[smitguy]

My wife and I are looking at ordering an X5 (for lease) from the local dealership, and, after a few test drives agreed over the phone to invoice +$500 and a $200 doc fee (the dealer's printed fee is $399). However, the dealer's write up of the deal has a couple minor issues that I wasn't sure about

(1) The doc fee has been raised to $399 and the selling price has been lowered to invoice +$300. On a lease, does this change net out as a wash?

(2) We have the $1000 Drive for Team USA discount and the $750 owner's loyalty rebate. The dealer is saying that he can apply the $1000 to the selling price of the car, but the $750 can only be used as a rebate and cannot be used to lower the cost of the car -- instead, he wants to use it as a credit against our MSD. I was hoping that the $750 would lower the price of the car enough get us below the next $50 security deposit threshold, which, I think would have the effect of lowering the amount we would have to put down by $350. Is there any other downside to the dealer's proposed set up?

Thanks in advance for the help.

 

[Kar Don]

I was able to stack both as a discount. For item #1 it will probably give you a lower payment and raise your upfront cost.

 

[miamiboyca]

My wife and I are looking at ordering an X5 (for lease) from the local dealership, and, after a few test drives agreed over the phone to invoice +$500 and a $200 doc fee (the dealer's printed fee is $399). However, the dealer's write up of the deal has a couple minor issues that I wasn't sure about

(1) The doc fee has been raised to $399 and the selling price has been lowered to invoice +$300. On a lease, does this change net out as a wash?

Thanks in advance for the help.

My understanding of leases (have done 8) is that this will have no effect either way for you. At the end it is the total capitalized cost, which is what you are paying. This would only matter if your residual was based on the selling price of the car, which with BMW it is not.

A dealer (with the right credit) could have you walk off the lot with only frist month payment and registration fees, but the other fees (loan Acquisition, Doc Fee, etc) will be added onto the price.

 

[smitguy]

Thanks for the replies. Because of the amounts involved, it does seem like it will be a huge deal either way, but I always get a little nervous when dealers start changing numbers after the deal has been agreed to.

Thanks again -- I appreciate it.

 

[mclaren]

The reason they did the doc fee thing was because this money is on every car and doesn't count in the gross profit. In other words, every car sold has a $399 doc fee period, the computer won't let them change it. This is used to partially pay the owner's alimony and child support.

 

[smitguy]

The reason they did the doc fee thing was because this money is on every car and doesn't count in the gross profit. In other words, every car sold has a $399 doc fee period, the computer won't let them change it. This is used to partially pay the owner's alimony and child support.

Thanks for the information -- I appreciate it.

 

[SARAFIL]

The reason they did the doc fee thing was because this money is on every car and doesn't count in the gross profit. In other words, every car sold has a $399 doc fee period, the computer won't let them change it. This is used to partially pay the owner's alimony and child support.

Well, mostly correct. The doc fee is programmed in the system, but it can be overwritten. They just don't want to do it.

But yes, you are spot on for the reasoning... the GM, VP, President, Dealer Principal, etc. are all pretty firm that the doc fee goes on every deal and it can not be negotiated down. If the salesman or sales manager says they will "eat it" or reduce it, they do so by taking additional discount out of the selling price.

I used to be very clear to customers back in the day if there was every discussion about doc fee... that number absolutely will not change, so if we agree to any arrangement it will be in the selling price. At the end of the day, all that really matters is the bottom line number anyway.

 

[SARAFIL]

(2) We have the $1000 Drive for Team USA discount and the $750 owner's loyalty rebate. The dealer is saying that he can apply the $1000 to the selling price of the car, but the $750 can only be used as a rebate and cannot be used to lower the cost of the car -- instead, he wants to use it as a credit against our MSD. I was hoping that the $750 would lower the price of the car enough get us below the next $50 security deposit threshold, which, I think would have the effect of lowering the amount we would have to put down by $350. Is there any other downside to the dealer's proposed set up?

Thanks in advance for the help.

Sounds like he is saying the $750 must show as a rebate and not as a credit "built into" the selling price. That's fine. He can go into his system and allocate that $750 as Cap Cost Reduction (which will do what you are looking for) rather than having it go towards drive-off fees.

 

[smitguy]

Sounds like he is saying the $750 must show as a rebate and not as a credit "built into" the selling price. That's fine. He can go into his system and allocate that $750 as Cap Cost Reduction (which will do what you are looking for) rather than having it go towards drive-off fees.

Great -- thanks for the confirmation -- really makes me much more comfortable about the deal.