jrm21

right here, this bothers me : just Fees and Taxes upfront. $3200/Total

first of all, you don't pay taxes up front on a lease, you pay it monthly for the most part, excluding some taxes on the fees themselves. does that include a large deposit? that seems like an aweful lot of money for JUST "inception" fees. also, the 10k a year, that reduces your payment by about $30-$35 a month for the lower mileage... don't go over, it will cost you .20 a mile! add it up! can you break up the fees and taxes for me? seems like a decent deal, though.
[/quote]

Taxes up front or not are really a matter of preference. In almost 20 years of leasing cars, I have always paid taxes up front. Two good reasons in favor of this are:

1. when including taxes in the monthly, you are paying finance charges on the taxes.
2. when including taxes in the monthly, you actually pay more in taxes due to the way the tax in calculated (this is true in New York State - YMMV in other states.)


I will agree that 10k/year is on the low side. That would never work for me. Still, I imagine there are people that do drive that amount.

It is my understanding the BMW leasing has an option to buy extra miles up to a certain point in the lease. If you thought the 10k would do it for you, that might be a good option if you could increase the mileage allowance later on at a better rate than the end lease overage charge.

--Joe
[/quote]

actually, in regards to #1 above, that is not true. the lease is calcuated on it's own, and once the payment is derived, than, and only then is the tax calcuated. regarding #1, can't see how this is done.

In almost 20 years of leasing myself, I have always paid taxes monthly, for couple reasons.

1. if the car is stolen or worse, totalled, than gap covers the payoff, but, you are out your taxes, up front!
2. as far as I have always calcuated by hand, and with all the lease programs and calcs I've used, tax is based solely on the net payment


regarding the other fees, again, bank fee is being paid up front, etc. this is just a different angle of what is known as a cap cost reduction. It is a decent deal, no doubt, but why not pay your taxes monthly, and have your $1300 working for you, at 3%, that's and extra $39 a year, or another $3 off the total bill monthly, after all is said and done.

Here's the bottom line, no matter who's calcs are right - GO FOR IT! it's a great car, and a great deal!
[/quote]

You are right on the gap. That is an advantage of paying as little up front as possible.

As to the tax... taxes are a state/local issue. Each state/county/town can and will handle it their own way. In New York, you always end up paying more if you include the taxes in the payment. If your tax up front is $3,600, the monthly increase is more than $100. It has been explained to me as a finance charge, although it could also be just a different tax structure since the state is not getting all their money up front (in which case, it is a finance charge from the state). Other areas will certainly work differently, as the rules of tax collection differ in those states.

Compounding the matter in New York is that due to recent changes in liability laws, most companies no longer lease a car here. Although it is still usually called a lease, you are actually buying the car with a 37th "optional" balloon payment equal to the buyback amount (on a 36 mo. lease). This is done to keep the car/finance company name off the title and eliminate their liability. These legal semantics are also likely to affect how tax is calculated/collected.

--Joe