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Prices Paid: Buying & Leasing Experiences BMW 3-Series Prices Paid and Buying Experience
10318 messages, Last post on Dec 06, 2009 at 9:01 AM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: vsaxena (Apr 20, 2007 8:09 pm) How goes it?
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Replying to: vsaxena (Apr 20, 2007 8:09 pm) Regarding the MSD vs Down Payment idea, I see your point, and I can see how my post looks like I don't understand the MSD concept. I might not! That's why I'm here, and appreciate all the help so much. Here's what I was trying to get at: Can I ever benefit from offering a large down payment? We agree, for one reason or another, that if you had a 36 mo. lease  $1000.00/mo., w/ no $ down, that it would be bad to ask the dealer, "Would you mind if I just paid all $36,000 on day 1?" Your risk-of-loss argument may be one reason, and another reason is that instead of your money earning interest for you, it's earning interest for the dealer. So another way to look at what I'm asking is: since down payments benefit the dealer, can I use that fact as a bargaining chip somewhere? BMW dealers don't have to offer MSDs, and some don't. But they all accept down payments! So I'm looking for a back-door (front-door?) approach whereby I can get MSD type benefits from a BMW dealer who doesn't offer MSDs. [Note: The following is not BMW specific - it's related to general lease questions I have after reading vsaxena's foregoing post] Also, thank you for your tip about "equity". I was under the impression that, down payment or otherwise, I would never have "equity" in a leased car. I had only thought that I had equity in the lease agreement itself, since I own it, but not the leased property, which I don't (I only own the use of it). Thx! (Actually, I'm still not 100% clear on this! Is there a website or Forum post that explains this more? And wouldn't gap coverage solve this problem if the car got totaled?) New question though: if a leased car gets totaled, how is the risk of loss of a down payment different from the risk of loss of MSDs? Down payments & MSDs are both paid up front, right? And, one way or another, you don't get the amount of either one back if you total the car, right? So, in the end, what's the difference? (Again, I'm thinking gap coverage helps here - and that there's a big difference between "equity" and "equity value"...)
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| I am considering getting a 2007 328i. I just found that the car no longer has a coolant temp gauge and also eliminated the oil dipstick. I am concerned about how reliably the engine oil and temperature can be monitored. The MB C-class once got rid of the temp gauge but later put it back. Can anyone address this issue? Thank you! | |
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Replying to: pepperjack (Apr 21, 2007 7:00 am) Unless you are credit-challenged, the dealer doesn't care if you make a down-payment or not.. If you are buying the car, the dealer gets the full selling price upfront.. either from you, if you are paying cash, or from the bank you are borrowing the money from. If you are leasing, it works the same way.. You and the dealer negotiate a selling price. Then, the leasing company buys the car from the dealer for that amount, and then rents it to you. If the selling price is $40K, the dealer gets the entire amount upfront, whether you make a down-payment or not. If you put $4000 down on the lease, the dealer keeps that, and the leasing company (bank, BMWFS, etc.) pays them the other $36K. So... a down-payment on a lease only serves to pay part of the obligation upfront, reducing the payments by the same amount. True, the down-payment money will reduce the finance charges slightly, but not enough to make much difference. Generally, the leasing company will not reduce the money factor, just because you made a large down-payment. MSDs on the other hand... reduce the amount of finance charges on the entire lease. But, they are a financial agreement between you and the leasing company. They don't affect the dealer at all. As far as what happens to MSDs if the leased car gets totaled? Common sense would lead one to believe that you'll get those back. Unfortunately, we've had no one post a real-world experience regarding that issue. Hope this helps, kyfdx |
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Replying to: kyfdx (Apr 21, 2007 10:51 am) just curious.. I have followed your advice and others here and am doing the max MSD..I am happy for that little known secret..it reduced my monthly pymt by roughly 40 dollars a month for a 3150 outlay. great return on the money. I'm thrilled with the deal I got..but it does leave me wondering being as BMWFS is the ONLY bank that offers this incentive (reduction of MF) with the security deposits -- what do you think is in it for them? What's their incentive, other than maybe the psychology of the hope you will take better care of the car keeping in mind you (the driver/registered owner) want that security dep. back hassle free.. kind of like renting an apartment when they ask for a security dep.. but could that be the only reason BMW does it, and if so why not others I wonder..just curious what you and others think.. Curious, Donna |
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Replying to: donnabgood1 (Apr 21, 2007 3:48 pm) 1) Reduced risk associated with missed payments. If you miss a couple of payments, they can take action to recover the vehicle before it actually costs them anything since they already have your money for several months. 2) They earn interest while holding your security deposit. I don't know how it works for car leases but for escrow on your house or a security deposit on an aparatment lease, the bank is required to reduce your payment on the home loan by the amount of interest they earn on this money in no risk savings account, while a landlord at the end of a lease must return the sd + minimal interest earned (usually a bank savings account rate). So, if BMWFS doesn't return your money + interest, well they keep the interest. If they wisely invest your money and earn a good return on it (which they ought to be able to do with their financial clout) but give you 3.5% then they make the difference. So, it turns out to be a wash for you if they reduce the interest rate you pay by the amount you would earn on the money - but they win for reason 1. Considering their reduced risk, they should cut the rate by greater than the amount of interest you could reasonably expect to earn on the MSD. That way you both win.
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Replying to: kyfdx (Apr 21, 2007 6:06 am) Well that sucks, if you look at their price differences between 10K, 12K, and 15K mi/yr, then they only charge you half that per mile. What's the deal with that?
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Hoping someone can help me out. In the process of looking for a new 3 series. Currently have a 525i coming off lease but looking to "downsize" my payment. Given the issues I always have in the snow w/ my 525 (sport pkg) first option was to go with the 328xi. First question - (1) Every BMW I have had (4) has had the sport pkg which is why I am leaning towards the xi. However, I do have interest in the 335i - no sport pkg. Can I expect to get stuck everywhere (snow) in a 335i premium? Or - will I atleast be able to get home on snow covered roads? Now, got a lease quote yesterday from a dealer in Norther NJ for a 328xi - metallic paint, cold weather, premium pkg. Can someone tell me if this dealer is ripping me off or am I atleast in the ballpark: 2007 328xi metallic / cold / prem $3000 out of pocket at pickup (money down,mvs, first month and bank fee) - those were the only specifics he gave me as it was an internet quote. 30 months 12k yr - $454 15k yr - $482 Now, given that SAME exact deal noted above, I told the dealer that I wanted to "sign and drive" - nothing out of my pocket at delivery. 30 months 12k yr - $567 15k yr - $596 Bottom line - let me know if I am even in the ballpark. If I am not - let me know where I should be and if the 328xi is a better choice then the 335i (specific to the weather in northern NJ).
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Replying to: trewquis (Apr 21, 2007 4:17 pm)
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New to the forum, but would like some help/advice on how to proceed. Been reading a bit and the information is insightful, here is my situation. I leased an 04 base model and had a payment of 500 with 3k down. This is due to the fact that I was way upside down on my trade in. Got quoted 588 on an 07 328i with 3k down. This included my trade in and the car was a Sport package, xenon, leatherette, a pretty complete car. My 04 has 59k miles on it and some wear on it (not ugly to see but it has seen the road). I do not want to put any money down and also do not want to pay more than 550 for the new car. Any ideas as to how I can negotiate down? Or can anybody give me the name of a dealer in southern california that would give me a good deal? This quote is from the dealer I leased the car from in the first place. Let me know I am missing anything. Any advicce will be greatly appreciated!!
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