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Did We get ripped?

slambertslambert Member Posts: 8
edited August 2015 in BMW
We just leased a 2015 BMW 535i yesterday. This was our first lease not sure everything went in our favor, need to know what you think before I call dealer on Monday. After discounts car was 51,300. We had 3500 in equity in our trade in. Acquestion fee was $925.00 Doc fee $599.00. Then the finance guy says we need to purchase a 5000 insurance policy so that when we return the car if the tires are not good any dents dings etc. we would be covered up to 5000.00 He actually says that the tires will need to be new when returned and also be the run flats that are on and those are $400 each for a total of $1600, and that is what the cost of this protection is but will give us another $3400 in added benefits in case we lose a key fob are there is some minor damage to the car it would be covered, we walk away when we turn it in with no questions asked. So my question is if we only drive the vehicle for up to the 36,000 miles that we leased it for over the 3 year period are we going to have to replace the tires before turning it in, I relize if any are blown are damaged those would be replaced, but are we not paying a monthly payment to cover wear and tear for the 3 years ? And also what does the acqustion fees cover?

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  • slambertslambert Member Posts: 8
    Just noticed on my contract the equity that we had in our trade is under Amount due at signing in the line captilized cost reduction is that correct ?? Why would something that should be a deduction in a column that is a plus it does come off on the opposite side under Capitilized cost reduction but not sure why it is added in the first column just want to be sure..
  • MichaellMichaell ColoradoModerator Posts: 182,302
    slambert said:

    Just noticed on my contract the equity that we had in our trade is under Amount due at signing in the line captilized cost reduction is that correct ?? Why would something that should be a deduction in a column that is a plus it does come off on the opposite side under Capitilized cost reduction but not sure why it is added in the first column just want to be sure..

    The "cap cost reduction" is the fancy lease term for down payment ... it reduces the capitalized cost of the car.

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  • slambertslambert Member Posts: 8
    Yes but should it be under the first column A under Amount Due at Signing listed along with the Doc Fee Sales Tax etc. as an amount owed..
  • slambertslambert Member Posts: 8
    Also is it standard to have a $350.00 Disposition fee ??
  • MichaellMichaell ColoradoModerator Posts: 182,302
    slambert said:

    Yes but should it be under the first column A under Amount Due at Signing listed along with the Doc Fee Sales Tax etc. as an amount owed..

    Without seeing the contract I can't really say. But, trade equity is often used as a cap cost reduction.

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  • slambertslambert Member Posts: 8
    Last question they did talk us into buying a wear and tear warranty which I don't think we need, as far as tires what ratio of wear is exceptable when you return the car and about how much life is in a run flat tire, we leased the vehicle for 36,000 miles and probably will put close to that on it but not over
  • MichaellMichaell ColoradoModerator Posts: 182,302
    slambert said:

    Last question they did talk us into buying a wear and tear warranty which I don't think we need, as far as tires what ratio of wear is exceptable when you return the car and about how much life is in a run flat tire, we leased the vehicle for 36,000 miles and probably will put close to that on it but not over

    I don't have an answer to that .. perhaps my co-host (who has leased BMW's before) has more information on the subject.

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  • slambertslambert Member Posts: 8
    are all of these set figures based on the numbers above.. Depreciation and Amortized Amounts and Rent Charge ?
  • MichaellMichaell ColoradoModerator Posts: 182,302
    slambert said:

    are all of these set figures based on the numbers above.. Depreciation and Amortized Amounts and Rent Charge ?

    Depreciation is a fixed amount, set by the bank, from the MSRP. Rent charge is based on the money factor, amortized amount is the depreciation divided by the lease term, plus the monthly rent charge.

    Here is a good article on how to calculate your own lease payment using a spreadsheet:

    http://www.edmunds.com/car-leasing/calculate-your-own-lease-payment.html

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  • slambertslambert Member Posts: 8
    Thank you for all of your help..
  • kyfdxkyfdx Moderator Posts: 187,333
    edited August 2015
    slambert said:

    Thank you for all of your help..

    Residual is fixed by the bank (percentage of MSRP)

    Depreciation is the difference between your adjusted CAP cost (aka net CAP cost) and the residual. That number is affected by the selling price you negotiate, and any extras added and reductions made.

    Amortized amounts are additions to CAP cost (so, amortized in the monthly payment)

    Rent charge is the finance portion of the lease payment

    Last time I turned in a BMW, the minimum tire tread depth to pass was 1/8". (somewhere around 4mm)

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  • slambertslambert Member Posts: 8
    Is .00170 for the money factor Rent a good rate or is that to high 4.08%
  • kyfdxkyfdx Moderator Posts: 187,333
    slambert said:

    Is .00170 for the money factor Rent a good rate or is that to high 4.08%

    It's marked up the maximum allowed from the base rate of .00130

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