BMWFS Improves the MSD Program!

Originally Posted by Adesh

It's been 2 months since I got my lease and the local BMW dealer also told me that doing MSD's was not financially beneficial. He was very firm about it.

Not sure why they do that...if the customer has done the analysis then the dealer just looks ignorant about their product (at best) or untruthful (at the worst).

I did the analysis (as many on this forum have) and even had my CPA-sister look at it; the MSD program makes a lot of financial sense (assuming you have the cash to throw at it).

This actually was the "last straw" for me with that dealer and I went to a different dealer to lease my car.

I totally agree. They are either incompetent or not trustworthy, and you don't want to deal with either. Good move.

i was able to get 8 MSDs yesterday on my lease. we were all set on getting 7 MSDs but my CA came up to me and said i could do 1 more because i'm a first time leaser (at least that's what i think he said). either way, i was able to do 1 more and it brought my MF down from 0.00166 to 0.00151. i'm not sure why it's not 0.00159 but i didn't sit there and argue. i got buy rate but had to add 0.00015 b/c i'm a first time leaser then subtracted all the MSDs.

RVD.

Originally Posted by RVD

i was able to get 8 MSDs yesterday on my lease. we were all set on getting 7 MSDs but my CA came up to me and said i could do 1 more because i'm a first time leaser (at least that's what i think he said). either way, i was able to do 1 more and it brought my MF down from 0.00166 to 0.00151. i'm not sure why it's not 0.00159 but i didn't sit there and argue. i got buy rate but had to add 0.00015 b/c i'm a first time leaser then subtracted all the MSDs.

RVD.

You do not have 8 MSD's per se...as a new BMWFS customer an SD is required to reduce the MF by 0.00015 (returning BMWFS customers do not have to do this)...the rest of your MSD's are at 7 times 0.0007 each...

Originally Posted by RVD

i was able to get 8 MSDs yesterday on my lease. we were all set on getting 7 MSDs but my CA came up to me and said i could do 1 more because i'm a first time leaser (at least that's what i think he said). either way, i was able to do 1 more and it brought my MF down from 0.00166 to 0.00151. i'm not sure why it's not 0.00159 but i didn't sit there and argue. i got buy rate but had to add 0.00015 b/c i'm a first time leaser then subtracted all the MSDs.

RVD.

Greg is correct. Your CA basically added .00015 from the outset to waive the initial security deposit. It is to your advantage to put down the initial security deposit. You will have a total of 8.

ah, it all makes sense now. i didn't realize i had the option to put down the initial SD to avoid the 0.00015.

RVD.

I had leased a car a few years ago through BMWFS. Does the initial security deposit waiver for returning customers apply to me on a new lease, or is the deposit required to reduce the MF by .00015 since I'm not coming immediately from one lease to the next?

If you were to transfer your lease for whatever reason to another person, what happens to your deposits? Would the new person get the money at the end of the lease, or would it still come back to you?

Originally Posted by Kypt

If you were to transfer your lease for whatever reason to another person, what happens to your deposits? Would the new person get the money at the end of the lease, or would it still come back to you?

This has been dicussed before, the answer was the new person would get the deposits. The exact thing happened to one of the posters and when he found out he contacted the person who took over the lease and was, luckily, able to get him to send him the money.

is the SD calculated based on the payment amount + tax or just the payment amount?

Thanks,

Originally Posted by pciguy

is the SD calculated based on the payment amount + tax or just the payment amount?

Thanks,

Total payment including tax rounded to the next $50 increment.

I think this is a simple question for someone to answer...

When you calculate the money you owe up front for MSD, I get the rounding. But, do you use the payment amount before or after the discount on the money factor? I'm assuming before...but maybe they are nice....

Originally Posted by shosan521

I think this is a simple question for someone to answer...

When you calculate the money you owe up front for MSD, I get the rounding. But, do you use the payment amount before or after the discount on the money factor? I'm assuming before...but maybe they are nice....

You actually use the MF after the reduction, which is another advantage

Originally Posted by schley

You actually use the MF after the reduction, which is another advantage

Yup...I just confirmed that with BMWFS. Then the dealer tried to tell me no, so I had him call and sure enough...we were right! Thanks all!

Can this be combined with an aggressive cap cost reduction? If so, how aggressive a reduction is allowed? To me, borrowing money on the lease does not seem advantageous. However, the guaranteed residual does, especially in a heavily optioned car.

Originally Posted by DavidNJ

Can this be combined with an aggressive cap cost reduction? If so, how aggressive a reduction is allowed? To me, borrowing money on the lease does not seem advantageous. However, the guaranteed residual does, especially in a heavily optioned car.

Good or bad idea depends on each persons own cost of capital and or opportunity cost of capital and other associated subjective judgments unique to every individual...like our cars!

However, to answer your question the MSD's and the Net Cap Cost (Cost after Cap Cost Reductions) are mutually exclusive. Don't let your dealer tell you otherwise. The MSD's are provided on behalf of BMWFS, not the dealer and do not affect their commissions. Be prepared to battle with them a bit on this as most dealers are not educated on the MSD program or do not understand it.

Originally Posted by DavidNJ

Can this be combined with an aggressive cap cost reduction? If so, how aggressive a reduction is allowed? To me, borrowing money on the lease does not seem advantageous. However, the guaranteed residual does, especially in a heavily optioned car.

Why would you want to lower your apr on your depreciation (mf) by using msd's and then not use the advantage of that by lowering the depreciation amount in a cap cost reduction?

If you lower your interest rate to let's say .00101, which is 2.424% apr, you wouldn't want to pay down the $ you are paying that % interest on. You can do many more things wiht that money that would be more beneficial to you then saving 2.424% interest on your depreciation payments.

See what I mean?

can someone tell me what socal/orange county dealers will do MSDS? I want to put down 8 as a new BMWFS customer. My dealer is giving me heartache on this. They either don't get it or don't want to get it. Since they're the largest, I can't figure out why, but I'm at the end of my current lease and can't screw around with them anymore. Thanks.

Check your PM.

Hi--I am new to this site and I appreciate all of the valuable information on this thread. I ordered a 2007 525i which will be docking on 12/14 and will be ready for pick-up sometime shortly after that.

I have already negotiated the lease, but I haven't signed any documentation yet. This is the first I've ever heard of MSDs though--is it too late for me to do this? I was planning to put $2,750 down with some of it going to a cap cost reduction. Sounds like I should shift that to MSDs though... Thoughts?

Also, random question -- is gap insurance provided by BMWFS or your own insurance carrier? If BMWFS, is that included, can it be negotiated, or is there an additional fee? Sorry if these gap insurance answers are available elsewhere....haven't found it yet!

Thanks in advance!

Originally Posted by goheels98

Hi--I am new to this site and I appreciate all of the valuable information on this thread. I ordered a 2007 525i which will be docking on 12/14 and will be ready for pick-up sometime shortly after that.

I have already negotiated the lease, but I haven't signed any documentation yet. This is the first I've ever heard of MSDs though--is it too late for me to do this? I was planning to put $2,750 down with some of it going to a cap cost reduction. Sounds like I should shift that to MSDs though... Thoughts?

Also, random question -- is gap insurance provided by BMWFS or your own insurance carrier? If BMWFS, is that included, can it be negotiated, or is there an additional fee? Sorry if these gap insurance answers are available elsewhere....haven't found it yet!

Thanks in advance!

you can renegotiate your lease with MSD's factored in. Gap insurance is included with all bmwfs leases.

Originally Posted by Gianny

Check your PM.

Can I get that list, please? I am considering doing MSD on my next purchase in Spring 07

No renegotiation is required. Just inform your CA that you intend to take advantage of the MSD program provided by BMW FS. It costs the dealership nothing and saves you money. Everybody wins!

Thanks for the info, schley and SignHere!

Guys, this is the most informative thread in some time. Can I ask a few questions...

I am no finance expert, so bear with me...

The MSD program is basically a way to lower the money factor by 1.68% per deposit, which equals the lease payment (rounded), and you are allowed up to 7?

So I could lower the money factor by 11.76%?

And I get those deposits back?

So I am making a return on money during the lease better than any CD out there, right?

If I not a current BMWFS user, then the promo money factor will be raised by .0015, but I can use an initial SD to waive that, and still have 7 more to use?

I am looking at the X5 and the lease right now is .00322. So I would one SD to keep that from being raised to .00472?

Originally Posted by BloodRedHog

Guys, this is the most informative thread in some time. Can I ask a few questions...

I am no finance expert, so bear with me...

The MSD program is basically a way to lower the money factor by 1.68% per deposit, which equals the lease payment (rounded), and you are allowed up to 7?

So I could lower the money factor by 11.76%?

And I get those deposits back?

So I am making a return on money during the lease better than any CD out there, right?

If I not a current BMWFS user, then the promo money factor will be raised by .0015, but I can use an initial SD to waive that, and still have 7 more to use?

I am looking at the X5 and the lease right now is .00322. So I would one SD to keep that from being raised to .00472?

You are missing a ZERO.. .00015..

.00322 would then be .00337

It is a good deal, but not quite as good as it would be with one less zero.. ;-)

The MSDs are .00007 (4 zeroes)... X 7 MSDs = .00049 reduction

regards,
kyfdx