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Prices Paid: Buying & Leasing Experiences BMW 3-Series Prices Paid and Buying Experience
8951 messages, Last post on Jul 06, 2008 at 12:19 PM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: novalauren (Apr 04, 2007 8:03 am) |
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Does BMW have a single payment lease program? If so, does anyone know how it works and what would be the advantages/disadvantages of such a course?
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Replying to: kjenkins696 (Apr 04, 2007 10:23 am) |
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Hi All, I am getting ready to put out some offers on a pretty basic 328i Sedan w/Steptronics, Power Seats, and Sport Package. Here is the proposal I am going to be putting out but I want to make sure my #'s are correct and if this sounds like a fair deal. BMW 328i (w/options) MSRP $36,270 Invoice (w/options) $34,930 Destination Charge $775 MSRP $37,045 Sell Price $35,680 (invoice + $750) Acquisition Fee $625 (trying to tell me it’s $825) Gross Capitalized Cost $36,305 Capitalized Cost Reduction $0.00 Adjusted Capitalized Cost $36,305 Residual (63%) $23,338.35 Money Factor 0.00180 (brought down from .00195 with security deposit...I'm sure the dealer is marking this up) Term (months) 36 Georgia Tax 7% Monthly Lease Payment excluding tax $467.54 Monthly Lease Payment including tax $500.27 Charges Payable at Lease Origination 1st Payment $500.27 Security Deposit $550.00 Document Fee $499.00 (this seems OUTRAGEOUS!?!?!?) Document Fee Tax $34.93 License, Title, Registration Fee $39.00 Lemon Law Fee $3.00 Total Due at Lease Signing $1626.20 Any help would be greatly appreciated!!!!
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Replying to: mpm6821 (Apr 04, 2007 1:33 pm) I see you've been reading my posts as you've modeled your proposal after mine and that's good to see. I'll take that as a complement. Here are my comments... (1) All the calcs are correct. (2) The $499 doc fee is way out in space. Doc fees should cost no more than $150. (3) The acquisition fee, as far as I know, is $625 but apparently some dealers are trying to inflate them to $825. (3) The sell price seems more than fair. I'd say that you have a fair deal if the dealer drops the doc fee by $300 or so. Either that, or drop the selling price by $300. I would lower the sell price by $500 and leave the doc fee alone... $250 over invoice plus holdback isn't bad for them. You know darn well that the doc fee is grossly inflated. Good luck, John
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Replying to: delta737h (Apr 04, 2007 3:13 pm) You are correct...I have been studying this forum and especially your posts. Last question since I've got you on the line. Should I press the issue on the MF? From everything I've read, it looks like it was at .00125 last month but the dealer said it went up. After a security deposit, .0018 seems ok. I have some extra cash so I figure I could always apply it to some MSD's to lower it... BTW...you need to write a book or something  this is great stuff! Kind Regards, Michael
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Replying to: mpm6821 (Apr 04, 2007 3:45 pm) A few comments for you: 1) For 328i sedan's I am routinely seeing $500 over invoice on this board. There's definitely room to squeeze him on this. 2) It looks like maybe the Lic/Reg and Doc numbers are flipped. For me in CA, the Lic/Reg is $341 and Doc/Tire Fee is $54. 3) I'm not sure what the rate has changed to for April, but in March the base MF for this car was .00125 which is dramatically different than the MF you have listed above. 4) You should capitalize the fees. In other words, don't pay them up front, make the dealer build them into the monthly payment. All in all, for this configuration, you should be shooting for a monthly payment of around $450 and a total drive off of about $900 (1st month and security deposit). |
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Replying to: mpm6821 (Apr 04, 2007 3:45 pm) My apologies! I'm glad you mentioned the 0.00180 money factor. It does seem high and I wouldn't be surprised if the dealer is earning reserves. Let me give you some history... It used to be that dealers were compensated at lease end for writing a lease at a higher rate. The money was held in "reserve" until the end of the lease in case the lessee defaulted. I've been told that this has changed and that most fund providers send the dealer the reserve payment soon after the lease is booked. Reserves work in much the same way that mortgage loan points work. A 1% reserve level means the dealer earns 1% of the adjusted cap cost excluding the acquisition fee. The fund provider just isn't going to allow the dealer to earn reserves on their own fees. So, for example, if the adjusted cap excluding acquisition fee is 25,000 and the reserve level is 1%, the dealer earns $250. My guess is that your 0.00180 MF has a 1% or 2% reserve level. The term, base rate or buy rate, means an interest rate or money factor with 0% reserves. I would ask the dealer for the money factor with 0% reserves. Be very specific. Many people will ask for the buy rate and guess what happens in many instances? Yup, they're often quoted a rate with reserves. Asking for the MF with 0% reserves pins them down AND it is an indication that you know something about car financing. Therefore, they're not as likely to BS. If the dealer refuses, simply deduct the amount of the reserves from the sell price. You may argue: If I deduct the reserves from the sell price, I'll end up with a different adjusted cap than the one I started with. Actually, this apparent dichotomy can be resolved with just a little bit of algebra. My TI 83/84 program actually captures reserve issues and I've used it to deduct reserves with moderate success. Hope this helps. John
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Replying to: delta737h (Apr 04, 2007 4:52 pm) Thanks for taking the time to explain. For the most part, the reserve discussion makes sense until the last part...was pretty sure my head was going to explode! Thank god for TI's! Long story short, I emailed the dealer and asked for an adjusted rate w/o the built in reserve...we'll see what he comes back with. Last question (hopefully) in reference to your earlier response. In order to capitalize the fee's, do they just get added to the Gross Capital Cost? Also, just to make sure I'm clear on the major fee's, these include: 1. Acquisition Fee 2. License/Title/Reg Fee 3. Doc Fee 4. MACO (BMW specific) 5. Training Fee (BMW specific) Again...thanks!!!!
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Replying to: mpm6821 (Apr 04, 2007 5:24 pm) BMW 328i (w/options) MSRP $36,270.00 Destination Charge $775.00 MSRP $37,045.00 Sell Price $35,680.00 Financed Amounts- TAXABLE ITEMS 1st payment 497.00 Acquisition Fee $625.00 Document Fee $499.00 Gross Capitalized Cost $37,301.00 Capitalized Cost Reduction $0.00 Adjusted Capitalized Cost $37,301.00 Residual (63%) $23,338.35 Money Factor 0.00180 Term (months) 36 Georgia Tax 7% Monthly Lease Payment excluding tax $497.00 Monthly Lease Payment including tax $531.79 Charges Payable at Lease Origination Security Deposit $550.00 License, Title, Registration Fee $39.00 Lemon Law Fee $3.00 Total Due at Lease Signing $592.00 Notice that I rolled (capitalized) the first payment into the lease. This means that you will be paying 35 payments of $497 each plus tax. Many dealers incorrectly compute the payment and they do it in two stages. The first stage is computed in the same way that one would ordinarily compute a lease payment without regard to the fact that it is being capitalized. Next, they'll include this payment as an amount finance and compute a new payment that is obviously different from the first. ALL payments must be identical. Next, they'll add this payment to the selling price claiming that this is the new sell price because they're making the first payment on your behalf. At this point, many people go with the flow but this makes me furious even though there is no financial harm. The sell price is sacred ground. Never ever adjust a sell price for any reason once it's established. Finally, the dearler proceeds to incorrectly complete the lease worksheet and lease agreement which makes me even more furious. If they're in this business, they darn well better be able to do things correctly. My paper addresses the issue capitalizing fees and 1st payment as well as tax consequences. That said and, to keep things simple (come on, don't laugh), I elected to seperate the taxable items from the non-taxable items. I don't believe that the security deposit is subject to tax in Georgia. It shouldn't be taxable in any state. Note that the amounts financed are those items that are TAXABLE. Remember that Georgia sales tax will be levied on the resulting payment and so that payment can't include non-taxable items. I constructed the proposal so that you would be paying the non-taxable items at lease signing. Because the MF equates to an interest rate of about 4.32%, it's best to capitalize as much as possible. However, paying $592 up front isn't that big of a deal for most folks that tool around in BMWs. At any rate, to give you an idea, that's how it would look. Remember, none of this is etched in stone. Some of these numbers (MF, doc fee) are very questionable as we discussed. The calculated values, however, are spot on. John
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