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BMW X5, Car Leasing, SUV
Dec 30, 2011 (5:18 am)
I'm new to this forum, but have found some very interesting information. How about a new approach. I am considering a lease on a new 2012 X5 sport with the following info. What would you consider a fair lease payment?
36 mo lease, 12,000 miles per year
Has navigation package
First time BMW owner, so no credit there
This purchase is in the Kansas / Oklahoma region
I would qualify for BMW's best rate
Kind of a novice here, and it looks like getting the very best deal could be kind of tricky. I just did not want to make a real mistake. Thanks for any opinions.
#1786 of 2373 Re: New Approach [wherespete]
Dec 30, 2011 (7:46 am)
That's not really enough information to calculate a lease payment. Generally, with minimal money down, a ball park 36 month lease payment for a new X5 in the range of $800 / month is not unusual depending on options, model, etc. Highly optioned models will be higher. Subtract about $30 per month per extra thousand dollars down payment.
Never start negotiation with your dealer based on a target monthly payment. There are too many ways for them to rig the deal to their benefit and not yours.
The advice in earlier posts still applies. First, start with the dealer invoice price. Add up to $1,000 dealer profit or less if your dealer will allow it. (Some people try to buy a BMW for dealer invoice minus incentives because there is a hold back of around 3% below invoice for dealer profit. That works if you're buying a honda. You can use that as your starting point for negotiation, but it may or may not work on a BMW unless it's a left-over vehicle. If the dealer does offer the vehicle at dealer invoice, make sure they didn't arrive at that price by including cash-back incentives.)
Then subtract all current incentives ($1,000 end of year incentive on the X5, Owner Loyalty, etc.)
Then add tax, tags, etc.
Then review the lease rate and ask your dealer how much they marked up the lease rate. They will often pad their profit by marking up the lease rate by around 50 basis points on top of what BMW finance charges. Ask them to cut the mark up in half. (Multiply the "money factor" by 2400 to calculate the equivalent interest rate.) A mark up of 50 basis points can increase your interest rate by more than a full percentage point.
The residual value is fixed by BMW Finance and not negotiable. The residual value decreases by 1% with each increase in annual mileage (10k, 12k, 15k). It also varies between X5 models. Through December 31st, the residual value for a diesel X5 is lower than for the 3.5i and 5.0i. That means that the lower residual more than offsets the extra incentive on the diesel. Ask the dealer to show you the current residual value sheet provided by BMW. Every 1% increase in residual can reduce your lease payment by around $15 - 20 / month depending on purchase price.
If your dealer is not willing to answer these questions or will not show you the dealer invoice, then you might want to find another dealer.
You can use these metrics to assess whether your dealer is giving you a fair deal. But, they're not charities and they don't sell at cost.
I always recommend not letting anxiety over fine tuning the purchase price by a few dollars ruin the excitement of buying or leasing a new BMW. If you're happy with the car and the deal, that's all that matters. Don't worry about whether someone somewhere else might have found a similar car for a hundred bucks less.
#1787 of 2373 Re: Help with my Lease for a X35d [ab10000]
Dec 30, 2011 (7:55 am)
ab10000, you are wrong about model years being "just marketing". The model year directly affects residual value. A 2012 has greater market value and residual value than a 2011 sold in Dec 2011 or Jan 2012. A dealer generally is more motivated to unload a left-over 2011 that's been sitting on the lot than he is for a 2012 that just arrived.
There are other reasons why you are wrong: some model years involve substantial styling changes, new drive trains, etc. That was the case in 2010 vs 2011 for the X5.
BMW also makes substantial changes to option packages and pricing from year to year. So for example, a fully loaded 2012 X5 5.0i will cost over $1,000 less than a loaded 2011. That's because navigation and heated seats are standard in 2012 and because options packages bundle features together at lower price by including more options that previosly were stand alone. That typically happens to a greater degree late in the production lifecycle of a particular model.
It's not "just a marketing ploy". The scenario that you mentioned only happens with BMW with very early release of the next model year. For example, when the 2011 X5 was released on April 1, 2010. Some of the 2011 model's changes to electronics (mobile office, etc) weren't available until October 2010. But the styling changes and new engines were available and those matter most.
#1788 of 2373 Re: New Approach [abmwfan]
Dec 30, 2011 (12:37 pm)
Thanks for the reply. After I finished typing and sending the message, I thought "that's not going to be enough information", but you helped me out. Also, are the deals "really" going to be that much better in the next couple of days, before the end of the year? I find myself pushing hard to get something closed before then, and am wondering if it is really worth the rush.
#1789 of 2373 Re: New Approach [wherespete]
Dec 30, 2011 (2:25 pm)
The end of year cash incentive for 1k ends soon. That only is available in nov to dec. Also, lease residuals change january 1. They could stay the same or go up or down. Your dealer should know the answer by now.
#1790 of 2373 Questions on 2012 Prices, MF, etc
Jan 05, 2012 (12:25 am)
Hi all, does anyone know current incentives on 2012 X5s - diesel, and regular models. I was hoping to find out about incentives as well as buy rate on MF for 36 month lease 15k miles. I am a current BMWFS customer in case that helps ... I'm in California. Thanks so much.
#1791 of 2373 Re: Dec. X5 MF and residual [lvit]
Jan 05, 2012 (4:43 pm)
Hi lvit. The answer to your question is no, I don't believe that BMW is offering any money factor reductions for loyal customers in the new year.
Prices Paid: Buying & Leasing Experiences Forum
#1792 of 2373 Re: Questions on 2012 Prices, MF, etc [alexkoper]
Jan 05, 2012 (4:47 pm)
Hi alexkoper. BMW Financial Services' January buy rate lease money factor and residual value for a 36-month lease of a base 2012 X5 with 15,000 miles per year are .00195 and 57%, respectively.
The January numbers for an otherwise identical lease of an X5 Diesel are .00195 and 56%.
I do not believe that BMW is providing a money factor reduction for loyal customers any longer.
Prices Paid: Buying & Leasing Experiences Forum
#1793 of 2373 Re: Questions on 2012 Prices, MF, etc [Car_man]
Jan 07, 2012 (12:29 am)
Thanks Car_Man! Really appreciate it. Are you aware of any manufacturer to dealer or manufacturer to consumer incentives? Am I better off waiting? Seems like I could get the same car for much less in 2011 ...
Very grateful for your help.
P.S. when you say base model, do the extra packages, etc change the residual much?
#1794 of 2373 Re: Questions on 2012 Prices, MF, etc [alexkoper]
Jan 07, 2012 (5:28 am)
Alexkoper - residual percentages don't change when you add options. The residual rate is set according to the model, number of lease years, and the number of miles per year on the lease.
The residual percentage normally decreases by 1% for each increment in annual lease miles (10k, 12k, 15k). Each increment in annual mileage allowance will cost you about $16/month for a 36 month lease. ((1% x negotiated final price) / 36).
When you add options, the payment changes because you are paying the same depreciation rate (100% - Residual) on a more expensive car.
For a 36 month lease with 15k miles, payments generally change by about $30/month per $1,000 increase/decrease in price. Add 10k of options, and your lease payment will increase by $300/month. That's very easy to do on a BMW.
Ask your salesman to show you the lease residual chart from BMW. Sometimes you will find that a particular model has a much higher residual and you can get a nicer more expensive car for almost the same lease payment because the residual value is higher.