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.
