Originally Posted by sarafil
yes, it does work but mostly at higher MSRP ($80k+ usually)... for a 3er or regular 5er, the math usually works out best to just buy 12k or 15k miles per year on the lease.
Run the scenarios yourself... do a 10k, 12k, 15k scenario and in each "buy" more miles to get to 20k miles. You'll probably find the 15k lease + 5k extra miles scenario is cheapest. Plus, if you buy the extra miles upfront as part of the lease, they are $0.15 vs. $0.16 AND the ones you don't use are refundable. If you buy miles during the lease for $0.16 but don't use some of them after, BMW won't refund for those.
??? You can't really be serious thinking this is a good thing....
$0.15 for it. If they refund that mile to you three years from now, you will receive $0.15. You aren't coming out ahead or breaking even on that arrangement; you're losing. You are giving someone free use of your fifteen cents for three years at zero interest.
A dollar invested today that will three years later return only a dollar is, to you, zero rate of return. You spent the present value of a dollar, which is a dollar, to get the future value only one dollar. The longer the term, the worse it is for you.
I realize this involves the time value of money, but since we are talking about a business and not an individual, the time value of money and the as well as the cash flow impact of this leasing decision is germane.
So far, I have yet to see anyone here present a scenario that yields a breakeven outcome for a business, that is, neither net gain nor net loss on the use of resources. I do see net loss/cost; I don't see net gain/miscellaneous income.