Good Lease Deal?

wiphilly9001 · May 2015

2015 BMW 328i xDrive with premium, cold weather package and rear view camera.

MSRP $45,450
10k miles
36 months
L.E.V. 65%
Residual $29,542
Initial Cap Cost $42,743
Assignment Fee $795
Net Trade $2,966
Lease Factor .00169
Pmt with tax $364.99
Amount due at start $2,810

kyfdx · May 2015

wiphilly9001 said:
2015 BMW 328i xDrive with premium, cold weather package and rear view camera.

MSRP $45,450
10k miles
36 months
L.E.V. 65%
Residual $29,542
Initial Cap Cost $42,743
Assignment Fee $795
Net Trade $2,966
Lease Factor .00169
Pmt with tax $364.99
Amount due at start $2,810

Don't know your tax rate, and we don't have the NET CAP cost.. but, a few things to note.

Money factor is marked up from the base .00129
$2966 trade + $2810 is a lot of money upfront. That's what makes the payment seem so reasonable.
The actual full monthly cost of the lease is about $515/mo, if you amortize that big upfront payment.

wiphilly9001 · May 2015

Tax is 5.1%. Thanks for pointing out the MF. Based on that I think I can get it for $362/mo with the $2966 trade + $1400. Would that be a good deal?

Michaell · May 2015

wiphilly9001 said:
Tax is 5.1%. Thanks for pointing out the MF. Based on that I think I can get it for $362/mo with the $2966 trade + $1400. Would that be a good deal?

We don't recommend using trade equity as down payment - if the car is stolen or totaled, you lose that money.

Consider instead using it for MSD - this lowers the base MF of .00129 and you get that money back at the end of the lease.

wiphilly9001 · June 2015

Here's what I ended up doing:

MSRP: $45450 (2015 328i xDrive with Premium Package, Driver Assist Package & Cold Weather Package).

Payment $365 36mo 10k (with the $2966 trade equity + $1754 includes first payment).

Breakdown:
Initial Cap Cost: $43,135
Title Fee $89 + First Payment $365
Residual: 66% @ $29,997
MF: .00129
Acquisition Fee: $1024 ($795 + $229 Service Fee)
Cap Cost Reduction: $1300
Value of trade $18,000 (2013 Accord Sport with 20k miles. Got car new for $22,200 no money down @ 2.00%)
Balance on trade $15034

They would do the MSD with lower MF, more cash upfront and higher payment so I passed on that.

kyfdx · June 2015

Congrats on the new BMW!

Regarding MSDs: Yes, higher payment and more money upfront, but a lot of money returned at lease-end. It's a lower overall cost, but it's not for everyone. It's a lot of money out of pocket.

wiphilly9001 · June 2015

Thanks kyfdx, appreciate the feedback! When I plug in the numbers into the Edmunds Lease calculator I believe they would have had to consider the $1000 Anniversary Credit to get to the payment, otherwise the payment is showing as $399.

I think with one more counter offer I could have gotten' the $229 service fee knocked off, but I think it was an ok deal. The car is great, I'm really liking it!

kyfdx · June 2015

wiphilly9001 said:
Thanks kyfdx, appreciate the feedback! When I plug in the numbers into the Edmunds Lease calculator I believe they would have had to consider the $1000 Anniversary Credit to get to the payment, otherwise the payment is showing as $399.

I think with one more counter offer I could have gotten' the $229 service fee knocked off, but I think it was an ok deal. The car is great, I'm really liking it!

Great! Enjoy your new car!

wiphilly9001 · July 2015

Hey Guys,

I've been trying to plug in the numbers into Edmunds lease calculator, but it's showing an extra $20 for payment. (Calculator is coming up with $385 vs my $365 payment).

Here is the breakdown on how I'm plugging in the numbers in the calculator.

MSRP 45,450 (Edmunds True Market Value for my area 42,999)
Gross Capitalized Cost is actually $44159 Net breakdown (43135 sale price + 229 service fee + 795 acquisition)
Other Fees: $89 (Doc fee)
Value of trade: 18000
Amount Owed: 15044 (for Net Trade allowance of 2956)
Cash down payment or Capitalized cost: $1300
Lease term 36
Residual 29997
MF 0.00125
Miles 10,000
Security Deposit 0
Sales Tax: 5.1 (5.1 is my home tax, dealer located in 5.6 tax area)

My total out of pocket $1754 (89 doc, 1300 down, 365 first payment)

Edmunds comes up with monthly of $385
My payment is $365

I'm trying to understand what i'm missing. Any help would be appreciated.

Michaell · July 2015

wiphilly9001 said:
Hey Guys,

I've been trying to plug in the numbers into Edmunds lease calculator, but it's showing an extra $20 for payment. (Calculator is coming up with $385 vs my $365 payment).

Here is the breakdown on how I'm plugging in the numbers in the calculator.

MSRP 45,450 (Edmunds True Market Value for my area 42,999)
Gross Capitalized Cost is actually $44159 Net breakdown (43135 sale price + 229 service fee + 795 acquisition)
Other Fees: $89 (Doc fee)
Value of trade: 18000
Amount Owed: 15044 (for Net Trade allowance of 2956)
Cash down payment or Capitalized cost: $1300
Lease term 36
Residual 29997
MF 0.00125
Miles 10,000
Security Deposit 0
Sales Tax: 5.1 (5.1 is my home tax, dealer located in 5.6 tax area)

My total out of pocket $1754 (89 doc, 1300 down, 365 first payment)

Edmunds comes up with monthly of $385
My payment is $365

I'm trying to understand what i'm missing. Any help would be appreciated.

I'm not getting either of those payments ... with what you've shared, I get a pre-tax payment of $486.08; $510.87 with 5.1% tax applied.

wiphilly9001 · July 2015

Hmmmm. Are your numbers minus the trade and minus the down payment?

wiphilly9001 · July 2015

Those numbers make sense as they match RWG. I had been plugging in the numbers at http://www.ridewithg.com/rwg-calculator/ but then I was trying to subtract the money down and also the trade equity but it wasn't coming to the $365. So then I tried Edmunds which allows to plug in the trade and cash down, but thats where the payment is showing at $385.

I was trying to figure out the RwG Deal rating and either i come up with 88.5 or 89.5 depending on if the service fee is entered with Sale Price or Fees rolled in. Those numbers pretty much match your numbers, but again, when I try to back track to the $365 things don't add up for me which is what lead me to post my question.

Thanks.

Michaell · July 2015

wiphilly9001 said:

Hmmmm. Are your numbers minus the trade and minus the down payment?

No - what is the net cap cost after those are factored in?

wiphilly9001 · July 2015

$39,891.95

Michaell · July 2015

wiphilly9001 said:
$39,891.95

Ah, that makes sense. Now I'm getting $362/mo before tax and $381/mo after.

wiphilly9001 · July 2015

One small correction: the MF is .00129 (not .00125).

So now I get $365/mo before tax and $384 after with the RWG calculator which also closely matches the Edmunds calculator with tax (Edmunds is showing $388 with tax).

Few questions:

1. The difference i was looking for with the ~$20.00 looks to be with the tax. In my contract they are not charging tax so my payment is staying at $365/mo. Is that because I had a trade?

2. As long as I don't total the car or it gets stolen, in the end is this a good lease? According to the RWG calc, it is rating it as an exceptional deal when plugging in the sale price of 39891.95 with 0 fees rolled in. Would you agree with that?

3. If it is a good deal, would this lease be worth buying at lease end "if" I get a negotiated down lease end price?

Michaell · July 2015

wiphilly9001 said:
One small correction: the MF is .00129 (not .00125).

So now I get $365/mo before tax and $384 after with the RWG calculator which also closely matches the Edmunds calculator with tax (Edmunds is showing $388 with tax).

Few questions:

1. The difference i was looking for with the ~$20.00 looks to be with the tax. In my contract they are not charging tax so my payment is staying at $365/mo. Is that because I had a trade?

2. As long as I don't total the car or it gets stolen, in the end is this a good lease? According to the RWG calc, it is rating it as an exceptional deal when plugging in the sale price of 39891.95 with 0 fees rolled in. Would you agree with that?

3. If it is a good deal, would this lease be worth buying at lease end "if" I get a negotiated down lease end price?

1. Tax has to be paid somewhere ... either at the beginning of the lease in certain states or added to the monthly payment. Trade in should not impact your tax obligation.
2. I don't make final decisions with other people's money. How can you predict what will happen in the next three years?
3. You can't negotiate the residual value at the end of a lease.

wiphilly9001 · July 2015

Thanks for the info, I'll have to confirm with dealer how the tax was done. In my state of WI it is supposed to be on the monthly payment.

#2 was hypothetical, since it is advised not to give money down on lease, but with that aside was looking for another opinion on if this lease was a good deal.

wiphilly9001 · July 2015

Michaell, apparently the tax credit on trade with equity does impact tax on a new lease - at least here in Wisconsin. So that explains the difference I was looking for.

Per the dealer, "On a lease you are taxed on the payment. It is what is called a use tax and you are not taxed on the whole car. Your tax credit from your trade was applied to the use tax. If your lease does not show tax on the payment (which mine does not), that is because your credit covered the whole amount".

Michaell · July 2015

wiphilly9001 said:

Michaell, apparently the tax credit on trade with equity does impact tax on a new lease - at least here in Wisconsin. So that explains the difference I was looking for. Per the dealer, "On a lease you are taxed on the payment. It is what is called a use tax and you are not taxed on the whole car. Your tax credit from your trade was applied to the use tax. If your lease does not show tax on the payment (which mine does not), that is because your credit covered the whole amount".

I learn something new every day. Thanks for explaining that. Wonder if it's that way in other states?

kyfdx · July 2015

Not many states, I bet.. nice for Wisconsin, though!

Good Lease Deal?

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