The thing is technically my cash down isn’t permanent. I’m advancing until rebates are issued. Then the only drive-offs are tax, registration, docs, and etc.
I think you’re misunderstanding what everyone is giving as advice.
Now, if $137 has some kind of magical meaning in your life and that’s what you want to pay every month, so be it.
What I and others that understand the advantages of a lease are recommending is to have a higher monthly payment and keep all the cash in your pocket.
Think of it this way, what your insurance will do if your car is totaled, is effectively make the balance of your payments to BMW to relieve you of your lease.
Now if your insurance is going to pay the rest of your payments, would you prefer that number to be higher or would you prefer to give them a nice chunk at the beginning so that they have to pay out less?
The end result is the same, you’re out of your lease early.
In one instance you have $3,816 in your pocket, in the other you have $9,316.
Good explanation, everyone was just putting him on the defensive
yeah agree, great explanation. thanks! All any one ever says on this site is don’t put money down because then you lose out if you total the car. (by how much people talk about this you’d think it happens all the time). The only time I’ve experienced a car being totaled was a purchase car of a girlfriend and we received $4000 more than we paid for the car. But if the insurance company is only paying what you owe then that explains it. WOW.
And I agree the deal is decent compared to what you see now a days. Thanks for sharing the deal.
The other place where the “put the minimum out-of-pocket” advice shines is when it comes to Pull Ahead and Conquest programs.
Pull ahead is when a manufacturer waives your remaining payments if you lease another car from them.
For instance, Porsche will waive anywhere from 3 months to 1 year of lease payments if you get into another Porsche.
Now, do you think it’s better to have a higher lease payments that Porsche will be eating or for someone to have given them a gift at the beginning of their lease?
Conquest programs work in lots of different ways but for some it’s tied to remaining payments and their actual amount.
Porsche, for example, will give you a rebate matching up to 3 lease payments worth if you lease a new Panamera or 718 right now.
So if you have 3 payments of $1250 left on your lease, they will give you a $3750 conquest rebate.
The running theme here is that the vast majority of time, a higher monthly payment is superior to putting money down.
NP. You are welcome.
Good deal, thank you for sharing.
Can you outline how you received $13,663.36 in rebates?
$7,500 lease credit
+$ 500 Costco
remainder $5,663 in rebates
Thanks a lot for the explaination. I got similar deal as OP, but not only 0 down, but everything rolled into monthly payment.
That’s exactly what you should do, well done.
Wow! BMW Riverside gave you 12% off MSRP right off the bat?!
If so, that’s probably the best deal i3 deal I’ve seen in SoCal. Well done!
Yes. The fleet manager was quite easy to work with. Even delivered the car to me, along with contract. Save me a trip to riverside. Unfortunately I couldn’t use the UDE. Otherwise my monthly payment could have been $99.
The numbers are on the very top of the post
No, an insurance company doesn’t just pay out what is owed on a lease. They pay the retail replacement value of the car based on mileage/year/equipment. If you got a GREAT lease deal (the way most people who frequent this forum do), the retail replacement value will be higher than the lease payoff. And again the lessee would get the difference between what the insurance total loss valuation is and the lease payoff amount minus the policy’s deductible.
When the lease deals are so good that the monthly payment is so far under what the normal market payment is (like most of you that frequent this forum get), and you put cap cost reduction down, you WILL get money back from insurance after a total. The only time you won’t is when, your deal is in the opposite direction… for instance a deal with lots negative equity rolled in or you sign a deal at MSRP. In these cases your lease balance will be retail (or higher) so there absolutely will not be money coming back in case of a total loss.
As you can tell I disagree with the blanket mentality of don’t put any cap cost reduction up front and/or put as little up front as possible. I’m a NY resident and I put inception and tax up front on my leases (about $3,500). Why? Because I don’t want to pay sales tax and interest on top of my already high 8.625% AND because if my $93k MSRP vehicle is totaled, I’ll receive from between a minimum of $3,500 to a maximum of $11,000 from my insurer AFTER my $1k deductible is deducted (how much would depend on when in the lease period it happened).
To the original poster, bravo on the great deal!
Robotech, Thanks for your point and validation. This was my approach to leasing this vehicle.
I got 10.8% off (before incentives) with base MF (.00216, Inception fee Waived) back in July.
Ordered another i3 BEV for my parents in law on September 3rd, got same discount.
This is in South Florida home of the outrageous dealer fees and generally harder to negotiate dealers (vs CA).
This sounds completely wrong to me. Why would you get back a minimum of $3500? You’ll never see your drive-off fees and taxes again. Why would insurance over that?
You’re giving bad advice and showing a lack of understanding of how the structure of a lease works.
There is no possible way you know that you would get a MINIMUM of $3500 just because you paid that upfront.
In a lease structure, the money you put down upfront has the same weight as the dollar amount of the discount and any rebates.
Why are you not saying “at a MINIMUM, I would get $3500 + all my rebate money + the discount I got on the car?”
See how absurd that sounds when you extend your argument to it’s logical conclusion?
Only in the best case scenario, would you even get your down payment money back 100%.
Any extra money you receive in your dream insurance scenario is money you would have got back anyway or still had in your pocket.
The OP’s deal is a perfect (and typical) example of why you’re wrong.
His residual of $28,347 is unrealistic and much too high.
Now, if you think his 30 month old i3 with 30K miles is going to be worth $28K at the end of the lease, I have some swamp land to sell you.
His depreciation is $13,696 so his lease payoff will start around $42K and go down as he makes payments.
The value an insurance company would pay out for his car will NEVER catch up to his lease payoff at any time in his 30 month lease.
To spell it out, he will not be getting back a minimum of $5500 if his car is ever totaled.
Leasehackr worthy deals tend to be ones with inflated residuals, low money factors, high rebates or ideally a combination of all 3.
All 3 of those things make putting money down much less favorable.
I can go through each factor and explain why but this post is going to turn into a book.
I apologize if I sound a bit snarky but I hate it when people that don’t quite understand what they are saying give advice.
The only advantage to putting money down upfront in a lease is the interest you save, that’s it.
It is completely wrong, what he said doesn’t make any sense.
Everyone understands that you are insuring the car and not the lease right?
With that statement in mind, when an insurance total loss valuation is higher than the lease payoff at the time of a total loss claim, the lessee gets the difference (less the deductible of course).
I helped an employee though this process 2 months ago. He put $2k up front and when it was all said and done he received $3k in his pocket. Mind you he rolled in $4k in negative equity, so he would have gotten $6k if he didn’t trade something in (not $7k because he got $1k in tax credit savings—NJ deal).
Listen I never said it makes sense to put a ton of money up front on every lease and that you get money back over and above from your insurance 100% of the time when a car is totaled. What I take exception with is the Internet forum rule (to be clear it is not just this forum) that you should never put money up front in a lease because you won’t get it back if you suffer a total loss. That statement is not true. Nor is the opposite. The truth lies somewhere in the middle. Every deal is different.
Couple of responses to questions/criticisms posed:
In my specific case, my vehicle is one of a kind. In the used market, the manufacturer accessories mounted on it will equate to roughly $3k in retail used value in a few years ($15k now). So in the last few months of my lease, armed with a copy of my window sticker, pictures of my car (pre total loss of course), and the current prices from the manufacturer of those accessories, I’ll end up with a few thousand in my pocket because when the insurer calls around to dealers as part of their process of establishing value for my vehicle, I will point out that those cars are all worth less as they don’t have all these accessories on them. This isn’t my first rodeo with this process. I have helped out quite a few friends and clients through the years with this. Whether they paid cash, financed or leased.
Regarding rebates, an insurer can’t force you to replace a vehicle using the same type of financial transaction that you used initially. If you tell them you are paying cash for the replacement vehicle, if rebates are tied to financing or leasing then, the rebates are meaningless. You will get the retail value of your car. Not retail minus rebates. It’s just like parts. When a collision claim is paid out, they pay retail for parts. If there happens to be a $120 rebate for 4 tires (and your claim included 4 tires) you can apply for that rebate and get that money sent to you.