[budfox]

Say your paying $700/month for a new $45,000 335i on a 36 month lease.

$700 * 36 = $25,200. Subtract that from the sales price ($45,000-$25,200)= $19,800 remaining.

Say you financed the car for an additional 36 months. $19,800 / 36 = $550 per month.

Keep the car for 1 year 12 * 550 = $6,600 and you have a remaining balance of ($19,800 - $6,600) = $13,200.

Sell it with a residual value of approximately $19,000 and you would have $5,800 in equity.

Smart, Stupid or do I not know what the F*&% i'm talking about?

[MIKEYMIKE]

Where is River Oaks?

[shimshimhada]

What about financing costs? I'm pretty sure there are factors which weren't factored in to prevent that.

[canucklion]

haha, I'm with Shim, did you consider all the relevant financing/leasing costs???
but if you have info on 0% financing or leasing, please share with us

Originally Posted by shimshimhada

What about financing costs? I'm pretty sure there are factors which weren't factored in to prevent that.

[BMW F22]

Originally Posted by budfox

Say your paying $700/month for a new $45,000 335i on a 36 month lease.

$700 * 36 = $25,200. Subtract that from the sales price ($45,000-$25,200)= $19,800 remaining.

Say you financed the car for an additional 36 months. $19,800 / 36 = $550 per month.

Keep the car for 1 year 12 * 550 = $6,600 and you have a remaining balance of ($19,800 - $6,600) = $13,200.

Sell it with a residual value of approximately $19,000 and you would have $5,800 in equity.

Smart, Stupid or do I not know what the F*&% i'm talking about?

The residual is set by BMW. So when you turn in the car at the end, you're gonna be financing ~63% of whatever the original MSRP is. So say after 3 years the RV of a 335 is 28,000 (63% of whatever the MSRP was), you're gonna be financing that amount. SO there is flaw in your method.

[roppongicorolla]

Look up TVM.

[BMW F22]

^ you mean TMV- true market value

[btc]

and don't forget to add Tax..

[ward]

and that you're probably not going to want to keep your car for that long

[BMW06]

Originally Posted by BMWE90

^ you mean TMV- true market value

No he meant Time Value of Money.

[AW330i]

Originally Posted by MIKEYMIKE

Where is River Oaks?

I could be wrong about his meaning but, it is a neighborhood here in houston...

[e90fan1234]

And if you finance and keep the car for a total of 60 or 72 months, don't forget to factor in maintenance and repair costs after 50,000 miles or 4 years.

[Hawkshaw]

Originally Posted by budfox

Say your paying $700/month for a new $45,000 335i on a 36 month lease.

$700 * 36 = $25,200. Subtract that from the sales price ($45,000-$25,200)= $19,800 remaining.

Say you financed the car for an additional 36 months. $19,800 / 36 = $550 per month.

Keep the car for 1 year 12 * 550 = $6,600 and you have a remaining balance of ($19,800 - $6,600) = $13,200.

Sell it with a residual value of approximately $19,000 and you would have $5,800 in equity.

Smart, Stupid or do I not know what the F*&% i'm talking about?

Assumptions: Interest = 5%
Tax = 10%

- $700 a month for 36 months implies a residual value (after considering taxes and interest) of $26,144 (not 19,800).

- Financing for another 36 months will cost (with interest but no tax) will cost $709 a month.

- Keeping for 12 months will cost 12 * $784 = $9,408

- Remaining principle on the car will be $16,911.

- You sell it for $19,000, pay off the $16,911 and are left with $2,089.

- Total out of pocket expense for driving the $45,000 car for four years would be 36 * 700 + 12 * 784 - 2,832 = $31,776 (not including maintenance, gas, insurance, etc)

[kevbh]

Originally Posted by budfox

Say your paying $700/month for a new $45,000 335i on a 36 month lease.

$700 * 36 = $25,200. Subtract that from the sales price ($45,000-$25,200)= $19,800 remaining.

Say you financed the car for an additional 36 months. $19,800 / 36 = $550 per month.

Keep the car for 1 year 12 * 550 = $6,600 and you have a remaining balance of ($19,800 - $6,600) = $13,200.

Sell it with a residual value of approximately $19,000 and you would have $5,800 in equity.

Smart, Stupid or do I not know what the F*&% i'm talking about?

I'm not really familiar with leasing... Do you have to pay some money out of pocket in the beginning when you sign the lease, like a down payment? If so, I think you would need to add that to your calculation. The other big factor will be what you can actually sell the car for at the end of year 4. As mentioned earlier, you could factor in the Time Value of Money since you expenses are not earning interest invested elsewhere, but given the current interest rate environment, I don't think that would be significant for this example.

What is more discouraging is if you calculate the actual cost per mile to drive the car in this example (or any new car). In three years you'll have spent $25,200, and I'll assume you're limited to 36,000 miles (12,000/yr). If my math is correct, you'll be spending $0.70 per mile without factoring in the cost of gas and insurance! Oh well, gotta pay to play I guess...

[txusa03]

Originally Posted by shimshimhada

What about financing costs? I'm pretty sure there are factors which weren't factored in to prevent that.

exactly, I am no math teacher but I have financed 3 cars and a mortgage and it aint that simple as +-...you left out the Finance Charge/Interest Rate. No bank is going to lend you money for free.