So glad you agree – 71% say the F-TYPE is the vert to have. This week, an experimental post. I often say that at Machines With Souls, money is no object. The cars are the stars, and how you afford them, or the depreciation they take, has no bearing. But perhaps there’s a story here with this brand new M4. With an MSRP of over $117,000 and someone in over their head, it’s a lesson in waiting.
But first, the car…
The 2025 BMW M4 xDrive Competition Coupe
See the 2025 M4 listing here
You’ve got to really try to make an M4 cost M5 money, but someone ordered this car and then discovered they couldn’t afford it. Now it sits on a dealer lot, waiting for a home.
It’s a really nice spec:
- Frozen Portimao Blue over Extended Silverstone leather
- Carbon buckets
- Carbon ceramic brakes
- Carbon fiber package
- Black 826M wheels
- Pretty much every other option you can click
- MSRP: $117,310
What’s missing? An individual color for $4,500, and a convertible top. Otherwise, it’s the most expensive M4 you can buy without fixing a CS badge on the truck.
Because the car has sat, the dealer is now offering $10,000 off the sticker price. That’s rare, and good. But is it enough?
Buying the M4
So gross, but let’s do maths. If you have $107,000 lying around, you don’t need financial advice from a car blog. But what I will ask is this: can you make more money on interest or investment rather than purchasing outright? Depends on the return you get, vs the cost of borrowing money.
If you did not write that check, you could…
Finance the M4
It gets tricky from here. BMW doesn’t list their financing rate for the M4, but many models have 2.99%, and I can’t imagine the M4 being much higher. Obviously these depend on having excellent credit.
Using that rate, let’s not put any money down and just take the $10k the dealer is giving us. Since we’re cool, surely they can knock off that final $310. Our M4 now costs $107,000 before tax and tags. We’ll pay those outright.
We’ll do a five year loan, which comes to a total of $115,330. Financing will cost you $8,330 in interest.
Just for laughs, if you invested that $107,000 in a five-year CD at 2.99%, you’d get $16,982.12 in interest. So in this case, it’s better to keep that chunk of change and finance the car.
But there’s a third option.
Leasing the M4
If we lease this car, we pay only the tax and tags out of pocket (please don’t put money down on a lease). Let’s do 10,000 miles a year, giving us a payment of about $1,622 per month. Using this model, financing would be about $1,922 – $300 more.
But with leasing, you’re only locked in for three years, not five.
No matter what, you still pay for…
Depreciation on the M4
Wow, the market does not like these cars. BMW M4 xDrive models were cheaper to buy just a few years ago, and it’s extremely rare to find one as costly as our example, but as you can see, they lose a lot of value – $20-$25k in three years.
This matters because if you were to finance instead of lease, at the end of five years your M4 would cost you $115,000, and you could only sell it for $75,000, maybe? The G82 hasn’t been out for five years, so it’s tough to guess the full loss.
Following the math, we’d get to own said M4 for five years, and it would cost us $40,000.
If you were to lease, your total cost would be $58,392 – over just three years. But it also takes out factors like wear and tear. How many sets of $1,200 Michelins are you going to need in those five years? How many miles are you putting on? And when you sell it, you need to actually find someone to give you what you think the car is worth.
The terms are never black and white.
New cars are a bad financial decision, but only if you can’t afford it
I often see people bragging on social media that they haven’t had a car payment in 10 years because their rusty Accord is just fine. And to non-car people, I’m sure it is. I’ve worn the same black t shirts for three years because I’m not a fashionista.
From a technical standpoint, buying any new car isn’t a smart financial decision. But you probably spend a lot of time in your car – should make you feel good, no? It’s okay to accept depreciation because you’ve used it. Unless you’re one of those guys that buys an M3 and sits on it, hoping to make thousands upon selling.
So, here’s $117,000. What will you do with it?
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