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Acoustik
06-05-2007, 10:39 AM
Hi everybody, this is my first post so first of all let me say thank you for all the great information everybody has posted. I have found it really useful and am enjoying being a part of this forum.

Moving on, I have a question some of you knowledgeable people may be able to help me out with. I am in the U.S. under a diplomatic visa working for an international organization. I've been at my current job for about a year and a half, and attended college in Dallas, Tx. before that. My current job makes me around 65k tax free, no wife or kids and I have a healthy amount of cash left over at the end of the month. I also currently have about 60k in savings.

I know my credit is not very good, as I was on a very tight budget in college and often had to juggle my payments around. I have no credit cards in this country, and I know my credit history is probably not much longer than 3 years.

When I applied for a BMWFS lease and I was denied. However there was an annotation that said they could approve me if I could get a cosigner. The guy at the dealership said it has to be a family member (?), so I'm currently trying to get in touch with a cousin of mine who may be able to help me out.

My question however comes down to doing a prepaid lease. If I were unable to sort out a reasonable cosigner, could BMWFS approve me for a prepaid lease since I seem to be a borderline case? I would like to know if any of you know what the process is to get approved for a lease and if the criteria is a bit more lenient. I know it is not the best idea to do chose this option, but I have the cash to do it, and when my contract expires in 2 years I would rather not have the hassle of getting rid of a car if I have to leave the country, so a lease looks fairly attractive.

I appreciate any input any of you may have on this matter, and hopefuly I can finally drive a BMW of my very own sometime soon.

Thanks
-Eddy
hector
06-05-2007, 10:54 AM
my understanding is that if you pre-pay the lease and the car is totaled or stolen you're out all the money.
Acoustik
06-05-2007, 11:00 AM
I had concerns about this earlier on as well Hector, however doing some research in the forum it seems that BMWFS treats this differently and they pro-rate your lease and refund you a certain amount in the event of a total loss. Though I'm sure the refund would come up short, it still improves the situation alot. I would definetly discuss this with my dealer before signing anything though. Thanks for the heads up!

-Eddy
Robsa
06-05-2007, 11:10 AM
Was there any discussion about putting more money down instead of a cosigner?
Acoustik
06-05-2007, 11:17 AM
I would still need a cosigner even if I put more money down. Besides, the risk mentioned by Hector in a previous post does apply in the case of money used as cap cost reduction. If the car is totalled you lose that cash, however this is not the case on a prepaid lease though... (as far as I understand)

-Eddy
Robert A
06-05-2007, 04:47 PM
I don't think that's correct. My understanding on a one-pay lease is that there's a proration of the single payment based on the period leading up to the destruction. Moreover, the lessee has to have insurance to protect BMWFS from the loss anyway.

my understanding is that if you pre-pay the lease and the car is totaled or stolen you're out all the money.
kaismaeel2000
06-05-2007, 05:46 PM
So how are the payments calculated for a prepaid lease? Do you pay depreciation only, or you still pay leasing charges (interest)?
Robert A
06-05-2007, 07:35 PM
In theory, you are "borrowing" the residual (since you've already paid the cap. cost down to that figure). Except, you're borrowing that residual for the term of the lease, so some sort of interest is factored into the total payment (at least if it's done correctly).

Thus, the total one-payment figure is based largely the difference between the cap cost and the residual. To a lesser extent, there is an interest payment because the payment of the residual is deferred.

So how are the payments calculated for a prepaid lease? Do you pay depreciation only, or you still pay leasing charges (interest)?
kyfdx
06-06-2007, 05:45 AM
So how are the payments calculated for a prepaid lease? Do you pay depreciation only, or you still pay leasing charges (interest)?

It is calculated just like a normal lease, with no CAP cost reduction. The money factor is discounted, to account for the amount being paid upfront. (.0008 MF discount from the standard lease MF). Then, the payments are added up, and that is your payment amount.


A couple of things..

1) The discount is only available from the standard MF, which is around .0032. So, if the vehicle already has a discounted MF, then the one-pay lease won't help.

2) Not sure, but doing a one-pay lease won't have a big effect on whether you get the lease. If you are credit challenged and need a co-signer, it may be difficult under any circumstances.

regards,
kyfdx
kyfdx
06-06-2007, 05:47 AM
I don't think that's correct. My understanding on a one-pay lease is that there's a proration of the single payment based on the period leading up to the destruction. Moreover, the lessee has to have insurance to protect BMWFS from the loss anyway.


Exactly right..
Dave 330i
06-06-2007, 07:31 AM
I don't know why the guy at the dealer mentioned that he may have a co-signer for you. Why would anyone want to gamble that you will come through? I find this type of agreement troublesome. Are there financial issues that we should know about in trying to get your BMWFS lease?
Acoustik
06-06-2007, 08:22 AM
Dave 330i,

The guy at the dealership didn't say he had a cosigner for me, there was an annotation on my application made by BMWFS that IF I could get a cosigner they could approve me, I have to find the cosigner on my own however. I'm sorry if my explanation was a little confusing.

-Eddy