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Prices Paid: Buying & Leasing Experiences BMW 3-Series Lease Questions
3226 messages, Last post on Dec 08, 2009 at 2:50 PM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: boomer23 (Jan 30, 2008 11:22 pm) When doing a lease, recognizing I am talking about a car in relatively high demand (and apparently a generally low motivated dealer), what are the specific components of a lease that are negotiable. Obviously the monthly payment is one... (can you illustrate a for example of how the money factor plays into the calc?_) . What are some of the other factors? Is there any difference in the amount of money the car is worth at the end of the lease that will factor in, or that I can be blindsided by:? Thanks, this forum looks like a godsend. Dawgfan1
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This from a different dealer now: 328xi metallic cold premium auto ipod msrp 41325 cap cost 38805 mf .00175 3 yr/ 10k residual 64% monthly payment 510 out the door 2230. I'm thinking to move on this one. |
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Replying to: dawgfan1 (Jan 31, 2008 6:43 am) First, you need to know the residual (set by BMW) and the money factor on the lease of the car you're looking at. Residual is just the value of the car after the lease is over. It'll be a percentage, but convert it to a decimal. E.g., 64% residual = .64. Money factor is just a way to calculate your interest payments. Then, lease payments should be calculated as follows: Cap Cost * (1-.residual) / Term of Lease = Depreciation Cap Cost * (1+residual) / money factor = Interest Depreciation + Interest = Base monthly payment. Add on tax and there you have it. I typically negotiate lease deals based on cap cost, as if you were purchasing the car. If you negotiate based on monthly payment it's harder to identify the options on the car that are giving the dealer his profit. Also make sure your dealer is giving you the base rate money factor. Lots of dealers like to mark this up. |
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Replying to: dawgfan1 (Jan 31, 2008 6:43 am) To add to that, the negotiable factors are: - The cap cost (the negotiated price on the car, either a markup from invoice cost or a discount from MSRP). - The money factor (equals the APR of the financing divided by 24). As stated above, BMW sets this factor monthly, it varies by model and BMW only allows the dealers to mark it up by .0004. - Bank fee. Base bank fee is universally $625. BMW allows dealers to mark it up by up to $200. Can be paid up front or rolled into the lease, your choice. - Other fees. Often include "MACO" ( $300 to $400 regional advertising fee charged to the dealer by BMW, some dealers have to pay this, others don't, depends on their region and advertising practice), "training" ( about $150, dealers also pay this fee to BMW), "documentation" and others. Some or all of these can be negotiated down. Can be rolled into the lease or paid up front. - Down payment, "customer cash", "cap reduction". As often suggested, try to make this zero, for several reasons. - Security deposit(s). Generally, if you roll any agreed fees into the lease, the total cash due at inception would equal just the first month's payment, any security deposit(s), DMV tag fee, a few small service fees, state tire fee, etc, and in certain states, sales tax. Remember that the dealer has to make some money to be interested in your business. He'll make it through a combination of markup from his invoice cost, padding the money factor, padding the bank fee, and other fees that are pure profit. I personally got a $2800 discount from MSRP on my 328i coupe, but paid a $200 markup on the bank fee and a slightly higher MF, equal to about $10 a month dealer profit. Overall, I was satisfied with the deal because the cap cost was discounted enough to make up for the padded fees. |
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received this from dealer: "It is obvious you have access to BMW FS bulletins, listing the rates and residuals. You are also aware that I cannot actually contract a client above the .0040 basis point max markup. If you look at the bulletin effective dates, you will notice that it expired 1/2/08, the new bulletin I am allowed to contract by BMW FS to use expires 1/31/08, so the rates and residuals that I have sent you by email expire today. An itemized breakdown is below. Sales Price=$36,500 MSRP=$38,250 Residual=61% or $22185.00 Oklahoma Excise tax of 3.25% or $1186.25 Reg fees $90.75 Title fee $11 Inspection $21.75 Documentary fee $50 Security Deposit=$500 The total for fees and SD are $1859.75. Your $3000 will account for $1959.75, first payment of $499.93 and will actually put $540.32 towards the cap cost. One more item if we used the Money factor of .00205 and an residual of 58% your payment would actually increase by $23. This is due to the decrease residual." Note: I believe he used MF of .00215. I had them itemize the deal I posted from above and this is what I got. Is the MF still too high?
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Replying to: companyman21 (Jan 31, 2008 1:22 pm) Also, I've read on another site that the February rates will be the same as the January rates, so his pressure to sign today is bogus (unless you are leasing a 2007 car, 2007 rates end today. But the 2007 rates were lower). Also, the residual amount is set solidly by BMW and only varies based on your contracted miles per year. The dealer shouldn't be able to adjust the residual. Notice that you're still putting $540 towards the cap cost. I wouldn't do that. I'd tell him that he should reduce the cap cost by that amount and you'll keep your $540. If you're feeling uncomfortable about the inflated rates, down payment, etc, find another dealer, if you have them available. It might be worth driving 50 miles to get a better deal. |
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I understand that you can reduce mf by .00015 for each $400 security deposit paid up front. I am planning on trading in my wife's car, for which I owe $4,900. I am planning on getting $7,000 on trade. I live in WA, where I do not have to pay sales tax on the value of trade. Does anyone know if I can take the difference between what I owe and what the dealer gives me and apply it toward security deposits, rather than cap reduction? With 5 security deposits, my payment would be about the same, but I would get the 2k back at the end of the lease. Am I thinking in the right direction?
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I have seen 2 different mf for the 328i on this forum, .00175 and .00165. Recent offers from dealers are quoting .00175. Are they increasing the rate or is this the best BMW lease rate available?
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Replying to: hopefall (Jan 31, 2008 8:27 pm) |
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Replying to: hopefall (Jan 31, 2008 6:34 pm) On your ability to use the cash from your trade for SDs rather than down payment, I would say absolutely. You should be able to craft the deal that you want. That cash is yours if they'll give you the $7K for the trade. You should be able to pocket it, use it for a down, or use it for SDs. Anyone disagree? |
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