E90 Lease Questions
 

Okay, I'm new to the leasing thing and I'm about to embark on it so please bear with my newbie questions.

:dunno: For those of you who are accountants or use your leased vehicle as a business vehicle, how much and how do you go about writing it off? I know you can but I'm curious what the magic formula is.

:dunno: I do not want to put any money down because conventional wisdom tells me not to. I fear that if I do put money down and the car gets totalled the next day I'm out the money. Besides, why pay up front when you can keep your money until it's due. Any thoughts on putting money down?

I went to my dealer today and talked to the sales manager. He's a very straightforward guy, low pressure, and was good with my X5 purchase from him. I have also sent a couple of people to him and they were treated well. Here's the lease he threw down for me.

2006 E90 330i (To be built for late May/early June delivery.)

-Black Sapphire/Terra (A hot, hot, hot combo!)
-Steptronic (I think given my circs, this is the better option than manual. I know, I know....)
-Premium
-Navigation (Don't care for the iDrive but the the screen is good for all other features like BT.)
-Sport
-Comfort Access (Very cool and convenient!)
-Fold down rear seats with ski bag (For hockey sticks and larger items.)
-PDC (It's a slick system and only a few hundred bucks.)
-Satellite radio prep (Just in case.)
-Metallic paint

Here are the numbers:

-Lease term: 36 months
-Mileage: 15,000 per year (I live in SoCal and 12,000 a year is rare.)
-Money factor: 0.0021 (That is pretty close to cost; 0.0004 above at most.)
-Residual factor: 62%
-Bank fee: $625 (Dealer cost, supposedly.)

-Selling price: $44,340
-MSRP: $46,370
-Dealer cost: $42,495
-Residual value: $28,671.90
-Total depreciation: $16,293.10
-Capital reduction: 0

-Drive off: $1,060.52 (License, registration, doc fees, first payment, $0 security deposit)
-Monthly payment: $654.28 (Including sales tax)

I know the dealer is making $1,845 on the deal. That's when the dealer costs are added up. He's telling me that it's the best he can do considering his "other costs". I went through it with him on the X5. There are things like advertising fees, etc. Most people say they're BS fees. Whatever. I only know that when I was pricing my X5 my dealer's price was only a couple or three hundred more than the best fleet price I could get through contacts. That difference wasn't enough to make me drive hundreds of miles and spend the time to save that money. Plus my dealer only gives loaners to those who bought from them so there's some good will to be had. They are the only BMW dealer within 90 miles.

I went to Leasecompare.com and the lowest lease for 36 months and 15,000 miles is $752. (MF: 0.0023; Residual value: $23,850; higher fees up front; $395 turn-in fee) That sounds like crap. It makes the numbers look good.

What do you think?

Never ever. put money down on a lease. Never. Ever.

Looking at the numbers for that lease, the only thing that looks high is the lease factor, Interest Rate = Money Factor x 2400, so that money factor is almost 5%!!! That's ridiculous.l Money factors should be in the .001x areas. For comparison, the lease factor on my '04 4.4i was .0012.

The dealer probably can't adjust the money factor, it's set by BMWFS, but they can adjust the pricing to offset it.

btw - the $350 turn in fee is BMWFS also, I don't think you can get around it. The $650 bank fee is not something they usually waive either, i couldn't get it waived on either my '01 or '04

330 is hot
 

The 330 is a great car and BMW is moving a lot of them.

Therefore the lease deals are not great. If this is a must buy now option fine, but I would wait the BMW lease deals in July seem to be better.

Also I would look at the deals on the 5, or a Audi A6 might be a better deal. I drove the 3 (loaner) and loved it. Was ready to buy it as a second car until I saw the price.

With regard to % write off my acountant bases it on miles driven for Bis vs Per.

Lease and tax rules will vary with jurisdiction, but the rules where I live are that all claims for business purposes must be supported by a mileage log, then you calculate all business trips as a percentage of total mileage. That % is the % claim for tax purposes, calculated against total costs. Driving to work is not counted as business use here, presume it is similar elsewhere. It used to be that seeing a client on the way to work made it a business trip, but no more. Lease costs can be offset against business income, but if you don't have a company that can lease the car then it is pretty much limited to an offset against commission or bonus income, not salary. YMMV.

With respect to the E90, it's a nice car. That will be a 2007 model, but just a thought; the 335 is rumoured to be Sept production in the coupe (not sure about the sedan, but likely 2008). Whether you want the power and price increase (plus first year issues) for the N54 or not, it should result in reductions to the price of the 330, or at least favourable lease rates. Supposedly the 325 goes away, and is replaced by a 328 (which is still a 3.0 litre, but detuned less than the 325, assume 230 hp in lieu of 215). So, not sure when or if the 330 will actually be dropped, but when that date is clear, or the 330 is not the highest power option, then that will be the cheapest time to buy a 330.

Did you drop the idea of the ED? That would be a great trip.