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BMW X3 Lease Questions



  • I was feeling lucky: On a 24-month, 12,000-mile-per-year lease, I got a quote of $500 over invoice on a 2006 X3 (MSRP $38,470, invoice price $35,250, quoted purchase price $35,750).

    I said I'd pay up front for taxes, which would be $1,788 in Maryland (5% of the purchase price, even on a lease) plus fees, which they said would be $1,674 ($299 for tags and title service, $825 acquisition fee, which they called "standard," and $550 security deposit). This would make my initial payment $3,462, leaving a cap cost of $35,750, the same as the quoted purchase price.

    I then got their monthly payment quote: $503. For residual value, they said they were using BMW's "standard" 73% of the MSRP, which would be $28,083, and .0023 for money factor (5.5% interest), even though I mentioned that another dealer used .00205 (4.9%).

    Well, using these numbers, I came up with a $37 per month discrepancy--in their favor, of course. The monthly payment should be $466. So, unless I'm missing something (am I?) they're using a higher cap cost, lower residual percentage, or higher money factor. My money's on the latter, as $503 would be the payment on a .002875 money factor (6.9%).

    I want to call them on it and enjoy the great price they "offered," but wanted to know what the proper money factor should be. Should it be .00175? And what about the acquisition fee? Is it inflated? What do you recommend I do?
  • kyfdxkyfdx Posts: 27,704
    This doesn't look right... But, I have some ideas..

    I added up your $3462, but I don't see a provision for the first lease payment.. Something tells me that there is no security deposit, but there is a first payment, and possibly sales tax on the acquisition fee?

    Using these numbers, I too, get a payment of $466..

    The only way to get to .0023 for the money factor, is to mark up the base rate the maximum (.00175 + .0004), and then add the .00015 for the security deposit waiver..

    Did they break down all of the upfront numbers as you've shown? Or did you extrapolate this from their offer? Also, are they saying that the Cap cost is the same as the purchase price, or are you just assuming that it should be?

    As you've already discovered, something doesn't add up..

    It should look like this:

    $38,470 MSRP
    $35,750 Selling price
    $35,750 Cap Cost
    2yr/24K lease
    Residual 73%
    Money factor .00175
    Payment $432/mo.
    Due at signing: Tax, 1st payment, $450 security deposit, $625 (base) acquisition fee, $299 tags
    About $3600 total..

    If you roll the tax and the acquisition fee into the cap cost..
    $38,163 Cap cost
    Payment $536/mo.
    Due at signing: 1st payment, security deposit, $299 tags.
    About $1385 total.

    They did give you a great price.. maybe too great.. I doubt they would make this deal on an '06 model, without marking up the money factors and fees...

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  • jrynnjrynn Posts: 162

    basement wrote that the deal IS on a 2006. What in the numbers prompts you to think that the deal s/he is describing is on a 2005?

    (Not that I necessarily disagree with your thought that a $2750 discount on a 2006 sounds high. Unless "lease" pricing is better than "purchase" pricing, in the MD/VA/DC area, several dealers I've spoken too about an X3 buy are quoting discounts in the $1900-$2100 range.)
  • kyfdxkyfdx Posts: 27,704
    I didn't say that I thought it was an '05... I just mentioned that with that big of a discount on an '06 model, they are likely going to make up the money somewhere else..

    In other words, the big discount is most likely dependent on the marked up money factor..

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  • check out these 3 senarios..

    SCENARIO #1 (w/security deposit)
    36 months
    12000 miles allowed annually
    $41,895.00 MSRP
    $40,500.00 Selling Price
    $25,974.90 Residual
    .00175 Money Factor
    $550.66 Monthly Payment
    $600.00 Security Deposit
    $128.50 Tag Fees
    $2,500.00 Total Due

    SCENARIO #2 (w/o security deposit)
    36 months
    12000 miles allowed annually
    $41,895.00 MSRP
    $40,500.00 Selling Price
    $25,974.90 Residual
    .00190 Money Factor
    $543.42 Monthly Payment
    $0.00 Security
    $128.50 Tag Fees
    Total Due $2,500.00

    both on a 06 x3 automatic transmission
    metallic paint
    premium package
    cold weather package
    heated steering wheel
    xenon headlights
    satellite radio preparation
    privacy glass
    $41,895.00 MSRP

    and finally this one:
    24 months..10K/yr
    Black Sapphire with Beige
    leather, Premium pkg., Automatic, Heated Steering Wheel, Heated Seats,
    Xenon Headlights, Satellite Radio Prep., and Privacy Glass for an M.S.R.P. of
    $41,645.00 and a selling price of $41,000.00 for $538.31 per month with $3946.81 down.
    It is a 73% residual and a money factor of .00175.

    they all sound high. opinions??
  • Our 8+ month old 2005 BMW X3 is one of my wife's favorite cars EVER (and she and I combined since 1977 have had 28 Audis and 2 BMW's -- take a deep breath that did include several company cars that were Audis.)

    She got the 3.0 with the 6spd manual and

    Cold Weather
    Sound system upgrade
    Bi Xenons
    Sat Nav
    Chrome tail pipe extensions
    In car built in/removable Sony Ericsson T637 Bluetooth and mounted phone.
    BMW specific (dealer sold) Kleen Wheels

    And probably a couple other things I forget right now.

    MSRP including shipping and the three accessories mentioned above ~$47K; we put $250.00 down (for the Servotronic), sec dep and got a 36 month 15K per year lease including tax (state of Ohio) for $581/mo.

    We custom ordered the car, it took 7 weeks to come in -- black gloss (at the time the bumpers ONLY came in black, now they are body colored) with the Terracotta Leather Sport seats and the light birch wood.

    We have had the wiper blades changed once, it has over 13,000 miles on it and we have had to add one pint of oil during this period of time. Picked up the car in May 2005, car was built in April 2005. Only other visits to dealer are for weekly free car washes Starbucks and choc chip cookies avail to all customers all day Saturday.

    I assume there are changes in the 2006's beyond the dressed up bumpers.

    We thought the vehicle with the 5spd auto was adequately powered as the transmission seemed to hunt a lot (Cincinnati is the city of "7 Hills.") With the 6spd manual it was a blast and the mileage is good (~24 highway around town; in the city ~20; on long trips over 25mpg even with the A/C on.)

    Regrets: we didn't get the home link transmitter option (didn't know it didn't come with it); we didn't get the privacy glass option (the only one we've seen without it is ours); AND MAYBE the power folding mirrors, but frankly this has never been a problem so for $350 or whatever, we might re think that one.

    Encourage others to: ORDER the car with SERVOTRONIC it is "only" $250 and it transforms the steering and feeling you get via the wheel. It was here in Cincinnati a sold order option only. Beats me why. The stock sound system is lame. The upgraded system with Sat Radio and the single CD in dash is very nice.

    It is a BMW -- it is NOT based on a truck. It is NOT really an off road vehicle. It rides higher than a BMW sedan and has a firm suspension. It handles, therefore, like a somewhat taller sport sedan from Germany -- the ride is firm, at slower speeds on a "washboard" surface the sensation can be one of being jostled. This happens, to us here in Pot Hole Central, less than 5% of the time.

    This is a relatively quiet vehicle, but there is a bit less isolation than in a similar Lexus -- some people love this (my wife) some don't want to hear or feel the road -- hell, some don't even want to see the road. The X3 needs a slight upgrade to the material covering the dash. This has not been and I suspect it will not be a durability issue, it is an appearance issue. It seems to look better in black which hides the coarse pebble grain of the dash.

    With a high contrast interior, like Terracotta, it is not really too much of an issue, but for $47K you'd think they would take a page out of the book of the 3 series or from an Audi A4 for Pete's sake.

    Confidence inspiring is what my 50 year old lawyer wife says after 3 Audi TT 225HP coupes and a dozen Audis of various ilks since her first Fox in 1979.

    She likes being slightly higher off the road and the feeling of the X drive when we have one of those nasty but brief Cincinnati Snowstorms (luckily only 1 this year.)

    Hope this helps if you are a shopper at this moment in time. The deals, too, seem to be quite good as the residual (subvented or not, who cares?) on these cars seems impressive.

    Drive it like you live.

  • Thanks for taking the time to post such a detailed message about your lease, markcincinnati. I'm amazed that you've had over 28 Audis :surprise: . What made you switch to BMW? Did you just get sick of them or did you get a bad one?

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  • Hi,
    I wanted to ask your opinion on the deal I am considering here in NY:
    X3 White/Terracotta 2006
    Premium Package, Heated Seats, Privacy Glass
    The MSRP comes to $40,220
    The lease I was quoted was
    36 motnth/10,000
    $495 per month before taxes
    $3,495 due at signing ( including 8.25% NY sales tax)
    Does it seem fair?
    I want to get as low as $470 per month, do you think it is reasonable?
    Also, in general do you get a better pricing when you buying off the lot, or when ordering and waiting 8 weeks?
    thank you, appreciate your comments.
  • Looks like with the current demand for sedans so high (up 10% over 2004) no great deals are currently offered on a 3-series sedan (325i or 330i)and I am looking to switch to an X3 when my 330i lease runs out next month, and I had two questions:

    1. Has anyone moved from a 3-Series to a X3 and what did you like and not like after the switch that you had not predicted, and

    2. What are the current lease terms for February - I am looking for a 2 year 15K a year lease or possibly a 20K miles a year lease.

    Also, my lease is up in March and the current programs only last through the end of February, any thoughts on gambling on a better rate in March versus doing a deal this month? The rates seem to have gotten better in February from January based on the nominal offer on bmwusa's web site.

    Thanks for any thoughts!

  • Wish I could help...I'm looking too. My salesperson is reluctant to reveal anything and I'm getting irritated. I think I am getting a reasonable deal, but her attitude is turning me away. All she will tell me is my total payment and the Purchase price, no down payment, no 1st payment, No deposit. The purchase price includes a navigation system I don't want and she has told me I won't have to pay for because it's the only one they have that has all of my other options. That tells me she is not so honest. I have sent her an email asking for all of the specifics but not sure what to watch for in her response.
    I am looking for 36mos/15K/PremiumPackage.

    Also, what is the "Prepay amount" that they did specify in the info sheet she gave me?
  • Hey there,

    I moved from a 2002 325Ci Coupe to a 2005 X3 3.0 last year after my lease was over. Considering I had the Sports Package on the 325 I still like the ride of the X3. It handles very well for its height, it has more interior space, and the huge sunroof is great.

    I don't know if the 2006 received an upgrade to the interior or not but it is not as good as the 3.

    If you want to know more let me know.

  • Hi Michael. You never mentioned the selling price of the X3 that you are interested in leasing. This is an important number for you as a consumer to know for two reasons. First, the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. Without knowing the price of the truck that you want to lease you don't know how good a price you are getting it for. The second reason is that one needs the selling price of a vehicle that they want to lease is that it is necessary to calculate its lease payment. I would be more than happy to work give you my opinion on this deal if you let me know what its selling price is.

    Generally speaking, dealers usually prefer to sell vehicles that they already have in stock to ordering them. The logic behind this is that when they sell a unit that they already have, they can stop paying floorplan interest on it. Plus, a lot can happen between the time that a consumer orders a vehicle and they take delivery of it. If you drive off in something that is in stock, they know that you won't back out of the deal like you can with an order.

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  • Greetings Peter. According to the latest information that I have seen, if you were to lease a 2006 BMW X3 through BMW Financial Services for 24 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00125 and 60%, respectively. 15,000 miles per year is the highest mileage allowance that BMW publishes residual values for. If you need to drive more than this, you will have to purchase additional miles on a per-mile basis. It is less expensive to do so at lease signing than it is to wait until lease-end and have to pay an excess mileage penalty.

    It is difficult to say what BMW's March lease program on the X3 will be like. BMW just enhanced its lease program on this truck for the month of February. If I had to make an educated guess, I would say that its lease program for it will probably be about the same next month. Again, it is tough to say what will happen for certain though. A lot of what BMW does will depend upon how its February sales turn out.

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  • Hi mariab. Please see my previous message for the money factor and residual value information that you are interested in. I'm not sure what the "prepay amount" that was on the info sheet that you were given means. Perhaps it is the amount due at lease signing. BMW Financial Services charges lessees their vehicle's first month's payment, a security deposit equivalent to that payment rounded up to the nearest $50 increment, a $625 lease acquisition fee, and any other required state fees or taxes at lease signing. You can have your truck's security deposit waived in exchange for an increase of .00015 in the money factor that is used to calculate its lease payment.

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  • Car_man, thank you for reply; I see what you are saying
    The selling price quoted was 39,800.
    So:X3 White/Terracotta 2006
    Premium Package, Heated Seats, Privacy Glass
    The MSRP comes to $40,220 ; Selling Price 39,800
    The lease I was quoted was 36 motnth/10,000
    $495 per month before taxes
    0 down
    $3,495 due at signing ( including 8.25% NY sales tax)

    This seem high to me especially with this month deal;
    what is reasonable monthly payment I can bargaain for?

    thank you
  • kyfdxkyfdx Posts: 27,704
    My first reaction to your deal is that you aren't getting nearly enough off of the MSRP... $420 discount... A decent deal would be at least $1000-$1500 less.. Which would equate to a payment that is $30-$45 lower per month...

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  • After much research on the internet and e-mails to BMW car dealers, I got the following written lease information on a X3 2006 premium pkg, black exterior and light leather interior. $299.00 for 24 months with $4,500 down. The $4,500 includes first month's payment and $625.00 acq. fee.
    Sales tax of $977.83,$45.00 Doc fee and $10.00 inspection fee are extra. The lease is for 12,000 miles per year, two year and .20 per extra mile. Total amount due at inception, $5,844.31 Total cost $12,721.31. Is this a good deal?
  • billmvbillmv Posts: 145

    In a prior post of yours you made the following statement: "...if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through..." The implication is that the lessee's obligation to the bank/lessor is then extinguished, and everybody walks away with no further obligation on the part of the lessee.

    I have always operated under the impression that my insurance company would pay me the value of the vehicle at the time it was stolen, and then I would have to settle up with the lessor, which may or may not fully satisfy my obligation under the lease. The fact that they will pay off the BALANCE of the lease is surprising. Since the value of a vehicle theoretically drops most quickly right after the vehicle is sold, doesn't that put the insurance company in the position of potentially having to pay more to a lessor than they would if they had to pay someone who owned their vehicle free and clear, if the theft occurred early in the lease, rather than toward the end, when the balance owed and the value converge? I just can't believe they would take this additional exposure on willingly.

    I don't know how the lessors compute the remaining balance on their leases at any given point in time, but if it's anything like a normal loan payoff there would definitely be a gap between the balance owed and the value of the vehicle. So you pay a little extra for "gap insurance" if it's not already built in to the lease rate to protect against just this situation.

    My wife leased her car through a private leasing company, and they passed the bank's gap insurance fee ($125) through to her (at no markup, unlike the Mercedes dealer would have done if she had leased through them).

    Can you enlighten us all on this, please? Is this something that BMW FS agrees to do (take the amount offered by the insurance company) that is different from other lessors?

    Thanks! By the way, great intel on MFs, promotions, timing and other nuances of how to tailor a BMW lease to your needs.
  • Sorry about the previous blank message.

    Anybody every try one of the free lease quote sites? This one is attached to a site selling lease analyzing software.

    Wanted to see if anyone had any experience. might just try them to see. Thanks, Tom.
  • Car_man,
    I've been talking to a few dealers about leasing the 2006 x3. They keep quoting a money factor of .00165 indicating it is based on a "buy rate" of .00125.

    What is the difference between the two? Or, is one just the rate from BWM and the other the rate after their markup?

    Does the dealer have the option of reducing/eliminating the markup on the "buy rate"? (i.e. is it a negotiation point).

    Also, they all keep quoting me an acquisition fee of $825 (vs the $625 I've seen here) and one dealer quoted a 60% residual on a 36mo/30K mile lease (even after I asked why it wasn't 63% as quote on the board...his response was "BWM has one of the highest residual values" so if feels like I'm getting the runaround).

    Any input regarding how to get the dealer down to the "buy rate" and higher residual value would be greatly appreciated!

    Thanks for your help!
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