No, some consumer loans are and few mortgage loans are …i told myself that I was going to drop this but i can’t let this one slide either. unless you get a sub-prime rippoff this is not true. The intrest is only calculated on the principal, you do pay more in intrest than principal early on but thats because you simply owe more it is NOT like a “rule of 9′s” or a “rule of 78″ loan….in other words a regular mortgage is calculated like a simple intrest loan. when you make a pre-payment or pay extra on the principal you dont pay any intrest in that payment, it applies directly to principal and slides you forward in the amortization schedule, where the other “rule” loans have you paying a disproportionate amount of intrest up front, there are prepayment penalties built into the very structure of the loans. when you make any prepayment it simply pays off the loan quicker but you still pay the intrest so you dont reduce your principal directly by the prepayment amount

ok im done ….we are far away from MINI’s now…but please learn about the diffrent types of loans and know what you are getting before you sign anything.

Also consider what can be had for 35 in the CPO BMW market, particularly E46 330’s with the ZHP performance pack.

I’d be surprised if you couldn’t find that car for much less.

Will MINI give us a factory JCW Clubman and at what price?

answers are coming…

Too true, dr :-p. But then most consumer loans are. You pay the interest up front, then the principal. Take a look at your mortgage some time, and check out how much of your payment actually goes to paying off the loan principal in the first 10 yrs of a 30 yr loan for a real shocker. That $300K house is actually going to cost you over half a $ mill, if you stay the 30 yrs.

http://www.forbesautos.com/advice/toptens/billionaire2006/03-warren_buffett.html

What i tried to point out was that YOUR particular loan was a rip-off loan, It is not realistic comparison!….IF you financed 15k….paid 7600 in payments (24mths) and only reduced the principal 3k, Then you paid 4.5k in intrest and/or fees….thats a bad loan! your balance on the loan should not be 12k it is around 8.8k….In a realistic loan, you have equity in the car that you ARE NOT accounting for (because you put down 8k)and subtracting that from your out of pocket numbers at the end….your numbers are coming out around 4k skewed toward the lease because you arent subtracting the 4k in diffrence between the trade-in and loan balance because YOU hand no diffrence is a result of the bad financing…AND AGAIN, you said that you sell the car outright in you lease but trade in the car in your buy scenario…sell the car outright in BOTH scenarios or use dealer trade-in/residual values in each scenario….12k for a two year old MINI is not realistic at all! The MINI has held its value better than almost every car on the market…Next time you are ready to sell a 2yr MINI for 12k give me a call

Actually he is THE Financial Advisor to the rich and shameless. If you own shares in his investment company (by invitation only) he provides you with financial advice and helps you manage your investments.

Lease option for 24 months: $2500 down, $1000 lease fee, payments of 307 a month for 24 months. Total out of pocket = $9868. Owners Choice Lease option for 24 months: $2500 down, $1000 lease fee, payments of $275 a month for 24 months. Total out of pocket = $10,100. Purchase at 6% for 54 months (to keep payment in line with leases, and my “real” experience): $8000 down, payments of $317 a month, paid for 24 months. Total out of pocket = $15,608. So when I went to “trade-in” my ’04 for an ’06, was offered what was owing on the note, about $12,000. Owning vs best lease (Owners Choice) costs me an extra $5508 over 24 months.

Lease option for 36 months: $2500 down, $1000 lease fee, payments of 303 a month for 36 months. Total out of pocket = $14,408. Owners Choice Lease option for 36 months: $2500 down, $1000 lease fee, payment of $283 for 36 months. Total out of pocket = $13,688 Purchase at 6% for 54 months (to keep payment in line with leases, and my “real” experience): $8000 down, payment of $317 a month, paid for 36 months. Total out of pocket = $19,412. Owed on note: $9000. Edmonds valuation for trade-in $12,900 (I know the Dealer won’t offer anything close to that, but lets use this “optimistic” number anyway). Owning vs best lease (Owners Choice) costs me $1824 over 36 months.

So like has been said, leases make good financial sense if you are only keeping a car 2 to 3 years. I think break even is in year 4, and then 4 yrs plus, the benefits swing in favor of ownership vs leasing.

For those of you not familiar with dealership lingo, here is an explanation of what “Rule of 78″ means:

http://www.bankrate.com/brm/news/auto/20010827a.asp

http://www.smartmotorist.com/lea/lea.htm

On your bad financing decision….do the math yourself and show me if I am wrong….But

if you bought a 23k car put 8k down, financed the remaining 15k and still owed 12k after 3years …..YOU got ripped off!

Sounds to me as that your deal was a fee laden, rule of 78s (you pay intrest up front, about 75% of intrest is paid in the first halh of the term) bad idea dealer finance dept loan and is not a correct comparison

LOL…I think a financial advisor worth $52 Billion would count as being maybe as rich as his clients. It was Warren Buffett.

…no way. This example was based on my own “real” ’04 MINI. I put $8K down, on a total purchase price of $23K, and financed the rest for 5 yrs. At 3 yrs old, I looked at trading for an ’06. Amount still on the note was just over $12K, which is basically what the Dealer offered for it on trade. If I had traded it it (did not) it would have been a wash. The lease amounts/figures in the example are straight from MINI/BMW Finance, so I suspect are accurate.

This is inaccurate. Depends on each persons situation and the value of the lease vs purchase transaction. In 2006 I leased a Toyota Highlander Hybrid because it was a great lease deal vs purchase and I like to “own/lease” newer vehicles and change them every few years. When we bought our 2007 Mini in July, purchase was by far the better deal FOR US. In both cases the particulars of the options (lease vs purchase) and the particulars of our situation were the critical factors.

Mark you are dreadfully wrong! Your comparison does not acurately acount for the value of the car! and I don’t think you calculated the loan corectly. (use one that shows month by month amorization) At the end of 36months the amount remaining on the loan is about $6500 and total payments plus down is $16,500…you trade in the car in your buy scenario but sell in your lease scenario…That is not a correct comparison, and you certainly will not get only $6500 on trade….SO for the sake of discussion you sell the car privately for 14k after 3yr (in either scenario) The cost of ownership is simply -down-payments-loan bal+sold value OR -8k-8.5k-6.5k+14k = 9k

lease was 4.5k mistake using your lease numbers

A famous financial advisor once said: “Poor men buy their toys, rich men rent them.”

Have you ever noticed that the financial advisors are never as rich as their clients? the REAL wealthy people dont care what anyone else thinks about the car they drive. Read the millionare next door or rich dad, poor dad….. the truly rich dont need to overcomplicate thier lives, they just pay cash. Those who finance wheteher lease or loan are really just living to far far beyond thier means.

So….Act your wage, Live debt free!

That said, given what we know, and can surmise of pricing, I’d be hard pressed not to spec it one of 2 ways. First I’d look to the 135i with Bluetooth and the cold weather package, and depending on pricing the leather seating. That’s it. It’ll be sporty enough with 300+ hp and I can live without iDrive. I’d rather have it, but if pressed it’s low on the priority list. No sunroof. Take it European Delivery, if an option, and the wife and I will have a long weekend in Munchen, maybe a quick run to Stelvio via Davos. We’ll guess 32base plus 1k for CWP and 1k for Bluetooth so 35 plus tax etc… Second is a loaded 128i, lighter with a quicker revving engine, but weight savings negated by the extra equipment, also likely to touch 35 with ease. I prefer the former to the later but they’re both a bit of a long shot. Also consider what can be had for 35 in the CPO BMW market, particularly E46 330’s with the ZHP performance pack.

Further, questions to be answered before any self-respecting MCS driving enthusiast moves onto a 1. What will the tii concept mean when it hits production and will it make it to the US? Will it pay off to wait another year and discover the 135i get’s a power boost and a legit LSD or M-diff? Will MINI give us a factory JCW Clubman and at what price?

I’ll give you this though…leasing does seriously curtail the ability to mod you car almost completely so if you want to ding leasers for not being able to go totally “enthusiast” with their Bimmers or MINIs, sure, that’s fair.

But I am not about to apologize for enjoying the flexibility to get a new car every three years, pretty much hassle (and maintenance cost) free. And one that has the excellent driving characteristics of a BMW. It can work for some, depending on your situation and what you do with the car. I don’t put a ton of miles on my cars and I treat them very well, so I end up getting very favorable deals on the next one, and/or usually have the option to get out early by selling or swapping the lease if need be.

I will say this…leasing a MINI is not nearly as good a deal as leasing a BMW. Money factor is much higher as a rule. MINIs are priced to buy.

–Bill W.

Example. I buy a $23K MINI with $8K down, at 6% for 5 yrs (to keep the payments close to same lease vs buy ballpark). Payments plus downpayment = $19,500 over the first 36 months. Trade in at 36 months and all you will get in trade is about what is still owed on the car (personal experience on my MINI). So buy/trade at 36 months, out of pocket total (downpayment plus payments) = $19,500. Lease the same car for 36 months, lease charge plus payments = $14,500. Owners Choice lease the same car for 36 months, lease charge plus payments = $13,500. No turn-in or over-mileage charges added here, as I always sell my lease car privately just as the lease is up, since what is “owed” at the end of the lease is the Dealer Wholesale price making the car easy to sell (and then the dealer can’t charge me for over-mileage or disposal). Most buyers looking for used, will snap up as a heck of a deal a car priced close to the wholesale price. (Even though I normally make a profit on the sale, am not including that $1K or $2K I could make here which would push out the difference even more).

So if I stick to this 3 yr scenario, buying, vs. best-lease, buying costs me an extra $6 grand over an Owner’s Choice Lease. (Add-in my possible profit on my end-of-lease sale, and that can go to an $8 grand difference).

A famous financial advisor once said: “Poor men buy their toys, rich men rent them.”