Official - BMW Multiple Security Deposit Program Discontinued

by Tim Jones on April 7, 2017, 1:37 pm
BMW Multiple Security Deposit Program Discontinued

Today we got official confirmation that BMW Financial Services is discontinuing the Multiple Security Deposit (MSD) Program for leased vehicles. You can still use MSD on any credit approvals dated May 1, 2017 or prior so if you're thinking about a BMW lease with MSD starting taking to a Bimmerfest sponsor dealer now.

To take advantage of the MSD program before it ends you must use a BMW program from April or prior months to take advantage of the MSD discount. If you wish to use May or later programs no discount will be applied unfortunately.

The Security Deposit Policy and Security Deposit Waiver program will remain unchanged. Multiple Security Deposits as a stipulation of credit will remain but without a money factor discount.

Coming on the heals of cuts to the No Cost Maintenance Program and a reduction in the European Delivery program discount it will be interesting to see how BMW sales end up at the end of 2017.

What are Multiple Security Deposits?
BMW Financial Services allowed customers leasing a new BMW to lower the money factor (interest rate) on the lease if they made a series of fully refundable security deposits up front. A money factor reduction of .00007 was available for each deposit, maxing out a seven. For buyers with liquid assets (cash) available to be put down as a MSD there is a savings over the term of the lease. MSD have been a popular leasing tool for those in the know on Bimmerfest.

BMW MSD vs Competitors
Bimmerfest member eazy created a chart comparing BMW's MSD program to competitors. This gives you a sense of how MSDs are viewed by automakers.

bmw msd vs competitors



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236 responses to Official - BMW Multiple Security Deposit Program Discontinued

Motorboat411 commented:
April 7, 2017, 1:50 pm

Not trying to hijack this thread but over the last 3 years, I've convinced and helped 5 of my friends lease BMWs (first time), but it seems like BMW is hell bent on losing sales

- Made Euro Delivery more expensive than US. (especially since pretty much no incentive applies to ED anymore)
- Cut out the Maintenance Program
- Now cancelled MSD - a single factor that made bmw leases more attractive to people, that otherwise would have settled for a Japanese/American car.

It'll be interesting to see BMW sales figures this year.
Vitacura commented:
April 7, 2017, 1:55 pm

Wow, sad to hear. Thanks for the confirmation!
VitaminHan commented:
April 7, 2017, 1:59 pm

A few days ago I saw another thread about the MSD rumor I thought that was an April fool's joke...
Motorboat411 commented:
April 7, 2017, 2:00 pm

Quote:
Originally Posted by VitaminHan View Post
A few days ago I saw another thread about the MSD rumor I thought that was an April fool's joke...
Maybe someone forwarded the April fool's joke to BMWFS and they took it literally.
MJBrown62 commented:
April 7, 2017, 2:03 pm

Well, there are a few CAs out there that took abuse from some of us who discounted their knowledge of this change.

Kudos to them.

Tough times for BMW leasing.

mjb
AksNasZasNas commented:
April 7, 2017, 2:08 pm

Quote:
Originally Posted by MJBrown62 View Post
Well, there are a few CAs out there that took abuse from some of us who discounted their knowledge of this change.



Kudos to them.



Tough times for BMW leasing.



mjb


No worries. Such is the Internet. We are all trying to help each other with good deals and reward the good CAs. Thanks Mike.
MJBrown62 commented:
April 7, 2017, 2:12 pm

Quote:
Originally Posted by AksNasZasNas View Post
No worries. Such is the Internet. We are all trying to help each other with good deals and reward the good CAs. Thanks Mike.
And by us I meant other CAs like me!
Motorboat411 commented:
April 7, 2017, 2:16 pm

Quote:
Originally Posted by MJBrown62 View Post
And by us I meant other CAs like me!
I wonder what CAs think about the impact of No MSDs on BMW sales?

Personally, I think because of increased sales in Asia (specifically China), BMW will start treating BMWNA market more like they treat European i.e. limited incentives, reduced maintenance, decrease in ED benefits etc...which is inline with European markets.
AksNasZasNas commented:
April 7, 2017, 2:17 pm

Quote:
Originally Posted by Motorboat411 View Post
Maybe someone forwarded the April fool's joke to BMWFS and they took it literally.


Fwiw, My intel (and post) predated April 1 and I had never seen the April Fool's MSDs thread before my post. I wonder if bmw waited to May 2 so ppl wouldn't think it was an April Fools joke. [emoji848]
VitaminHan commented:
April 7, 2017, 2:23 pm

Lucky I still get to keep the March term and MSD, hope BMW will realize the mistake and reinstate the MSD program in 3 years when my lease is up.

Or maybe in 3 years everyone will drive a $25000 Tesla model a (stands for affordable) and no need to worry about BMW anymore
Kief commented:
April 7, 2017, 2:38 pm

Quote:
Originally Posted by tim330i View Post
It's no longer a joke BMW FS has officially discontinued the Multiple Security Deposit Program - http://www.bimmerfest.com/forums/sho...d.php?t=972966
A sad day indeed!
LycanNyc commented:
April 7, 2017, 2:41 pm

Wow =\
adrian's bmw commented:
April 7, 2017, 2:43 pm

Quote:
Originally Posted by MJBrown62 View Post
Well, there are a few CAs out there that took abuse from some of us who discounted their knowledge of this change.

Kudos to them.

Tough times for BMW leasing.

mjb
I had no idea it was coming. At least this is one less thing to fret about for sales managers in calculating leases. I'll bet the reason why it was discontinued was too many errors and charge backs in miscalculating buy rate and MSD amounts. Dealer's probably said enough is enough.
adrian's bmw commented:
April 7, 2017, 2:45 pm

Quote:
Originally Posted by VitaminHan View Post
Lucky I still get to keep the March term and MSD, hope BMW will realize the mistake and reinstate the MSD program in 3 years when my lease is up.

Or maybe in 3 years everyone will drive a $25000 Tesla model a (stands for affordable) and no need to worry about BMW anymore
Is it really going to make that much of a difference to you? Wow. I can picture the objection now. "Ehhh, I don't want a BMW because I can't do MSD's. " *sniff*

Because I don't really keep up with other manufacturer's finance programs, does Tesla offer MSD's? Who else offered it? Let me guess- BMW was the only brand.

RIP MSD's. Epitaph will read: "I saved some savvy BMW clients a few bucks a month on their money factor and gave them their money back at lease end. Yay!"
ED_2007 commented:
April 7, 2017, 2:57 pm

It's more of a combination of all 3 as someone mentioned above. ED discount, MSD's, maintenance including brakes/wipers etc for 50k miles. Before all these changes we never blinked and just ordered our next BMW. For the first time in 20 years we are now exploring other car brands. Maybe we still end up in another BMW, it's just not a given as it was before. Change is good, right
Robert A commented:
April 7, 2017, 2:58 pm

I never understood why a manufacturer would discount the interest rate to an otherwise credit-worthy customer. In any event, they still have to respond to market forces, and that discount will probably resurface in some other form.

Who knows, maybe we'll just go back to buying our cars like we used to!
VitaminHan commented:
April 7, 2017, 3:03 pm

Quote:
Originally Posted by adrian's bmw View Post
Is it really going to make that much of a difference to you? Wow. I can picture the objection now. "Ehhh, I don't want a BMW because I can't do MSD's. " *sniff*

Because I don't really keep up with other manufacturer's finance programs, does Tesla offer MSD's? Who else offered it? Let me guess- BMW was the only brand.

RIP MSD's. Epitaph will read: "I saved some savvy BMW clients a few bucks a month on their money factor and gave them their money back at lease end. Yay!"
lol... not saying that I will go Tesla when my lease is up, or the MSD itself is a deal breaker... I may still get another BMW in 3 years, but I can imagine that I will be paying a lot more than what I pay now for the same car if BMW keeps going this direction.
DBV commented:
April 7, 2017, 3:05 pm

Mercedes recently started doing it and they allow up to 10. All I know is BMW is becoming less and less competitive in the US market in a more competitive market. Too bad, as they don't seem to really care based on there sedan sales.


Quote:
Originally Posted by adrian's bmw View Post
Is it really going to make that much of a difference to you? Wow. I can picture the objection now. "Ehhh, I don't want a BMW because I can't do MSD's. " *sniff*

Because I don't really keep up with other manufacturer's finance programs, does Tesla offer MSD's? Who else offered it? Let me guess- BMW was the only brand.

RIP MSD's. Epitaph will read: "I saved some savvy BMW clients a few bucks a month on their money factor and gave them their money back at lease end. Yay!"
adrian's bmw commented:
April 7, 2017, 3:10 pm

Quote:
Originally Posted by DBV View Post
Mercedes recently started doing it and they allow up to 10. All I know is BMW is becoming less and less competitive in the US market in a more competitive market. Too bad, as they don't seem to really care based on there sedan sales.
Good to know. Thanks.

Less competitive, huh?

BMW Tops Mercedes for First Time in 2017, Narrowing the U.S. Luxury Race

The sedan market altogether is suffering across most brands.
border9 commented:
April 7, 2017, 3:27 pm

Quote:
Originally Posted by adrian's bmw View Post
Is it really going to make that much of a difference to you? Wow. I can picture the objection now. "Ehhh, I don't want a BMW because I can't do MSD's. " *sniff*

Because I don't really keep up with other manufacturer's finance programs, does Tesla offer MSD's? Who else offered it? Let me guess- BMW was the only brand.

RIP MSD's. Epitaph will read: "I saved some savvy BMW clients a few bucks a month on their money factor and gave them their money back at lease end. Yay!"
It is interesting reading your reply compared to Mike's. One of you obviously has some sort of class and empathy for those that provide you with a paycheck. It really is amazing how condescending you consistently act towards consumers who want to save money, which is ironic because the reason you are condescending is because you want to make money (you have to see the irony in that right??)
Even though I'm in the south east I would never buy a car from you, I'm sure you act nice and respectful in person, but on this forum you really have come off as an arrogant jerk to anyone who questions BMW's policies. You might be right, they may lose no sales from this, but why is your opinion more valid than consumers who think they will lose sales from this?
Der_Kommissar commented:
April 7, 2017, 3:28 pm

Unbelievable. If they don't find a way to reduce MSRP or increase content/value, BMW is going to loose a lot of current customers. But I expect they know that. Plus, don't forget the effect this will have on the CPO market. If Acura ever figures out how to make their cars fun again, this may well be my last BMW. I almost got into a lease the last time, but the thing that held me back was thinking that the terms would not be as good for the next lease. I was right.
ED_2007 commented:
April 7, 2017, 3:44 pm

He definitely doesnt need me defending him but Adrian has been around here for at least the 10 years since I've joined. I've seen a lot of CA's come and go around here. We are lucky to have them. Adrian contributes greatly to the forum and maybe he's just defending the brand he's been working at for years. Maybe being from the NE I have tougher skin but I found nothing objectionable about his post.

Quote:
Originally Posted by border9 View Post
It is interesting reading your reply compared to Mike's. One of you obviously has some sort of class and empathy for those that provide you with a paycheck. It really is amazing how condescending you consistently act towards consumers who want to save money, which is ironic because the reason you are condescending is because you want to make money (you have to see the irony in that right??)
Even though I'm in the south east I would never buy a car from you, I'm sure you act nice and respectful in person, but on this forum you really have come off as an arrogant jerk to anyone who questions BMW's policies. You might be right, they may lose no sales from this, but why is your opinion more valid than consumers who think they will lose sales from this?
Robert A commented:
April 7, 2017, 3:56 pm

IMO, it's unbelievable they offered it at all. It was a gift to those who had knowledge of the program. I suspect the vast majority of consumers have no idea of MSDs and will never know it went away.

Quote:
Originally Posted by Der_Kommissar View Post
Unbelievable. If they don't find a way to reduce MSRP or increase content/value, BMW is going to loose a lot of current customers. But I expect they know that. Plus, don't forget the effect this will have on the CPO market. If Acura ever figures out how to make their cars fun again, this may well be my last BMW. I almost got into a lease the last time, but the thing that held me back was thinking that the terms would not be as good for the next lease. I was right.
ctorrey commented:
April 7, 2017, 4:12 pm

It was always a differentiator for me. I was a BMW guy for a number of years, but moved to Audi for about a decade. Came back to BMW because 1) I really love their products, and 2) incredible value with the leasing program. A $43k A4 leased for ~$525 back in '05. My on-order, $64k 340xi will come in at about $50/mo more that that A4 - same 36/10 lease terms. If cost is the same across manufacturers, then I will definitely consider other options in 3 years. Leasing a BMW has always been a no-brainer. Now?
Motorboat411 commented:
April 7, 2017, 4:15 pm

Quote:
Originally Posted by Robert A View Post
IMO, it's unbelievable they offered it at all. It was a gift to those who had knowledge of the program. I suspect the vast majority of consumers have no idea of MSDs and will never know it went away.
True, but vast majority is concerned with saving money and getting good deals. I doubt any of my friends will opt for a BMW again, mainly because other than people like us, Not everybody is a BMW Fanboy and they do cross shop between BMW, Audi, Merc. A friend of mine recently got a 5-series only because he got a good deal (MSD helped as well), otherwise he was ready to pull the trigger on A6 - simply because he was getting a good deal on it.

I'm divided on how this will affect BMW Sales, because I see a lot of uninformed customers who basically go in with a certain monthly payment in mind - and CAs typically have them put down a nice down payment, to get to customer's specific monthly payment number.
adrian's bmw commented:
April 7, 2017, 5:21 pm

Quote:
Originally Posted by border9 View Post
It is interesting reading your reply compared to Mike's. One of you obviously has some sort of class and empathy for those that provide you with a paycheck. It really is amazing how condescending you consistently act towards consumers who want to save money, which is ironic because the reason you are condescending is because you want to make money (you have to see the irony in that right??)
Even though I'm in the south east I would never buy a car from you, I'm sure you act nice and respectful in person, but on this forum you really have come off as an arrogant jerk to anyone who questions BMW's policies. You might be right, they may lose no sales from this, but why is your opinion more valid than consumers who think they will lose sales from this?
I love it. Look, I respect your opinion. You're free to express how you feel about me. I'm fine with that. In fact, I respect and welcome it. Sometimes, it's refreshing for someone to tell me when I'm being a little hard on you guys. Keeps me from being jaded about the car business. But yes, in person, on the phone, via email, I am genuinely a nice and respectful client advisor.

Consider me the dealer curmudgeon. Condescending? Maybe. Sometimes. Occasionally. All the time? Nahh. Nevertheless, I apologize if I've been condescending to any of you. Arrogant jerk when it comes to anyone who questions BMW's policies? Again, here and there. But if I don't, what dealer here will? This is the Ask a Dealer forum, right? I'm a dealer sponsor and have been here a very long time (probably the longest except for my friend, Jon Shafer, the founder of Bimmerfest).

Still, I don't recall ever saying that my opinion is more valid than consumers who think BMW will or will not lose sales from this. For example, we sell hundreds of cars per month at our center. I can count with one hand how many deals we did with MSD's. Why? Because I was the only one here that did them! Unless you're on the Fest and came to me as a client, no one does MSD's. It's so rare. So while it may seem that here on this forum, we can be collectively be saddened that MSD's are going away, dealers won't miss them, CA's won't- why? Because no one hardly ever does them. And now that we have Owner's Choice here in GA, the MSD take rate plummetted because more clients do OC than conventional leasing here. So I can't say that my opinion is more valid than someone who posts here, but I do this every day and see it first hand.

As for never buying a car from me. Never say never.

I will say this. I'll miss MSD's. I've helped countless clients over my eighteen years with BMW save a little extra extra with MSD's. I'll miss that email that says, Adrian, send me a lease on this stock # or build "Max MSD's" 36/10k upfronts only.
Robert A commented:
April 7, 2017, 5:33 pm

The issue in the car leasing business is one of asymmetrical information. These incentive programs are kept so well hidden from consumers that they're hard to unearth and find. Even after 15 years of frequenting these boards and drilling into them intensely, I'm still amazed at the stuff I never new existed.

Quote:
Originally Posted by adrian's bmw View Post
I can count with one hand how many deals we did with MSD's. Why? Because I was the only one here that did them! Unless you're on the Fest and came to me as a client, no one does MSD's. It's so rare.
visualguy commented:
April 7, 2017, 5:37 pm

The attractive lease deals is a huge factor in the popularity of BMWs in my area. I think eroding that will have an impact on volume, but maybe BMW now cares more about profit-per-car than overall revenue.

The remaining question is what happens to residuals - will they start going down as well?

When I checked a couple of years ago, Audi was making it attractive to do a one-pay lease where you pay all lease payments in advance to save on interest. BMW doesn't give you much of a break for that. I hope they at least change that at some point.
adrian's bmw commented:
April 7, 2017, 5:37 pm

Quote:
Originally Posted by Robert A View Post
The issue in the car leasing business is one of asymmetrical information. These incentive programs are kept so well hidden from consumers that they're hard to unearth and find. Even after 15 years of frequenting these boards and drilling into them intensely, I'm still amazed at the stuff I never new existed.
Indeed. It was never ever advertised anywhere. Could you imagine the ad campaign? $399 lease special on a BMW 320i. But wait! If you put $2,450 in MSD's your payment would be just $349!
Robert A commented:
April 7, 2017, 5:43 pm

No, but I've often thought there could be a placard in dealer showrooms that described the types of programs in general terms and invited customers to ask for details. It's not just MSDs, but also corporate, prepay, USAA/AARP, acq fee waiver, etc. There's just no transparency in automobile leasing.

Quote:
Originally Posted by adrian's bmw View Post
Indeed. It was never ever advertised anywhere. Could you imagine the ad campaign? $399 lease special on a BMW 320i. But wait! If you put $2,450 in MSD's your payment would be just $349!
quackbury commented:
April 7, 2017, 5:46 pm

Quote:
Originally Posted by border9 View Post
Even though I'm in the south east I would never buy a car from you,
And if I was a CA and a self-important little pr*ck with an attitude like that walked into my Center, Id refuse to work with him. Anyone who has been here for longer than 2 months / 2 posts knows that Adrian is one of the good guys. You? I think we've all formed a pretty strong impression.
Motorboat411 commented:
April 7, 2017, 5:47 pm

Quote:
Originally Posted by adrian's bmw View Post
I will say this. I'll miss MSD's. I've helped countless clients over my eighteen years with BMW save a little extra extra with MSD's. I'll miss that email that says, Adrian, send me a lease on this stock # or build "Max MSD's" 36/10k upfronts only.
Quote:
Originally Posted by Robert A View Post
The issue in the car leasing business is one of asymmetrical information. These incentive programs are kept so well hidden from consumers that they're hard to unearth and find. Even after 15 years of frequenting these boards and drilling into them intensely, I'm still amazed at the stuff I never new existed.
I've had email exchanges with Adrian quite a few times over past few years and always found him to be courteous and responsive - even if the deal didn't work out.

Also, good to hear from an experienced CA that MSDs were barely used by consumers. I guess that's what factored into BMWFS's decision of scraping MSDs - probably something to do with too many CAs calculating incorrect MF. I know my last CA certainly did an incorrect calculation but I was able to correct him out (with help from CAs on this forum).

I wish BMWFS kept the program but simplified it i.e. each MSD = 0.00010 and Max 5. That pesky 0.00007 made the numbers look complicated
MJBrown62 commented:
April 7, 2017, 6:29 pm

The larger concern is the overall increase in the "price:" higher monthly payments due to rate/NF increases, lower residuals, higher pricing, etc. I don't think discontinuing MSDs has significant impact; just another stick in the spokes.

mjb
skilletbgm commented:
April 7, 2017, 6:43 pm

I'd be interested to see what the attach rate is for MSD's -- if it was a successful program, it would stay. I suspect that since they're sunsetting the program, it means it's not used often enough to warrant the cost/effort in continuing.

Cheers,
MJBrown62 commented:
April 7, 2017, 6:44 pm

Again, this is off topic, but Adrian and we other CAs have to play on thin ice.

We sell cars for a living, and joined this forum to gain access to a specific prospect base it incrementally increase our sales.

We want to provide accurate information and assistance.

But, we want to lend our experience and expertise from the Dealer side. Sometimes it involves info and experience that you might disagree with. And we want to be direct.

All that and we are cognizant that our organization(s) can monitor our activities, so we need to be careful.

It's a dance. I credit Adrian for jumping in the fray.

Michael
visualguy commented:
April 7, 2017, 6:55 pm

I asked my salesman here in the Bay Area how popular MSDs are. He said he does quite a few, and they're almost all Chinese customers for some reason. He said I was one of very few who wasn't Chinese. Anyway, that may not be surprising since the Chinese population here is is very large.
The BoatMan commented:
April 7, 2017, 7:58 pm

Somewhat related.....My CA in NJ told me that 9 out of the 10 deals he does from NY buyers are all MSD's. NY CA's are most likely happy about this and not so much NJ CA's. Not sure what other states don't allow MSD's.
The BoatMan commented:
April 7, 2017, 8:03 pm

Oh, and props to Adrian. I did 2 ED from him in 2007, the most painless transactions ever.

If I lived in the SE or anywhere in his vicinity I would never use anyone else. I've been a member here since 2002 and he's still around while many others have left.

Thankful for his advice and all the other CA's that donate their time to us here at bimmerfest. No reason to reply to that user with 2 posts who joined in Jan 2017. Ignore.
namelessman commented:
April 7, 2017, 8:36 pm

Quote:
Originally Posted by Robert A View Post
IMO, it's unbelievable they offered it at all. It was a gift to those who had knowledge of the program. I suspect the vast majority of consumers have no idea of MSDs and will never know it went away.
It does puzzle me how MSD MF discount makes sense given the amount of MSD is not that much, while the reduced lease interest is way more than the interest that BMWFS saves by holding on that MSD(and hence reduce the amoutn BMWFS needs to borrow).

My original guess is that the actuary made some errors on the default risk without MSD, and arrive at MF reduction that is too generous for the MSD paid.

Given that tiered RV and MRM do get rolled back, it is too early to say if the demise of MSD is permanent.
namelessman commented:
April 7, 2017, 8:43 pm

Quote:
Originally Posted by adrian's bmw View Post
Still, I don't recall ever saying that my opinion is more valid than consumers who think BMW will or will not lose sales from this. For example, we sell hundreds of cars per month at our center. I can count with one hand how many deals we did with MSD's. Why? Because I was the only one here that did them! Unless you're on the Fest and came to me as a client, no one does MSD's. It's so rare. So while it may seem that here on this forum, we can be collectively be saddened that MSD's are going away, dealers won't miss them, CA's won't- why? Because no one hardly ever does them. And now that we have Owner's Choice here in GA, the MSD take rate plummetted because more clients do OC than conventional leasing here. So I can't say that my opinion is more valid than someone who posts here, but I do this every day and see it first hand.
Some of my family and friends do lease BMW, and even though they are well aware of MSDs, they never sign up for MSDs.

Their opinion is that it is no high rate CD's like some festers like to think. Instead these MSDs are SECURITY DEPOSITS that can be forfeited!

The only thing that puzzles me is that, even with MSDs(say, $5k), the amount of interest that BMWFS saves from not needing to borrow extra $5k is smaller than the interest reduction that BMWFS foregoes by offering MSD MF reduction.
BSSBC commented:
April 7, 2017, 9:11 pm

Quote:
Originally Posted by tim330i View Post

The Security Deposit Policy and Security Deposit Waiver program will remain unchanged. Multiple Security Deposits as a stipulation of credit will remain but without a money factor discount.
Can someone please explain what this means?
Motorboat411 commented:
April 7, 2017, 9:15 pm

Quote:
Originally Posted by namelessman View Post
The only thing that puzzles me is that, even with MSDs(say, $5k), the amount of interest that BMWFS saves from not needing to borrow extra $5k is smaller than the interest reduction that BMWFS foregoes by offering MSD MF reduction.
I guess BMW was betting that in case of damage to lease return it would be more cost effective to use security deposit than send it to collections and not get anything back.
Motorboat411 commented:
April 7, 2017, 9:16 pm

Quote:
Originally Posted by BSSBC View Post
Can someone please explain what this means?
If you have bad credit, BMW will require security deposit or multiple security deposits, however, you will not see any MF reduction.
jjrandorin commented:
April 7, 2017, 9:21 pm

Quote:
Originally Posted by BSSBC View Post
Can someone please explain what this means?
BMW Leases require a security deposit (without a money factor discount). If you are above a certain credit threshhold, you get a "security deposit waiver" meaning you dont need to provide a security deposit to leave the dealership with their 35-150k car.

Those are "mandatory" security deposits, without any sort of discount. That program (the need for mandatory security deposits, and the waiver of them for people with credit scores that qualify for that waiver, remains unchanged.

What is changing according to this is that its currently possible to provide security deposits to reduce the interest rate on your lease. That is going away, according to this.
nyca commented:
April 7, 2017, 10:21 pm

This will be the end of their lease rolls to customers who already have them on their cars, and just roll into the next lease with the MSDs still in the "bank" and get the lower monthly payment. Luckily we are in the know here and will get in under the wire, I guess this will be my last BMW lease.
nyca commented:
April 7, 2017, 10:33 pm

Quote:
Originally Posted by The BoatMan View Post
Somewhat related.....My CA in NJ told me that 9 out of the 10 deals he does from NY buyers are all MSD's. NY CA's are most likely happy about this and not so much NJ CA's. Not sure what other states don't allow MSD's.
Same thing with my NJ dealer (maybe the same as yours) - all their NY business are MSDs, all their BMWCCA leases too, and many others. This "no one uses it" line is baloney. These dealers will start to see the declines right away in May, especially on repeat leases where people have their MSDs in the bank already and will then be told they cannot use them for the re-up. Near 100% of those people are going to walk just on principle. BMW better start cutting production.
jjrandorin commented:
April 8, 2017, 12:34 am

Quote:
Originally Posted by nyca View Post
Same thing with my NJ dealer (maybe the same as yours) - all their NY business are MSDs, all their BMWCCA leases too, and many others. This "no one uses it" line is baloney. These dealers will start to see the declines right away in May, especially on repeat leases where people have their MSDs in the bank already and will then be told they cannot use them for the re-up. Near 100% of those people are going to walk just on principle. BMW better start cutting production.
You seem to be under the impression that these forums represent a large portion of the buying public. This is not the case. Most customers (even for BMW) shop on monthly payment, dont know anything about MSDs (in fact they would be confused by them), etc.

This will make enthusiasts upset but it is likely to have little to zero effect on their actual bottom line.

I am sad they are going away, but all of the "this is my last XXX" is humorous to me, since even people on the forums have to have threads dedicated to why these were good.

"joe the bmw buyer" did not (and does not) care.
visualguy commented:
April 8, 2017, 12:55 am

They will definitely lose some business. Hard to say how much... For example, I was close to buying an Audi S6, but decided to lease a 550i because of the good lease deal. If this lease was meaningfully more expensive, I would have gone for the S6.
alewifebp commented:
April 8, 2017, 1:19 am

This is really bad news. I'm not going to be one of those people that says I'll never lease a BMW again, but I will certainly use this opportunity to shop around, which was not something that I was planning on doing. I'm hopeful that they will return the program, as they dropped the tiered residuals and MRM. I hope that dealers that have a good uptake on this option raise hell with BMW letting them know their displeasure.
nyca commented:
April 8, 2017, 3:31 am

I guess they can cancel the other incentive programs as well, and it will have "no effect" either. How many people know about fleet, AARP, loyalty, etc. I mean, doesn't everyone want to pay more? Let's see where they are next year at this time.
The BoatMan commented:
April 8, 2017, 7:46 am

I agree with you that there are a select group of people that use MSD's.

My point was that MSD's are not allowed in NY. That drove those wanting to utilize MSD's to neighboring states that allow them.

As I said before my CA in NJ told me that 9 out of the 10 deals he does from NY buyers are all MSD's.

So he will lose that NY business most likely. Will it have a huge impact on him, I have no idea.

Quote:
Originally Posted by jjrandorin View Post
You seem to be under the impression that these forums represent a large portion of the buying public. This is not the case. Most customers (even for BMW) shop on monthly payment, dont know anything about MSDs (in fact they would be confused by them), etc.

This will make enthusiasts upset but it is likely to have little to zero effect on their actual bottom line.

I am sad they are going away, but all of the "this is my last XXX" is humorous to me, since even people on the forums have to have threads dedicated to why these were good.

"joe the bmw buyer" did not (and does not) care.
rkinra commented:
April 8, 2017, 7:55 am

Quote:
Originally Posted by adrian's bmw View Post
Is it really going to make that much of a difference to you? Wow. I can picture the objection now. "Ehhh, I don't want a BMW because I can't do MSD's. " *sniff*



Because I don't really keep up with other manufacturer's finance programs, does Tesla offer MSD's? Who else offered it? Let me guess- BMW was the only brand.



RIP MSD's. Epitaph will read: "I saved some savvy BMW clients a few bucks a month on their money factor and gave them their money back at lease end. Yay!"


Actually, I know Mercedes, Audi, Lexus/Toyota all offer MSDs.

So, for me it will make the monthly lease price higher, which means I will absolutely cross shop and that isn't good for BMW. Other manufacturers are stepping up their game, so who knows what will be available in ~3 years when my lease is up.
mikeriley commented:
April 8, 2017, 9:55 am

very true about cross shopping. in the past other makes were looked at, such as audi, and were liked, but the end conclusion seemed to be "the bmw was 100 less a month compared to the audi so it was a no brainer" was a common conclusion. Not such a no brainer anymore.

lowered residuals, higher mf, no MSD, higher MSRP = less sales for bmwusa and less commissions for CAs.

the head of bmwfs will do just fine thought! sales will continue to decline, even tank, the BMWNA president will be blamed and the head of BMWFS will look like a genius making money on declining sales. He might even get a promotion!!!
weinschela commented:
April 8, 2017, 10:07 am

MSDS were not allowed in New York so I guess we didn't know what we were missing. BMW lease rates without MSDs were very competitive because of the high residuals. In 2014 when we were shopping for two cars, we compared MB lease rates on a '14 E Class wagon (for my wife) and a F10 535 for me. The MB lease rates were so ridiculously high that we bought that car, while we leased the BMW. MSD is just another financial term and if BMW remains competitive on overall lease rates vs MB and Audi (Audi was also ridiculously high), they will do fine. As for ED, that is a nice program but how many people as a percentage of all BMWs sold take ED?
mikeriley commented:
April 8, 2017, 11:23 am

Quote:
Originally Posted by weinschela View Post
MSDS were not allowed in New York so I guess we didn't know what we were missing. BMW lease rates without MSDs were very competitive because of the high residuals. In 2014 when we were shopping for two cars, we compared MB lease rates on a '14 E Class wagon (for my wife) and a F10 535 for me. The MB lease rates were so ridiculously high that we bought that car, while we leased the BMW. MSD is just another financial term and if BMW remains competitive on overall lease rates vs MB and Audi (Audi was also ridiculously high), they will do fine. As for ED, that is a nice program but how many people as a percentage of all BMWs sold take ED?


You are missing the point. Things have changed drastically since 2014. Residuals are much lower and money factor has increased. So they have a much less competitive advantage than 2014.


Sent from my iPhone using Bimmerfest mobile app
MJBrown62 commented:
April 8, 2017, 12:57 pm

Quote:
Originally Posted by rkinra View Post
... other manufacturers are stepping up their game ...
And this is just the point I wanted to make.

BMW is the standard that you are all comparing too! I cruise the thread(s) and see comments like:
  • Stepping up their game
  • Almost as direct response as ...
  • Nearly as fun ...
  • etc..

You know that the BMW DNA is the standard for driving, everyday or aggressive or performance. Which cars stop faster in traffic? Which one has the balance to not nose dive? Which one will swerve out the way of a problem and maintain control and steering?

You know which one.

What I have seen in my 11 years in the brand is that BMW has gradually then dramatically "cheap-sold" their cars. MSDs, lease credit, big fleet cash, cheap unmatchable online leases, dealers selling new cars at $500 over, etc. All this has made us the payment brand and not the top high-line brand.

As a long term strategy, maybe discontinuing or amending all these will cause a course correction. Which will end up being better for dealers in the long run.

I had a client recently who had been with BMW for years, then went to the new Lexus. After about 7,000 miles, she came back. When I asked her why, she said, "The IS had all the things I wanted, but I was bored."

Michael
dima123 commented:
April 8, 2017, 1:48 pm

This isn't a smart move by BMW. Cutting maintenance program, cutting discount on ED program, then removing MSD. Will lead to drastic sales loss for them. I'm from NY and have always got a car in NJ and CT just because of MSD; so has my family. Between us thats over 10 cars in past decade and majority of them were msd leases.

To the people who say that BMW shouldn't have offered the program aren't correct. Your prepaying thousands of dollars that BMW uses for 3 years for slight reduction in interest; with inflation technically you'd be better of using the money yourself today than to let bmw have it for several years.

BMW has lead sales for many years due to attractive lease rates. The fact they are eliminating the program which realistically never lost them any money will cause a backlash. I for one just leased 340 last year. In 2 years when my lease is up; I will shop around to other brands. Mercedes, lexus, Infiniti all offer msd programs. Before it was no brainer get another bmw. Now they honestly lost my loyalty. Between my family and I we have 4 bmw leases maturing in next 1-2 years. You best believe bmw will have hard time to win us over.

Im truly upset by the cost cutting this company has been doing. For someone who has been driving bmw's for last 13 years and seen how they progressively have become more luxurious than ultimate driving machines. This might have been last straw for me to move ship. sorry for rant
jjrandorin commented:
April 8, 2017, 2:27 pm

Quote:
Originally Posted by nyca View Post
I guess they can cancel the other incentive programs as well, and it will have "no effect" either. How many people know about fleet, AARP, loyalty, etc. I mean, doesn't everyone want to pay more? Let's see where they are next year at this time.
Likely selling less cars in the united states but STILL setting Sales records internationally like they have done for like 20 straight months.

I have been saying the same thing for months, the united states is no longer the center of BMWs profit or sales universe. They were down 11 percent last year in the US and still set BMW group sales records.

It sucks for us here in the US, but it does not take an economist to see that if you are giving away record levels of incentives and still not taking the sales crown in the US, but your COMPANY sales are setting records because of margins in other markets, you would sell more cars in those other markets, right?
Motorboat411 commented:
April 8, 2017, 2:34 pm

Quote:
Originally Posted by MJBrown62 View Post
And this is just the point I wanted to make.

BMW is the standard that you are all comparing too! I cruise the thread(s) and see comments like:
  • Stepping up their game
  • Almost as direct response as ...
  • Nearly as fun ...
  • etc..

You know that the BMW DNA is the standard for driving, everyday or aggressive or performance. Which cars stop faster in traffic? Which one has the balance to not nose dive? Which one will swerve out the way of a problem and maintain control and steering?

You know which one.
Actually, BMW has been slipping here as well, BMW had journalists over in UK for 5-series reviews and had their engineers in the cars with those journalists. Every journalist, who complained about softer ride and less steering feel was told by the engineers that people want more "Isolation". So BMWs itself is making steerings numb and suspensions softer. You can't really say BMW DNA is still there. I guess if you go for an M5 or M235i, lets be honest, these cars don't make for nice family saloons or commute cars.
chrischeung commented:
April 8, 2017, 3:11 pm

This might help right the imbalance of leasing to purchases.

http://video.cnbc.com/gallery/?video=3000590228

I doubt that BMW will hurt for long. A lot of SUVs in the pipeline to push up sales. That is where the growth is these days. Sell more SUVs. Lose less with subvented leases.

I never really understood MSDs making much sense to BMW either. Since the people who mostly used them never defaulted I expect. Just look at credit history instead. You almost want to only let them do MSDs if they don't want to use MSDs in the first place.

Dealer - You want to save money with MSDs that you will get back at lease end?
Client - Yes!
Dealer - Sorry, by saying yes, you don't qualify.

I've used MSDs on the last 8 of my car leases - all BMW(7) and Benz(1) did was give me money. Their risk without doing MSDs, compared to just using my credit score, was likely the same. One costs them money - the other is free.
Gulol commented:
April 8, 2017, 3:17 pm

Hate to see it go - thankfully, I was able to take advantage of it on my current lease. The business is cyclical - I work for a captive of another manufacturer (and they loooooove it when I don't drive the company product!) and MSDs with us have come and gone. With the captive's mission primarily to be to support sales, if the lack of a MSD program ends up costing more business than forecast, they can always bring it back or some variant of it.
Robert A commented:
April 8, 2017, 3:21 pm

Really? Go drive an X1 and a Subaru Forester or an F10 and an E-Class back to back, and let me know what you think.

Quote:
Originally Posted by Motorboat411 View Post
You can't really say BMW DNA is still there.
chrischeung commented:
April 8, 2017, 3:23 pm

Quote:
Originally Posted by Robert A View Post
E-Class back to back, and let me know what you think.
I have a 2015 550i, 2016 C300 and drove 2017 E300, and 2017 330i loaners. The Benzes did not feel like BMWs and vice versa. I would concur generally with your assessment. The differences are still there, even if the scales moved closer.
ard commented:
April 8, 2017, 3:25 pm

Quote:
Originally Posted by MJBrown62 View Post

You know that the BMW DNA is the standard for driving, everyday or aggressive or performance. Which cars stop faster in traffic? Which one has the balance to not nose dive? Which one will swerve out the way of a problem and maintain control and steering?

You know which one.

It may be 'in the DNA', but BMW marketing experts are neutering the brand. The dilution of performance is undeniable.

Better than Lexus? Sure. But as BMWs direction is increasingly driven by short term buyers and 'luxury owners', the DNA you speak of is being diluted and suppressed.

IMO

Glad there is no new BMW I am dying to own...so far
Robert A commented:
April 8, 2017, 3:31 pm

I had an X1 loaner 2 weeks ago and I thought it was a lot of fund to drive. My wife is in the market for a car of this size and was thinking of the Forester. I drove the Forester yesterday and noticed just how much less enjoyable it is to drive. The engine lurches in city traffic and the CVT is a pure annoyance.

Quote:
Originally Posted by chrischeung View Post
I have a 2016 C300 and drove a 2017 E300 loaner, and 2016 328i. The Benzes did not feel like BMWs and vice versa. I would concur generally with your assessment. The differences are still there, even if the scales moved closer.
visualguy commented:
April 8, 2017, 3:58 pm

Quote:
Originally Posted by weinschela View Post
The MB lease rates were so ridiculously high that we bought that car, while we leased the BMW. MSD is just another financial term and if BMW remains competitive on overall lease rates vs MB and Audi (Audi was also ridiculously high), they will do fine.
I think the more important issue is whether leasing will still make sense. Even if BMW lease rates remain competitive with MB and Audi, they may be over the threshold where leasing stops making sense vs buying. If buying becomes the more prudent thing to do, that changes the competitive picture because now customers will start considering more seriously cars that they were dismissing before because of the lease rates which made them too expensive to lease (such as the MB you mentioned).
Robert A commented:
April 8, 2017, 4:11 pm

BMW prices are mostly a concern because they're not associated with sufficient build quality and retained value. I don't think I'd mind paying $55k for a car that's worth $40k after 3 years.

Quote:
Originally Posted by MJBrown62 View Post
The larger concern is the overall increase in the "price:" higher monthly payments due to rate/NF increases, lower residuals, higher pricing, etc. I don't think discontinuing MSDs has significant impact; just another stick in the spokes.

mjb
Robert A commented:
April 8, 2017, 4:17 pm

Leasing still make sense and, I believe, in a big way. BMW is still packing huge incentives in the residual and you lose them when you buy.

MSDs only affected the interest rate by taking it well below market. Losing that break only means paying market rates, which is what you'd pay anyway if you financed.

Quote:
Originally Posted by visualguy View Post
I think the more important issue is whether leasing will still make sense. Even if BMW lease rates remain competitive with MB and Audi, they may be over the threshold where leasing stops making sense vs buying. If buying becomes the more prudent thing to do, that changes the competitive picture because now customers will start considering more seriously cars that they were dismissing before because of the lease rates which made them too expensive to lease (such as the MB you mentioned).
visualguy commented:
April 8, 2017, 4:26 pm

Quote:
Originally Posted by Robert A View Post
Leasing still make sense and, I believe, in a big way. BMW is still packing huge incentives in the residual and you lose them when you buy.

MSDs only affected the interest rate by taking it well below market. Losing that break only means paying market rates, which is what you'd pay anyway if you financed.
With buying, you have the option of paying cash, though, which you don't really have with leasing - you're forced into paying interest. Interest rates are going up, and killing the MSDs makes it even worse.
Robert A commented:
April 8, 2017, 4:28 pm

You can pay cash in a lease too, at least to the RV, though not for the whole car. Even still, cash has an opportunity cost, so it's not entirely free.

Quote:
Originally Posted by visualguy View Post
With buying, you have the option of paying cash, though, which you don't really have with leasing - you're forced into paying interest. Interest rates are going up, and killing the MSDs makes it even worse.
visualguy commented:
April 8, 2017, 5:17 pm

Quote:
Originally Posted by Robert A View Post
You can pay cash in a lease too, at least to the RV, though not for the whole car. Even still, cash has an opportunity cost, so it's not entirely free.
You can do a one-pay lease, but it doesn't make sense in the case of BMW because you pay only slightly less interest with that.

I agree that cash has an opportunity cost, but I don't know of a safe investment that yields more than what I have to pay in interest if I borrow the money (or anywhere near that after taxes for that matter).

We'll see where the incentives and residuals go. I hope BMW lease rates don't become too prohibitive.
justinnum1 commented:
April 8, 2017, 5:38 pm

no longer the ultimate driving machine, now more expensive to lease, BMW really wants people to consider other makers
namelessman commented:
April 8, 2017, 6:55 pm

Quote:
Originally Posted by Robert A View Post
You can pay cash in a lease too, at least to the RV, though not for the whole car. Even still, cash has an opportunity cost, so it's not entirely free.
Cash does have an opportunity cost if there is other debts that charge above BMWFS lease rates. If that is not true, then paying cash will be a viable option esp. when risk free rate is still close to 0%.
namelessman commented:
April 8, 2017, 6:59 pm

Quote:
Originally Posted by Robert A View Post
The issue in the car leasing business is one of asymmetrical information. These incentive programs are kept so well hidden from consumers that they're hard to unearth and find. Even after 15 years of frequenting these boards and drilling into them intensely, I'm still amazed at the stuff I never new existed.
What are the stuff that was missed after 15 years cruising these boards?

My take is that these incentives exist to implement dramatic market pricing, so one has to be on top of them to not miss out.
Greg@Pacific BMW commented:
April 8, 2017, 8:16 pm

I'll throw this in........... I sell around 35-55 cars a month ........ and maybe 10%-15% of my clients do MSD's. I think it will be missed but BMW will come up with something else that will be financially beneficial. All good things come to an end eventually.
richpat69 commented:
April 8, 2017, 9:27 pm

Met with my salesman today as my G30 had just arrived and I will pick it up Monday. He too confirmed that the MSD program was ending. He said a very significant number of his customers have used MSD's and he felt that this was not a good direction for BMW to go. Personally, I like BMW and have had several BMW's and will continue to do so as long as the dollars and cents make sense. If not, lots of other good cars out there.
chrischeung commented:
April 9, 2017, 12:47 am

Quote:
Originally Posted by Greg@Pacific BMW View Post
I think it will be missed but BMW will come up with something else that will be financially beneficial. All good things come to an end eventually.
I'm not as positive.

The difference is about a cost saving of $1,500 and tying up a couple of grand. Or thereabouts. After a year, I say it will blow over, and the vast majority of folks will take it as how things are. I certainly wouldn't drive a car I don't like over one I prefer for about $1-$2K on a 3 year lease. Yep, I'm really going to drive that Benz E300 over a BMW 530i for $1.50 a day. I'm sure the Benz drivers will do so because they want a Benz - not because it's $1.50 a day cheaper due to MSDs.
alewifebp commented:
April 9, 2017, 1:12 am

I do wonder what it will do in regards to ASP. Not only did the MSD program help drive sales, it helped to drive sales of heavier cars. If I can lease a $70k car at one manufacturer, and another at BMW for $75K, the BMW is easy choice to make.

For me, what this really does it makes me think harder about my next lease. I like the G30, I like my dealer and I like my CA. But if the numbers don't work out, they don't work out. I already knew I was going to have to pay more than my current lease, which was a great price. But there are limits to how much more I want to spend. From what was an automatic decision of going with BMW, is now a look around and see what else is around.

I understand why they are doing some of things that they are doing, as they want to increase margin. However, I always felt that that the MSD program was something that doesn't really cost them much, if anything in the long run. BMW has been sitting on my MSD money for nearly 9 years now, investing it as they see fit, for some savings for me, but also an additional protection against default and an easy recoup of lease end costs.

It would be interesting to see what they have in their MSD "account," and how much they will have to pay out in the next three years as these leases expire. We'll see if they take a charge against the cost in their financial statements, and if it is material.

I will be letting them know my displeasure, and I encourage everyone else to do the same.
namelessman commented:
April 9, 2017, 3:07 am

Quote:
Originally Posted by alewifebp View Post
I do wonder what it will do in regards to ASP. Not only did the MSD program help drive sales, it helped to drive sales of heavier cars. If I can lease a $70k car at one manufacturer, and another at BMW for $75K, the BMW is easy choice to make.

For me, what this really does it makes me think harder about my next lease. I like the G30, I like my dealer and I like my CA. But if the numbers don't work out, they don't work out. I already knew I was going to have to pay more than my current lease, which was a great price. But there are limits to how much more I want to spend. From what was an automatic decision of going with BMW, is now a look around and see what else is around.

I understand why they are doing some of things that they are doing, as they want to increase margin. However, I always felt that that the MSD program was something that doesn't really cost them much, if anything in the long run. BMW has been sitting on my MSD money for nearly 9 years now, investing it as they see fit, for some savings for me, but also an additional protection against default and an easy recoup of lease end costs.

It would be interesting to see what they have in their MSD "account," and how much they will have to pay out in the next three years as these leases expire. We'll see if they take a charge against the cost in their financial statements, and if it is material.

I will be letting them know my displeasure, and I encourage everyone else to do the same.
It is possible that BMWFS needs to position for rising interest rate, and has to cut out some lucrative incentives which are financed by cheap money.

There are financial news saying that auto loans/leases can be packaged into asset back security. My guess is that the MSD-backed leases can be classified as senior tranch and can have lower interest rate that non-MSD. In a rising rate environment this strategy may not work that well.
bschmidt25 commented:
April 9, 2017, 3:16 am

I get that your average BMW lease customer didn't know that MSDs existed, let alone how they worked. But for those of us who did, this is bad news. Regardless of how we get there, the vast majority of us are concerned about the bottom line. If it suddenly becomes more expensive to lease a BMW compared to an Audi or Benz, BMW is going to be moving a lot fewer cars. None of us NEED to lease a BMW.
mwm1166 commented:
April 9, 2017, 5:21 am

Quote:
Originally Posted by quackbury View Post
And if I was a CA and a self-important little pr*ck with an attitude like that walked into my Center, Id refuse to work with him. Anyone who has been here for longer than 2 months / 2 posts knows that Adrian is one of the good guys. You? I think we've all formed a pretty strong impression.
And that's the whole cycle isn't it. Guys like Greg and Adrian can choose their customers and customers are free to choose to not work with a certain CA. However, some CA's are so desperate that they literally have to work with anyone who walks in the door. To be frank dealerships turn over salesman at an incredible rate. The customer has tons of brands and in the day and age of the internet, tons of dealers they can work with all over the country if they like. Guys like Adrian (who, yes, can be super condescending about their customers wanting to spend the least of dollars possible for the most amount of car, meanwhile he wants a 6 figure income for an unskilled job) they have built their business. He makes his money and has choices. Most CA's aren't in that situation. Good for those guys, but it's the exception not the rule.
mwm1166 commented:
April 9, 2017, 5:35 am

Quote:
Originally Posted by MJBrown62 View Post
And this is just the point I wanted to make.

BMW is the standard that you are all comparing too! I cruise the thread(s) and see comments like:
  • Stepping up their game
  • Almost as direct response as ...
  • Nearly as fun ...
  • etc..

You know that the BMW DNA is the standard for driving, everyday or aggressive or performance. Which cars stop faster in traffic? Which one has the balance to not nose dive? Which one will swerve out the way of a problem and maintain control and steering?

You know which one.

What I have seen in my 11 years in the brand is that BMW has gradually then dramatically "cheap-sold" their cars. MSDs, lease credit, big fleet cash, cheap unmatchable online leases, dealers selling new cars at $500 over, etc. All this has made us the payment brand and not the top high-line brand.

As a long term strategy, maybe discontinuing or amending all these will cause a course correction. Which will end up being better for dealers in the long run.

I had a client recently who had been with BMW for years, then went to the new Lexus. After about 7,000 miles, she came back. When I asked her why, she said, "The IS had all the things I wanted, but I was bored."

Michael
And here is where I come back and always ask.

What do we, the customer, care about "better for the dealers"? That seems to be a you guys concern, but general what's better for the dealerships is worse for us the end customer. What you see as being the "payment brand." We looked as the "buyer friendly brand." Sure some of that means the same thing. However, if the pricing model becomes more opaque and more equal to all the competition as the cars take a step back towards the competition it just means that "we" the "customer" will look to see if we can't do better for "ourselves" the people who make the payments and use the equipment, elsewhere. Sure it doesn't mean you definitely will lose or won't compete. But it changes a lot of us from "automatically going to re-lease" to "sure they are a great option but I'll check out what's on offer since they are all the same."

I know your dealerships can't always see that, and I'm sure you just all see that the brand is built and hallowed. However, millions of brands have been and then slowly destroyed from cashing in, or changing their core character. I'm not saying it will happen, but it could.

All you dealership guys seem to think that it's impossible that BMW could fall behind with their own customer base, and that you have nothing to lose.

You may be right, this might all work out perfectly, and all dealers and CA's margins will go sky-high and the amount of customers lost will be more than made up for in new roundel badge whores looking to show off a luxury item. You could be right! But there is always a chance this is Faustian Bargain...

And every time you guys poo-poo the possibility just makes me think you're drinking the kool-aid...
Alpine300ZHP commented:
April 9, 2017, 8:11 am

Quote:
Originally Posted by chrischeung View Post
I have a 2015 550i, 2016 C300 and drove 2017 E300, and 2017 330i loaners. The Benzes did not feel like BMWs and vice versa. I would concur generally with your assessment. The differences are still there, even if the scales moved closer.


This has been my assessment as well. I cross shopped the M4 with the C63s and the RS5. The m4 was clearly the best car IMHO irrespective of lease price.


Sent from my iPhone using Bimmerfest mobile app
Alpine300ZHP commented:
April 9, 2017, 8:13 am

Quote:
Originally Posted by ard View Post
It may be 'in the DNA', but BMW marketing experts are neutering the brand. The dilution of performance is undeniable.



Better than Lexus? Sure. But as BMWs direction is increasingly driven by short term buyers and 'luxury owners', the DNA you speak of is being diluted and suppressed.



IMO



Glad there is no new BMW I am dying to own...so far


I agree with you too which is why nothing BMW makes moves me unless it is a "real" M car.


Sent from my iPhone using Bimmerfest mobile app
Shon528 commented:
April 9, 2017, 8:22 am

Quote:
Originally Posted by chrischeung View Post
I'm not as positive.

The difference is about a cost saving of $1,500 and tying up a couple of grand. Or thereabouts. After a year, I say it will blow over, and the vast majority of folks will take it as how things are. I certainly wouldn't drive a car I don't like over one I prefer for about $1-$2K on a 3 year lease. Yep, I'm really going to drive that Benz E300 over a BMW 530i for $1.50 a day. I'm sure the Benz drivers will do so because they want a Benz - not because it's $1.50 a day cheaper due to MSDs.
As I read through the 4 pages of this thread, I find myself in the same boat. I'm shopping for the product, not the payment. Losing the MSD program sucks. However, to me anyway, it's almost the same as when they take away an option credit or a loyalty credit for a given month. It's just another discount that's no longer available. But if the product is what I want, and it can fit within my budget, then I'm still going to get it. 6MT is more important to me personally. Under the new programs, if a 6MT 340i is going to cost me $500/mo while a 9AT C43 costs the same or less, I'll still stick w/ BMW as their product is what I want.

The dent BMW may see is with people who have less concern about the driving dynamics and more about the "stuff" included as standard. Those are the ones on here talking about leather and xenons being standard on a loaded Camry, Accord sport, TLX, etc. Take away the MSD discount, increasing the payment by $50-75/mo, those are the ones that you'll see jump ship.

#savethemanuals
VitaminHan commented:
April 9, 2017, 10:16 am

I try to fit my expenses to my budget so I can achieve my other life goals such as savings, mortgages and travel while enjoying nice things like a BMW.

I can afford a 340 if I want to sacrifice my some other goals, or a M4 if I sacrifice more, but that is not something that I would like to do. Eventually I settled with a 320i w/manual because I am comfortable with the payment and the overall financial picture of my life after I lease it. 9 years ago I bought a car that I could barely afford after I got my first job and learned my lesson, I made all the payments but I was constantly under pressure because I only had about $200 each month after I paid all the expenses, I do not want to go through that again.

I like BMW, more than other brands, and I have to thank BMW for setting a high residual so I can lease one for less money, I appreciate that. I have been wanting to own a BMW since I was in high school and I feel it is an item on my bucket list that I would like to cross off, but I also know I am not the one that "has to" have a BMW at any cost. If the cost goes over to a certain point that I feel not worth it, I may scale back to some other brands, like a VW or Acura.

I guess I only represent a small percentage of BMW shoppers. After all, I hardly see anyone owns a 320i on this board, and the brands that people cross shop because "no MSD" are Audi or Mercedes. It has nothing to do with how much money I make, I just have a "limit" that I do not want to go over on a leased car. For the people who have to drive a BMW then the car matters more, but it's just me.

Call me frugal, or call me poor, I do not mind. But for the condescending topic in this post, I just ran the numbers, and w/o MSD for the same car my monthly payment goes up about $30, which equals to about $1100 increase in the net cap cost. Can I afford it? sure, but if a CA says to me "let me lease you the car for $1100 more than the fair price, because it does not really cost you that much, how much do you really save by leasing the car at fair price?" , I won't do the deal.
MJBrown62 commented:
April 9, 2017, 1:07 pm

I appreciate your opinion and thoughts.

There will always be a dynamic tension between the manufacturer, the franchise, and the customer. And this is the nature of for-profit businesses. It has always existed, and has an ebb and flow that benefits one over the other depending on circumstances.

And that dynamic always includes competition, pricing, value, reputation ... all that.

Many if not most of us in the business are decidedly not kool-aid drinkers. We're realists, we're people seeing our numbers go down (units and $$) as volume AND profit drops.

We're salespeople ... we could sell trucks and Subarus (no disrespect to either) but we stay with BMW. 11th year for me. Jon, Greg, Adrian ... probably longer. So I guess yes, our "kool-aid" is a genuine belief that there is more value to BMWs than other comparative brands.

I don't think that BMWs have taken a significant step backwards, enough to warrant defection (I know a strong word) just due to the pricing and financing changes.

How do I know that? I see the comparison performance data, I attend ride and drive events with competitive cars; I know the core DNA remains by and large unchanged.

And I know every time I take a client on our "slot car track" test drive and see their reaction.

I think we lost a portion of our base, to use the political term, with the advent of the electronic control systems. But that had to be weighed against the consumers that came to the brand that previously thought BMWs were too stiff and heavy-steering.

We will likely lose some of the base accustomed to lower leases. With all due respect, I still think that "buyer friendly" in the current context equals payments which equals MF, residual, and incentives.

The future is likely to not be utopia for either of us. As BMW continues to increase the base cost of the vehicles and lower the MSRP to Invoice margin, and have our holdback be tied to harder measures, our margins will not all of the sudden "sky-rocket." And we will lose some loyal customers who feel that there isn't enough driving differentiation with competitors to warrant a higher payment.

But it seems this is a course correction for BMW and BMWFS that we all, customer and dealers, hope is a tack that works out.

I'm not about to head off to the "AudiFest" forum any time soon.

Michael

Quote:
Originally Posted by mwm1166 View Post
And here is where I come back and always ask.

What do we, the customer, care about "better for the dealers"? That seems to be a you guys concern, but general what's better for the dealerships is worse for us the end customer. What you see as being the "payment brand." We looked as the "buyer friendly brand." Sure some of that means the same thing. However, if the pricing model becomes more opaque and more equal to all the competition as the cars take a step back towards the competition it just means that "we" the "customer" will look to see if we can't do better for "ourselves" the people who make the payments and use the equipment, elsewhere. Sure it doesn't mean you definitely will lose or won't compete. But it changes a lot of us from "automatically going to re-lease" to "sure they are a great option but I'll check out what's on offer since they are all the same."

I know your dealerships can't always see that, and I'm sure you just all see that the brand is built and hallowed. However, millions of brands have been and then slowly destroyed from cashing in, or changing their core character. I'm not saying it will happen, but it could.

All you dealership guys seem to think that it's impossible that BMW could fall behind with their own customer base, and that you have nothing to lose.

You may be right, this might all work out perfectly, and all dealers and CA's margins will go sky-high and the amount of customers lost will be more than made up for in new roundel badge whores looking to show off a luxury item. You could be right! But there is always a chance this is Faustian Bargain...

And every time you guys poo-poo the possibility just makes me think you're drinking the kool-aid...
mikeriley commented:
April 9, 2017, 2:49 pm

Quote:
Originally Posted by jjrandorin View Post
Likely selling less cars in the united states but STILL setting Sales records internationally like they have done for like 20 straight months.

I have been saying the same thing for months, the united states is no longer the center of BMWs profit or sales universe. They were down 11 percent last year in the US and still set BMW group sales records.

It sucks for us here in the US, but it does not take an economist to see that if you are giving away record levels of incentives and still not taking the sales crown in the US, but your COMPANY sales are setting records because of margins in other markets, you would sell more cars in those other markets, right?
i can assure you the ppl in new jersey headquarters care VERY much about sales in the US. And likewise I can assure the ppl in munich care very much about what the ppl in new jersey are doing to increase sales. don't be so naive. the us based management's bonuses and subsequent promotions etc are based on their success here, not the companies success globally. if you are a CA your bonuses and commissions are based on your sales not how someone else is doing in china. the head of bmwfs is trying to make a name for himself, all while ruining sales and taking others down. he will do well while others including CAs in the us will not.
richpat69 commented:
April 9, 2017, 6:46 pm

Quote:
Originally Posted by mikeriley View Post
i can assure you the ppl in new jersey headquarters care VERY much about sales in the US. And likewise I can assure the ppl in munich care very much about what the ppl in new jersey are doing to increase sales. don't be so naive. the us based management's bonuses and subsequent promotions etc are based on their success here, not the companies success globally. if you are a CA your bonuses and commissions are based on your sales not how someone else is doing in china. the head of bmwfs is trying to make a name for himself, all while ruining sales and taking others down. he will do well while others including CAs in the us will not.
It is a bit hard believing that the people in NJ care so much about the US market and then provide cars without full digital displays and without the four zone HVAC which our neighbors to the north enjoy as well as most of the rest of the BMW world.
mikeriley commented:
April 9, 2017, 7:52 pm

Quote:
Originally Posted by richpat69 View Post
It is a bit hard believing that the people in NJ care so much about the US market and then provide cars without full digital displays and without the four zone HVAC which our neighbors to the north enjoy as well as most of the rest of the BMW world.


You are obviously angry about the lack of those features but you are letting that anger cloud your judgement on the topic at hand which is msd. Don't kid yourself, the person making that decision on full display is not making multimillion dollar financial decisions. Stick to the topic.

To help u b more constructive channel your anger at getting things changed like ppl did in 2014 with the 704 suspension coming back after ppl complained on the msport package.


Sent from my iPhone using Bimmerfest mobile app
MJBrown62 commented:
April 9, 2017, 8:48 pm

Quote:
Originally Posted by chrischeung View Post
I'm not as positive.

Yep, I'm really going to drive that Benz E300 over a BMW 530i for $1.50 a day.
And thus my point in other posts. I'd give up a latte-a-day to drive a BMW over an E300.
MJBrown62 commented:
April 9, 2017, 8:54 pm

Quote:
Originally Posted by mikeriley View Post
i can assure you the ppl in new jersey headquarters care VERY much about sales in the US. And likewise I can assure the ppl in munich care very much about what the ppl in new jersey are doing to increase sales. don't be so naive. the us based management's bonuses and subsequent promotions etc are based on their success here, not the companies success globally. if you are a CA your bonuses and commissions are based on your sales not how someone else is doing in china. the head of bmwfs is trying to make a name for himself, all while ruining sales and taking others down. he will do well while others including CAs in the us will not.
BMW AG still considers BMWUSA as one of its top markets, not only due to volume, but due to reputation. So it was a bitter pill and maybe more for NA/FS execs when as JJ said you push incentives like crazy yet still lose in the market.

BMW also suffered from a bad product mix in the late 3rd and 4th qtr 2016. Nothing really new on the 3 and 4 series platform. No X3 or X5 diesels, and the terrible programs and inventory on i3s. MB had a great infusion of new models.

So the downturn can be measured on multiple fronts.
eazy commented:
April 9, 2017, 11:17 pm

I created a chart of MSD's from competitors and compared to BMW. Please feel free to tell me to make edits.
AksNasZasNas commented:
April 9, 2017, 11:33 pm

Quote:
Originally Posted by eazy View Post
I created a chart of MSD's from competitors and compared to BMW. Please feel free to tell me to make edits.


I thought Infiniti determined the MSD deposit off the original payment?

PS - great idea!
alewifebp commented:
April 9, 2017, 11:50 pm

Thinking from the mind of a BMW dealer (I am not one)

If I owned a small BMW dealer, or even a midsize dealer, I'd be asking myself a few questions. One, you, BMW NA, has accustomed us to a high rate of sales, and with that, we built gleaming new dealerships and hired tons of staff, and put up expensive color charts, bought i-related gear, etc. As a smaller dealer, I did all of this with expectation that the gravy train would continue. Sure, we'd still have to hustle, as you always do in a competitive market, but we did all of this with the expectation that we'd have x unit sales, and with hard work, and incentives from corporate, we could increase that volume. And for a few years, with BMW intent on getting the #1 luxury sales crown, it was great! I expanded my dealership, put in a new service bay. Now you hit me with this stuff.

MRM, tiered leases, less incentives, the signature maintenance program being gutted, and now dropping the MSD program. Oh, I even have one of those "sponsors" on my sales staff. I let him be a sponsor since he might sell each car at a lower margin, but he also brings in a lot more sales than his peers. So BMW is telling me that we will make it up in margin. That sounds great on paper, but I have a loan for the dealer improvement to pay, and a sales staff to pay. Will the gambit pay off? Well, I guess we are going to find out.

Heck, those MSD people. They just leave the money in the "bank" so to speak, and come back lease after lease. It's harder to start a new MSD at a new dealer, so if I provide a good price to those customers, I can expect them back in three years without having to put in too many marketing exercises, or having my "sponsor" take up too much time on each sale. Now corporate is going to be cutting each of those customers a check. Those customers have one less reason to be locked in.

/dealership hat off.
richpat69 commented:
April 10, 2017, 7:17 am

Quote:
Originally Posted by mikeriley View Post
You are obviously angry about the lack of those features but you are letting that anger cloud your judgement on the topic at hand which is msd. Don't kid yourself, the person making that decision on full display is not making multimillion dollar financial decisions. Stick to the topic.

To help u b more constructive channel your anger at getting things changed like ppl did in 2014 with the 704 suspension coming back after ppl complained on the msport package.


Sent from my iPhone using Bimmerfest mobile app
I pick up my 540iX M-sport today with 7 MSD's applied. I have called BMW NJ twice to complain about the other matters I referenced which were on display at auto shows and yet not in our cars. I had a long talk on Saturday with my CA about MSD's and how much damage he believes will be done to the leasing business. With all of these matters, while calling may help us feel better and may give BMW some guidance, the bottom line is sales volume and a balance sheet.
HPIA4v2 commented:
April 10, 2017, 9:18 am

Quote:
Originally Posted by alewifebp View Post
Thinking from the mind of a BMW dealer (I am not one)

If I owned a small BMW dealer, or even a midsize dealer, I'd be asking myself a few questions. One, you, BMW NA, has accustomed us to a high rate of sales, and with that, we built gleaming new dealerships and hired tons of staff, and put up expensive color charts, bought i-related gear, etc. As a smaller dealer, I did all of this with expectation that the gravy train would continue. Sure, we'd still have to hustle, as you always do in a competitive market, but we did all of this with the expectation that we'd have x unit sales, and with hard work, and incentives from corporate, we could increase that volume. And for a few years, with BMW intent on getting the #1 luxury sales crown, it was great! I expanded my dealership, put in a new service bay. Now you hit me with this stuff.

MRM, tiered leases, less incentives, the signature maintenance program being gutted, and now dropping the MSD program. Oh, I even have one of those "sponsors" on my sales staff. I let him be a sponsor since he might sell each car at a lower margin, but he also brings in a lot more sales than his peers. So BMW is telling me that we will make it up in margin. That sounds great on paper, but I have a loan for the dealer improvement to pay, and a sales staff to pay. Will the gambit pay off? Well, I guess we are going to find out.

Heck, those MSD people. They just leave the money in the "bank" so to speak, and come back lease after lease. It's harder to start a new MSD at a new dealer, so if I provide a good price to those customers, I can expect them back in three years without having to put in too many marketing exercises, or having my "sponsor" take up too much time on each sale. Now corporate is going to be cutting each of those customers a check. Those customers have one less reason to be locked in.

/dealership hat off.
IMHO, any lessee of BMW is "locked" in already at the end of lease he/she need to lease another car. That's the business model of lease; provide some sort of solution of owning a depreciating asset with no down payment. And BMW is a "want" than a "need".

But we'll see if BMW sales numbers on cars this year will go down while other brands stay the same, only time will tell.
jjrandorin commented:
April 10, 2017, 9:35 am

Quote:
Originally Posted by HPIA4v2 View Post
IMHO, any lessee of BMW is "locked" in already at the end of lease he/she need to lease another car. That's the business model of lease; provide some sort of solution of owning a depreciating asset with no down payment. And BMW is a "want" than a "need".

But we'll see if BMW sales numbers on cars this year will go down while other brands stay the same, only time will tell.
I think its a given sales will go down... what we need to look at (which will take looking "closer") is to look at BMW PROFIT, not sales... at least in the US.
HPIA4v2 commented:
April 10, 2017, 9:43 am

Quote:
Originally Posted by jjrandorin View Post
I think its a given sales will go down... what we need to look at (which will take looking "closer") is to look at BMW PROFIT, not sales... at least in the US.
That's my intuition as well, BMW sales probably go down. But it's hard to say if it's down because of MSD thingy or any other factor.
Remember, members of this forum or BMWCCA is not representing the mass of BMW owners out there, we are kinda the minority of schema of things
x5dGuy commented:
April 10, 2017, 11:51 am

I need to clarify something, so I hope folks on the thread can help!

I placed an order at the end of March for a 40e. The order is in the "order bank", as the dealer states they don't have an allocation yet for this quarter. I filled out my credit application, gave a deposit, filled out all other forms, so as they stated, the deal is locked. They are expecting a May production date Saved about 15% off MSRP after all discounts and rebates, and will combine my corp MF reduction plus always 7 MSDs.

However, does this mean I can still apply MSDs even though the deal will not close before May 1st? I typically apply the full 7 MSDs when I lease, so I will be really unhappy to know that I can't. Saving ~$3K between two X5 leases is a significant difference than not!

Thanks
tim330i commented:
April 10, 2017, 11:59 am

Quote:
Originally Posted by eazy View Post
I created a chart of MSD's from competitors and compared to BMW. Please feel free to tell me to make edits.
Thanks for creating that! I've added it to the first post with credit

Tim
jjrandorin commented:
April 10, 2017, 12:09 pm

Quote:
Originally Posted by x5dGuy View Post
I need to clarify something, so I hope folks on the thread can help!

I placed an order at the end of March for a 40e. The order is in the "order bank", as the dealer states they don't have an allocation yet for this quarter. I filled out my credit application, gave a deposit, filled out all other forms, so as they stated, the deal is locked. They are expecting a May production date Saved about 15% off MSRP after all discounts and rebates, and will combine my corp MF reduction plus always 7 MSDs.

However, does this mean I can still apply MSDs even though the deal will not close before May 1st? I typically apply the full 7 MSDs when I lease, so I will be really unhappy to know that I can't. Saving ~$3K between two X5 leases is a significant difference than not!

Thanks
Credit locks are good for 60 days (90 on the west coast). You have 60 days (and to the end of the month that the 60 days ends) to pick up the car and use the credit lock / terms from when you locked.

If you locked in march, you would have till the end of may (end of june on the west coast) to use your lock. It does not sound like you would get your car before the end of may, so I think your credit lock would expire (again unless you are on the west coast).

We also dont know if the usage of MSDs falls under the credit lock scenario. That would be something you want to very carefully check with your dealer. If I were you, I would push your dealer to trade for an allocation or something. Two months before they can even order it is a LONG time. Something in the order bank is not ordererd, its "to be ordered" when they have an allocation. Thats a REALLY long time to wait for an X5 before it starts production.
adrian's bmw commented:
April 10, 2017, 2:44 pm

Quote:
Originally Posted by VitaminHan View Post
I try to fit my expenses to my budget so I can achieve my other life goals such as savings, mortgages and travel while enjoying nice things like a BMW.

I can afford a 340 if I want to sacrifice my some other goals, or a M4 if I sacrifice more, but that is not something that I would like to do. Eventually I settled with a 320i w/manual because I am comfortable with the payment and the overall financial picture of my life after I lease it. 9 years ago I bought a car that I could barely afford after I got my first job and learned my lesson, I made all the payments but I was constantly under pressure because I only had about $200 each month after I paid all the expenses, I do not want to go through that again.

I like BMW, more than other brands, and I have to thank BMW for setting a high residual so I can lease one for less money, I appreciate that. I have been wanting to own a BMW since I was in high school and I feel it is an item on my bucket list that I would like to cross off, but I also know I am not the one that "has to" have a BMW at any cost. If the cost goes over to a certain point that I feel not worth it, I may scale back to some other brands, like a VW or Acura.

I guess I only represent a small percentage of BMW shoppers. After all, I hardly see anyone owns a 320i on this board, and the brands that people cross shop because "no MSD" are Audi or Mercedes. It has nothing to do with how much money I make, I just have a "limit" that I do not want to go over on a leased car. For the people who have to drive a BMW then the car matters more, but it's just me.

Call me frugal, or call me poor, I do not mind. But for the condescending topic in this post, I just ran the numbers, and w/o MSD for the same car my monthly payment goes up about $30, which equals to about $1100 increase in the net cap cost. Can I afford it? sure, but if a CA says to me "let me lease you the car for $1100 more than the fair price, because it does not really cost you that much, how much do you really save by leasing the car at fair price?" , I won't do the deal.
There's nothing wrong with being frugal. MSD's was (I can't believe I'm speaking in past tense on this) was an effective tool to basically make a return on one's money risk free. Interestingly, many can't afford to do MSD's and don't have that kind of money sitting in the bank much less know what an MSD is.

Indeed, you do represent a small percentage of BMW shoppers. Many of you on these boards do as well. But why would a CA even make a statement like that: "let me lease you the car for $1100 more than the fair price, because it does not really cost you that much, how much do you really save by leasing the car at fair price?" More than fair price..... when you've negotiated a great deal, you've employed all these incentives (from BMW no less) and now the deal is off because you can't use MSD's. Here comes the sarcasm... ready? (And I'm trying so hard not to be "super condescending" so I'll speak in jest [can we lighten up and at least be jovial?] Are we leasing a car or an MSD? The payment is in your budget- let's call it $375 on a 320i. But if you did MSD's, it reduces your payment to $349. It's still a $300 payment. Ok, so maybe BMW has the dealer sweeten the deal that much more to get you there in lieu of the MSD. Now what? And if it came down to it and you really liked the BMW more than the Audi or MB and they were within a few bucks of each other, then what?

See, I think the onus is now on the dealer network, not BMW. For example, the clients that were in NY going to NJ dealers to do MSD's- bummer for them. Now, they may have to fight for that repeat business by discounting more because of no more MSD's. And if not, well, then that client goes back to NY and says NJ will do this and there's your downward spiral.

And while there's a few brands left that still do MSD's, they may take note of what BMW is doing (remember, BMW took note of what MB and Audi were doing as far as pricing is concerned) and discontinue MSD's as well. Then what?

So yes, many of us here (myself included- chocker, huh?) will miss MSD's, I get that. It was a nice little risk free luxury. But now, maybe that eventually means when it comes to the savvy MSD BMW client, the CA ultimately has to fight that much more to earn the client's business. And if you like, trust, and respect the CA you're working with and want to give them the business, a little compromise may go a long way...
visualguy commented:
April 10, 2017, 2:56 pm

Quote:
Originally Posted by adrian's bmw View Post
Interestingly, many can't afford to do MSD's and don't have that kind of money sitting in the bank much less know what an MSD is.
Frankly, people who can't afford MSDs shouldn't really be leasing a BMW because they aren't in a financial situation that justifies spending so much more money than necessary on a car. Why lease such an expensive car when you don't even have a few throusand dollars available for MSDs?

I do realize that this is not how people operate in the real world, though.
Robert A commented:
April 10, 2017, 3:10 pm

But don't most customers enter a lease with a cap reduction? All of the BMWFS marketing campaigns are based on applying something of the sort. If so, then why wouldn't knowledgeable dealers present the idea of using that cash toward a refundable deposit? The math isn't terribly difficult to explain to a customer.
Quote:
Originally Posted by adrian's bmw View Post
Interestingly, many can't afford to do MSD's and don't have that kind of money sitting in the bank much less know what an MSD is.
adrian's bmw commented:
April 10, 2017, 3:14 pm

Quote:
Originally Posted by visualguy View Post
Frankly, people who can't afford MSDs shouldn't really be leasing a BMW because they aren't in a financial situation that justifies spending so much more money than necessary on a car. Why lease such an expensive car when you don't even have a few throusand dollars available for MSDs?

I do realize that this is not how people operate in the real world, though.
I was waiting for someone to bite.

And then there are those that won't do MSD's because that lowers the attractiveness of a BMW lease assumption because, well, some people would rather keep the money in their bank account or putting it to other uses. Not everyone has the means to put that extra money down or would rather buy a pre-owned car and use that as down payment.

There's clients with all kinds of financial situations, from the clients that live pay check to paycheck to the cash buyer who can and will pay in full (and will say why would I even lease a car when I can just own it and drive it for eight years, much less tie up money in a lease and wait to get it back). And that's the real world.
Robert A commented:
April 10, 2017, 3:17 pm

Adrian, how many of your clients lease a car with the intention of exiting early?
adrian's bmw commented:
April 10, 2017, 3:31 pm

Quote:
Originally Posted by Robert A View Post
Adrian, how many of your clients lease a car with the intention of exiting early?
I really can't put a number on it, but a few do. I've seen some from ED leases when they got leases before the ED price change to those who got factory demo leases. And there can be a whole number of reasones or explanations.
adrian's bmw commented:
April 10, 2017, 3:33 pm

Quote:
Originally Posted by Robert A View Post
But don't most customers enter a lease with a cap reduction? All of the BMWFS marketing campaigns are based on applying something of the sort. If so, then why wouldn't knowledgeable dealers present the idea of using that cash toward a refundable deposit? The math isn't terribly difficult to explain to a customer.
Sometimes, yes. Or something less. But some simply put what's required and do the adjusted payment without cap reduction.
jjrandorin commented:
April 10, 2017, 3:34 pm

Quote:
Originally Posted by Robert A View Post
Adrian, how many of your clients lease a car with the intention of exiting early?
thats not really a fair question, I dont think... Its like asking a company hiring manager "how many of the people you hire do you know are still looking for jobs after accepting your offer?"

I doubt very many people ENTER into a lease with the idea that "I know the lease is 36 months but I only intend to drive this 12-18 months".

Its likely that even the people he is speaking of just like to keep the flexibility for something like swap a lease, in case they "dont like the car" or "hey that LCI has features mine doesnt" or "I really should have gotten the manual / automatic".

I always laugh at the "you dont make enough money to drive a BMW unless you can do XXX or YYY" crowd, like a BMW is a bugatti veyron or something. A 3 year old BMW is no more cost than a toyota camry, or a honda accord.... or are people not considering a 3 year old BMW a "real" one?

Or, if someone has a budget for $375 for a car payment, whats wrong with getting a new BMW 320 / 330 for that vs spending 289/299 for that toyota? For everyone that says "you should live in a shoebox and save every penny you own so that you can be a millionaire when you retire, there are plenty of people who realize that you only get to make this life trip once. Why someone would deny themselves anything nice so they can spend a nice 10 years in retirement (yet suffered through the first 65 years) I simply dont get.

Its all degrees of course... there are people who live paycheck to paycheck but have a nice car, and many cant understand why. Maybe having that car means something to them and allows them to keep struggling forward? I dont know, but I also dont judge.

Everyones situation is different, but there is very little tolerance here for those differences (and no I am not living paycheck to paycheck, I have max MSDs on 2 MY 2016 BMWs that I leased within a week of each other a Year ago, own a house, am paying for my sons car and insurance, and education etc..). Even for me, I probably "should" be saving more than I am, but with my 70 mile round trip commute, I decided I wanted to actually enjoy it. I have a vanpool to work that I used to ride in that I dont any longer because I enjoy driving my car to work so much. My maxima never did that.

/shrug /rantoff.
gkr778 commented:
April 10, 2017, 4:03 pm

Quote:
Originally Posted by jjrandorin View Post
I think its a given sales will go down... what we need to look at (which will take looking "closer") is to look at BMW PROFIT, not sales... at least in the US.
BMW AG doesn't report profit by region in its annual report, though it does indicate revenue and unit sales by region.

FWIW, BMW AG's EBIT in FY 2016 was the highest on record for the company. However, EBIT margin decreased to 8.9% in 2016. That's 30 basis points lower than FY 2015 and 120 basis points lower than FY 2012.
White340 commented:
April 10, 2017, 6:07 pm

This could be one way to get those who were just able to afford the payments into looking into a CPO or leasing a used BMW to get them off their hands. From what I read, the next couple years are going to be a tough period for off-lease vehicle sales.

Combining this with the new residual structure will probably mean that my 650/mo 340 will cost 800 or more/mo, at which point as much as i like the car, i'll def shop around. 800 for a entry level luxury class is a bit much. If other's follow BMW and get rid of MSDs, then of course that is another story
DBV commented:
April 10, 2017, 6:13 pm

I hope that if you locked in March or April and planned on using the MSD's too, then BMW will let you still use the MSD's in May. I locked in March and my quote includes MSD's. I don't think my car will be here until mid May. I won't do the deal, if I can't do the MSD's.

Quote:
Originally Posted by x5dGuy View Post
I need to clarify something, so I hope folks on the thread can help!

I placed an order at the end of March for a 40e. The order is in the "order bank", as the dealer states they don't have an allocation yet for this quarter. I filled out my credit application, gave a deposit, filled out all other forms, so as they stated, the deal is locked. They are expecting a May production date Saved about 15% off MSRP after all discounts and rebates, and will combine my corp MF reduction plus always 7 MSDs.

However, does this mean I can still apply MSDs even though the deal will not close before May 1st? I typically apply the full 7 MSDs when I lease, so I will be really unhappy to know that I can't. Saving ~$3K between two X5 leases is a significant difference than not!

Thanks
nyca commented:
April 10, 2017, 11:17 pm

I just re-did the math on my current deal with no MSDs - it's like $1500 against the offered price to get the same monthly payment as with the MSDs. There simply isn't room in the price structure for the dealer to cover losing that. So unless BMW NA changes some rules to allow for example stacking of the CCA discount with other discounts that currently exclude that, that segment of buyers who automatically re-up on a lease where they have MSDs already "banked", are going to walk when they see a not trivial higher monthly price for the same car. It's just human nature.
chrischeung commented:
April 10, 2017, 11:55 pm

Quote:
Originally Posted by adrian's bmw View Post
And while there's a few brands left that still do MSD's, they may take note of what BMW is doing (remember, BMW took note of what MB and Audi were doing as far as pricing is concerned) and discontinue MSD's as well. Then what?
BMW can drop free maintenance.

Make it a variable at the dealership level. We'll have some dealerships including it as part of their package (to be used at their dealership) etc. Make it harder on the clients to cross shop via Bimmerfest, Internet etc. Puts more emphasis on the dealership/CA experience.

I seriously think half the point of all these changes is to move the sale closer to the local dealerships of the purchasers, at the expense of the longer distance shoppers - the ones that test drive here, then buy elsewhere.
adrian's bmw commented:
April 11, 2017, 12:12 am

I think Land Rover operates similarly.

Sent from my STV100-1 using Bimmerfest mobile app
alewifebp commented:
April 11, 2017, 12:18 am

Quote:
Originally Posted by chrischeung View Post
I seriously think half the point of all these changes is to move the sale closer to the local dealerships of the purchasers, at the expense of the longer distance shoppers.
That's an interesting perspective. Many have talked on here in the past how some of the big national dealer chains have been putting pressure on corporate to do just that. Take away the ability for smaller shops to generate big sales by selling out of state. BMW practically encourages this with PCD and PCD West, eliminating the need for some customers to worry about shipping it.

The big chains deliver big sales, so they get more say. If I was a smaller chain, I'd be more than a little miffed about this.

Of course, for people that are in competitive markets, and with my board sponsor 20 minutes away, I don't fit the mold.

Ultimately, in my mind, what this does is punish the most loyal customers. Lowering the ED discount? Those are your most loyal of all loyal customers, willing to travel to a different country to pick up a car. My non-car interested family thought I was just a little nuts. MSDs? Yeah, I'm giving BMW some money to keep, and at next lease, guess who is going to be on the very top of my shopping list? It was assumed that I was going to get a G30. They had my sale in the bag, with no marketing that needed to be thrown my way. Sure, I'm going to ask for a better deal, but I can guarantee you that in three more years I'll be back, and continue the cycle.
bmw325 commented:
April 11, 2017, 12:31 am

Quote:
Originally Posted by alewifebp View Post
That's an interesting perspective. Many have talked on here in the past how some of the big national dealer chains have been putting pressure on corporate to do just that. Take away the ability for smaller shops to generate big sales by selling out of state. BMW practically encourages this with PCD and PCD West, eliminating the need for some customers to worry about shipping it.



The big chains deliver big sales, so they get more say. If I was a smaller chain, I'd be more than a little miffed about this.



Of course, for people that are in competitive markets, and with my board sponsor 20 minutes away, I don't fit the mold.



Ultimately, in my mind, what this does is punish the most loyal customers. Lowering the ED discount? Those are your most loyal of all loyal customers, willing to travel to a different country to pick up a car. My non-car interested family thought I was just a little nuts. MSDs? Yeah, I'm giving BMW some money to keep, and at next lease, guess who is going to be on the very top of my shopping list? It was assumed that I was going to get a G30. They had my sale in the bag, with no marketing that needed to be thrown my way. Sure, I'm going to ask for a better deal, but I can guarantee you that in three more years I'll be back, and continue the cycle.

Yep - I always viewed MSDs, ED, bmwcca and high lease residuals as a wickedly effective way to ensure loyalty. And for 3 cars in a row it worked. Probably sold about 10 bmws to friends and family over that time as well. I think they are shooting themselves in the foot but time will tell. Guessing there is new management in charge looking to make their mark.
mauicoug commented:
April 11, 2017, 1:07 am

I have always used MSD's, after I learned about them.... I can't tell you how many times I used to comment on this forum and another forum about the virtue of MSD's. It was a great tool to lower your payment and get a good return on your money. I don't comment very often anymore, just from time to time....

But, I can't help but wonder the direction BMW is going, first they took away the transferability of the included service, then they shorten the included service term, now they want to take away MSD's. I realize most BMW buyers are unaware of MSD's, but that is really due to the lack of transparency from the dealers. Every CA should of been trained on MSD's vs. Cap Cost reduction, so they could present the option to each customer. Instead, the finance guy tries to push all of the other products they try to sell you and actively encourage the buyer to not use MSD's.

I was walking out on an ordered car, when they tried to give me crap about wanting to use MSD's. It was only my email chain, which I had indicated I wanted to use MSD's, they relented...

I love the cars, still fun to drive, but I don't know if I will ever get another BMW.
jjrandorin commented:
April 11, 2017, 9:42 am

Quote:
Originally Posted by alewifebp View Post
That's an interesting perspective. Many have talked on here in the past how some of the big national dealer chains have been putting pressure on corporate to do just that. Take away the ability for smaller shops to generate big sales by selling out of state. BMW practically encourages this with PCD and PCD West, eliminating the need for some customers to worry about shipping it.

The big chains deliver big sales, so they get more say. If I was a smaller chain, I'd be more than a little miffed about this.

Of course, for people that are in competitive markets, and with my board sponsor 20 minutes away, I don't fit the mold.

Ultimately, in my mind, what this does is punish the most loyal customers. Lowering the ED discount? Those are your most loyal of all loyal customers, willing to travel to a different country to pick up a car. My non-car interested family thought I was just a little nuts. MSDs? Yeah, I'm giving BMW some money to keep, and at next lease, guess who is going to be on the very top of my shopping list? It was assumed that I was going to get a G30. They had my sale in the bag, with no marketing that needed to be thrown my way. Sure, I'm going to ask for a better deal, but I can guarantee you that in three more years I'll be back, and continue the cycle.

Unfortunately you can not pick up a car at the performance center in Thermal California. I would imagine this is one reason why. Competition is already pretty fierce here (there are 23 BMW dealers within 150 miles of my house, so there is ALWAYS "another dealer").

I asked at the performance center when I was there for a 1 day M school if they were ever going to allow pickup there, and was told there was currently no plans for it, but they get asked almost every day.
namelessman commented:
April 11, 2017, 10:52 am

My thinking is that BMWNA and BMWFS are making conscious efforts to reduce US incentives(free maintenance, ED, MSDs, tiered RV, MRM, etc, etc) with the goal to reduce US invoices/MSRPs. This is esp. true in US markets as customers are trending towards values, and BMWNA's inflated invoices/MSRPs are hurting their sales numbers.
chrischeung commented:
April 11, 2017, 11:05 am

Quote:
Originally Posted by alewifebp View Post
Ultimately, in my mind, what this does is punish the most loyal customers. Lowering the ED discount? Those are your most loyal of all loyal customers, willing to travel to a different country to pick up a car.
It cuts both ways. Loyal customers will end up paying more than before. However, I also think that BMW has a strong interest in supporting that loyalty through better benefits (think events, dealership experiences etc.), and converting more people to be loyal. And paying more.

Is loyalty based on cost savings really loyalty?
gkr778 commented:
April 11, 2017, 11:26 am

Quote:
Originally Posted by chrischeung View Post
Make it harder on the clients to cross shop via Bimmerfest, Internet etc. Puts more emphasis on the dealership/CA experience.
"Harder on the clients to shop around" means a less competitive retail environment for BMW automobiles.

That would put less emphasis on the dealership/CA experience due to reduced competition, wouldn't it?
gkr778 commented:
April 11, 2017, 11:40 am

Quote:
Originally Posted by chrischeung View Post
However, I also think that BMW has a strong interest in supporting that loyalty through better benefits (think events, dealership experiences etc.)
It does, but many of BMW of NA's recent policies have made benefits to customers and prospects significantly worse:
  • Discontinuation of Multiple Security Deposit Program
  • Reduction of European Delivery price concessions
  • Reduction in maintenance coverage for new vehicles
  • Reduction in scope of Ultimate Drive events
  • Price increases on new vehicles without corresponding additional content
As for BMW car dealership experiences, I haven't seen anything on BMW of NA's part to improve that. I will say that I've always been satisfied with my experiences with both BMW dealerships involved with the sale and servicing my F30 (BMW of Silver Spring and Roadshow BMW).
HPIA4v2 commented:
April 11, 2017, 12:55 pm

Quote:
Originally Posted by jjrandorin View Post
Unfortunately you can not pick up a car at the performance center in Thermal California. I would imagine this is one reason why. Competition is already pretty fierce here (there are 23 BMW dealers within 150 miles of my house, so there is ALWAYS "another dealer").

I asked at the performance center when I was there for a 1 day M school if they were ever going to allow pickup there, and was told there was currently no plans for it, but they get asked almost every day.
If this is available, I am opening a BMW dealer in Midwest with no showroom and make money by undercutting Northern/Southern CA dealers
chrischeung commented:
April 11, 2017, 3:06 pm

Quote:
Originally Posted by gkr778 View Post
"Harder on the clients to shop around" means a less competitive retail environment for BMW automobiles.

That would put less emphasis on the dealership/CA experience due to reduced competition, wouldn't it?
Name a few significant retail operations that compete successfully against the same product selling in a low cost online type manner. I think most of those are going out of business, or reducing market share. They are being forced to compete on price. BMW is trying to remove that aspect.

It puts more emphasis on the dealership experience. If you take price out of the equation, then what are dealerships competing on? It's service and experience.

The main issue that BMW in my opinion, is trying to stop, is folks buying long distance, purely on price, never setting foot in a dealership. You then have dealers willing to settle for a mini deal since they don't need to have the facilities to manage foot traffic (think the days of $500-$1000 over invoice on ED). It then becomes a Costco like experience, where price is first, then Brand second (or third).

Personally - I bought long distance for a few cars - just on price. But perhaps that's just me and a few 'Festers.
Robert A commented:
April 11, 2017, 3:08 pm

But how do you evaluate dealership experience? It's really after-sales service and support. There's really no way to know.
Quote:
Originally Posted by chrischeung View Post
I think it puts more emphasis on the dealership experience. If you take price out of the equation, then what are dealerships competing on? It's service and experience.

The main issue that BMW in my opinion, is trying to stop, is folks buying long distance, purely on price, never setting foot in a dealership. You then have dealers willing to settle for a mini deal (think the days of $500-$1000 over invoice on ED). It then becomes a Costco like experience, where price is first, then Brand second (or third).

Personally - I bought long distance for a few cars - just on price. But perhaps that's just me.
chrischeung commented:
April 11, 2017, 3:14 pm

Quote:
Originally Posted by Robert A View Post
But how do you evaluate dealership experience? It's really after-sales service and support. There's really no way to know.
I wouldn't be so sure.

BMW is generally a pretty savvy organization. The people they employ do this for a living. Their success rate is probably above the industry average. I expect they ran all the numbers, made the projections etc. before making this move. Sure they have the odd misfire - but it's generally less than the average automotive manufacturer. There are folks there who are betting their careers on changes like this. I would think they're not doing it on a whim.

What's the worst that can happen? It ends up costing them too many sales? They reinstate the policy. Perhaps even at a lower rate of 0.00005. It's at least worth a try. No guts no glory. In fact - it may be a good test of how strong the brand is, without really giving away too much. We've seen that BMW's not shy to roll out a finance policy, then take it quickly back based on dealership feedback. I expect the same thing would happen here. If BMW sees dealers telling them that clients are walking to Benz, Audi etc. due to MSDs, I would expect them to consider reinstating MSDs. Or perhaps loyalty programs etc.
Robert A commented:
April 11, 2017, 3:27 pm

I meant, how does the consumer evaluate the dealership experience in advance? When selecting dealers, we have no access to reliable data. BMW does, but we don't.

Quote:
Originally Posted by chrischeung View Post
I wouldn't be so sure.

BMW is generally a pretty savvy organization. The people they employ do this for a living. Their success rate is probably above the industry average. I expect they ran all the numbers, made the projections etc. before making this move. Sure they have the odd misfire - but it's generally less than the average automotive manufacturer. There are folks there who are betting their careers on changes like this. I would think they're not doing it on a whim.

What's the worst that can happen? It ends up costing them too many sales? They reinstate the policy. Perhaps even at a lower rate of 0.00005. It's at least worth a try. No guts no glory. In fact - it may be a good test of how strong the brand is, without really giving away too much. We've seen that BMW's not shy to roll out a finance policy, then take it quickly back based on dealership feedback. I expect the same thing would happen here. If BMW sees dealers telling them that clients are walking to Benz, Audi etc. due to MSDs, I would expect them to consider reinstating MSDs. Or perhaps loyalty programs etc.
visualguy commented:
April 11, 2017, 4:09 pm

Quote:
Originally Posted by gkr778 View Post
As for BMW car dealership experiences, I haven't seen anything on BMW of NA's part to improve that. I will say that I've always been satisfied with my experiences with both BMW dealerships involved with the sale and servicing my F30 (BMW of Silver Spring and Roadshow BMW).
It really varies a lot by area. In my area (Bay Area in CA), there are too few BMW dealerships relative to the huge demand. It looks like there are more BMWs than Toyotas or Hondas around here. The BMW service departments are completely flooded every day with long lines of cars. I dread having to go there. It's much saner at the service departments of other luxury brands. Paying extra on BMW leases for the dealership experience is certainly not warranted around here... I would pay extra to avoid this dealership experience.
gkr778 commented:
April 11, 2017, 4:48 pm

Quote:
Originally Posted by chrischeung View Post
The main issue that BMW in my opinion, is trying to stop, is folks buying long distance, purely on price, never setting foot in a dealership. You then have dealers willing to settle for a mini deal since they don't need to have the facilities to manage foot traffic (think the days of $500-$1000 over invoice on ED). It then becomes a Costco like experience, where price is first, then Brand second (or third).
For new car sales transactions (as opposed to after sales service and support), the only things that matter to most consumers regardless of automotive marque/brand are:
  • price
  • convenience/lack of hassle
  • (for European Delivery orders) experience with ED processes
A satisfactory "long distance" transaction emphasizes excellence in all three of these areas. Bimmerfest sponsor dealerships generally rate highly in this regard.

A potential BMW new car customer should shop around and do business with the dealership that offers him or her the best combination of price, convenience, and ED experience (if applicable) even if that dealership isn't in the customer's home locale. It would be bad news all around if BMW of NA makes it more difficult for potential customers to do just that. Lost sales and lower customer satisfaction ratings will be the likely result.
Motorboat411 commented:
April 11, 2017, 4:53 pm

+1. During sales, unless a CA acts like a stereotyped used car salesman/prick/condescending it doesn't really make much of a difference where you shop. Its the same routine i.e. negotiate, meet with the finance guy who pushes various warranties on you, sign docs and then walk out etc.

Service experience is what really matters and I agree with couple of posts above that SF Bay area service centers are always busy and its hard to get an appt on a short notice, usually you have to wait for a week.
gkr778 commented:
April 11, 2017, 4:58 pm

Quote:
Originally Posted by visualguy View Post
It really varies a lot by area. In my area (Bay Area in CA), there are too few BMW dealerships relative to the huge demand. It looks like there are more BMWs than Toyotas or Hondas around here. The BMW service departments are completely flooded every day with long lines of cars. I dread having to go there. It's much saner at the service departments of other luxury brands. Paying extra on BMW leases for the dealership experience is certainly not warranted around here... I would pay extra to avoid this dealership experience.
Good points visualguy. In the Memphis area, there's only one BMW new car dealership (Roadshow BMW). However, BMW automobiles are not as common in greater Memphis including northern Mississippi and western Arkansas as they are in some other parts of the USA. Roadshow BMW's service department has always been able to accommodate me on my schedule.

Incidentally, I did not purchase my F30 320i from Roadshow BMW. That appears to make no difference to their service department - they have always treated me as a valued service customer, as they should.
chrischeung commented:
April 11, 2017, 5:00 pm

Quote:
Originally Posted by gkr778 View Post
It would be bad news all around if BMW of NA makes it more difficult for potential customers to do just that. Lost sales and lower customer satisfaction ratings will be the likely result.
I think that is your opinion. I think you're wrong. But I'm not certain. I definitely think BMWNA has a difference of opinion (why else would they be doing this?).

But I think we'll definitely be able to see in a few months to a year. See if the sales gap widens or contracts - or in my opinion - remain about the same. If anything, I think BMW will enjoy a lot more sales. They have a few SUV products soon to hit the market. So that will likely dominate any effect of these changes.
gkr778 commented:
April 11, 2017, 5:15 pm

Quote:
Originally Posted by chrischeung View Post
I think that is your opinion. I think you're wrong. But I'm not certain. I definitely think BMWNA has a difference of opinion (why else would they be doing this?).
No problem chrischeung. I've been wrong about many things regarding BMW and their products and services. It will be interesting indeed to see how things play out in the next 6 to 12 months.

My take on the "why else would they be doing this?" question: IMO, BMW AG is de-emphasizing the U.S. market, at least for BMW Group automobiles (I don't know about their strategies for BMW Motorrad). On page 42 of the BMW Group FY 2016 Annual Report, the second paragraph commences with the following heading:

"Dynamic growth in Europe and Asia, challenges on the US market"

Thus, BMW seems to be focusing its sales efforts in markets outside the U.S., as they offer greater growth potential.

This helps explain the spate of customer unfriendly policy changes from BMW of NA recently. Not just elimination of the Multiple Security Deposit program as described in this thread, but changes to Ultimate Service (included maintenance) and European Delivery programs as well.
jjrandorin commented:
April 11, 2017, 6:41 pm

Quote:
Originally Posted by gkr778 View Post
No problem chrischeung. I've been wrong about many things regarding BMW and their products and services. It will be interesting indeed to see how things play out in the next 6 to 12 months.

My take on the "why else would they be doing this?" question: IMO, BMW AG is de-emphasizing the U.S. market, at least for BMW Group automobiles (I don't know about their strategies for BMW Motorrad). On page 42 of the BMW Group FY 2016 Annual Report, the second paragraph commences with the following heading:

"Dynamic growth in Europe and Asia, challenges on the US market"

Thus, BMW seems to be focusing its sales efforts in markets outside the U.S., as they offer greater growth potential.

This helps explain the spate of customer unfriendly policy changes from BMW of NA recently. Not just elimination of the Multiple Security Deposit program as described in this thread, but changes to Ultimate Service (included maintenance) and European Delivery programs as well.
I agree with this point and have been saying it for months actually (when I realized that although the US market was suffering double digit losses, the overall BMW market was setting records.

Everyone keeps wanting to remind me that " THIS is the US market, we dont really care about the other markets, and BMW NA doesnt care about them etiher. "

Sure... BMW NA probably cares about the NA market very much, but they also have to answer to the mothership. If they cant win on volume (which they tried to do with all those incentives), now they want to try to win on profit.

Also, I do NOT want to turn this into a political discussion, however I am sure the current political climate in the US with our current administrations policies on trade (and threats) and such are not going unnoticed.

For all we know, this could be as simple as a pride thing /shrug.
DBV commented:
April 11, 2017, 7:31 pm

I am not sure what BMW is doing in the US market, as it makes absolutely no sense. And it started way before the current administration. The US market is more competitive than ever and it seems like in the US BMW is not even trying.


Quote:
Originally Posted by jjrandorin View Post
I agree with this point and have been saying it for months actually (when I realized that although the US market was suffering double digit losses, the overall BMW market was setting records.

Everyone keeps wanting to remind me that " THIS is the US market, we dont really care about the other markets, and BMW NA doesnt care about them etiher. "

Sure... BMW NA probably cares about the NA market very much, but they also have to answer to the mothership. If they cant win on volume (which they tried to do with all those incentives), now they want to try to win on profit.

Also, I do NOT want to turn this into a political discussion, however I am sure the current political climate in the US with our current administrations policies on trade (and threats) and such are not going unnoticed.

For all we know, this could be as simple as a pride thing /shrug.
tturedraider commented:
April 11, 2017, 9:35 pm

I haven't read the whole thread and this has probably already been said at least once. Regarding the MSDs. Yes, it sucks that they're going away. But, the number of customers who know about them is minuscule and the number who use them is even smaller. Most CAs have never dealt with a Bimmerfest member. The vast majority don't even know Bimmerfest exists. Nor do they know about the other BMW forums. Bimmerfest/BMW forum type customers are virtually the only ones who know about MSDs and only a fraction of those customers actually use MSDs. This change will be a tiny blip on BMWNA's and BMWFS's screen. The reality is it will have virtually zero effect on BMW sales and leasing.
The BoatMan commented:
April 11, 2017, 10:19 pm

Consensus is very few utilize or even know about MSD's. According to the CA's here practically no one except enthusiasts use them.

To me your most loyal customers are the ones using MSD's. Rolling them over lease after lease.

If so very few use, know about them, etc., what is the gain by eliminating them? Is the program costing BMW that much money for the "few" that use MSD's?
bmw325 commented:
April 11, 2017, 10:42 pm

Quote:
Originally Posted by The BoatMan View Post
Consensus is very few utilize or even know about MSD's. According to the CA's here practically no one except enthusiasts use them.

To me your most loyal customers are the ones using MSD's. Rolling them over lease after lease.

If so very few use, know about them, etc., what is the gain by eliminating them? Is the program costing BMW that much money for the "few" that use MSD's?

Right - why bother eliminating it?
Rafe528i commented:
April 11, 2017, 11:05 pm

I leased my first BMW back in June. A 528i Luxury. Loaded. I love it. Had a mishap with a pothole and got an impact bubble and bent rim, but that's another story. Anyway, back when I was shopping for a new car, I had pretty much decided to order an Audi A6. The Audi felt more nimble than the BMW. Wife hated the seats though. Went back to BMW. The more I drove it, the more I liked it. Began serious negotiation with the dealer. Settled on a reasonable number and I began to walk since I always like to sleep on big decisions. That's when the CA suggested MSDs. I didn't even know about MSDs. I still left, but the next day, I signed the lease with MSDs. I think I'll lease or buy another 5 series when this lease ends, MSDs or not. I enjoy driving it more than any other car I've had.
alewifebp commented:
April 11, 2017, 11:26 pm

Quote:
Originally Posted by The BoatMan View Post
Consensus is very few utilize or even know about MSD's. According to the CA's here practically no one except enthusiasts use them.

To me your most loyal customers are the ones using MSD's. Rolling them over lease after lease.

If so very few use, know about them, etc., what is the gain by eliminating them? Is the program costing BMW that much money for the "few" that use MSD's?
Exactly, more or less what I was saying as well. People on this board (and others like it), are a minority, but we are also the most vocal. We certainly are a hard bunch to please, and I'm sure this vocal minority gives them more than a few headaches. But we are also loyal to a fault. When you see the number of repeat EDs that people have done, it's pretty amazing really. I don't know the numbers, but if it is truly a small number of people that use the MSD program, how much will it really impact the bottom line?
alewifebp commented:
April 11, 2017, 11:41 pm

Quote:
Originally Posted by chrischeung View Post
Is loyalty based on cost savings really loyalty?
It's part of the puzzle, yes. Loyalty is a two way street. I'm being loyal to them. They need to continue to give me good products, good service, a good experience, and yes, a good price.
Motorboat411 commented:
April 12, 2017, 3:53 am

Quote:
Originally Posted by alewifebp View Post
Exactly, more or less what I was saying as well. People on this board (and others like it), are a minority, but we are also the most vocal. We certainly are a hard bunch to please, and I'm sure this vocal minority gives them more than a few headaches. But we are also loyal to a fault. When you see the number of repeat EDs that people have done, it's pretty amazing really. I don't know the numbers, but if it is truly a small number of people that use the MSD program, how much will it really impact the bottom line?
People like us are the ones pushing friends/family to get BMWs and it seems like BMW decided to cut us off

I was fully ready to do my first ED this time, but the incentives (lack of) killed that idea for me.
HPIA4v2 commented:
April 12, 2017, 9:32 am

Quote:
Originally Posted by Motorboat411 View Post
People like us are the ones pushing friends/family to get BMWs and it seems like BMW decided to cut us off

I was fully ready to do my first ED this time, but the incentives (lack of) killed that idea for me.
That's exactly right, many times I told my friends (after they complained leasing BMW is kinda pricey) about MSD.
But many corporate decision is not made on loyalty, common sense but it's based on dollar sign; just ask United CEO
chrischeung commented:
April 12, 2017, 9:44 am

Quote:
Originally Posted by HPIA4v2 View Post
But many corporate decision is not made on loyalty, common sense but it's based on dollar sign; just ask United CEO
Wait - BMW is a for profit company? I thought it was some non-profit enthusiast supporting charity. I think I'll take my donations to Porsche.
gkr778 commented:
April 12, 2017, 10:02 am

Quote:
Originally Posted by chrischeung View Post
Wait - BMW is a for profit company? I thought it was some non-profit enthusiast supporting charity.
You may be thinking about BMW Car Club of America, which is indeed a nonprofit corporation registered in South Carolina. Additionally, BMW CCA operates a tax-exempt, 501(c)(3) public charity called BMW CCA Foundation.

http://www.bmwccafoundation.org
chrischeung commented:
April 12, 2017, 10:02 am

Quote:
Originally Posted by alewifebp View Post
It's part of the puzzle, yes. Loyalty is a two way street. I'm being loyal to them. They need to continue to give me good products, good service, a good experience, and yes, a good price.
Here's my suggestion. And what has worked for me. Work with your dealer. Work with your CA Be loyal to them. They usually will reduce their margins for repeat customers.

BMW will be loyal to their dealer body. Dealer bodies will work with their loyal customers. BMW is constantly looking for their dealership bodies to allocate loyalty to their clients, since they are in a better position to know them better. While BMW wants to manage the brand and product at a whole. That is my interpretation.
Alpine300ZHP commented:
April 12, 2017, 11:42 am

Quote:
Originally Posted by chrischeung View Post
BMW can drop free maintenance.

Make it a variable at the dealership level. We'll have some dealerships including it as part of their package (to be used at their dealership) etc. Make it harder on the clients to cross shop via Bimmerfest, Internet etc. Puts more emphasis on the dealership/CA experience.

I seriously think half the point of all these changes is to move the sale closer to the local dealerships of the purchasers, at the expense of the longer distance shoppers - the ones that test drive here, then buy elsewhere.


Chris, I honestly disagree. I wish I could think these moves were to help the local dealers, but I don't see that. I think these moves are pure profit moves to help BMWNA and BMWAG.

I have remained largely silent in this debate, but as someone who has owned 2 dozen BMW's and tries to only buy from fest sponsors, I feel I need to weigh in on this topic. I will be the first to admit that I do not like paying more for something than anyone else. I dislike the recent changes by BMW (dating back to the start of the changes in January 2016 with the adjustment to the MAP program) and I do think that the changes will hurt US sales significantly. I do think that BMW has watered down the brand and I wish they would go back to the brand that they were before they released the first F chassis car. However, change is inevitable and BMW has made the decision to pander to the masses and make the cars softer. I understand why, but that does not mean that I like it. On the topic of incentives and cost cutting by BMW, I am not one to say that the reduction of incentives means that I am going to buy a competing make just for the sake of spite. I always cross shop and that will not change. For example, I cross shopped the RS5 and C63AMG before I got the m4. I cross shopped the Range Rover sport and MB GLE coupe before I settled on the x6. My replacement for the x6 will be either an x6m, GLE63AMG coupe, a Range Rover Supercharged, G90 m5, Audi S6 or MB E63AMG. I will pick whatever I like the most relative to the price I can get on each model. The recent changes by BMW just increase the likelihood that I may leave the brand because something else may be more competitive in performance and price, but I won't buy a competitor product just to show BMW that I am pissed off. That seems to be the general consensus of many people posting here and it just does not make sense. Lastly, many of you may notice I failed to mention what will replace the M4. The answer is probably nothing and that is a direct result of BMW's new policies. I drive 30k miles a year and after years of declining a work car, I ended up accepting one last year. BMW's recent changes made it such that I am no longer willing to pay a significant chunk of money every month to drive a BMW for work like I have for the past 17 years. To put it bluntly, I no longer see enough value in BMW to continue to do that. This is just one example of how BMW's policies have cost them sales....the guy who, on average, has purchased or leased a BMW every 18 months for the past 17 years is no longer doing so......


Sent from my iPhone using Bimmerfest mobile app
RaveD commented:
April 12, 2017, 11:44 am

Quote:
Originally Posted by visualguy View Post
Frankly, people who can't afford MSDs shouldn't really be leasing a BMW because they aren't in a financial situation that justifies spending so much more money than necessary on a car. Why lease such an expensive car when you don't even have a few throusand dollars available for MSDs?
I agree completely. If one cannot "afford" to put a few thousand dollars into an investment that offers a risk free APR around 12% then it is likely they cannot afford the car at all.

I consider leasing a new BMW every three years a considerable luxury. I am not sure I would take the same path if MSDs, high residual, loyalty credit, and corporate fleet discount were not available to substantially reduce my payment. The loss of this incentive, combined with the likelihood of considerably higher interest rates in 3 years, make it less likely that I will lease another BMW. The more prudent investment is to buy a car for cash and drive it until the doors fall off
HPIA4v2 commented:
April 12, 2017, 1:11 pm

Quote:
Originally Posted by RaveD View Post
I agree completely. If one cannot "afford" to put a few thousand dollars into an investment that offers a risk free APR around 12% then it is likely they cannot afford the car at all.

I consider leasing a new BMW every three years a considerable luxury. I am not sure I would take the same path if MSDs, high residual, loyalty credit, and corporate fleet discount were not available to substantially reduce my payment. The loss of this incentive, combined with the likelihood of considerably higher interest rates in 3 years, make it less likely that I will lease another BMW. The more prudent investment is to buy a car for cash and drive it until the doors fall off
I have not run the number, but this MSD is also hot topic at F80 M3 forums, some says their lease monthly w/o MSD would be around $70 more, and some will shop for other brands. So only time will tell what the fall out, maybe nothing maybe something.

I never lease, just thinking about it
HPIA4v2 commented:
April 12, 2017, 1:13 pm

Quote:
Originally Posted by chrischeung View Post
Wait - BMW is a for profit company? I thought it was some non-profit enthusiast supporting charity. I think I'll take my donations to Porsche.
Typical Chris, where did I say on my post I suggest BMW should not have profit, maybe sometimes you need to listen before yapping :-)

Are you BMW employee?
Motorboat411 commented:
April 12, 2017, 1:15 pm

Lets look at it this way...According to dealers, very few people used MSDs. Then why cancel it? It's not like BMWNA's profits are gonna see a noticeable bump from doing so? Why alienate a knowledgable group of bimmerheads who are unofficial brand ambassadors?
AksNasZasNas commented:
April 12, 2017, 1:27 pm

Quote:
Originally Posted by Motorboat411 View Post
Lets look at it this way...According to dealers, very few people used MSDs. Then why cancel it? It's not like BMWNA's profits are gonna see a noticeable bump from doing so? Why alienate a knowledgable group of bimmerheads who are unofficial brand ambassadors?


It's about increasing margins, me thinks. They are probably still reeling from the Takata situation and the reality that interest rates are rising. So why not profit a little bit from those increases?
Robert A commented:
April 12, 2017, 2:01 pm

I think price discrimination is very important to large enterprises. If only 5% of sales resulted from MSDs and 1-2% are lost because the program is cancelled, my guess is that this matters. If it didn't, why offer BMWCCA rebates or corporate incentives to only a select group of customers? Why try to fill every last seat on an airplane?

To me, the MSD program seemed like a corporate giveaway -- there was no logical sense to offer such a large discount for such a small amount of collateral. But the folks at BMW thought it was a good idea, so it must have mattered at one time.
Quote:
Originally Posted by Motorboat411 View Post
Lets look at it this way...According to dealers, very few people used MSDs. Then why cancel it? It's not like BMWNA's profits are gonna see a noticeable bump from doing so? Why alienate a knowledgable group of bimmerheads who are unofficial brand ambassadors?
socal59 commented:
April 12, 2017, 2:20 pm

Quote:
Originally Posted by AksNasZasNas View Post
It's about increasing margins, me thinks. They are probably still reeling from the Takata situation and the reality that interest rates are rising. So why not profit a little bit from those increases?


Yep I think the airbag fiasco has cost them some serious coin. I turned in my X5 last September at lease end, and I am still getting bottom feeder lawyer letters wanting to see if I want free money from assorted problems they claim I had (I had none) with my X5.
I am cross shopping and not sure which SUV I'll get, definitely BMW is not as competitive as it was 3 years ago. I loved my X5 handles great, but the reality in Southern California is that you are usually driving in heavy traffic (very slow) with rough roads. So handling takes a back seat to a comfortable ride. Even when I head up to mountain roads, they are crowded and driving slow. Most people I know feel the same way and can't utilize the potential of BMW's driving dynamics (see their marketing works) around crowded urban areas. BMW most likely knows this from focus groups. But, with this being said, other brands stand aside to compete on value and price. BTW, I've been driving BMW's since 1990.


Sent from my iPhone using Bimmerfest mobile app
adrian's bmw commented:
April 12, 2017, 2:20 pm

Quote:
Originally Posted by chrischeung View Post
Wait - BMW is a for profit company? I thought it was some non-profit enthusiast supporting charity. I think I'll take my donations to Porsche.
Funny you should say that. Porsche doesn't include maintenance at all, doesn't do MSD's afaik (didn't see it on the grid on page 1 of this thread), and charges more for ED than U.S. delivery. Chris, you're on to something here.... is BMW trying to be like Porsche (heck, they're perhaps one of if not the most profitable brands, but then again, they don't have the volume like BMW or MB.)
adrian's bmw commented:
April 12, 2017, 2:22 pm

Quote:
Originally Posted by socal59 View Post
Yep I think the airbag fiasco has cost them some serious coin. I turned in my X5 last September at lease end, and I am still getting bottom feeder lawyer letters wanting to see if I want free money from assorted problems they claim I had (I had none) with my X5.
I am cross shopping and not sure which SUV I'll get, definitely BMW is not as competitive as it was 3 years ago. I loved my X5 handles great, but the reality in Southern California is that you are usually driving in heavy traffic (very slow) with rough roads. So handling takes a back seat to a comfortable ride. Even when I head up to mountain roads, they are crowded and driving slow. Most people I know feel the same way and can't utilize the potential of BMW's driving dynamics (see their marketing works) around crowded urban areas. BMW most likely knows this from focus groups. But, with this being said, other brands stand aside to compete on value and price.


Sent from my iPhone using Bimmerfest mobile app
That airbag drama hurt many brands, not just BMW.
socal59 commented:
April 12, 2017, 2:27 pm

Quote:
Originally Posted by adrian's bmw View Post
That airbag drama hurt many brands, not just BMW.


Yep, but think BMW was more generous in its benefits/fix to its customers.


Sent from my iPhone using Bimmerfest mobile app
MJBrown62 commented:
April 12, 2017, 2:27 pm

And yet this ...

"BMW Group global sales record best- ever March and first quarter"
adrian's bmw commented:
April 12, 2017, 2:32 pm

Oh most definitely. And very helpful to dealers who took them in on trade and sat on them waiting for airbags.

Sent from my STV100-1 using Bimmerfest mobile app
BERMER commented:
April 12, 2017, 3:30 pm

I've still got another year on my F10 but this will definitely affect my purchasing decision. It doesn't mean I'll rule out BMW, but it was going to be automatic that I was just gonna roll over my current MSD's and make up any difference on the max with the G30. I know Audi, Mercedes and Lexus have a MSD program.
adrian's bmw commented:
April 12, 2017, 3:44 pm

Quote:
Originally Posted by BERMER View Post
I've still got another year on my F10 but this will definitely affect my purchasing decision. It was going to be automatic that I was just gonna roll over my current MSD's and make up any difference on the max with the G30. I know Audi, Mercedes and Lexus have a MSD program.
And if you liked the BMW G30 more than the other brands and the payments were all the same (BMW's without MSDs) and the others with MSD's ( Oh, and BMW offered a pull ahead and loyalty credit, to boot), would you still go with BMW? Just curious.
BERMER commented:
April 12, 2017, 3:56 pm

Quote:
Originally Posted by adrian's bmw View Post
And if you liked the BMW G30 more than the other brands and the payments were all the same (BMW's without MSDs) and the others with MSD's ( Oh, and BMW offered a pull ahead and loyalty credit, to boot), would you still go with BMW? Just curious.
I would - I actually edited my message to indicate I wouldn't rule out BMW because of this, however, it goes from leasing another BMW without looking to now going out there to cross-shop. So there's the potential that I may go elsewhere and the cancellation of the MSD program led me there.
bmw325 commented:
April 12, 2017, 3:56 pm

Yep for as much none of us like these changes, overall, BMW leases will still likely look good compared to typical competitors.

Audi, Porsche - don't subvent their residuals, Lower discount (or none) for ED
JlR(chase): doesn't have msds, doesn't subvent residuals, can't do lease transfers,
Lexus: not usually feasible to custom order, no Ed (obviously)much their product line is unlikely to appeal to former BMW enthusiasts anyway
Mercedes: pricey, stacked option packages mean cars have much higher msrps depending onwhuch options you want. Similar residuals to BMW and decent ED program but that higher price means you'll likely still pay more than for a similar BMW
Volvo: could possible take some x3,x5 and 5 series buyers but, generally, residuals not as good and not enthusiast oriented
Alfa Romeo : going to be a niche player for a while, lease programs look unappealing compared with BMW


So I'm guessing that BMW is closing the pricing gap because they can still likely compete effectively on price. But, customers hate to have things taken away so they will likely lose some out of spite. Others (like myself) could decide that it's no longer worth the price for a BMW or any of the competitors and move on to something else.

As someone else mentioned, it's all about effectively using price discrimination. I think they are tweaking/experimenting with their model.
gkr778 commented:
April 12, 2017, 4:46 pm

Quote:
Originally Posted by MJBrown62 View Post
And yet this ...

"BMW Group global sales record best- ever March and first quarter"
Details here: https://www.press.bmwgroup.com/globa...-first-quarter

Sounds like the scenario jjrandorin and I thought about in posts #136 and #137 is playing out after all: BMW AG is focusing its sales efforts in markets outside of the U.S. to achieve its growth targets. They acknowledge stagnation of BMW automobile sales in the U.S. market, so why put forth effort to attract customers here when more favorable growth opportunities exist elsewhere?

YTD sales growth for BMW Group in 2017 compared to 2016 by region (January - March):
  • Europe: +4.2%
  • Asia: +9.2%
  • Latin America plus Mexico: +19.3%
  • USA: +0.6%

Mainland China, BMW's single largest market, increased sales by 12.4% during this period.
namelessman commented:
April 12, 2017, 4:47 pm

Another way to look at this is, once the customers are hooked in with teaser deals, it is time to trim down the goodies and charge industry norms.
tim818 commented:
April 12, 2017, 8:10 pm

I consider this as one of BMW's first few small steps to harvest more profits, and see how the US market reacts. A few weeks back we had this tiered RV, and that didn't go well as I'm sure a lot of customers balked due to the confusion. Now that we have this discontinued MSD program, which benefits BMWFS by not discounting the lease/loan. To me, they're slowing taking away all the aces from our hands, so that they can maintain profit margin. I won't be surprised there will be more program discontinuations coming, but just like the tiered RV, they can always cancel the program any time if it affects the sales number. Based on what I see here, people who use MSD program are minority, hence BMW may not bring it back as it does not affect most customers.

Maybe they're driving me away so I get closer to P-car as my next ride?

Tim
kyfdx commented:
April 12, 2017, 10:45 pm

Quote:
Originally Posted by AksNasZasNas View Post
I thought Infiniti determined the MSD deposit off the original payment?

PS - great idea!
I agree... at least they did in 2011, when I leased. Each deposit based off the pre-MSD payment.
kyfdx commented:
April 12, 2017, 10:49 pm

Quote:
Originally Posted by tturedraider View Post
I haven't read the whole thread and this has probably already been said at least once. Regarding the MSDs. Yes, it sucks that they're going away. But, the number of customers who know about them is minuscule and the number who use them is even smaller. Most CAs have never dealt with a Bimmerfest member. The vast majority don't even know Bimmerfest exists. Nor do they know about the other BMW forums. Bimmerfest/BMW forum type customers are virtually the only ones who know about MSDs and only a fraction of those customers actually use MSDs. This change will be a tiny blip on BMWNA's and BMWFS's screen. The reality is it will have virtually zero effect on BMW sales and leasing.
I'm glad you typed all this out, so I didn't have to.. ;-)
kyfdx commented:
April 12, 2017, 10:52 pm

Quote:
Originally Posted by socal59 View Post
Yep, but think BMW was more generous in its benefits/fix to its customers.


Sent from my iPhone using Bimmerfest mobile app
I don't know, I waited two years for one airbag, and three years for the other. My friend who has a Honda CR-V was given a loaner to drive for SIX months, while his remained parked, waiting on the replacement airbag.
Alpine300ZHP commented:
April 13, 2017, 11:52 am

Quote:
Originally Posted by tim818 View Post
I consider this as one of BMW's first few small steps to harvest more profits, and see how the US market reacts. A few weeks back we had this tiered RV, and that didn't go well as I'm sure a lot of customers balked due to the confusion. Now that we have this discontinued MSD program, which benefits BMWFS by not discounting the lease/loan. To me, they're slowing taking away all the aces from our hands, so that they can maintain profit margin. I won't be surprised there will be more program discontinuations coming, but just like the tiered RV, they can always cancel the program any time if it affects the sales number. Based on what I see here, people who use MSD program are minority, hence BMW may not bring it back as it does not affect most customers.



Maybe they're driving me away so I get closer to P-car as my next ride?



Tim


The tiered RV thing was not in place long enough to get pushback from customers. I suspect it was the crying from the dealer network that lead to the discontinuation of the tiered RV program. You are more optimistic than I.....I think that most of these changes are permanent. Time will tell.

Good luck with the Porsche shopping. I recently cross shopped a Cayenne GTS with an x6m. IMHO, the x6m is a vastly superior car for my needs. If I went off road then the Cayenne GTS would be the better choice, but I don't go off road.


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chrischeung commented:
April 13, 2017, 1:19 pm

Perhaps some MBA intern came up with the calculations and suggestions? They saw so many folks taking advantage of it on Bimmerfest, and when employed over the summer, presented it as a cost saving program. Just kidding .
namelessman commented:
April 13, 2017, 1:32 pm

Quote:
Originally Posted by chrischeung View Post
Perhaps some MBA intern came up with the calculations and suggestions? They saw so many folks taking advantage of it on Bimmerfest, and when employed over the summer, presented it as a cost saving program. Just kidding .
In a way it is BMWNA realigning/simplifying their programs relative to the rest of the world, which happens to haul in big profits in spite of the lack of such goodies in those local markets.
chrischeung commented:
April 13, 2017, 1:38 pm

Quote:
Originally Posted by namelessman View Post
In a way it is BMWNA realigning/simplifying their programs relative to the rest of the world, which happens to haul in big profits in spite of the lack of such goodies in those local markets.
Or it could be the new guy - http://www.autonews.com/article/2016...-of-operations
gkr778 commented:
April 13, 2017, 2:01 pm

Quote:
Originally Posted by chrischeung View Post
According to that Automotive News article, "new guy" Mr. Witt had a previous role as managing director of BMW Sweden. I guess BMW Sweden doesn't offer a MSD program?
eazy commented:
April 14, 2017, 12:11 am

Porsche does not have MSD's plus Porsche does not give a Euro Delivery discount which was better than 10 years ago where you had to pay an extra $500 for Porsche euro delivery.

Now if BMW wants to improve their dealership experience I wish them lots of luck since it going to cost them a lot of money to reach Lexus service levels. Some Lexus dealers have outrageous amenities like a putting green, virtual golf, full service restaurant, hair/nail salon, & a Tommy Bahama store.
A couple of years ago some lexus dealers did no price haggling I do not know if that was successful. https://www.usatoday.com/story/money...hips/31219743/
visualguy commented:
April 14, 2017, 12:41 am

Quote:
Originally Posted by eazy View Post
Porsche does not have MSD's plus Porsche does not give a Euro Delivery discount which was better than 10 years ago where you had to pay an extra $500 for Porsche euro delivery.

Now if BMW wants to improve their dealership experience I wish them lots of luck since it going to cost them a lot of money to reach Lexus service levels. Some Lexus dealers have outrageous amenities like a putting green, virtual golf, full service restaurant, hair/nail salon, & a Tommy Bahama store.
A couple of years ago some lexus dealers did no price haggling I do not know if that was successful. https://www.usatoday.com/story/money...hips/31219743/
Porsche is relatively low-volume. It's a different story. Also, their cars are somewhat special. If you want the experience that a 911, Cayman, or Boxster offers, you pretty much have to go with Porsche. The Cayenne, Macan and Panamera aren't as unique, but they still offer a level of handling and build quality that goes beyond their competition for people who care about that. All this results in being able to get higher margins.

BMW isn't really in that position... Audi and Mercedes offer comparable (and in some cases better) cars. Also, the dealership service experience of BMW isn't anywhere near the top, at least in my area. I don't care much about that because I lease, so I don't need to see them much. However, if their leases become less attractive, other brands will become more attractive.

The interest discount that was available with 7 MSDs is almost 1.2% a year. That makes a fairly significant difference. If you add price increases, lower residuals, fewer incentives, and higher interest rates, the decision to lease a BMW becomes much less obvious.
Robert A commented:
April 14, 2017, 12:43 am

But what's the retained value on a Porsche?
Quote:
Originally Posted by eazy View Post
Porsche does not have MSD's plus Porsche does not give a Euro Delivery discount which was better than 10 years ago where you had to pay an extra $500 for Porsche euro delivery.
eazy commented:
April 14, 2017, 7:23 am

Quote:
Originally Posted by Robert A View Post
But what's the retained value on a Porsche?


Porsche does have a tier lease system. If you opt for the pdk in the caymen/boxer & 911 your residual value will go down 1%.
The 1st general cayenne use to drop like a rock. The 2nd generation it manage to hold on to its value a lot better.


Sent from my iPhone using Bimmerfest mobile app
Robert A commented:
April 14, 2017, 10:27 am

I didn't make myself clear. Porsche has almost no incentives unlike BMW, yet don't Porsches in general (and I mean their sports cars) depreciate far more slowly than BMWs?

Quote:
Originally Posted by eazy View Post
Porsche does have a tier lease system. If you opt for the pdk in the caymen/boxer & 911 your residual value will go down 1%.
The 1st general cayenne use to drop like a rock. The 2nd generation it manage to hold on to its value a lot better.


Sent from my iPhone using Bimmerfest mobile app
jjrandorin commented:
April 14, 2017, 10:46 am

Quote:
Originally Posted by Robert A View Post
I didn't make myself clear. Porsche has almost no incentives unlike BMW, yet don't Porsches in general (and I mean their sports cars) depreciate far more slowly than BMWs?
BMW M cars also depreciate slower than non M cars.... not sure what point you are making though.

Non mass market cars will likely depreciate slower, if they are popular.
Robert A commented:
April 14, 2017, 11:09 am

My point was to counter easy's comments about Porsche not having an MSD program. I believe Porsche makes up for it by offering cars that hold value better.

Quote:
Originally Posted by jjrandorin View Post
BMW M cars also depreciate slower than non M cars.... not sure what point you are making though.

Non mass market cars will likely depreciate slower, if they are popular.
dkreidel commented:
April 14, 2017, 11:18 am

Quote:
Originally Posted by Robert A View Post
My point was to counter easy's comments about Porsche not having an MSD program. I believe Porsche makes up for it by offering cars that hold value better.
I've owned 2 new 911's in the last 10 years. One sold to a wealthy gentleman in Shenzhen PRC; the other to a guy in Vancouver CN. The C2S sold for 88% of my investment after 18 months of ownership; the 911 TT sold for exactly $8K less than the $138K I paid for it. The C2S included a $1K Euro delivery premium.

Both were "cheap" cars if you ignore the opportunity cost of tying up capital in a sports car - I think that's Robert's point.

dk
Drose commented:
April 14, 2017, 11:19 am

Hey Its a Shame but if your getting ready to get a newer BMW submit a credit app so you can lock in the MSDs at least for another month until your ready to buy!!!!
Drose commented:
April 14, 2017, 11:25 am

Quote:
Originally Posted by tim330i View Post
BMW Multiple Security Deposit Program Discontinued

Today we got official confirmation that BMW Financial Services is discontinuing the Multiple Security Deposit (MSD) Program for leased vehicles. You can still use MSD on any credit approvals dated May 1, 2017 or prior so if you're thinking about a BMW lease with MSD starting taking to a Bimmerfest sponsor dealer now.

To take advantage of the MSD program before it ends you must use a BMW program from April or prior months to take advantage of the MSD discount. If you wish to use May or later programs no discount will be applied unfortunately.

The Security Deposit Policy and Security Deposit Waiver program will remain unchanged. Multiple Security Deposits as a stipulation of credit will remain but without a money factor discount.

Coming on the heals of cuts to the No Cost Maintenance Program and a reduction in the European Delivery program discount it will be interesting to see how BMW sales end up at the end of 2017.

What are Multiple Security Deposits?
BMW Financial Services allowed customers leasing a new BMW to lower the money factor (interest rate) on the lease if they made a series of fully refundable security deposits up front. A money factor reduction of .00007 was available for each deposit, maxing out a seven. For buyers with liquid assets (cash) available to be put down as a MSD there is a savings over the term of the lease. MSD have been a popular leasing tool for those in the know on Bimmerfest.

BMW MSD vs Competitors
Bimmerfest member eazy created a chart comparing BMW's MSD program to competitors. This gives you a sense of how MSDs are viewed by automakers.

bmw msd vs competitors


I see this thread and I know Its sucks but at least you have time to lock them in.
Robert A commented:
April 14, 2017, 11:29 am

Exactly.

If a $55k 340i were worth $40k after 3 years, who would care about MSDs.

Quote:
Originally Posted by dkreidel View Post
I've owned 2 new 911's in the last 10 years. One sold to a wealthy gentleman in Shenzhen PRC; the other to a guy in Vancouver CN. The C2S sold for 88% of my investment after 18 months of ownership; the 911 TT sold for exactly $8K less than the $138K I paid for it. The C2S included a $1K Euro delivery premium.

Both were "cheap" cars if you ignore the opportunity cost of tying up capital in a sports car - I think that's Robert's point.

dk
namelessman commented:
April 14, 2017, 12:05 pm

Quote:
Originally Posted by Robert A View Post
My point was to counter easy's comments about Porsche not having an MSD program. I believe Porsche makes up for it by offering cars that hold value better.
The MSD saving helps to cushion the drop from RV to FMV at lease buyout, but the Porsche lease rate probably is higher than BMWFS's 3%, so the cost of ownership of Porsche can still be higher than BMW in spite of the high(er) FMV. Also Porsche RV, plus mileage allowance, is a lot worse than BMW, so Porsche lease is basically a rental program, while BMW lease can be used as alternative to new car ownership(assuming at least 10% RV discount).
chrischeung commented:
April 14, 2017, 12:50 pm

Here is a note for the MSD table. I called MBFS, and per the rep. MSD for Benz is considered part of the deposit. It is policy that deposits are not protected by the GAP Waiver that is part of a MBFS lease. So in case of a write off, any shortfall will be taken out of your deposit first, before the MBFS GAP Waiver kicks in. From their site - https://www.mbfs.com/mbfsr/en/leaseF...ClassLease.do:

Gap Waiver
Our GAP Waiver is designed to give you peace of mind. If for some reason (such as accident or theft) your leased Mercedes-Benz is declared a total loss, we will cover the difference between the insurance proceeds and the balance owed to Mercedes-Benz Financial Services, less any deductible.


Security Deposit
While no security deposit is required on our standard lease program, in some states we offer a Multiple Security Deposit option. By putting down up to 10 refundable security deposits, you'll reduce your monthly lease payments. At lease-end, you can have your deposits refunded or rolled over into your next First Class Lease.

Of course - how often or likely is it to write off a car in an accident? (In my case, my wife did it in February 2017).
namelessman commented:
April 14, 2017, 12:53 pm

Quote:
Originally Posted by dkreidel View Post
I've owned 2 new 911's in the last 10 years. One sold to a wealthy gentleman in Shenzhen PRC; the other to a guy in Vancouver CN. The C2S sold for 88% of my investment after 18 months of ownership; the 911 TT sold for exactly $8K less than the $138K I paid for it. The C2S included a $1K Euro delivery premium.

Both were "cheap" cars if you ignore the opportunity cost of tying up capital in a sports car - I think that's Robert's point.

dk
Were those 911's sold with minimum miles put on them? 911's are not meant to be DD as far as retaining value goes, and in that regard, BMW(e.g. 3-series?) seems to be good choice.
namelessman commented:
April 14, 2017, 1:34 pm

Quote:
Originally Posted by chrischeung View Post
Here is a note for the MSD table. I called MBFS, and per the rep. MSD for Benz is considered part of the deposit. It is policy that deposits are not protected by the GAP Waiver that is part of a MBFS lease. So in case of a write off, any shortfall will be taken out of your deposit first, before the MBFS GAP Waiver kicks in. From their site - https://www.mbfs.com/mbfsr/en/leaseF...ClassLease.do:

Gap Waiver
Our GAP Waiver is designed to give you peace of mind. If for some reason (such as accident or theft) your leased Mercedes-Benz is declared a total loss, we will cover the difference between the insurance proceeds and the balance owed to Mercedes-Benz Financial Services, less any deductible.


Security Deposit
While no security deposit is required on our standard lease program, in some states we offer a Multiple Security Deposit option. By putting down up to 10 refundable security deposits, you'll reduce your monthly lease payments. At lease-end, you can have your deposits refunded or rolled over into your next First Class Lease.

Of course - how often or likely is it to write off a car in an accident? (In my case, my wife did it in February 2017).
Wow, the BMWFS MSDs are protected by GAP, right? If Benz's MSDs are taken before GAP kicks in it will be a bad option then. Thanks for heads up on the Benz fine prints.
jjrandorin commented:
April 14, 2017, 1:52 pm

Quote:
Originally Posted by namelessman View Post
Wow, the BMWFS MSDs are protected by GAP, right? If Benz's MSDs are taken before GAP kicks in it will be a bad option then. Thanks for heads up on the Benz fine prints.
Yes, BMW MSDs are protected from the gap waiver / total loss. Someone on bimmerfest went through this last year sometime. I dont remember who but I remember the subject (ninong was still with us at the time someone confirmed their MDSs were not taken in a total loss).
dkreidel commented:
April 14, 2017, 2:04 pm

Quote:
Originally Posted by namelessman View Post
Were those 911's sold with minimum miles put on them? 911's are not meant to be DD as far as retaining value goes, and in that regard, BMW(e.g. 3-series?) seems to be good choice.
Yes, both P cars under 10K miles. My daily drivers were 650 vert and X5M
chrischeung commented:
April 14, 2017, 4:27 pm

Quote:
Originally Posted by namelessman View Post
If Benz's MSDs are taken before GAP kicks in it will be a bad option then.
Not necessarily a bad option. Same as buying or anything else for that matter with cash or finance instead of leasing. How often do you hear of someone who says they rent instead of buying a house because they're afraid that if it burns down insurance won't cover their loan in full?

These relatively minor risks are usually non starters. The majority of people who do MSDs don't really need that money. It's not as though they say, I've got $5K here that I don't need now, but I will in exactly 3 years time. Instead, they're after monetary return for some level of risk. You just need to evaluate the Benz MSD offer (while inferior to BMW's) for what it is. I did max MSDs with MBFS, and I would do the same again. Even considering the fact that the reason I leased a Benz was because our Mazda was written off in an accident.

Sure - if you're frequently accident prone, or can't afford the hit, don't do MSDs. Just approach it with common sense. No worse than BMW (now) .
nyca commented:
April 14, 2017, 10:52 pm

A low optioned Porsche with low miles will have a very good residual. But heavily optioned cars, and as we know you can really get the price on a Porsche into the stratosphere with options, will see poor resale value relative to the price you paid for it. The real key with BMWs, is that if you look at their lease residuals - if you bought that same car and traded it in after 36 months with the indicated mileage - there is no way you are going to get that on a trade or a private sale. No way. With a low optioned Porsche, you can.
AdamGinOC commented:
April 15, 2017, 4:23 am

I have leased 3 BMWs (all with MSDs) as well as two Mercedes, Jeeps, Audi and other makes. MSDs are great, but ultimately I'm shopping: (i) the type of car I want; and (ii) the monthly cost, taking into account differences (e.g., whether maintenance is included or not). Stated differently, I'm looking at price and value.

So if I'm considering a 5 series, I'm costing that against an E class, A-6, Lexus, and possibly a Cadillac (Porsche is really not a comparable brand unless you're buying an M, given the low volume, considerably higher prices, and relatively few models offered). Do I like driving a 5 series more - probably. But am I willing to pay a lot more for a BMW compared to those other cars? No. Some people "absolutely have to have XXX car" - but most people are not in that category. Price/value matters. MSD are just one component of price/value.

Is eliminating MSDs a bummer? Yes. But ultimately, my buying decision is a function of the cost/value of the BMW vs. its competitors. In my experience, for the past decade, BMW has been far less expensive to lease compared to an apples-to-apples truly comparable mercedes/audi/cadillac/lexus. That has been for 3/5 series, X3, X5 types of cars (higher volume). I've shopped around every time, and that has been the truth (mostly because of better residuals), and it hasn't been all that close. If I were buying as opposed to leasing, that would not necessarily have been the case.

As others have pointed out, BMW has taken value from their cars in the past few years (worse maintenance, elimination of MSDs, price increases). The total effect of that will be losing market share to other brands, but it won't be solely (or even primarily) because of MSD.

Final thought - when I've shopped I've never seriously considered jaguar even though the lease payments were pretty close to BMW, mostly because of reliability concerns and the limited dealer network. Their product has improved - lots of nice cars - and they have good maintenance/warranty programs. I think there is a good chance they will take market share from BMW for people who are oriented to shopping payments like I am.
mwm1166 commented:
April 15, 2017, 4:46 am

Quote:
Originally Posted by AdamGinOC View Post
I have leased 3 BMWs (all with MSDs) as well as two Mercedes, Jeeps, Audi and other makes. MSDs are great, but ultimately I'm shopping: (i) the type of car I want; and (ii) the monthly cost, taking into account differences (e.g., whether maintenance is included or not). Stated differently, I'm looking at price and value.

So if I'm considering a 5 series, I'm costing that against an E class, A-6, Lexus, and possibly a Cadillac (Porsche is really not a comparable brand unless you're buying an M, given the low volume, considerably higher prices, and relatively few models offered). Do I like driving a 5 series more - probably. But am I willing to pay a lot more for a BMW compared to those other cars? No. Some people "absolutely have to have XXX car" - but most people are not in that category. Price/value matters. MSD are just one component of price/value.

Is eliminating MSDs a bummer? Yes. But ultimately, my buying decision is a function of the cost/value of the BMW vs. its competitors. In my experience, for the past decade, BMW has been far less expensive to lease compared to an apples-to-apples truly comparable mercedes/audi/cadillac/lexus. That has been for 3/5 series, X3, X5 types of cars (higher volume). I've shopped around every time, and that has been the truth (mostly because of better residuals), and it hasn't been all that close. If I were buying as opposed to leasing, that would not necessarily have been the case.

As others have pointed out, BMW has taken value from their cars in the past few years (worse maintenance, elimination of MSDs, price increases). The total effect of that will be losing market share to other brands, but it won't be solely (or even primarily) because of MSD.

Final thought - when I've shopped I've never seriously considered jaguar even though the lease payments were pretty close to BMW, mostly because of reliability concerns and the limited dealer network. Their product has improved - lots of nice cars - and they have good maintenance/warranty programs. I think there is a good chance they will take market share from BMW for people who are oriented to shopping payments like I am.

+1

I don't think eliminating a portion of price shopping customers can in anyway increase volume. To increase volume in the USA they have to add value or decrease price even further. They have decided they are going the other direction and increasing margins to make more money which inherently means giving up some of the volume.

Nothing wrong with it, but when the lease deals are closer to the competition, thousands will be more open to the competition. Also, as the cars have also gotten closer to the competition (the 5 series doesn't drive better by the same margin against the e class today as it did 15 years ago) then you're risking a lot of people shopping other places.

So, there are a few options for how this goes.

1) BMW stays put with where their driving quality is against competition, their pricing in USA increases and they lose some sales volume and make it all up on margins and they are happy being more expensive and doing less business and this has little to no effect on their dealer network.

2) BMW continues the trend of falling back to the pack in driving-fun, and increase the price chasing margins, and tarnish their brand, which will eventually further diminish their ability to increase margins and they lose market share and their dealer network will also suffer eventually.

3) BMW increases the price and increases the driving experience and lives up to to actual reputation the brand built while increasing the interior luxury as well. Then, they will have increased the value of their cars to the customer so they will continue to increase their sales volume while increasing their margins which make them rich and richer and everyone is happy.


I'm imagining some form of 1 or 2 is likely to happen. Several CA's are essentially floating 3 as what is happening. That BMW's cars are still so far ahead of everyone that they can totally afford to raise prices and it's better for everyone. I am just doubtful. It's certainly possible, but o me, it's just not likely.
namelessman commented:
April 15, 2017, 2:19 pm

Quote:
Originally Posted by chrischeung View Post
Not necessarily a bad option. Same as buying or anything else for that matter with cash or finance instead of leasing. How often do you hear of someone who says they rent instead of buying a house because they're afraid that if it burns down insurance won't cover their loan in full?

These relatively minor risks are usually non starters. The majority of people who do MSDs don't really need that money. It's not as though they say, I've got $5K here that I don't need now, but I will in exactly 3 years time. Instead, they're after monetary return for some level of risk. You just need to evaluate the Benz MSD offer (while inferior to BMW's) for what it is. I did max MSDs with MBFS, and I would do the same again. Even considering the fact that the reason I leased a Benz was because our Mazda was written off in an accident.

Sure - if you're frequently accident prone, or can't afford the hit, don't do MSDs. Just approach it with common sense. No worse than BMW (now) .
It is interesting to read Jon's comment(on another thread) that the origin of MSDs is to entice cash buyers to lease. It has also been intriguing to see that BMWFS is willing to give up 1%+ interest rate to hold on to 7 MSDs. What makes sense to me is that, the MSD's original intent is to allow lessees with subprime credits to qualify, but somehow BMWFS folks saw this also as a marketing tool to increase sales, and now MSD becomes fester's favorite.

And as a cash buyer myself my comparison is usually how much lease would cost on top of cash purchases. Cutting 1%+ with MSDs is meaningful in cash versus lease analysis, as that's $1500-ish for a typical $50k MSRP car with 65% RV and 85% cap cost.

As most say MSDs are seldom used, and most $50k MSRP lessees who are not festers do not know anyway, so the impact probably will be minimal. At one point my thought is that BMWNA may actually lower prices, but Jon's comment of "improve or retain profitability" rings true, and it is likely to be the direction heading forward.
bmw325 commented:
April 15, 2017, 3:58 pm

Quote:
Originally Posted by mwm1166 View Post
+1



I don't think eliminating a portion of price shopping customers can in anyway increase volume. To increase volume in the USA they have to add value or decrease price even further. They have decided they are going the other direction and increasing margins to make more money which inherently means giving up some of the volume.



Nothing wrong with it, but when the lease deals are closer to the competition, thousands will be more open to the competition. Also, as the cars have also gotten closer to the competition (the 5 series doesn't drive better by the same margin against the e class today as it did 15 years ago) then you're risking a lot of people shopping other places.



So, there are a few options for how this goes.



1) BMW stays put with where their driving quality is against competition, their pricing in USA increases and they lose some sales volume and make it all up on margins and they are happy being more expensive and doing less business and this has little to no effect on their dealer network.



2) BMW continues the trend of falling back to the pack in driving-fun, and increase the price chasing margins, and tarnish their brand, which will eventually further diminish their ability to increase margins and they lose market share and their dealer network will also suffer eventually.



3) BMW increases the price and increases the driving experience and lives up to to actual reputation the brand built while increasing the interior luxury as well. Then, they will have increased the value of their cars to the customer so they will continue to increase their sales volume while increasing their margins which make them rich and richer and everyone is happy.





I'm imagining some form of 1 or 2 is likely to happen. Several CA's are essentially floating 3 as what is happening. That BMW's cars are still so far ahead of everyone that they can totally afford to raise prices and it's better for everyone. I am just doubtful. It's certainly possible, but o me, it's just not likely.

Well said. Only Porsche seems to be able to achieve #3 across the board. But their volume targets are also much lower
MJBrown62 commented:
April 15, 2017, 4:40 pm

I doubt #3 is likely. Well, at least the portion that says we will increase sales volume by raising price and driving experience. We will go back to the niche market we were years ago. I hear the stores all the time from the "old guard" who remember the days of taking orders at full price. It wasn't a growth strategy at all.

Again, I reiterate that this forum represents the 1-2% of BMW and high end car buyers that are knowledgeable about the car, the finances and the process.

As a salesperson, I've had people come in during the mid-late 2000s that found the car "stiff," or firm, or "bumpy, the steering "heavy". Etc. The BMW wasn't their driving experience. Decisions had to be made on how to expend the market and gain buyers fro other brands.

I think the direction is likely 2a: Increase price, increase quality, increase luxury, increase technology, and maintain current drive characteristics, to grow the market and maintain a value-added reputation.

I see everyday the power of the Roundel.


Quote:
Originally Posted by mwm1166 View Post
+1

I don't think eliminating a portion of price shopping customers can in anyway increase volume. To increase volume in the USA they have to add value or decrease price even further. They have decided they are going the other direction and increasing margins to make more money which inherently means giving up some of the volume.

Nothing wrong with it, but when the lease deals are closer to the competition, thousands will be more open to the competition. Also, as the cars have also gotten closer to the competition (the 5 series doesn't drive better by the same margin against the e class today as it did 15 years ago) then you're risking a lot of people shopping other places.

So, there are a few options for how this goes.

1) BMW stays put with where their driving quality is against competition, their pricing in USA increases and they lose some sales volume and make it all up on margins and they are happy being more expensive and doing less business and this has little to no effect on their dealer network.

2) BMW continues the trend of falling back to the pack in driving-fun, and increase the price chasing margins, and tarnish their brand, which will eventually further diminish their ability to increase margins and they lose market share and their dealer network will also suffer eventually.

3) BMW increases the price and increases the driving experience and lives up to to actual reputation the brand built while increasing the interior luxury as well. Then, they will have increased the value of their cars to the customer so they will continue to increase their sales volume while increasing their margins which make them rich and richer and everyone is happy.


I'm imagining some form of 1 or 2 is likely to happen. Several CA's are essentially floating 3 as what is happening. That BMW's cars are still so far ahead of everyone that they can totally afford to raise prices and it's better for everyone. I am just doubtful. It's certainly possible, but o me, it's just not likely.
weezl commented:
April 15, 2017, 9:16 pm

Quote:
Originally Posted by MJBrown62 View Post
I think the direction is likely 2a: Increase price, increase quality, increase luxury, increase technology, and maintain current drive characteristics, to grow the market and maintain a value-added reputation..
I agree mostly. Drive characteristics are no longer that different than close competitors so I am not sure that their migration to mediocrity there will stop this year.
nyca commented:
April 15, 2017, 9:47 pm

Reading on another board here that BMW just ditched the AARP discount as well. Looks like they are cleaning everything out, I expect fleet will be next and then CCA will be eliminated as well in time. The auto show coupons are being eliminated as well, NY auto show has nothing. The cars in these segments are just too similar for BMW to think its brand name justifies doing this, they are in for a rude awakening especially with existing owners who just rollover leases into new deals without cross shopping. And here's another angle - look at the waiting list numbers for the Tesla model 3, how many 3 series sales is that taking away?
namelessman commented:
April 16, 2017, 2:53 am

Quote:
Originally Posted by nyca View Post
Reading on another board here that BMW just ditched the AARP discount as well. Looks like they are cleaning everything out, I expect fleet will be next and then CCA will be eliminated as well in time. The auto show coupons are being eliminated as well, NY auto show has nothing. The cars in these segments are just too similar for BMW to think its brand name justifies doing this, they are in for a rude awakening especially with existing owners who just rollover leases into new deals without cross shopping. And here's another angle - look at the waiting list numbers for the Tesla model 3, how many 3 series sales is that taking away?
The current corporate fleet is good for Model Year 2016, 2017, and 2018, so that should last at least until July 2018.

There are rumors that AARP is meant to be a trial run, but there is no official announcement one way or the other.
Vitacura commented:
April 16, 2017, 10:28 am

The AARP discount isn't being ditched (yet), but the member before 2/20 may begin to be enforced. So those that became members after that date exclusively to get the discount may have a hard time getting it.
AksNasZasNas commented:
April 16, 2017, 2:01 pm

Quote:
Originally Posted by Vitacura View Post
The AARP discount isn't being ditched (yet), but the member before 2/20 may begin to be enforced. So those that became members after that date exclusively to get the discount may have a hard time getting it.


This.
Motorboat411 commented:
April 16, 2017, 3:06 pm

Quote:
Originally Posted by Vitacura View Post
The AARP discount isn't being ditched (yet), but the member before 2/20 may begin to be enforced. So those that became members after that date exclusively to get the discount may have a hard time getting it.
How are they going to check/enforce Membership before 2/20? The membership card just has a Valid Thru date, your name and ID.
gkr778 commented:
April 17, 2017, 11:25 am

Quote:
Originally Posted by nyca View Post
And here's another angle - look at the waiting list numbers for the Tesla model 3, how many 3 series sales is that taking away?
Zero. Tesla Model 3 isn't in production. Tesla Inc. may not even exist as an independent automaker by the end of the decade.
jjrandorin commented:
April 17, 2017, 2:23 pm

Quote:
Originally Posted by gkr778 View Post
Zero. Tesla Model 3 isn't in production. Tesla Inc. may not even exist as an independent automaker by the end of the decade.
There have been some articles stating that a lot of the model 3 reservations may be from "Joe the toyota owner". The gist of the articles were somewhat that with the teething pains that tesla currently has, they still enjoy fierce loyalty from their (mostly affluent) user base.

When the car is mainstream and people like "joe the toyota owner" who is used to their car "just working" buy these, will tesla be able to deal with the teething pains etc?

I think its a combination of people who think that electric is cheaper (at least for me in southern california, given electricity rates an electric car wont save much over gas unless you have a large solar system), and people for whom it will be a 2nd car / commute to work car.

If that 35k tesla is actually 55k when it is decently equipped with mostly electronic features, and / or extra battery (because range anxiety is STILL real and will be for a LONG time), will be interesting to see if it takes away 3 series sales in any meaningful way. My bet is on "no".

I would imagine Audi / Merc (and even alfa romeo) might take more sales than tesla for model 3 vs 3 series.
AdamGinOC commented:
April 17, 2017, 4:06 pm

Quote:
Originally Posted by jjrandorin View Post
There have been some articles stating that a lot of the model 3 reservations may be from "Joe the toyota owner". The gist of the articles were somewhat that with the teething pains that tesla currently has, they still enjoy fierce loyalty from their (mostly affluent) user base.

When the car is mainstream and people like "joe the toyota owner" who is used to their car "just working" buy these, will tesla be able to deal with the teething pains etc?

I think its a combination of people who think that electric is cheaper (at least for me in southern california, given electricity rates an electric car wont save much over gas unless you have a large solar system), and people for whom it will be a 2nd car / commute to work car.

If that 35k tesla is actually 55k when it is decently equipped with mostly electronic features, and / or extra battery (because range anxiety is STILL real and will be for a LONG time), will be interesting to see if it takes away 3 series sales in any meaningful way. My bet is on "no".

I would imagine Audi / Merc (and even alfa romeo) might take more sales than tesla for model 3 vs 3 series.
I can only speak for myself, but if I am an example, then I think Tesla 3 will impact the BMW sales. $45-55K is pretty much what a nice 3 series costs and is less than a 5 series.

I'm on the Tesla 3 list. Last year I leased a 2016 553i - for 30 months. My expectation is that the Tesla 3 will be out and available in 2 years - about the time my 5 series lease is expiring. If the Tesla meets my needs and delivers on most of its promise, there is a very good chance I'll ditch BMW and get one and have no problem paying $45k+ (which is less than the cost of the typical car I would buy).
dima123 commented:
April 17, 2017, 5:49 pm

Am I the only one asking how many millions Bmw has to pay out to give back everyone the MSDs?


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dima123 commented:
April 17, 2017, 5:50 pm

I also predict Infiniti, Mercedes, Lexus will offer competitive leases to take over many upset bmw customers.


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Robert A commented:
April 17, 2017, 5:52 pm

No, but the benefits obviously justified the business case for offering it until now.

Quote:
Originally Posted by dima123 View Post
Am I the only one asking how many millions Bmw has to pay out to give back everyone the MSDs?


Sent from my iPhone using Bimmerfest
beware_phog commented:
April 17, 2017, 6:09 pm

Quote:
Originally Posted by dima123 View Post
I also predict Infiniti, Mercedes, Lexus will offer competitive leases to take over many upset bmw customers.


Sent from my iPhone using Bimmerfest
Uh, you think all the other car companies are simply NOT competing right now or the past 100 years?
dima123 commented:
April 17, 2017, 6:12 pm

Quote:
Originally Posted by beware_phog View Post
Uh, you think all the other car companies are simply NOT competing right now or the past 100 years?


They are but I'm just saying the leases prices would seem more attractive than bmw!! I honestly have been looking for a reason to take the bite on cpo Porsche. This might have pushed me over edge.


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1968BMW2800 commented:
April 18, 2017, 10:21 am

My 2 cents here:

http://www.bimmerfest.com/forums/sho...3#post10120703
LinkF1 commented:
April 18, 2017, 11:02 am

Running some numbers this morning this is costing lessees roughly $800 - 2000 over the term of the lease on their next car, depending on the price of the car, residual etc.

Even though I am a big fan of the MSD program and used it for two leases in the past: $800 on a $35,000 car isn't usually a deal maker or breaker. I think it will be more of a mental change for those who price out a lease with MSDs, and what we consider a "good deal".
socal59 commented:
April 18, 2017, 11:33 am

Quote:
Originally Posted by LinkF1 View Post
Running some numbers this morning this is costing lessees roughly $800 - 2000 over the term of the lease on their next car, depending on the price of the car, residual etc.

Even though I am a big fan of the MSD program and used it for two leases in the past: $800 on a $35,000 car isn't usually a deal maker or breaker. I think it will be more of a mental change for those who price out a lease with MSDs, and what we consider a "good deal".
It's not just the elimination of MSD' S that many are complaining about. It's shorter maintenance, higher MF, lower residuals, standard equipment etc.

But who knows what will happen, BMW can easily move numbers around if sales decline. Most likely, they will be (somewhat) competitive as other manufacturers are. Also, if demand is very strong for their new models, then it probably won't matter much.
Drose commented:
April 18, 2017, 12:48 pm

Quote:
Originally Posted by Motorboat411 View Post
How are they going to check/enforce Membership before 2/20? The membership card just has a Valid Thru date, your name and ID.
I dont want to sound shady Buy does it say a sign up date on the cards... If not how would anyone know??
weezl commented:
April 19, 2017, 12:59 am

Quote:
Originally Posted by LinkF1 View Post
Running some numbers this morning this is costing lessees roughly $800 - 2000 over the term of the lease on their next car, depending on the price of the car, residual etc.

Even though I am a big fan of the MSD program and used it for two leases in the past: $800 on a $35,000 car isn't usually a deal maker or breaker. I think it will be more of a mental change for those who price out a lease with MSDs, and what we consider a "good deal".
For me it is mental. Also, I am a 3 pedal guy, when I hear parallels to Tesla all I can say is

Ew
ssstraub commented:
April 19, 2017, 9:53 am

BMW will likely be losing me to Tesla in the next year.

As someone that drove only manuals for nearly 15 years, that incredibly smooth and always available electric torque more than makes up for the fun I had with a stick.

Single fixed gear > manual >>>> auto.
bmw325 commented:
April 19, 2017, 10:03 am

Quote:
Originally Posted by ssstraub View Post
BMW will likely be losing me to Tesla in the next year.



As someone that drove only manuals for nearly 15 years, that incredibly smooth and always available electric torque more than makes up for the fun I had with a stick.



Single fixed gear > manual >>>> auto.

One pedal driving is a lot of fun - especially in a city
chrischeung commented:
April 19, 2017, 1:47 pm

Quote:
Originally Posted by bmw325 View Post
One pedal driving is a lot of fun - especially in a city
How about no pedal driving? Autonomous connected cars. No traffic lights, no speed limits, no traditional rules.

Once we get to that point, there won't me any need for MSDs. Since we'll likely be car (or pod) sharing, and will be paying by the mile or similar.
bmw325 commented:
April 19, 2017, 9:31 pm

Quote:
Originally Posted by chrischeung View Post
How about no pedal driving? Autonomous connected cars. No traffic lights, no speed limits, no traditional rules.



Once we get to that point, there won't me any need for MSDs. Since we'll likely be car (or pod) sharing, and will be paying by the mile or similar.

Of course that's coming. But I think there will always be a market for private cars as well - with and without autonomous capabilities. Plus, it will be a long time before we get level 5 autonomy where the vehicle can drive anywhere in any conditions. level 4 "pods" will have their uses but won't cover all of your transportation needs/wants (in the same way they Uber doesn't currently)
cha777 commented:
April 23, 2017, 5:42 pm

Audi S5 with PenFed Payment Saver Loan. Cheaper than a lease. Haven't. Looked. Back!
beware_phog commented:
April 23, 2017, 6:11 pm

Quote:
Originally Posted by socal59 View Post
It's not just the elimination of MSD' S that many are complaining about. It's shorter maintenance, higher MF, lower residuals, standard equipment etc.

But who knows what will happen, BMW can easily move numbers around if sales decline. Most likely, they will be (somewhat) competitive as other manufacturers are. Also, if demand is very strong for their new models, then it probably won't matter much.
Yep. I am seeing this right now. Higher MF, Lower Residual...will probably buy my car at end of the lease because the new "deals" are terrible.
nyca commented:
April 23, 2017, 8:33 pm

Yes, that's what I am thinking too - if my current car proves to be reliable, I am more likely to just buy it at lease end.
Yinzer commented:
April 23, 2017, 8:36 pm

Quote:
Originally Posted by nyca View Post
Yes, that's what I am thinking too - if my current car proves to be reliable, I am more likely to just buy it at lease end.
I was thinking the same. My buyout at lease end is 43k. If the dealer is willing to negotiate from that we may just buy it.
Kief commented:
April 24, 2017, 7:19 am

Quote:
Originally Posted by cha777 View Post
Audi S5 with PenFed Payment Saver Loan. Cheaper than a lease. Haven't. Looked. Back!
Even with the sales tax?
Robert A commented:
April 24, 2017, 2:03 pm

You can't know that unless you also know value when you go to sell it.
Quote:
Originally Posted by cha777 View Post
Audi S5 with PenFed Payment Saver Loan. Cheaper than a lease. Haven't. Looked. Back!
Greg@Pacific BMW commented:
April 24, 2017, 3:15 pm

How is the Penfed purchase deal cheaper than a lease?
1968BMW2800 commented:
April 24, 2017, 3:37 pm

Quote:
Originally Posted by Greg@Pacific BMW View Post
How is the Penfed purchase deal cheaper than a lease?
I have been told that on a lease return if one doesn't do a buyout at the dollar amount specified in the original lease deal the car must be turned in -- that the buyout amount cannot be renegotiated.

Is it true that a BMW dealer who grounds a lease return has an option to purchase the car from the lender for less than the residual?

Or is the dealer required to pay the full residual as specified in the lease if the dealer wants to retain the car for inventory or to sell to the original leasee?

Thanks.
Greg@Pacific BMW commented:
April 24, 2017, 3:40 pm

only the dealer can get a lower price.
bmw325 commented:
April 24, 2017, 3:42 pm

Or, if you're patient, wait a few weeks and do a search for your old VIN. Odds are it will be up for sale for thousands less than your residual and include a CPO warranty.
1968BMW2800 commented:
April 24, 2017, 4:22 pm

Quote:
Originally Posted by Greg@Pacific BMW View Post
only the dealer can get a lower price.
Thank you.
chrischeung commented:
April 24, 2017, 4:45 pm

Quote:
Originally Posted by bmw325 View Post
sale for thousands less than your residual and include a CPO warranty.
Try tens of thousands. My 7 series was $30K less than residual from memory. No CPO though since it went to auction. It showed up on a local used lot.
bmw325 commented:
April 24, 2017, 6:25 pm

Quote:
Originally Posted by chrischeung View Post
Try tens of thousands. My 7 series was $30K less than residual from memory. No CPO though since it went to auction. It showed up on a local used lot.

Wow.

Found my old 5 series as a CPO but on a different dealers lot. Would think that means they must've bought it at auction. But maybe bmwfs has their own "internal" auctions?