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GermanCarsFan
05-01-2007, 04:46 PM
Do you guys know if the residuals calculated on ED leases are based on the regular US sticker price or the lower ED sticker price? I am sure that would make a big difference in the payments.... Also when a car is returned and resold by BMWFS nobody knows if it was originally acquired through ED or leased through a US dealer here.

JoeIrish
05-01-2007, 04:49 PM
Residuals are based on US MSRP.

shosan521
05-01-2007, 04:55 PM
I second! ED MSRP on the base price...and the options.

GermanCarsFan
05-01-2007, 07:07 PM
Residuals are based on US MSRP.

Then the savings achieved by leasing through the ED are doubled:

For example:
If US MSRP = 65,000 and ED MSRP = 62,000
and assuming the cars are leased at MSRP to make the example easier...

Case 1 - Regular US lease:
Residual = 60% of US MSRP $65,000 = $39,000
Lease is calculated on the difference between US MSRP of 65,000 and residual of 39,000 = 26,000

Case 2 - ED lease based on ED MSRP:
Residual = 60% of $62,000 = $37,200
Lease is calculated on the difference between ED MSRP of 62,000 and residual of 37,200 = 24,800

Case 3 - ED lease based on US MSRP:
Residual = 60% of $65,000 = $39,000
Lease is calculated on the difference between ED MSRP of 62,000 and residual of 39,000 = 23,000

So what you guys are saying is that Case 3 is the correct way of calculating the ED lease? The advantages are doubled - lease residual is higher and MSRP is lower. Please confirm.

jacksonhunter31
05-01-2007, 07:25 PM
Leasing thru ED amplifies--but doesn't really double your savings. There are three factors to a lease..residual value, capitalized cost and money factor. with ED your residual value is based on US MSRP, the cap cost is based on ED price--and that should be negotiated up from the ED wholesale price, lots of advice on this site about how to do that. You do pay a smalll penalty with the money factor to finance BMW's paying your second lease payment.

It is a good deal to lease this way. I'm leasing a $60K 08 535 for about the same monthly payment as purchasing a new $40k Audi A4...

shosan521
05-01-2007, 07:25 PM
Yes...you get the bennifit of a lower cap cost (ED MSRP, though paying ED MSRP is a rip off) with the residual percentage calculated off of the higher USA MSRP.

JoeIrish
05-01-2007, 07:53 PM
See if this helps:

MSRP Invoice
528xi $46,500 $39,785
609 Navigation 1,900 1,730
ZPP Premium Pkg 2,300 2,095
ZCW Cold Weather Pkg 750 685
655 Sirius 595 540
6Fl iPod 400 365
ZSP Sport Pkg 1,300 1,185
496 Rear Heat Seats 350 320
Destination 775 775
$54,870 $47,480
Mark-up $1,250
Selling Price $48,730

MSRP $54,870.00
Selling Price $48,730.00 $825 Acquisition
Residual Value Factor 74% 659.75 DMV
Residual Value 24 Mos / 15K $40,603.80 876.60 Tax
Money Factor 0.00250 $2,361.35
Depreciation $8,126.20 $561.93 1st Payment
Term 24 $2,923.28
MIC 223.33
Mo Depreciation 338.59
Base Payment $561.93

Lease Formula
MSRP * RVF% = RV
SP + RV * MF = MIC
SP - RV = D
D / LT = MD
MIC + MD = BP

JoeIrish
05-01-2007, 07:55 PM
Sorry, it did not post right.

GermanCarsFan
05-01-2007, 09:03 PM
See if this helps:

MSRP Invoice
528xi $46,500 $39,785
609 Navigation 1,900 1,730
ZPP Premium Pkg 2,300 2,095
ZCW Cold Weather Pkg 750 685
655 Sirius 595 540
6Fl iPod 400 365
ZSP Sport Pkg 1,300 1,185
496 Rear Heat Seats 350 320
Destination 775 775
$54,870 $47,480
Mark-up $1,250
Selling Price $48,730

MSRP $54,870.00
Selling Price $48,730.00 $825 Acquisition
Residual Value Factor 74% 659.75 DMV
Residual Value 24 Mos / 15K $40,603.80 876.60 Tax
Money Factor 0.00250 $2,361.35
Depreciation $8,126.20 $561.93 1st Payment
Term 24 $2,923.28
MIC 223.33
Mo Depreciation 338.59
Base Payment $561.93

Lease Formula
MSRP * RVF% = RV
SP + RV * MF = MIC
SP - RV = D
D / LT = MD
MIC + MD = BP

Thank you. This makes perfect sense... So basically the lease formula totally ignores the ED MSRP for the calculations and uses only the real (US) MSRP.

JoeIrish
05-02-2007, 06:16 AM
You are correct.

BeemerGuy
05-03-2007, 06:31 AM
OK - let's say I do this, I lease the car through BMWFS and get ED. When does my lease payment start - when I receive the car in Germany or when I receive it in the US? If it starts when in Germany, then I'll be making a couple of extra payments on the car while it is in transit. If it's on US delivery, then I'm getting the car "for free" while in Germany.

Anyone know? (no guesses please :) )


Thx,

Michael

eddiethekub
05-03-2007, 04:53 PM
This is how it works....when you take delivery in Munich, the clock starts on your lease. Yes, you lose some driving time while the car is in transit to the US, but BMWFS tries to make that up by making the 2nd lease payment for you.
However BMWFS does add a .0003 kicker to the MF, so they get some of that "free payment" back. Nevertheless, it is still a great deal. I did it in 11/06 and plan on another trip this Fall. Oh, and you have to complete the paperwork (including any deposits) 14 days prior to pickup.
One last point, run the numbers for both a 24 month & 36 month lease. Due to residuals and the spread between ED cost and US MSRP, it sometimes is cheaper to go 24 months. Of course you have to go back in 2 years for another one...but that is not necesarily a porblem to some!

chrischeung
05-03-2007, 05:23 PM
This is how it works....when you take delivery in Munich, the clock starts on your lease.

Not exactly. The clock starts on the lease when you sign it at the dealership state side.

BeemerGuy
05-04-2007, 05:02 AM
Thanks, Chris and Eddie. I was wondering about that - so I guess the same applies if you finance or pay cash. You buy the car, then fly to Europe and pick it up. Makes sense, the more that I think about it. BMW wants their money before they give you the car.

So, finally, I found a down-side to the ED. I knew there had to be one somewhere! :cry:

And Eddie, you are correct, good point on the terms. When I bought my E38 I got a better lease deal for 24 months than 36 (it was only a $1 difference) and as I tend to flip cars pretty quickly (24 months is an eternity) it was perfect for me.

Michael

Ågent99
05-04-2007, 07:16 AM
Hardly a downside IMO. Most people fight mileage concerns on a lease...not time.

On the west coast, it is worse because the transit time is usually 2 weeks longer than the east coast time (it would be longer without the Panama Canal! ;) )

The "loss" of 6 weeks driving time while paying for it is often made up in mileage rather quickly...especially on a BMW!! :D

eddiethekub
05-04-2007, 03:47 PM
Chris-
You are correct....clock starts upon signing in US.