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Discussion Starter #1
Thank you for everyone's assistance.

What is the current (June 2016) BMW FS discount per Security Deposit? It was my understanding that it should be seven points (.00007) per SD.

Yesterday, I took delivery on a 2016 F30 328i Sport Line and was quoted a payment which came out to a MF of .00138 per my calculations.

I am a Tier 1 customer. I put down 7 Security Deposits for MSD reduction. Once I got home (my fault) and I calculated things out my final payment came out to be about $11 higher than it should have. I calculated out that the effective money factor is on my payment and it is .00106.

If I had been given the .00007 discount per SD, then based on this payment, the effective 'base' MF (without SDs) is .00155. I find this disturbing. If I was quoted an effective MF of 138 without SDs, then my effective MF with seven SDs should have been .00089 with an $11 additional reduction in total monthly payment.

This puts my effective return on my MSDs over the 36 months down to around 20% vs 30%. I believe they took my SDs for the back office (finance profit) and didn't honor the base 138 money factor to discount off of.

Thoughts please?

Thank you,
-Darius
 

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Thank you for everyone's assistance.

What is the current (June 2016) BMW FS discount per Security Deposit? It was my understanding that it should be seven points (.00007) per SD.

Yesterday, I took delivery on a 2016 F30 328i Sport Line and was quoted a payment which came out to a MF of .00138 per my calculations.

I am a Tier 1 customer. I put down 7 Security Deposits for MSD reduction. Once I got home (my fault) and I calculated things out my final payment came out to be about $11 higher than it should have. I calculated out that the effective money factor is on my payment and it is .00106.

If I had been given the .00007 discount per SD, then based on this payment, the effective 'base' MF (without SDs) is .00155. I find this disturbing. If I was quoted an effective MF of 138 without SDs, then my effective MF with seven SDs should have been .00089 with an $11 additional reduction in total monthly payment.

This puts my effective return on my MSDs over the 36 months down to around 20% vs 30%. I believe they took my SDs for the back office (finance profit) and didn't honor the base 138 money factor to discount off of.

Thoughts please?

Thank you,
-Darius
The discount is .00007 per MSD up to a total of .00049 for the maximum 7 MSDs. Keep in mind that the money factor is negotiable between a certain range (which it sounds like you know). For june it was .00138 to .00178 for tier 1 credit.

That means with Maximum MSDs for tier 1 credit, the money factors could be anywhere between .00089 and .00129. The number you mention .00106 is within this range, but sounds like its not what you negotiated with them.

You sure that there is not some extra fees in there that you did not account for, like a higher doc fee, or a some sort of paint sealant, etc?

You are within your rights to go back to the finance person with your numbers and show them to them, and ask them to show you how it reaches the money factor you negotiated.
 

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Discussion Starter #3
The discount is .00007 per MSD up to a total of .00049 for the maximum 7 MSDs. Keep in mind that the money factor is negotiable between a certain range (which it sounds like you know). For june it was .00138 to .00178 for tier 1 credit.

That means with Maximum MSDs for tier 1 credit, the money factors could be anywhere between .00089 and .00129. The number you mention .00106 is within this range, but sounds like its not what you negotiated with them.
Thank you for your response. I am 100% certain that the money factor for my initially quoted payment was based on .00138 because that is what I calculated out before I ever went into finance and my payment was spot on, off by something like 80 cents. I unfortunately, should have but did not calculate my payment with the .00049 SD discount or I would have caught it.

You sure that there is not some extra fees in there that you did not account for, like a higher doc fee, or a some sort of paint sealant, etc?
Positive - no extra fees.

You are within your rights to go back to the finance person with your numbers and show them to them, and ask them to show you how it reaches the money factor you negotiated.
I may be within my rights to go back to them and ask them to show it, but am I within my rights to have them fix it? I am in Florida.

Thank you,
-Darius
 

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Thank you for your response. I am 100% certain that the money factor for my initially quoted payment was based on .00138 because that is what I calculated out before I ever went into finance and my payment was spot on, off by something like 80 cents. I unfortunately, should have but did not calculate my payment with the .00049 SD discount or I would have caught it.

Positive - no extra fees.

I may be within my rights to go back to them and ask them to show it, but am I within my rights to have them fix it? I am in Florida.

Thank you,
-Darius
I dont know... I doubt they have to, since you signed it, but if you have something in writing (email etc) saying what your agreement with them was, they might want to take care of you for the "misunderstanding" if you can demonstrate it to them.

I cant comment on what they have to do though... I would go there and work the angle that "I am running my numbers and they dont check out to what we negotiated... I was hoping you (finance dept) could go over them with me?"

Vs " You guys screwed me!!! fix it!!!!"

Thats what I would do, anyway. You may find out there is an error in your calculations (unlikely but possible), or that there was a misunderstanding in the money factor... such as you expected it before MSDs and they "thought" it was after MSDs. I wouldnt accuse them of anything but would let them play the "misunderstanding" angle if they would fix it. If they dont, ask to speak to the sales manager etc. and stress that you are frustrated in that you thought you had XXX agreement.... but dont yell or threaten.
 

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i dont know... I doubt they have to, since you signed it, but if you have something in writing (email etc) saying what your agreement with them was, they might want to take care of you for the "misunderstanding" if you can demonstrate it to them.

I cant comment on what they have to do though... i would go there and work the angle that "i am running my numbers and they dont check out to what we negotiated... I was hoping you (finance dept) could go over them with me?"

vs " you guys screwed me!!! Fix it!!!!"

thats what i would do, anyway. You may find out there is an error in your calculations (unlikely but possible), or that there was a misunderstanding in the money factor... Such as you expected it before msds and they "thought" it was after msds. I wouldnt accuse them of anything but would let them play the "misunderstanding" angle if they would fix it. If they dont, ask to speak to the sales manager etc. And stress that you are frustrated in that you thought you had xxx agreement.... But dont yell or threaten.
+1
 

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Discussion Starter #6
I believe I got this figured out. Spoke with the finance manager.

While I know that in my discussions with him at the start of the deal with no MSDs I mentioned (but we didn't have an agreement of) a MF of .00138, the deal had >$400 of cap cost reduction (which I usually do not put down ANY of on a deal).

Then, when I asked him to take out the cap cost reduction and add the 7 MSDs, he did so. What I *thought* was us starting with a MF of .00138 was really a starting MF of .00155.

I think what they are doing when they setup the deal before sending it to finance is including cap cost reduction in an amount sufficient to get them to a MF of .00155. Even though I've done several leases before, it was late at night and I was not fast on my feet.

So that is how we ended up at .00106 with 7 MSDs.

The question I really have right now is whether .00138 as the bottom range for Tier 1 in June 2016 was the 'buy' rate or whether it is already 'bumped' (padded) by the dealer?

The dealer I used to work with in Atlanta before moving back to Florida never gave less than a 20 point bump from the bottom of the range. If I use that on this deal, it would have been .00158 so considering my starting pre-MSD MF was at .00155, I actually did a couple points better than usual.

Thanks for everyone's input and listening (reading).

-Darius
 

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The base rate was .00138. The .00155 rate was marked up by the dealer.
 

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Has anyone actually received the raw base rate without markup AND a very well discounted selling price without 'knowing someone'?
I've been leasing BMWs since 2002 (year not model) and I was always given the base MF. Cannot imagine any dealer in NYC area marking up the MF.

BTW before 7 MSDs the payment for our 2015 BMW 328 was $509 per month, MSDs brought it down to $466.
 

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Has anyone actually received the raw base rate without markup AND a very well discounted selling price without 'knowing someone'?
It depends on where you are, and how many BMW dealers are around you. In Southern California, its pretty common to get that kind of a deal, provided you are willing to shop around and know what to ask for (and are ready to buy when you see a good deal).

There are something like 23 BMW dealers within 150 miles of me, though. The lowest price is not always the best deal. Sometimes it might be worth paying a bit extra to get either someone local who will take care of you if you have an issue, or a specific Dealer / Client advisor you have worked with before and liked.

No one likes to feel ripped off, but there is also a lot of concentration on the "last 5 dollars" as it were in deals here on bimmerfest.
 

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I've been leasing BMWs since 2002 (year not model) and I was always given the base MF. Cannot imagine any dealer in NYC area marking up the MF.

BTW before 7 MSDs the payment for our 2015 BMW 328 was $509 per month, MSDs brought it down to $466.
same here. always base buy rate before msds, always invoice or below after incentives.
depends on how competitive the market in your area is really.

i usually spell out in my communications with the dealer (even though i've dealt with the same CA for the past 10 years)
- base rate on MF before MSDs
- no markup on acq fee (when it used to be variable)
-$XXX over invoice before incentives
- when is the next avail allocation
leaves no room for "misunderstandings"
 

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I negotiated a deal with a 3,000 down payment and no MSDs (didn't know about them at the time).

Shouldn***8217;t the dealer have told me that I could instead use the 3,000 as MSDs, and get a better MF?

If I applied the 3,000 as MSDs, it would have lowered my MF by about .0049, and lowered my lease costs by about $2,000.

I'm not taking delivery until today, and haven't signed all the official papers yet.

Do I have a right to tell them to apply the 3,000 as MSDs, and get the lower MF?

Thanks
 

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Discussion Starter #13
I will leave it to the pros to respond, but in the interest of time since you are taking delivery today, I will provide you with what I know.

I negotiated a deal with a 3,000 down payment and no MSDs (didn't know about them at the time).

Shouldn't the dealer have told me that I could instead use the 3,000 as MSDs, and get a better MF?
No - it is not the dealer's obligation to disclose the MSD program to you.

If I applied the 3,000 as MSDs, it would have lowered my MF by about .0049, and lowered my lease costs by about $2,000.
While it lowers your total lease costs, it won't lower your monthly payments as much as that $3,000 'down' (a.k.a. Capital Cost Reduction) will.

When you put money 'down' you are simply 'pre-paying' a portion of the total lease costs to lower your monthly payment for your own psychological happiness.

Also, when you pay cap cost reduction ('down') on a lease, every $1,000 will lower your monthly payment a bit more than the MSDs would. Every $1,000 on a 36-month, 12-thousand mile lease averages around $30-35 less in your monthly payment. For MSDs, every $1,000 in MSDs would, for example, average around $10 less per month in your total payment.

BUT your total overall costs of the lease go down.

I'm not taking delivery until today, and haven't signed all the official papers yet.

Do I have a right to tell them to apply the 3,000 as MSDs, and get the lower MF?
If you haven't signed the BMW Financial Services Lease Agreement, YES - you have every right to restructure the lease.

So you know, you can put up to seven (7) MSDs down on a BMW FS lease. If you are a first-time lessee, I believe that number goes up to eight (8).
 

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I'm also from the NYC area and received the base money factor. The thing is NY state does not allow MSD's to lower the money factor and living so close the NJ/CT which allows MSDs, I believe most NY dealers will give the base MF to try to stay competitive.

The MF is one of those things car salesmen love to slip in for lease negotiations, especially when you're placing MSDs down. Less prepared buyers wouldn't think twice about it.
 

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I negotiated a deal with a 3,000 down payment and no MSDs (didn't know about them at the time).

Shouldn't the dealer have told me that I could instead use the 3,000 as MSDs, and get a better MF?

If I applied the 3,000 as MSDs, it would have lowered my MF by about .0049, and lowered my lease costs by about $2,000.

I'm not taking delivery until today, and haven't signed all the official papers yet.

Do I have a right to tell them to apply the 3,000 as MSDs, and get the lower MF?

Thanks
No, a dealer is under no obligation to tell you about multiple security deposits, so I dont agree they are under any "obligation" to tell a customer about them. They are not for everyone, and some dealers dont like to deal with them (but usually will if you ask them to).

As for going back to them, if you have not taken delivery of the car, you can probably tell them you want to do the MSDs (and make sure that the money factor does not change as what seems to have happened to the OP hydrogen).

They might not be happy to "re negotiate" as it were, as that may be the angle they try to play with you.. but you should be able to tell them that you were not aware of the multiple security deposits, and you want to move the cap cost reduction to multiple security deposits. Keep in mind that cap cost reduction results in a lower "seeming" monthly payment (because you are pre paying part of the payments with the cap cost reduction)... so dont be surprised if you move to MSD and your payment goes up.

I would run the numbers through a spreadsheet / lease calculator to make sure they dont change anything else when you go back in there, and I would take the lease calculator with me.

As far as I understand, until you actually drive off the lot in that car, the deal is not fully closed so you should be able to do this... even if you signed a deal but did not take the car. If you DID take the car, you may be out of luck.
 

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Thank you for everyone's assistance.

What is the current (June 2016) BMW FS discount per Security Deposit? It was my understanding that it should be seven points (.00007) per SD.

Yesterday, I took delivery on a 2016 F30 328i Sport Line and was quoted a payment which came out to a MF of .00138 per my calculations.

I am a Tier 1 customer. I put down 7 Security Deposits for MSD reduction. Once I got home (my fault) and I calculated things out my final payment came out to be about $11 higher than it should have. I calculated out that the effective money factor is on my payment and it is .00106.

If I had been given the .00007 discount per SD, then based on this payment, the effective 'base' MF (without SDs) is .00155. I find this disturbing. If I was quoted an effective MF of 138 without SDs, then my effective MF with seven SDs should have been .00089 with an $11 additional reduction in total monthly payment.

This puts my effective return on my MSDs over the 36 months down to around 20% vs 30%. I believe they took my SDs for the back office (finance profit) and didn't honor the base 138 money factor to discount off of.

Thoughts please?

Thank you,
-Darius
You should be contacting the Finance Manager that did your contract ASAP to alert him/her to a "discrepancy" and that you need to re-contract. When they ask why, say that the MF is wrong and ask what they have in the system. Get them thinking about this NOW. The longer you wait, the harder it is to get traction.

Look in Section 9 of your lease contract. Line 9A3 is "Refundable Security Deposit." If it has the MSD total, then they've included it in the transaction. If it's zero, then they didn't.

And double check your calculations too. If you want to PM me the details of Section 9 and 13, I can break it down.

0.00138 is the base rate for June programs. If they used MSDs, then the rate is 0.00187, which isn't cashable by BMWFS.

Something seems amiss.

Michael
 

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The MSD program is capped at 7 "extra" security deposits.

The first SD is required for lower credit tiers OR is waived for repeat customers. Top Tier first-time clients can get that first SD waived.

You don't ever get an 8 MSD reduction.
 
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