Regional Rate?

Some people seemed to be getting quotes with a regional rate money factor that is lower than the base money factor. What is a regional rate? And when is it able to be applied?

The base MF or buy rate varies by geographic region. Most sponsor's here are from CA so they are quoting the MF for the western region. The MF may be somewhat different for whatever region BMW FS puts Texas in.

I saw a quote the other day and the dealer used a .00095 rate and called it a regional rate which he said is lower than the standard base rate. It seems to be different than base rate. It just seems like it can only be used in certain circumstances. I am wondering what those circumstances are.

Originally Posted by djsaad1

I saw a quote the other day and the dealer used a .00095 rate and called it a regional rate which he said is lower than the standard base rate. It seems to be different than base rate. It just seems like it can only be used in certain circumstances. I am wondering what those circumstances are.

Sounds like someone is trying to do a one pay lease...

one pay leases are based off regional rate - .00080 = buy rate

Thanks, that is probably what he did. That would make more sense.

Interesting.

Why in the world would anyone do a one-pay lease then? The money factor is actually less for the regular programs, no?

Regular with MSDs

.00125 - .00049 = .00076

One-pay

.00095

Doesn't make sense to me

I am pretty sure you can still do msd with one pay. But your right, I would have thought the one pay difference would have been bigger.

You can't do msds with a one pay lease. The reason someone might do a 1 pay is the rate .0090 vs .0076 with msds. That is not a lot different, about $15 or so a month and you don't have to tie up the msd money.
I just remembered, I did a 1 pay lease on my M3.

But I'm guessing you can do MSDs and a cap reduction nearly down to residual.

Originally Posted by mclaren

You can't do msds with a one pay lease. The reason someone might do a 1 pay is the rate .0090 vs .0076 with msds. That is not a lot different, about $15 or so a month and you don't have to tie up the msd money.
I just remembered, I did a 1 pay lease on my M3.

A one-pay lease is usually used as a cash-conversion tool. It's a good option for a cash buyer that knows they only keep their cars for a few years and they might appreciate the act that they can only "pay" for the portion of the car they'll be using vs. tying up the full price of the car until the time they trade/sell. They also get the benefit of no monthly payments and the protection of the residual value guarantee.

While it is true that they might be able to save a few $$ each month with MSD, many of these buyers like the "set it and forget it" nature of prepay and don't want to make monthly payments. It's a different buyer.

Originally Posted by SARAFIL

A one-pay lease is usually used as a cash-conversion tool. It's a good option for a cash buyer that knows they only keep their cars for a few years and they might appreciate the act that they can only "pay" for the portion of the car they'll be using vs. tying up the full price of the car until the time they trade/sell. They also get the benefit of no monthly payments and the protection of the residual value guarantee.

While it is true that they might be able to save a few $$ each month with MSD, many of these buyers like the "set it and forget it" nature of prepay and don't want to make monthly payments. It's a different buyer.

The issues if the car gets stolen or totaled is what would worry me, seems like it would be a hassle to get the money back. If it isn't much cheaper I don't really understand the benefit.

If it is for the ease and forgetting about it, you could technically move all the money for a lease to a savings account and do auto pay from there. At least that way you will be making a few points on your money.

Originally Posted by djsaad1

The issues if the car gets stolen or totaled is what would worry me, seems like it would be a hassle to get the money back.

Personally, I've owned a few cars that I've fully paid for. The possibility of those cars getting stolen or totaled never really worried me or gave me a sleepless night. Or any item/object for that matter. If there is any concern, I just make sure I have sufficient insuance coverage.

Your money is not at risk on a pre-pay lease. This has been discussed here at length. There is a monthly payment built into the pre-pay formula and that amount gets applied to your account each month by BMWFS behind the scenes. If the car is totaled, they refund any portion that has not been "used" yet. For example, a 36 month one-pay for $500/month is $18,000. BMW applies $500 per month on your account (i.e. your lease starts at -$17,500 balance after they apply the drive off first payment, goes to -$17,000 after the 2nd, and so on). If at any point it is totaled, the insurance company pays the settlement and BMW calculates payoff without applying the remaining payments. They then refund the negative account balance.

Originally Posted by SARAFIL

A one-pay lease is usually used as a cash-conversion tool. It's a good option for a cash buyer that knows they only keep their cars for a few years and they might appreciate the act that they can only "pay" for the portion of the car they'll be using vs. tying up the full price of the car until the time they trade/sell. They also get the benefit of no monthly payments and the protection of the residual value guarantee.

While it is true that they might be able to save a few $$ each month with MSD, many of these buyers like the "set it and forget it" nature of prepay and don't want to make monthly payments. It's a different buyer.

+1 and even if someone normally would buy the car for cash they might want to do a 1 pay lease because interest rates are very low, you get the BMWFS hc and loyalty offsetting the lease fee some of the interest, and you can get out of the car at the end of the lease or buy it. If you want to buy it you may be able to do it for less than the residual.

I understand the pros and cons of leasing vs buying. What I am not understanding is the pro of one pay vs normal lease and msd. The money factor is better with msd and your actual lease money is not tied up, so you can technically make money on that to off balance your msd being tied up. I just don't see what the incentives are for one pay. And it seems like I am missing something, because a lot of people do one pay.

Originally Posted by djsaad1

I understand the pros and cons of leasing vs buying. What I am not understanding is the pro of one pay vs normal lease and msd. The money factor is better with msd and your actual lease money is not tied up, so you can technically make money on that to off balance your msd being tied up. I just don't see what the incentives are for one pay. And it seems like I am missing something, because a lot of people do one pay.

Alot of companies do one pay...it's a write off for them...instead of monthly they can write off the lump sum

Originally Posted by djsaad1

I understand the pros and cons of leasing vs buying. What I am not understanding is the pro of one pay vs normal lease and msd. The money factor is better with msd and your actual lease money is not tied up, so you can technically make money on that to off balance your msd being tied up. I just don't see what the incentives are for one pay. And it seems like I am missing something, because a lot of people do one pay.

The reason I did a 1 pay was mostly convenience, it costs about $15 a month more. As I recall the 1 pay was $768 and the regular with msds was $753. The drive off included all fees and taxes on both so they were the same except for the $5600 msds. The difference is the 1 pay money factor is .0017-.0008 = .0009 where the msd lease money factor is .00125-.00049 = .00076.