Why bumped mf and waive acquisition fee?

I have seen a number of BMW leases posted in the forum that mf is bumped to waive acquisition fee. Does dealers make more money this way and at the same time leasees pay less monthly payment - win win?

It doesn’t affect anything for the dealer. It simply lowers the payment in some cases

No… BMWF makes less and you pay less… no impact to the dealer… like buying points on your mortgage to reduce the rate… doesn’t impact the selling price.

Are you guys 100% certain it doesn’t benefit the dealer?

If it did, they’d likely do it on every single lease

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Does the bank or the dealership get the benefit when MF is bumped up from buy rate without waiving the acq fee?

Dealer benefits.

Gotcha! When the acquisition fee is waived and the MF is bumped, does that extra $ from the MF bump go to BMWFS to offset no acquisition fee?

I’d think so. But I guess it’s possible that a dealer keeps mark up and pays acqusition fee to BMW, if it benefits them.

Why would BMWFS agree to increase interest rate and waive the acquisition fee if the increase in interest rate over the course of the loan is less than the value of the acquisition fee?

It doesn’t make very good business sense to me.

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I think it is a creative way to sell - telling customers that the bank fee is waived and you are saving $1,000 is just awesome. Who doesn’t want to save $1000 upfront? Not everyone understands mf and how much total lease payment will increase with the bumped mf. Maybe the bumped mf increases the total lease amount by $1000. But customers still feel they just save $1000 vs other dealers that don’t offer waived bank fee.

The dealers have nothing to do with this except have the ability to present a lease with perceived lower fees.

In theory, the captive wants it to be a wash regardless of which option you choose. Collect it up front in the acq fee or over the life of the lease with higher interest.

In principal, since the increased MF is multiplied by the sum of the net cap cost plus RV, it isn’t always exactly a wash on the profit for the captive.

The only way to know which is more favorable to you on a specific vehicle is to calc the payments both ways add them up to se what the total out of pocket costs are.

My guess is that the difference is negligible (less than $100)

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Had a dealer today tell me waiving the acq fee wouldn’t be an option bc they are still having to cover that. Said 0.0005 MF bump isn’t enough to cover their side. How true is this?

Lies and chicanery.

I’ll assume we’re talking BMW here.

(edit: fee is now $925 universally)

On a 24mo lease it makes total sense to waive up to a certain selling price, on a 30 all it really means is an overall reduction in buyout (payments it’s a wash up to a certain point) should you want to purchase the car at lease end or prior to. Doesn’t make much sense on a 36 unless you just want to reduce payoff and can even increase payments unless you’re getting a ridiculously low (for BMW) capitalized cost.

Same with MF, if they won’t come off a .0002 or .0004 bump on top of buy rate they basically just don’t want to give up that back end profit.

BMW acq is actually 725 for bmw? Well dang. I guess all dealers just universally up charge for it.

It says $925 on BMW site, so no idea where he got his $725

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Bah. Old numbers I suppose. It used to be $725 but I guess FS put a stop to that profit center. (Unless they’re now just giving that $200 back to dealer but in a sneaky way)

In light of that, there’s really no reason they wouldn’t agree to it. Did you get this from salesperson or F&I?

If they are a stupid dealer they won’t do it, mine doesn’t. I even told the stupid finance guy that he could be making money on this if he used it the right way, sell the customer some stuff bump the rate then drop the aqc fee and look like a hero, I think it flew right over his head. I think allot of people don’t bother reading the programs

So what loss is it to the dealer to do this - is there any at all and if so, how much?

Totally understand your example of throwing in things and waiving the acq.

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Some dealers are just lazy and don’t know the programs or only do things a certain way or as directed by ownership/management, there’s nothing you can do about it other than find one that’s willing to do it, annoying I know but it’s just how it is.

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