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Old 11-15-2012, 12:38 PM
Marwan Marwan is offline
Officially Welcomed to the 'Fest
Location: Houston, TX
Join Date: Oct 2006
Posts: 391
Mein Auto: 2012 X5 xDrive 35d
Originally Posted by kbeamer View Post
Very interesting. So what's the point of all dealers saying there is money due at signing. Could you explain msd a little more?
In a lease there is always money due at signing because even if one puts zero dollars for a down-payment, they still have to pay the 1st month payment and security deposit (if applicable) at signing.

Multiple security deposits (MSDs) are just what's in the name. You can pay up to 7 times your security deposit upfront. Each one of these 7 security deposit payments decreases your money factor (MF) by 0.0007. So if one makes 7 MSDs, their MF goes down by 0.0049. That is a very significant number which could easily save one hundreds of dollars over the life of their lease (I'm saving a total of about $1700 over the 36 months of my lease). That by the way is way more than I could have made by putting the money in a savings account or even in a CD.

So what's the difference between MSDs and a down-payment? The MSD money is yours to collect back at the "natural" end of the lease, at an early pull out of the lease, or at its end due to a totaled or stolen car. The down-payment money is NOT yours to collect under any circumstance. Once you make a down-payment, you never see that money back again no matter what!

OK, so why aren't dealers pushing MSDs on their customers all the time? Well, in my dealer's case it was simple ignorance on the CA's part. When I mentioned MSDs to him he looked bewildered and said "what's that?". Yes, a BMW dealership CA had not even heard of MSDs until I asked!!! Other CAs at that dealership did not fare any better; only the GM knew what I was talking about. Go figure...
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