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2014 BMW 5-Series Lease Questions

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  • wassupbeewassupbee Posts: 8

    Hello, I am in the market to lease a 5 Series. I live in Alaska and there's only one BMW dealership so they are very hard to negotiate with. Any recommendations of BMW dealerships in WA or CA that have good lease deals? Thanks.

  • MichaellMichaell ColoradoPosts: 6,532

    @wassupbee said: Hello, I am in the market to lease a 5 Series. I live in Alaska and there's only one BMW dealership so they are very hard to negotiate with. Any recommendations of BMW dealerships in WA or CA that have good lease deals? Thanks.

    I would think that the Seattle, Portland or SF Bay areas would have several dealers to choose from. Keep in mind that any money saved in the deal up front may be cancelled out by shipping costs back to AK.

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  • wassupbeewassupbee Posts: 8
    @ Michaell. That's a valid point. I might try negotiating with the dealership in town, but they are quite hard necked. They make you pay 1k above MSRP... What the freak is that...!
    If I could get it from Seattle, I think the shipping cost might not be too bad.

    Could I ask a big favor please. I am new to the lease field.
    I read through most of the pages (14) but I didn't quite understand what was what. Everything was foreign to me. Would you be able to explain the important things to look out for in a lease. I understand that the MF is like the interest when purchasing a vehicle. How do I respond when a sales rep asks me how much I want to put down? As I was reading, it seemed like there were two types if down payments (drive off and cap cost). Sorry, I am a noob. Is it a good lease if the payments (down & monthly) do not go over the depreciation of the vehicle at the end of the lease?
    For example, if my payments (down & monthly) add up to 20k in 3 years, the depreciation of the vehicle must be 20k? Is that how it works? If I lease the vehicle at 50k and the residual value of the vehicle is 30k, it evens out?
    Thank You.
  • MichaellMichaell ColoradoPosts: 6,532

    @wassupbee said: @ Michaell. That's a valid point. I might try negotiating with the dealership in town, but they are quite hard necked. They make you pay 1k above MSRP... What the freak is that...! If I could get it from Seattle, I think the shipping cost might not be too bad.
    Could I ask a big favor please. I am new to the lease field. I read through most of the pages (14) but I didn't quite understand what was what. Everything was foreign to me. Would you be able to explain the important things to look out for in a lease. I understand that the MF is like the interest when purchasing a vehicle. How do I respond when a sales rep asks me how much I want to put down? As I was reading, it seemed like there were two types if down payments (drive off and cap cost). Sorry, I am a noob. Is it a good lease if the payments (down & monthly) do not go over the depreciation of the vehicle at the end of the lease? For example, if my payments (down & monthly) add up to 20k in 3 years, the depreciation of the vehicle must be 20k? Is that how it works? If I lease the vehicle at 50k and the residual value of the vehicle is 30k, it evens out? Thank You.

    Good questions you are posing.

    MF is indeed the 'lease charge' or interest rate for the money borrowed during the lease.

    Down payment can mean a couple of things in a lease. First, it can mean 'cap cost reduction', or money used to reduce the price.

    Second, it can represent the up front out of pocket costs - taxes, fees, etc. These can be rolled into the lease price but are often paid by the customer at the time of lease signing.

    You don't want to make a cap cost reduction - if the car is stolen or totaled, you are out that money.

    There are two components to a lease payment - depreciation and rent charge. Depreciation is exactly what it looks like - the difference between the selling price and the residual value (which itself is calculated by multiplying the MSRP by the residual percentage), divided by the number of months in the lease term.

    Rent charge is calculated as the sum of the residual and selling price, multiplied by the money factor.

    Add them up to get the pre-tax payment.

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  • wassupbeewassupbee Posts: 8

    @‌ Michaell Could you respond to my question about the monthly payment and down payment equaling the depreciation of the car at the end of the lease? Is it a bad lease if your payments are more than the depreciation? It seems like most leases' payments are more than the depreciation. Is this one of the flaws of leasing a vehicle or could this be worked out? Thank You. Could you show me how to do the calculation for the lease? The car I'm looking at is a 2014 535i XDrive with Driver's Assistance, Cold Weather Package, Navigation, and Premium package. The vehicle is priced @ $52,575. Do you think I could knock down the price more from here? With August's MF and RV, could you show me the calculations? I am tax-exempted so I do not have to worry about tax. Thank You.

  • MichaellMichaell ColoradoPosts: 6,532

    @wassupbee said: @‌ Michaell Could you respond to my question about the monthly payment and down payment equaling the depreciation of the car at the end of the lease?

    They won't, because you have to add the 'rent charge' (interest rate) to the base payment.

    Is it a bad lease if your payments are more than the depreciation? It seems like most leases' payments are more than the depreciation.

    Not necessarily - the two variables you have control over in a lease are the MF (don't let the dealer inflate the base MF on you, and use MSD's to lower the MF) and the negotiated selling price.

    Is this one of the flaws of leasing a vehicle or could this be worked out? Thank You. Could you show me how to do the calculation for the lease?

    There are lots of lease calculators on the internet.

    The car I'm looking at is a 2014 535i XDrive with Driver's Assistance, Cold Weather Package, Navigation, and Premium package. The vehicle is priced @ $52,575. Do you think I could knock down the price more from here?

    I'm not in the market for a 5-series, so I can't comment on whether you are getting an OK price, a good price or a great price.

    With August's MF and RV, could you show me the calculations? I am tax-exempted so I do not have to worry about tax.

    What is the MSRP? With that and the selling price, I can use the MF and residual to calculate a payment for you.

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  • wassupbeewassupbee Posts: 8

    @‌ Michaell I've come to an offer from a dealership in Georgia. The MSRP of the vehicle is $61,950 with the sales price being $52, The dealership approved of 7 MSD's. I would like to keep my monthly payment in the $400 or $500 range, how much would I have to put down? Thank You.

  • wassupbeewassupbee Posts: 8

    Also, could you explain briefly about the concept of MSD? I understand that it's to lower the payment, but then what's the difference between the MSD and Down payment? Thanks.

  • MichaellMichaell ColoradoPosts: 6,532

    @wassupbee said: @‌ Michaell I've come to an offer from a dealership in Georgia. The MSRP of the vehicle is $61,950 with the sales price being $52, The dealership approved of 7 MSD's. I would like to keep my monthly payment in the $400 or $500 range, how much would I have to put down?

    With an MSRP of 61,950 and a selling price of 52,000, using the adjusted MF of .00081 and RV of 61% (36 months, 12K miles), I get a payment of $467.47/mo.

    However .... Georgia has implemented an "ad valorem" tax, which I believe is 6.75% of the selling price, added on to the selling price. If I add that tax to the selling price ($55,510), the payment goes to $567.81.

    Also, could you explain briefly about the concept of MSD? I understand that it's to lower the payment, but then what's the difference between the MSD and Down payment?

    Multiple security deposits are used to lower the MF on the lease. The main difference is that the MSD monies are returned to you at the end of the lease, while down payment money is not.

    Every $1000 down lowers your payment in a 36 month lease by about $28/mo.

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  • crni123crni123 Posts: 12

    Hi everyone I am new to this so hope the post is correct. Trying to get some help on a lease

    2014 528i Premium Package Driver Assist M Sport Heated Seats

    MSRP $ 60,825 Selling Price of $52980 which includes 1500 USAA incentive.

    Is selling price a good price? Also I wanted to lease for 36 Months and wanted my payments under 500.00 with tax. my tax rate is 6%.

    What would i need to do with MSD to get me there. I would hate to have to put down money on a lease.

    Thank you for your help

  • wassupbeewassupbee Posts: 8

    @‌ Michaell
    I was just offered another deal by a dealership in NJ. MSRP: $62,575 Sales Price: $51,575 What would the monthly payment be with and without MSD? Also, the calculation above, how much money down is that? What's a decent amount for Down payment?

  • wassupbeewassupbee Posts: 8
    edited August 27

    @‌ Michaell
    They got some numbers for me. MSRP: $61,950 Sales Price with Freight and Doc Fee: 53,770 What's Gov't Fee: $514.00
    MF: .00091 RV: 62% ($38,409) Miles: 10K/Year MSD: $3500
    Down Payment $1,524.28
    Monthly Payment $475.72
    Does this look legit?

  • MichaellMichaell ColoradoPosts: 6,532

    @wassupbee said: @‌ Michaell
    I was just offered another deal by a dealership in NJ. MSRP: $62,575 Sales Price: $51,575 What would the monthly payment be with and without MSD? Also, the calculation above, how much money down is that? What's a decent amount for Down payment?

    Now you have me confused. Your first offer was from a dealer in GA; now you have one from a dealer in NJ?

    The tax implications are huge. I noted, GA taxes the entire purchase price up front. In NJ, they calculate the tax for the entire lease up front and it can either be rolled into the cap cost or paid out of pocket at lease inception.

    I would not make any down payment (AKA cap cost reduction) on a lease. You aren't saving any money, and if the car is stolen or totaled, you would lose that money.

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  • MichaellMichaell ColoradoPosts: 6,532

    @crni123 said: Hi everyone I am new to this so hope the post is correct. Trying to get some help on a lease

    2014 528i Premium Package Driver Assist M Sport Heated Seats

    MSRP $ 60,825 Selling Price of $52980 which includes 1500 USAA incentive.

    Is selling price a good price? Also I wanted to lease for 36 Months and wanted my payments under 500.00 with tax. my tax rate is 6%.

    What would i need to do with MSD to get me there. I would hate to have to put down money on a lease.

    Thank you for your help

    You don't mention lease term and miles per year so I'll assume 36mo and 10K.

    MF is .00130 and residual is 62%. With your MSRP and selling price, I get a pre-tax payment of $542.02. With 7 MSD the MF drops to .00081 and the payment goes to $497.59 (6% tax takes it to $527.44).

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  • @Michaell said: The tax implications are huge. I noted, GA taxes the entire purchase price up front. In NJ, they calculate the tax for the entire lease up front and it can either be rolled into the cap cost or paid out of pocket at lease inception.

    If I could chime in here, being that he is an Alaska resident and that the car would be titled and registered in Alaska, he would be exempt from paying GA's TAVT tax or New Jersey's upfront sales tax due to a commerce clause for out of state residents. The dealership should file a tax exemption form on his behalf.

  • crni123crni123 Posts: 12

    Hello everyone I am new to this but looking for help on a lease. Here is the information

    2014 528i Glacier Silver Metallic M Sport Driver Assist Premium Package Heated Seats Harman Kardon Sound

    MSRP $ 60,825 Selling Price $52,980 This includes a USAA BMW $1500.00 Incentive

    My question is this is $7845.00 off a good deal and if I was to lease this car what would I need to do to get my payment under 500 with tax included. My tax is 6%.

    Thank you for your help

  • kyfdxkyfdx Posts: 29,962

    @wassupbee said: @‌ Michaell
    I was just offered another deal by a dealership in NJ. MSRP: $62,575 Sales Price: $51,575 What would the monthly payment be with and without MSD? Also, the calculation above, how much money down is that? What's a decent amount for Down payment?

    You live in Alaska and you are shopping in NJ and Georgia for a new car? That seems like a big waste of time.. If you can't find a deal on the Pacific Coast, then you aren't trying hard enough..

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  • MichaellMichaell ColoradoPosts: 6,532

    @crni123 said: Hello everyone I am new to this but looking for help on a lease. Here is the information

    2014 528i Glacier Silver Metallic M Sport Driver Assist Premium Package Heated Seats Harman Kardon Sound

    MSRP $ 60,825 Selling Price $52,980 This includes a USAA BMW $1500.00 Incentive

    My question is this is $7845.00 off a good deal and if I was to lease this car what would I need to do to get my payment under 500 with tax included. My tax is 6%.

    Thank you for your help

    Look up about 3-4 posts .. I've answered your question there.

    May be difficult to get to under $500/mo with tax.

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  • cindyg3cindyg3 Posts: 1

    I'm new to leasing and I've been reading this forum for hours. Can you please tell me if this is a good deal?

    2014 535i xdrive Gran Turismo

    MSRP $72300.00 Sale Price $63000.00 36 months / 15,000 miles RV 59% MF .00015

    payment quoted is $794 per month with $1762.00 down which is initial payment and inceptions.

    Thanks for all your time and help!

    Cindy

  • MichaellMichaell ColoradoPosts: 6,532

    @cindyg3 said: I'm new to leasing and I've been reading this forum for hours. Can you please tell me if this is a good deal?

    2014 535i xdrive Gran Turismo

    MSRP $72300.00 Sale Price $63000.00 36 months / 15,000 miles RV 59% MF .00015

    payment quoted is $794 per month with $1762.00 down which is initial payment and inceptions.

    Thanks for all your time and help!

    Cindy

    MF is marked up from the base of .00130. $9K off sticker is a nice discount.

    There seems to be a bit of room to improve the deal.

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  • crni123crni123 Posts: 12

    Michaell Thank you for your reply. Would I assume that your answer is with no money down and just the numbers stated above or would I need to consider inceptions like 1st payment etc. Once again Thank you

  • MichaellMichaell ColoradoPosts: 6,532

    @crni123 said: Michaell Thank you for your reply. Would I assume that your answer is with no money down and just the numbers stated above or would I need to consider inceptions like 1st payment etc. Once again Thank you

    My calculations assume no cap cost reduction and that inception fees are paid up front at lease signing.

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  • mstein1mstein1 Posts: 3

    Hi I was wondering on your take on this deal on 535xi in NJ

    MSRP 63125 Selling price 55714 36 mos 733/mo with $4050 down (fees and taxes) no cap cost reduction. And the dealer is picking up 4 remaining payments of $780 ($3120) on my current MB E350 lease

    Thanks!

  • MichaellMichaell ColoradoPosts: 6,532

    @mstein1 said: Hi I was wondering on your take on this deal on 535xi in NJ

    MSRP 63125 Selling price 55714 36 mos 733/mo with $4050 down (fees and taxes) no cap cost reduction. And the dealer is picking up 4 remaining payments of $780 ($3120) on my current MB E350 lease

    What lease term and how many miles per year?

    "Picking up the 4 remaining payments" - you might be leaving money on the table with your trade. It has a specific trade value and a specific payoff. The dealer could be low balling your trade by paying off the remaining payments. There could be more equity in your trade - use the tools here at Edmunds to determine the trade value; also use the "Real World Trade in Values" discussion to get an expert value on your trade. And, contact MBFS to determine the current payoff.

    Knowledge is power.

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  • mstein1mstein1 Posts: 3

    Hi Its a 36 mos lease and 15k per year. Thanks.

  • MichaellMichaell ColoradoPosts: 6,532

    @mstein1 said: Hi I was wondering on your take on this deal on 535xi in NJ

    MSRP 63125 Selling price 55714 Its a 36 mos lease and 15k per year. 733/mo with $4050 down (fees and taxes) no cap cost reduction. And the dealer is picking up 4 remaining payments of $780 ($3120) on my current MB E350 lease

    Base MF is .00130, and residual for 36/12 is 61%.

    With your MSRP and selling price, I get a pre-tax payment of $480.98.

    NJ calculates the tax for the entire lease up front, which you are paying at inception as part of the $4050 out of pocket.

    I'm wondering if the remaining payments on your current vehicle are being added into your new lease - that would add about $87/mo to my number above, but still much less than the $733/mo you were quoted.

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  • mstein1mstein1 Posts: 3

    Hi to clarify its 36/15. I called MBFS and they basically said that the current payoff would be the 4 payments of $780. So it does appear that the BMW dealer is putting the MB $3120 into the new BMW monthly lease. Now I am really at a loss on next steps, thanks again for the assistance here.

  • MichaellMichaell ColoradoPosts: 6,532

    @mstein1 said: Hi to clarify its 36/15. I called MBFS and they basically said that the current payoff would be the 4 payments of $780. So it does appear that the BMW dealer is putting the MB $3120 into the new BMW monthly lease. Now I am really at a loss on next steps, thanks again for the assistance here.

    Whoops, I didn't see the mileage in your original post. RV drops to 59% and the pre-tax payment increases to $505.64.

    I'm not sure I buy what MBFS is telling you. Ask them what it would cost if you wanted to buy the car outright now, not when the lease ends in 4 months. That's the payoff. Then use the pricing tools here at Edmunds - or the Real World Trade in Values discussion - to get a value on your trade. The delta between those two numbers represents the positive or negative equity you have in your car now. If negative, then that amount would be added into your cap cost. If positive, then you can use that equity to help offset some of the up front costs of the new lease.

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  • maxman8maxman8 Posts: 8

    Hey everyone, I'm seriously considering moving forward with an E class, but I'm trying to also get a competitive lease deal on a 528i x drive (MSRP $54 and change).

    I live in NY (sales tax 8.6%) and am wondering what kind of deal I could get. Ideally, I'd like to put no more than $3,000 down, and would like to stay as close to $500/month as possible.

    Also, is a 27 month lease possible, or a good option with BMW?

    Any help would be appreciated.

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