definition of fair - X5 lease

[lovmac]

Hello everyone - I'm considering a lease for the first time and have been lurking around for a while and learning a ton.

While I now understand the mechanics of leasing math, I still have to develop an understanding of what constitutes a "fair" profit for the dealer to make on the transaction.

Is it a total $ amount or % over MSRP regardless of whether the vehicles is purchased outright, leased or financed? Do dealers prefer to make all their money in one place, or spread it out over multiple buckets?

I am getting ready to negotiate this weekend, and want to come in with a predefined "profit allowance" and then negotiate with the dealer to allocate that across selling price + markups, etc.

If it helps, the vehicle I am looking at is the xdrive35d, MSRP $63k. After reading around on the forum I want to minimize the money down, and intend to max out on the MSD's. Credit is in the 770 range.

Is $1000 dealer profit fair?

Thanks in advance

[ZoomVT]

yes, i think is fair. you should be able to get that without much hassle.

[Bismark]

I had maxed out the MSDs when I leased my 02 X5, but had been told within the last year that BMWFS no longer provided the MSD option. Obviously this is not case, correct?

I too want th X5 diesel with an MSRP of approx. $63K - you can determine the dealer profit with the information provided on this website?

Thanks in advance for the guidance and advice.

[lovmac]

Bismark,

Yes you can with the information available here and on other internet sites such as edmunds.

Essentially if you buy, dealer profit = (selling price - invoice amount) + financing markup + markups on any "extras" + miscellaneous fees they slip past you :mad:

If you lease it is the same except "financing markup" = "leasing markup" which has two components: markup on the origination fee (capped at $200 by BMWFS) + markup on the money rate (limited to .0004 by BMWFS)

Others with more experience may be able to provide additional detail, but at a high level this is how it works.

[mclaren]

Hello everyone - I'm considering a lease for the first time and have been lurking around for a while and learning a ton.

While I now understand the mechanics of leasing math, I still have to develop an understanding of what constitutes a "fair" profit for the dealer to make on the transaction.

Is it a total $ amount or % over MSRP regardless of whether the vehicles is purchased outright, leased or financed? Do dealers prefer to make all their money in one place, or spread it out over multiple buckets?

I am getting ready to negotiate this weekend, and want to come in with a predefined "profit allowance" and then negotiate with the dealer to allocate that across selling price + markups, etc.

If it helps, the vehicle I am looking at is the xdrive35d, MSRP $63k. After reading around on the forum I want to minimize the money down, and intend to max out on the MSD's. Credit is in the 770 range.

Is $1000 dealer profit fair?

Thanks in advance

I think you meant over invoice. In order to make an offer you need to KNOW the invoice. It can be calculated from information in this section or on Edmunds but you must add $180 training fee plus MACO. MACO is an advertising fee the dealer pays and it is difficult or impossible to know what that amount is. It could be 0 or $500 or something in between. You could ask the dealer but who knows whether the answer will be correct, it won't be too low, I promise you. After you determine their cost you have to negotiate the money factor markup and the lease acquisition fee. Shoot for no markup on either. At most pay the base $725 lease fee and .0002 markup on the money factor. Finally there is the dealer fee or doc fee. Many dealers have one that is not negotiable. If it's something ridiculous like $595 or more you may have to find another dealer or offer $400 over invoice to make up for it. My strong opinion is it is not worth arguing about a couple of hundred dollars, the purpose of this forum is to make sure you get a fair deal for both parties rather than grind the dealer into dust. They have to make a profit. :thumbup:

[flatout18]

This may help. Just leased an X5d. MSRP 60020

3yr/30,000 miles

Cap cost - 53,494 (includes dealer fee and acquisition fee). No money down and maxed MSDs payment of $669/month (which includes 7% FL tax; $625 without tax). No mark-up on money factor.

This was for a car on the lot, not a demo. If I ordered the car the best I could do was $750 over invoice (not invoice on edmunds but invoice adding ad fee and MACO fee). That deal was very difficult to find. I felt that delears were shooting for 2.0%-2.5% over invoice after taking into account dealer fess and any mark-up on acquisition fee, but that's just a guess.

Hope this helps.