Best "M" Financial Decision

[SloPoke]

I'm at a crossroads right now. I purchased my 1M 17 months ago and have loved every minute since. I drove it all the way back from the dealership 1000 miles home with my 8 week old in the back seat. I'm debating now on selling the 1M and picking up a lightly used e90 M3 for around the $40k mark with no more than 30k miles. I went with the BMW Select program with the 1M so my payments are relatively low ($720). I could get the M3 for about the same per month but in an outright purchase. The question is, in 4 years, where would I be equity wise with both options. The residual on the 1M is set at about $22k. I'm going to guess it will be worth about $30k at that point with 70k miles. That's a complete guess, but who knows. The M3 would be paid off, but worth less. Now from I see, financially speaking, the M3 makes more sense. This leaves out the factor of warranty length on the 2011 1M vs. a 2008/09 M3. The M3 I would be looking at may not have the warranty anymore right now. Opinions?

[PLAY_HRD]

IF you're really going to look at the financials of both options here are a few more calculations to add up:
1. To buy an M3 you'll have to pay sales tax. i.e. 3%x$30,000=$900 or 6%=$1800
2. Insurance; My 1M is over $200 a year cheaper than my e90 M3 was.
3. Gas: 1M gets 19 city / 26 highway verse M3 14/20.

[SloPoke]

I'll be buying private party so no sales tax.

Valid point on insurance

My company pays for my gas

[doug_999]

In IL, when you register the car and note that it is purchased from a private party, you pay sales tax. I forget the formula. It appears you have something like this in GA.

That said, do you think you will have either of the two cars in four years? Do you really want either of these two cars out of warranty?

Sometimes we get stuck just wanting something different - yes, even with the 1M.....and if that is the case, go for it

[SloPoke]

I've bought private party in the past and never had to pay sales tax when registering.

[johnz330]

Originally Posted by SloPoke

I've bought private party in the past and never had to pay sales tax when registering.

Right, no sales tax with a private party purchase in GA.

[atl_1M]

Originally Posted by johnz330

Right, no sales tax with a private party purchase in GA.

That's no longer the case. Private party is now taxed effective march 1 of this year. Check out the ga dor website for the updated rules that went into effect 3/1. I was lucky enough to register mine a week before they went into effect so I was grandfathered into the old system where I pay annual ad valorem tax instead of the up front sales tax.

[CarJunkie]

If it has to be a financial decision, it may make sense . . . otherwise, it should come down to what you would rather drive. If you would rather drive the e90, its a no brainer. If not, what is the difference worth to you?

[Amnizu]

You're basically asking should "I cover the early deprecation or let someone else do it and buy used."

The financial answer is obvious most of the time, especially when it comes to German luxury cars. A used just off lease car is typically the best bang for the buck.

However, in the case of the 1M it is looking more and more like owners are only going to have to cover their actual mileage usage of the car, not much of any of the standard registration and drive off the lot depreciation has been happening. That's not to say that it won't happen, it just seems to be mitigated thus far due to scarcity.

If I were you I would refinance the 1M into a purchase and continue to enjoy it, money is cheap right now.

[b33g33]

Originally Posted by PLAY_HRD

I
3. Gas: 1M gets 19 city / 26 highway verse M3 14/20.

If anyone is getting 19 mpg in city driving, you must have the self-control of a saint and the short-shifting pattern of a 80's automatic.

My driving in 90% city and I'm very lucky if I average 16 mpg. I mostly hover around 15.5 - 15.7

[analogue]

Originally Posted by Amnizu

If I were you I would refinance the 1M into a purchase and continue to enjoy it, money is cheap right now.

Best answer right there. The 1M is currently worth more than the E90 you are looking at, and based on current trends it should hold value much better than an E90 after 4 years.

So how much over $40k is your current Select loan payoff? If it is anywhere near $40k or lower, refinancing the 1M into a traditional loan is the better financial choice.

[doug_999]

Originally Posted by b33g33

If anyone is getting 19 mpg in city driving, you must have the self-control of a saint and the short-shifting pattern of a 80's automatic.

My driving in 90% city and I'm very lucky if I average 16 mpg. I mostly hover around 15.5 - 15.7

OT - but.... I'm lucky to get 14.5

[de85275]

Originally Posted by b33g33

If anyone is getting 19 mpg in city driving, you must have the self-control of a saint and the short-shifting pattern of a 80's automatic.

My driving in 90% city and I'm very lucky if I average 16 mpg. I mostly hover around 15.5 - 15.7

I definitely don't drive like a saint, but I also don't drive in heavy traffic either. I usually get around 21mpg...

[Em/1]

Originally Posted by analogue

Best answer right there. The 1M is currently worth more than the E90 you are looking at, and based on current trends it should hold value much better than an E90 after 4 years.

So how much over $40k is your current Select loan payoff? If it is anywhere near $40k or lower, refinancing the 1M into a traditional loan is the better financial choice.

This is where you are getting good advice; I would point out that 18 mos ago I traded in a cherry, tho lightly equipped, 2009 E90 M3 with 16000 and got 41K (plus the sales tax bump of 10% here in IL where dealers use their clout with the legislature!) for it. You are not getting a good price and you are getting a car that is less fun and WAY MORE EXPENSIVE OUT OF WARRANTY! That M3 engine is a detuned race engine; by comparison our N54 is a throw-away with simple and rugged construction and many future blocks lying around in trashed cars. REFI! I can't believe anyone brings up the cost of gas with cars like these. The real advantage of the 1M is that the tank lasts a bit longer.

[M3 Adjuster]

Originally Posted by analogue

Best answer right there. The 1M is currently worth more than the E90 you are looking at, and based on current trends it should hold value much better than an E90 after 4 years.

So how much over $40k is your current Select loan payoff? If it is anywhere near $40k or lower, refinancing the 1M into a traditional loan is the better financial choice.

agree

1M worth more now and also in 4 years... .. likely lower maintenance cots.. .. lower fuel costs.. (which doesnt matter to the OP)... and it a also has a factory warranty remaining (loan cars from dealer etc).

An E90 M3 Sedan is a nice option with more doors and a little more back seat room but it will come at a cost.

You can't really go wrong with either vehicle. . but if the main goal is a better financial decision.. Keeping the 1M is the clear choice.