2016 BMW 228i xDrive - don't understand it

Hey all - newbie here.

So, I priced out a 2016 228i, but I don’t get how the dealer got to the payment they’re stating on the disclosure sheet.

MSRP was $43,670
Residual: $25,537
Negotiated down to $37,400 (below TrueCar by about 1k)
$3500 in MSD’s
$0 down
MF: .00127
Taxes: $1,387

The dealer sheet says it comes to 494/mo - there’s a line that says “Inception Feeds Waived: $2,941” so drive off is still 3500. What is this?

Also, wouldn’t maxing out the security deposits bring down the MF below the .00127 (3%) realm?

And via Leasify, these numbers should at least be around $430/mo.

What am I missing here?

Your dealer is marking up the money factor significantly. It should be .00136 to start and .00087 after 7 MSDs.

The inception fees waived means that everything that would normally be due at signing is instead rolled into the monthly lease payment. So your first payment, registration fees, doc fee, and possibly the acquisition fee.

Thanks. Got it on the inception fees.

For the rest of it though, are they hiding a marked up MF somehow or is that in plain sight here that I’m somehow not seeing? How would someone navigate that?

I guess it could be considered hiding it if they don’t expect you to know what it’s supposed to be. You can tell them that you know the buy rate is .00136 and should be .00087 after 7 security deposits.

Also, what is the lease term (months/miles) and what are they saying is the residual percentage? Something seems off with either the residual value you posted or the MSRP.

I shot them a note, asking about the MF difference. Lease term is 3 years, 10k/miles/year.

The residual is what their disclosure sheet stated.

Got a reply - they said MF usually is .00176 to start. Is that usual with around an 810 credit score?

Some dealers will…that is the max they can charge you. Maybe because they gave you a big discount, you have to take the markup in the money factor? Insist on the 0.00136 STARTING MF (0.0008 after MSD) and see what they say.

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Looking into it a bit further, per BMW’s own website the residual is 61% for 36/10k and there is $1500 in lease cash available. So your dealer is probably including that in their selling price, which makes it not as good as it seems.


If they give you the buy rate MF and apply the $1500 incentive on top of the $37400 sale price, it would bring your monthly down significantly and your MSDs would only be $3150.

Yes usually all Bmw dealers try to shake an extra 3 to 4 k off you. Very usual. Haven’t met a bmw dealer that gave a decent price at the first offer. Even if you show them a competitors ad, they will pretend they cannot do that deal.

Just as a follow up for others, here are the final details for the deal. Haven’t pulled the trigger since my wife is debating a Mini Countryman instead at $388/mo with no MSD’s, and a .0007 MF, but here’s what shook out with the 228i:

MSRP: $43,670.00
Neg Price: $36,900
MF: .00136, down to .00087 with 7 MSD’s totaling $2800
$500 loyalty
(paid cash for required up front MN tax, title, lic, etc)
368.98 / month

Called around to multiple dealers in the midwest and it’s a pretty great sale price. Thoughts on the lease terms?

Good deal if there us no money down. Loyalty is $1000 not 500

The OP is correct, loyalty is 500 on the 2, 1000 on the 3 and 5.

Op that’s a solid dead on a 2, they don’t lease as well as the 3 and the 5, it would be tough to do better.

@jpea as it was already mentioned by another poster, the 2 series does not lease well. It’s one of those cars where if you really want it you kinda have to pay for it. Same with the X5, doesn’t lease well for what it is but people love it and are willing to pay the price.

If a dealer is marking up the MF, I would use the lease calculator on this site and redo the lease using the non-inflated MF and see what the payment comes out to and then see if you can get another dealer to go to that price keeping everything else the same.

@jpea can you tell us the breakdown and exactly what was paid upfront on the deal you’re describing at $368?

Sure thing. The numbers above + the cash included:
925 acquisition
134.75 - fees and insurance
1,037.29 - up front MN state tax
368.98 - first month payment
33.98 - cash down cap reduction

So, about 5,300 cash up front, mostly to cover taxes, MSD’s and acquisition fee

The MF is not marked up on his deal, it is base.