent leasing companies. If you can compare a CPO car with factory lease. If available this may be the best option for you as they come with warranties. Good luck.

Derek
 

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You'd think depreciation would be lower at this point, so a lease should work out ok, but the interest rate is often jacked up higher than on a new lease. Also make sure you have a full bumper to bumper warranty for the entire term, wouldn't want to pay for repairs on someone else's car!
Mike
 

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Why not write off the car expenses- independent of lease or purchase??? You can write off the finance paments, or if you buy it for cash, you can write off depreciation as well as maintenance expenses. In ANY case, the business use (and hence the deductibility) must be justified.

I would never lease, personally. Yet I write off two vehicles (one for a horse business- go figure).

Leasing would only be a good idea, financially for me, if my BUSINESS was paying for it totally out of it's profits- and I never wanted to own the car.

There is a GREAT website on leasing over at roadfly ...finance or something. You can get a much better sense of what's a good deal. They know residuals, lease factors, etc, etc.. you can learn from others sorry tales of woe...

A
 

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I leased my CPO 03 M5. My accountant said that due to the luxury nature of the car and various tax laws combined with my business use leaseing was the only way.
 

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Discussion Starter #6
Here are the actual lease numbers I have been quoted at the dealer:

Cap cost-54K, 48 month lease, monthly payment 787+tax, $2187 drive off, residual 26,500, money factor 0.00245.

The car: 2003 Sterling Grey M5, 28.5K miles with shades, PDC, fold down seats. M audio and the car is in great condition. I have pulled Dealer records & car fax, no troubles.

So guys, is this a deal to say yes To?
 

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We leased our E39, and it was around $450 a month pre tax dollars due to my fathers company. At the end of the lease, BMW wouldnt allow us to release our old car for some reason, so to finance the rest made it $600 post tax dollars, and then all of a sudden it doesnt make sense to keep the car...
Leasing a used car can be interesting, but as long as you get a good interest rate and they dont try to get tricky with the residual value of the car, there isnt anything wrong with it. I prefer to lease new cars to keep my payments down, and life moves fast for me so I dont know what I'll be doing in 4 years, so being able to dump the car then works well for me.
That deal sounded very attractive. I know many people who lease Mini Cooper S's for $500 a month (Mini of Scottsdale...), so those numbers make good sense to me. Didnt look like you were getting hit in the deal, but I've never leased an M5 so dont take too much of what I say as gospel for your situation.
:cheers:
 

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Leasing can be a good idea...I looked into it briefly myself. I went to leasecompare.com. They are able to offer several excellent lease deals for any particular car to those with excellent credit. Leasing is more feasible for a used M5 because the residual value holds up better than in most cars, meaning your lease payment is lower. This may, of course, backfire on you if you want to purcahse the car at the end of the lease for the residual value.

Ultimately I chose to buy my car outright becuase I knew that I wanted to keep it for the long term. Interest rates for loans still seem to be better than lease interest rates as well. I have seen loan interest rates (for a used car, bought at dealer) as low as 4.25% (excellent credit); most leases are around 5.76% (excellent credit).

(Money factor X 2400 = the interest rate you are paying)
 

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Your interest rate is 5.88%.

http://1040tools.com/html/wc.dll?cptest1~calc2~leasec~my

I paid the same drive off. Your residual looks good to me. I have a 3 year lease with a residual of 37k.

greer said:
Here are the actual lease numbers I have been quoted at the dealer:

Cap cost-54K, 48 month lease, monthly payment 787+tax, $2187 drive off, residual 26,500, money factor 0.00245.

The car: 2003 Sterling Grey M5, 28.5K miles with shades, PDC, fold down seats. M audio and the car is in great condition. I have pulled Dealer records & car fax, no troubles.

So guys, is this a deal to say yes To?
 

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Greer - sounds like a decent deal to me. I assumed a lease to get into my M5 - the original lessee put close to $10k down to get his payments low, and I'm pretty much the beneficiary of that! Try looking at www.swapalease.com for some listings on M5's available for lease assumption...it takes some work over the course of a month, but you can find good deals from people who really want to get out of their existing leases...you could even have a situation where someone pays you to assume their lease! Good luck!!
 

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buymenow00 said:
the original lessee put close to $10k down to get his payments low, and I'm pretty much the beneficiary of that!
A good reminder for those who want to lease...do NOT put money down!! If the car is totaled or you want to get out of the lease, that money is gone. Instead, consider putting the same amount of cash in a money market account and drawing the money out on occasion to make up the difference between the monthly payment and what you wanted to pay each month. Also, some leases will let you put down a refundable security deposit which can lower your money factor or monthly payment...but you will get this back, no matter what.
 

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KevinM said:
A good reminder for those who want to lease...do NOT put money down!! If the car is totaled or you want to get out of the lease, that money is gone. Instead, consider putting the same amount of cash in a money market account and drawing the money out on occasion to make up the difference between the monthly payment and what you wanted to pay each month. Also, some leases will let you put down a refundable security deposit which can lower your money factor or monthly payment...but you will get this back, no matter what.
Well, on the other hand- the original owner of mine had to write a check to BMWFS for $3500 ! That, plus my check was the lease buy out amount. He rolled every cost into the lease. Either way you go you can be backwards (Although I admit you can insure yourself for any shortfall in the event of an accident- so called gap insurance)
 

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ard said:
Well, on the other hand- the original owner of mine had to write a check to BMWFS for $3500 ! That, plus my check was the lease buy out amount. He rolled every cost into the lease. Either way you go you can be backwards (Although I admit you can insure yourself for any shortfall in the event of an accident- so called gap insurance)
Why did he have to write a check to BMWFS? I've leased a few cars through them and never had to give them money at the end of a lease...and I never but money down either (besides registration, etc.).

Just curious.
 

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Oh, it wasn't the end of the lease...He rolled tax, title and registration all into the lease. There was no fees or penalties. They took the previously agreed upon residual/purchase price, added 15 payments on the principal to that, the total was the cost to get out. (They discount the payment- the monthly was around 1300, they said 400 was interest and charged 15x900... roughly) It was not a pretty lease.

The price we agreed on for me was less.

He paid the diff.

This is precisely why leasetrader, swapalease, etc work- the buy out is so high, it pays to give someone the $$ to just take it over.
 

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Discussion Starter #19 (Edited)
Here's the verdict,

The car had a clean car fax along with all dealer records which showed it was a clean car. I'm ready to buy the car all the terms are worked out, the last step before paying for the vehicle is my PPI ( pre purchase inspection).

I take it to Avus Autosport for the inspection and when they lift the car they see evidence of a major rear end collision. Also the front bumper was replaced and the clutch needs to be replaced soon.

Taking into account the damage I say i'll pay 50K no more and walk out.
So, onto the next deal.
 

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Was this vehicle CPO? And what's the name of the dealership that we should all stay away from since they either don't know a clean car from their ars...or misrepresent their vehicles? I've already put on this board that BMW of Morristown, NJ doesn't mind selling damaged goods and I appreciate the feedback from other board members on their experiences.

FYI, I have a silver 02 with 18,500 miles for sale...but you get what you pay for. PDC, Shades, and M-audio with solid black seats and titanium trim. If you want a pristine car...be prepared to pay for a pristine car...it's always worth the money. The only way to know where a car has been is to talk to the owner. I don't care how well you know the dealer...find the previous owner and call him. It's a lot easier than you'd think to get that information and from my experience...previous owners WANT to talk about their cars. We're all enthusiasts here.

We all know carfax is a joke. If you buy from a dealer, make the dealer put in writing that the car hasn't had any paintwork. Not frame damage, not flood damage...paintwork. How they react to that is indicative of what you're about to get into.
 
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