Last post on Dec 04, 2013 at 5:16 PM
You are in the Prices Paid - Buying & Leasing Experiences
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BMW X3, Car Leasing, SUV
#1019 of 1194 Help needed on offer from dealer
Jan 29, 2013 (5:10 pm)
So I'm trying to finalize a deal after finally finding the vehicle I wanted with the right options, working to get the best possible price. I located a 2013 x3 35i optioned the way I'd want it, somewhat aggressively priced since it's a demo with 8000 miles. I need some advice on whether this offer from the dealer is really bad (I don't think it's great) and, if so, suggestions on how to best get the financials in line. Here's the deal:
2013 x35i premium w/ sports appearance, tech, convenience, radio, and apps
Demo vehicle, 8000 miles, in service 4/2012
MSRP = $54,245
Selling Price = $46,691
Lease Term = 36 Months, 10,000 Miles / Year
Money Factor = .00170 (I keep seeing .00125 - .00135 on here)
Residual = 60% BUT salesman claims BMW will reduce the residual by $2,271 'because of miles on the vehicle'
Payment = $651.25 (with zero capital reduction)
Appreciate any suggestions - good deal / bad deal, best way to counteroffer? My math says that the payment should be more like $552 / month MF of .00125 and 60% residual, the $2,271 residual reduction is throwing me, not sure if that's reasonable.
#1020 of 1194 Re: Help needed on offer from dealer [ken954]
Jan 29, 2013 (5:44 pm)
Ultimately, a good deal comes down to only 3 things, the selling price, money factor, and fees. The selling price you can negotiate; check the invoice on that car with those options and you should aim for invoice or lower. The MF is set by BMW finance, and it depends on your credit score, and with a score of 740 or higher, MF should be around .0013. Fees, they should be able to tell you upfront what the fees will be (check my previous posts for fees I paid). For your reference, I was quoted on a demo 2013 X5 diesel with around 12,000 miles for well below invoice. Just my 2 cents.
#1021 of 1194 Re: Help needed on offer from dealer [ken954]
by kyfdx@Edmunds HOST
Jan 29, 2013 (8:10 pm)
The residual reduction is $0.30/mi. for any miles over 500 (I think), so that looks right. Which should also give you a good idea of how big of a discount you should get compared to a new model. It should be more than that additional residual reduction.
The maximum markup on the MF is .0004, so it looks like they are taking the max.. Most dealers that markup the money factor also bump the acq.fee the max as well ($925 vs $725)
Best way to counteroffer? Tell them you won't pay a marked up MF, or no deal.. That alone will knock $32- $35 per month off..
#1022 of 1194 Re: Is this a good deal? (Quote #2) [okcloo]
Jan 30, 2013 (3:33 am)
A tire warranty for $1,100? That seems like a lot of money for some insurance against potential, not factual, tire damage. As always such "warranties" are designed not to save the customer money but to provide profit for the dealer and warranty provider. Most consumer advocates seem to advise not to purchase such things.
Experienceing "a nail every two years" seems very unusual. I don't think I have had more than three or four nails in thirty years. I have never destroyed a rim.
In any case, on a three year lease that would mean one tire will be replaced. Certainly not worth $1,100 or more.
The buyer would be better served to put the $1,100 in a savings account to cover any tire damage occuring during the lease. If no damage, the buyer, not the warranty company, will have the $1,100 at the end of the lease.
#1023 of 1194 Re: Good deal? [jc_hills]
Jan 30, 2013 (3:43 am)
With the numbers you listed, the monthly lease payment computes to about $472 not $499. Adding an aquisition fee of about $900 to the sale price of $40,190 gets you to $499.
#1024 of 1194 Re: Is this a good deal? (Quote #2) [ltllady]
Jan 30, 2013 (3:56 am)
I always find it interesting people are so willing to spend thousands of dollars for protection against the possibility of future events that, statistically, will not occur. Warranties, such as a warranty against future tire damage, are designed by people fully versed in statistics and set up in such a way to assure significant profit is made.
Making the matter even worse, from a consumer prospective, is the profit is exagerated since both the warranty provider and dealer have their hands in the money pool pulling out profit. It is never a benefit to the consumer to become involved in a monetary exchange involving muliple levels of profit.
Spending well over a thousand dollars for tire protection on a lease of three years does not appear prudent.
#1025 of 1194 Re: Is this a good deal? (Quote #2) [ltllady]
Jan 30, 2013 (4:40 am)
I read Edmunds forums on a regular basis as they often contain valuable information along with some amusing comments. I do find it interesting that so many people seem to accept two items presented in a dealer's F&I office as necessary products/fees when they are really overpriced, useless, or false.
One is warranties of any kind. Seems every year the F&I people come up with a new warranty to make money. Five years ago, I bought my daughter a new car. The F&I guy pitched the tire protection product for $500. To intice me to buy, he told me about his daughter who had the same vehicle had replaced the tire and rim twice in three years. I suggested his daughter was obviously not a very good driver. Well here we are five years later and my daughter has not damaged a single tire or rim and I, not the dealer, have the $500.
Another is the dealer documentation fee. Dealers in some places, like Florida, charge hundreds of dollars for this "fee." Any cost of preparing documents for the sale of a vehicle is minor and is covered by the dealer's overhead which is included in the selling price. This is basic cost accounting.
Most of the document preparation is done in the F&I office while the customer sits across the table from the dealer's best sales person. Of course the only reason the customer must sit with the F&I person is so the F&I person can have an opportunity to increase the dealer's profit on the back end of the deal.
#1026 of 1194 is this a good deal?
Jan 31, 2013 (1:19 pm)
x3 28i - premium pkg, tech pkg, roof rails, comfort keyless entry, 36 month/10K year.
3000 total drive off including 1st month payment, taxes etc.
Residual value: 27,992
Lease factor: 0.00125
lease payment: $499 + tax per month
#1027 of 1194 Re: Help needed on offer from dealer [kyfdx]
Feb 01, 2013 (7:25 am)
Thanks so much kyfdx - dealer isn't budging much so far, but that info gives me a bit more ammunition. I've been back and forth between new and demo, sport appearance and m-sport - and not a lot of inventory in my area. Appreciate your help.
#1028 of 1194 Re: Help needed on offer from dealer [ken954]
by kyfdx@Edmunds HOST
Feb 02, 2013 (6:01 am)
Some (most?) BMW dealers will always mark-up the MF and won't budge.. If that is the case, you have to inject some real competition into the equation. And, be willing to go elsewhere..
Your local dealer has to believe you'll go to another dealer, and even then, you might have to actually do it...