Lease without money down
 

Does BMW offer leases without money down?

That depends on your credit worthiness. If you've had a loan with BMW Financial before, you won't have a problem.......Phil

if you did get 0 down for lease, your payments would be really high

Correct, zero down = high lease payments but you're still responsible for "drive off" as in registration fees, taxes, and normally first mo. lease payment.

Higher payments for sure, and interest on the amount that isn't put down. (Did that make sense?!) BUT, if anything happens to the vehicle (i.e., totaled), gap insurance pays it off at the full amount remaining on the lease. If a substantial amount of money was put down, and the vehicle it totaled, the amount of money put down is lost. In that case, the insurance company wins. (They need to pay out less.)

Not to say that one should plan to have a totaled (or stolen) vehicle, but it is a consideration.

Joel

I never put money down on a lease, and most financial planners/advisors will tell you it is a bad idea in general. I write my lease payments off, so it is of no benefit from that financial standpoint alone.

Yes, one of the biggest advantages of leasing is that it requires less money to get "into" the car. It's true if you put some money towards cap reduction (down payment) you will pay less on finance charges, but the general idea is that you can take that money and invest it (perhaps in the stock market) and earn a greater ROI.

At the end of the day, do what feels best for YOU. Just remember, as JB pointed out, if the vehicle is totaled or stolen, the money you put down will not be repayed to you by your insurance company.

I don't believe that is necessarily true. Whether one would get paid by their insurance company would depend on the value of the vehicle at the time of the totaled/stolen vehicle. If the value exceeds that amount owed to the leasing company, you would get the difference back.

I believe that would be an extremely rare case. Leases are designed to have the "rent" closely follow the depreciation (plus interest, of course). That keeps the payments as low as possible, while ensuring that the leasing company isn't taking a hit when the vehicle is returned. (If the depreciation is under-estimated, they take the hit on resale. If it is over-estimated, the payments are too high for the buyer. The "sweet spot" is what leasing companies desire.)

The scenario you paint would most likely only be relevant in the last six to eight months of the lease on average. That means that, from a risk perspective, the lessee is exposed for a majority of the lease, if money was put down. The reverse (little/no cap reduction), however, the lessee is not exposed---the gap insurance company is. (In the likely event the vehicle is "upside-down," [more is owed than the vehicle is worth] they make up the difference in the negative equity.)


Further any decent financial management of the money that would have been used for cap reduction would likely erode any gain from positive equity that may have been present---inclusive of interest charges. ING Direct, for example, has very good rates for plain savings accounts that often eclipse what one would pay in interest on an automotive loan. (Presuming a good credit rating.)

Joel

:iagree: , I also write my lease payments off on my business car but I would never put money down on it. Also I dont lease for my personal autos