chuckg

anyone know the incentives for feb. for the 550? I live in the midwest, maybe chicago region. I saw 2.9% being advertised on ebay. Is this the new rate for feb to get rid of the 06's? any rebates or dealer cash?

jdubbs

See lease rates here:

http://forums.e60.net/index.php?showtopic=21853

550i dropped from .0026 to .0020 in February. Note that this only applies to 06 models. 07 models (begin production in March) will certainly be higher when they show up.

chuckg

I noticed the lease rates, but the interest is almost twice as much instead of purchasing, although the residual may make up for it.

jdubbs

Leasing is the way to go if you are self-employed or can otherwise write off your payment, since most any BMW purchased new must be depreciated over 20+ years (whereas lease payments can be written off in full). Leasing can also be a good idea -- if the rates are favorable -- if you are the sort who changes cars every 3 years or so. If you think you'll own your car a long while, are not self-imployed or an exec at a company that will pay for your car as a business expense, then you may be better off buying.

If you go this route and own your home, you may also consider taking out an equity line of credit on your house and buying the car outright (don't tell the dealer this until AFTER you negotiate a purchase price, as they will assume they can get some money from financing or lease payments) since mortgage interest payments are tax deductible and typically at a better rate than a car loan.

Veight

I am getting 2.9% on my purchase on an MY07. I wont recieve the car on ED till June but I will be paying for the car in April so I qualify.

chuckg

You may want to check with your dealer on that. Typically, incentives are offered to clear old model year inventory(i.e. my06). I just spoke with a business manager at the BMW dealer in our group and he said it was 2.9 acroos the board ex.M series, 3, and 7. Also, only 2006 models qualify. Promo ends Feb. 28 unless extended. Approvals good 31 days after submision.( i.e. end of March if submitted in feb). Hopefully your salesman was correct, but I would ask to speak with the business mgr to confirm. Please let me know what you find out

530iii

Someone on Bimmerfest mentioned 1.9 APR for up to 60 months but dunno if it's thru BMWFS or who?

doug_999

Believe it or not, for my 550, purchasing was cheaper than leasing!! This was using the money factor and December residuals. I had my accountant run all the numbers and the purchase came out over $6K cheaper at the end of three years. They called this a wash because I was using BMW residual numbers for both the purchase and the lease and they questioned if I could really get 59% of the car value at the end of 3 years. Still I was shocked.

Note that this is at the end of three years it is cheaper - years one and two I'm spending a lot more out of pocket because of the depreciation you mention.

Also remember that here in IL, we pay sales tax on the full amount of the car (purchased or leased)- so there is no tax advantage to leasing.

jdubbs

I don't doubt it... in December the money factor on 550 leases was still high (.0026 or .0028 I think), and residuals were low, meaning higher monthly payments. In January the residuals went up a bit, which made for better monthly payments. In February the MF went down substantially, at which point it might have become more cost-effective than buying. But still, the sales tax issue would be a negative for you (here in CA, you only pay tax as you go, i.e., on the leased amount). And again, leasing is only 100% assured to be a better option if you can write off the payment, because it's like getting a 30% refund.

Veight

Chuck, that came from the financing mgr at my dealer. I got 2.9% which now has been extended to April. Its 2.9% on any BMW 5 series MY06 or MY07.

You need to check with your dealer.