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  #1  
Old 05-08-2006, 06:07 PM
Teo Teo is offline
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New to leasing? Tips and Facts here

I recently placed an order for my new 330i, which I will be leasing. I did a lot research to try and get the best deal possible. Unfortunately much of the information I needed was scattered among many threads, so I put together what I learned here, hoping that it would help those of you who are new to leasing. I welcome any additions, suggestions or criticisms of my findings.

I included what factors to look at before entering negotiations and what I feel are the least important variable to the lease equation and the ones I feel are the most important. I also included some notes down at the bottom that you should keep in mind.


Before Negotiations Begin
What Car This may sound like common sense but you should know what car you are talking about. Some of the figures explained below vary depending on what car you want. Even though they are both part of the 3-series the 325 and 330 do not use the same Money Factor or Residual Value.

Lease Terms Right after figuring out what car you want you should figure out what lease terms you want. Are you going to lease for 24, 36 or 48 months? Will you need 12,000 miles a year or 15,000? Your answers to these questions will also affect the Money Factor and Residual Value.



Least Important Factors
MSRP Many people place a lot of importance on this number but it's not as important as you may think. Negotiations should never start here. You should however know what the MSRP of your car is, as it will factor into the lease formula. Also note that MSRP should also include the Destination Charge, currently $695

MACO This is an advertising fee that all dealers charge. It ranges from $200 - $400 dollars. There is usually very little negotiation with this number

Residual Value This will represent how much your car will be worth when the lease expires. Typically this number is represented as a percentage. It varies depending on what car you get and what lease term you are looking at. This number is basically set for a given car and lease term combination, and there is no room for negotiating here, but make sure to check that the dealer is giving you the correct percentage, if they for whatever reason will not, don't bother dealing with them, look for someone else. If this number is represented as a dollar amount on your lease it is calculated by multiply the MSRP of the car by the Residual Value Percentage.


Most Important Factors
Money Factor This is equivalent to the interest rate in a traditional loan. Make sure you know the Money Factor your dealer is giving you. There is a fair amount of negotiation that can be done with this number. Unlike traditional financing there is a minimum a dealer can offer you called the "Buy Rate". Please note that the Buy Rate is set for a given car and lease term combination, but what you can negotiate is how much above that Buy Rate they will charge you. The maximum they can charge you is set at 0.0004 over the Buy Rate. Make the Buy Rate your target and try to get as close to it as you can.

Invoice Price This is one of the most important numbers of the whole equation. Know the invoice price of the car you want. All negotiations should start from this number. Currently negotiating $1,000 over invoice (Dealer Markup) is a good deal, any thing under that just makes the deal that much sweeter. Also note that Invoice Price should also include the Destination Charge, currently $695.

Down payment This is an amount that you will give to the dealer to reduce the Cap Cost of the car. A Down Payment is not required but will reduce your monthly payment.

Cap Cost This is the negotiated price of the car. It is basically the Invoice Price plus Dealer Markup, MACO and any fees (see note 1) and less a Down Payment. There really isn't any negotiation that is done here but you should make sure to check this amount so that no unknown charges will make their way into the deal.

Inception Fees This is a fee charged by the dealer for paperwork, securing financing and the like. This number is often overlooked but there is room for negotiation here too. As with the Money Factor there is a minimum ($625) and a maximum ($825) that a dealer can charge you.

Security Deposit This amount is determined by your monthly payment, it is basically your monthly payment increased to the next higher $50 increment. (Example: if your monthly payment including tax is $524, then your security deposit will be $550). Security deposits are typically only imposed on new BMW customers, returning customers should not be charged this fee. Also note that your security deposit is refundable and will be refunded to you when the lease ends.

Due at Signing This is the amount you will have to give the dealer when all the paperwork is signed and are ready to take possession of the car. This can include various amounts depending on how you structure your lease. Amounts that can be included are first month's payment, down payment, license and registration, inception fees, security deposit and taxes. The ones I mentioned are the pricier items that can be included. There could be others, but they are typically small amounts. Question anything over $50.


A few additional notes
Note 1: Make sure you know when you will be paying the various fees you will be charged. With some fees you can pay them up front or you can roll them into the lease. If you roll them into the lease they will increase the cap cost thereby increasing your monthly payment. The advantage to rolling then into the lease is that you will have to pay less at the start of the lease (Due at Signing). Some fees that you can roll into the lease are inception fees and license and registration.

Note 2: Don't forget Sales Taxes. These will very depending on where you lease your car. Make sure to get your quote with sales taxes already included on your monthly payment amount or your may be in for a surprise when you go to sign the paperwork.

Note 3: A down payment is not required and most people would advise against giving one for a leased car. The logic behind this is that if you get into an accident and the car is totaled you will loose any down payment you have given. If you have extra money lying around and would like to lower you monthly payment, a better option would be to take advantage of the Multiple Security Deposit program described below.

Note 4: BMW's Multiple Security Deposit program allows you to give up to 7 extra security deposits for your car. These will not be used to lower the cap cost, but instead for every additional security deposit you give, your money factor will be dropped by 0.00007, thereby lowering your monthly payment. These security deposits are also refunded to you at the end of the lease.

Note 5: Remember to get your floor mats and a full tank of gas. Some dealers will try to charge an additional fee for these. Try to negotiate for them upfront, don't wait until you are about to leave the dealer to ask for them.

Note 6: If you would like to save even more money on your lease and have the time, try the European Delivery program offered by BMW. I don't know all the details about this program so I won,t go into it, but you can find out more about it on the BMW website.

Note 7: Some of the necessary figures like Invoice Prices, MRSP, Money Factors and Residuals can be found at the top of the Ask A Dealer forum of this great site. They are reffered to on this site as Sticky's.

I hope some of you find this useful.

Last edited by Teo; 05-09-2006 at 04:14 PM.
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  #2  
Old 05-08-2006, 08:14 PM
rgzimmer rgzimmer is offline
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Good info. Thanks for putting it together.
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  #3  
Old 05-08-2006, 08:49 PM
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iversonm iversonm is offline
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I say give the man a sticky after 11 posts.

Here's a couple embelishments upon your summary:

Are you a candidate for leasing?

To be a good leasing candidate, you should drive a predictable amount of miles per year, and take good care of your car. A few scratches and chips here and there are no problem, but curb rashes and dents will cost you (not that it won't cost you when you own the car).

Negotiating

When leasing a BMW, you are negotiating more than just the purchase price. You are negotiating the sale price (cap cost), markup on the inception fee, and markup on the finance rate.

Don't get stuck on one number, like the purchase price, only to get screwed on the finance rate. Consider them all, and plan your moves carefully. If you push for an unrealistic sale price ($5 over invoice!) you may find that you're stuck with an unfavorable finance rate that destroys your beautiful deal.

Beware of and refuse to pay documentation fees, prep fees, etc. These are fees the dealer tacks on to make it appear that you got a good deal, only to have it evaporate in $500 of add on fees. You cannot negotiate away the $625 inception fee, and you'll have to pay your state's title and registation fees.

Spreadsheet

Download the lease payment spreadsheet, and really understand how the payment is calculated. You should be able to arrive at the same number the dealer computes.

State Taxes

Some states have laws that make it very unfavorable to lease a car. Texas and Illinois come to mind, but I can't give you specifics. Several other force to pay sales taxes up front, or some other scheme like that.

European delivery (ED) and leasing.

ED gives you a 7% discount on the car, calculated from MSRP. So, if your car had an MSRP of $40,000, you would get a discount of $2800. This discount comes from BMW, not the dealer. So if you can ordinarily buy that $40k for $37,500, you should be able to get $37,500 - $2,800 = $34,700.

But wait! There's more! The dealer does not have to pay the $200-$400 MACO fee, so you can negotiate another $200-400 off the purchase price, now about $34,300. This really helps when leasing, since the residual value is still computed off the original MSRP. A (very) crude approximation to leasing is that you only finance the difference between the purchase price and the residual. Since the residual is fixed off the MSRP, ED makes for significant savings. Another crude approximation is that $1000 on the purchase price is about $30/month on a lease payment. Therefore, on our $40k car, you can expect to save around $100/month on the lease payment in the ED program.

The downside is you have to fly to Europe to get your car, and be forced to drive your car legally at speeds that would put you behind bars here in "the land of the free" faster than you can whistle "Yankee Doodle." (For our Canadian readers, please subsititute "the True North strong and free" and "O, Canada" in the previous sentence. Canadians do get credit for the fact that 100 km/h does seem to be universally ignored on the 401, from my experience.)

The downside of ED is that you must part with you car (which you own) during the 6-8 agonizing weeks required to ship it back home. BMWFS does waive one lease payment while you wait for redelivery. However, you pay for this in the form of a slightly higher money factor, which covers this "free" payment and a little bit more.

You can find out more about ED by moving one forum down to "European Delivery" forum.
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Last edited by iversonm; 05-09-2006 at 07:35 AM.
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  #4  
Old 05-09-2006, 06:48 AM
iSelJerseyShore iSelJerseyShore is offline
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Teo & iversonm,


Thanks for the great welth of information on Leasing a BMW.. Now I only wish I could drive less then 15,000 miles a year so I can lease :-)...

Thanks Again!


-iSellJerseyShore
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  #5  
Old 05-09-2006, 08:37 AM
BayAreaBMWFan BayAreaBMWFan is offline
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Quote:
Originally Posted by iSelJerseyShore
Teo & iversonm,


Thanks for the great welth of information on Leasing a BMW.. Now I only wish I could drive less then 15,000 miles a year so I can lease :-)...

Thanks Again!


-iSellJerseyShore
You can buy extra miles above 15K/year. I think the rate is 15 or 16 c/mile. If you buy them initially you also get a refund of unused miles over 15K/year if you do not use them by the end of the lease. So for a person driving 22.5K miles per year, the extra charge will be around $1100/year. I would be more concerned about driving the car out of warranty on a 3 year lease than the miles.
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  #6  
Old 09-09-2007, 12:31 AM
jmatz jmatz is offline
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Adjusting the miles/yr amt.

Quote:
Originally Posted by BayAreaBMWFan View Post
You can buy extra miles above 15K/year. I think the rate is 15 or 16 c/mile. If you buy them initially you also get a refund of unused miles over 15K/year if you do not use them by the end of the lease. So for a person driving 22.5K miles per year, the extra charge will be around $1100/year. I would be more concerned about driving the car out of warranty on a 3 year lease than the miles.
The dealer I am negotiating my lease with told me today that I can always adjust the miles/yr amount upwards, as long as I still have a year or more left on the lease. So on my 24mo. lease @10k/yr., if I realize in the 11th month that I'm already at 11k or more, I can ask them to up my amount to 12k per year and begin paying the difference with no $ penalty.
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  #7  
Old 05-09-2006, 08:38 AM
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SteveinBelAir SteveinBelAir is offline
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A couple of things.

Can someone, maybe a dealer verify - once and for all - if the residual is calculated from the MSRP including the destination or the MSRP before destination. That seems to be a gray area and obviously affects the monthly payment which will be higher if the residual does NOT include the dest.

Capital cost reductions are subject to sales tax in some states. This is because it is treated as a payment. So in a 5% state (for example) your $2000 payment will be subject to $100 tax.

Different states have different tax laws regarding vehicle leases that can drastically change the payment given by the generic lease calculators available here. In MOST states, the sales tax is applied to the payment, so for example, in a 5% state, if your payment is $500, you add 5% or $25 for a total payment of $525. These are lease-favorable states because you are only paying tax on the part of the car that you are leasing.

Several states that include Illinois, Virginia, Maryland and Texas (please chime in if there are more) require you to pay tax on the negotiated price of the car. Yes, that's right, just as if you are buying it outright. In these states, you either pay it all up front or build it into the lease. On a 24 month lease, this will kill your payment

Note also that if you decide to buy the car at the end of the lease, YOU WILL PAY TAX AGAIN!

Disposition fee: When you turn in a leased vehicle, you will be subject to a disposition fee of $400 (on a BMW). I have leased many cars of different manufacture and there is always a disposition fee. So subtract it from the security deposit - that's what you will be getting back. Note that if you re-lease a BMW, there is an unwritten understanding that BMWFS will waive the disposition on the returned vehicle (and the security deposit on the new vehicle)

Remember that a leased vehicle has to be returned in very good condition. BMW will send an independant inspection 'dude' to your location and he will generally go through the car very thoroughly. You are allowed a ding or two and small scratches but one thing to note is that tears or rips in leather and tires that are either not a matching set, or with less than 5/32" tread will be flagged. No mods unless you can remove them. Window tints will have to be removed.

Probably more but I have a meeting. Nice write up.
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Last edited by SteveinBelAir; 05-09-2006 at 08:40 AM.
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  #8  
Old 05-09-2006, 10:32 AM
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Ågent99 Ågent99 is offline
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Quote:
Originally Posted by SteveinBelAir
A couple of things.

Can someone, maybe a dealer verify - once and for all - if the residual is calculated from the MSRP including the destination or the MSRP before destination. That seems to be a gray area and obviously affects the monthly payment which will be higher if the residual does NOT include the dest.
Destination IS included...I don't even know why they bother calling it out anymore. It should just meld with the price of the car and we shouldn't even see the word any more.
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  #9  
Old 01-25-2010, 06:59 AM
obi.wan obi.wan is offline
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Quote:
Originally Posted by SteveinBelAir View Post
A couple of things.
Several states that include Illinois, Virginia, Maryland and Texas (please chime in if there are more) require you to pay tax on the negotiated price of the car. Yes, that's right, just as if you are buying it outright. In these states, you either pay it all up front or build it into the lease. On a 24 month lease, this will kill your payment

Note also that if you decide to buy the car at the end of the lease, YOU WILL PAY TAX AGAIN!
.
So now the Maryland tax rate is 6%, still pay the tax on the full negotiated price
BUT starting I believe last year, no longer have to pay tax if you do a lease buyout

Having to still pay tax on the full price is a bummer
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Old 05-09-2006, 10:42 AM
Teo Teo is offline
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Glad to hear that there is a favorable response to the information that I have posted.

steveinbelair my understanding is that destination charge is included when calculating residual value. This is the methodology used for both leases I have entered into. California does it like this but I'm not sure if it applies to every other state.

As far as the disposition fees, it is written in the lease end documentation and on BMW website that disposition fees will be waived if you lease another BMW, it is not just an unwritten understanding.

I think that special attention should be placed on the tax issues brought up by both iversonm and steveinbelair. Some states do require one to pay taxes on the entire purchase price of the car. Here in California we are required to pay taxes on only the leased portion of the car. Make sure you know the particular requirements in your state.

Does anybody else know of any lease terms, fees or lease regulations that change depending on what state you are in? It might be helpful to others to bring these up here.
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Old 05-09-2006, 06:37 PM
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iversonm iversonm is offline
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Quote:
Originally Posted by Teo
Glad to hear that there is a favorable response to the information that I have posted.

steveinbelair my understanding is that destination charge is included when calculating residual value. This is the methodology used for both leases I have entered into. California does it like this but I'm not sure if it applies to every other state.

As far as the disposition fees, it is written in the lease end documentation and on BMW website that disposition fees will be waived if you lease another BMW, it is not just an unwritten understanding.

I think that special attention should be placed on the tax issues brought up by both iversonm and steveinbelair. Some states do require one to pay taxes on the entire purchase price of the car. Here in California we are required to pay taxes on only the leased portion of the car. Make sure you know the particular requirements in your state.

Does anybody else know of any lease terms, fees or lease regulations that change depending on what state you are in? It might be helpful to others to bring these up here.
One more tax tidbit. Ohio taxes your lease like most states, where you only pay taxes on your lease payments. However, they force you to pay all the taxes up front.

New Jersey evidently gives you the option to pay taxes up front or wrap them into the payment.
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Old 05-10-2006, 01:12 AM
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Asteroid Asteroid is offline
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Apply to lock lease rate

It should also be mentioned that you may be able to lock in the lease rate for 60 days, starting on the date of the expiration of the current program. Could someone post on what happens if the rates drop during the 60-day period, and whether you get the lower rate?
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Old 05-10-2006, 10:07 AM
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Ågent99 Ågent99 is offline
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Quote:
Originally Posted by Asteroid
It should also be mentioned that you may be able to lock in the lease rate for 60 days, starting on the date of the expiration of the current program. Could someone post on what happens if the rates drop during the 60-day period, and whether you get the lower rate?
You should get the lower rate but you are protected from higher rates. Hopefully your dealer is looking out for you but you should keep on top of it just in case.
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Old 05-10-2006, 08:05 PM
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iversonm iversonm is offline
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Old 07-08-2006, 03:30 PM
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Quote:
Originally Posted by iversonm
One more tax tidbit. Ohio taxes your lease like most states, where you only pay taxes on your lease payments. However, they force you to pay all the taxes up front.

New Jersey evidently gives you the option to pay taxes up front or wrap them into the payment.

Not true, you can roll tax into your payments in Ohio. If you were told otherwise, you were lied to.
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Old 07-08-2006, 04:13 PM
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iversonm iversonm is offline
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My source is: http://www.leaseguide.com/lease09.htm:
In some states, such as Ohio, you pay sales tax up front on the capitalized lease cost. In other states, such as Texas and Illinois, you actually pay sales tax on the full value of the leased car, not just the leased value, just as if you were buying it. In Illinois, you can also pay monthly taxes. In a few states, such as New Jersey, you have a choice of paying up-front taxes on either the full purchase price or the total of lease payments. Some states tax fees and taxes; others don't. Most states tax the lease acquisition fee; a few don't. Some states, have a cap on the total amount of taxes paid. Some allow a tax credit for trade-in vehicles, others do not.
I lived in Ohio when they made this change, but I did not actually lease a car under this rule, so I can't speak to the exact implementation.

My understanding is that Ohio gets all the sales taxes when you start the lease.
If you roll the taxes into the payment, and you're more or less financing the taxes like a regular loan.

This is distinct from other states that simply compute the taxes as a percentage of the monthly payment. It is likely that this method is cheaper than Ohio's approach.
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Old 07-08-2006, 04:33 PM
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iversonm iversonm is offline
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I did a little more investigating, and here's (hopefully) the definitive answer on taxation in the 17th state.

Ohio taxes are computed on the sum or all lease payments, and are payable upon lease inception.

It is possible to roll the cost of those taxes into the lease, but this does not change the fact that the State of Ohio gets paid up front. Therefore, when you choose this option, you are in essence financing the taxes, and will pay interest on this amount as a result.

Anecdotally, it appears there may be a problem if you move to another state during you lease, as you could be subject to double taxation, as the new state will collect sales taxes on payments, after having already paid up front to Ohio.
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Old 08-07-2006, 11:28 PM
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great info from everyone but let me ask everyone this, assuming you're about to purchase a brand new 750i with a price of $75,000 and you only drive 15,000 miles/yr. Which would be more profitable in 3 years, to lease it or finance it with a rate of 8%
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Old 02-24-2008, 10:42 AM
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Ed103 Ed103 is offline
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Damn...

I just got my new Z4 on Friday, and I saw this thread today. I didn't know all this stuff was negotiable...

Well...My monthly payment is $427 before tax and I paid $1,700 at the lease signing. All for a car with an MSRP of $38,900.00

How do you think that is?
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  #20  
Old 10-30-2008, 11:24 AM
BigMoneyWasted BigMoneyWasted is offline
2008 Z43.0i
Location: Columbus Ohio
 
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Thumbs up Lease Calculations by total cost

I would like to thank all the great posters who contribute to this thread and this board. As a newbie considering his first Z4, this really is immensely helpful. I have read the strings on lease calculations, downloaded the lease spreadsheet, and communicated directly with BMWFS on getting 7 or 8 MSDs on my lease. I think I understand money factors, residuals cap costs and other innovative terminology.

Now I have a simplistic question. When trying to figure out the best deal can I use just one number, my total expense over the term of the lease, divided by the MSRP (or dealer cost) to determine that? For example, I am considering leasing my Z4 at $369 per month for 36 months, with a $2500 down payment. This is simply $369x36+2500 = $15784 total cost.

Using Ed103's numbers, his total cost is $427*36+1700=$17,072. Ed, I assumed you had 36 months, please correct.
So If Ed and I were looking at identically configured cars driven the same number of miles, I have the lower cost. I really don't need to know the money factor, residual, cap cost, acquisition, inception fee, etc. Of course sales tax must be added.

Quote:
Originally Posted by Ed103 View Post
I just got my new Z4 on Friday, and I saw this thread today. I didn't know all this stuff was negotiable... Well...My monthly payment is $427 before tax and I paid $1,700 at the lease signing. All for a car with an MSRP of $38,900.00 How do you think that is?
By the way, the MSRP on my Z4 is $41,950; it has the sport package, xenon, heated seats and automatic top. Whaddaya think, should I go for it?

Last edited by BigMoneyWasted; 10-30-2008 at 11:26 AM.
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  #21  
Old 05-09-2006, 10:57 AM
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Ågent99 Ågent99 is offline
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Quote:
Originally Posted by Teo
Before Negotiations Begin
What Car This may sound like common sense but you should know what car you are talking about. Some of the figures explained below vary depending on what car you want. Even though they are both part of the 3-series the 325 and 330 do not use the same Money Factor or Residual Value.

Lease Terms Right after figuring out what car you want you should figure out what lease terms you want. Are you going to lease for 24, 36 or 48 months? Will you need 12,000 miles a year or 15,000? Your answers to these questions will also affect the Money Factor and Residual Value.
One should quickly see that BMW lease terms longer than 36 months are very, very expensive. BMW wants these cars back after 3 years as they still have the full factory warranty.

Quote:
Originally Posted by Teo
Least Important Factors
MSRP Many people place a lot of importance on this number but it's not as important as you may think. Negotiations should never start here. You should however know what the MSRP of your car is, as it will factor into the lease formula. Also note that MSRP should also include the Destination Charge, currently $695.
This is important because it provides your residual amount: Residual percentage times (base MSRP+dest+MSRP options) equals the residual number in dollars. Note that this may have zero to do with the actual price of the car you negotiate or it could match it exactly.

Quote:
Originally Posted by Teo
MACO This is an advertising fee that all dealers charge. It ranges from $200 - $400 dollars. There is usually very little negotiation with this number.
Correct...this is a regional number determined by BMWFS and the dealer has no control over it. Sneaky dealers, to get you into their dealership, may not bring this number up in order to give you a low phone/email quote only to bring it up later.

Quote:
Originally Posted by Teo
Residual Value This will represent how much your car will
be worth when the lease expires. Typically this number is represented as a percentage. It varies depending on what car you get and what lease term you are looking at. This number is basically set for a given car and lease term combination, and there is no room for negotiating here, but make sure to check that the dealer is giving you the correct percentage, if they for whatever reason will not, don't bother dealing with them, look for someone else. If this number is represented as a dollar amount on your lease it is calculated by multiply the MSRP of the car by the Residual Value Percentage.
Correct, the Residual numbers are provided by BMWFS and are 100% non-negotiable. Everyone in the US uses the same residual numbers so they are a constant in all lease figures.

Quote:
Originally Posted by Teo
Most Important Factors
Money Factor This is equivalent to the interest rate in a traditional loan. Make sure you know the Money Factor your dealer is giving you. There is a fair amount of negotiation that can be done with this number. Unlike traditional financing there is a minimum a dealer can offer you called the "Buy Rate". Please note that the Buy Rate is set for a given car and lease term combination, but what you can negotiate is how much above that Buy Rate they will charge you. The maximum they can charge you is set at 0.004 over the Buy Rate. Make the Buy Rate your target and try to get as close to it as you can.
I hate the way MFs are represented. Too many zeroes mess people up. Actually, the max bump a dealer can do is 0.0004. There are often Promotional Rates available that are well below the base rates, too. Also, there can be add-ons for things like European Delivery (0.0003) and for first time lease buyers (0.00015).

Quote:
Originally Posted by Teo
Invoice Price This is one of the most important numbers of the whole equation. Know the invoice price of the car you want. All negotiations should start from this number. Currently negotiating $1,000 over invoice (Dealer Markup) is a good deal, any thing under that just makes the deal that much sweeter. Also note that Invoice Price should also include the Destination Charge, currently $695.

Down payment This is an amount that you will give to the dealer to reduce the Cap Cost of the car. A Down Payment is not required but will reduce your monthly payment.
IMO, Down payments on leases should be avoided. If the car is totalled early in the lease, you will never see that money back. It is better to learn about MSD - Mulitple Security Deposits. It is a sticky near the top of the forum...read it well. Further, the whole point of a lease is to put as little money down as possible...my opinion of course.

Quote:
Originally Posted by Teo
Cap Cost This is the negotiated price of the car. It is basically the Invoice Price plus Dealer Markup, MACO and any fees (see note 1) and less a Down Payment. There really isn't any negotiation that is done here but you should make sure to check this amount so that no unknown charges will make their way into the deal.

Inception Fees This is a fee charged by the dealer for paperwork, securing financing and the like. This number is often overlooked but there is room for negotiation here too. As with the Money Factor there is a minimum ($625) and a maximum ($825) that a dealer can charge you.
Also known as an acquisition fee. Often, this is included in the cap cost and IMO, that is were is should stay!

Quote:
Originally Posted by Teo
Security Deposit This amount is determined by your monthly payment, it is basically your monthly payment increased to the next higher $50 increment. (Example: if your monthly payment including tax is $524, then your security deposit will be $550). Security deposits are typically only imposed on new BMW customers, returning customers should not be charged this fee. Also note that your security deposit is refundable and will be refunded to you when the lease ends.
Again, see the sticky near the top of the forum about MSDS.

Quote:
Originally Posted by Teo
Due at Signing This is the amount you will have to give the dealer when all the paperwork is signed and are ready to take possession of the car. This can include various amounts depending on how you structure your lease. Amounts that can be included are first month's payment, down payment, license and registration, inception fees, security deposit and taxes. The ones I mentioned are the pricier items that can be included. There could be others, but they are typically small amounts. Question anything over $50.


A few additional notes
Note 1: Make sure you know when you will be paying the various fees you will be charged. With some fees you can pay them up front or you can roll them into the lease. If you roll them into the lease they will increase the cap cost thereby increasing your monthly payment. The advantage to rolling then into the lease is that you will have to pay less at the start of the lease (Due at Signing). Some fees that you can roll into the lease are inception fees and license and registration.

Note 2: Don't forget Sales Taxes. These will very depending on where you lease your car. Make sure to get your quote with sales taxes already included on your monthly payment amount or your may be in for a surprise when you go to sign the paperwork.
Be aware of your state's rules for handling sale's tax on car leases. In California, you only pay tax on the value of the car for the amount of time you own it. In other words, you don't pay sale's tax on the full amount of the car--only for the time you are driving it.

Quote:
Originally Posted by Teo
Note 3: A down payment is not required and most people would advise against giving one for a leased car. The logic behind this is that if you get into an accident and the car is totaled you will loose any down payment you have given. If you have extra money lying around and would like to lower you monthly payment, a better option would be to take advantage of the Multiple Security Deposit program described below.
Obviously I didn't read through the whole thread as I responded. No biggie...it just reitereates the points!

Quote:
Originally Posted by Teo

Note 4: BMW's Multiple Security Deposit program allows you to give up to 7 extra security deposits for your car. These will not be used to lower the cap cost, but instead for every additional security deposit you give, your money factor will be dropped by 0.0007, thereby lowering your monthly payment. These security deposits are also refunded to you at the end of the lease.
Again, those pesky zeroes mess everyone up: 0.00007 is the correct number to use.

Quote:
Originally Posted by Teo
Note 5: Remember to get your floor mats and a full tank of gas. Some dealers will try to charge an additional fee for these. Try to negotiate for them upfront, don't wait until you are about to leave the dealer to ask for them.

Note 6: If you would like to save even more money on your lease and have the time, try the European Delivery program offered by BMW. I don't know all the details about this program so I won,t go into it, but you can find out more about it on the BMW website.

Note 7: Some of the necessary figures like Invoice Prices, MRSP, Money Factors and Residuals can be found at the top of the Ask A Dealer forum of this great site. They are reffered to on this site as Sticky's.

I hope some of you find this useful.
Yes, and check the various forum for the specific car you are looking forum. I keep the the 5er forum up to date!

Nice write-up and worth a sticky.
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  #22  
Old 05-09-2006, 04:23 PM
Teo Teo is offline
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Thanks for the additional comments Agent99, I think they are very informative. By the way I changed the mistyped MSD reduction and the maximum MF increase. You're right it gets very confusing some times with all those zeros.
I see my thread became a sticky. Does anyone know how a thread becomes a Sticky, who decides this?
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  #23  
Old 05-09-2006, 04:44 PM
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Ågent99 Ågent99 is offline
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Look down in the lower right section of the forum. Whose name do you see under Moderator??
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2001 530i/5 (E39), Topaz Blue/Stone Green/Black (118k miles) *very rare interior/exterior color combo*
2005 545i/SMG (E60), ED Order, Titanium Grey/Grey (lease over)
2015 335i, ED Order Summer 2015
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  #24  
Old 05-09-2006, 04:50 PM
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Ågent99 Ågent99 is offline
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Oh, and be sure to sign up for BMWCCA program and after 1 year, you'll be eligible for rebates on newly purchased/leased cars!

$500 for 3-series and $1000 for 5-series, in general.
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2005 545i/SMG (E60), ED Order, Titanium Grey/Grey (lease over)
2015 335i, ED Order Summer 2015
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  #25  
Old 07-29-2012, 09:36 PM
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Dave 330i Dave 330i is offline
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be careful of lessor using 39 month instead of 36 month lease. There is not too much you can do about it. Never heard if anyone had negotiated it into a 36 month lease. In 39 month lease, you pay for the 4th year's registration. It may be advantage to the lessor in some states.

And, in TX, as in some other states, you pay the sales tax of the leased price of the car up front.
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Last edited by Dave 330i; 07-29-2012 at 09:39 PM.
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