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BMW 3-Series Lease Questions

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  • Help:
    I live in NJ and am interested in a 2006 BMW 325i 6 speed transmission. Options: folding rear seats, Xenon lights only.
    I've recieved a 36 month lease price of $532.06
    Out of Pocket: 2,090.36
    MSRP: 32,870.00
    Residual: 17,800.70
    Mileage: 20,000
    Can someone tell me if this is a good deal or can I do better? HELP.
  • Kirstie_HKirstie_H Posts: 10,907
    What was the purchase price? Are you paying MSRP, or were you able to negotiate a lower purchase price?

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  • Agreed Value: 31,355.00
    a) Gross Capital Cost 32,433.70
    b) Inception Fee Deficiency 0.00
    c) Adjusted Capital Cost 32,433.70
    d) Residual 17,800.70
    e) Depreciation Charge 14,633.00
    f) Rent Charge 4,521.16
    g) Total of base MP 19,154.16
    h) Lease Term 36
    i) Base MP 532.06
    j) Monthly Tax 0.00
    k) Personal Prop Tax 0.00
    l) Excise Tax 0.00
    m) Other Amounts 0.00
    n) Total MP 532.06

    Itemization of Amount Due at Signing
    a) Total Capital Cost Reduction 0.00
    -Cap Reduction (Cash) 0.00
    -Rebates 0.00
    -Trade-In 0.00
    b) Tax on Capital Cost Red. 42.00
    c) First Monthly Payment 532.06
    d) Last Monthly Payment(s) 0.00
    e) Refundable Security Deposit 550.00
    f) Acquisition Fee 625.00
    g) Gap Insurance 0.00
    h) Documentation Fee 75.00
    i) Monthly Tax (Upfront) 0.00
    j) Upfront Tax (not in Capital Cost) 0.00
    k) Service Tax (not in Capital Cost) 0.00
    l) Tire Tax (not in Capital Cost) 7.50
    m) Lic., Insp., Title, Reg. Fees 250.50
    n) Other Fees 8.30
    o) Total Due at Signing 2,090.36
  • kyfdxkyfdx Posts: 29,962
    1) The extra 5K miles/year is reducing your residual by $2250.. (15K miles X $0.15/mi.)

    Are you sure you'll need all of those miles? This raises your payment about $57/mo. over a 15K/year lease..

    2) Why is the cap cost almost $1100 higher than the agreed upon price? Are you rolling over some negative equity from a trade-in? If not, then this number troubles me..

    3) It appears that the dealer is using the base money factor, and acquisition fee.. The $1500 discount from MSRP is pretty good at this low price level..

    4) Sales tax isn't included in these numbers, right? Unless that is where the $1100 extra in the cap cost comes from..

    5) At 15K mi./yr, the payment would drop to $475/mo.

    regards,
    kyfdx
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  • Thank you so much!!!!!!!!
    Unfortunately, yes I believe I will need approx 18-20k. BMW offers to reimburse any unused miles (over 15k) so it seems cheeper to buy the additional 5k miles upfront versus at termination which .16/mile.

    I am not trading anything in at all. I'm not sure about the Capital cost number - ? but, Yes, the payment includes tax. These are total numbers.
  • kyfdxkyfdx Posts: 29,962
    If it includes tax, I'd assume that the Cap cost being higher than the selling price is attributable to that... And the rest of the numbers look great... I think it is a good deal..

    But.. If the cost at lease termination is $0.16/mi., and you are paying $0.15/mi. upfront... that isn't much of a savings... Actually, I believe the cost at termination is $0.20/mi... The $0.16/mi. is what you pay to upgrade during the lease term..

    You might consider signing up for 18K mi./year... That would drop your payment by about $20-$22 per month.. You can always reassess after 2 years, and then purchase any extra mileage needed for $016/mi. at that time..

    Because buying too many miles will quickly erode any savings you might get..

    Either way... you did well!!

    regards,
    kyfdx
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  • THANK YOU!!!!!!!! I really appreciate your very, very sound advice. I will consider 18k/year. Thanks again!
  • kyfdx,
    Thanks for your quick response and help! I got my black 06 325i yesterday and i love it! so many features youd never think of! Thanks again!
    By the way- to all those who dont know-
    if you lease a car through BMWFS and at the end of the lease you do not lease another car through them OR buy another car and finance it through BMWFS, there is a $350.00 charge! I thought this was outrageous and that I was getting screwed! anybody have any thoughts???
  • bdr127bdr127 Posts: 950
    if you lease a car through BMWFS and at the end of the lease you do not lease another car through them OR buy another car and finance it through BMWFS, there is a $350.00 charge! I thought this was outrageous and that I was getting screwed! anybody have any thoughts???

    Pretty standard fee with all leasing companies..... It's called a disposition (or disposal) fee. You're not getting screwed by this fee (at least not any more than anyone else who has ever leased a car). It's a way for the leasing company to cover their costs of selling/auctioning your car when you are done with it....
  • kyfdxkyfdx Posts: 29,962
    As bdr127 says, this is a standard fee on most leases.. Standard or not, those extra fees are irritating, and designed to either earn income or reduce expenses for the lending institution..

    In this case, the fee is designed to encourage you to purchase the car at lease-end.. That removes any residual risk for the bank.

    regards,
    kyfdx
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  • Hi atfryar. BMW Financial Services' money factors for leases with 12,000 miles per year are the same as its 15,000 miles per year factors, but its residuals for a 12K lease are 2% higher.

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  • I am glad that you find this discussion so helpful, Lady A. BMW Financial Services' Owner's Choice program is what is known in the industry as a balloon note program. There is nothing wrong with balloon notes, but they are much much less popular than leases. As a result, I do not personally keep tabs on manufacturers' balloon note programs. Sorry. I can tell you what this car's lease payment would be though if you want.

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  • Hello zman9. Let's take a look at your deal. The first think that I notice about it is that you are using the proceeds from your trade as a capitalized cost reduction for your lease. There's nothing wrong with trading a vehicle in when leasing, but you would be much better off having the dealer that you are working with cut you a check for your car than using the proceeds from it as a cap cost reduction. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is 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 and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for 330xu would be exactly the same, regardless of whether you had put $5,000 down, or had made absolutely no down payment at all.

    You mentioned that you are being given a $1,200 discount on this car. That's not bad, but given the fact that there is over a $3,200 gap between the full MSRP and dealer invoice price of a base 2006 BMW 330xi I would not be surprised if you were able to negotiate a bigger discount by shopping around. You may want to stop by the following discussion to see how much other community members have paid for similar cars lately: "BMW 3-Series: Prices Paid & Buying Experience".

    Let's calculate a lease payment on this car using BMW's actual base lease program assuming a $2,000 discount and no cap cost reduction from your trade and see what sort of payment we come up with. According to my calculations, if you were to lease a 2006 BMW 330xi with an MSRP of $44,020 and a selling price of $42,020 through BMW Financial Services right now for 36 months with 15,000 miles per year, your zero down, pre-tax monthly payment should be around $577.

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  • Hi igoose. One of the most important things to remember when leasing is that the selling prices of leased vehicles are negotiable, just as if you were paying cash or financing. I would be happy to give you an idea of what sort of lease payment to expect on this car, but in order for me to do so it would be a big help if you provided me with its full MSRP and an approximate selling price. You can get a good idea of how much you should pay for this car in your area right now by visiting the following discussion: "BMW 3-Series: Prices Paid & Buying Experience". Once you have these numbers, let me know and I will use them to calculate a lease payment using BMW Financial Services' current base lease program for you.

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  • Hi sj233. You are getting $1,500 off of this car's MSRP, which is a reasonable deal. Another good sign is that the dealer that you are working with is using BMW Financial Services' current buy rate lease money factor for this car, .00250, to calculate your lease payment rather than trying to mark your car's factor up to add additional back-end profit to your deal. I just estimated what your car's lease payment should be like using the prices that you gave me and I came up with a 36 month, 15,000 miles per year, zero down, pre-tax monthly payment of $529. As you can see, this is a little lower than the payment that you were quoted for a similar lease. One possible explanation for this would be if you were having your car's security deposit waived or were rolling BMW FS' $625 acquisition fee rolled into your car's capitalized cost instead of paying it at lease signing. If you are paying both of these items at signing, you need to find out why the payment that you were quoted is higher.

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  • Greetings luv2run. The selling price that you were quoted for this car is good, but the money factor and acquisition fee are not. BMW Financial Services' buy rate lease money factor for consumers who pay a security deposit at lease signing is currently only .00250. It appears to me as though the dealer that you are working with is marking BMW's base factor up to add additional back-end profit to your deal. This sort of practice is perfectly legal and happens all the time with luxury brand dealers, but it can usually be avoided by confronting the dealer that you are working with with the buy rate or by shopping around. The dealer that gave you this quote is also marking-up BMW FS' normal acquisition fee of $625 by $200. Make sure to negotiate this mark-up out as well.

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  • Hi speedy19. While dealers can add options or something called ADM (Additional Dealer Mark-up) they cannot pad vehicles' actual MSRPs. The full MSRP, including destination charges, of a 2006 BMW 325i is indeed currently the $31,595 that you were quoted. The selling price that you were quoted looks good to me. It is around $1,000 over invoice. The money factor that you were quoted looks good to me as well. It is in line with BMW Financial Services' buy rate factor for this car. I don't understand how the lease payment that you were quoted is so high though. Using the prices that you were quoted, I come up with a zero down, pre-tax monthly payment of around $422, assuming you pay an acquisition fee and security deposit at lease signing. The dealer that you were speaking with told you the truth, BMW Financial Services charges an acquisition fee of $625 on all of its leases. All consumers must pay this charge at lease signing, unless they agree to an increase in the money factor that is used to calculate their payment to have it waived or add it into their vehicle's capitalized cost. In fact, the dealer that you are working with was being good by not trying to mark this charge up. Many dealers pad it by a few hundred dollars to add additional hidden profit to deals.

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  • Hello ikmarco. You never mentioned the selling price of the car 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 car 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 give you my opinion on this deal if you let me know what its selling price is.

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  • Congratulations on your new car, speedy19. The $350 charge that you mentioned is known in the industry as a lease disposition fee. Many banks charge their lessees some sort of lease-end fee like this. BMW FS will waive this fee for consumers who lease another vehicle through them.

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  • isamu66isamu66 Posts: 12
    Speedy, where is this dealership/name of salesperson you got this deal from? Thanks,

    Charles
  • Kirstie_HKirstie_H Posts: 10,907
    From just above the message box:
    You may include the dealership name, city and state in your post. Please do not post names of salespeople, telephone numbers, email addresses, or other contact information.

    Please don't ask for names of salespeople - Thanks!!

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  • Car_man,

    If you chose to waive the $625 acquisition fee with BMW, roughly what would be the incremental cash cost over the life of the lease if you either capitalized it into the cost or went with the higher money factor? In other words, what would you recommend, pay it up front or not?
  • kyfdxkyfdx Posts: 29,962
    If you capitalize it into the monthly payment, it is $625/term.. For example $625/36 = $17.36/mo.. It will actually be slightly higher than this, as the $625 in the cap cost will be subject to the money factor.. Maybe add another $1.00-$1.50 per month to account for that....

    I always recommend rolling it into the payment, for the same reason that you wouldn't want to make a cap cost reduction...

    Rolling it in is cheaper than having it waived...

    regards,
    kyfdx
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  • I was wondering if this was a fair quote on a 36month/10000 miles per year lease:
    325 xi wagon
    msrp 40520 (including metallic paint, premium package, automatic transmission, heated seats)
    dest. charge 695
    shipping freight for shipping car from out of state dealer 800
    tax here is 6.25
    0 down, rolling taxes into the monthly payment
    paying only a security deposit and first month payment at delivery
    $681 per month
    Thanks
  • In case the wagon didn't work out (see above post), I also go a quote on a 325i 36mon/10000 mile lease. 30,900 msrp plus 1275 auto trans, 475 metallic paint, 75 sat. radio prep, 695 dest. charge for total 33420. Discounted to 32670. 0 down, rolling taxes and fees into the monthly payment.
    Paying only a security deposit and first month's payment at delivery.
    $572 per month.
    This seems a little high to me using a money factor of .0025 and a residual of 63%. Sales tax is 6.25%.
    Am I using the wrong numbers for mf and residual? Also, what would be a fair price?
  • bdr127bdr127 Posts: 950
    This seems a little high to me using a money factor of .0025 and a residual of 63%. Sales tax is 6.25%.

    .0025 is the base money factor for a 325i.... (i.e. dealer is making no extra money on you)
  • kyfdxkyfdx Posts: 29,962
    Did they say that they were using .0025 as the money factor? Because adding in the acquisition fee to the selling price of $32,670 gives you a cap cost of 33,295.. and a residual of 64%.. (63% is the residual for 12K/yr).. and using an MF of .0025, results in a payment of $468/mo. + tax...

    So, someone is making extra money somewhere.. I doubt tax could account for over $100/mo..

    If they are quoting 12K mi./yr, a residual of 63% and marking up the money factor the maximum to .0029, then the payment would be $498/mo.+ tax.. Still, far below your payment..

    I think you need to ask them what cap cost they are using to calculate the lease... and what is in it... There shouldn't be anything other than your selling price and acquisition fee ($625)... I'm guessing there is a lot more than that..

    regards,
    kyfdx
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  • I'm scheduled to pick up a 2006 330i on 02-Jan-2006 in Munich. This would put the contract date at the middle of Dec-2005 (14 days ahead of pickup).

    Does the 60-day period for locking in lease terms count backwards from the Delivery date (Jan-06) or the Contract date (Dec-05)?

    I'm doing a 3-yr, 12K/yr lease. The October program was a big improvement over previous months. If I can lock in 60 days ahead of the Contract date, I can do the Oct program. If the lock in is from Delivery date, I will have to wait for the Nov program.

    Also, anyone hear rumors yet on what the Nov lease programs will look like?

    Thank you!
    Jon
  • kyfdxkyfdx Posts: 29,962
    Lock it now... the lease program in effect at the time you have to pay for it, will be the one they use (December)... or, of course, October's program if it is better and you lock this month...

    regards,
    kyfdx
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  • Thanks for the reply. They did not tell me mf .0025 and 64% residual. I went back to the dealer and asked for specifically for the base mf and 64% residual and I'm currently waiting for a reply.
This discussion has been closed.