2013 and earlier BMW X5 Lease Questions



  • CarMan@Edmunds[email protected] Member Posts: 38,514
    edited November 2011
    Here's the information that you're looking for, j335d. BMW Financial Services' November buy rate lease money factor and residual value for a 24-month lease of a 2012 X5 35d with 10,000 miles per year are .00195 and 62%, respectively for consumers who qualify for its top credit tier.

    This money factor would be .00030 lower for loyal customers.

    When negotiating your deal on this truck, make sure to take advantage of the $2,500 option credit and $1,000 cash incentive that are currently available on leases of it.

    Prices Paid: Buying & Leasing Experiences Forum
  • landl1landl1 Member Posts: 5
    Here's the lease deal I just got over the weekend. Any comments/thoughts?

    2012 X5 xDrive35d with premium package, BMW Apps and iPhone cradle

    MSRP: $61,590
    Sale price: $51,500 (including ECO, Nav and leasing credits)
    10,000 miles/year
    36 months
    Residual: 54%
    Money factor: .00195
    Monthly payment: $676/month
    Out of pocket: $3960 (includes all sales taxes, first month's payment and fees)

  • ab10000ab10000 Member Posts: 127
    Hi landl1
    Does your payment include tax? What state you are in?
    I thought the residual for 10k milies is 59%
  • landl1landl1 Member Posts: 5
    All the taxes are paid up front in my state and included in the up front payment. I think the residual on the gas version is 57% in November and 53% for diesel. Can anyone confirm?
  • ab10000ab10000 Member Posts: 127
    edited November 2011
    Hi landl1

    Gas is 59% for the 10k, I think they are making money on the inflated residual.
  • liverpoolfcfanliverpoolfcfan Member Posts: 1
    Hi Carman,

    Can you pls tell me the money factor and residual value for a 2012 X5 50i ?

    I got offered the following for a 2012 X5 50i with premium package+3rd row seats+running boards for a 36/12k lease with 3k down (CA/Bay Area dealer). Doesn't seem to be a great deal based on threads so far (the money factor seems way off). Thoughts welcome ?

    - 61% residual/0.00270 Money factor
    - MSRP $69,195
    - Cap Cost - $66,695 with deal discount+1k lease credit
    - 1,045monthly payment.

    Thanks to everyone for sharing their thoughts/deals..very useful for a new buyer.

  • bluffmatebluffmate Member Posts: 15
    Hi Carman,

    My local dealership in Northern California gave me the following numbers for a 12000 mile 36 month lease:

    MSRP: 70625

    Selling Price: 66590 (they say this is 1000 over invoice)

    Money factor to me: .00185 (Buy rate MP + 20 basis points that is their markup - 30 basis points loyalty discount as I currently lease a 5 series from BMWFS). The dealership said that I can get a 1000 finance credit but the 30 basis point discount will be better for me. Is this correct?

    Monthly payment with sales tax of 8.25%: 898 with 2500 cash due at signing OR 791 with 6000 cash due at signing OR 730 with 8000 cash due at signing.

    Is this a good deal? Should I negotiate more anywhere? How? Where? Please guide me.

  • bluffmatebluffmate Member Posts: 15
    Hi Ashish,

    This ain't a pretty deal. My understanding is that you should get to the invoice price minus $1000 when you include the $1000 cash bonus and the $1000 finance credit that is available from BMW and BMW FS respectively.

    The buy rate money factor for the X5 50i is .00195 for the month of Nov 2011. Dealerships are in their right to markup this number by 40 basis points - bringing it to .00235, however, most times buyers are able to negotiate this down. In the bay area, the most expensive dealer to buy a car from are BMW of Mountain View, Stevens Creek BMW and BMW of Fremont. Try dealing with any other dealer even if you have to travel a few miles to get your vehicle is my opinion.

    After all the negotiations, you should be able to get the pm payment to $825 (for an 69125 MSRP X5 including sales tax of 8.25% with minimum drive-off - i.e. about $1600-1700.

    Info source: a 6 time BMW leaser.

    Thanks and good luck.
  • ab10000ab10000 Member Posts: 127
    One of highest price BMW dealer in bay area is East Bay BMW, they want $2000 above invoice plus .00235 MF. I found Peter Pan more competitive 500 above invoice and the BMW dealer in Berkeley also very aggressive good pricing.

    I think a fair deal is invoice minus all the credits. Because their is $500 marketing fee and about $1300 hold back included in the invoice price, a total of $1800 backed in.

    Dealers in LA have better pricing, the will give the buy rate .00195
  • ashedmashedm Member Posts: 3
    I talked my sales rep in New England area with regards to a new "2012 BMW X5 xDr35d" machine.

    This machines has the following:
    Sport Activity Package
    Cold Weather Package
    Premium Package
    Sport Package
    Smartphone Integration
    BMW Apps
    Destination Charge
    Total MSRP ==> 64,275.00
    On top of this, I seem to get...
    $2500 for ECO Credit
    $1730 Options Credit
    $1000 Other Credits

    Now, the terms,
    36 month lease
    12,000 miles per year
    Cap cost reduction of $1500.00
    Total due at signing is $3826.95
    The residual = 53% at the end of the lease ($34,065.75)
    Money factor = .00146 with the 7 Multiple Security Deposits.
    $5600 in MSDs

    Monthly payment ==> US$ 799 (incl Tax)

    Is this a good deal? What am I missing?
  • ashedmashedm Member Posts: 3
    edited November 2011
    This is not a Capital Cost Reduction (CCR) based lease deal.
    This is a 7 MSDs kind of a deal.

    The total due at signing came out to $7830.32, including $5600 in MSDs and $2230.32 towards acquisition fee, first months payment and registration costs.

    Monthly payment ==> US$ 799 (incl Tax)

    I am not convinced at all with this. With MSD deal, should I have to pay up front ?

    Any advise would be great?
  • wtikwtik Member Posts: 26
    you are paying too much.
    Call BMW of Cape Code. They worked a better deal in the past.
  • ashedmashedm Member Posts: 3
    Is there a specific advise on which factor I should focus on?
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    Hello Ashish. BMW Financial Services' current buy rate lease money factor and residual value for a 36-month lease of a 2012 X5 50i with 12,000 miles per year are .00195 and 61%, respectively for consumers who qualify for its top credit tier.

    The money factors for loyal customers would be lower than this.

    The money factor that you were quoted is way out of whack. Either don't qualify for BMW's top credit tiers, or more likely the dealer is attempting to mark BMW FS' base rate up on you to add additional hidden profit to your deal.

    Prices Paid: Buying & Leasing Experiences Forum
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    edited December 2011
    What you heard is correct, loyal customers are eligible for either a $1,000 credit or the .00030 money factor reduction, but they can't get both. Even better, if you are in a BMW FS lease that is scheduled to expire between now and the end of February, you're eligible for another .00075 money factor reduction on top of this.

    $1,000 over invoice is a decent price...if the dealer is subtracting the $1,000 BMW FS credit from that lowering the price to invoice, but not enough to justify the dealer marking up the money factor. Unless you are in an area that doesn't have much in the way of competition you shouldn't let the dealer get away with the mark up. I certainly wouldn't.

    One other thing, $6,000 to $8,000 is way too much money to pay at lease signing. I always advise consumers to pay as little as possible at signing on leases. I do so because consumers who make large down payments on leased vehicles risk losing part or all of the money that they put down if their vehicle is totaled in an accident or stolen and never recovered.

    I hope this helps. Let us know if you have any other questions.

    Prices Paid: Buying & Leasing Experiences Forum
  • x5fan10x5fan10 Member Posts: 19
    Hello Carman

    Thanks for the great advise you have been giving to BMW leasers like us.

    I have a question re: tires for X5 lease
    do i have to put new tires before returning the car back? I mean could they chrge me for a set of new tires when i return?

    Thank you
  • robprivirobprivi Member Posts: 9
    Hi Car Man,

    Can you please give me the December MF and residual, and any incentives for an X5 35i. I am a current BMW lease holder and will qualify for top tier credit. Thanks,
  • robprivirobprivi Member Posts: 9

    I forgot to give you all the info.

    36 month lease
    12k per year
  • ashkoashko Member Posts: 4
    Car man

    Can you explain the promotional lease? The offer is 589 per month with 4300 due at signing.
    They also offe the 1000 credit and 1730 option credit. Is it built into the deal? The promotional is on an msrp of 50250 and the car I am looking at is 46.5 selling price.

  • oznew2usaoznew2usa Member Posts: 3

    I hope someone can help. We are new to leasing in the US. Trying to work out whether this is a good deal or what we should be looking out for? What deals other are getting with similar config.
    All advise greatly appreciated. BTW we are in LA.

    We are looking at

    2012 BMW X5 Diesel
    Ext: Alpine white
    Int: Black Nevada lether
    Dart Bamboo trim
    Sport Activity Package
    Premium Package
    Running boards
    BMW Apps
    Space-saver spare
    Total as built: $64,775
    Selling Price : $58,915

    36 months
    10,000 miles per/year
    Money factor 1.95 (what is the APR?)
    Residual Factor 54%
    Residual value $34,978.50
    Total depreciation $18,708.74
    Capital reduction $5,227.76 (what is this?)
    Monthly Depreciation $516.69
    Monthly rent $172.90
    Month payment $692.59 + 8.75 tax = $753.19

    Drive off $8,000 less rebate $1,000
    Total due at signing $7,000

    Thank you in advance !
  • asteinbergasteinberg Member Posts: 138
    This NOT a good deal.
    YOu should be getting a better price because there are promotions.
    You should not do any cap reduction -- that is your putting money into the deal.
    What dealership are you with.
    I was offered a much better deal.
  • oznew2usaoznew2usa Member Posts: 3
    Hey thanks for the reply

    We re using a broker but I believe it is thru Center BMW, LA - what was you deal and where was it from. What sort of many factor or APR should we be looking at we have an excellent credit score.
  • robprivirobprivi Member Posts: 9
    My lease was ending on my 535i in Feb. and salesman said he could get me out early. My payoff was 36k and BMW lowered it to 29k and the dealer purchased it for that price. I didn't know that could happen. Anyway, with my credit score dealership gave me a .00090 MF. with 56% residual on 36 month 12k a year lease.
  • asteinbergasteinberg Member Posts: 138
    CenterBMW is a solid dealership.
    But when I was looking at deals, the ywre far better.
    Make sure you get the net money factor that is on this website, with no markup.
    Make sure your price is invoice MINUS any BMW promotions. For example, if BMW has a $2500 promotion, then deduct that from invoice.
    After that is all done, then ask to re-do the deal with maximum refundable security deposits to produce a lower money factor and lower monthly payment. Let me know what happens.
    If you're still not there, I can tell you that there is a salesman at Bob Smith wh will give a good deal. I don't know if I'm allowed to mention salesmen on this site.
    Also, there is a guy at Center I can recommend, but I don't know if I can menttion ames on this site.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    $7k cash down payment on a lease is excessive. Each $1,000 of cash down payment typically reduces your payment by about $30/month. This deal requires you to put $7,000 down, reducing your payment by about $210/month. But, for a lease, you will want to put as little money down as possible. If the vehicle is in an accident and totaled, the gap insurance will only pay the minimum contract balance needed to close your contract. The more money you put down, the less money the insurance company pays and you get nothing back.

    Three different incentives/rebates are currently available on the diesel X5: $2,500 eco credit, $1,000 "ghost protocol" rebate for the X5, and $1,000 (or an interest rate discount) for returning BMW owners. (I assume you're not a member of the BMW Car Club, but if you were, you'd also get an additional $1,000 rebate check in the mail.)

    A better way to evaluate this deal and negotiate a lease is to arrive at the actual purchase price (same as you would if you were paying cash) and THEN negotiate the lease terms.

    In my experience buying/leasing BMWs, you typically should expect to pay NO MORE than $1,000 ($1,500 in some regions) above dealer invoice on a vehicle like the X5 using a broker (like Costco, USAA, etc.) Some dealers will sell for closer to invoice if you compete them against each other or the car has been on the lot for a while. (They won't deal on a new/hot/limited availability model, but the X5 is not new/hot/limited.)

    Dealer invoice + $1,000 profit - $2,500 (eco credit) - $1,000 (ghost protocol rebate) - $1,000 (owner loyalty if you're eligible) = gross capitalized cost. Then add tax, tags, acquisition fee, processing fee, etc. to arrive at your cost of the vehicle.

    Your deal does not look good. The invoice on that vehicle is around $59,500 (ask your dealer/broker to show you the actual invoice.) That means your price before tax/tags/title/etc should be around $57,000. (You should get the invoice and do the math). Then add local tax, tags, title, etc to get your purchase price.

    You stated the money factor is"1.95". That probably means .00195, which is the typical way of showing it. The equivalent interest rate is .00195 x 2400 = 4.68%.

    The other question to ask your dealer is how much they marked up your lease money factor. Dealers will add as much as 50 basis points to the "interest rate" of your lease to pad their profits. Sometimes they'll sell closer to invoice and then pad the money factor. If they marked up your money factor, ask them to split the mark up with you.

    If you're paying a security deposit and have good credit, they often will waive the security deposit. But, be careful. Sometimes they'll increase your money factor if they waive the security deposit. Don't let them do that.

    Next, think about which X5 model you want. If your heart is set on a diesel, go for it. I've had 2 X5 diesels and was very happy with them. But pay attention to the residuals across the different X5 models. November/December residuals for 2012 X5 diesels are VERY low. Your residual of 53% is correct for that lease term. But the residuals for the 3.5i and 5.0i are much higher. For comparison purposes, the residual for a 5.0 using the same lease terms is 62%. That means you are paying 9% (about $5,400) more depreciation out of pocket for the diesel. The $2,500 eco credit doesn't begin to offset that lousy residual. And it would take you a very long time to recoup that $5,400 from the diesel's higher mpg. In fact, you can never recoup that extra depreciation cost from fuel savings in 36 months @ 10k/miles/year.

    For comparison purposes, I just leased (yesterday) an X5 5.0 with a $74k sticker for 36 months and 10k miles/year with ZERO money out of pocket for $960/month. That's about the same that your deal would cost if you put no money down. But I leased a vehicle that was $10k more expensive than your diesel. I don't think you're getting a very good deal.

    I hope this helps.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    I'm not Carman, but I did stay at a Holiday Inn last week and I have experience with this question. You do NOT have to replace the tires on your vehicle before lease turn in if the tires meet the minimum tread depth in your lease turn in guide or the inspection form. It's very explicit:

    minimum 4/32" (1/8") tread depth measured from thinnest tread not on the wear bar. Tires must also be free of additional damage such as but not limited to cuts, bulges or severe curb rash. (Including spare if applicable.) Tires must be run-flat if that's what shipped on the car when it was new.

    The charge is $300 per tire that does not meet this standard.
  • pmenpmen Member Posts: 1
    Hi, just took delivery on a new 2012 BMW X5 diesel. Alpine white with sand beige leather with premium pkg w/ navigation. MSRP 61075.00. Invoice 56,425.00 Negotiated price 53426. Total with tax tag and acq fee, 56152.

    Details are as follows:
    Offered 14,000.00 on trade of a 2004 BMW X5 3.0 with 80K miles in good condition.
    Provided 3000.00 in additonal cash out of pocket
    The rest was incentives, eco, nav, customer loyalty.
    Total credits from cash net equity and discounts, 6750.00

    Worked out to be 53% residual of 32369.00, money factor of .00025
    Monthly payment 651.00 for 3 years and 36000 miles. Thanks in advance for your review.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    My personal opinion (in case it matters because I'm not Carman) is that your deal looks kosher and your negotiated price was reasonable. It appears that the dealer started at $1,500 over the invoice, then subtracted current incentives of $4,500 ($2500 eco credit + $1,000 owner loyalty + $1,000 ghost protocol/December promotion). You got a deal that is as good or better than using a buying service. (If you did NOT get the $1,000 owner loyalty or used the lease money factor credit instead, then your deal is even better because your negotiated deal would have been $500 over invoice.)

    My advice (again, in case anyone cares what some guy on the internet thinks) is to enjoy the new car (including the excellent high-torque diesel engine and 600+ miles per tank on the highway). Don't let worry about whether you could have fine-tuned the deal to save a few more dollars spoil the fun of a new BMW. You traded out of the first generation X5 into the current generation. You'll enjoy a huge improvement between the two vehicles.
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    You're very welcome x5fan10. As long as your vehicle's tires aren't bald you probably don't have to put a new set on it before returning it at lease-end. Most banks have some sort of specific guideline as to how much tread has to be left on the tires of leased vehicles in order to avoid paying a penalty, but I'm not sure of BMW FS' exact policy on this matter.

    On a personal note I've probably leased a million vehicles in the past and I've never had to replace the tires.

    Prices Paid: Buying & Leasing Experiences Forum
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    I'd be happy to help you out robprivi. BMW Financial Services' current buy rate lease money factor and residual value for a 36-month lease of a base 2012 X5 35i with 15,000 miles per year are .00195 and 51%, respectively for consumers who qualify for its top credit tier.

    As a current BMW FS customer, you are eligible for a .00030 money factor reduction. If you have a BMW lease that is scheduled to expire over the next couple of months that reduction jumps to .00105.

    Prices Paid: Buying & Leasing Experiences Forum
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    Ahhh, robprivi, I see that you only wanted 12,000 miles per year. In that case, this truck's residual values would be 2% higher.

    Prices Paid: Buying & Leasing Experiences Forum
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    Hi ashko. Savvy consumers who are in an area that has a decent level of competition are usually able to negotiate lower selling prices than the ones that were used to arrive ay manufacturers' official advertised payments. If you shoot for $500 to $1,000 over dealer invoice minus the cash incentives that you mentioned you should be able to do better than the $589 per month on an equivalent vehicle.

    Prices Paid: Buying & Leasing Experiences Forum
  • CarMan@Edmunds[email protected] Member Posts: 38,514
    HA. Great answer abmwfan. Thanks for the detailed information!

    Prices Paid: Buying & Leasing Experiences Forum
  • shapappyshapappy Member Posts: 1
    edited December 2011
    Trying to complete a deal, but something feels off.

    Msrp: $66895
    Sale price: 58795 ($1k over invoice)
    Incentives I received: $2500, $1730, $1000
    36 months, 12k miles (53%) MF .00195
    $2600 due at signing
    Monthly payment $ 921.20 including tax (7.00 FL tax)

    One thing to note. I added a BMW tow hitch which upped the sale price to $60,295. Now, should I add the $1500 tow hitch to the msrp price also. That would raise the residual value. By my estimates, the payment should be below $900. Any help would be great!
  • realgenirealgeni Member Posts: 26
    I need some suggestions from you all.

    I want to know if it is good financially, If I lease first for 36 months and then buy at the end of lease or shoudl I just buy at once for all.

    Thank you
  • kyfdxkyfdx Moderator Posts: 216,453
    If you lease first, you'll pay an acquisition fee that isn't present in a straight purchase.... ($725-$925)....

    Not only that, interest rates on finance are dirt cheap, right now... Even if you found a lease that has a good interest rate, the rates might not be so good to finance a used car in three years...

    If you know you want to purchase, eventually, you are better off doing it upfront...

    Edmunds Price Checker
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  • realgenirealgeni Member Posts: 26
    Thank you.

    I agree with your point about interest rate.

    I am little concerned about mainteance issue after 3 years.
  • abmwfanabmwfan Member Posts: 47
    Why are you concerned about maintenance after 3 years? The full warranty is 4 years / 50,000 miles.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    Your starting point should be $1k over dealer invoice and THEN subtract all incentives. Was that the deal? If not, you're paying too much.

    The lease rate looks right.

    Assuming this is a dealer installed towing hitch, discount the price of the hitch by 5%. Then add the discounted part cost and the dealer's installation charge to the dealer invoice price (not the MSRP). Then subtract all incentives.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    I would not recommend a lease if you are sure you plan to buy at the end of the lease. The only advantages are that you get a lower payment during the lease period and an option to turn in the vehicle if you don't like it. But leasing to buy can result in higher interest rates and longer total finance periods, so your total cost usually is higher over the long run.

    If you buy at the end of the lease, you'll be refinancing a used car via another loan (unless you plan to pay cash.) You incur interest rate risk because you don't know what the interest rate will be in 36 months. It may be subsidized by BMW for pre-owned vehicles, but it probably will be closer to market than the new car loan rate that you will get now.

    If you buy now, you can take advantage of interest rates that are subsidized by BMW NA for new car sales.

    The only time that I would recommend leasing to buy is if you're not sure you want the car long term or if you're worried about maintenance problems. In that case, you have to be willing to pay a premium (lease rates, acquisition fee, etc) to have the option to turn it in. And there is an additional advantage to leasing: If you have an accident that requires significant vehicle repair, you have the option to turn in the vehicle at the end of the lease and BMW takes any depreciation hit. If you buy/own the car, you assume all depreciation risk.

    BMW used to have a finance program called Owner's Choice, but it is discontinued in my region. It gives you the option to turn in the car or finance a balloon payment at the end of 36 months. I don't see a real advantage other than you are buying the car with lease-like terms and have the option to turn it in.

    For comparison purposes, people are reporting lease money factors here as low as .00195 this month. That is the equivalent of 4.68% plus the additional cost of the acquisition fee. Can you buy for a lower interest rate than that and avoid the wasted acquisition fee?
  • realgenirealgeni Member Posts: 26
    Actually, I wanted to keep my options open if a new model comes out by 3 years and keeping the cost of lease low.
  • abmwfanabmwfan Member Posts: 47
    The option to buy a new model doesn't have anything to do with maintenance issues after 3 years, which was your original statement.

    If you want to know if a new X5 model will come out, just track the current generation's production cycle. BMW production cycles run 7 years (except for the new 3 series that goes on sale in the U.S. next spring. That production cycle could be much longer than 7 years).

    This current second generation X5 was released as a 2007 model in late 2006. That means that the third generation probably will be released as a 2014 model two years from now. So there WILL be a new model before the end of your 36 month lease if you lease now.
  • ab10000ab10000 Member Posts: 127
    I would try for invoice because there is a hold back and marketing fee on the car
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    ab10000, how many BMWs have you purchased for Invoice minus all incentives? There's nothing wrong with trying, but you're not likely to get it for that price. This is a new 2012 BMW being sold in 2011, not a left-over Kia or Chevy. Even buying clubs (like Costco, USAA, etc.) don't get you a new, current model BMW for invoice minus incentives unless the dealer gets their profit in another part of the deal (like your trade-in, jacked-up lease rates, etc.) When I checked last month, the Costco buying club price was $1,250 over invoice. Unless you get lucky or can get employee pricing, the only time you typically can buy a BMW for invoice or below (minus all incentives) is if the car is left over from a previous model year. It's not good advice to set unrealistic expectations.
  • lvitlvit Member Posts: 1

    Do you know, if MF reductions (.0030 and an additional .0075) will be still in effect after 01/03/2012 (self-destruction date :) )? The problem is that I had to go with a new factory order, since there were no vehicles in stock that match my criteria. All the dealers I talked to would honor .0030 MF reduction, but refused to lock and apply an additional .0075 MF reduction. I'm current customer of BMW FS, and my lease is up in end of January of 2012. Thank you.
  • ab10000ab10000 Member Posts: 127
    edited December 2011
    First of all the 2012 is marketing ploy, Mercedes Benz play the same game, they call their 2011 production 2012, so it is not model year, you have to go the actual production date to figure how old the car.

    Second , all these clubs pricing like Costco, amex etc. are for pepople who do not know how novitiate and you can can do lot better if you negotiate yourself.
    Costco have to make money too and that is coming off your price.
    I have tried all these clubs and every time I get a better price doing the negotiating myself.
    Personally I will pay invoice because there is a hold back and marketing fee backed in the price. In these economic condition I think it is fair.
  • gt97gt97 Member Posts: 5
    Is this a good deal? I think we are pretty close to coming to terms on this car. Let me know what you think:

    $60,175 MSRP incl Dest Fee
    $55,395 Invoice incl Dest Fee
    $55,274 Final Price including Doc Fee (but not incl taxes)
    The final price was figured after including $1000 rebate and $1730 nav credit. I do not qualify for loyalty as we have an Audi currently.

    Dealer is offering 3.9% financing for 60 months or a 36-month lease with 12k miles with money factor of .00215 and 56% residual. Lease also adds on $925 acquisition fee.

    Thanks for your feedback!
  • wherespetewherespete Member Posts: 6
    I'm new to this forum, but have found some very interesting information. How about a new approach. I am considering a lease on a new 2012 X5 sport with the following info. What would you consider a fair lease payment?

    MSRP $62,875
    36 mo lease, 12,000 miles per year
    Has navigation package
    First time BMW owner, so no credit there
    This purchase is in the Kansas / Oklahoma region
    I would qualify for BMW's best rate

    Kind of a novice here, and it looks like getting the very best deal could be kind of tricky. I just did not want to make a real mistake. Thanks for any opinions.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    That's not really enough information to calculate a lease payment. Generally, with minimal money down, a ball park 36 month lease payment for a new X5 in the range of $800 / month is not unusual depending on options, model, etc. Highly optioned models will be higher. Subtract about $30 per month per extra thousand dollars down payment.

    Never start negotiation with your dealer based on a target monthly payment. There are too many ways for them to rig the deal to their benefit and not yours.

    The advice in earlier posts still applies. First, start with the dealer invoice price. Add up to $1,000 dealer profit or less if your dealer will allow it. (Some people try to buy a BMW for dealer invoice minus incentives because there is a hold back of around 3% below invoice for dealer profit. That works if you're buying a honda. You can use that as your starting point for negotiation, but it may or may not work on a BMW unless it's a left-over vehicle. If the dealer does offer the vehicle at dealer invoice, make sure they didn't arrive at that price by including cash-back incentives.)

    Then subtract all current incentives ($1,000 end of year incentive on the X5, Owner Loyalty, etc.)

    Then add tax, tags, etc.

    Then review the lease rate and ask your dealer how much they marked up the lease rate. They will often pad their profit by marking up the lease rate by around 50 basis points on top of what BMW finance charges. Ask them to cut the mark up in half. (Multiply the "money factor" by 2400 to calculate the equivalent interest rate.) A mark up of 50 basis points can increase your interest rate by more than a full percentage point.

    The residual value is fixed by BMW Finance and not negotiable. The residual value decreases by 1% with each increase in annual mileage (10k, 12k, 15k). It also varies between X5 models. Through December 31st, the residual value for a diesel X5 is lower than for the 3.5i and 5.0i. That means that the lower residual more than offsets the extra incentive on the diesel. Ask the dealer to show you the current residual value sheet provided by BMW. Every 1% increase in residual can reduce your lease payment by around $15 - 20 / month depending on purchase price.

    If your dealer is not willing to answer these questions or will not show you the dealer invoice, then you might want to find another dealer.

    You can use these metrics to assess whether your dealer is giving you a fair deal. But, they're not charities and they don't sell at cost.

    I always recommend not letting anxiety over fine tuning the purchase price by a few dollars ruin the excitement of buying or leasing a new BMW. If you're happy with the car and the deal, that's all that matters. Don't worry about whether someone somewhere else might have found a similar car for a hundred bucks less.
  • abmwfanabmwfan Member Posts: 47
    edited December 2011
    ab10000, you are wrong about model years being "just marketing". The model year directly affects residual value. A 2012 has greater market value and residual value than a 2011 sold in Dec 2011 or Jan 2012. A dealer generally is more motivated to unload a left-over 2011 that's been sitting on the lot than he is for a 2012 that just arrived.

    There are other reasons why you are wrong: some model years involve substantial styling changes, new drive trains, etc. That was the case in 2010 vs 2011 for the X5.

    BMW also makes substantial changes to option packages and pricing from year to year. So for example, a fully loaded 2012 X5 5.0i will cost over $1,000 less than a loaded 2011. That's because navigation and heated seats are standard in 2012 and because options packages bundle features together at lower price by including more options that previosly were stand alone. That typically happens to a greater degree late in the production lifecycle of a particular model.

    It's not "just a marketing ploy". The scenario that you mentioned only happens with BMW with very early release of the next model year. For example, when the 2011 X5 was released on April 1, 2010. Some of the 2011 model's changes to electronics (mobile office, etc) weren't available until October 2010. But the styling changes and new engines were available and those matter most.
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