Clarifying BMW negotiated price vs. option credit vs loyalty discount

sm102

Hi,
I would appreciate if you could shed some light on how I combine various options to get to a final price for a lease. I'll be returning my X5 soon, close to the end of my 36 month lease, and am looking at a 550i. Based on my research, I'm thinking a final price (capitalized cost) of around $500-$1000 over invoice sounds about reasonable. My questions:
1. Considering I am returning a BMW and planning to get another one, do I qualify for a loyalty discount, and is this factored in after I negotiate my price....or do dealers consider this part of the overall negotiation?
2. What is an 'option credit'? I'm seeing post of these credits for approx. $1500 but don't understand how to factor that into my negotiations. Similar point as question 1.
3. Is the MF negotiable? I saw an earlier reply to a post, mentioning that MF is .0013 but at a 'drive by' conversation at my dealer, I was told it was .0017.
4. Finally, is 500-1000 over invoice a good deal based on what others are seeing out there? I'm in Silicon Valley

Much appreciated!
-SM

philip17

SM:

First of all, you've done a pretty good job with your research. Our TMV puts the 550i at about $400 over invoice. However, there is an "Option Credit Customer Bonus Cash" which our site defines as "available towards leasing or retail purchase. Can be combined with APR and Lease offers from BMW Financial Services." There doesn't appear to be a loyalty bonus available, at least no formally recognized one. However, you are in a stronger position when you stick with the same brand. The way to proceed would be to call the Internet salesperson at several BMW dealerships and tell them you are returning a BMW and are looking for the best deal on your next BMW. Let them bid for your business. As far as the money factor goes, this is set by the bank. However, .0017 is too high -- since it translates to over 4%. Let us know if you have any other questions. And good luck.

kyfdx

@sm102 said:
Hi,
I would appreciate if you could shed some light on how I combine various options to get to a final price for a lease. I'll be returning my X5 soon, close to the end of my 36 month lease, and am looking at a 550i. Based on my research, I'm thinking a final price (capitalized cost) of around $500-$1000 over invoice sounds about reasonable. My questions:
1. Considering I am returning a BMW and planning to get another one, do I qualify for a loyalty discount, and is this factored in after I negotiate my price....or do dealers consider this part of the overall negotiation?
2. What is an 'option credit'? I'm seeing post of these credits for approx. $1500 but don't understand how to factor that into my negotiations. Similar point as question 1.
3. Is the MF negotiable? I saw an earlier reply to a post, mentioning that MF is .0013 but at a 'drive by' conversation at my dealer, I was told it was .0017.
4. Finally, is 500-1000 over invoice a good deal based on what others are seeing out there? I'm in Silicon Valley

Much appreciated!
-SM

Option credit cash is money that BMW pays the dealer when they sell the car.. You should absolutely let the dealer know that you know about it, and are adjusting your offer, accordingly. So, if you think $1000 over invoice is a fair price, then your goal should be $500 under invoice, to account for the $1500.

There is a pull-ahead program available for current BMW lessees. You could probably make a deal now, and turn your current BMW in, with BMW forgiving your remaining payments.

There is a base MF, which on a 550i is .00130. You can't negotiate below that number, but your dealer is marking up the rate the maximum amount to .00170. That mark-up is certainly negotiable (but, your dealer will not want to give it up).

sm102

I wanted to thank everyone for the info you provided. Was able to get a great deal on the 550i in Silicon Valley, 750 below invoice, MF .0013 (they tried to sell me the 'retail' MF at .0017 but thanks to this forum I was able to bring it back down).

macdocofslo

This is Great Advice! I borrowed a 2014 BMW 335I with M sport, Premium, and Technology packages, still debating Lease vs. Purchase. As it looks on paper: I could save some Coin on money down and monthly payments and if I decide to purchase, After 3ty/ 15k per year. I would still be better off with Lease purchase. But we all know there will be something new to lease by then. Thank you for this advise the Money Factor and incentives are huge negotiating positions. Also, if your are Leasing don't forget to ask about the Security Deposits. Not only will they lower the monthly payments, Its like a savings that is returned to you at end of Lease. The way I see it is I won't feel like I have nothing when it's time to return lease, i'll get my ~7-10K deposits back at time of return, and it will have lowered my monthly payments. I'll be spreading the word when deal is done.