Just leased a x5 - is the residual value right?

I am new to forum but had been driving a '99 328 and a 2006 x3 3.0.

Family is growing so decided to get a 2012 x5 basic with 3rd row seats and convience package.

On New Years day, decided to lease a 2012 x5 basic. There was no car in stock and the car will be ordered and delivered in approximately 7-8 weeks.

The salesman quoted a money factor of 0.00195 and residual value of 53%.

I think the residual value is too low - I saw the post from the Santa Monica dealer which states the residual value for 2012 x5 is 57%. Finance is through BMWSF.

Is this a scam to try to jack up the monthly payment?

I was also told the Loyalty rebate may or may not be available when I finally take delivery of the car- depending if BMW will continue the program or not. It was available on 1/1/12 when I ordered the car but expired on 1/3/12.

Thanks for the any input.

Personally I would look for other dealers with a car in stock and see how that deal compares, seeing your in California I know there is no shortage of x5 or dealers.

There are 5 numbers you need on a lease to evaluate the deal.

Start reading..probably 20 posts in the last few weeks on "how is my X5 lease deal"

Yes, residual is 57% for 36months - 15k miles per year. Add 2% for 12k/year (59%) or add 3% for 10k/year (60%).

^ what they said. Another option is to call the dealer and tell them that they made a mistake. Ask them to correct it. Make sure you understand how lease numbers are calculated and double check their final numbers.

Originally Posted by Haris335

Yes, residual is 57% for 36months - 15k miles per year. Add 2% for 12k/year (59%) or add 3% for 10k/year (60%).

^ what they said. Another option is to call the dealer and tell them that they made a mistake. Ask them to correct it. Make sure you understand how lease numbers are calculated and double check their final numbers.

+1

It is always better to calculate the deal you should be getting, and then give those numbers to the dealer so they are working off your numbers. Then there can be no confusion. I suspect this was just a genuine mistake/incompetence, rather than an attempt to be sneaky, since the dealer doesn't set the residual value and cannot change it (unlike the MF).

FYI... You should use the following formula to calculate your deal:

SALES PRICE = (BMWConfig.com INVOICE PRICE + $250 to $1000 DEALER PROFIT) - REBATES AND INCENTIVES.

Note that the $250 to $1000 dealer profity should include any and all fees, such as MACO, etc.

Dealer does not have any ability to vary the residual as that is set by the lessor. Are you certain they are using BMWFS and not some local bank?

That being said, the lessee (you) does have the right to contract for a lower residual. Some folks do that when their plan is to use the vehicle for their business, then buy it for personal use at lease end. In that situation, the lower residual works in their favor.

Doesn't sound like that is what's happening here, though.

Sent from my HTC Inspire using BimmerApp

Originally Posted by quackbury

Dealer does not have any ability to vary the residual as that is set by the lessor. Are you certain they are using BMWFS and not some local bank?
p

Just FYI:

The numbers dealers toss around during negotiation and even on the 'deal worksheet' are not binding...

THe Finance guy can 'fix' it when it comes to signing, just throw a bunch of crap your way, say there was an error- but they were able to adjust the numbers to make your payment $5 per month less and for the trouble thrown in free mats. Or whatever.

Just saying, they can do a lot of stuff right up until the last 20 minutes and people arent fully aware.

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To be really nefarious....

The dealer can't lower the residual, but they CAN mark up the money factor. And as ard notes, the deal can change up to the second you sign the contract.

If you were really, really cynical you might wonder if the dealer quoted you the buy rate (figuring you might sniff that out on your own) and a bogus residual (figuring you wouldn't catch it). But the actual contract they ask you to sign would show the REAL residual and a marked up MF (which puts $$$ in the F&I guy's pocket), but the same monthly payment they'd originally quoted.

Nah. They'd never do that.

Would they?

Originally Posted by quackbury

To be really nefarious....

The dealer can't lower the residual, but they CAN mark up the money factor. And as ard notes, the deal can change up to the second you sign the contract.

If you were really, really cynical you might wonder if the dealer quoted you the buy rate (figuring you might sniff that out on your own) and a bogus residual (figuring you wouldn't catch it). But the actual contract they ask you to sign would show the REAL residual and a marked up MF (which puts $$$ in the F&I guy's pocket), but the same monthly payment they'd originally quoted.

Nah. They'd never do that.

Would they?

Oh yes they would! Nothing surprises me these days. Some examples:

1) Dealer in Houston: Took a test drive, started to talk numbers, asked how much over invoice, CA tells me:
"Oh no sir, this is a BMW, we don't really discount off sticker, but I might be able to get you some free mats" I laughed and walked out.

2) Dealer in Dallas: Called up looking for a CA I had done business with in the past. Turns out he left the dealer, so they put me through to another guy. I tell the guy my story and ask him what the December buy rate is on an X5 35d lease. I'm very clear that I know he may not give me buy rate, but I'm just looking for info to compare between models. He says he'll call me back. I get a call back, guy tells me:
"Buy rate is 0.00225." I tell him, "Really, but you have 0.0030 of markup built into that rate don't you, so that isn't buy rate is it? So the buy rate is in fact 0.00195, correct?" CA says "Yes, that's correct...". I say "Then why did you just give me incorrect information and tell me it was 0.00225? Thanks for the call, that's all I need for now. If I want to move forward, I'll be in touch."

Originally Posted by quackbury

To be really nefarious....

The dealer can't lower the residual, but they CAN mark up the money factor. And as ard notes, the deal can change up to the second you sign the contract.

If you were really, really cynical you might wonder if the dealer quoted you the buy rate (figuring you might sniff that out on your own) and a bogus residual (figuring you wouldn't catch it). But the actual contract they ask you to sign would show the REAL residual and a marked up MF (which puts $$$ in the F&I guy's pocket), but the same monthly payment they'd originally quoted.

Nah. They'd never do that.

Would they?

Precisely what I was implying.

(Not saying they ARE, but just by discussing the potential pitfalls and tactics, people can be forewarned.)

And we don't know what else is in this deal: down payment?, Acquisition fee marked up? "paperwork fee"?...lots of other moving pieces

Originally Posted by ard

Just FYI:

PHP Code:

The numbers dealers toss around during negotiation and even on the 'deal worksheet' are not binding... 


THe Finance guy can 'fix' it when it comes to signing, just throw a bunch of crap your way, say there was an error- but they were able to adjust the numbers to make your payment $5 per month less and for the trouble thrown in free mats. Or whatever.

Just saying, they can do a lot of stuff right up until the last 20 minutes and people arent fully aware.

A

I know that one for sure from my deal concerning my trade in, unless the contract is signed it "aint" a deal.

Thanks for all the inputs!

Will have to call the salesman and have him correct it.

If they don't agree, no deal.

Originally Posted by jolucb

Thanks for all the inputs!

Will have to call the salesman and have him correct it.

If they don't agree, no deal.

Do you feel comfortable with negotiating a lease with all the variable terms?

there are a lot of web resources, with really good explanations of how the number work and what to ask. even 'lease calculators' so you can see what is going on. Unless you control all of the possible factors, they can say "OK" on one and make it up with another.

I may be being presumptuous, but spend some time on that. Leasecompare.com is good. Check out the concept of MSDs (like downpayments, but you get the money back aftter the lease is over. NEVER do a downpayment, BTW)

Good Luck

Oh, a good number of posts on leasing ins and outs in the ASk A Dealer subforum

A