Bimmerpost
3
/
4 Series
BMW Garage BMW Meets Register Search Today's Posts Mark Forums Read
2019+ BMW 3 AND 4-SERIES FORUMS (G2x Generation) Ordering / Pricing / Order Tracking Forum Trade vs MSD on a Lease

Post Reply
 
Thread Tools Search this Thread
      02-19-2020, 10:59 AM   #1
bacampbe
Lieutenant
342
Rep
530
Posts

Drives: 2024 Z4 M40i PB
Join Date: Jun 2012
Location: Dallas, TX

iTrader: (0)

Trade vs MSD on a Lease

Hi,

I'm looking at leasing an m340i. We have an older trade that I expected the dealer to low-ball, but they appraised it at a higher value than I expected to get, and probably high enough that it's not worth the effort to try to sell it myself. (Weird, I know!).

I know people don't recommend putting unnecessary down payments on leases. Is it possible (and does it make sense) to apply trade proceeds to MSDs? Do you loose the sales tax advantage of the trade doing that? (I'm in TX, where we pay sales tax on the entire sales price even for a lease.)
Appreciate 0
      02-19-2020, 11:11 AM   #2
gofast182
Captain
614
Rep
766
Posts

Drives: 2020 M340i xDrive
Join Date: Jan 2019
Location: New Jersey

iTrader: (0)

MSDs are refundable at the end of the term so there's little worry about using your money for that. Paying extra for cap cost reduction is the big no-no.
__________________
2020 M340i xDrive, Portimao Blue
2019 X5 xDrive 40i, Mineral White
2006 S2000, Berlina Black (Track car)
Appreciate 0
      02-19-2020, 11:31 AM   #3
bacampbe
Lieutenant
342
Rep
530
Posts

Drives: 2024 Z4 M40i PB
Join Date: Jun 2012
Location: Dallas, TX

iTrader: (0)

Quote:
Originally Posted by gofast182 View Post
MSDs are refundable at the end of the term so there's little worry about using your money for that. Paying extra for cap cost reduction is the big no-no.
Thanks--my question is whether I can use proceeds from a trade to fund MSDs.
Appreciate 0
      02-19-2020, 11:37 AM   #4
kwg20
Enlisted Member
32
Rep
49
Posts

Drives: 2020 330i xDrive
Join Date: Feb 2020
Location: Pennsylvania

iTrader: (0)

Quote:
Originally Posted by bacampbe View Post
Thanks--my question is whether I can use proceeds from a trade to fund MSDs.
Absolutely.
Appreciate 0
      02-19-2020, 11:37 AM   #5
37b
☠️
37b's Avatar
United_States
86
Rep
147
Posts

Drives: M340i xDrive
Join Date: Oct 2015
Location: Apex, NC

iTrader: (0)

Quote:
Originally Posted by bacampbe View Post
Thanks--my question is whether I can use proceeds from a trade to fund MSDs.
Yes. I have done this.
Appreciate 0
      02-19-2020, 01:13 PM   #6
MUFCbmwbear
Major
MUFCbmwbear's Avatar
United_States
665
Rep
1,192
Posts

Drives: 24 M2 & 20 M340xi
Join Date: Nov 2008
Location: Chicago/Milwaukee

iTrader: (0)

MSDs
__________________
20 M340xi White Mocha
17 340i/M235i/E92 M3/135i All 6spd
Chicago-Lake County-Milwaukee-Shorewood
Appreciate 0
      02-19-2020, 02:15 PM   #7
gofast182
Captain
614
Rep
766
Posts

Drives: 2020 M340i xDrive
Join Date: Jan 2019
Location: New Jersey

iTrader: (0)

Quote:
Originally Posted by bacampbe View Post
Thanks--my question is whether I can use proceeds from a trade to fund MSDs.
Of course. Your trade has value which then becomes liquid even if you don't "see" that money.
__________________
2020 M340i xDrive, Portimao Blue
2019 X5 xDrive 40i, Mineral White
2006 S2000, Berlina Black (Track car)
Appreciate 0
      02-28-2020, 10:18 AM   #8
De1ta
New Member
United_States
5
Rep
21
Posts

Drives: 2020 M340i
Join Date: Jan 2020
Location: USA

iTrader: (0)

Quote:
Originally Posted by gofast182 View Post
Paying extra for cap cost reduction is the big no-no.
Hey do you mind expounding on this thought? Specifically, why? Not challenging you I am just about to sign my first lease and don't understand leasing 100%...
Appreciate 0
      02-28-2020, 10:23 AM   #9
37b
☠️
37b's Avatar
United_States
86
Rep
147
Posts

Drives: M340i xDrive
Join Date: Oct 2015
Location: Apex, NC

iTrader: (0)

Quote:
Originally Posted by De1ta View Post
Hey do you mind expounding on this thought? Specifically, why? Not challenging you I am just about to sign my first lease and don't understand leasing 100%...
The gist of it is if you total the car the next day that cap cost pmt is a goner. BMW gets made whole and you walk away without a car and without your down payment.
Appreciate 1
De1ta4.50
      02-28-2020, 10:27 AM   #10
De1ta
New Member
United_States
5
Rep
21
Posts

Drives: 2020 M340i
Join Date: Jan 2020
Location: USA

iTrader: (0)

Quote:
Originally Posted by 37b View Post
The gist of it is if you total the car the next day that cap cost pmt is a goner. BMW gets made whole and you walk away without a car and without your down payment.
Makes sense, thanks.

Ignoring that real risk for a second, does the cap cost pmt reduce the total cost of the loan, or worse, increase it?
Appreciate 0
      02-28-2020, 10:49 AM   #11
37b
☠️
37b's Avatar
United_States
86
Rep
147
Posts

Drives: M340i xDrive
Join Date: Oct 2015
Location: Apex, NC

iTrader: (0)

Quote:
Originally Posted by De1ta View Post
Quote:
Originally Posted by 37b View Post
The gist of it is if you total the car the next day that cap cost pmt is a goner. BMW gets made whole and you walk away without a car and without your down payment.
Makes sense, thanks.

Ignoring that real risk for a second, does the cap cost pmt reduce the total cost of the loan, or worse, increase it?
It's basically like prepaying for the lease. Your monthly payment is lower and you'll save a bit on interest.
Appreciate 1
De1ta4.50
      02-28-2020, 04:24 PM   #12
wtwo3
Major General
wtwo3's Avatar
17864
Rep
5,462
Posts

Drives: 23 X7 40i; 23 M3; 24 cooper s
Join Date: Aug 2019
Location: IL

iTrader: (0)

Garage List
Quote:
Originally Posted by De1ta View Post
Makes sense, thanks.

Ignoring that real risk for a second, does the cap cost pmt reduce the total cost of the loan, or worse, increase it?
It reduces it, but by very little. That's why cap cost reduction on a lease is typically not very beneficial, and when you do factor in the risk, doesn't make much sense.

There are also single-pay leases which help reduce the cost of the loan slightly, but they operate under a different set of rules and do not carry the same risk as a down payment would.
__________________
2023 BMW X7 xDrive40i
2023 BMW M3 6MT
2024 Mini Cooper S Convertible

'20 BMW m340i... '20 BMW X5 40i... '16 Infiniti Q50 RS 400... '10 Lexus RX 350... '08 Lexus IS 350... '00 Nissan Maxima... '93 Nissan Maxima
Appreciate 1
De1ta4.50
Post Reply

Bookmarks

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 03:36 PM.




g20
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2024, vBulletin Solutions Inc.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST