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Discussion Starter #1
Does anyone remember/know what the MF discount is for pre-paying a lease? I think it was .00020 but I am not sure.

Also, I believe gap insurance is still in play even if you pre-pay and should something happen where the car is totaled, you would get the remaining payments back.

I havent done the math to see if it even makes financial sense but I remember there was a MF discount.

Thoughts?
 

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Does anyone remember/know what the MF discount is for pre-paying a lease? I think it was .00020 but I am not sure.

Also, I believe gap insurance is still in play even if you pre-pay and should something happen where the car is totaled, you would get the remaining payments back.

I havent done the math to see if it even makes financial sense but I remember there was a MF discount.

Thoughts?
I dont remember what the discount was.. .00020 sounds familiar but I have never pre paid a lease so I dont know for sure.

One point to consider, would be that (I believe) if you pre pay a lease, you are not eligible for any sort of pull ahead programs etc near the end of your current one. They will not refund you any monies for example, so no pull ahead. You are taking that lease to the complete term.

For that reason alone, the lease can cost you 2-3 extra months in a particular car you may not have intended. I am not positive of this, but seem to remember reading it, and also checking the information in various pull aheads ( like the one you recently spoke about) I think it mentions pre paid leases are not eligible.

1. This loyalty payment waiver offer is valid for qualified customers who turn in their existing BMW Financial Services NA, LLC financed or leased BMW Model Year 2013 or 2014 3 Series, or BMW Model Year 2014 4 Series, (excluding 1, 2, 5, 6 and 7 Series, M's, Z's, and X Series SAVs, Alpinas, BMWi and Certified Pre-Owned leases) that are subject to either an existing OwnersChoice balloon financing or an existing 24- to 60-month BMW Financial Services NA, LLC ("BMW FS") lease contract maturing between November 1, 2016 and April 30, 2017. Existing pre-paid, extended, and re-lease lease contracts are not eligible. Eligibility also depends on the condition of your BMW and is subject to dealer inspection and approval. Consult your BMW Center for complete details.

2. Qualified customers need to lease or finance a new or Certified Pre-Owned BMW vehicle through BMW FS by no later than October 31, 2016. All new lease and finance contracts are subject to credit approval; not all customers will qualify.

3. Offer applies to no more than three of the scheduled monthly payments that have not been paid on the existing contract. If you have made one of your final three payments within 10 days of taking advantage of this promotion, you may be eligible for a refund of that one payment. Existing eligible OwnersChoice balloon financing or lease contracts must be in good standing and may not be past due or otherwise in default. To qualify for this offer, an existing BMW financed through OwnersChoice balloon financing must be turned in (re-purchased by BMW FS) pursuant and subject to all applicable terms and conditions of the OwnersChoice balloon financing contract; customer is responsible for any remaining balance due. Offer is non-transferable and is valid from October 1, 2016 through October 31, 2016. This offer is only available at BMW Centers participating in the Full Circle Retail Program; see your BMW Center for complete details.
 

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Discussion Starter #3
Thats a good catch on the pull ahead restriction.

If it is only .00020 discount then its not worth it - thats about $20/mo difference or about $800 for the life of a 36 month lease.
 

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It's .0008 but against what ? The base rate we hear is a subsidized rate. The non-subsidized rate is higher. For example a while ago the subsidized base rate was .0013 and the non-subsidized rate was .0018. So at that time a prepay was .001. Then for a while BMWFS changed and used the subsidized rate for prepays, i.e. .005, which was a great deal. I think BMWFS made a mistake because shortly they went back to using the higher rate on prepays. Incidentally the way you calculate a prepay is just do a normal lease using .0008 off the money factor then multiply by the number of months.
 

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Discussion Starter #5
Good point. Forgot about the non subsidized rate.

It was more of a curiosity than anything else. I wonder what's the use case for someone wanting to prepay - I guess there could be some savings but doesn't sound like it
 

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Yes it's 30 basis points now. You're better off taking the multiple security deposit route as it saves you more money AND you hang onto your cash.

The 80 point rate reduction that lasted about 6 months was AWESOME.
 
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