# Why is the lease so high on an M3?



## spta97 (Aug 18, 2004)

I've been interested in getting a M3 for years but financially it has been out of my reach. I was looking at the 330Ci ZHP and test drove it a few weeks ago. I love the car's ride but the lack of power is holding up my decision to get into a 36 month lease on it.

In speaking with my buddy the other day he says I should hold off and save up the money for a larger down payment on an M3 lease as I already have a car to drive now. Just using the numbers on the website I was able to configure the 330Ci to -$3,300 less than the M3 and yet the lease on the M3 was $220 / month more (totaling $9,000 over the 3 years).

Are the M3 lease rates just not as good as the 330Ci? I have not test driven the new M3 but I'm worried that if I do I will not be happy with the 330Ci and will not be able to afford the M3 so I won't get a BMW at all 

I do not want to buy either of them so leasing is the only option.


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## bren (Jul 1, 2002)

Putting money down on a lease is foolish. Just put the extra money in a savings account and draw on it to make the payments. Why tie your money up in something you'll never own? 

And yes to answer your question the M3 lease rates aren't as low as the other 3 series.

Oh, and one last thing....don't rely on the website for payment info, it is WAY off.


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## spta97 (Aug 18, 2004)

bren said:


> Putting money down on a lease is foolish. Just put the extra money in a savings account and draw on it to make the payments. Why tie your money up in something you'll never own?


- that's a great idea, never thought of it that way!



bren said:


> And yes to answer your question the M3 lease rates aren't as low as the other 3 series.
> 
> Oh, and one last thing....don't rely on the website for payment info, it is WAY off.


- In which direction? Is the site higher or lower? I'm assuming they are based off of MSRP which I have never paid and don't plan to.


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## bren (Jul 1, 2002)

spta97 said:


> - that's a great idea, never thought of it that way!
> 
> - In which direction? Is the site higher or lower? I'm assuming they are based off of MSRP which I have never paid and don't plan to.


The site is typically lower. It does them no good to discourage you before you come into the dealership.

If you are buying an M3 you should plan on spending pretty close to MSRP as discounts typically only run around $2k.


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## hugh1850 (Jun 20, 2003)

spta97 said:


> - that's a great idea, never thought of it that way!
> 
> - In which direction? Is the site higher or lower? I'm assuming they are based off of MSRP which I have never paid and don't plan to.


The website doesn't include TT&L in the computation.


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## JST (Dec 19, 2001)

Consider finding an 03 used and leasing that. It's what I did, the difference in payments was substantial, and I ended up with a 5000 mile, 1 year old car that was almost exactly what I would have ordered for $300 less a month.


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## spta97 (Aug 18, 2004)

JST said:


> Consider finding an 03 used and leasing that. It's what I did, the difference in payments was substantial, and I ended up with a 5000 mile, 1 year old car that was almost exactly what I would have ordered for $300 less a month.


I've always been told that leasing a used car is a bad idea because it has already deperciated and that is what you are paying for on the lease. Having said that, I REALLY want an M3 and to be honest since it IS a lease I'm not too concerned with mileage. If the car were in good condition, it really doesn't mean that much to me since I would be putting the mileage on anyway.

Would you mind sharing more about what your 03 M3 lease is costing you? Tax, title, payments, down payment, etc? I like the feeling of brand new but I think I would rather have a slightly used M3 over a new 330Ci ZHP. It seems that most people on the //M forum seem to agree


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## bren (Jul 1, 2002)

He can correct me if I'm wrong but I believe JST found a brass hat car that BMW was offering a subsidized/incentivized lease rate on....that is how I remember it anyway. Ordinarily you are correct in that the lease rate on a used car won't be substantially better than just financing it. 

In all seriousness though, if you are stretching this far to buy an M3 then it is a mistake.


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## kurichan (May 1, 2004)

spta97 said:


> I've always been told that leasing a used car is a bad idea because it has already deperciated and that is what you are paying for on the lease.


That's just plain false. In basic terms, your lease payment the difference between the agreed starting (purchase) price and the agreed ending (residual) price, divided by the number of months in your term with some fees and interest added in.

Since it's already depreciated, your starting price should be lower which is good. Maybe they don't give reasonable residuals or money factors on used cars and that causes the problem?


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## kurichan (May 1, 2004)

spta97 said:


> In speaking with my buddy the other day he says I should hold off and save up the money for a larger down payment on an M3 lease as I already have a car to drive now.


Bad advice. Put down the absolute minimum on a lease. If you can't afford the payment with minimum down, it's not the car for you. Why throw away precious cash all at once, all up front, that you'll never see again, that you could have used elsewhere?


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## spta97 (Aug 18, 2004)

bren said:


> In all seriousness though, if you are stretching this far to buy an M3 then it is a mistake.


I agree that leasing a new one is out of my budget. My concern is, that if I lease the 330Ci ZHP (which is in my budget) I will regret it after the "new car" feeling wears off due to the lack of power. If I was the type of guy to hold onto cars I would just save up for a new one but I like to have new cars every 2-3 years so along with other reasons that's why I want to lease.

My point is if I could lease an M3 for the same money as a 330 I would rather have the M3.


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## JST (Dec 19, 2001)

Yes, mine is a brass hat car, but I am pretty sure that the residuals they used are the same ones that BMWFS uses on every "pre-owned" (though not necessarily certified) used BMW. I priced out two other leases on mildly used M3s in the months before I pulled the trigger, and all of the terms were similar. 

New car companies generally offer better residual/money factor packages on new cars than used. However, my (limited) experience showed that a new enough M3 with less than 10K miles had residuals and MFs that made it highly attractive, especially since at the time dealers were still being coy about discounting new M3s. 

My memory of the details of my deal are hazy, and since it was a year ago the costs/residuals/MFs have probably changed so much that it isn't worth comparing, but I got my car for a cap cost of 46 and change and the lease payment (on a 24 mo/15K mile lease) is in the high 7s.

EDIT: A new one, similarly equipped for the same lease term, would have been over 1K/mo.


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