2019 X3 Lease payment deal or no deal?

Ask the Hackrs
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1

Hi All,

This has been such an informative forum I have leased many times in the past only to be happy with a “payment number” in mind but never really dug into the numbers until this recent quote.

If you could help me wrap my mind around this large payment I would appreciate it.

2019 X3 xDrive 3.0 Pending Custom Order Fully Loaded the only options missing are Wireless Charger and Vent Seats. Here are the details of my spec sheet in order. Please help me out and see if I am getting a deal or not.

Total Equipped
56,895
Selling Price
51,480
Term 36 months
10k miles per year
1.82 money factor
59% residual

Heres were things get a little tough to understand

Selling Price
51,480
Cap Reduction Tax 8.6% = 2,172 <–is that really right?
Bank Fee 925
Cap Reduction 1,500 (this is supposed to be the loyalty rebate)
TOTAL CAP COST 53,077.20

Residual Value 33,568
Total Deprecation 19,509
Monthly Depreciation 541
Monthly Finance Charge 157
Monthly Payment Total $699 . ??

Next line items I am not clear why they are adding the rebate of 1500 only to deduct it as wash basically.

Capital Reduction 1,500
Up Front Tax 137.57 (this appears to be the tax on rebate and doc fee)
Doc Fee 95
First Payment 699
security deposit 0
DRIVE OFF = 2,432

Rebate 1,500
Total Due at Signing
$932 + 280 DMV Fee

Any thoughts or help with this “deal” would be greatly appreciated. I “think” the numbers check out but still feel the payment is very high and there might be some “hidden” fees or add /take items in these numbers.

Thanks All

2

Where are you located and how are leases taxed there?

3

NY and I believe it’s only portion of lease used.

4

They also said they need a deposit by tomorrow to lock in the deal. 12/1/18

5

My 2c which i hope will help. Doc fees are fixed at $75 in NY so get them to adjust that. Your overall discount on MSRP is 9.5% with the incentive so you’re really only getting a 6.8% discount before incentives. Taxes look about right if they’re taxing the incentives so not much you can do there.

If I were you, I’d aim for a much larger discount before loyalty is applied e.g. 10% before incentives you’d would save $60 per month. Look into the dealer waiving the acquisition fee for a marginally higher acquisition fee (search the forums for details). Also consider if you really need all the bells and whistles here. The more optioned it is, the less inventory and consequently less willing they’ll be to negotiate. If there are some things you can live without it will open up a lot more inventory and deals for you. Finally be prepared to walk, the moment they get a deposit from you, it’s over.

good luck

6

Artdaug this was really helpful can’t thank you enough for taking the time on this for me.

See I thought I was doing good at 9.5% and getting the car down to 51k but what your saying is that with that rebate they are offsetting my gain? That’s what was confusing me on this setup, we have gone to this sales rep in the past and have a great experience in prior sales but I’m tending to think we make it too easy for that person when they get me the payment I want vs what I should be getting. How can approach this tomorrow when going in there to finalize? Their response when I even got them to “51480 was we are taking 5k off a brand new custom order car how much more could we take.”

Thanks again for all your help any additional thoughts or input in definitely welcome as I am headed there tomorrow afternoon.

7

I placed an order today in NJ at 11% off MSRP + $2,000 in incentives ($1,500 loyalty + $500 OL code from Citi Field event). Walked away from another dealership in NJ with same deal as I didn’t like the options in the car and they wouldn’t do an order. However I was also turned down by many who wouldn’t go above 7% + incentives. Hope this information helps you tomorrow and good luck with your negotiations.

8

Okay thanks pupsonboard, so are you saying I should be looking for a sale price of around 50,640 for my MSRP of 56,895? or am I trying to get the total cap cost that is currently at 53,077 down to what exaclty?
Hope that question makes sense…

I understand the 11% off MSRP but how are you determining that your deal is 11% on top of the $2000 discount in the calcs to ensure I am maintaining that 11% discount.

Thanks for the help…

9

Any other ideas… is the deal they are currently presenting me really that bad if they don’t budge…?

10

The $2k rebates shouldn’t even be in the same conversation as your dealer discount off MSRP so sepeate the two if that is where the dealer goes

11

In the past if I was confused about the pricing I would literally ask the sales person to take out a piece of paper, start with the selling price and then list out every expense that was included and that amount should get you to cap cost. Keep in mind the rebate is treated like a payment so it does appear in a separate part of the contract.

12

One other idea to try before you visit the dealership today would be to search the inventory of any dealer in the area that you would be willing to drive to (I used 2 hours) and if they have a car in inventory that has the options you want, email them and present an offer that is better than what was currently offered to you and let them know you can pick up the car today. Get the response in writing. If you can get a better deal consider going to that dealership or show the dealer that you are working with the offer and ask them to match.

14

Tax is calculated on the use of vehicle as per the leasing 101 i.e. take your monthly payments (depreciation + finance charge) x term x tax rate. They’re rolling your tax into your monthly payments by capitalizing it. The $1500 is repeated for different purposes each time. first to reduce your capitalized cost, second to calculate the tax on the rebate and third to reduce your payment out the door; in the case of the 3rd think of it as BMW HQ giving you $1500 cash and then you giving it to the dealer.

15

So I spoke with the dealer over phone and they stated that WE are WRONG. LOL
They said you are factoring in the tax into the overall discount thats why its coming out lower in ercantages, They stated that I am paying the tax into the total. This is what they said to me with regards to accurate discount I am receiving… your thoughts yet again…?

MSRP is 56,895
Agreed Price is 51,480
+925 bank fee
Equals
52,405= which comes to 7.9% Discount
THEN Factor in -1,500 rebate
50,905
Which would then be
10.5% Discount this would be BEFORE you would add in the cap reduction tax of
$2171
If you combine the tax then yes of course it would not be so much of a discount rate it would come to 6.7% like you all stated but thats not an accurate % since it has lease long taxes built in.

Are they BSing me…?

16

I am leaving in a few hours to go there in person. I did research about the Acq Waiver and the money factor bump I will present your idea for that as well.

Bottom line when I go there what am I telling them I want reduced? That I want a lower “Selling Price”…? If so what do you suggest my target number should be to work with.to get this at the level you guys are saying.

17

Your only lever is to try drive the sale price down further. I’d suggest looking at what other people have gotten on here to see if that is realistic and, as previously suggested see if you can find other inventory in a 200 mile radius to gauge the market.

18

Oh and a lot of hackers aren’t a fan of this but a 1 pay lease could reduce your overall payments by reducing MF. I don’t know what BMW’s policy is in the event of an accident/ write-off so you’d need to find that out. Additionally, it does mean you’ve paid the cash upfront so you’d have to see if the benefit outweighs the revenue you could have generated in an alternate investment.

19

Too expensive I’d say

20

Updated on status:

I went in there today and they stayed firm saying they really couldn’t mess with the tax as it was straight forward. They would not lower the overall “sales price” and stated that 9.5% was fair and that they have no control over “NY sales tax” adding to overall sales price and effecting margin % I was looking for. I told them I would not sign and have to think about it as I am not feeling the following calculation. ( I can’t understand why they are putting the 1500 rebate on the finalized drive off as a addition and not as a deduction. Its almost like they are negating the effects of the rebate SEE details BELOW)
This is from there detailed lease sheet…
"Capital Reduction +1,500<-why is rebate being added only to be taken out on next line item…? Is it fluff??
Up Front Tax +137.57 (this appears to be the tax on rebate and doc fee)
Doc Fee +95
First Payment +699 including tax
security deposit 0
DRIVE OFF = 2,432
THEY then MINUS the
Rebate -1,500
To Make The Total Due at Signing
$932 + 280 DMV Fee

Total Car payment $699 including NYS Tax

They also told me Im basically getting the sale price of
51,480 that we agreed to minus the rebate 1,500
and that my true sales price of the car is really
49,980 and that is as much as they can go, and that they obviously can’t touch the tax. So that I should be looking at 49,980 im getting the car for almost 12.26% off. (which i know is technically not correct since im not seeing that savings in payment.)

*Also December Program Data won’t be out until Monday Dec 3rd and that the reason for the deposit rush was so they can lock me into November Rates just in case December bank rates go up as there might be holiday savings but rates could jump a bit

21

Wtf is a cap reduction tax? In NY you’re taxed on the totality of your payments. Have you calculated what should be?