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7 Series - F01 / F02 (2009 - current)
The new re-designed 7 series F01 / F02 leads off the BMW Fxx chassis code!

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  #1  
Old 10-29-2014, 10:01 AM
Crackerman16 Crackerman16 is offline
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Is this a good deal?

Hi guys,

I have a quick question. I'm looking to lease a 2014 7-series and noticed my dealer has discounted them $15,000 off MSRP. However, I'm thinking that's mostly due to depreciation, and they won't seem to take off more than the 15k. The lease I calculated was much lower, so I want to know if I calculated it inaccurately or if the dealer isn't being too fair.
Thanks!
David

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  #2  
Old 10-29-2014, 10:30 AM
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Popoemt Popoemt is offline
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They are probably jacking your MF up, do you have all the numbers from them on rates?
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  #3  
Old 10-29-2014, 11:33 AM
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jgbackes jgbackes is offline
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Quote:
Originally Posted by Crackerman16 View Post
Hi guys,

I have a quick question. I'm looking to lease a 2014 7-series and noticed my dealer has discounted them $15,000 off MSRP. However, I'm thinking that's mostly due to depreciation, and they won't seem to take off more than the 15k. The lease I calculated was much lower, so I want to know if I calculated it inaccurately or if the dealer isn't being too fair.
Thanks!
David

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That's a little more than a 15% discount on what will be a year old car the moment you drive it off the lot.

I received a very similar deal back in February. I'd pass if I were you.

jeff
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  #4  
Old 10-29-2014, 12:32 PM
Crackerman16 Crackerman16 is offline
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Location: Tucson, AZ
 
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Unfortunately, this is all the information they have given me.

That was my thinking, too. The 15% discount is great, but taking into account the depreciation on a car that's last year's MY it's probably not so great.
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  #5  
Old 10-29-2014, 02:15 PM
knipper knipper is offline
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If you don't have all the numbers, then you can't do the math. So the first thing would be to get the money factor and the residual they are calculating. They are not required by law to provide this info, so they may play hard ball with you. 3 year residual on 7ers should be around 55% or so, I think.

After that, lease calculations are pretty simple. Here is what your payment (without taxes) should look like:

Depreciation fee = Cap Cost - Residual divided by term
($82,273 - $45,250) / 36 months = $1,028.42

Finance fee = Cap Cost + Residual times money factor (rate divided by 24)
($82,273 + $45,250) * (0.0311/24) = $165.14

Payment is the sum of the 2 items = $1,193.56 plus tax
So the 36 month payments they show are not far off with the out of pocket amounts on the left, which presumably are paying for part of that up front tax bill.

However, some considerations:
Why are you paying the taxes up front?
If you do this out of state and bring the car back to AZ, you will pay taxes again due to the AZ Transaction Privilege Tax. Sad but true, and double taxes always suck.
What the hell is a Lieu Tax?
Appearance protection is standard dealer BS charge
Tint is also a BS charge unless the car actually has aftermarket tint

Best of luck to you
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  #6  
Old 10-29-2014, 07:59 PM
Crackerman16 Crackerman16 is offline
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Thank you! That was a very helpful post. I'll email them in the morning and see if I can get the numbers. The problem is that their deadline for the discount is Friday, so that doesn't leave much time to negotiate. I also don't have any other offers to push them.

Regardless of the interest and residual they're using, would you say that the 15% discount is decent considering the car's age? I feel like taking into consideration the depreciation, that discount may not be so great. Again, thank you for your help! It's very much appreciated!
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  #7  
Old Yesterday, 04:10 AM
knipper knipper is offline
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Yes, I would say low $80s is 'decent'

If you do a search on 2014 used and CPO cars on BMWUSA, it looks like the bulk of them with very low miles (<5,000) are selling in a range from high 70s to high 80s. So your price seems to be somewhere in the middle of that bunch.

Try not to get too hung up on depreciation, these cars drop like a stone every year. Enjoy it for what it is and accept the fact that it will only be worth half that 3 years down the road.
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  #8  
Old Yesterday, 05:59 AM
MoneyJ MoneyJ is offline
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Why would you add the residual to the cap cost... that is like havibg two cars, the new and the used.
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  #9  
Old Yesterday, 06:09 AM
knipper knipper is offline
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Leasing was created primarily for 2 reasons: reduce the payment on an item that a person would not normally be able to afford if purchased outright, and create a 'behind the scenes' calculation area where dealers can easily hide a bunch of other charges, just showing you the monthly at the end.

Adding Cap and Residual is a standard part of the lease calculation used by everyone. If you want to learn more, this is a good resource that clearly explains the different parts.

http://www.leaseguide.com/lease08/

If you go into any transaction just looking for a monthly payment, chances are you are going to pay for extras that are hidden in those calculations. The simplest was already pointed out in this thread, they just elevate the money factor and pocket the extra above the real interest rate being charged by the lender.
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