BMW 5-Series Lease Questions

logic_3 · September 2009

tortez: I'll take a shot at giving you some advice, I've been hammering out these numbers over the last 2 weeks on my own deal and have learned quite a lot from a couple of forums.

First I need either the invoice price of the car or give me the specs and I can tell you what the invoice price is. Based on that we can see how much over invoice you are paying. That will give you an idea if you are getting a "good deal". Most recommend not paying more than $500 over invoice from what I have seen.

Since your in CA, I am assuming you are looking at a 528i. The MF and residual you were quoted are correct.

Line item your drive offs for me. When I try to back out the #'s something seems off. How much was your acquisition fee? Whats the tax rate in CA?

kyfdx · September 2009

Generally, a sales person gets paid off a percentage of the gross profit on the selling price, only... For 90% of the deals on a new car, they probably get the minimum payout ($150, or so on a BMW).

The finance department is usually credited with any other profit on the deal.. BMWFS pays the dealer 70% of any extra money made on money factor or acquisition fee bumps over the base rate..

BMW dealers can usually see about 5% of invoice, after the sale, in CSI bonuses, etc... The sales/finance people don't see any of that money.. That said, very few BMW dealers will do a deal at invoice.. unless it is a hard to move car at the end of the year...

Sales/finance managers generally have an average margin and a sales goal that they need to hit, to generate a certain profitability for the dealership.. There may be some variation in deals... but, they want that number.. and that's what they are working towards.. I like to know what the numbers are... but, I tend to not worry about who is making what, other than knowing their motivation... What comes out of my pocket is the number that matters to me... I find it rather rude to bring up compensation matters during a negotiation... by either the buyer or seller..

regards,
kyfdx

gregoryx · September 2009

I've been following these posts pretty closely and i am learning something new with each post. Thanks for the information. Does anyone have experience or an opinion about the bmw select program? short story is that it is a mix of a lease program and purchase option. the rate is 2.9% interest on 2010 model with unlimited miles for 60 months with no money down, with a ballon payment at the end of the term. at the end of the term, you have the option of rolling it into a short term loan (at the same interest rate) or trading your vehicle in for another vehicle (at the same interest rate).

thoughts? i don't see it in any of the posts and i'm trying to understand the pros/cons

Karen_S · September 2009

A reporter is looking to interview a consumer who passed on purchasing a Cadillac because there was no attractive lease option. Please send your daytime phone number to ctalati@edmunds.com by Wednesday, September 16, 2009.

logic_3 · September 2009

Thanks for the response kyfdx. I agree as well. I didn't want to know what the dealer makes. My current sales person started with the "What do you think I should make on this deal?" question when I talked about lowering the MF. Telling that he personally is only making $280 on the deal. And $80 of that comes from the upped MF. So like everything else, I started my fact checking on this.

So applying what you are saying to my deal, which is:

2010 535ix with Premium Pkg, Access Control and NAV
Its a demo car with 7k miles on it
$57,875 MSRP
$50,279 Sales Price
$32,930 Residual (56.9%)
.00217 MF
3yr lease, 12k miles
$599/mth
Due at signing, $599 1st mth, $600 security dep, $925 Acq. Fee, $2,400 MSD, $190 State/doc fees, $47 plate/title

Yes, the sales person gets the marked up acg. fee, but that is all they get? The sales person does not get a cut of the MF above BMWFS set rate? In my case, BMWFS requires a .00035 on top of the 00165 because it is being purchased by a tax exempt entity. And there is no money being made off the sales price of the car because it is priced below dealer invoice?

kyfdx · September 2009

The cost structure of the demo is the unknown variable in the equation.. I don't know the demo plan for BMW. I'm sure that the dealer credits some amount for the miles on the demo, but how much they get from BMW, I'm not sure.. (don't get me started on ... "How much do you think I should make?" )

But, the only thing you really need to know.. is if this deal is cheaper than what you can negotiate on a new (non-demo) car? It is a 3-year lease... so... .cheaper is cheaper.. As long as you have warranty and maintenance for the full term, then the 7K miles mean nothing to you..

I have to say... for a $58K MSRP car... $630/mo. is a great deal (amortized the acq.fee), even if you did have to do 4 MSDs to get it.. Does that include tax, as well?

You can get lost in the money factors and acquisition fees, after awhile... Sometimes, you need to look at the real world finances. How much am I paying to rent this car, per month? This looks cheap to me...

regards,
kyfdx

japhale · September 2009

Might be moving to Belgium for a 2 - 3 year stint. Any ideas on the leasing costs for a '09 528xi over there at 12k miles/yr ?

J

bettencb · September 2009

Any help on this one? Particularly interested in whether there is additional Lease Cash/Dealer rebate. Thanks.

gregoryx · September 2009

Community . . . i sent a post a couple of days ago asking about the BMW select program and no responses yet.

any thoughts?

politeindian · September 2009

Hi All,

Below is the offer I got from a Dealer in New Jersey. I am a returning customer

MSRP 49275
Sale Price 45500
MF - 0.00145
Residual - 58%
15000 miles a year
Due at signing - 2087
Monthly 627

Please let me know is this is a good deal or not.

thanks

armitagemike · September 2009

Can you provide me with the Money Factor and Residual value for:

2010 528xi 36 month 36,000 mile lease
2010 528xi 36 month 30,000 mile lease

Also, realize I can browse the "prices paid" forum, but wondering if there is becoming a standard "over invoice" price to be paid for this car to calculate a fair lease.

Thanks!

drewzie · September 2009

Here is the offer I got from my NJ dealer

MSRP $47,375
SALE PRICE $44,250
$2,550 DOWN
$598 PER MONTH
36 MONTHS
15K
RESIDUAL 58%
MF .00145

cancer · September 2009

I am looking for a 535xi with cold weather package only. The dealer in Pittsburgh gave me the following figures on a 10,000K miles 36month lease;

MSRP: 54,500
Negotiated Price: 52,000
MF: 0.00180
Residual: 61%
1500 initial payment includes first month payment, acquisition fee, document, title etc.
Monthly payment of 725.

To me this sounds like a BAD deal. I have excellent credit. Any input will be appreciated.

jeffal · September 2009

Does the 725 monthly include tax?

They only gave you $2,500 below MSRP and they bumped the MF. The current MF for that car is .00165 but dealers are allowed to bump it up for extra profit. The residual is correct.

acurious · September 2009

It does sound like a bad deal. The MF seems too high, Clueless. Right now, dealers should be biting at $500 over invoice, with a MF of .00155 to .00165. I just leased in late Aug my 535i with M Sport Package in San Jose, CA. MF was .00175 but got price down to $500 over invoice. My residual was 58%. Yours is better. I would work on the Invoice and MF. I recently learned that if you tell them you have one or two dealers who are willing to do "xyz" that may force a better deal. Good luck.

cancer · September 2009

I think it includes tax, but not 100% sure.

cancer · September 2009

Thank you friends. I plan to go back on this weekend. Your input/figures will definitely be very helpful.

tambaydriver · September 2009

Gregoryx,

I was told of this program too and the site below has a good thread concerning the topic:
http://www.bimmerfest.com/forums/showthread.php?t=298834

It appears there are several questions to get answered before I can make a good value determination but the program seems to carry a hefty risk at the back end.

Carman, are you familiar with the BMW Select Program? :confuse:

jake508 · September 2009

@all
wow what a great forum! I learned a bunch from you guys. Here's my deal 2010 528xi $49.4 msrp vp package split rear seat $589 month 36/12k $6790 driveoff with $4800 in msd's only 7 that count -00049 mf wow that helps 6.25% mass tax

I found that BMW stores in my market (Boston) inflate the MF 20-30 points that's $20 $25 a month more (shame shame) on them TIP ask for them to conferm the base MF rate aka lease loan rate they'll hide it if they can they keep 70cents on the dollor over the base rate (sneaky)

it's not much but hey it's my money just be upfront about it

gregoryx · September 2009

thanks . . . the bimmerfest thread was great. good looking out.

Carman, or anyone else in the community - are there any other insights that you have on the select program? it does have a ballon payment on the backend. because i live in ohio, i'm guaranteed 2.9% interest if i choose to finance the ballon payment for another 1-2 years OR i can pay it off OR i can take the residual value and roll into a new vehicle at the time.

kyfdx · September 2009

The Select program is just an extended loan...

The drawback in comparison with a lease, is you don't have the option to turn it in at the end of the term.... You have to refinance the balloon, or sell the car, and repay the balance...

Generally, they created the program as an alternative to leases for full-tax states like Illinois and Texas. It preserves the trade-in tax credit for those states, by putting the car in the name of the buyer, rather than a leasing company.

It is rarely used outside of the states with those taxing policies..

There is nothing inherently wrong with it... Though, many people have the opinion that if you can't afford to pay for a car with a 60-month loan, then it is too expensive for your budget.

regards,
kyfdx
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hcb210 · September 2009

here is an offer for 528 xi 52,370 MSRP
2300 at sign in
4000 trade
36/ 15K/year /574 (inc. tax)
58% residual

anmani · September 2009

All,

In the past I have always bought my cars but I am considering leasing a car at this time. I am looking at leasing a 2009 or 2010 528i with Prem package, navigation, park distance control and split rear folding seats. I am looking at a 3yr lease with 15K miles. Can I ask for some advice on what is a reasonable purchase price, what is the MF and what would be reasonable monthly payments. Live in SoCal.

Any help would be much appreciated.

gregoryx · September 2009

thanks
i have a vehicle allowance as part of my compensation package and i drive too many miles for a straight lease program. based on what the dealer told me, i can also roll the vehicle into a new vehicle and continue the lease type payments. i never plan nor need to purchase a vehicle given my situation so i'm going to go with it.

CarMan@Edmunds · September 2009

Here you go, bmwpower2010. BMW Financial Services' current buy rate lease money factor and residual value for a 36 month lease of a 2010 528i Sedan with 10,000 miles per year are .00145 and 61%, respectively.

Car_man
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CarMan@Edmunds · September 2009

Hi bettencb. The numbers that you mentioned in your post are indeed correct. BMW is not currently providing any cash incentives on leases of this car.

Car_man
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CarMan@Edmunds · September 2009

Hi armitagemike. Here's the information that you're looking for. BMW Financial Services' September buy rate lease money factor and residual value for a 36 month lease of a 2010 528xi Sedan with 12,000 miles per year are .00155 and 60%, respectively.

The money factor for a lease with only 10,000 miles per year is exactly the same, but the residual value would be 1% higher.

Car_man
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wedgeman · September 2009

I am about to sign lease w/ JMK BMW in NJ - 36 months - 15k miles/year; $15k down (includes Audi trade-in); MSRP = 60,170; Invoice = 55,925; "Price" on lease sheet = 57,000. MF = .00165 and .58 residual. Lease cost = $455/month. Liive Union County, NJ; Reasonable??? Should I be asking for .00155, and, for $500 above the invoice price?

pkim2 · September 2009

Need you advice please. Your help is amazing!! so nice of all of you to share the advice.

2010 - 530i (with Premium and Cold weather Pkg)
retails: $53,425 - ($3000 discount on the vehicle)
residual value: 61% at 10,000 miles per year (I don't drive much, so 10,000 is fine for me)
lease rate: .00113 with (6) six multiple security deposits ($700 x 6 = $4200)
$662.34/mo including tax  with $4937.34 due at singing ($4200 is refundable SD) (Sales tax in here is 6.75%)

Is this a good/bad deal?

Thanks in advance!

x021627 · September 2009

Never, ever but any substantial $$$ down on a lease. The point of leasing is to put as little as possible out of pocket on one. If unfortunately your car was to be totaled, you would be out whatever you put down on the lease less whatever the insurance company gives you. Usually when you have a trade when you are leasing, they cut you a check for the value of your car you are trading. Please re-think your decision here.

Best Wishes...... :mad:

wedgeman · October 2009

To x021627: Thanks, makes sense not to put down more than needed.

x021627 · October 2009

smartcpa · October 2009

Does anyone know if the October 2009 Money Factors were changed for 535XI? I was quoted .00165 MF and 60% Residual.

armitagemike · October 2009

Car Man:

Thanks for your reply. I have worked out the following "terms" with my dealer on a 2010 528XI, but we are not coming up with the same monthly payments. Here are the particulars:

MSRP of 52,895
Selling price of 49,500
Money Factor of .00155 and
Residual of 61% for 10K, 60% for 12K

No other cap reduction or cap increases are including, as I am paying all fees and taxes "at closing".

Also, I am turning in a leased car, and I am under the impression that in Illinois the Fair Market Value of the car can be used to reduce the taxes on the transaction.

So, I would greatly appreciate it if you would:

1) Advise me what you think the monthly payments should be for the 10K and 12K option given these numbers
2) Confirm that the taxes for this vehicle would be as I describe. Thanks!

CarMan@Edmunds · October 2009

Hi smartcpa. BMW's October lease program for the 2010 535xi is exactly the same as it was in September.

Car_man
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CarMan@Edmunds · October 2009

You're welcome armitagemike. Let's work up some payments and see what we come up with.

According to my calculations, if you were to lease a 2010 BMW 528xi Sedan that has an MSRP of $52,895 and a selling price of $49,500 through BMW Financial Services right now for 36 months with 12,000 miles per year, your zero down, pre-tax monthly payment would be around $620. The payment for a lease with only 10,000 miles per year would drop slightly to around $606.

Car_man
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sjbarrister · October 2009

Hi Car Man,

I need your help in determining whether this is a good deal on a 2010 BMW 528i:

MSRP: $49,400
Sale Price: $47,400
MF: .0016
Residual: 61%
Miles: 10,000 per year
Monthly Payment: $661 excluding tax

I am not paying anything out of pocket. The dealer is going to pay for first payment, aquisition fees, security deposit, etc.

Thanks for your help!!

ed4040 · October 2009

Car_Man,

If using the same numbers, what would the lease payment be for 15k miles per year?

kyfdx · October 2009

If the spread between 10K and 12K is $14/mo., then add $28/mo. to move from 12K to 15K..

regards,
kyfdx

sailingmoe · October 2009

We are going to lease a new 525 some time soon. We are very flexable on the timing. Is there a better month to lease in because of the residuals? late in the model year, early in the model year or does it not matter. Thanks for your thoughts

amgrouchy1 · October 2009

Does anyone have the October money factor and residual rates for a 550i?

also and prices paid and experiences would be appreciated!

Thanks.

amgrouchy1 · October 2009

i realize i didn't provide enough information. Hoping to get the money factor and residual for a 2010 550i, 10k miles/yr for both 24 and 36 month term.

i was given a residual of 57% by the dealer for 10k and 36 months, but i saw somewhere else the residual listed at 57% for 15k miles per year and am wondering if the dealer gave me wrong information or i should blame it on the internets.

trying to get a deal done this week so any insight quickly would be great help!

also, has anyone been getting straight invoice or even below? a 550 with manual transmission is hard to come by without ordering.

poppdriver · October 2009

I am interested in leasing a 2010 535i. After doing some research, I settled on a configuration that I like. I have two questions:

1. I would prefer a car with the Logic 7 sound system. Since few dealers seem to have one in stock, will this make it more expensive for me to lease the car? For example, will the dealer be less willing to deal on the sales price (cap cost) if he has to obtain the car from another dealership? (I know I'll have to pay for the cost to truck the vehicle here.)

2. Based on what I have read on this forum and elsewhere, I was thinking I would offer to pay a cap cost of $1000 above invoice and a MF of .00156. Is that unrealistic?

Thank you.

sergeym · October 2009

October numbers are
2010 BMW 550i Sedan
24 Month  Residual 61% of MSRP  .00155 Base Rate
36 Month  Residual 57% of MSRP  .00155 Base Rate
for 15K miles per year, you should add 3% for 10K miles., MF does not change.
You can shoot for invoice and agree on $2-500 over with some dealers.
You will most probably have to order one. Not many 550 are in stock even with auto.

sjbarrister · October 2009

I negotiated with a dealer a sale price on a 528i for $45,000 with MF of .00145. The dealer agreed, but wants to lower the price to $43,981.00 but raise the MF to .00185. For both scenarios, the monthly payment is the same. But is there something I am not seeing? Is there any disadvantage or advantage to agreeing to the dealer's offer?

Thank you.

CarMan@Edmunds · October 2009

Hi sjbarrister. Let's take a look at the deal that you were quoted. The car that you are interested in, a 2010 528i Sedan, probably has a spread of around $3,800 between its full MSRP and its dealer invoice price. That puts the selling price that you were quoted at around $1,800 over dealer invoice. That's enough meat left on the bone that if you have the time and are so inclined it wouldn't hurt to comparison shop a little to see if you can beat this offer.

Once you arrive at a selling price that you are comfortable with, have the dealer calculate your car's monthly payment using its buy rate lease money factor of .00145 (.00160 for non-loyal customers who wish to have their security deposit waived).

Car_man
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CarMan@Edmunds · October 2009

Hi ed4040. Using the numbers in the post that you referenced, but increasing the mileage allowance to 15,000 miles per year would cause the payment to rise to around $647.

Car_man
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CarMan@Edmunds · October 2009

You don't sound that grouchy to me, amgrouchy1. BMW Financial Services' October buy rate lease money factor and residual value for a 36 month lease of a 2010 550i with 15,000 miles per year are .00155 and 57%, respectively.

Car_man
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sjbarrister · October 2009

Thank you Car_Man. I have negotiated a sale price and MF as described in my post #2547. What you you think?

Your response is greatly appreciated.

Thank you.

CarMan@Edmunds · October 2009

You're welcome sjbarrister. The $45,000 selling price that you negotiated is an excellent deal. I guess that somehow the dealer is making more profit on this deal by marking up the money factor. As long as none of the other terms of you lease have changed and the monthly payment is exactly the same, I don't see any harm in letting them reduce the price further and mark the factor up.

Car_man
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BMW 5-Series Lease Questions

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