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disposition fee

9K views 53 replies 11 participants last post by  jimefam 
#1 ·
Im finalizing my order fro my 535i and there is a $350.00 disposition fee.

Is that normal?
 
#3 ·
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.
 
#5 ·
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:
 
#15 ·
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.
 
#20 ·
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?
 
#28 · (Edited)
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.
Sure he could. At least 2 out of the 3. (Quack has never been charged a dispo fee, so no need for him to factor it in). Like I said above, HISTORICALLY there have been better uses of capital than sinking it into a DEPRECIATING asset. I think we can all agree today's yield curve is an anomaly, but let's play along.

Framing it the way you are asking, let's say Solstice and I each have $70,000 cash sitting in our respective pockets, and each get a $65,000 car. To make the math easy, let's assume we "invest" our funds in a non-interest bearing checking account, so we earn 0.00% instead of 0.7%

Solstice buys his car outright. He pays cash for the car, plus the sales tax. (Let's assume he has a $40,000 trade-in, so he only pays sales tax on $25,000. And for sh*ts and giggles let's assume his state's sales tax is 5.00%, so his total cost is $66,250. He's got $3,750 left in his checking account when he walks out of hte dealership.

OTOH I lease mine, pay the $775 acquisition fee, then lease payments of $800/month (including tax). 36 months from now I've spent $28,800 on lease payments, plus $775 on the acquisition fee = $29,575 total. I hand the dealer the keys and walk away. I've still got $40,425 in my checking account.

If Solstice can sell or trade his car for more than $36,675, he comes out ahead. ($36,675 plus $3,750 equals the $40,425 in my checking account). But he has to go through all the hassle of marketing the car. Assuming his time is worth something, you need to factor that in.

Now here's the kicker. It makes no difference to me what the market is for my car 36 months from now, as my residual is locked in. OTOH if folks don't want Solstice's car 3 years from now, he's SOL. (Know anyone who bought a Yukon Denali in 2006? Any idea what that truck was worth 3 years later? They lost their shirts! Even worse if they bought a Pontiac or Hummer).

To me, a QUANTIFIABLE monthly expense beats a crap shoot any day. YMMV.

EDIT: I left out any "other" costs out of the above - registration, property tax, etc. - as you're going to face those regardless of whether you lease or pay cash).
 
#23 ·
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?
 
#26 ·
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?
I am not sure why on your paperwork for your new lease why they have a disposition fee. That is billed from BMW (if I understand it correct) as the fee is theirs. Maybe if you didn't have a cash security deposit down, then maybe the dealer collects it and all fees. Not sure on that one. Acquisition fee at cost is $725, with the maximum markup of $200, $925. This is again, NOT a dealer fee, but one from BMWFS. Something is off.
 
#24 ·
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.
 
#27 ·
Disposition Fee is the fee you pay when you DON'T want to buy the car after your lease is over. It's listed on the fine print in your lease agreement. In other words, if you buy the car after your lease is over, you don't have to pay for the disposition fee but otherwise you have to. It's fairly standard from what I see in BMW lease so you are not being screwed.
 
#29 ·
Actually, dispo fee is charged if you don't FINANCE OR LEASE ANY BMW within 6 months of your lease end. I have never purchased my existing car at lease end, yet I have never paid a dispo fee since I am always moving into my next BMW.
 
#33 ·
Dealer is giving you the buy rate. Always a good sign.

Looks like you are getting the car for +/- $1,500 over invoice which is a reasonable deal for the F10. (X5 would be $1,000, 3 series would be $500).

My lease calculator gives me EXACTLY $797.00 as a payment, so nothing fishy going on.

Too bad you are not a BMWCCA member - the $1,000 rebate would be helpful.

The cap cost reduction is foolish. that money is GONE the minute you leave the dealership. If the car is stolen or totalled you will not get it back. Plus you are paying sales tax on it.

Rather than piss away $2,000, I would do 3 multiple security deposits, for a total cost of $2,550. You will get the $2,550 back at the end of the lease. The MSD's lower your MF, and you are getting about a 11% tax-freee ROR on the funds.

The monthly payment "my way" is $835.02. If the extra $37 a month is a deal killer, you shouldn't be leasing an F10.
 
#36 ·
Dealer is giving you the buy rate. Always a good sign.

Looks like you are getting the car for +/- $1,500 over invoice which is a reasonable deal for the F10. (X5 would be $1,000, 3 series would be $500).

My lease calculator gives me EXACTLY $797.00 as a payment, so nothing fishy going on.

Too bad you are not a BMWCCA member - the $1,000 rebate would be helpful.

The cap cost reduction is foolish. that money is GONE the minute you leave the dealership. If the car is stolen or totalled you will not get it back. Plus you are paying sales tax on it.

Rather than piss away $2,000, I would do 3 multiple security deposits, for a total cost of $2,550. You will get the $2,550 back at the end of the lease. The MSD's lower your MF, and you are getting about a 11% tax-freee ROR on the funds.

The monthly payment "my way" is $835.02. If the extra $37 a month is a deal killer, you shouldn't be leasing an F10.
Thanks for your reponse and advice.

$37.00 is not a deal killer, I just had a specific number in mind. Your advice on MSD is better than anything my dealer is telling me. I just leanred of this option recently.

I repsectfully disagree that 1,500 over invoice is fair when Im leasing my third car from the same dealer and the dealer is stating its 680 over invoice. I jsut want them to be honest with me,, again, unless im missing something.

Would you be willing to email me you leasing calculator? Would be grealty apreciated. Im PM you my private email.

BTW, What is BMWCCA?

Thanks again.
 
#35 ·
And a bird in the hand beats a Reggie Bush. With or without the Heisman. You'd rather have the car, I'd rather have the cash. The very essence of YMMV
 
#37 ·
Cash is no problem, I got it. Partly due to my save before buying philosophy. It works best for me but I'm sure there are other ways that works better for others like yourself. To each his own but to say that I am out of cash just because I buy a car is not even close to be true.
 
#46 ·
The Reggie Bush thing was a play on words - there's an old expression "a bird in the hand is worth two in the bush." I was just trying to lighten the mood with a non-sequiter, as someone was getting a little testy. Obviously, my comment was a little too obtuse..

I think what Ronsell was trying to say is that we are all very fortunate to have the opportunity to be driving BMW's. Whether that fortune comes from luck, hard work, God's grace, or winning the lottery doesn't matter. Nor does whether you lease, finance or pay cash. We should all count our blessings.
 
#49 ·
Mr. Potter, is that you?

(PS If you really think you are the only one on this board with a solid balance sheet, you are very, very mistaken.)
 

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#51 ·
(Sigh). Let's just both agree that you don't get it, and you don't like it, and leave it go at that, okay?

Leasing is not a panacea, and to the best of my knowledge no one on this board said it improves cash flow. Rather, it allows you to retain capital, with the potential to invest said capital into equities, a closely held business, or any other (potentially) APPRECIATING asset, instead of a mass produced automobile which is almost always a DEPRECIATING asset. It may also offer tax advantages for those of us who use capital assets (like cars, notebooks, servers, and telecommunications equipment) in their business, instead of sitting home in Potterville admiring themselves in the mirror and sniping at others.

The great thing about capitalism is that we are all free to invest our capital however we think best. I'm fine with you investing your cash in cars. I don't understand why you have a problem with folks who don't share your philosophy.

Since you are on the West Coast, your BMW arrived at your dealership first via train, then via truck. There is a 99.99% probability that both the rail car and the trailer that transported your vehicle were owned by a leasing company, who leased them to the railroad or the common carrier. If you flew to Munich to do ED, there is also a 99.99% probability that the aircraft you flew was owned by GE Capital or another entity, then leased to Delta, American, Lufthansa or whatever airline you used. You may feel morally superior to the railroads, the trucking company and the airlines, but all the MBA's employed by them choose leasing for a reason. (Heck, many of them also engage in employee leasing, which even I find odious).

By the way your prior posts are contradictory. You start by boasting that you pay cash for your cars, then go on to say that paying cash allows you to invest the money you would otherwise spend in payments. The inference is that it is somehow more valuable to invest $800/month than a $65,000 lump sum. Makes zero sense to me.

Are there schmucks who enter into leasing not understanding the transaction, just so they can drive a fancier car than they can really deserve? Sure there are. Just check out Swapalease and look at all the poor souls who are trying to bail on a lease where they are over mileage (leased the car for 10,000 miles/year to keep the payments low, drove 20,000 miles instead), and find themselves royally screwed. But there are also schmucks who allocate capital to dubious investments (Bernie Madoff ring a bell?). Lessees don't have the market cornered on stupidity. You insult a lot of intelligent business people by claiming that they do.
 
#52 · (Edited)
Quack, this is how it started

"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."

This is what I responded to before you jumped in with your 2c.
So sure we can agree to disagree but don't believe that leasing is a non-profit operation. There is administration and profit margins as with any business model and who do you think pays for it? That's right, you the leasee. Cash buyers don't. Anyhow I'm not against leasing or people who choose to. I just don't agree with people who pushes it as being a better financial decision since I think that is rare and requires more fincancial wit than what is the norm.
 
#53 ·
Actually, I think you both have valid points. Of course, we would all save a lot of $$$
by just riding the bus--but then we wouldn't have nearly as much fun--and we would
miss the smell of that rich Corinthian leather (in this case, Nappa or Dakota). If you
remember that commercial, then you are older than dirt--which I am. ;)
 
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