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02-06-2008, 06:13 PM | #23 | |
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The key here is that you have to accept a fairly high degree of risk to outperform the obscenely high lease rates that (at least) BMW Canada provides - as recently as high as 8.5% on some models (especially as bond rates of return are so, so low). If you look at that rate another way, that is, on an after-tax basis, in Canada you would have to earn about 14% on a pre-tax basis to breakeven against this cost. If the lease rate is 6%, you would need to earn about 10-11% pretax. How do you do this with little risk given that bond returns are so miserably paltry these days. I personally would sink this money into the lease as a downpayment because it is essentially a pre-tax 10-11% rate of return GUARANTEED with no risk. I totally understand where you're coming from with your argument, but many people - actually, the average buyer - would, in my view, be better served to reduce their risk and accept a very slightly lower rate of return through the downpayment on their lease. Now, if the lease rates were 2-4%, it becomes a no brainer to take the lease. I'm getting a 3.9% lease rate on my E92 335i which is coming in a few weeks. I'm not jumping for joy at that rate, but it is better than my line of credit rate of 5.75%, so I'll pay nothing down. By the way, you did not offend me in the least - apology not necessary - and even though I mentioned that your comments may have been arrogant, I'm certain that that's not an appropriate reflection of you. The internet and forums have a way of being so impersonal that it's easy not to get the full flavour of the spirit in which things are written. On that same point, if I have offended you, please do accept my apologies as well. We're all car enthusiasts and enjoy the same passion about the incredible bimmers we've purchased or are about to. :headbang: |
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