Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

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Topic Author
JustWantToGetItRight
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Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Hi all, I am 53, take-home about 42K, unmarried, no children….what would you do?
—————————————-

I leased a 2016 BMW 328I
Miles: 8K and in excellent shape (I don’t drive much)
Lease expires in one month

Will Have Paid total of $16,000 in monthly payments by lease-end
Current Value of Car: $22,000
Buy Out to Keep/own Car: $27,000 more + 5k for 6-year extended Warranty = $32,000
Total of lease payments I already made for 3 years, plus buyout, plus extended warranty = $48,000 all in
—————————————-

Option 1:

Buy out BMW + Warranty with $32,000 Cash
Keep for 7 more years
Pay estimated 12K (or more) in upkeep (yearly oil, new sets of tires, new brakes, new plugs)

—————————————-

Option 2:

Buy new car (like a reliable Honda Civic) for $23,000 with cash
Keep for 12 years
Pay estimated 3K in maintenance

——————————————

Option 3:

Buy two-year old used Honda Civic (with low miles) for $17,000 with cash
Keep for 10 years (if it will last)
Pay estimated 4K in maintenance


What would you do?

Note: The BMW was a dream car and I love driving it, but I am afraid of getting trapped with high maintenance costs (in its older years) which I could be putting toward my retirement instead.

Thanks
Last edited by JustWantToGetItRight on Tue Sep 18, 2018 10:24 pm, edited 9 times in total.
stan1
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Re: BUT OUT BMW LEASE / BUY NEW HONDA 2019 / BUY USED HONDA 2017

Post by stan1 »

In my areas 2018 Honda Civic and Accord sedans are selling for up to 15% below MSRP right now. People want CUVs instead and there are many cars on the dealer's lots before 2019s come in. I'd buy a new 2018 Civic at a price well below the MSRP.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
Topic Author
JustWantToGetItRight
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Re: BUT OUT BMW LEASE / BUY NEW HONDA 2019 / BUY USED HONDA 2017

Post by JustWantToGetItRight »

stan1 wrote: Tue Sep 18, 2018 10:08 pm In my areas 2018 Honda Civic and Accord sedans are selling for up to 15% below MSRP right now. People want CUVs instead and there are many cars on the dealer's lots before 2019s come in. I'd buy a new 2018 Civic at a price well below the MSRP.
Thanks. So why did you answer the way you did? I'm trying to get to the heart of the Bogle's values, beliefs, and personal financial strategies. Is it just because there are good deals on cars right nw, or is it something deeper like: live within your means, never buy an upside-down lease, or something like that??
stimulacra
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by stimulacra »

Walk away. I don't think that car suits your income or lifestyle. Just my 2¢.

I would even wager that leasing a new BMW leaves you in a better financial spot.

If you drive that few miles a year I might consider getting a higher mileage version and/or forgo the extended warranty. The majority of expensive repairs usually correlates with mileage and/or wear and tear drive train components.
emoore
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by emoore »

Consider a used Leaf. Very cheap to buy and to operate.
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Nate79
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Nate79 »

Option 3 or other cars - buy something you can actually afford which is not what you current have.
stimulacra
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by stimulacra »

A good friend of mine owns an M3. He was freelancing full-time when its warranty expired. He took it upon himself to figure out how to do all regular maintenance and repairs on his vehicle. About half of the maintenance costs is labor and that allowed him to re-forecast his projected cost of ownership in the long term. There's plenty of tutorials on Youtube and message board forums for the F30 chassis to get you up to speed pretty quickly.
desiderium
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by desiderium »

With your income most would say the BMW is too much car.
But the fact that you are asking the question means you have some insight into this problem, so good for you.
How much cash to you have to purchase a car? I would limit the car to what you can pay for with cash.
After that develop a long range financial plan for retirement, looking carefully at how much you need to save every month.
After that you can make a budget for living expenses, including saving for the next car.
tim1999
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by tim1999 »

Even with only 8k miles, no way would I buy that car at the lease end for 27k, nor would I pay 5k for a warranty on top of that.

New Hyundai Sonatas are much nicer cars than Civics, come with a 10 year powertrain warranty, and new 2018 leftovers are dirt cheap right now. Probably not much more than you mentioned for a 2 year old Civic. Maybe look into that.

What do your non-car expenses look like?
Agggm
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Agggm »

JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Hi all, I am 53, take-home about 42K, unmarried, no children….what would you do?
—————————————-

I leased a 2016 BMW 328I
Miles: 8K and in excellent shape (I don’t drive much)
Lease expires in one month

Will Have Paid total of $16,000 in monthly payments by lease-end
Current Value of Car: $22,000
Buy Out to Keep/own Car: $27,000 more + 5k for 6-year extended Warranty = $32,000
Total of lease payments I already made for 3 years, plus buyout, plus extended warranty = $48,000 all in
—————————————-

Option 1:

Buy out BMW + Warranty with $32,000 Cash
Keep for 7 more years
Pay estimated 12K (or more) in upkeep (yearly oil, new sets of tires, new brakes, new plugs)

—————————————-

Option 2:

Buy new car (like a reliable Honda Civic) for $23,000 with cash
Keep for 12 years
Pay estimated 3K in maintenance

——————————————

Option 3:

Buy two-year old used Honda Civic (with low miles) for $17,000 with cash
Keep for 10 years (if it will last)
Pay estimated 4K in maintenance


What would you do?

Note: The BMW was a dream car and I love driving it, but I am afraid of getting trapped with high maintenance costs (in its older years) which I could be putting toward my retirement instead.

Thanks
option 3
Thesaints
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Thesaints »

Why would you need new tires if you drove 8k miles since 2016 ?
Maybe your take home pay is too low to own, or lease, a new BMW, but you can certainly afford a used one. Buy it ~7 years old and insurance + registration savings more than compensate extra maintenance.
surfstar
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by surfstar »

Shop around better - $17k for a used Civic is too much. Switch to a Hyundai or a VW Golf or ...

But yes, the BMW was overbudget, hopefully you enjoyed it and worked it out of your system. Only 8k miles a year? You could buy a used car with 80k miles for $10k and it'll last you a long time...
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Watty
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Watty »

JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Miles: 8K and in excellent shape (I don’t drive much)
If you have only driven 8K miles in three years then I think that you should consider going without a car.

If you rent a car when you need one or take taxis or Uber that would likely be a lot less expensive.


Just FYI, you can net a new 2018 Corolla LE for around $15k-$16K plus taxes and fees which might put it in the ballpark of $17K out the door depending on your local taxes. I'm not sure about Civics but you can likely get them for a lot less than what you were thinking either new or used.
boogiehead
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by boogiehead »

How many total miles do you have on your lease? Since it seems like you are way under have you tried going to carmax and see how much they willing to buy the car out from you? There might be a possibility in which they'll pay you more than what your buy out would be since your car has such low mileage and you can pocket the difference towards your next car.
Topic Author
JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

boogiehead wrote: Tue Sep 18, 2018 11:05 pm How many total miles do you have on your lease? Since it seems like you are way under have you tried going to carmax and see how much they willing to buy the car out from you? There might be a possibility in which they'll pay you more than what your buy out would be since your car has such low mileage and you can pocket the difference towards your next car.
CarMax quoted me at 22L and the lease buy out is 27K (yikes). Plus if I keep it, I need to add 5K for the extended warranty (since beamers can be really expensive to fix if something goes out on a computer). It was fun to lease,,,,,but I think it is out of my league to own or continue into another lease.
runner3081
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by runner3081 »

JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Buy out BMW
Pay estimated 12K (or more) in upkeep (yearly oil, new sets of tires, new brakes, new plugs)

Buy new car (like a reliable Honda Civic)
Pay estimated 3K in maintenance
I think that is too extreme of a difference, having owned a number of BMW's in the past. Maintenance costs aren't really much more, assuming you stay away from a dealership.

With that said, I would go with option 3.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Watty wrote: Tue Sep 18, 2018 11:03 pm
JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Miles: 8K and in excellent shape (I don’t drive much)
If you have only driven 8K miles in three years then I think that you should consider going without a car.

If you rent a car when you need one or take taxis or Uber that would likely be a lot less expensive.


Just FYI, you can net a new 2018 Corolla LE for around $15k-$16K plus taxes and fees which might put it in the ballpark of $17K out the door depending on your local taxes. I'm not sure about Civics but you can likely get them for a lot less than what you were thinking either new or used.

Lots of folks are doing Ubber for sure. I live in LA and work nearby so I could even bike to work. But wondering if I could deal with getting an Uber to go shopping.....go to Ikea to get a bookshelf.....go to the beach and chill out after a long week......a car sure does give you a sense of freedom.....and I am 54....... Good thoughts though. Thanks for the feedback
adamthesmythe
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by adamthesmythe »

Not enough information.

If your income is high buy whatever you want. Might as well make it a new BMW.

If your income is moderate buy whatever new, moderately priced Toyonda you like. Keep it for a while.

There's no compelling reason to plan your car 10 years out. No, there is. Plan to not buy a BMW for the next 10 years. Unless your income is high enough that it doesn't matter.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Thesaints wrote: Tue Sep 18, 2018 10:47 pm Why would you need new tires if you drove 8k miles since 2016 ?
Maybe your take home pay is too low to own, or lease, a new BMW, but you can certainly afford a used one. Buy it ~7 years old and insurance + registration savings more than compensate extra maintenance.
You missed the point......I'll try to be more clear.......if I keep the car for over the next 7 years, I will have accumulated enough miles and use so that it needs the breaks done replaced probably twice (I only city drive), tires change, and other stuff that costs three times as much as maintaining a Honda or Toyota.

BTW, the worst thing to do is buy a BMW used if you don't want to get hot with all the repairs and don't have a lot of money....but the best thing to do is buy a BMW used if you don't have money and you want a BMW.
Last edited by JustWantToGetItRight on Tue Sep 18, 2018 11:20 pm, edited 1 time in total.
Thesaints
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Thesaints »

A new beemer is close to 40k at its cheapest level and let's say it is maintanance free.
If you buy a well kept used one for less than 20k you save a bunch on insurance and registration and have 20k to carry forward for maintenance.
True, you won't be able to choose the color, but...

Especially for someone who does not drive a lot that's the optimal solution, IMO.
You have gone around on a F30 for 2 years; leave the honda civic to someone else. It is not the same thing.
Thesaints
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Thesaints »

JustWantToGetItRight wrote: Tue Sep 18, 2018 11:19 pm
Thesaints wrote: Tue Sep 18, 2018 10:47 pm Why would you need new tires if you drove 8k miles since 2016 ?
Maybe your take home pay is too low to own, or lease, a new BMW, but you can certainly afford a used one. Buy it ~7 years old and insurance + registration savings more than compensate extra maintenance.
You missed......if I keep the car for over three years, I will need to change the breaks twice, change the tires, and other stuff that costs three times as much as maintaining a Honda or Toyota. BTW, the worst thing to do is buy a BMW used if you don't want to get hot with all the repairs and don't have a lot of money....but the best thing to do is buy a BMW used if you don't have money and you want a BMW.
I change brakes maybe every 30k miles and I live on the hills; tires can go longer than that. At the OP's pace we are talking another 8 years, maybe more.

Personally, I can easily afford any BMW brand new, but the three I've had were all purchased 7 years old and two are still with me.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

runner3081 wrote: Tue Sep 18, 2018 11:15 pm
JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Buy out BMW
Pay estimated 12K (or more) in upkeep (yearly oil, new sets of tires, new brakes, new plugs)

Buy new car (like a reliable Honda Civic)
Pay estimated 3K in maintenance
I think that is too extreme of a difference, having owned a number of BMW's in the past. Maintenance costs aren't really much more, assuming you stay away from a dealership.

With that said, I would go with option 3.

These are just estimates......if you've owned several beamers than you would know better than me......are they expensive to keep up if I planned to keep this for the next 7 years (10 total)?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Thesaints wrote: Tue Sep 18, 2018 11:23 pm
JustWantToGetItRight wrote: Tue Sep 18, 2018 11:19 pm
Thesaints wrote: Tue Sep 18, 2018 10:47 pm Why would you need new tires if you drove 8k miles since 2016 ?
Maybe your take home pay is too low to own, or lease, a new BMW, but you can certainly afford a used one. Buy it ~7 years old and insurance + registration savings more than compensate extra maintenance.
You missed......if I keep the car for over three years, I will need to change the breaks twice, change the tires, and other stuff that costs three times as much as maintaining a Honda or Toyota. BTW, the worst thing to do is buy a BMW used if you don't want to get hot with all the repairs and don't have a lot of money....but the best thing to do is buy a BMW used if you don't have money and you want a BMW.
I change brakes maybe every 30k miles and I live on the hills; tires can go longer than that. At the OP's pace we are talking another 8 years, maybe more.

Personally, I can easily afford any BMW brand new, but the three I've had were all purchased 7 years old and two are still with me.

Wow, sounds like you know what you are doing. I could never change breaks and stuff like that.... yes, you are right, I don't drive a lot----so if I continue on this trend, it would be years before I need major work.....

But I think the real issue is whether you would pay off a car that is valued at 22 for 27 and pay 5k more for a warranty in addition to the 18k I already spent on monthly lease payments. That is 50K for someone who takes home 43K.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Thesaints wrote: Tue Sep 18, 2018 11:19 pm A new beemer is close to 40k at its cheapest level and let's say it is maintanance free.
If you buy a well kept used one for less than 20k you save a bunch on insurance and registration and have 20k to carry forward for maintenance.
True, you won't be able to choose the color, but...

Especially for someone who does not drive a lot that's the optimal solution, IMO.
You have gone around on a F30 for 2 years; leave the honda civic to someone else. It is not the same thing.

Dont get me wrong.....I love the car.....but I am feeling a little wasteful.....I make 43K and will pretty much be driving a 50K car. Thoughts?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

adamthesmythe wrote: Tue Sep 18, 2018 11:17 pm Not enough information.

If your income is high buy whatever you want. Might as well make it a new BMW.

If your income is moderate buy whatever new, moderately priced Toyonda you like. Keep it for a while.

There's no compelling reason to plan your car 10 years out. No, there is. Plan to not buy a BMW for the next 10 years. Unless your income is high enough that it doesn't matter.

I am planning ten years out because this is a financial planning blog.....I am thinking about being practical and saving for retirement instead of driving a 50K car when I take home 45K.

I'm glad I did because I could afford the down payment, have pretty credit, and never missed a payment in three years, but to BUY IT, MAINTAIN IT, and pay for the extended warranty kinds of scares me and makes me feel a little wasteful......
Thesaints
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Thesaints »

I don't do anything myself, except very minor things. Wiper blades, checking coolant/oil and the likes. The most complicated job I've ever done was replacing the motor for the moonroof. $70 on ebay and maybe 20 mins to screw/unscrew. Youtube has plenty of videos explaining how to do small jobs.

However, yes a 50k car is perhaps too much for you. Buy it when it costs 20k, or 15k. To give you an idea, the first 328 of the current series came out in 2012 and one with 60k miles in excellent conditions may be had for less than that.
That's what I'd do.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Thesaints wrote: Tue Sep 18, 2018 11:37 pm I don't do anything myself, except very minor things. Wiper blades, checking coolant/oil and the likes. The most complicated job I've ever done was replacing the motor for the moonroof. $70 on ebay and maybe 20 mins to screw/unscrew. Youtube has plenty of videos explaining how to do small jobs.

However, yes a 50k car is perhaps too much for you. Buy it when it costs 20k, or 15k. To give you an idea, the first 328 of the current series came out in 2012 and one with 60k miles in excellent conditions may be had for less than that.
That's what I'd do.

I was told that at 60 or 70K the problems start slowly but surely.....and they are expensive problems.....is this true?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

emoore wrote: Tue Sep 18, 2018 10:32 pm Consider a used Leaf. Very cheap to buy and to operate.

They look nice. But this is electric right....meaning I need a place where I can charge this baby up.....I am currently renting and parking on the street.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

stimulacra wrote: Tue Sep 18, 2018 10:38 pm A good friend of mine owns an M3. He was freelancing full-time when its warranty expired. He took it upon himself to figure out how to do all regular maintenance and repairs on his vehicle. About half of the maintenance costs is labor and that allowed him to re-forecast his projected cost of ownership in the long term. There's plenty of tutorials on Youtube and message board forums for the F30 chassis to get you up to speed pretty quickly.
I think this would be cool to do for sure. But I am worried that 50k for a car when I could be investing that money is too much. I kind of feel guilty
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

desiderium wrote: Tue Sep 18, 2018 10:39 pm With your income most would say the BMW is too much car.
But the fact that you are asking the question means you have some insight into this problem, so good for you.
How much cash to you have to purchase a car? I would limit the car to what you can pay for with cash.
After that develop a long range financial plan for retirement, looking carefully at how much you need to save every month.
After that you can make a budget for living expenses, including saving for the next car.
Well that is the thing. While I might not make currently a lot of money, I have about half a million including an emergency fund of 35k. Also, no debt. The way I got there was by being smart, so I decided to do something dumb to treat myself....LOL........It started off as a lease that I was going to turn in after three years......and then.....maybe lease again.......but them I saw that I paid 18k in three years_____I could have bought a car that I could use for another 7 years.......and put the money into Vanguard index funds. But that is the past......so now I want to do something smart again, instead of another dumb move......or let's say.......slightly lavish move.......Thoughts?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

tim1999 wrote: Tue Sep 18, 2018 10:41 pm Even with only 8k miles, no way would I buy that car at the lease end for 27k, nor would I pay 5k for a warranty on top of that.

New Hyundai Sonatas are much nicer cars than Civics, come with a 10 year powertrain warranty, and new 2018 leftovers are dirt cheap right now. Probably not much more than you mentioned for a 2 year old Civic. Maybe look into that.

What do your non-car expenses look like?
Thanks. I can afford to pay cash for something like the Hyundai.....then I could put the monthly income that would have gone into the car into index funds. Thoughts
Thesaints
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Thesaints »

JustWantToGetItRight wrote: Wed Sep 19, 2018 1:06 am I was told that at 60 or 70K the problems start slowly but surely.....and they are expensive problems.....is this true?
I don't drive a lot, just like you, and maybe I have to spend something like 1/1.5k per year on average, maybe 2 at the very most. If the used car costs 20/25k less than a new one, there you've got at least 10 years of buffer, with the advantage of not having to spend that money right away to purchase the car. This not even counting the savings on insurance and registration.
lazydavid
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by lazydavid »

runner3081 wrote: Tue Sep 18, 2018 11:15 pm
JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Buy out BMW
Pay estimated 12K (or more) in upkeep (yearly oil, new sets of tires, new brakes, new plugs)

Buy new car (like a reliable Honda Civic)
Pay estimated 3K in maintenance
I think that is too extreme of a difference, having owned a number of BMW's in the past. Maintenance costs aren't really much more, assuming you stay away from a dealership.
Agreed. At the current rate of use, it'll have 25k miles at the 10-year mark. $2k/year for a car that gets driven <3k miles/year is more than a bit excessive. My E46 3-series cost me $5,500 over 12 years and 155k miles, including brakes, tires, batteries, and wiper blades. My current E90 has been well under $1,000 excluding wheels and tires* over 7 years and 90k miles, with only one out of warranty repair.

*My current car is making close to 500 lbft of torque at the wheels, so it's expensive to keep good tires on it. But that's a choice I've made, and not a problem that would present on a 328i, so I've excluded the costs.
FireSekr
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by FireSekr »

JustWantToGetItRight wrote: Tue Sep 18, 2018 11:27 pm
Thesaints wrote: Tue Sep 18, 2018 11:23 pm
JustWantToGetItRight wrote: Tue Sep 18, 2018 11:19 pm
Thesaints wrote: Tue Sep 18, 2018 10:47 pm Why would you need new tires if you drove 8k miles since 2016 ?
Maybe your take home pay is too low to own, or lease, a new BMW, but you can certainly afford a used one. Buy it ~7 years old and insurance + registration savings more than compensate extra maintenance.
You missed......if I keep the car for over three years, I will need to change the breaks twice, change the tires, and other stuff that costs three times as much as maintaining a Honda or Toyota. BTW, the worst thing to do is buy a BMW used if you don't want to get hot with all the repairs and don't have a lot of money....but the best thing to do is buy a BMW used if you don't have money and you want a BMW.
I change brakes maybe every 30k miles and I live on the hills; tires can go longer than that. At the OP's pace we are talking another 8 years, maybe more.

Personally, I can easily afford any BMW brand new, but the three I've had were all purchased 7 years old and two are still with me.

Wow, sounds like you know what you are doing. I could never change breaks and stuff like that.... yes, you are right, I don't drive a lot----so if I continue on this trend, it would be years before I need major work.....

But I think the real issue is whether you would pay off a car that is valued at 22 for 27 and pay 5k more for a warranty in addition to the 18k I already spent on monthly lease payments. That is 50K for someone who takes home 43K.
Changing brakes is incredibly easy. Plenty of YouTube videos showing how to do it on an F30. Takes less than an hour.

Your real problem is BMW changed the lease buyout rules a month or two ago. In the past, When you turn in your leased BMW, the dealer would negotiate on price and you can buy the car for market value which is lower than your agreed upon lease buyout. In your case the car is worth $22k (according to car max) but the lease buyout is $27k

Now, BMW will not negotiate the lease buyout anymore so you have to pay the amount in your lease terms ($27k).

Your cost estimates for longer term ownership seem excessively high...$12k for 7 years just seems off base especially when you’re driving 8k miles over 3 years. An oil change at BMW is $89 and needs to be done once a year or 10k miles whichever comes first. You’ll also possibly need tires and brakes over that timeframe although that’s not definite given how little you drive. You’ll have to change your coolant 2x, which BMW charges $250 for but you can do yourself in half hour for about $30. Other than that you may have something break, but the newer BMWs are reliable and are ranked higher than many Asian brands for dependability

That said, I wouldn’t buy it out. The F30 is probably the worst 3 series BMW has made and is the reason why I replaced my E90 with a G30 5 series. The next generation 3 series will be revealed in a few weeks and the preliminary reviews are extremely promising.

Given your income though and low mileage, leasing a new BMW would be a huge mistake. Try using Lyft instead of getting a car or get a used civic.
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Jack FFR1846 »

So you have a car that's worth $22k and you're considering buying it for $32k?

If you want a closer feel to a BMW, drive a VW GTi. Much more solid, like all German cars. Less tin can with wheels zip tied like an Accord would feel. With the new warranty that VW has, it's worth consideration. Big discounts right now on both 18's and 19's.
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Leemiller
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Leemiller »

Do you own or rent? Overall, I’d say you’ve done a great job so far to have 500k saved. Depending on how it’s invested and how the market does, you will have a million in something like 7-10 years - even without putting any more money in. Once you add social security, your retirement will mean more income than you make now. We are sort of in a similar place where retirement looks more lush than today (after considering what we currently spend on mortgage and kids!)

If you love that car buy a CPO BMW. Do not buy this car - google “sunk costs” it does matter what you’ve spent, you can get the same car for less on the market.
NextMil
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by NextMil »

Keep it, but don’t buy any of the bs warranties or maintanence packages. Find a good Bmw Indy mechanic.

Enjoy your ultimate driving machine.

Also, car max is wholesale price. $27k for a 16 328i with such low mileage seems reasonable especially if you have packages on it.
dsmclone
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by dsmclone »

I bought a used CPO 2015 BMW m235xi this year. Love the car overall but if I was in your position and looking 10 years out, I would go the new Civic route. I bought the m235 knowing that I would probably keep it 3-4 years and knowing that it had already lost $15k in value since new. BTW, $21k for your car seams too low.
stimulacra
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by stimulacra »

JustWantToGetItRight wrote: Wed Sep 19, 2018 1:06 am
Thesaints wrote: Tue Sep 18, 2018 11:37 pm I don't do anything myself, except very minor things. Wiper blades, checking coolant/oil and the likes. The most complicated job I've ever done was replacing the motor for the moonroof. $70 on ebay and maybe 20 mins to screw/unscrew. Youtube has plenty of videos explaining how to do small jobs.

However, yes a 50k car is perhaps too much for you. Buy it when it costs 20k, or 15k. To give you an idea, the first 328 of the current series came out in 2012 and one with 60k miles in excellent conditions may be had for less than that.
That's what I'd do.

I was told that at 60 or 70K the problems start slowly but surely.....and they are expensive problems.....is this true?
You don't put a lot of miles on your car. Most powertrain issues (engine, transmission, driveshaft) that pop up are more a function of miles not age.

Even then you can mitigate the issue by either finding an independent mechanic that specializes in either BMW or German makes or doing simple maintenance at home. Taking an out of warranty BMW to a dealership for maintenance and repairs isn't a great idea. An independent can usually do the same job for one half the quote and they have BMW dealership parts department on speed dial, they can get most parts as fast as your service department.

BMWs are nice vehicles but they are not that rarified of a brand. They sell 300k cars a year in the U.S. It's a global bauble.

First time German luxury owners get a little too enchanted with the mystique of German engineering and the pampering they get in from the service department. A lot of that magic fades away once the warranty expires. You won't miss the free lattes taking your car to an independent mechanic, you might miss paid professionals stroking your ego.
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Thesaints wrote: Wed Sep 19, 2018 1:48 am
JustWantToGetItRight wrote: Wed Sep 19, 2018 1:06 am I was told that at 60 or 70K the problems start slowly but surely.....and they are expensive problems.....is this true?
I don't drive a lot, just like you, and maybe I have to spend something like 1/1.5k per year on average, maybe 2 at the very most. If the used car costs 20/25k less than a new one, there you've got at least 10 years of buffer, with the advantage of not having to spend that money right away to purchase the car. This not even counting the savings on insurance and registration.
So you are suggesting that buying out a car I originally intended to lease is probably not a good idea. However, If I intended to buy in the first place, getting one used would be the way to go.....right?

So are you suggesting to get rid of what I have----turn in the lease----and be done with it?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

stimulacra wrote: Wed Sep 19, 2018 7:49 am
JustWantToGetItRight wrote: Wed Sep 19, 2018 1:06 am
Thesaints wrote: Tue Sep 18, 2018 11:37 pm I don't do anything myself, except very minor things. Wiper blades, checking coolant/oil and the likes. The most complicated job I've ever done was replacing the motor for the moonroof. $70 on ebay and maybe 20 mins to screw/unscrew. Youtube has plenty of videos explaining how to do small jobs.

However, yes a 50k car is perhaps too much for you. Buy it when it costs 20k, or 15k. To give you an idea, the first 328 of the current series came out in 2012 and one with 60k miles in excellent conditions may be had for less than that.
That's what I'd do.

I was told that at 60 or 70K the problems start slowly but surely.....and they are expensive problems.....is this true?
You don't put a lot of miles on your car. Most powertrain issues (engine, transmission, driveshaft) that pop up are more a function of miles not age.

Even then you can mitigate the issue by either finding an independent mechanic that specializes in either BMW or German makes or doing simple maintenance at home. Taking an out of warranty BMW to a dealership for maintenance and repairs isn't a great idea. An independent can usually do the same job for one half the quote and they have BMW dealership parts department on speed dial, they can get most parts as fast as your service department.

BMWs are nice vehicles but they are not that rarified of a brand. They sell 300k cars a year in the U.S. It's a global bauble.

First time German luxury owners get a little too enchanted with the mystique of German engineering and the pampering they get in from the service department. A lot of that magic fades away once the warranty expires. You won't miss the free lattes taking your car to an independent mechanic, you might miss paid professionals stroking your ego.

Totally agree with the independent mechanic route----but are saying that buying out the lease is a good or bad idea----from a financial perspective, and then getting an independent mechanic?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

dsmclone wrote: Wed Sep 19, 2018 7:42 am I bought a used CPO 2015 BMW m235xi this year. Love the car overall but if I was in your position and looking 10 years out, I would go the new Civic route. I bought the m235 knowing that I would probably keep it 3-4 years and knowing that it had already lost $15k in value since new. BTW, $21k for your car seams too low.
Buying a used BMW makes sense to so many who really want a BMW because the depreciation in the first year is so extreme. So you can get a 40K BMW for 25K that is only two or three years old. With one year warranty left on the car, you do run the risk of having to deal with some hefty repairs down the line, however. You could luck out and have no problems. Or you could find an indie mechanic who you can trust that will cost cheap. Or you could learn to do it yourself. And the great thing is that you have a beautiful BMW that drives ultimately!


But Getting back to me and the original question.....my fear is that I am buying a car that is quoted at 22k at CarMax when the dealer wants 27K from me if I want to buy it out. Additionally, it has been highly recommended from professional car buyers that If I get the car, I should also get the extended warranty too. That would make it a 32K tool investment to own a car that has a higher cost of ownership than a more economical car. Surely, a more economical car is NOT a BMW, but on a BLOG that is dedicated to finances and getting rich, is living rich (getting an expensive car) the way to go? Or is spending less and investing more the way to go? Thoughts?
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

NextMil wrote: Wed Sep 19, 2018 7:42 am Keep it, but don’t buy any of the bs warranties or maintanence packages. Find a good Bmw Indy mechanic.

Enjoy your ultimate driving machine.

Also, car max is wholesale price. $27k for a 16 328i with such low mileage seems reasonable especially if you have packages on it.
Wow! Everyone is so fixated on those warranty packages....and you say not to get one.....what happens if the navigation on that things goes out? That is going to cost fortune to fix.....or I could just NOT fix it at all I suppose......
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JustWantToGetItRight
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by JustWantToGetItRight »

Leemiller wrote: Wed Sep 19, 2018 7:23 am Do you own or rent? Overall, I’d say you’ve done a great job so far to have 500k saved. Depending on how it’s invested and how the market does, you will have a million in something like 7-10 years - even without putting any more money in. Once you add social security, your retirement will mean more income than you make now. We are sort of in a similar place where retirement looks more lush than today (after considering what we currently spend on mortgage and kids!)

If you love that car buy a CPO BMW. Do not buy this car - google “sunk costs” it does matter what you’ve spent, you can get the same car for less on the market.
Wow....this was a great recommendation.....I watched this video: https://www.youtube.com/watch?v=-FzVxsUQ3_w and realized that I am really making a decision based on the fact that I already paid 18k for the lease.....and feel that if I am going to own a BMW.....I must as well just buy this one out (i know the car, I cared for the car, and there is nothing wrong with the car).

However, I now see that if I am looking at the 18K and feeling as though it was a bit extravagant (i.e., I could have bought an 18k car three yers ago and could hang on to it for another 7 years), then I am really thinking about the concept of SUNK costs. Sunk costs should really be irrelevant.

The way I need to look at this is as follows: If I walked into a dealership today as saw a car with an extended warranty on sale for 32K (when it is valued at 22K) would I buy it? I think the answer is NO.......but wow, why do we as humans so badly want to factor that 18k already spent? This is crazy. LOL.

Thanks for turning me on to sunk costs...
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Watty
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Watty »

JustWantToGetItRight wrote: Tue Sep 18, 2018 10:02 pm Hi all, I am 53, take-home about 42K, unmarried, no children….what would you do?
—————————————-
JustWantToGetItRight wrote: Wed Sep 19, 2018 1:16 am I have about half a million including an emergency fund of 35k.
You are doing fine but something like a layoff or some other setback could put you in a big bind for retirement so you need to be careful with your money.

There is no way that you can justify a BMW in any form, new, used, leased, or purchased. If cars were your passion in life and you would use it a lot then you might be able justify it as your one big splurge but it is obvious that you are not a "car guy(or girl)" since you only drive about two thousand miles a year.

There was one week this summer when I put that many miles on my car on a big road trip that I took.

I think you need to just turn it in at the end of the lease and buy a modest car that will get you around town when you need it.
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by Jack FFR1846 »

Thinking about this some more...... How about this? At the end of the lease, turn in the car. Open a Zip Car account. Drive a Zip Car when you need a car. No insurance, no registration, no taxes, no depreciation. If you don't feel like driving, call up a Lyft.
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El Greco
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by El Greco »

I agree with others. BMW is too much car for someone with your salary. You leased it, had your fling and fun. Reconsider down the line. For now, buy the new Civic,or perhaps a new Mazda3. You can probably get manufacturer 0% financing on the Mazda and it's a sharp, little ride. I would never buy out a lease, especially on a German vehicle. Guarantees that you pay well over MSRP for the car and start heading into the "high maintenance" years. Here's a good maxim: Lease German, Buy Japanese.
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by FlyAF »

Am I the only one wondering how you live in LA (w/o a monster commute) and drive a new BMW making 42 grand a year?
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wabbajack
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by wabbajack »

Suggestions for a Honda Civic for a person who enjoys driving a BMW are unhelpful at best. Once you get behind the wheel of a German car with balls, it's hard to go back to driving less exciting cars. Speaking from personal experience.

OP, your income does not afford the BMW. However, that's a sunk cost, so let's not obsess over the lease payments already made. Let me flip the questions around for you: What car would you buy for $30k? Assuming that you buy out your lease at $27k and pay for the unnecessary warranty, what are the other palatable options around that price point? How much is it worth to you to drive a car that only you have ever been in?

Used 2015-2016 BMW 3 series on Autotrader etc are going for $25k or less. A certified example would probably be $28k, which is similar to what you would buy. Alternatively, you could get an even older (2012-2013) example for under $20k and budget for future maintenance items. The point I want to make here is that you may be too attached to the car you have because it is yours. There are thousands of similar models out there, and you will most definitely get a better deal shopping around.
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Re: Buy-Out BMW Lease / Buy More Practical New Model / Buy Practical Used Model? Help

Post by caffeperfavore »

wabbajack wrote: Wed Sep 19, 2018 9:46 am Used 2015-2016 BMW 3 series on Autotrader etc are going for $25k or less. A certified example would probably be $28k, which is similar to what you would buy. Alternatively, you could get an even older (2012-2013) example for under $20k and budget for future maintenance items. The point I want to make here is that you may be too attached to the car you have because it is yours. There are thousands of similar models out there, and you will most definitely get a better deal shopping around.
I was about to say the same thing. A quick estimate on Kelly Blue Book shows that even certified 2016 BMW 328i's are going for around 25k in my area. That means that BMW should be motivated to sell the car to you and you should be able to get a better buy-out deal if you're patient and wait. Read some of the leasing forums (Edmunds, etc.). They can walk you through the process. I wonder if you could get it for 23-24k.

And if not, there's tons of gently used nice cars out there that can give you a little more luxury and performance than a Civic in that range. Consider Lexus IS (good reliability), Infiniti, Acura TSX, etc.

Update: I lost track of your salary and location. Yeah, I wouldn't want BMW maintenance costs, but stand by the used Lexus or Acura recommendation. Better yet a gently used Accord with some of the bells and whistles.
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