One time lease payment on a 2005 325i......

Good Morning Group!

I have a few questions to which I know I can find the answers to here.

I am interested in leasing a 2005 325i with an automatic transmission. Presently, BMW offers a lease on said vehicle for $3,165 up front, with 35 remaining payments due at $315/ month. Total due through the life of the lease (I believe) is $14,190.

http://www.bmwusa.com/vehicles/3/325....htm?PanelID=4

BMW's lease offer is based on a MSRP of $31,270. According to the web sites I have visited, dealer invoice is $28,750 (with transmission and destination fee included).

Here are my questions:

1) Is it possible to negotiate a lower price, and then base the lease off that?

2) If a lease is paid off at inception, are there any fees which I could have waived? (security desposit?)

3) If I were to pay the lease off at inception, what would be a fair amount to offer, or accept?

Thank you for taking the time to read my post, I look forward to any advice.

Michael

Ps. I presently own a Lexus ES 330, so leasing is new to me. I have always wanted a BMW, this seems like a great opportunity to pacify one of my desires while making it easy to justify (to the little lady) monetarily.

Depending on your locale, I think if you pay the lease off at inception you may save a bundle of tax?

Originally Posted by BMW29

Good Morning Group!

I have a few questions to which I know I can find the answers to here.

I am interested in leasing a 2005 325i with an automatic transmission. Presently, BMW offers a lease on said vehicle for $3,165 up front, with 35 remaining payments due at $315/ month. Total due through the life of the lease (I believe) is $14,190.

http://www.bmwusa.com/vehicles/3/325....htm?PanelID=4

BMW's lease offer is based on a MSRP of $31,270. According to the web sites I have visited, dealer invoice is $28,750 (with transmission and destination fee included).

Here are my questions:

1) Is it possible to negotiate a lower price, and then base the lease off that?

2) If a lease is paid off at inception, are there any fees which I could have waived? (security desposit?)

3) If I were to pay the lease off at inception, what would be a fair amount to offer, or accept?

Thank you for taking the time to read my post, I look forward to any advice.

Michael

Ps. I presently own a Lexus ES 330, so leasing is new to me. I have always wanted a BMW, this seems like a great opportunity to pacify one of my desires while making it easy to justify (to the little lady) monetarily.

1) yes
2/3) not sure why you would want to pay off the lease, at inception. Basically, what you are suggesting is paying cash for the car.

Unless you are talking about prepaying the monthly lease payments. In which case, I would expect that the prepayment amount would be less than the sum of the lease payments - but then you would have to pay the sales tax on the lease payments up front, as well.

One thing to think about is... what happens to your payment if the car is totaled?

You may not get any money back. At least with montly payments if it get wrecked GAP insurance covered the off set of what you owe vs value.

Unless you have a business or a fianacial reason to lease it is not as cost effective an option as an outright purchase.

Originally Posted by sfca-325i

1) yes
2/3) not sure why you would want to pay off the lease, at inception. Basically, what you are suggesting is paying cash for the car.

Unless you are talking about prepaying the monthly lease payments. In which case, I would expect that the prepayment amount would be less than the sum of the lease payments - but then you would have to pay the sales tax on the lease payments up front, as well.

I am of the understanding that a one payment lease option would save money over term of the lease.

What I should have said in my first post is this.

BMW has a lease totalling $14,190, on a 2005 325i with an automatic transmission. This lease is based on a MSRP of $31,270........

If I were to go to the dealer, negotiate a price for that car, and offer an one payment lease option, what would be fair for both sides?

Thanks,

Michael

Originally Posted by LmtdSlip

Unless you have a business or a fianacial reason to lease it is not as cost effective an option as an outright purchase.

I have no intentions of keeping a car longer than 3 years. I already own a 2004 Lexus outright, and that is the "family" car. This car is basically a way to have fun on the weekends when I don't have to worry about car seats. With that said, a lease payment is cheaper than the alternative.

My thoughts are I could secure a 3 year lease at a better "total" out of pocket price (to me) if I were to agree to a one payment lease.

Thanks,

Michael

Very important point, and something worth considering.

Originally Posted by noonehome

One thing to think about is... what happens to your payment if the car is totaled?

You may not get any money back. At least with montly payments if it get wrecked GAP insurance covered the off set of what you owe vs value.

Basically, the interest cost is based on the residual instead of the amortized capitalized cost. So in effect you total cost would be less based on the interest rate implicit in the lease.

Originally Posted by BMW29

I am of the understanding that a one payment lease option would save money over term of the lease.

What I should have said in my first post is this.

BMW has a lease totalling $14,190, on a 2005 325i with an automatic transmission. This lease is based on a MSRP of $31,270........

If I were to go to the dealer, negotiate a price for that car, and offer an one payment lease option, what would be fair for both sides?

Thanks,

Michael

What has your lcoal dealer offered you. I would start there first.

You really want to minimize your upfront costs & make payments over time. If you prepay a lease or do a 1 time payment, those funds are likely to be loss if the car is totaled. BMW fin. will be made whole prior to you getting any of your money back. You can lose a lot of money if anything happened, particularly if early on. Why take unnecessary risk?

Money factors are really low now. I would suggest putting the cash in the bank & drawing it down monthly.

Originally Posted by LeaseCompare

What has your lcoal dealer offered you. I would start there first.

Here's how BMW does pre-pay leases:

1. All pre-pay leases use BMWFS's standard rate, and qualify for a rate deduction for the pre-pay.

2. Normal leases qualify for any special Sales Support programs that BMWFS might have in place. Pre-pay does not.

3. Residual value is the same as a conventional lease.

4. They do not waive any fees.


So, what does that mean? Well, usually, it is a bad idea to do a pre-pay lease. In this case, the interest rate you'd pay would be HIGHER than if you did a conventional lease, based on the current rates. You couldn't take advantage of the special lease programs in place right now if you did a pre-pay lease. Plus, as others have said, you always face the problem of what happens if the car is totalled.

If you are set on a pre-pay lease, here's the way to do it: Sign a normal lease agreement. A week later, write out a check for the sum of your remaining payments, and send it to BMWFS with a letter instructing them to use that check to cover all your remaining payments. Therefore, you can take advantage of the special programs.