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Another point: Just because the tax has to be paid upfront, doesn't mean you can't roll it into your lease's cap cost, and add it to the monthly payment.
regards,
kyfdx
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I'm gonna try and scoop up on an 05 X3 3.0 lease before end of August. Do you know of any particular fees that apply only to Tennessee? I still don't understand tax. Our rates are 8.25%. Someone once told me that cars in Tennessee are only at 6%.
I believe I've got all the MF, Residual, MSRP, Invoice info I need. Its all the other fees I'm afraid of.
Thanks!
regards,
kyfdx
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You also pay the local option tax up front (the city/county part of the sales tax). This is your local tax rate (your rate - 7% state) on the first $1,600 and 2.75% on the next $1,600. In my county, the local rates is 2.25% on top of the 7% state rate, so the up front local option tax due on a car SALE or LEASE is $80 ($1,600 x 0.0225 = $36 + ($1,600 x 0.0275 = $44) = $80).
If your local tax is 1.25% on top of the state 7%, then you would pay $64 in local option tax, 7% on any cash you put down to reduce the price of the truck, and then pay 7% on whatever the payment works out to be.
Example: $300 and month payment = $321 ($300 x 1.07) with tax.
Dennis
X3 3.0 - [non-permissible content removed] Silver, Grey Leather, Cold Weather package, Satellite Radio, Privacy Glass
MSRP: $40,450
Cap Cost: $39,400
Residual 60% - 15K
Money Factor: .00100
Price $452
39 month lease
Price does not include
$625 acquisition fee
$500 Security Deposit
$452 first month
$1528 - NYS Taxes @ 8.375%?
I'm not knowledgeable about whether this is a good deal or not. Any help given would be very much appreciated.
Yes, 9.25% total tax in Knoxville (7% state, 2.25% local).
7% tax on the monthly fee. I can remember that part.
I'm a little confused in the first $1,600 and next $1,600. What are these? Where does this $1,600 figure come from? Or do i simply pay a one-time $80 fee for local tax no matter the cost of the car?
In your case and mine the local tax is 2.25%.
On large ticket, single item purchases (a car, plasma TV, etc) the locals can only collect on the first $3,200 of the item.
So if you BUY a car you would pay 7% on the full purchase price, and 2.25% on the first $1,600 and 2.75% on the next $1,600 ($80 total).
On a lease, it is done more or less the same way. Rather than have you pay 9.25% on top of each payment, they have you pay the local option tax up front ($80) and only add the state tax to the payment. This is to your advantage in almost every case. For example, if your payment was $500 for 36 months you pay $535 x 36 = $19,260 + the $80 up front. If they taxed local on the payment, then you would pay $546.25 x 36 = $19,665 which is more money.
Obviously, on a higher dollar car with a payment this would save even more (on a $1,000 a month lease it saves over $900 over the course of a 36 month lease).
Does this make sense? You go ahead and pay the local tax on the first $3,200 of a single big-ticket item up front, then avoid the local tax for the rest of the lease.
So just figure on $80 for the local tax, plus tags, dealer fees, lease acquisition fee, etc at signing, then 7% on top of the monthly payment for state tax.
Dennis
So, maybe the same payment with only $2100 due at signing, instead of $3100 would be a good deal...
regards,
kyfdx
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Thanks for your reply.
I understand what you're saying, and it's good to see the numbers make sense and it seems that the dealership is being fair, but aren't those costs which add up to $3100 sort of fixed. Should I concentrate on getting the cap cost to be lower and getting a lower monthly lease price? Or am I just missing something.
Thanks again.
-rgottheim
The end result, is that they have to lower the selling price by $1000 to achieve that... Then they take $1000 of that "upfront" amount, and add it to the selling price...
Put another way.. Just because there are $3100 of costs due at inception, doesn't mean that you have to pay them all upfront... you can roll just about any or all of it into the monthly cost... They can structure the lease just about any way you want it... I prefer to pay only the 1st payment and security deposit upfront... I like to roll everything else into the cap cost... It doesn't matter if it is taxes, acq.fee, whatever... you can roll it all in..
So, lower the payment, or lower the upfront... $1000 less is $1000 less....
regards,
kyfdx
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One last question. What should the invoice price be on this X3? And should the cap cost be $500 or $1000 over the invoice? It's an x3 with the premium package, cold weather package, satellite radio, and privacy glass.
rgottheim
Sorry for all the questions. I'm kind of nervous about all this and I want to make sure I don't get a bad deal.
MSRP: 42,340 (41,645 + 695 Destination)
Cap Cost: 37755 ($500 over invoice)
39 Months
15K Miles per year
MF: .001
Residual: 61%
Tax: 7%
$80 Local Tax
$625 Acq. Fee
$450 Security Deposit
I come up with $395.87 ($369.97 + $25.90 Tax). But when I punch these same numbers into Edmunds Lease Calculator they come up with $434.19. Am I calculating something wrong? I just want to be realistic, and have an idea what a good deal looks like if my dealer were to present such a thing. (Har Har)
regards,
kyfdx
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39mo/15K.. Residual 60%.. MF .0010
2.5 model...
39mo/15K.. Residual 59%.. MF .00125
Most people want automatics... The automatic is a no cost option on the 3.0 model and the moonroof is standard.... That makes the spread between the prices a lot less than you would think...
So, the 3.0 is probably a little more to lease... but, not much..
regards,
kyfdx
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Residual.. is 60%, not 61%
Your Cap Cost isn't realistic, I don't think.. Did you add the destination charge into the invoice price?
I think $39,500 would be a more realistic Cap cost, and a very good deal.. Using that as cap, and 60% as residual, the payment would be $427/mo.+ tax... If you get the Cap cost down to $38,500, the payment would drop to around $400/mo.+ tax..
regards,
kyfdx
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Thanks for the numbers. I think I'm prepared.
Now if I could only get that idiot dealer to express some sort of interest in selling me a car... Jeesh!
X3 3.0 - [non-permissible content removed] Silver, Grey Leather, Cold Weather package, premium package, Satellite Radio prep, Privacy Glass
MSRP: $40,450
Cap Cost: $38,600
Residual 60% - 15K
Money Factor: .00100
Price $430
39 month lease
Price does not include
$625 acquisition fee
$500 Security Deposit
$452 first month
$1528 - NYS Taxes 8.375%?
Thanks again for your feedback.
rgottheim
Now, to further confuse things...
I'd roll the tax and the acquisition fee into the cap cost... This will result in a payment of $488, but you won't have to pay those costs upfront... your upfront would just be your security deposit and first payment..
A pretty good deal... an average selling price, but the lease program that BMWFS is offering is fantastic, and your dealer is giving you all the base rates...
regards,
kyfdx
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MSRP: 42515 ( $41,145 + 695 dest. + $325 Sirius and $350 Universal Tranceiver)
Invoice: 39760 (based on what he told me, $700 over invoice)
15K Miles Per Year
39 Months
My calculations using the .001 MF and 60% Residual come out as....
$ 430.69 and 7% tax $30.15 for a total of $460.84.
I was prepared to give him $1615 for $80 local tax, tag, registration, first payment, acquisition and security deposit.
Advice please. I'm a horrible negotiator. I just want to run and try another dealer. What should I do next?
Why he says the residual is 59%, I have no clue... the X3 3.0 has a 60% residual...
If he is quoting with only $1000 upfront, he is waiving the security deposit for a bump of .00015 in the money factor... Probably adding the acq.fee into the cap cost as well... And, of course.. he could be padding the money factor..
If you have a dealer that isn't willing to break down the deal for you, I'd shop somewhere else... Make it clear upfront that you understand leasing, and want all of the details/numbers spelled out...
regards,
kyfdx
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Anyway... enough complaining.... do I just add in the Sirius and Universal Tranceiver as extras that I pay for separately?
By the way: He said if I fill out a credit application tomorrow I can keep the current incentives for 30 days. Which buys me time to re-negotiate. But if I were to lease from another dealer, do I have to fill out a separate credit application for them as well? And if I lease through another dealer, what about when I get my X3 serviced at my local dealer? Are they gonna treat me like a second-class citizen (aside from not getting a loaner car)?
This sucks! It shouldn't be this difficult to lease a vehicle. It all tarnishes the BMW nameplate!. :mad:
I agree, it sucks. BMW of NA needs to clean house on its dealers - they are quite a sleazy lot, and bringing down the BMW brand. My leasing experience was horrible, I was lied to about everything with the exception of the MSRP. I found this Forum after it was too late.
I have located some dealers so far that have X3's, but don't exactly know what info to ask.
I was quoted the following:
Titanium Silver
Black Leather Interior
Premium Pkg
Cold weather Pkg
Privacy Glass
Heated Steering Wheel
Satellite Prep
MSRP= $40595
36 Months/10,000 (I only need 10,000)
Security Deposit waived as a returning BMW customer
$439 Month + 6% Ct tax=$464
First month, tax, title and registration fees at signing.
I did not ask about the invoice or anything else.
What other information should I ask? Does this sound like a good deal or should I look around further? I will have to drive about 2 hours to pick up the car from a dealer I have never dealt with.
They also had an Alpine White with Terracotta leather interior
Automatic
Premium, Cold Weather and Sport package
Privacy Glass
Satellite prep
(said it had heated steering wheel, but that is not available with the sport package).
He said that would run about $20-$25 more a month. I'm not sure how Terracotta interior would look, but he said this is a much nicer vehicle.
Any thoughts on the value of having the sports package?
Thanks in advance for any direction you can give me!
To come up with your lease payment, the assumption is a selling price of $38,500, using the base money factors...
That is a pretty good deal...
I like the White w/Terracotta.. a nice color combo.. But, if the heated wheel is important... (don't know..never had one). The sport package is going to come with bigger wheels, and eventually more expensive tires.... Also, a slightly stiffer suspension, and nicer seats... and, a nicer steering wheel (which prob can't be heated, ergo the deletion).
Adding the sport package, but losing metallic paint.. Probably looking at $20/mo. more...
I could live with either one... but, you might want to drive the sport package, to make sure you like the ride, drive and seats....
regards,
kyfdx
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I would second that suggestion. You would never think folks would complain that an SUV "rode to rough" or was "too sporty" but you do hear that from folks trying the X3 w/sport. To each his or her own, of course
Dennis
$325 is the part cost for Sirius.... installation is additional (check the disclaimer). To get the Sirius radio installed at the factory on a 3-series, for example, the total charge is $595. Your local BMW Center may be higher or lower....
Parts and installation for the Universal Transceiver can range from $300-$500 depending on model.
The $1100 may not be that far off once you include installation time.
They sell the Sirius Reciever and Intallation kit for under $300, this assumes you already have Satellite Pre-Wiring for the antenna. You can probably find an independent BMW tech or stereo installer to do it for $100.
By Universal Transceiver, I assuming you are talking about HomeLink? A waste in my opinion...
Titanium Silver
Black Leather Interior
Cold Weather Package
Premium Package
Heating steering Wheel (great feature... if you have had it before you get spoiled)
Privacy glass
Satellite Prep
10,000/36 months
MSRP=$40,595
Took off $1600=$38,995
Didn't know Invoice $
63% residual
0 down
Monthly Payment (incl 6% tax)=$446.48
63% residual
Due at signing:
1st month payment
$625 acq. fee
2 year registration $225 (seems high)
$37.50 tax (Is this tax on cap cost reduction??? Is this a necessary charge?)
Delivery in 2-3 weeks, which is fine.
I can live without the sport package although I was kind of getting excited about the white/terracotta color combo.
Any room here for further negotiations?
Thanks again for your help!
And, yes.. you have to pay tax on the acquisition fee...
MIght be able to knock enough off the selling price to pay for that acquisition fee.. if you keep negotiating..
regards,
kyfdx
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Thanks!
Cap cost=$38,5000
Acquisition $625+37.50 tax=$662.50 rolled into monthly payment.
Monthly payment 36 months including 6% tax=$450.40
Out of pocket at signing=first month+$225 2 year registration fee=$675.40
Are the calculations correct?
I have to leave a deposit today so if this looks right, I will go ahead with it.
Did I miss anything?
Again, thank you so much for your help on this.
Your deal looks very good... The minimum upfront and $450/mo.
regards,
kyfdx
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Also, someone posted that they had their acquisition fee waived on another thread. Is that possible? What is the money factor for September? I have not seen it anywhere.
Guess this was more than "1 last thing"!
Thanks
Acquisition fees can't be waived... without an increase in the money factor.. You don't want to do that... It is cheaper to just have them roll the acquisition fee into the cap cost.
I haven't seen the new lease program, but I've heard the numbers are the same as last month.. 60%-63% residual, depending on mileage allowance, and a money factor of .0010...
regards,
kyfdx
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What is the invoice price?
What is the money factor?
Is the acquisition and 37.50 tax fee included in the cap cost?
Are they obligated to disclose this info if asked?
The dealer has to have this trucked to them. I am assuming they are charging for this somewhere.
Thank you, again!
Remember the original quote was $446.48 + acquisition of $625+tax at signing using a cap cost of 38,995 (from $40,595).
Then they came down to $38,500 and the monthly is $450.40. Does the $38,500 include the acquisition fee? I learned a lot from you, but I'm still not good at this.
Thanks.
2) I'm not sure if they have to disclose the money factor, but from all of the numbers you have been quoted, they almost have to be using the base factor of .0010.... Otherwise, the price would be higher...
3) I can't tell if your acq.fee is included in the cap cost.. But, I can tell you that the cap cost is indeed $38,500... If you aren't paying it upfront, it has to be included...
So... If you are getting the car for $450/mo. tax included, and only have to come up with around $1000-$1200 at inception.... then you are getting about $2700 off of MSRP, and the base money factor....
That is a great deal..
regards,
kyfdx
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Thanks a million for your help!
The only thing I didn't get was the invoice, but I have a good idea from Edmunds.
Thanks...you were a great help!
And go with what YOU like, not somebody on the internet.
- Mark
I have read over the weekend that the 2006 model will be all one color, but it didn't occur to me to price out a 2006. Is anyone familiar with the pricing for the 2006 X3? I did give a deposit for the silver, but did not sign an agreement yet. It doesn't seem that there will be too much of a difference between the 2005/2006 models. The price I got on the 2005 was pretty good, but if the 2006 is close, I have the time to wait. Any thoughts?
Thanks!
I learned a ton from your discussion forum – hopefully someone can learn from my numbers
My vehicle configuration is Premium Pkg., Cold Weather Pkg. & Privacy Glass.
Invoice price is $33,215 + $1,640 + $685 +$320 + destination charges $695 = $36,555.
The agreed upon price was $37,962.16. That’s a $1,407 (3.85%) premium over invoice.
NJ capitalizes taxes – that is, they take tax on the depreciation (1 – residual %) and add it into the Adjusted Capital Cost. The Adjusted Capital Cost was $38,755.80.
I called this “real depreciation” as opposed to “adjusted depreciation” b/c you’re taxed on the real depreciation but actually pay for depreciation on the adjusted (capitalized) capital cost if that makes sense this is specific to NJ so most of you can probably ignore that
Lease term is 39 months. Money factor is .001. 12k miles/year; 62% residual.
Total rent charge is $2,476.14 or $63.49 per month ([adjusted capital cost + residual]*MF*number of months).
Total depreciation charge is $14,020.90 or $359.51 per month.
Total monthly payment is $63.49 + 359.51 = $423 per month.
Due at signing:
• Initial monthly payment $423
• Bank fee $625
• Security deposit $450
• Capital cost reduction $0
• Registration fees $299
• Acquisition fee $625
• Doc fee/NJ Tire fee $140.20
Total due at signing: $1,937.20; monthly payment $423/month.
The additional $1,407.16 (capital cost over invoice) ends up costing me $1,549.76 over the term of the lease – this is $39.74 per month.
Should I have gotten down to invoice? Can you get below invoice with a BMW? I’m glad that I know that I paid over invoice – at least I’m not some putz thinking I got some great deal. But should I beat myself up over this additional $1,549.76 cost or did the dealer give me, as he said, “an aggressive deal”?
So...will I be in the doghouse for a $423/month deal when the newspapers are advertising $299/month?
Thanks for your response/comments. You have a very informative forum.
You got the base money factor, and acquisition fee... and nearly $2K off of MSRP... Unless there are dealer incentives on the model (and there aren't, in this case), BMWs never go for invoice... Did you get the absolute lowest price? Probably not, but very few people do... You got a fair selling price, without the lease terms being "marked up", on a car that has a very aggressively priced lease program...
A $40K car for $423/mo.. Check out any of the other "Prices Paid" discussions.... You will find that is a screaming deal...
regards,
kyfdx
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- Mark