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F07 Gran Turismo (2010 - Current)
The 5 Series Gran Turismo -- now available in the USA as a 535i, 550i and 550i xDrive model.

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  #1  
Old 05-25-2013, 06:56 PM
jpwolfe31 jpwolfe31 is offline
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Location: California
 
Join Date: Jun 2012
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Mein Auto: 2009 Z4 35i, 2013 535iGT
Do dealers routinely mark up lease rates?

Trying to get into a 535i GT. I ordered one a few weeks ago and it will be arriving in a week or two. I thought I got a reasonable price at about $500 over invoice. I put a small deposit down which is refundable. The option to buy or lease was left open when I ordered.

Since then, I decided I would like to lease this vehicle instead of purchase outright, so I asked the dealer to confirm the lease terms so there would be no misunderstanding when I went to pick up the car.

After a few back and forths, it turns out they think I should pay a mf of .00167 or more, even though I know the rate from BMW FS for a 535i for May is currently 0.00127. Credit score is not a factor.

Should I expect any mark-up on the BMW FS rate?

Did I screw up by not getting the lease terms locked in up front? At the time it seemed it would be hard to do this since they change monthly.

Any insights would be appreciated. I will of course let you know how this turns out.
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  #2  
Old 05-26-2013, 04:46 PM
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quackbury quackbury is offline
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Mein Auto: 535i M Sport; 328i Wagon
Re: Do dealers routinely mark up lease rates?

Yes, they routinely mark up the MF. Most buyers never catch it. And yes, you should have included the "buy rate" in your negotiations.

You have limited leverage now. Know that you are dealing with 2 separate profit centers. Your client advisor gets paid for selling the car. The finance guy / gal earns his / her living by "selling" you a car loan or a lease. The more profit they can pad into that transaction, the bigger their paycheck.

Since you didn't negotiate it up front, your best chance is telling the client advisor that you are offended by being asked to pay a higher MF, so much so that you will walk away from the deal if you don't get the buy rate. Faced with losing the sale, the CA may lean on the finance guy and tell him to play nice.

BTW they are almost certainly going to mark up the lease acquisition fee, too. You should have negotiated that up front. But you may want to throw them a bone and let the finance guy win that battle.
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  #3  
Old 05-28-2013, 09:47 AM
jpwolfe31 jpwolfe31 is offline
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Location: California
 
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Mein Auto: 2009 Z4 35i, 2013 535iGT
Thanks for the insights. Luckily, I am in a position to walk away from this.

If I need to, I will order another car from one of the many other dealers in this area making certain to confirm the lease pricing going in.

Hopefully it will not come to that.
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  #4  
Old 06-01-2013, 05:19 PM
jpwolfe31 jpwolfe31 is offline
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Mein Auto: 2009 Z4 35i, 2013 535iGT
We are the new owners of a 535i GT. Really like it so far. I told the sales guy that I assumed we were talking the buy rate when we were negotiating the price and I would not buy the car unless we received this rate. 0.00127 mf with 7 MSDs netted out to .00078. $725 acq fee. $750 loyalty since we own a Z4. 0.65 residual with 10k miles. They charged a $80 doc fee but I was ok with this given the overall deal. End of month certainly helped as well!
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  #5  
Old 06-15-2013, 03:28 PM
WingedWheel WingedWheel is offline
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Location: Michigan
 
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Mein Auto: 2011 535ix GT
I'm also considering a lease deal on a 2013 GT. For the novice like me, can you guys clarify what you mean by "MSD" and "0.00127 mf"? Thanks.
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  #6  
Old 06-16-2013, 08:50 AM
jpwolfe31 jpwolfe31 is offline
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Location: California
 
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Mein Auto: 2009 Z4 35i, 2013 535iGT
The money factor is the interest rate expressed as 1/2400th of the annual rate. This was useful before computers to help calculate lease payments. Multiply this by 2400 to get the annual interest rate.

MSD is monthly security deposit. Take you total payment with sales tax and round up to the nearest $50. For each deposit you make (up to 7 I believe), the mf goes down 0.00007 per current BMW rules. The MSDs are refundable when you return your car.

Here is a good website that explains lease terms.

http://www.realcartips.com/leasing/0...se-terms.shtml

Here is a link to a BMW lease payment calculator so you can see how the numbers work on a spreadsheet.

http://www.bimmerfest.com/forums/sho...74&postcount=9

Here is another link to the ask the dealer forum which has latest lease information.

http://www.bimmerfest.com/forums/forumdisplay.php?f=20

This was my first lease, and I can say it definitely pays to do some research to understand how the final payment comes together. The first monthly payments quoted to me were at least $100 more per month than the final.
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  #7  
Old 06-16-2013, 10:39 AM
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kjboyd kjboyd is offline
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Do dealers routinely mark up lease rates?

MSD is actually "multiple" not monthly.



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  #8  
Old 06-16-2013, 11:45 AM
WingedWheel WingedWheel is offline
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Mein Auto: 2011 535ix GT
Great -- many thanks for the additional info
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