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BMW 5-Series Lease Questions

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  • Hello kevhollywood. The first thing that I noticed about your lease is the large down payment that you plan on making. 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 your 530i would be exactly the same, regardless of whether you had put $3,000 down, or had made absolutely no down payment at all.

    Another problem that I have with this deal is that the money factor that you are being charged on this car is way too high. BMW Financial Services' current buy rate lease money factor on the 2006 530i is only .00175. This means that the dealer that you are working with is marking-up your car's money factor to add additional back-end profit to your deal. This sort of practice is fairly common amongst BMW dealers, but usually can be avoided by comparison shopping or confronting the dealer that you are working with with your vehicle's actual buy rate. Using BMW's actual base lease program for this car and the prices that you provided in your post, an MSRP of $57,990 and selling price of $54,495, I come up with a 36 month, 15,000 miles per year zero down, pre-tax monthly payment of around $704.

    Car_man
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  • Thank you so much Car Man. This information is EXTREMELY helpful. I nearly got ripped off!
  • I am looking at a lease on a black on black 545 with...

    Sport Pkg
    Premium Sound
    Cold Weather Pkg
    Auto trans.
    Sat Radio
    Heated Rear Seats
    Sun shades

    The dealer is telling me that although the 545 is an outgoing model... that demand is still very high... also the supply is now very limited. With that in mind, what type of amount off of MSRP (around 65k) should I try and negotiate? Based on above messages... I will definitely be sure to get the .0010 money factor. What monthly payment should I be looking at if I can negotiate down to something like 62k)? I am in So.Cal. Thanks!
  • I know people who have recently gotten the 545 for about $1500 over invoice. Your dealer is full of crap and is trying to bamboozle you into overpaying. If I were in your shoes, I would call sales manangers at all area dealerships and offer something in the vicinity of $1500 over invoice. I guarantee you, they will sell it to you at that price. The key is to talk to multiple dealers. If you somewhat cannot get into that price range, try dealers who is not in So. Cal. I live in the NYC area and, to save $$, I have sometimes leased cars from dealers outside of the NYC metro area, such as in Central Pennsylvania. Well worth the extra drive if you can save big $$.

    Also, you do not need to go into the dealership to negotiate the deal. I have done all of the negotiations and paperwork via phone and email. Being inside the dealership gives them the advantage over it and the negotiations then occur in more of a pressure cooker environment. The phone and email keep things fairer and at arms length.
  • Car_man, my dealer is alleging that .00175 base rate is only available to returning BMW lessees and that the buy rate for my lease will actually be .00190. Do you know if this true?

    Thanks.
  • It seems as though your dealer is bumping up your money factor the required .00015, in lieu of you making a security deposit.. Some returning lessees aren't required to make a security deposit, so he is somewhat correct in the way he worded it....

    However, if you make a security deposit (your payment rounded up to the next $50 increment), then you can get the same base rate... If you don't make a security deposit, then the base rate is indeed .00190

    regards,
    kyfdx
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    Moderator - Prices Paid, Lease Questions, SUVs

  • Thanks for the info 540dude. The dealer has come down to $2500 over invoice... for now. Additionally, the .0010 money factor is only for returning customers... unless you put down a security deposit. The thing is... they are telling me that they have to actually trade for this car from another dealier in central Cali... and that they will incur shipping expenses. Is it feasible to think that a loaded 545 black on black is no longer available in LA? Seems strange to me that there are not at least a few left. I have called a few dealers though... have only found one... and it did not have the sport package I definitely want.
  • Well you have made some progress but $1500 over invoice is the target. If I were you, I would call Sales Managers at dealers all over the state. You'll get your price. Try dealers outside of car-crazy So. Cal., where demand for the 545 is highest.
  • "they are telling me that they have to actually trade for this car from another dealier in central Cali... and that they will incur shipping expenses. Is it feasible to think that a loaded 545 black on black is no longer available in LA?"

    It's certainly possible, but dealer exchanges happen all the time. And it's no big deal...someone from Dealer A gets in the car and drives it to Dealer B, trades for the desired car (with a check for any price differential), and then drives back to the original dealership. I did a few for extra $$$ when I was in college (what fun to drive brand new Audis!), but trust me, the expenses are negligible.
  • You're very welcome, kevhollywood. I'm glad that I was able to help you out.

    Car_man
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  • HI alzadol. I am not personally all that familiar with what the market is like for the 2005 BMW 545i right now, but you may be able to get an idea of how much you should pay for this car by visiting the following discussion: "BMW 5-Series: Prices Paid & Buying Experience". Once you have an idea of what you should pay for this car, feel free to stop back and I will be happy to estimate what your lease payment should be like on it for you.

    Car_man
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  • Hey kevhollywood. What your dealer said is sort of true, but not exactly. BMW Financial Services will waive its lease security deposit requirement for returning lessees. As a non-returning lessee, you have to pay a security deposit equivalent to your vehicle's monthly payment rounded up to the nearest $50 to get the .00175 factor. If you want your car's deposit waived, its money factor will be .00015 higher.

    Car_man
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  • Thanks for the info Car_man. One more question for you (well, actually, 2). Do you know the respective residual rates on a 2006 530i for a 36 month lease at either 18K miles/year or 20K miles/year?

    Thanks.
  • My 94 325i has seen better days and on its way to junkyard. I have been looking for a 'deal' and open to either buying or leasing any 00 and up used 5 series.
    I just talk to a guy who is trying to get out of his 03 525i lease. Apparently, he put 7K down to keep the monthly to $399. The car is a base model, 5 speed, Titanium Silver and has 175xx miles. The lease allows only 10k/yr and expires in Jan'07.
    Here is the dilemma: I like the fact that both lease payment and mileage are really low and the car will be under warranty throughout the duration if I were to assume his lease. Bad part: He supposedly got hit on the left rear door and BMW put a brand new door for him. I'm worried if there had been any structural damage. There is a pair of very very tiny (but visible) dings from other peoples' doors on the front passenger door. It is only a base model.

    The payoff on the car, right now, is $288xxx - which I think, is over the real market value especially considering the accident showing up in Carfax report.

    Initially, I thought it was a great opportunity - I didn't have to put any down payment (other than $450 to BMW leasing to transfer).. but now I'm not too sure.

    Any help/input is highly appreciated. Thank you in advance.
  • That is a pretty good deal, if you are just going to lease the car, and then turn it in at the end of the term.... Assuming you can stay under the mileage requirements...

    But, if the payoff is almost $29K right now, that is not a car that you want to purchase.... even after 15 more payments, the payoff will be way more than it is worth...

    So, if you want to drive it until the end of lease, go for it... But, if this is a car you want to own long term, the price is too high..

    regards,
    kyfdx
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    Moderator - Prices Paid, Lease Questions, SUVs

  • Kyfdx, Thank you for your advice. I think I misspoke when I said the pay off is about $29k..its actually $24858 as of 10/13/05. Is it still pretty bad of deal to buy it (I'm actually partial to leasing)?
    Also, BMW said they cant do anything to renegotiate the mileage/yr term..but they have something called 'mid term mileage negotiation'. One must have at least 9 more payments remaining to participate in that program..it reduces per mile cost to $ 0.16 from $0.20.
    What is your take on that..? Thank you.
  • Well... $4000 makes a big difference...

    How many more miles are you going to need? I am familiar with the mid-term mileage adjustment... It isn't a bad deal, as long as you don't buy any more miles than you will use....

    At that price, I'd take a chance on it.... start out leasing... take it to the end of the term and see what happens.... It may be a decent buy at that time..

    The seller should be able to tell you the residual value at end of lease.. I'd be very interested in knowing what that is..

    regards,
    kyfdx
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    Moderator - Prices Paid, Lease Questions, SUVs

  • You're welcome kevhollywood. 15,000 miles per year is the highest mileage allowance that BMW Financial Services publishes residual values for. If you need to drive more than that 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.

    Car_man
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  • drtraveldrtravel Posts: 395
    Need to know the residual and money factor for 12K and 15K per year - 3 years.

    Thank you
  • dar63dar63 Posts: 3
    Good Morning Car_man,

    I am in the middle of negotiating my 4th BMW-and need some help determining the best deal. This may get a little long-but would appreciate your advice.

    I have dealt with the same RI dealership for the prior 3, and have returned for the 4th time. I currently have a 42 month lease, 12,000 mile for a 2002 525it-which I pay $650 a month (including a 7% tax) is coming to end. The car is in great shape-however, it has 55,500 miles-and exceeds my mileage allotment. The car has a 23,935 residual value-and the salesman is telling me that the car can not be re-certified by BMW (a fact that I checked with BMW-and is correct) and disqualifies me from a program by which BMW will payoff the last 3 payments of the car. So he is going to give me a deal of a life time-take me out of my station wagon-which he claims has no resale value for BMW dealership and put me into a brand new 2006 525ix Sedan -12,000 miles. One more note-I have 5 more payments of $650

    Sales Price $48,720
    Fees 1,910 (Doc fee $75, Gov't fees $195, 1st payment $777 and acq fee $800)
    downpayment 2,500
    MF .002
    residual 62% 30,206
    Trade #1 20,000
    Payoff 23,124
    Payment 777 (including 7% RI Tax)

    He has financed my fees-but I would like to pay cash for me fees. Does this all sound reasonable?? In addition, I went in asking for a 530xi--was told there is very little difference between a 525xi and 530xi-is that true??

    What facts would I need to know for negotiating a 530xi (i.e. MF, residual)-
This discussion has been closed.