10-04-2018, 06:27 PM | #1 |
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Dealer pushing prepay lease
Most of the time, I have not leased my cars and have had quite a few BMWs over the course of time. I usually pay my cars off after 2 years and then have no payments for another 2 years or so. My M5 is on order for later this year and my client advisor is pushing me to do a prepay lease. I did some research on it but was curious if any of you have had experience with a prepay lease. The prepay lease deal is CP M5 price $114,000 - trade M3 = one time payment $21,600 for 3 years/12K miles.
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10-04-2018, 07:12 PM | #2 |
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I would not trade your M3, sell it privately.
Prepay leases are a great deal for BMW, not necessarily for you. If you have the cash to pre-pay, put it in a fund and collect the growth/dividend as you make your payments. What is the incentive/discount to pre-pay?
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10-04-2018, 08:08 PM | #3 |
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I believe when you do a prepay lease, BMW waives the sales tax on the car (i.e., they pay it on your behalf). In Texas, that can be a substantial discount as sales tax is 6.25% on the full price of the car (not just the leased/depreciated value over the lease).
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10-04-2018, 08:22 PM | #4 |
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Are you sure about having to pay full sales tax on a lease? I didn’t think that was the case. Thought you only pay sales tax on depreciation amount.
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10-04-2018, 08:40 PM | #5 |
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I wish this was the case, but every state is different. In Colorado I only paid tax on the monthly payment. Texas instead charges tax on the overall price of the car, even though it's only a 36 month lease. I leased a 2017 Acura NSX with an MSRP of $206k. Texas was going to charge me about $13,000 in taxes spread out over 36 months. I decided to register the car in Colorado. The savings were astronomical.
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10-04-2018, 08:47 PM | #6 |
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If you lease in Texas, you pay tax on the agreed purchase price for the lease. On a $100,000 car, the sales tax = $6,250. If you do a 1 pay lease, you can avoid the sales tax amount. What happens to the amount of money paid up front if you total the car in the first month of leasing? I would think you would recover a good amount of the prepaid lease, but not sure.
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10-04-2018, 09:58 PM | #7 | |
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Quote:
That averages down to $600/month all in. Anybody saying to put that money in a separate account and collect the interest or dividends on it instead of THAT deal has no idea what they are talking about. |
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10-04-2018, 10:03 PM | #8 | ||
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Anyone can get that lease if they put 50k down. |
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10-05-2018, 01:50 AM | #9 | |||
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Quote:
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10-05-2018, 03:53 AM | #10 | ||||
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Quote:
https://www.leaseguide.com/articles/prepaid-lease/ |
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10-05-2018, 04:11 PM | #11 |
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I actually printed out that exact article. Good material and i used it for the dealer. Had to talk to the finance dude.
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10-08-2018, 08:28 AM | #14 |
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Exactly!!!!! You pay the depreciation up front.
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