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  #401  
Old 06-15-2011, 08:12 PM
mrMTB mrMTB is offline
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Excellent. OK, one more... The calculator shows the Interest Rate (from MF) as the Money Factor * 24... Should this be the Money Factor * Lease terms in months, or is 24 a constant (I'm thinking the former)?
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  #402  
Old 06-15-2011, 08:14 PM
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SARAFIL SARAFIL is offline
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Originally Posted by mrMTB View Post
Excellent. OK, one more... The calculator shows the Interest Rate (from MF) as the Money Factor * 24... Should this be the Money Factor * Lease terms in months, or is 24 a constant (I'm thinking the former)?
it is a constant.... if you look at the formula for interest calculation it makes sense.
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  #403  
Old 06-15-2011, 08:44 PM
mrMTB mrMTB is offline
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Thanks for your help, SARAFIL. There's a very special 535i I have my eye on, and the CA is really making it hard for me to want to give him my business; I'm trying to get my head around the various ways this thing moves around as I tweak the various levers. (His opening was $1088/mo @36 months on a car with an MSRP of $66k. I'm looking at an invoice of $60,730 minus NAV credit plus HIS PAYCHECK and plus seven MSDs and a token amount down ($15 to drop the payment just under the $50 threshold) for a payment of $749/mo @36 mo)...
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  #404  
Old 06-23-2011, 08:41 AM
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TXPearl TXPearl is offline
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Quote:
Originally Posted by SARAFIL View Post
0.00005 (four zeros)
SARAFIL, are you sure? That works out to an interest rate of 0.12%....basically nothing. Why even have a floor at that point? Maybe to cover just the paperwork/admin costs??
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  #405  
Old 06-25-2011, 02:52 PM
kavel kavel is offline
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How much should I put in cap reduction to get under the 50 boundary?

Hi all;

Thanks to the amazing amount of information I got from this board, I decided to do the max number of SDs (7) in my deal. My monthly payment, with the MF reduction due to 7 MSD will be $416, which would mean I'd put 7*$450 ($3150) upfront as security deposit. I know it is considered a smart move to try to move under the next $50 threshold when you're close to it, but how close is close considering our effort to avoid any cap reduction?

Specifically, in my situation, it would take somewhere in the neighborhood of $425 cap reduction to get my payments down to $399.99, and hence my SD upfront to $2800 instead of $3150. Should I do it, or just stay with the $416/month payment with no cap reduction?
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  #406  
Old 06-25-2011, 05:54 PM
Mace14 Mace14 is offline
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Originally Posted by kavel View Post
Hi all;

Thanks to the amazing amount of information I got from this board, I decided to do the max number of SDs (7) in my deal. My monthly payment, with the MF reduction due to 7 MSD will be $416, which would mean I'd put 7*$450 ($3150) upfront as security deposit. I know it is considered a smart move to try to move under the next $50 threshold when you're close to it, but how close is close considering our effort to avoid any cap reduction?

Specifically, in my situation, it would take somewhere in the neighborhood of $425 cap reduction to get my payments down to $399.99, and hence my SD upfront to $2800 instead of $3150. Should I do it, or just stay with the $416/month payment with no cap reduction?
You're too far away, don't do any cap cost reduction. Think of it, using your numbers you have to put $425 as CCR to save $350 in MSD. Your total out of pocket drive off costs would be $75higher, it makes no sense.
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  #407  
Old 06-25-2011, 07:29 PM
kavel kavel is offline
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Originally Posted by Mace14 View Post
You're too far away, don't do any cap cost reduction. Think of it, using your numbers you have to put $425 as CCR to save $350 in MSD. Your total out of pocket drive off costs would be $75higher, it makes no sense.
Yep, shouldn't have even asked I managed to confuse myself with the numbers I was running earlier that had a lower cap cost reduction. Thank you very much for bringing me back to my senses.
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  #408  
Old 06-26-2011, 07:01 AM
ZoomVT ZoomVT is online now
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Shouldn't the 400-600 saved in payments over the term of the lease be included in the calculation?


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  #409  
Old 06-26-2011, 08:15 AM
kavel kavel is offline
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Originally Posted by ZoomVT View Post
Shouldn't the 400-600 saved in payments over the term of the lease be included in the calculation?
One way of looking at it would be to add all the payments made through the lease term to the cap cost reduction (disregarding the security deposit as it is refundable in either case) and see what the difference would be. In my particular case, paying the $425 in cap reduction reduces the total cost of the lease (27 month term) by $20. I don't think this is enough of a savings to warrant putting in cap reduction, considering that it actually increases my out of the door costs by $75.
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  #410  
Old 10-14-2011, 06:35 AM
Matt_UKTX Matt_UKTX is offline
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Guys,

Is it true that if you put down MSD's, that you lose them if you trade-in or sell or car, rather than turn it in at lease end? I've only ever turned in my lease once. The other times, I just traded it at the dealer for another BMW. It's better this way because of the way sales taxes work on leases on the State of Texas.

I'd love to do MSD's, but don't want to lose $4900 if I trade my car.

Thoughts / Comments?
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  #411  
Old 10-14-2011, 04:58 PM
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SARAFIL SARAFIL is offline
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Quote:
Originally Posted by Matt_330i View Post
Guys,

Is it true that if you put down MSD's, that you lose them if you trade-in or sell or car, rather than turn it in at lease end? I've only ever turned in my lease once. The other times, I just traded it at the dealer for another BMW. It's better this way because of the way sales taxes work on leases on the State of Texas.

I'd love to do MSD's, but don't want to lose $4900 if I trade my car.

Thoughts / Comments?
If you trade or sell, there are two payoffs... one is the gross amount (where BMW sends the MSD back to you) and the other is the net amount (where BMW reduces the payoff by the MSD amount-- you don't "lose" the MSD since your payoff is lower, and therefore it increases your equity position in the car).
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  #412  
Old 11-06-2011, 11:09 AM
gsfo gsfo is offline
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Hello fellow lease guru´s. After perusing as much of the wisdom my mind can absorb from this forum I have but one simple question. Does the first security deposit on a lease decrease the MF by 0.00007 or not?
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  #413  
Old 11-07-2011, 12:08 AM
ssaq ssaq is offline
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no, the reduction is on multiple security deposits.

so for each additional deposit (up to 7) you get a 7 pt rediction, for a max reduction of .00049. (So you would have left them 8 mos worth of deposits to max out)

They are giving you a reduction because you are reducing their risk by giving them extra deposits. The first deposit is mandatory (if you are new to BMWFS).
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  #414  
Old 11-07-2011, 10:37 AM
dtc100 dtc100 is offline
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Quote:
Originally Posted by ssaq View Post
no, the reduction is on multiple security deposits.

so for each additional deposit (up to 7) you get a 7 pt rediction, for a max reduction of .00049. (So you would have left them 8 mos worth of deposits to max out)

They are giving you a reduction because you are reducing their risk by giving them extra deposits. The first deposit is mandatory (if you are new to BMWFS).
Actually the current leases have zero security deposit requirement.
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  #415  
Old 11-24-2011, 06:51 PM
j3ff j3ff is offline
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i just finished reading all 17 pages [!] of this thread, and i just want to thank all the contributors and, more generally, the people who founded and sponsor this incredibly informative site.
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  #416  
Old 11-24-2011, 07:40 PM
hyperzulu hyperzulu is offline
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Quote:
Originally Posted by ssaq View Post
no, the reduction is on multiple security deposits.

so for each additional deposit (up to 7) you get a 7 pt rediction, for a max reduction of .00049. (So you would have left them 8 mos worth of deposits to max out)

They are giving you a reduction because you are reducing their risk by giving them extra deposits. The first deposit is mandatory (if you are new to BMWFS).
I can't say I know for certain, but I believe this has less to do with risk, more to do with BMWFS paying you in interest for loaning them money for a certain amount of time. They loaned you money and also charge interest, but now they have also agreed to borrow money from you, so they can use it as capital to lend out to others, possibly at a higher rate. So, they dictate the interest rate at which they are willing to borrow that money and reduce it from your rates on the car loan. You win with lower rates, they win by securing capital for 36 months to continue doing business.
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  #417  
Old 11-25-2011, 04:59 PM
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Jon Shafer Jon Shafer is offline
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i just finished reading all 17 pages [!] of this thread, and i just want to thank all the contributors and, more generally, the people who founded and sponsor this incredibly informative site.

You are very welcome!

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  #418  
Old 02-01-2012, 02:24 PM
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armoredsaint armoredsaint is offline
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Quote:
Originally Posted by SARAFIL View Post
In a bulletin released today, BMWFS made some changes to the MSD (multiple security deposit) program.

The current program is up to 5 over the required amount, and a 0.00005 reduction in the money factor for each one.

The new program is up to 7 over the required amount, and a reduction of 0.0007 per.
sorry for the re-tread, but does the .0007 still hold true today?
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  #419  
Old 02-01-2012, 04:18 PM
Mace14 Mace14 is offline
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Quote:
Originally Posted by armoredsaint View Post
sorry for the re-tread, but does the .0007 still hold true today?
Yes
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  #420  
Old 02-07-2012, 08:41 PM
bzcat bzcat is offline
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There was some disagreement about this half way thru the thread and I don't think it was definitively answered - the security deposit amount is determined based on lease amount or month payment? Basically, is MSD a multiple of the monthly lease payment or monthly lease payment+sales tax?

Last edited by bzcat; 02-07-2012 at 08:42 PM.
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  #421  
Old 02-07-2012, 08:47 PM
hyperzulu hyperzulu is offline
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Quote:
Originally Posted by bzcat View Post
There was some disagreement about this half way thru the thread and I don't think it was definitively answered - the security deposit amount is determined based on lease amount or month payment? Basically, is MSD a multiple of the monthly lease payment or monthly lease payment+sales tax?
Each security deposit is equal to your monthly (tax included) rouded up to the next multiple of $50. Monthly is $602, security deposit is $650.
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  #422  
Old 02-07-2012, 10:28 PM
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mclaren mclaren is online now
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Quote:
Originally Posted by hyperzulu View Post
Each security deposit is equal to your monthly (tax included) rouded up to the next multiple of $50. Monthly is $602, security deposit is $650.
This is correct and if it was $602 you should make a small cap cost reduction to get the payment down to $600 or $599. Then the MSDs would be $4200 instead of $$4550 with the same benefit. The lowest money factor allowed is .00005 which in rare cases would be violated with 7 MSDs. For example if the promotional money factor was .0005.
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  #423  
Old 02-10-2012, 03:05 PM
PhilT3 PhilT3 is offline
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holy crap... this is a lot of math! I would have to devote a substantial amount of time to this to really understand it.

Kudos to you all who do!

Can someone tell me if this deal "looks" okay?

I placed an order last week with a dealer to start production on an X5. Leasing.

But my gut tells me I could have gotten a better deal. I went with my wife. She is not a negotiator and just wants me to get what I want.

So, we paid them the whole down payment as the deposit to start the order.

As built = $62,745.
10k miles / year
$810 / month (includes 9% PA tax)
$3200 out of pocket

Info on my trade in:
2010 Jeep SRT8, 13k miles. 9 out of 10 condition. I owe $34,400 on it. (At first offer the CA had them giving me $36 on the paper. In talking with a neighbor in the business, I expected around $38k)

So I really don't know how much they are giving me for my trade. I negotiated from the per month and down payment.

Does this deal look alright with the info I provided?

Should I stop payment on the check and shop?

I don't know how I feel about doing that as I "made a deal" and shook the salesman hand. I am in sales myself and sell value... so would not appreciate one of my customer's pulling a deal after we agreed.

Thanks for your input.
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  #424  
Old 02-12-2012, 12:10 PM
F30owner F30owner is offline
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Is it true that with MSD I don't have to pay Sales Tax upfront. I am in MD, and I have to pay taxes on the negotiated price - I was planning to pay it upfront, now I am thinking that I should use that money towards MSD, avoiding the tax and reducing payments.

I am correct on this strategy ?
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  #425  
Old 02-16-2012, 07:58 PM
obi.wan obi.wan is offline
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you can roll the tax into your lease payment. you will have to run the numbers to see if you save any money depends on the size of your tax due I guess
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