To those who have been leasing

[JasonCSU]

Originally Posted by rdano

I got bored of the STI, it doesn't have that power I'm looking for unless I go stage 2 or 3. Also, I don't want to have the racer boy look anymore, and looking for a fun car and the 135i sold me that.

First off, how are you already bored of a '13 STi with only 1100 miles on it. It is barely broken in at this point. It has 305hp, and just a stage 1 tune from Cobb with bump it up by around 36hp and 52lb-ft of torque. This is a pretty impressive car to have at age 22 and you can always swap out the rear wing to lose the boy racer look.

Originally Posted by rdano

Thanks for the advice. Unfortunately, the finance manager told me that I had to put at least $5000 down. The price for the car is 41,800 OTD, and I'm trading in my 2013 STI with at 1100 miles on it. When I got it appraised a few months ago at Audi, which was 800 miles at that time, they said the car is worth $32,000 and if I decided to trade it in to purchase their car, then I have an additional $1,200 on top of it.

I told the finance manager to set the approximate value of the STI to 32,000 for now, and I still owe $35,200 right now on the car. Since, i'm going on a negative equity, he said they have to raise the lease price.

Second, I also do not want to sound rude like others have said, but you need to take a step back and realize how much money you will be losing on this deal by trading in such a new car. While the STi is new with very low miles, it took that initial hit of depreciation like every new car does when driving it off the lot. You should not be trying to trade in a car that is not going to cover what you owe on it. There is some good advice in the posts here, though you may not be hearing it if you are absolutely determined to get a different car.

Originally Posted by rdano

I already asked the manager what's the money factor and the residual values for 36 months for 15k miles a year and the sales tax here in MD is 6%.My total payments would be 57,000, and even with $3000 negative equity the car will be $45,000? Where are you getting this numbers from?

You're right greg, the finance manager told me that one of the reason why the rate is up is I don't have much credit history and I have a loan under my name which is the STI that I cosign with my sister. I had the STI appraised in carmax as well, and they only offered $32,000 as well. The only reason I'm considering trading it in so that way I won't have to pay for the tax.

Third, keep in mind that your sister is also liable for the loan being that she is your co-signer, and that it will appear on her credit history. I don't know you financial situation, but understand that if your sister remains a co-signer assuming you go through with this trade and end up with a much larger loan, it may impact her on getting her own car or home loan in the future.

[Xyloft]

Originally Posted by JasonCSU

First off, how are you already bored of a '13 STi with only 1100 miles on it. It is barely broken in at this point. It has 305hp, and just a stage 1 tune from Cobb with bump it up by around 36hp and 52lb-ft of torque. This is a pretty impressive car to have at age 22 and you can always swap out the rear wing to lose the boy racer look.


.

lol. that's what i was thinking.

but the OP reminds me of myself i had my STI for 26 months (46,000 mi). it was my "Dream car" through college and I autoXed it and took it to the drag strip often. I was upsdie down a 3,000 on my Tiburon GT when i traded it in too.

when the 128/135 came out i was very interested and went to look. i was 3,000 upside down, and did a 72 month loan@ 5% all in all a terrible deal but i took it.

i mean... if you don't like the STI, you don't like it. the 135i is a pretty awesome car. but when the 50,000 maintenance plan is out and your paying a large car payment AND repairs/maintenance.... you're going to hate life. (at least I do).

for me the 128 is my get back into the correct car buying position car. it'll be paid off soon and I can start saving a real down payment for the next "real" sports car.

[08LMB135i]

How is it even legal to offer 9.99% interest rate on a car, that's nuts! I financed me 2008 135i when I was 21 and only paid 0.9% interest on it which worked out to around $900 total over 4 years of interest.

[bradleyland]

1) Automobile financing is pretty simple math. If you can't do the math, find someone you can sit down with who won't judge you for your decision, but will explain the math to you. That can happen through this site, but you have to be willing to listen and learn.

2) There is NO MAGIC when it comes to automobile financing. This relates back to #1, but when a dealer tells you he has to "adjust the lease payment because you have negative equity", he's really telling you that you're making a HORRIBLE financial decision. No magic, only math. A good or bad decision is defined by the math.

If you can't come to terms with these two items, then just walk in to that dealership and buy the car, because everyone here would be wasting their breath to educate you with advice you will ignore. If you're willing to accept these points, the starting point is to understand the math involved with leasing a car.

Red pill or blue pill, it's your choice. If you're willing to learn about lease financing, let us know and we can explain/post links.

[bradleyland]

Also, if you do nothing else, get a competitive quote from. Specifically David Aviles. He's a forum sponsor and an all around awesome guy. I have a feeling you'll fall over when you see just how much difference there is in the price. That should illustrate how important understanding the math is. You can waste thousands on ignorance in a transaction like this.

Northwest BMW
c/o David Aviles
9702 Reisterstown Rd
Owings Mills, MD 21117

[rdano]

Originally Posted by EnlightenedOne

You need to ask what the money factor and residual values are. At first glance your lease price does not seem good. What is the sales tax rate in your state?

Option #2 is insane. Honestly I would have already found another dealer. Your total payments would be $57,000 and even with the negative equity of $3000 the car price would only be $45,000. If your best rate is 9.99% then you shouldn't be buying the car.

Your best bet is to try and sell the car to CarMax or just sell it yourself and then approach the BMW as a separate transaction if you want to lease. If you are buying then there may be some merit in trading the car in as most states allow a tax credit on the trade-in, so in this case if your state charges 6% sales tax and you trade in the car for $32,000 that would take $1920 off of the new car price in tax savings. If you sell it yourself you won't get that tax benefit.

I also strongly suggest that you e-mail or call at least 10 dealers to see who will offer you the best deal.

Originally Posted by HeyMoe53

I would run away as fast as you can from the dealer who gave you those numbers above.

I financed my recently-purchased 128 through BMW Financial, and got 3.1%

You may want to ask yourself how much of your income you are spending on cars at this point in your life. I know that sounds rude, but hey, I'm just an old guy...

Anyway, IMO, there are better BMW dealers out there than the one you are trying to work with.

And, I am going to use the money I saved on not getting the tire and rim package on non-runflat tires, with money left over.

Originally Posted by gregthegr8

I think you guys may be overlooking an unknown that may be affecting the MF and lease rates in that you don't know what his credit score is and sounds like he has no leasing history, both of which could have a significant effect on the rate he receives and may mean he is not eligible to get the lowest MF. Or, at least any reputable finance manager isn't going to want to give him those rates due to credit risk.

Would definitely be better off though selling it privately and leasing with no negative equity rolled in, since you're paying a high interest rate on that negative equity and financing it, so is like adding insult to injury.

Originally Posted by Xyloft

lol. that's what i was thinking.

but the OP reminds me of myself i had my STI for 26 months (46,000 mi). it was my "Dream car" through college and I autoXed it and took it to the drag strip often. I was upsdie down a 3,000 on my Tiburon GT when i traded it in too.

when the 128/135 came out i was very interested and went to look. i was 3,000 upside down, and did a 72 month loan@ 5% all in all a terrible deal but i took it.

i mean... if you don't like the STI, you don't like it. the 135i is a pretty awesome car. but when the 50,000 maintenance plan is out and your paying a large car payment AND repairs/maintenance.... you're going to hate life. (at least I do).

for me the 128 is my get back into the correct car buying position car. it'll be paid off soon and I can start saving a real down payment for the next "real" sports car.

I thought the STI is exactly what I'm looking for but, it's not the right one for me. It just drives different than the 135i in so many level.

Originally Posted by 08LMB135i

How is it even legal to offer 9.99% interest rate on a car, that's nuts! I financed me 2008 135i when I was 21 and only paid 0.9% interest on it which worked out to around $900 total over 4 years of interest.

I don't know why is that, I was surprised too when I saw 9.99%, it's not like my credit score is below 500. I just don't have enough credit history which is why I want to lease the car under my name so I can start getting credit. Also, I don't plan to keep the car more than 3 years because of the warranty.

My friend who kept his STI for 6 years is now suffering for all the maintenance that need to be done, and he didn't even mod it. He just travels a lot .

[rdano]

Originally Posted by bradleyland

1) Automobile financing is pretty simple math. If you can't do the math, find someone you can sit down with who won't judge you for your decision, but will explain the math to you. That can happen through this site, but you have to be willing to listen and learn.

2) There is NO MAGIC when it comes to automobile financing. This relates back to #1, but when a dealer tells you he has to "adjust the lease payment because you have negative equity", he's really telling you that you're making a HORRIBLE financial decision. No magic, only math. A good or bad decision is defined by the math.

If you can't come to terms with these two items, then just walk in to that dealership and buy the car, because everyone here would be wasting their breath to educate you with advice you will ignore. If you're willing to accept these points, the starting point is to understand the math involved with leasing a car.

Red pill or blue pill, it's your choice. If you're willing to learn about lease financing, let us know and we can explain/post links.

Originally Posted by bradleyland

Also, if you do nothing else, get a competitive quote from. Specifically David Aviles. He's a forum sponsor and an all around awesome guy. I have a feeling you'll fall over when you see just how much difference there is in the price. That should illustrate how important understanding the math is. You can waste thousands on ignorance in a transaction like this.

Northwest BMW
c/o David Aviles
9702 Reisterstown Rd
Owings Mills, MD 21117

I appreciate your advice, this is my first time leasing which is why I'm asking for all your input. I don't want to lose a lot of money especially on the STI, if I have to keep it for another year, then so be it.

Also, by contacting David Aviles, could he help me on leasing and get better rate? Even though the price is already set? Is he a financial advisor?

[rdano]

I spoke to David Aviles just now and asked him if there's anything he can do for me. Out of curiosity, if I back out on the order I put in, am I still entitled to get my money back? I put down $1000 to order it, and if other dealership can give me a better rate, then maybe they can pull that same car I built and bring it on their lot for an exchange?

[bradleyland]

Originally Posted by rdano

I appreciate your advice, this is my first time leasing which is why I'm asking for all your input. I don't want to lose a lot of money especially on the STI, if I have to keep it for another year, then so be it.

Also, by contacting David Aviles, could he help me on leasing and get better rate? Even though the price is already set? Is he a financial advisor?

Good to hear it. Also glad to hear you're open to hanging on to your STI to avoid rolling over negative equity.

Regarding David, the rates available to you will depend on your credit rating. Here's how the money factor (same as interest) works:

BMW Finance (or another bank) gives a "buy rate" to the dealer. The dealer has the option to mark this rate up by a number of points (there's a limit). You should feel ok asking the dealer what the buy rate is. David will tell you if you ask him.

Also, the price is never set. Just about every number in an automobile financing scenario is variable. There are limits to how far you can negotiate, but the numbers are flexible.

David is one of the few dealers who will give you a no-haggle offer based on dealer invoice. There's a tool available at BMWConfig.com that will show you the dealer invoice price for a car. Dealers who offer no-haggle pricing will give you a price that is a fixed number above invoice. No matter how you configure the car, their markup stays the same, and is completely transparent. This is how I prefer to negotiate a purchase. I want to know all the numbers:

1) Purchase price
2) Residual value
3) Money factor (interest rate)

[bradleyland]

Originally Posted by rdano

I spoke to David Aviles just now and asked him if there's anything he can do for me. Out of curiosity, if I back out on the order I put in, am I still entitled to get my money back? I put down $1000 to order it, and if other dealership can give me a better rate, then maybe they can pull that same car I built and bring it on their lot for an exchange?

You can back out of an order any time. Keep that in mind. Even if your car was sitting at the dealer ready for delivery, you can back out. Don't let them strong arm you.

When buying a car, you trade patience for money. If you're impatient, you're going to pay extra. Often in terms of thousands of dollars. Again, this should always be at the front of your mind. In psychological studies, the ability to "delay gratification" is a strong predictor of future success in business. Be patient!

Dealers get a certain number of "allocations" from BWM. When you order a car at a dealer, they're giving you one of their allocations. In order for David to get the car, he would have to "buy" that allocation from the dealer. When I say "buy the allocation", I don't mean pay them, I mean that David would have to give them something in exchange. The dealer you're working with feels that they've already completed the sale, so you're going to give up $$$ if you go that route. The car is theirs, so any deal where you still get it is going to require money in their pocket. Now you've got two people looking to make a profit off of one car. I'm sure you can see why that would be a bad position to negotiate from. Remember, patience = $$$.

Rather than try to redirect this car, ask David what kind of deal he would give you on the very same car. Explain that you've talked to some people, and now you really feel like the other dealer might have taken you for a ride. If you have a copy of your car's config, send that to him. If you don't have a copy of your config, go to the website below and configure the same exact car. Download the config in Excel format and send it to David.

http://bmwconfig.com/BmwConfig/Config.aspx

[bradleyland]

Originally Posted by rdano

Out of curiosity, if I back out on the order I put in, am I still entitled to get my money back? I put down $1000 to order it...

I don't know the law in Maryland, but in most states, the dealer cannot keep your deposit if you do not accept delivery of the car.

You should have gotten a deposit receipt that has some terms and conditions. Have a look at that to see if the deposit is refundable. I would be amazed if they can keep it.

[rdano]

Originally Posted by bradleyland

I don't know the law in Maryland, but in most states, the dealer cannot keep your deposit if you do not accept delivery of the car.

You should have gotten a deposit receipt that has some terms and conditions. Have a look at that to see if the deposit is refundable. I would be amazed if they can keep it.

Hey, I just wanna say thank you for taking your time and effort on explaining all this stuff for me. I really do appreciate it, you seem to know from the experience and this is exactly what I need.

I looked at the receipt, but nothing that say about terms and condition nor refund, but I'll ask the dealer. I'm still awaiting for the money factor and the residual value from the original dealer I spoke to and from David as well. If the number still doesn't look right, I'll wait just like you said.

If I decided to get a cheaper car, say BRZ with the MSRP of $27,635. I'm sure I can talk the price down some more to about $25,000 or so and if I want to trade the STI in with an estimated value of $32,000 then what happen to the difference? Just want to see my other options.

[LuisBoston]

Originally Posted by rdano

1) BMW Tire & Rim 3yrs $1149.00 (strongly recommend as the car has run flat tires)
2) SafeLease $1275.00 covers additional wear and tear at lease turn in time)
3) paintless dent repair $399 for 3 years

That's really high. I recommend it, but I just paid $849 for 5 years.

[135ivert]

Originally Posted by rdano

If I decided to get a cheaper car, say BRZ with the MSRP of $27,635. I'm sure I can talk the price down some more to about $25,000 or so and if I want to trade the STI in with an estimated value of $32,000 then what happen to the difference? Just want to see my other options.

If you aren't happy with the STi, then I really doubt you'll be happy with a BRZ. Everything I've read says that it needs moar power.

I know you want instant gratification, but as others have mentioned, your best bet is to keep the STi for now. Probably until you are no longer underwater on it.

[EnlightenedOne]

Originally Posted by rdano

My friend who kept his STI for 6 years is now suffering for all the maintenance that need to be done, and he didn't even mod it. He just travels a lot .

Chances are if your friend kept his STI for 6 years he has totally paid it off, so he is still in a better position overall compared to you because the maintenance and repairs surely do not exceed what a monthly payment would cost if he were to get another car.

[JasonCSU]

Originally Posted by EnlightenedOne

Chances are if your friend kept his STI for 6 years he has totally paid it off, so he is still in a better position overall compared to you because the maintenance and repairs surely do not exceed what a monthly payment would cost if he were to get another car.

This is a very great point to bring up. People always seem to worry about maintenance costs, but have no problem paying ongoing monthly lease payments.