sell bmw and lease a car to pay mortgage faster?

[twoblacknines]

Hi, I'm trying to gain some insight from some people smarter than me.

I bought a brand new 2006 bmw 325i last year and paid it off in cash. After options and tax the total was ~39k.

I bought a condo this summer and have a 103k mortgage on it right now. I have been thinking it would be a good idea to sell my BMW (they have been going for around 34-35k so I think I am only losing 4-5k on my car for getting more than 1 year's use out of it). I would then use around 30k of that money towards my mortage. This would eliminate the PMI in my mortgage and make it so my monthly mortgage payment would be going more towards principle than interest.

I would then lease a car. The reason I would lease is I want to keep the same class car I have now, although not neccesarily a BMW, looking at Mercedes Benz also. Now I have heard leasing a car is generally bad but to me it seems that the money invested in my car as of right now would be better served invested in my condo, which should appreciate in value compared to my car which will keep depreciating. I saw that when you lease you pay some extra money up front. Do you get this back or is it just an extra fee?

I am not looking for people to tell me to get a cheaper car. I know that it is smarter economically but I really enjoy driving a nice car and I think sometimes you have to enjoy the money you make.

So does this idea make any sense? Off the top of my head it seems that the money I would be saving in interest towards my mortgage > the money I would spend on leasing, making this a good idea.

I appreciate any thoughts and insights. I should note that I am sitting fine financially, so it's not like I need to do this to make my house payments. I'm just trying to make my money work for me better. My goal is to pay off my condo this year.

[twoblacknines]

I forgot to mention I have a no doc loan on my condo giving me a higher interest rate. I believe its at 7.25%. I have a 30 year fixed but I always intended to pay this off ASAP.

[Thremp]

Move into hovel. Give away all material possessions.

[Thremp]

I'm trying to get my head around this. If you can pay condo off in one year... Why not keep beamer and pay condo off in two?

Leasing a car sucks in general. And you home loan sucks also. Doesn't leasing a car of that cost.... end up being like 2-4k due at signing?

[twoblacknines]

well that is what I am unsure of. The money you pay at signing, is that like a deposit and you get it back by taking care of the car, or is it gone?

The only reason I would sell the car is to pay off the mortgage faster, so I would save a bunch of interest. That is where my question lays. Maybe it is a dumb idea, that was what I was trying to figure out. If there are a bunch of hidden fees associated with leasing a car then it wouldn't make sense.

[Thremp]

Its gone.

I'd just hold tight and pay other the mortgage in 16 months or whatever.

[twoblacknines]

another option would be if instead of leasing I bought another car, but financed it. If I could get around 3.9%- 4% it would be a lot less than the 7.25% I am paying on the condo.

I am probably making this too complicated though, and should just keep the car (I do love it). This idea just came to me on a whim, so I figured I would at least look into it, not really expecting it to be the best option.

[SlowHabit]

I don't mean to hate but shouldn't you be thinking about this before you bought the beamer and then the condo? You're losing a lot of money by paying extra percentage points on your mortrage and your PMI. FWIW, I would've bought the house first and then the beamer.

As for your current situation, I would sell the beamer and pay whatever the mortrage needs and drive a shietty car for a few months. Then after your financial situation is stable, you can resume your baller status (and indirectly know who the gold-diggers are). [img]/images/graemlins/cool.gif[/img]

[dc_publius]

If the only alternative is to either lease or buy another expensive car, then you're better off just keeping your current ride. Paying off 30K of you mortgage doesn't carry nearly the benefit to offset depreciación/lease costs. It sounds like you just want a new car.

Also, to get a better idea of what you can get for your car, check out autotrader.com

[pig4bill]

[ QUOTE ]
So does this idea make any sense?

[/ QUOTE ]

No.

You would lose the money that depreciated off your car. Then you would turn around and lease another car, with monthly payments that are more than your pmi, and lose money on depreciation on a second car!