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-   -   disposition fee (http://www.bimmerfest.com/forums/showthread.php?t=484797)

gregb10 09-16-2010 12:23 PM

disposition fee
 
Im finalizing my order fro my 535i and there is a $350.00 disposition fee.

Is that normal?

vortexx 09-16-2010 01:13 PM

Yes, but if you purchase another BMW at the time your current lease is up, they credit that back to you with your new purchase or lease.

chrischeung 09-16-2010 01:17 PM

I've heard (indirectly) that it is negotiable. However, I've never read of anyone ever successfully negotiating it down, to say $250. Most folks don't bother, since they plan on getting another BMW anyway.

tunafish 09-16-2010 02:29 PM

Quote:

Originally Posted by gregb10 (Post 5474049)
Im finalizing my order fro my 535i and there is a $350.00 disposition fee.

Is that normal?

:cry:Yup, I just paid it (along with $100 for a tiny scratch on the bumper). I also paid a $800 lease origination fee when I got the car. Two of the reasons why I will never lease a BMW again.

brandonw 09-16-2010 05:05 PM

Quote:

Originally Posted by tunafish (Post 5474424)
:cry:Yup, I just paid it (along with $100 for a tiny scratch on the bumper). I also paid a $800 lease origination fee when I got the car. Two of the reasons why I will never lease a BMW again.

Well, you wouldn't have had to pay the disposition fee if you were happy with BMWs and would have gotten another one. I hope your not complaining about a measly $100 for some scratches. :tsk:

Origination/Acquisition fees are not unique to BMW. Many if not most manufacturers charge some some sort of fee at lease inception.

I'm sorry that you experience with your BMW was SO poor that some $1,000 in fees (in this case the acquisition and disposition fees where clearly presented at lease signing) has turned you off from BMW or at least leasing. You didn't have to sign the lease and take the car, did you? :dunno:

tunafish 09-16-2010 07:00 PM

Quote:

Originally Posted by brandonw (Post 5474765)
Well, you wouldn't have had to pay the disposition fee if you were happy with BMWs and would have gotten another one. I hope your not complaining about a measly $100 for some scratches. :tsk:

Origination/Acquisition fees are not unique to BMW. Many if not most manufacturers charge some some sort of fee at lease inception.

I'm sorry that you experience with your BMW was SO poor that some $1,000 in fees (in this case the acquisition and disposition fees where clearly presented at lease signing) has turned you off from BMW or at least leasing. You didn't have to sign the lease and take the car, did you? :dunno:

My dissatisfaction is with leasing, not the car. In fact, I just paid cash for a new 535i (took delivery yesterday).

brandonw 09-16-2010 08:07 PM

Quote:

Originally Posted by tunafish (Post 5475050)
My dissatisfaction is with leasing, not the car. In fact, I just paid cash for a new 535i (took delivery yesterday).

Well, I am glad to hear that you dissatisfaction wasn't with your BMW. Leasing certainly isn't for everyone. It more complicated than financing. Cash is the way to go. Some prefer the idea of a purchase where as others like knowing all numbers up front (e.g. residual amount of actual depreciation they are paying for the usage of the car).

Congrats on you new F10 purchase! I can wait to get mine. Its in transit this week.

tunafish 09-16-2010 09:26 PM

Quote:

Originally Posted by brandonw (Post 5475215)
Well, I am glad to hear that you dissatisfaction wasn't with your BMW. Leasing certainly isn't for everyone. It more complicated than financing. Cash is the way to go. Some prefer the idea of a purchase where as others like knowing all numbers up front (e.g. residual amount of actual depreciation they are paying for the usage of the car).

Congrats on you new F10 purchase! I can wait to get mine. Its in transit this week.

Yeah, I find the dealer's nickel-and-diming tactics (is $1150 a nickel or dime?...dunno) in these lease deals annoying. I was told that the initiation fee was because I had not leased with BMW before. Maybe I could have avoided the disposition fee if I leased again. But you have to ask yourself, what is so profitable about this scheme that you are given these incentives for renewing your lease over and over? Is it the interest (cleverly renamed money factor - shades of Orwell!), or forced brand loyalty, or the constant supply of lightly-used cars for resale, or all of the above. I was also peeved that I had to put $2K worth of tires on this thing just before I turned it in.

Ronsell 09-17-2010 07:16 AM

Quote:

Originally Posted by brandonw (Post 5475215)
Well, I am glad to hear that you dissatisfaction wasn't with your BMW. Leasing certainly isn't for everyone. It more complicated than financing. Cash is the way to go. Some prefer the idea of a purchase where as others like knowing all numbers up front (e.g. residual amount of actual depreciation they are paying for the usage of the car).

Congrats on you new F10 purchase! I can wait to get mine. Its in transit this week.

I agree. Cash is the way to go--so much easier just to write a check and be done
with it.

chrischeung 09-17-2010 09:26 AM

Quote:

Originally Posted by Ronsell (Post 5475987)
I agree. Cash is the way to go--so much easier just to write a check and be done
with it.

I disagree. Leasing is the way to go if you always like to rotate your cars, or if you like to maintain your cash flow.

brandonw 09-17-2010 09:40 AM

Quote:

Originally Posted by tunafish (Post 5475406)
Yeah, I find the dealer's nickel-and-diming tactics (is $1150 a nickel or dime?...dunno) in these lease deals annoying. I was told that the initiation fee was because I had not leased with BMW before. Maybe I could have avoided the disposition fee if I leased again. But you have to ask yourself, what is so profitable about this scheme that you are given these incentives for renewing your lease over and over? Is it the interest (cleverly renamed money factor - shades of Orwell!), or forced brand loyalty, or the constant supply of lightly-used cars for resale, or all of the above. I was also peeved that I had to put $2K worth of tires on this thing just before I turned it in.

OH NO!!! You put new tires on yourself? That's never the way to go. It will always cost you more. When you turn your car in, you can have BMW charge you (as they did for the scratches you had). Run flats are a steal at only $250/ea regardless of size. All regular tires are I think only $150/ea

Quote:

Originally Posted by chrischeung (Post 5476304)
I disagree. Leasing is the way to go if you always like to rotate your cars, or if you like to maintain your cash flow.

I agree as well. If you are indeed one of those who wants a new car every few years, you be crazy to purchase (unless you have wads of cash that you don't car about loosing). But on the flip side as far as paperwork and financing details, if you are not good at it, don't understand it (or rather choose not to) or don't want to understand all the ins an outs of the multitude of fees, formulas and calculations, then purchasing is indeed the better way to. Leasing paperwork is pretty full on disclosure. There is just lots of see, connect and understand. All fees are disclosed. What is not, is the dealers actual profit. That's for them to know and for you to negotiate a deal that you are comfortable with, prior to signing.

Ronsell 09-17-2010 11:32 AM

Quote:

Originally Posted by brandonw (Post 5476350)
OH NO!!! You put new tires on yourself? That's never the way to go. It will always cost you more. When you turn your car in, you can have BMW charge you (as they did for the scratches you had). Run flats are a steal at only $250/ea regardless of size. All regular tires are I think only $150/ea



I agree as well. If you are indeed one of those who wants a new car every few years, you be crazy to purchase (unless you have wads of cash that you don't car about loosing). But on the flip side as far as paperwork and financing details, if you are not good at it, don't understand it (or rather choose not to) or don't want to understand all the ins an outs of the multitude of fees, formulas and calculations, then purchasing is indeed the better way to. Leasing paperwork is pretty full on disclosure. There is just lots of see, connect and understand. All fees are disclosed. What is not, is the dealers actual profit. That's for them to know and for you to negotiate a deal that you are comfortable with, prior to signing.

Just a personal choice--like colors, etc. I buy most everything with cash. I don't like
debt. I was fortunate enough to retire at 60--prudent investments, savings, etc. Unfortunately, I think many of my generation (baby boomers) will be working until
they drop. My apologies for the drift from topic.

quackbury 09-17-2010 11:38 AM

Quote:

Originally Posted by tunafish (Post 5475406)
Yeah, I find the dealer's nickel-and-diming tactics (is $1150 a nickel or dime?...dunno) in these lease deals annoying. I was told that the initiation fee was because I had not leased with BMW before. Maybe I could have avoided the disposition fee if I leased again. But you have to ask yourself, what is so profitable about this scheme that you are given these incentives for renewing your lease over and over? Is it the interest (cleverly renamed money factor - shades of Orwell!), or forced brand loyalty, or the constant supply of lightly-used cars for resale, or all of the above. I was also peeved that I had to put $2K worth of tires on this thing just before I turned it in.

Want some cheese with that whine?

Everyone pays the bank acquisition fee - it goes to BMWFS, not the dealer - regardless of how many BMW's you have leased in the past. The only thing that new customers have to pay is a security deposit, which makes perfect sense when you think of it. (Ever leased an apartment, a ski house or anything else without a security deposit? I doubt it). The security deposit protects BMW in case you turn your car in over-mileage or with excess wear-and-tear. Security deposits are waived for returning BMWFS customers.

The dispo fee was clearly stated in your lease agreement when you picked up the car. If you didn't read it, that's hardly the dealer's fault.

AFAIK the dispo fee is waived if you have a new BMW on order. (I know for a fact it is waived if you lease another BMW - not sure what the deal is if you pay cash). If you did, in fact, get a 2011, I would call BMWFS, give them the new car's VIN and request that your dispo fee be waived.

And like someone else said, you have only yourself to blame if you paid full retail for new tires. The cost of having the dealer replace then was clearly spelled out in the Lease Turn In Kit you should have received 60 days before your lease ended. It is ALWAYS cheaper to go this route - you not only save on tires, but you do not get dinged for shipping, mounting, balancing, and disposing of the old tires.

The Lease Turn In Kit also had a clear plastic wheel that would have allowed you to determine if the scratch in your bumper was chargable or not. If it was, it would have been a lot cheaper to buy a tube of touch up paint in the parts department instead of paying $100.

The sad fact of the matter is you really have no one but yourself to blame if you didn't do your homework.

tunafish 09-17-2010 12:52 PM

Quote:

Originally Posted by quackbury (Post 5476680)
Want some cheese with that whine?

Everyone pays the bank acquisition fee - it goes to BMWFS, not the dealer - regardless of how many BMW's you have leased in the past. The only thing that new customers have to pay is a security deposit, which makes perfect sense when you think of it. (Ever leased an apartment, a ski house or anything else without a security deposit? I doubt it). The security deposit protects BMW in case you turn your car in over-mileage or with excess wear-and-tear. Security deposits are waived for returning BMWFS customers.

The dispo fee was clearly stated in your lease agreement when you picked up the car. If you didn't read it, that's hardly the dealer's fault.

AFAIK the dispo fee is waived if you have a new BMW on order. (I know for a fact it is waived if you lease another BMW - not sure what the deal is if you pay cash). If you did, in fact, get a 2011, I would call BMWFS, give them the new car's VIN and request that your dispo fee be waived.

And like someone else said, you have only yourself to blame if you paid full retail for new tires. The cost of having the dealer replace then was clearly spelled out in the Lease Turn In Kit you should have received 60 days before your lease ended. It is ALWAYS cheaper to go this route - you not only save on tires, but you do not get dinged for shipping, mounting, balancing, and disposing of the old tires.

The Lease Turn In Kit also had a clear plastic wheel that would have allowed you to determine if the scratch in your bumper was chargable or not. If it was, it would have been a lot cheaper to buy a tube of touch up paint in the parts department instead of paying $100.

The sad fact of the matter is you really have no one but yourself to blame if you didn't do your homework.

I clearly recall the dealer asking if I had EVER leased a car from BMW. When I said "no", he said that I would have to pay an $800 lease acquisition fee. My assumption was that if I leased again I would not pay this. I was never required to provide a security deposit, but perhaps this was because I opted to pay for the lease through direct checking account deduction.

I should have been more explicit about the words "just before". I got the tires 4 months before turn in, but only after they were too worn to pass State inspection. I didn't see much in the a way of an alternative if I wanted to drive the car the last 4 months of the lease.

I was aware of the disposition fee, but I understood that charging it was more or less at the discretion of the dealer. I bought my car from a different dealer, so the old dealer refused to waive it. If it is, in fact, a fee charged by BMWFS, then I'll give them a call.

You are certainly right about the touch up paint. I should have used it. I used a "scratch cover" product which didn't quite pass muster.

While I found some of your comments useful, you tone is unhelpful.

tunafish 09-17-2010 01:16 PM

According to the BMWNA website:

"The Disposition Fee is a charge included on your Lease Agreement, which is used to defray the cost of preparing and selling the vehicle at the end of the lease (either scheduled or early termination) if the vehicle is returned. It is not due if you purchase the vehicle. As a courtesy to our returning customers, this fee will be credited to your next account if you finance with BMW Financial Services within six (6) months."

It does not appear to be refundable if you buy a DIFFERENT BMW, but if anyone knows about this, I would be interested to hear.

brandonw 09-17-2010 02:39 PM

Quote:

Originally Posted by tunafish (Post 5476888)
I was never required to provide a security deposit, but perhaps this was because I opted to pay for the lease through direct checking account deduction.

If you were a first time BMWFS customer on this lease and you didn't see a line item for the security deposit or your dealer said they waived it, then you most likely paid more over the term of your lease. That is because a dealer cannot "waive" it. They can mark up the money factor .00015. So in turn you pay for it in your lease, which usually equates to more than the deposit and since it not a deposit any longer, you cant get it back. Security deposit waivers are never a good idea. This is different than the MSD (Multiple Security Deposit Pgm).

Quote:

Originally Posted by tunafish (Post 5476888)
I was aware of the disposition fee, but I understood that charging it was more or less at the discretion of the dealer. I bought my car from a different dealer, so the old dealer refused to waive it. If it is, in fact, a fee charged by BMWFS, then I'll give them a call.

Yes, the Disposition fee is a fee charged by BMWFS. The dealer cannot waive it. They may opt to cover the cost for you if you got another car from them. But if you used BMWFS for that purchase they would waive/refund it for you anyway. But this is NOT a dealer fee.

Quote:

Originally Posted by tunafish (Post 5476972)
According to the BMWNA website:

"The Disposition Fee is a charge included on your Lease Agreement, which is used to defray the cost of preparing and selling the vehicle at the end of the lease (either scheduled or early termination) if the vehicle is returned. It is not due if you purchase the vehicle. As a courtesy to our returning customers, this fee will be credited to your next account if you finance with BMW Financial Services within six (6) months."

It does not appear to be refundable if you buy a DIFFERENT BMW, but if anyone knows about this, I would be interested to hear.

When all your lease turn in paperwork and car is complete, you usually get a bill (unless you have security deposit on file). This is a fee they withhold by default as stated in the lease. However, if you do get another BMW, and lease/finance it via BMWFS, they you can provide the VIN or production number and they will then refund (waive) the disposition fee. There might be a confusion on words here. The fee is never "waived." They do refund it back to you if the get another car.

quackbury 09-17-2010 03:10 PM

Quote:

Originally Posted by tunafish (Post 5476888)
While I found some of your comments useful, you tone is unhelpful.

Is that your way of waying "thank you"?

Everyone who leases gets charged the acquisition fee. It is not waived for returning customers (I'm on my 7th BMWFS lease and it's a black and white issue). You can pay it in cash or roll it into the cap cost, but it is never waived.

You do NOT pay a dispo fee if you lease or finance another BMW within 6 months. And yes, by definition they are talking about a DIFFERENT BMW. If you truly paid cash for your 535, you may be SOL. But if you financed, I just saved you $350. You're welcome.

And like brandonw noted, if you didn't pay a security deposit, you were charged a higher MF as a result.

If you ran your tires down so far they would not pass state inspection, how is that the dealer's fault or BMW's? Likewise your conscious decision not to get some touch-up paint.

You are certainly not the only one who has entered into a lease transaction without understanding the contract and reading the fine print. But at the end of the day it's no one's fault but your own. Save the drama for your mama. :bawling:

solstice 09-17-2010 03:25 PM

Quote:

Originally Posted by chrischeung (Post 5476304)
I disagree. Leasing is the way to go if you always like to rotate your cars, or if you like to maintain your cash flow.

I've never leased or financed a car but the depreciation of my E60 535i turned out to be ~$650/month after three years when I traded it. It sounds like leasing payments are closer to a grand a month. How can that be better, especially when taken all the other restrictions with leasing into account?

quackbury 09-17-2010 04:00 PM

Quote:

Originally Posted by solstice (Post 5477255)
I've never leased or financed a car but the depreciation of my E60 535i turned out to be ~$650/month after three years when I traded it. It sounds like leasing payments are closer to a grand a month. How can that be better, especially when taken all the other restrictions with leasing into account?

The answer is you are ignoring the time value of money.

Historically, if you had invested the cash you paid for the 535 into equities, fixed income, or even real estate, it would have appreciated over 3 years. Assume you paid $64,000 for the 535, and sold it 3 years later for $40,000. If you had invested that capital instead, and it had appreciated just 4.00%/year, it would have grown in value to $72,000 after 3 years. So your real opportunity cost would be $72,000 - $40,000 = $32,000 or +/- $900/month. In 2007 you could lease a nicely-equipped 535 for $800 to $850/month, so economically it would have been a wash.

But the beauty of leasing is that it takes all the guesswork out at the end of the term. You don't have to worry that the car you fell in love with in 2008 is no longer desirable, and you don't have to haggle over trade-in price (or worse, deal with the tire kickers if you sell the car privately).

In retrospect, you lucked out. The capital you sank into the 535 in 2008 would have DEPRECIATED over the past 3 years if you'd put it into most traditional investments back then. But that's the exception, rather than the rule.

And of course the downside of leasing is that it is a fairly complex transaction, and a whole lot of folks get fleeced by entering into it without a full understanding of how it works.

dalekressin 09-17-2010 04:15 PM

I sure like to stay clear of the lease for all the reasons stated above. You pay to borrow the car and pay to run it and then pay to return it.
Ohhhhh did I forget to say you pay for what you get?

solstice 09-17-2010 04:41 PM

Hmmm..$650 vs $850 that's a 30% premium. I'd say that getting that kind of return in average is pretty unusual and much more of gamble/luck. Nope I stick to buying cash, thank you.

tunafish 09-17-2010 04:51 PM

re-calc?
 
Could Quackbury do the same calculation with the current 3 yr T-bill yield of .75? Also, include the bank acquisition and disposition fees. Just curious.

gregb10 09-17-2010 05:25 PM

Wow, I didn't meant to spark such controversy.

Im furious at my dealer. I feel I am being cheated.

Im leasing my 3rd BMW and they are ripping me off.


Charging a disposition fee, $350.00 Really? After leasinga 3rd BMW

Charging me a purchase price of 63,776.88 for a car the shows at Edmunds for 61,730.

Cardsdirect.com shows an invoice price of $62,220. I think they account for the advertising fee. Even that seem hi but carsdirect.com shows a purchase price of $62,920 which is 700 over invoice.

Deal told me 680 over invoice but a purchase price of over 63k then has a separate line item for disposition fee and quoted me a higher lease payment than carsdirct.com

I should cancel my order and bring my business elsewhere,,, im pissed.

Full offer is as follows:

MSRP 67,175

Purchase Price $63,776.88
Disposition Fee $350
Acquisition Fee $105.00
Up front Taxes $2,722.17
Cap Cost reduction $2,000.00


Lease Payment 797.00

I have a lease spreadsheet and cant get it to match this number. Im doing something wrong.

Am I getting screwed here?

solstice 09-17-2010 05:31 PM

And also factor in that while the leasee pays $850/month of his income the cash buyer can sink that money into investments, IRAs or paying of debt as a mortage etc. There are quite a lot factors but my guess is that the chances to coming out ahead is a fair amount bigger for the cash buyer. And that's just the financial side, then there is the satisfaction of actually owning your vehicle and do what you want with it when you want to.

brandonw 09-17-2010 05:34 PM

Quote:

Originally Posted by quackbury (Post 5477338)
But the beauty of leasing is that it takes all the guesswork out at the end of the term. You don't have to worry that the car you fell in love with in 2008 is no longer desirable, and you don't have to haggle over trade-in price (or worse, deal with the tire kickers if you sell the car privately).

And of course the downside of leasing is that it is a fairly complex transaction, and a whole lot of folks get fleeced by entering into it without a full understanding of how it works.

Agree totally! Leasing is actually very attractive and desirable, IF you understand how a lease works and what your payment is made up of. You know up front and the terms and costs of the lease (before you even have to sign). Sure, in 24/36/48 months things could change, but at least you know of of the gate how the deal looks form both sidesl. I think too many people get into leases to drive cars they cant really afford - IMHO. Leasing is complicated, but actually straight forward if you do you homework and understand the numbers and how they effect things. It is NOT the dealers job to educate the buyer on leasing (nor straight financing) and its principals. Their job is to present you the contract, which discloses all fees, etc.... that make up your payment. To many folks only look at the down payment and monthly payment and are thrilled that they can get x car for that payment and sign without really understanding the gross cost for the term and if they could have gotten it for less. That's totally the fault of the buyer. These are the folks that dealers usually make their money on, which is fair game.

Quote:

Originally Posted by dalekressin (Post 5477372)
I sure like to stay clear of the lease for all the reasons stated above. You pay to borrow the car and pay to run it and then pay to return it.
Ohhhhh did I forget to say you pay for what you get?

Very true. You DO get what you pay for. Sadly, in terms of leasing and other financial dealings full disclosure still isn't enough.


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