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Discussion Starter · #1 ·
I did a research in the forum but not really see any recent post on this topic.

A few questions here:

- Does BMWFS still have this payment option available these days?
- Can I then have zero MF?
- Do 7 MSD's still work or help under this situation?
- If the car were totaled during the lease term, would insurance company cover the lose 100%?

Bottom line, what's the major advantage/disadvantage of doing one-pay lease?

Thanks!
 

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Try a search, a lot has been asked and answered.

-lower MF in some cases, but not all
-no, the MF is not zero
-no, can not use MSD
-kind of, the unused payments get credited back but not any that you have already used up.
 

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There isn't much talk on it and I've asked plenty of times.

You get .0008 off of the standard MF, which isn't always the same as the MF for leasing. Right now it seems to be.

No MSD's.

Sometimes the sales support rate with MSD's is lower than the standard rate with the .0008 off, so it makes no sense.
 

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Discussion Starter · #4 · (Edited)
The lowest/minimum Money Factor (MF)

So, assuming if I can take the 0.0009 reduced rate under current loyalty program, the actual and final MF would be only 0.0001?
 

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So, assuming if I can take the 0.0009 reduced rate under current loyalty program, the actual and final MF would be only 0.0001?
The Onepay rate is not .0009.

It is .0008 off of the standard non sales support MF. Depending on model, on some models that is .00195 right now, so MF is .00115.

You have to ask a CA is the current OLP MF reduction is applicable to a one pay lease. A onepay lease is not usually available with other MF reductions. In this case, you get a lower MF by using the OLP and MSD's. If you can't take the OLP MF reductions on onepay, you can usually take the OLP cash.
 

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how does this work if the vehicle is involved in an accident and is subsequently totalled? I Assume BMWFS will cut you a check for the difference?
Nope. You'll get whatever the insurance company determines the FMV of the car to be at the time, less what's owed to BMWFS. Which means you're going to be out some cash. Possible quite a bit of it.

The arguments in favor of the 1-pay lease just aren't compelling given that risk IMHO. Other opinions may well vary. :)
 

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Nope. You'll get whatever the insurance company determines the FMV of the car to be at the time, less what's owed to BMWFS. Which means you're going to be out some cash. Possible quite a bit of it.

The arguments in favor of the 1-pay lease just aren't compelling given that risk IMHO. Other opinions may well vary. :)
BMW leases include GAP insurance coverage. Any sales people care to comment.
 

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Nope. You'll get whatever the insurance company determines the FMV of the car to be at the time, less what's owed to BMWFS. Which means you're going to be out some cash. Possible quite a bit of it.

The arguments in favor of the 1-pay lease just aren't compelling given that risk IMHO. Other opinions may well vary. :)
Incorrect.

You're thinking of a large cap cost reduction.

A onepay is calculated with a MF, payments totaled and payed up front. Everything else is just like if you paid those reduced payments over the lease term.
 

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Nope. You'll get whatever the insurance company determines the FMV of the car to be at the time, less what's owed to BMWFS. Which means you're going to be out some cash. Possible quite a bit of it.

The arguments in favor of the 1-pay lease just aren't compelling given that risk IMHO. Other opinions may well vary. :)
Incorrect.
I think he's right. I was just researching single pay leases last week, and that issue was always cited as the most significant risk. According to the articles I read, a one-pay lease is a capital reduction large enough to lower the payment to zero. If the car is stolen or totaled during the lease, you still owe BMW the residual. The sum of the residual plus the amount paid at the inception of the single pay lease might be greater than the insurance claim, depending on when the loss occurs. And I don't think the gap insurance helps.

Here's my source.

Excerpt:
If your car should be stolen or destroyed in an accident, your insurance would pay only the current market value of the vehicle, not the total amount you have invested in your lease. You would stand to lose a large chunk of your up front cash payment, the same loss you would incur if you had paid cash for your car.

Contrast the above total-loss situation with a normal monthly payment lease - no pre-payment and no down payment. The lease company picks up financial responsibility for the difference between what you still owe on the lease and your insurance settlement. This is known as "gap" coverage and is automatically included in most leases. You would lose nothing except your insurance deductible. This is one of the good benefits of car leasing with little or no down payment.

Gap coverage, even if included in your pre-paid lease, provides no benefit to you. It does not cover your cash losses. This risk is greatest in the early months of a pre-paid lease, and lessens as the lease nears its completion.
 

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I don't think that's right. When you have a 1 pay lease you are paying the rent charge, interest, and tax all at once. If the car is destoyed the next day they can't keep the interest. I think you would lose the tax which is considerable.
 

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1oz perception-1# obscure
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I don't think that's right. When you have a 1 pay lease you are paying the rent charge, interest, and tax all at once. If the car is destoyed the next day they can't keep the interest. I think you would lose the tax which is considerable.
That's a good point, and I bet it would depend on the terms of the contract and the structure of the lease. Technically, in a single-pay lease, the only interest in the payment should be against the residual. I suppose you would still owe that.
 

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Lots of misinformation here guys. Once again, if you don't know how it works, you shouldn't assume unless you are being very clear that it is just your guess. People that don't know better will make a bad decision if they rely on your misinformation to be true.

The payment on a one-pay lease IS NOT CAP COST REDUCTION. BMW calculates a "monthly payment" using the discounted MF and you pay all of those "payments" upfront. They get applied to your account one month at a time. If the car is totaled, you will get reimbursed for any unused monthly payments. i.e. car totaled 10 months into 36 month one-pay lease, you would get 26 months worth of your payment back. Note that it is not your original one-pay amount divided by 36 months and multiplied by 26... as your one-pay amount also included fees like acquisition fee, doc fees, registration, etc.
 

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That's a good point, and I bet it would depend on the terms of the contract and the structure of the lease. Technically, in a single-pay lease, the only interest in the payment should be against the residual. I suppose you would still owe that.
also wrong. not how BMW calculates a one-pay.
 

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1oz perception-1# obscure
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Lots of misinformation here guys. Once again, if you don't know how it works, you shouldn't assume unless you are being very clear that it is just your guess. People that don't know better will make a bad decision if they rely on your misinformation to be true.

The payment on a one-pay lease IS NOT CAP COST REDUCTION. BMW calculates a "monthly payment" using the discounted MF and you pay all of those "payments" upfront. They get applied to your account one month at a time. If the car is totaled, you will get reimbursed for any unused monthly payments. i.e. car totaled 10 months into 36 month one-pay lease, you would get 26 months worth of your payment back. Note that it is not your original one-pay amount divided by 36 months and multiplied by 26... as your one-pay amount also included fees like acquisition fee, doc fees, registration, etc.
That's great news and I am happy to be wrong. I will point out, though, that my assertions were not "just a guess" and that I did cite my source. It simply appears that BMW's leasing policy in this regard is different from the industry standard which led that author to write the article.

While we're at it, what's your source? Do you have a BMW on lease?
 

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That's great news and I am happy to be wrong. I will point out, though, that my assertions were not "just a guess" and that I did cite my source. It simply appears that BMW's leasing policy in this regard is different from the industry standard which led that author to write the article.

While we're at it, what's your source? Do you have a BMW on lease?
My source is a very good one...

Assistant Sales Manager at BMW dealer, 2005-2006
Pre-Owned Sales Manager at BMW dealer, 2006-2007
Sales Manager at MINI dealer, 2007-2009

Have leased many BMWs. Did a one-pay lease in 2009 that I turned in a few months back. Worked the deal myself and know exactly how it was calculated. And had my statements every month to prove the info I gave above.

:thumbup:
 

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1oz perception-1# obscure
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Not asserting otherwise. Just pointing out that you were advising me to cite my slice without doing so yourself. Again, I'm happy to be wrong.
 

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Not asserting otherwise. Just pointing out that you were advising me to cite my slice without doing so yourself. Again, I'm happy to be wrong.
no worries.

Bottom line, the one-pay can be an alternative for a cash buyer that typically only keeps cars for 2-3 years. You get the perks of the lease (big one being the walk-away benefit with no resale value risk) and your cash outlay is only a portion of paying for the entire car. But, there is still interest... on a $60k BMW, that could be about $3500-$4000 for a 36 month term.
 

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