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MINI Cooper Lease Questions

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  • qbrozenqbrozen Posts: 17,285
    leasing isn't even an option when comparing these choices. If you choose to finance, you'd most likely have equity after 3 years of payments, vs nothing at the end of the 3 year lease. As you suspect, the MF in the Mini lease deal is just not favorable in the least.

    I know nothing of their balloon note, but if you have to buy it at the end, it doesn't seem like such a good option. What is the rate on the balloon note? If its a very low rate, then MAYBE it could work in your favor if you are careful.

    My personal opinion is to finance it. As long as the residuals stay ridiculously high, as they have been since the car was introduced, you'd at least be building equity pretty quick.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • miniloverminilover Posts: 2
    Picking up my mini today. Have been quoted MF of .00435 for 15K miles on a selling price of $29349. They are charging me a bank fee of $850. The MF seems to relate to an APR of 10.44%!!!!
    When I do my own lease calcs (using something I got off the internet) my payment should be about $439 (incl CA sales tax at 8.25%.
    the payment they quote (oh sorry...6500 down) is over $500.
    I can't figure why the big difference.
    And reading the above postings, seems like I am being screwed.
  • mattinlamattinla Posts: 7
    I thought Mini's MF's were more in the .0038 range (9+%)...I paid an $800 bank fee. But $6500 down resulting in an over $500 payment seems like you are being screwed.
  • mattinlamattinla Posts: 7
    It's true that you build equity if you finance, and if you lease, you are basically renting. However, if you have certain types of jobs (esp. self employed), there are situations where your lease payment is a tax deductible expense. Check with your accountant.And if you don't plan on keeping your car for a long time, leasing can make sense over financing anyway.
  • qbrozenqbrozen Posts: 17,285
    That's true ... if you are dealing with decent leasing rates. But if leasing will cost you more than financing, and you can't take a deduction, it doesn't make sense. This seems to be the case being discussed here since the leasing rates being offered by Mini are not favorable.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • kyfdxkyfdx Posts: 28,475
    You could put $6500 down, and probably have a payment around $500/mo. for 60 months... With the re-sale on a MINI, you would probably even build equity (maybe a lot of equity) over the next three years... You would certainly get your $6500 back out of it, after paying off the loan.

    Something that you wouldn't get back on the lease..

    regards,
    kyfdx

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • miniloverminilover Posts: 2
    Any idea if different dealers charge different money factors?
  • qbrozenqbrozen Posts: 17,285
    well, its not necessarily what the dealer is charging, its the banks they work with. So, yes, if different dealers are using different banks, the rates can be different.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • saabgirlsaabgirl Posts: 184
    If you can take your car payment as a tax deduction leasing may make sense. But for everyone else, as your example shows, it's probably financially nuts, especially for a hot car.

    In this case, you shovel in $6500. Then you shovel in another $500 per for X months. At the end, they keep all the money and you give them back the car. Nonono.

    My .02 is that someone in this position should examine their options far away from the showroom floor and from any marketing propaganda.

    If you must have a Mini, finance the base model trying for a down payment as close to 50% of the total deal as you can manage. Work the phone and Internet to find the best rate. Then, even if you do stretch out the payments, you'll have equity in the car which will protect you if you change your mind a year or two down the road. Plus, you can complete the loan early by paying every third week instead of every fourth week. (Or if you've found a really good rate, you may decide there's no reason to pay early, esp if interest rates go up.) But it will be your choice.

    Applicable cliches: 1) A car is your biggest non-appreciating expenditure, so you need to understand where your best interests are, 2) For most buyers, leasing is a sucker's game, 3) You will lose any negotiation unless you are willing to get up and walk away, 4) Even after you have numbers that seem okay, say, "I need 12 hours to think about it."

    You know the little voice that says you must have something, and you need to make the sales person think you're a good guy? Well fire it. He's probably cost you a fortune already.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Wow, minilover, the money factor that you were quoted is really bad. Even though BMW is not providing any sort of lease support on Minis right now, its standard lease money factors are a lot better than that. BMW Financial Services' current buy rate lease money factor for consumers who lease a Mini and qualify for its top credit tier is actually around .00385 and for consumers who qualify for the next tier down it's .00310 - .00315 or so. BMW FS' exact standard money factors vary depending upon what part of the country one is in. Your money factor for this car should be much better than this unless your credit is in really rough shape.

    Furthermore, $6,500 is way too much money to put down when leasing. If your leased vehicle is totaled in an accident or stolen and never recovered that $6,500 will just disappear. If you have that much money to put down on your lease, you would be much better off using it to make additional security deposits. Each additional deposit that you make, up to seven additional, will reduce your car's money factor by .00007.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi mattinla. See my previous post for info on Mini's money factors. As far as their acquisition fees go, BMW FS charges an acquisition fee of $625 in most states. If you are asked to pay more than this, there is a good chance that the dealer you are working with is trying to mark your car's factor up to add additional back-end profit to your deal.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    The reason why you are seeing different dealers quote different money factors for the same car, minilover, is because dealers are allowed to mark banks' buy rate money factors up to add additional back-end profit to deals. This is why it is important to find out what the buy rate is for the vehicle that you want.

    Car_man
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  • I'm leasing a 2006 Mini with an MSRP of $21,700; the adjusted cap. cost (wish I knew what this was!) is $22,448. I'm in Washington State. The lease is for 15K miles/year for 36 months. I'm putting $1,500 down, the lease factor is .00320, and my total payment comes out to $363 (base monthly rental of $332.70 + 9.1% tax). Is this an ok deal? Is anything here negotiable? Thanks!
  • qbrozenqbrozen Posts: 17,285
    hmmm... well, do you know what they are selling the car to you for? Adjusted cap cost COULD include fees (bank fee, doc fees, DMV fees). But all of that would add up to more than $748. So either they are selling the car below MSRP and then adding all fees, OR they are only accounting for some fees in the adjusted cap, OR they are charging you over MSRP and it takes no fees into account.

    You also want to find out what of that $1500 down is actually going towards cap cost reduction.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • Here's the information that they gave me when I asked for the lease terms:

    MSRP: $21,700
    L.E.V. %: 68%
    Lease-End Value: $14,756
    Lease term: 36 mos
    Documentary fee: $35.00
    Initial Cap. Cost: $22,150
    Cash Cap. Reduction: $527.29
    Total Cap Reduction: $527.29
    Total Add Cap Cost: $825
    Adjusted Cap. Cost: $22,447.71
    Lease factor: .00320
    Base Monthly Rental: $332.70
    Monthly Tax: 9.1%: $30.28
    Total Monthly Payment: $362.98
    Security Deposit: $400
    License Fee: $124.25
    Cap Reduc. Tax: 9.1%: $47.98
    Amount Due at Start: $1,500
    Customer Cash Down: $1,500
    Total Sales Tax: $1,138.06
    Total Working Cash: $1,500
    VSC Tax Rt/Amt: 8.8%
  • qbrozenqbrozen Posts: 17,285
    oy vey. I'm lost. Hopefully someone who understands all of this better will chime in.

    I'm not clear on what is going on here. I would think your initial cap cost is the selling price, but why is it $450 over the MSRP? Are they charging you over MSRP? Or is that MSRP excluding destination? Destination, however, is $550. Hmmmm... So are they giving you $100 off the car, then adding destination? Or are they overcharging you $450 for the car? This is the question I am unable to ascertain by looking at this list of numbers. What did the sticker on the car say? The sticker should have included destination.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • qbrozenqbrozen Posts: 17,285
    And here's something else, if i put all this into Edmunds lease calculator (found here: http://www.edmunds.com/apps/calc/CalculatorController?pmtcalAction=lease_calc), I get a payment of $306. Keep in mind, I used the MSRP up in the top as the selling price.

    something else i just noticed, though. What is this additional 8.8% VSC tax thing at the bottom of your list??

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • qbrozenqbrozen Posts: 17,285
    Only thing I can definitely see here is that they are charging you $22975, making $972 of your downpayment vanish, and then taking the remaining $527 of your downpayment off the cap cost.

    Your total fees listed here are:
    $35 doc fee
    $400 security deposit
    $124.25 license fee
    *********
    $559.25 total

    What about an acquisition fee?? I don't see that anywhere. Let's say, out of good faith, we estimate that the $972 they made disappear out of your down payment is going towards all of these fees (including the elusive acquisition fee).

    If that's even the case, then why the heck is the cap cost $1275 above the MSRP?? I would have thought that was all the fees, but apparently its not.

    I'm not an expert by any means, and maybe there is an explanation for all of this, but what I'm seeing so far does not look right at all.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • kyfdxkyfdx Posts: 28,475
    It looks like they are charging $450 over MSRP..

    The $825 is the acquisition fee.. This is marked up $200 over the base fee of $625.

    If you add up all the other fees, 1st payment and security deposit, they come to about $970.. So, $1500 upfront minus the $970 is the $530 cap cost reduction.. Subtract this from the $22,150 selling price, then add back in the $825 acquisition fee, and the numbers match..

    I even get the same payment, down to the penny..

    Now.. I don't know the base money factor (Car_man would)... but, I'd bet that it is marked up, just like the acquisition fee...

    To recap...

    $450 over MSRP for the selling price..
    $200 markup on the acq.fee
    Maybe a marked up money factor..

    Actually, this is typical for a MINI lease..

    If it were me (and it isn't), I'd rather buy the car.. Even at that selling price, once you add 9% tax and the fees, the payment would be around $440/mo. for 60 months, if you put down the same $1500.. and got a 6% APR on the loan.

    Just my $0.02
    kyfdx

    MODERATOR
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  • qbrozenqbrozen Posts: 17,285
    Well, at least I knew it was wrong. ;)

    where do you come up with $970 fees, though? I'm missing $50 somewhere.

    Your total fees listed here are:
    $35 doc fee
    $400 security deposit
    $124.25 license fee
    *********
    $559.25 total
    $362.98 first month
    *********
    $922.23

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • kyfdxkyfdx Posts: 28,475
    From memory... I'm too lazy to go back... ;)

    Tax on the Cap Cost reduction... Somewhere around $50..

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  • qbrozenqbrozen Posts: 17,285
    ok.. yeah, its like $48. I just couldn't figure out what exactly that charge was (probably has to do with the fact that they list tax 3 separate times ... only aiding confusion).

    Of course ... after all this ... it doesn't seem like our poster has come back to respond. I hate when that happens.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • Sorry to not respond sooner. I really appreciate your analysis! I've been taking it all in and trying to figure out how to negotiate this. I'm going to call the salesman this morning and point out that the price is $450 over MSRP, that $200 was tacked onto the acquisition fee and that the money factor could be better and ask him to come up with a better offer -- given that I could pay only about $80 a month more on a 60 month loan and actually own something, the lease payment should be less. If he doesn't come up with a substantially better lease offer, I'll buy it instead. Thanks again and I'll keep you posted.
  • qbrozenqbrozen Posts: 17,285
    good. excellent. Thanks for the update.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • Well, the dealer was upfront about marking up the MSRP by $395 and the acquisition fee by $200 and would not reduce either. They did take off the security deposit ($400); not a real victory since I'd get it back anyway! In any event, the best they'd give me on a lease was $350/mo, 15,000 miles/year for 36 mos. Since it was only $100 more a month on a 60 month loan at 6.5%, I bought it (I could have gotten 6.35% interest rate through Capital One, but the difference was only a couple of dollars a month, so I went through BMW for convienience).

    I SO excited to have the car finally (had to wait 5 months for it)!! She's beautiful and zippy!
  • qbrozenqbrozen Posts: 17,285
    Congrats on the purchase.

    So did they still mark up the MSRP by $400 on the purchase? At least you didn't have to pay the acquisition fee this way.

    Enjoy.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • kyfdxkyfdx Posts: 28,475
    I think you made a good choice... MINI is one vehicle that might actually have better re-sale than the residual would suggest...

    If that turns out to be the case, you might end up even farther ahead..

    Congrats on the new car!!

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • Yes, they did still mark up the price by $400. Kind of a drag, but I was glad not to also pay the (marked up) acq fee. Certainly, if the demand remains at all the same, the resale value will be better than the residual.

    Thanks again for all your guidance.
  • tonkadutonkadu Posts: 1
    anyone know what a proper bmw financial services money factor should be in this area? i have been quoted .004 by mini san francisco, which seems very high. any help would be greatly appreciated.
  • earcomearcom Posts: 16
    Hello Car_Man,

    Like many people on these boards I depend on your assistance when purchasing/leasing cars and in this case I would like to know the October 2006 money factors and residuals for both the Mini Cooper and the Mini Cooper S for 36 months and 12K miles.

    Thank you for all of the information and assistance that you provide.
This discussion has been closed.