Quote:
Originally Posted by jd_perspective
General guidance is 1% rule. So a $60K car = $600/mo. before tax.
Instantly you know if it's high or not. I have had numerous leases and never have been over that except once - but I acted stupidly on that lease.
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I'm compelled to dispel the 1% myth. 1% does NOT tell you if it's a good deal or not, because there are many more non-negotiable factors involved (residual value, incentives, geographic markets, timing, and overall discount-ability of the specific model in question).
On one car, 1% might be an unrealistically incredible deal, while on another it might be a pretty crappy deal. Case in point, on my X5 1% was unrealistic when I ordered it, however on my 3 series 1% would have been simply an OK deal, not good but not bad. On an M8 coupe 1% would not be a good deal as discounts can get quite heavy on them.
Another things to consider - If someone doesn't currently have a BMW and doesn't qualify for loyalty causing them to fall outside of the "1% rule", is that automatically a bad deal?
To truly evaluate if something is a good deal or not, you have to consider what sorts of discounts others have been able to achieve on the same model in your market. For that, forums like these as well as leasehackr are very valuable.
1% is something someone at one point came up with as the lazy-man's way of evaluating a deal, but it needs to be put to rest.