BimmerFest BMW Forum banner

1 - 6 of 6 Posts

·
Registered
Joined
·
3 Posts
Discussion Starter #1
Hi all,
I am considering ordering a custom build X3 with an $53,420 MSRP
I calculated an invoice price of: $50,039 from the forum thread

I am looking at 3yr/10,000 mile lease deals. The best offer so far is one has a cap cost of $48,470

Using 7 MSD's the payment is down to $416/mo with $3320 at signing (includes taxes, first payment, bank fees, etc.) +$3150 in MSD's

My fleet discount of $1000 is included in the lease numbers

This seems like a good deal, I am planning to order by Monday so interested to see if you all agree.
 

·
Registered
Joined
·
8,892 Posts
Hi all,
I am considering ordering a custom build X3 with an $53,420 MSRP
I calculated an invoice price of: $50,039 from the forum thread

I am looking at 3yr/10,000 mile lease deals. The best offer so far is one has a cap cost of $48,470

Using 7 MSD's the payment is down to $416/mo with $3320 at signing (includes taxes, first payment, bank fees, etc.) +$3150 in MSD's

My fleet discount of $1000 is included in the lease numbers

This seems like a good deal, I am planning to order by Monday so interested to see if you all agree.
The questions I would have are:

1. What exactly is in the 3320 due on signing? That looks like a particularly large number to be just drive offs (lease acquisition, first month, dealer fees, taxes on cap cost reductions). What is that exactly? Is there cap cost reduction in it?

2. What is the money factor being used for your deal? Since you are mentioning fleet discount, and MSDs, if you are getting base money factor to start you would be at .00136 - .00020 (fleet) - .00049 (MSDs) = .00067. What money factor are they quoting you (and make sure you ask them what it is both BEFORE your msds and corporate discount, and after).

2017s have a 1k incentive and then your corporate incentive of 1k. The 1k incentive from BMW would be included in the selling price, while the 1k incentive from corporate discount is shown as cap cost reduction (and taxed).

if you were being sold the car at invoice, the selling price would be 49,039 based on your numbers, then your 1k applied as cap cost reduction to bring the cap cost to 48,039.... so it appears to me that you are getting the car for roughly 400 over "invoice" when factoring in your incentives. I believe this is good, but just wonder about the points above i mentioned.
 

·
Registered
Joined
·
737 Posts
Hi all,
I am considering ordering a custom build X3 with an $53,420 MSRP
I calculated an invoice price of: $50,039 from the forum thread

I am looking at 3yr/10,000 mile lease deals. The best offer so far is one has a cap cost of $48,470

Using 7 MSD's the payment is down to $416/mo with $3320 at signing (includes taxes, first payment, bank fees, etc.) +$3150 in MSD's

My fleet discount of $1000 is included in the lease numbers

This seems like a good deal, I am planning to order by Monday so interested to see if you all agree.
Hey Optimus,

You might ask about a lease where you put down about $20,000 and then have payments of about $114 a month of 36 months, the term of the lease. This comes out to substantially less than if you get a regular 36 month, 10,000 mile lease. I believe it's called a two payment option and a lot of dealers and BMW don't want you to know about it.
But, obviously you have to have the $20,000 G's to put into it. Good luck.

Joe:)
 

·
Registered
Joined
·
8,892 Posts
Hey Optimus,

You might ask about a lease where you put down about $20,000 and then have payments of about $114 a month of 36 months, the term of the lease. This comes out to substantially less than if you get a regular 36 month, 10,000 mile lease. I believe it's called a two payment option and a lot of dealers and BMW don't want you to know about it.
But, obviously you have to have the $20,000 G's to put into it. Good luck.

Joe:)
I would love to see the particulars of that lease (I have heard of 1 pay leases but not 2 pay). Pre paying a lease with cash down only pre pays the lease obligation. so a lease with 20k down and 114 a month is actually:

114 a month + 20,000 \36 (555.55) so the actual outlay of cash on the lease you spoke about is actually 669.55 a month. If you are talking about an X3, that would not be that great of a deal at all, regardless of how much cash you have to outlay.

The issue with 1 pay leases is that you are not eligible for any pull ahead programs (getting out of lease 3-6 months early depending on the program). If you 1 pay a lease you WILL be taking that lease to the term date, as any pull aheads specifically exclude 1 pay leases.

Usually, in exchange for outlaying that much cash up front, you get a reduction in the money factor. Right now, BMWs reduction in the money factor for a 1 pay lease is something like .00030 (less than if you do the full 7 MSDs which costs a LOT less money).

@ClosemJoe, Do you have any specifics around this program? Im pretty familiar with leasing (Especially BMWs), and like to help people here. As I mentioned, I am not aware of a 2 pay lease, and if its actually a better deal for people I would like to know the specifics so that I can recommend it when appropriate.

Feel free to drop me a PM about it if you dont want to discuss it here. Thanks in advance.
 

·
Registered
Joined
·
737 Posts
I would love to see the particulars of that lease (I have heard of 1 pay leases but not 2 pay). Pre paying a lease with cash down only pre pays the lease obligation. so a lease with 20k down and 114 a month is actually:

114 a month + 20,000 \36 (555.55) so the actual outlay of cash on the lease you spoke about is actually 669.55 a month. If you are talking about an X3, that would not be that great of a deal at all, regardless of how much cash you have to outlay.

The issue with 1 pay leases is that you are not eligible for any pull ahead programs (getting out of lease 3-6 months early depending on the program). If you 1 pay a lease you WILL be taking that lease to the term date, as any pull aheads specifically exclude 1 pay leases.

Usually, in exchange for outlaying that much cash up front, you get a reduction in the money factor. Right now, BMWs reduction in the money factor for a 1 pay lease is something like .00030 (less than if you do the full 7 MSDs which costs a LOT less money).

@ClosemJoe, Do you have any specifics around this program? Im pretty familiar with leasing (Especially BMWs), and like to help people here. As I mentioned, I am not aware of a 2 pay lease, and if its actually a better deal for people I would like to know the specifics so that I can recommend it when appropriate.

Feel free to drop me a PM about it if you dont want to discuss it here. Thanks in advance.
Hi JJ,

Let me try to give you the particulars on my two pay lease deal. The MSRP on my new 2016 X3 was $51,945 and I negotiated a purchase price of $47,545 which at the time was about $700 under invoice. The two pay lease started with a price of $47,545. I put down a lump sum of $21,800 and in addition have 35 payments of $94.66, for a total in of $25,413. In addition at the end of the lease I get back $1,050 for the refundable security deposit. I think you guys call it the MSD. So, that's about it. At this point I don't know if there are better deals out there but I am happy. At the time, I shopped five different BMW dealers in Florida and my local dealer in Sarasota finally matched my best deal even though at the beginning they were only giving me $1,000 off of the MSRP. So, you really have to do your shopping and fortunately, I like doing it! I'm a salesmen myself and before I retired 10 years ago I owned several insurance agencies. I hope this helps you and let me know what you think. Our three year lease has another two years to go and I'd like to contact you then if I may to get some pointers from you before we enter into another three year lease. This is the first car that I have ever leased in all my years of owning cars and I really like the idea of leasing rather than buying at my stage in life. And, we can always learn more on a subject.:thumbup:

Regards,
Joe:)
 

·
Registered
Joined
·
8,892 Posts
Hi JJ,

Let me try to give you the particulars on my two pay lease deal. The MSRP on my new 2016 X3 was $51,945 and I negotiated a purchase price of $47,545 which at the time was about $700 under invoice. The two pay lease started with a price of $47,545. I put down a lump sum of $21,800 and in addition have 35 payments of $94.66, for a total in of $25,413. In addition at the end of the lease I get back $1,050 for the refundable security deposit. I think you guys call it the MSD. So, that's about it. At this point I don't know if there are better deals out there but I am happy. At the time, I shopped five different BMW dealers in Florida and my local dealer in Sarasota finally matched my best deal even though at the beginning they were only giving me $1,000 off of the MSRP. So, you really have to do your shopping and fortunately, I like doing it! I'm a salesmen myself and before I retired 10 years ago I owned several insurance agencies. I hope this helps you and let me know what you think. Our three year lease has another two years to go and I'd like to contact you then if I may to get some pointers from you before we enter into another three year lease. This is the first car that I have ever leased in all my years of owning cars and I really like the idea of leasing rather than buying at my stage in life. And, we can always learn more on a subject.:thumbup:

Regards,
Joe:)
Sorry I missed this (thanks for the PM).

What you effectively did is put down a VERY large cap cost reduction along with multiple security deposits to reduce your money factor.

I say that because you still have 35 payments (so a regular lease term). You just have very small payments because you put down such a large amount of money.

The easiest way to explain this that I can think of, is by using an analogy that I used elsewhere on here.

If you went to lease an apartment, lets assume the apartment lease is 3 years, at 1000 per month. This works out to 12k a year, or 36k over the life of the lease.

Now, lets say you gave them a 10k down payment on your lease, because you have the money sitting around. Now, they tell you "ok now your monthly payment is only 722.22 a month". You tell your family and friends "I got this cool apartment, and my monthly payment is only 722 a month!!! But, is it though? its 722 a month PLUS the 10k you gave them, for a total of 36k, same as it would have been before. It just appears cheaper.

Thats why I am saying your payment is not "94.66 a month" even though that is what you are sending them. Its your monthly payment of 94.66 + 20,000/ 36 = 555.55 so (not counting fees and such) your effectively paying 650 a month.

Additionally, if you had totaled your car in the first few months, ALL of that 20k would have been gone. BMW leases come with gap protection, so protect you automatically from any negative equity if you total the car, but in your case, it would be pretty impossible to have negative equity... because of the large cap cost reduction. YOU would just be bearing the loss.

It did not happen or you would have told us about it, but they dont call them "accidents" for nothing.

I am a big believer in "what works for you is correct", so I am not going to tell you that you did something "wrong". I would say, however, that I would not advise anyone to structure a deal the way you did. There is no benefit to paying that much cap cost reduction. You dont save on taxes because cap cost reduction is taxed. All it does is make your monthly payment APPEAR to be cheaper. The risks are a very real risk of money loss if you had totaled that car at the begining of the lease, and the fact that if you wanted to somehow swap out of that lease, it would be impossible with that much money tied up in it to get much of it back.

The benefits are a psychologically low payment, and thats about it.
 
1 - 6 of 6 Posts
Top