Rennteam 2.0 - EN - Forum - Re: need lease help please - Page1

Apr 10, 2008 10:30:23 PM

dkreidel: Co-Pilot; Loc: SoCal USA , United States; Posts: 167, Gallery; Registered on: Jan 10, 2006

need lease help please

My new 2008 550i Sport arrived today, and I need to make a quick decision on leasing. I have the cash to purchase outright, but am considering a lease. I expect to drive the car for 3 years - about 50K miles. This will be my daily driver, and I've never leased before.

MSRP $70,575
My price 67,575

15,000 mile, 36 month lease:

Residual $41,639
MF .000216
7 security deposits @.00007 buy down = .000049 $7,350
Drive off $9,766
Monthly payment is $1,028 including 7.75% CA tax

or should I simply give them a check for the 67,575 + 7.75%= $72,643 ??

Sorry - I need to figure this out in the next day or so.

Dick

Thanks!

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Apr 11, 2008 12:13:02 AM

eclou: Veteran; Loc: Texas , United States; Posts: 1182, Gallery; Registered on: Jun 4, 2006; Reply to: dkreidel

Re: need lease help please

Dick, for people looking to lease you might consider doing what they call a "one pay" which is a lump sum lease payment - usually has a good MF discount. That way, you are still leasing and can walk away at xx months (let the bank assume all liability for market forces) and your total lease costs are less than paying monthly.

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Apr 11, 2008 12:26:30 AM

sparkhill: Junior; Loc: Reno, NV; Posts: 115, Gallery; Registered on: Nov 5, 2007; Reply to: dkreidel

Re: need lease help please

Quote:
dkreidel said:
My new 2008 550i Sport arrived today, and I need to make a quick decision on leasing. I have the cash to purchase outright, but am considering a lease. I expect to drive the car for 3 years - about 50K miles. This will be my daily driver, and I've never leased before.

MSRP $70,575
My price 67,575

15,000 mile, 36 month lease:

Residual $41,639
MF .000216
7 security deposits @.00007 buy down = .000049 $7,350
Drive off $9,766
Monthly payment is $1,028 including 7.75% CA tax

or should I simply give them a check for the 67,575 + 7.75%= $72,643 ??

Sorry - I need to figure this out in the next day or so.

Dick

Thanks!

A few questions...
What is the security deposit buy-down for $7,350? Whatever it is, it seems excessive.

The lease finance rate is about 5.1% (0.00216 x 2400). Can you do better than that?

Can you write-off any part of a lease or a purchase?

How long do you usually keep cars?

Do you modify your cars?

Check LeaseCompare to see how the rates compare to what your dealer is offering. The dealer often has other lenders they can use if you push them.

Finally, here is a spreadsheet I made to calculate lease payments Lease Payment

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Apr 11, 2008 12:26:33 AM

AAHTT: Senior; Loc: san diego , United States; Posts: 654, Gallery; Registered on: Jan 21, 2006; Reply to: dkreidel

Re: need lease help please

Quote:
dkreidel said:
My new 2008 550i Sport arrived today, and I need to make a quick decision on leasing. I have the cash to purchase outright, but am considering a lease. I expect to drive the car for 3 years - about 50K miles. This will be my daily driver, and I've never leased before.

MSRP $70,575
My price 67,575

15,000 mile, 36 month lease:

Residual $41,639
MF .000216
7 security deposits @.00007 buy down = .000049 $7,350
Drive off $9,766
Monthly payment is $1,028 including 7.75% CA tax

or should I simply give them a check for the 67,575 + 7.75%= $72,643 ??

Sorry - I need to figure this out in the next day or so.

Dick

Thanks!

Dick, according to bmwusa website a 36 months lease in CA on a 67k$ 2008 550i with 15k miles/year and with 7k$ downpayment, should be 853.00$ plus tax (919.00$).
I would shop around if you have time and avoid a high down payment on a leased car.

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Apr 11, 2008 12:36:25 AM

cannga: Expert; Loc: Los Angeles's "twisties" :-) , United States; Posts: 1940, Gallery; Registered on: Feb 6, 2005; Reply to: eclou

Re: need lease help please

Dick,

As I might have told you, I came within one dealer's accident (the dealer spray painted my ordered-to-spec car accidentally while it sat on the lot waiting for me to pick up) of leasing a loaded 550i before buying my first Porsche. 2 things I remember (sorry if it's old news):

1. BMW Financial offers one of THE MOST favorable MF rate (low) and residual (high) around, making the payments unusually low compared to, say, Porsche for the same car cost.

2. The most recent special offer for particular model could be found on a forum in Edmunds IIRC. You post a question, the guy maintaining the site answers within a couple days. Or if your BMW guy is a friend & straightforward with you, just ask him directly. If you are interested , let me know and I'll start searching for that Edmunds site.

It's been so long so all these numbers are *very* rough estimates: My car was 2005, loaded to MSRP 71k; I got a discount of $1500 above invoice. With a 4 year lease, no money down, 15 k a year, I somehow recall the payment to be less than 850 a month, maybe even 800 (??). In other words, even though we have different terms and our costs slightly different, your payment seems high.

What are those "security deposits" of $7350? Thought in general lease is best if no money down?

I assume you already use something like the lease calculator to check the dealer's math?
http://www.calculator.com/pantaserv/lease.calc

Addendum: Here is the Edmunds site that I referred to, I believe (have not had time to confirm). Just scroll down to BMW 5 Series.
http://townhall-talk.edmunds.com/WebX/.ef17997/

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Apr 11, 2008 12:41:05 AM

dkreidel: Co-Pilot; Loc: SoCal USA , United States; Posts: 167, Gallery; Registered on: Jan 10, 2006; Reply to: AAHTT

Re: need lease help please

Anthony: The $7,350 isn't a downpayment, it is a fully refundable security deposit (actually, in BMW speak it is 7 deposits) that each reduce the MF by .000007 or by .000049 in aggregate. It makes the effective MF .00021-.000049 = .000167 . According to the dealer the payment goes from $1086/mo to $1028/mo and the entire $7,350 comes back to me at the end of the lease.

I kind of like the idea of a one payment lease Eugene - never heard of such a thing.

Dick

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Apr 11, 2008 12:50:51 AM

dkreidel: Co-Pilot; Loc: SoCal USA , United States; Posts: 167, Gallery; Registered on: Jan 10, 2006; Reply to: cannga

Re: need lease help please

Hi Can

Yes, mine is ordered to spec too. Carbon Black, natural brown leather, nav, heads-up, hot seats, Logic 7, 6 speed manual, Sport package, 19" non-runflats, anthracite headliner, i-pod interface, Sat radio, etc. I'm getting rid of my 2005 E55 (great motor, lousy car)

I will check out Edmunds - thanks. The car arrived at the dealer today, and I'm anxious to get it off the lot as the sales guy (a personal friend) says it is attracting a lot of attention - it should be quite striking. My old M5 ws also Carbon Black. HRE is now making 19" P40's for BMW's, so I may get their first set or perhaps spring for the lovely 19" Dinan forged wheels.

Dick

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Apr 11, 2008 1:05:47 AM

cannga: Expert; Loc: Los Angeles's "twisties" :-) , United States; Posts: 1940, Gallery; Registered on: Feb 6, 2005; Reply to: dkreidel

Re: need lease help please

You are welcome Dick. First I am no lease expert, ok? So be careful about what I am writing, don't trust me 100%.

LOL. I thought somewhere I have read that the best lease is a simple lease: no down payment, no more than one single security deposit.
At least one advantage would then be the financial guy won't have a chance to "play around" with the numbers in his favor, and the second one would be that when you shop around, the comparison is straightforward, one number against another. But, this is a friend of yours so maybe I am just being overly cautious here. Good luck and let me know if the Edmunds site is the one that I was talking about, where latest internal rates by various car companies are revealed.

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Apr 11, 2008 4:51:10 AM

AAHTT: Senior; Loc: san diego , United States; Posts: 654, Gallery; Registered on: Jan 21, 2006; Reply to: dkreidel

Re: need lease help please

Quote:
dkreidel said:
Anthony: The $7,350 isn't a downpayment, it is a fully refundable security deposit (actually, in BMW speak it is 7 deposits) that each reduce the MF by .000007 or by .000049 in aggregate. It makes the effective MF .00021-.000049 = .000167 . According to the dealer the payment goes from $1086/mo to $1028/mo and the entire $7,350 comes back to me at the end of the lease.

I kind of like the idea of a one payment lease Eugene - never heard of such a thing.

Dick

interesting, I have been leasing cars for a very long time and have never heard of a refundable multi deposit that lowers your interest rate. my problem with this is that if you want to get rid of the car (trade in) before the end of the lease based on payoff, what happens to the refund? would you lose it?.
the classic recommendation for leasing is to get the best rate with the least amount out the door.

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Apr 11, 2008 5:21:37 AM

sparkhill: Junior; Loc: Reno, NV; Posts: 115, Gallery; Registered on: Nov 5, 2007; Reply to: dkreidel

Re: need lease help please

Quote:
dkreidel said:
Anthony: The $7,350 isn't a downpayment, it is a fully refundable security deposit (actually, in BMW speak it is 7 deposits) that each reduce the MF by .000007 or by .000049 in aggregate. It makes the effective MF .00021-.000049 = .000167 . According to the dealer the payment goes from $1086/mo to $1028/mo and the entire $7,350 comes back to me at the end of the lease.

This security deposit sounds bizarre. Watch the fine print and make sure the $7350 is fully refundable if you decide to go that route.

My advice is similar to others regarding leasing:
1) If you want to keep the car more than three years, choose the lease with the lowest payment AND lowest residual.
2) If do not want the car at lease end, simply look for the lowest payment.
3) Pay as little money up front as possible.
4) If you use the car for business, talk to your accountant; some consider leases "easier and cleaner" to deduct.

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Apr 11, 2008 4:31:13 PM

SciFrog: Rennteam VIP; Loc: USA , United States; Posts: 9870, Gallery; Registered on: Nov 15, 2005; Reply to: eclou

Re: need lease help please

Quote:
eclou said:
Dick, for people looking to lease you might consider doing what they call a "one pay" which is a lump sum lease payment - usually has a good MF discount. That way, you are still leasing and can walk away at xx months (let the bank assume all liability for market forces) and your total lease costs are less than paying monthly.

I didn't think leasing companies did that...
What would happen if the cars gets stolen and never to be recovered after 3 months?

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Apr 12, 2008 12:54:24 AM

phojes: Newbie; Loc: Los Angeles, CA, USA; Posts: 2, Gallery; Registered on: Feb 6, 2005; Reply to: SciFrog

Re: need lease help please

The lease sounds expensive to me - almost $10k drive-off plus more than $1k per month for 3 years = total of $46,774. E.g., if you were to buy the car at lease-end, you'd have to pay the $44,866 and so you'd end up paying over $91k to own a $72.6k car (tax included in above figures) - I think I did my sums correctly...

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Apr 12, 2008 6:18:11 AM

TedChen1973: Newbie; Loc: CA, USA; Posts: 19, Gallery; Registered on: May 28, 2005; Reply to: phojes

Re: need lease help please

Quote:
phojes said:
The lease sounds expensive to me - almost $10k drive-off plus more than $1k per month for 3 years = total of $46,774. E.g., if you were to buy the car at lease-end, you'd have to pay the $44,866 and so you'd end up paying over $91k to own a $72.6k car (tax included in above figures) - I think
I did my sums correctly...

it is the same as financing , the interest really adds up. use cars.com's lease vs purchase calculator. it is missing some critical numbers like acquisition fee or security deposit but it gives u an idea of how much interest etc.
your money factor is pretty good imo since leases usually has a higher interest rate than financing unless it is a car the mfg is trying to dump and is offering some crazy lease incentives.

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Apr 13, 2008 4:03:38 AM

TT Surgeon: Senior; Loc: Long Island, NY , United States; Posts: 783, Gallery; Registered on: Dec 28, 2004; Reply to: TedChen1973

Re: need lease help please

You should insist on a zero dp, zero sd lease. The whole idea is to minimize any initial out of pocket expenses. Use it for work and write it off, should be perfect for you.

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Apr 13, 2008 5:51:05 AM

isurg: Newbie; Loc: KY, USA; Posts: 16, Gallery; Registered on: Jan 3, 2008; Reply to: TT Surgeon

Re: need lease help please

Your money factor sounds good compared to the .0029 that I was quoted by my dealer for my 997TT that arrives next week. Even though I can lease thru my practice, I'm not sure if I should just buy it at that lousy money factor since I plan on keeping it.

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Apr 13, 2008 5:03:04 PM

dkreidel: Co-Pilot; Loc: SoCal USA , United States; Posts: 167, Gallery; Registered on: Jan 10, 2006; Reply to: isurg

Re: need lease help please

I was able to get the MF down to .0000196 after some EZ negotiating. I purchased my 997TT because I intend to keep it , but expect to swap the new BMW in 3 years as BMW's new V8 TT motor should proliferate through their product line much as their inline 6 TT motor already has.
Curiously, BMW Financial Services favorable MF is only obtainable if one makes the multiple security deposits (7 of them in my case; each equal to one months lease payment). So, by placing $7,000 in FULLY REFUNDABLE security deposits for 36 months I was able to reduce my aggregate lease payments by $2,480 over 36 months - a pretty good ROI on the $7K tied up for 3 years.

The ipod interface, Bluetooth and the heads-up display on the new 550 are really cool - Porsche should be ashamed of themselves for not adapting what is available from their Bavarian neighbors.

Dick

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Apr 13, 2008 8:27:54 PM

eclou: Veteran; Loc: Texas , United States; Posts: 1182, Gallery; Registered on: Jun 4, 2006; Reply to: dkreidel

Re: need lease help please

MF's are getting alot better. Mine was well over .003 back in 9/06

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