Life Lesson- BMW SELECT Never Again !!

[youngman1234]

A few years back I thought the bmw select would be a good option, smaller monthly and one balloon paymebt but don't have to worry about Miles.

I learned last year the worst mistake in my financial life. Will never happen again !!! Normally we never did leases as we drove a lot of miles. But now I have figured out the best options. We bought 2 toyotas use these for highway and long work drives. And leased 2 cars: Range Rover and Maserati.

But will never again do select financing. I was having a 12k on my BMW X5...got the dealer to take some off the new car and give me a lil more for the bmw. So total loss was 10k.... I will never do this again. From
Now on just buy toyotas and lease the nice cars...

[Anonymous]

Not sure I quite understand.

I have a BMWFS Auto Lease, with a balloon payment at the end. Allotted 12k/year miles over a 36 month term. Are you saying you tried to trade in the BMW and ended up having a mileage issue?

Could you explain?

[youngman1234]

I never heard of a lease with a ballon payment.

I bought a 2013 BMW X5 and when through bmw select financing. What they do is approx 68% they finance for 5 years and then you have a 32% balloon payment at the end of 5 years. No mileage restrictions beacause its bought not leased. But if you drive a lot then the Loan to value will be negative versus amount owed to bank. I owed like 40k to bank when car was only worth like 30-31k due to age and mileage. Now I learned the luxury cars just lease.

[Anonymous]

Yeah. A dealer tried to have me do a BMW Select on a BMW 6 series but I read through all of it and did my research. No way I would do that. Might as well lease

[fury1995]

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@youngman1234 wrote:
I never heard of a lease with a ballon payment.

I bought a 2013 BMW X5 and when through bmw select financing. What they do is approx 68% they finance for 5 years and then you have a 32% balloon payment at the end of 5 years. No mileage restrictions beacause its bought not leased. But if you drive a lot then the Loan to value will be negative versus amount owed to bank. I owed like 40k to bank when car was only worth like 30-31k due to age and mileage. Now I learned the luxury cars just lease.

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This sounds like an open ended lease.

This is actually how leases used to be back in the day.

Times have changed over the years and all leases are closed end leases now but they weren't then.

OP, if you had leased the BMW and had driven 10K miles / year more than planned, you would have had a similar mileage penalty anyway. 

[Anonymous]

All luxury car lose value.. Reason u owe more than what it's worth is cuz ur payment is lower compared to finance... Right now a x5 ranges from 60-115k so just imagine the monthly payment on a lease compared to a purchase

[Anonymous]

I will never lease a car.  I rather buy a 2 year older car with only one previous owner. 

[fury1995]

People have different preferences... 

For instance..

I will never finance a car that I know I'm not keeping longer than 3 years.

If I can't pay cash, I'll lease it.

[Anonymous]

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@fury1995 wrote:

People have different preferences... 

For instance..

I will never finance a car that I know I'm not keeping longer than 3 years.

If I can't pay cash, I'll lease it.

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That's right.. For me even if I don't keep a vehicle for over 3 years I still wouldn't lease cuz the extra miles will kill me at end of lease anyways

[youngman1234]

Imagine for a minute if I leased versus buying:

My payment would have been around the same $700-800 a month with 15k a year mileage allowance.

I had the car for 3 years. They would have gave me 45k miles but I had 63k. Putting me over of about 18k miles at 20 cents my loss was only $3600 versus the 10k loss I took. Hands down lease from now on. Plus we can write it off for business purpose