Need some advice. I got the following numbers from a dealer for 328 xDrive loaded with M sports. It is a exec demo with approx 5000 miles:
I am a little lost because if I plug these number into the calculator, it shows a monthly payment way below what I got from the dealer. Can someone please comment on this offer?
The dealer mentioned that he calculated the numbers with 6%, but since I am in in Ohio my tax rate would be 7.5% which is taxed on the total lease payment. So does that mean my drive off would be higher?
And when I first spoke to him on the phone, he gave me a approx rate of $460 (w/ tax) for 12K miles without MSD. He told me that using MSDs would lower the payment down by another $30-35, which he did, but for 10K miles not 12K.
Finally, he said that since it is a 2016 model, I will still get the maintenance package for 4 years/50000 miles. But if the car is a exec demo, wouldn’t I be the second owner, and hence not eligible for maintenance program?
So it looks like they marked up your moneyfactor. With max MSDs, it should be .00085.
Other than that in Ohio you pay sales tax on the total amount of lease payments upfront.
So your upfront should be MSD, Tax and initial fees. If I run it through the lease calculator, my base monthly with that capitalized cost, my numbers match theirs. If you roll the taxes in my numbers still match their post tax numbers.
If you can negotiate the MF down, you save another $25-30. Plus any amount off the sales price.
Thank you for the response. I really appreciate it! I was clearly doing something wrong.
He told me that if you go from 10K to 12K, it adds about ~ $30 to 35. Maybe if I can convince them to lower to .00085 that can offset the additional mileage.
Based on the previous deals on this forum, under what monthly price point would it be a decent deal if not great? Also, do I lose the MSD if the car is totaled?
BMW leases include GAP insurance to cover the potential that the insurance payout of the totaled car doesn’t equal what is owed on the car. Your MSD is basically a loan to the finance company to lower the interest rate, and you will get it back at the end of the lease. The only time you wouldn’t is if you had so much extra wear and tear (damage and over mileage) that it wiped out your MSD. That’s not likely to happen if you don’t treat your car like crap or drive it way over the mileage. Even then, you can purchase extra miles at or before the end of the lease, usually at a discount if done before the end.
12k miles per year reduces the residual from 59% to 58%. So with your numbers assuming a base MF, max MSD and 12k a year, I come up with $382/month before tax. Due at signing is MSD, first month, fees and tax.
MSRP: $54220
Cap Cost: $41,717 (including $925 acquisition fee)
MF: .00085
Residual: $30097.60 (58% less $1350 mileage adjustment)
36/12k Lease
Monthly Pre-tax: $384
Due at signing: MSD, First Month, Tax and Fees.
If you included 7,5% tax on 36 months of payments ($1036.80) in the lease rather than upfront the payment would be $414 and a cap cost of $42,753.80.
Thanks @anon98469396 and @28firefighter for breaking it down for me. I will call him tomorrow and see what they are willing to do.
Could you please tell me what am I doing wrong here to not get $398.15?
I added initial cap cost + acq fee + initial fees + sales tax to get the sales price of $42,848
Tax is set to 6% and tax levied on monthly lease option is selected
First your money factor. It’s .00125 after your MSDs in their calculations. This means your pre MSD money factor should be .00174 and then select 7 MSDs.
Second your residual is not correct. It’s 59% for 10k miles a year and then you need to take an additional $1350 off to adjust for the mileage on the car as a demo. The lease hackr calculator does not let you enter that correctly. So you have to back calculate - 59% of $54,220 is $31,989 less $1350 which is $30,639. Divide that by $54,220 and your effective residual is 56.5%.
Lastly your sales price is $40,792.
If I enter those I get this for 10k miles per year using the dealer numbers.
Wow! Thanks for adding the additional bit of information, so much to learn! I agree with you, the price looks competitive. At least no dealer in Ohio is offering me anything close to it. I was talking to one in state, we had 5-6 calls and the dealership manager straight out refused to share any details (MF, residual etc.). He said let’s just talk monthly payments, everything else is internal to us so we can’t share it with you or anyone else
They aren’t jerking you around on price at all - it’s competitive - at least to me. I would just ask for the base money factor of .00134 before MSD and .00085.
@28firefighter I think the dealer made a typo. The initial cap cost should have been $39,922. I don’t know how I missed it as well when the sheet first came to me.
Anyway, keeping that mind, I have done the following calculation for the 3 yr/12K miles with OH tax. Can you please tell me how does it look to you? The first column shows his calculation and the next two show my calculations with corrected cap cost, MF, and Ohio sales tax. He had also mentioned only a $70 fee which I have adjusted as well. Instead of going back and forth, I am planning to send this sheet to him to see what best he can do. I am hoping that he will honor the initial cap cost, so the net negotiating factor really would be MF.
I have also highlighted a small discrepancy in his tax calculation ($14.04), which also carries to his ‘Amnt due at start’ calc.
Assuming they are willing to honor those numbers, your calculations are within a dollar or two of mine.
Rather than negotiate back and forth, I’d just send them your column as an offer as you plan to do and tell them you’ll take it if they meet your numbers.
The dealer came back with $436.58 w/ tax for 12K miles. He said residual is set to 59% even for 12K miles, but the current 5400 miles on the car brings it down further by about $1225. Due to which he is now calculating the residual at 56.74%??
He also marked up the MF to 0.00136 saying that his manager said that since this is a complex deal, that’s the best they can do. I was like wow, you marked it up more than you gave me the first time, at least you should have stuck to that.
I have made him a counter offer of $414 w/tax. Here’s the breakdown I got:
At this price point, does it make more sense to buy the car or leasing it is still the best option?
I don’t understand what’s going on here. You have a selling price of 39,XXX but an initial cap cost of 41,XXX. I also don’t see the MSD discount reflected in the money factor. Your dealer has you focused on monthly payment. I would focus on the selling price and money factor as well as dealer fees and the rest will do itself.
Agree. They are focusing you on the payment and not the deal. I personally would not lease with a marked up MF. I think I understand the cap cost because it includes tax and acquisition fees rolled in.
This is not a complicated deal at all, I can tell you from experience having just leased a demo myself.
I’d tell them your offer is a take it or leave it, personally.
Thank you for the inputs. I’ll wait to see their response (or even if they respond), but if the lease thing doesn’t work out, what is your opinion to buy the vehicle at this price?
BMWs sedan leases are subsidized (residuals tend to be higher than actual values on the sedans – there are exceptions and of course SUVs are a different story). Unless you plan on keeping the car a long time, I would try to lease personally.
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