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2013 and earlier BMW 7-Series Lease Questions

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  • blckislandguyblckislandguy Posts: 1,150
    edited September 2010
    As I mentioned above, I've always been a buy and hold kind of guy but now my CPA firm has me convinced that leasing--and expensing to my company-beats the much slower buy and depreciate route. So, I checked out leasing a 7 Series with the intention of buying it at the end of the lease.

    As far as I can tell, every one agrees on two things.

    1) BMW residuals are articificially inflated. Buying a BMW at the end of the lease is going to be an above-market price transaction. Translation: you, a loyal BMW customer, are going to pay more for your soon to be off lease car than the guy who walks in and wants to buy your car. Thank you very much, BMW.

    2) Everyone also agrees that you don't want to own a 7 Series that is out of warranty. So, if you want to buy your car at lease end, you will want to have it CPOed to get the added warranty. This is going to cost you roughly $2500 for the paperwork and the remedial work.

    All in all, while maybe leasing for business owner is a good deal, BMW makes it harder than they have to if you want to buy the car at end.

    A question for the house. We all know that some options are more valuable down the road than others. When they compute residual values do they recognize this? For example does the $6000 M Package have more resale value than larding the 7 Series up with $6000 worth of random options. Saying it differently, does spending $600 on a "ceramic" coating of the I drive knob really have any residual value at all???
  • In general (with BMWs), almost any option on the Monroney sticker is fully residualized.. Almost anything added by the dealer is not...

    Moderator - Prices Paid, Lease Questions, SUVs

  • blckislandguyblckislandguy Posts: 1,150
    edited September 2010
    You know, this whole leasing thing is beginning to hurt my head for several reasons. There seem to be no end to the fees. Moreover, BMW 7 Series option pricing is a suckers game. I think because most 7 Series cars are leased, often by people with advance degrees after their name but not much business savvy, they think " what the heck, just roll the added cost of an option into the lease payment". As a result the cars that are here on the ground are loaded with options of dubious value.

    Want an example? The "Premium Sound" package for $1800 adds a couple of speakers, a woofer, Sirius radio and your mobile phone is "prewired." I have never seen a 7 Series without this. Whats the big deal? Well, those three speakers and a woofer just cost you $66 per month for your three year lease. (Who needs a 'prewired phone' when you can hold your cell phone in your hand?).

    Or maybe, the car you like has the Luxury Seating package? Again, I have never seen a new 7 Series in New England without this $2000 gem. This option has a massage feature, some ventilation, and a button to push that does something to the bolsters. I figure that the average owner will use these features exactly once, unless he lives in South Texas and really needs the ventilated seats. Again, for a $2000 option you are going to pop $66 bucks a month on a three year lease.

    Now, don't get me started on my last example. For $600 BMW will ceramic coat the I Drive knob. The fact that you hardly understand how to work the I Drive is beside the point. This little bit of coating is going to cost you roughly $40 per month for 36 months.

    What is particularly galling about this, is that the Aurtomatic Roll Stabilization , the one option that you probably should pop for I have never seen available on a dealer's lot. While it was standard on many 2010 750's , BMW decontented the car and it is now an option. But because it probably doesn't sell well, the dealers don't order cars with it . (Notice how all the Bimmers tested by the car books have this option.)

    You want to drive a 7 Series? Tell them to bring one in with zero options. You'll be happy to wait 6 weeks just on principle. Tell them that you didn't build your business or professional practice by being a dummy. Tell them that you would be mortified if a colleague ever said to you, "Bernie, you are paying $40 a month for a coating on a knob you can hardly use?. Don't you remember when we came back from Vietnam and went to school on the GI Bill that we rented a house off campus for $40 a month?"
  • Hi mrhoni. BMW does not offer support on 60 month leases. The longest its special lease money factors are available for is 42 months. That's really the longest that anyone should lease a BMW for.

    BMW FS' current 42 month buy rate lease money factor for the '11 740i is .00210. That's equivalent to an interest rate of around 5%.

    BMW is providing 1.9% conventional financing on the 2011 7-Series right now. For whatever reason, its lease program just is not as aggressive at this time.

    Car_man
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  • jimmy24jimmy24 Posts: 10
    Dear Car Man,
    All the discussion on residuals and factors hurts my fat head. In dummy terms, what is a reasonable payment on a 2011 750i for either 36 or 42 months w 15k/year? Thanks,J
  • nik11nik11 Posts: 8
    In TX - Is this good deal ( I ahve been working wiht local dealer)- 2011 740i Sapphire Black with M sport package for $74,500 (before TT&L) - will likely lease (15,000K and 36 months)just trying to finalize price first.

    Have perfect credit what would be fair monthly price on this and what is a good money factor?

    Also having dilemma choosing wheels - like the 19 inch on M sport (only reason going with the M package) but also considereing the 19 inch radials or 21 inch ferric grays. Any downside with 21 inch on the 7 series?
  • Any downside with 21 inch on the 7 series?

    Massive tire replacement cost?

    Moderator - Prices Paid, Lease Questions, SUVs

  • I know what you mean, jimmy24. Still if you don't understand how leasing works, it probably would be in your best interest to check out the following informative articles on the subject that are available here at Edmunds.com: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment.

    In short, the easiest way to get a good deal on a leased vehicle is to shop around for the lowest possible selling price and then have the dealer that you decide to go with calculate your vehicle's monthly payment using its buy rate lease money factor.

    If you provide me with the MSRP and approximate selling price for the 750i that you're interested in I would be happy to use BMW's current lease program to work up a payment for you.

    Car_man
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  • nik11nik11 Posts: 8
    Car_man,

    I am in process obtaining black 2011 740i with 19 inch radial spoke wheels only- MSRP $72,800 the selling price $69,600.

    What would my payments be using the current BMW lease program (I have perfect credit).
  • Hi nik11. Let's crunch some numbers and see what we come up with.

    According to my calculations, if you were to lease a 2011 BMW 740i that has an MSRP of $72,800 and a selling price of $69,600 through BMW Financial Services right now for 36 months with 15,000 miles per year, your zero down, pre-tax monthly payment would be around $1,052.

    Car_man
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  • nik11nik11 Posts: 8
    Car_Man,

    Thanks. No dealer Houston giving me buy rate even with near perfect credit score. Offering .00265, with multiple security deposits can get it down which i will do, maybe 4 deposits to around .00222.

    Also in TX so tax on whole purchase price of car adds 120$ a month to payments as well. After all taxes included getting price $1210.

    The money factor rate is getting me.

    Is the deal worth it, do you think incentives may improve Nov/Dec?

    Also do you think I should maybe negotiate on car on the lot trying to get to same net cap cost, because this month there is tax credit which will save me 4300$ or so and car with hiugher MSRP/residual will also help bring down payments.?

    The monthly paymeny price not that big issue with me just want to know I am getting a good deal or not befor I pull the trigger, thanks.
  • Car-Man,

    Any chance you have the MF and residual for a 3 year lease of a 740i, 12k miles per year? I believe the figures for October were .00210 and 57%, but I am guessing that the numbers were recently updated (for November)? Also, it appears that there currently is a $2,500 cash back incentive. Do you think I could realistically negotiate the purchase price down to the invoice price, given this incentive -- that is, even if the dealer gives me the car at invoice, do they still end up with $2,500 profit with respect to the lease?

    Thanks much.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,518
    edited November 2010
    Hi nik11. To me, the ideal deal on this car would be the use of the buy the lease money factor and a selling price of around $1,000 over invoice. This may not be possible in your area. Have you tried shopping around? Shoot for a deal as close to this as possible.

    OH by the way, BMW just introduced a $2,500 cash incentive on this car for the month of November. This cash should enable you to negotiate a much more attractive selling price than you were able to get last month.

    Car_man
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  • I certainly do, zellamsee. BMW Financial Services' November buy rate lease money factor and residual value for a 36 month lease of a 2011 740i with 12,000 miles per year are .00220 and 54%, respectively.

    You're correct, BMW did just introduce a $2,500 holiday credit on this car. Make sure to take this cash into account during your negotiations. That means that the dealer would indeed make $2,500 on a car that it sold at dealer invoice.

    Car_man
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  • nik11nik11 Posts: 8
    Car_man,

    Thanks. I did just do the deal. I used extra $2500 incentive plus the $3200 of MRSP that I negotiated initially so got 2011 740i with only upgrade of 19 inch wheels radial spoke sapphire black for $67100. The lease is for 15K/36 month but residual dropped to 52% and MF for any dealer in Houston is .0025. I will buy this down for sure, of course they added 1200$ in fees (acquisition included and doc fee) and something called phantom footprints for 290$ that they say is required comes with all cars. Pre tax around $1090

    In TExas so pay 4300$ taxes upfront rolled into car, hopefully when all said and done monthly payment including taxes wil be 1200$
  • You're very welcome, nik11. Texas taxes are wild. I've never heard of phantom footprints before. Did the dealer explain what it is? Window etching?

    Anyhow, congratulations and enjoy your awesome new ride!

    Car_man
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  • I just got back from the dealership. 2011 750i. msrp 94775 reduced 6500 to 88275.

    2500 down.

    54% residual on 36month/36 mile lease
    .00260 factor.

    w/ tax (7%) monthly payment is about $1540/month.

    is this a good price or do I need to shop around? I bought my last car so not in a big hurry. is there a "best time" of the year to lease a bmw.

    thanks for all your help.

    Jimmy
  • When you say $2,500 down... does that mean as a down payment plus inception fees or total out of pocket?? I come up with a .00210 money factor and you should be capping the car at about $83,641.00. Brings the payment to $1,274.07 with an out of pocket of $2,384.38 plus plates. Thats a 36 month term with 12,000 miles per year. What state are you registering the car in?
  • Thanks for the reply. it is the 750iL. I put 750i before.

    I understood it to be a downpayment. i'd still have to pay the first month's lease payment. I'm in Georgia and the tax for the county is 7%.

    As an aside, I was shopping the deal and another salesman said just tell me what options you want so told him I really only want the luxury front seats, rear camera and bigger rims. Told me car would "have to be made" and would be just under 92k and that a 36 month lease w/ 12k/year is $1352 (includes 7% tax). He was giving the $2500 rebate and another 6k off that so i guess around an $84k car. (I didnt assk for residual, money factor etc so cant give to you.) Sounded like a good deal but won't do anything w/o your blessing.

    Here's another question. If i go w/ the above, he says he has to order and it will take 6-8 weeks to get here. It doesn't seem to be an unusual package. Is that normal? is he telling me that b/c none on the lot and he doesn't want to pay to ship one from out of state? could i offer to pay that costs and if so, what would it run?

    sorry for all the questions, but youre an awesome source to make sure i don't screw this up.

    Jimmy
  • Feel like I have fair offer on 750iL w luxury seating, camera and iPod only. Salesman says can't find so has to order which will take 4-6 weeks. My question its not a difficult (metallic silver) color or options and is he just not wanting to pay delivery? Is that a bargaining issue for me or can I pay to have it shipped now instead of waiting 6 weeks? If so how much would it coats me or dealer on average? Thanks.
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