I’m in the market for a new car and been browsing Leasehackr & Bimmerpost to become more knowledgeable around leases+BMWs. I seem to have hit a point where I need some validation/correction around what I’ve learned before I start my deal search.
Some Background/Context
I usually purchase/keep cars for 6-8 years and now looking to make the EV leap for various reasons (primarily EV driving experience, low maintenance, and future solar roof). I understand this means accepting major EV depreciation risk and missing out on future EV tech advancement. Also, taking leasing route due to backdoor $7500 lease EV credit else I would have looked into financing.
2025 BMW i5 xDrive Custom Order Questions
When would BMW dealers know if they have an allocation for 2025 BMW i5 xDrive orders?
Is the earliest I can put in a custom order June '24 or can I work out a deal out sooner?
What is the usual range of BMW MSRP discount, if any, for model orders at the beginning of production cycle?
Lease Questions
Based on recent news that NJ sales tax exemption for EVs may get phased out next 3 years, doing a lease buyout will help save 6.625% sales tax on the future vehicle buyout price. Is this reasoning correct?
If my plan is for immediate lease buyout, should my focus be only on negotiating capitalized cost and no junk fees? Do lease term, miles/year, one-pay or MSDs come into play at all as part of lease negotiation?
Assuming immediate BMW lease buyout within 2 months of lease start and fees paid as DAS, is the estimated vehicle buyout price calculation below correct?
No MSD Lease : Net Capitalized Cost - (2 * Monthly Depreciation)
With MSD Lease : Net Capitalized Cost - (2 * Monthly Depreciation) - (Total MSD)
One-Pay Lease : Net Capitalized Cost - [One-Pay Amount - (2 * Monthly Lease Payment)]
Do BMW dealers care if leases are immediately bought out?
Does BMW have any early lease termination fees?
In what circumstances, would financing this make more sense?
Allocations are already open for 2025 I5 xDrive orders. I suspect we will start seeing some inventory within the next 30 to 45 days. In any case, you should be able to put in an order now. I would be looking for discount around 10% given offers in Marketplace. Either a NJ lease, or purchase, will be tax exempt as long as the state keeps the benefit in place. If you intend to immediately buyout, I wouldn’t mess around with MSD or one-pay, not significant enough benefit to bother with the complexity. Most dealers don’t like immediate buyouts, they will want to see you hold for a few months, best to not even bring this up when negotiating. I would suggest waiving the lease acquisition fee if you know you will buyout.
Thanks @z0lt3c! Appreciate you validating most of what I’ve learned these past couple of weeks. From your experience, does my calculation for lease vehicle buyout look right for no MSD/one-pay lease?
Here is how BMWFS website is showing the buyout on my 2024 I5 M60 in NJ after 2 payments. Maybe easier than explaining?
Note that they erroneously include sales tax. You have to call in and get them to provide a custom payoff without sales tax. I did this with an I4. Also NJ DMV runs at least 45 days behind, if not longer, and you can’t buyout until title work is complete. The process can be frustrating.
Is NJ already committed to ending the exemption, or is it simply talk right now? My understanding from the articles was that this was a plan but not yet set in stone with any specific details (i.e. how the phaseout will happen).
Who knows, but the reality is incentive fatigue as a sentiment is really starting to build up across the country if you stay keyed into social and economic policy factors (almost a requirement when you’re in the business)
They may just do it to virtue signal to those who cannot afford a BEV even with all current incentive structures or place income caps to limit eligibility.
Not passed yet as far as I know as the removal of the EV sales tax exemption seems counterintuitive to the effort to increase EV adoption in NJ.
That being said, the bill to help fund NJ transportation trust fund passed recently and is on governor’s desk which is increasing EV annual registration fees to $250 starting July 1st, 2024 with $10 annual increases upto $290 in 2028.
Thanks! I did actually consider the i4 considering how it has better range/HP/torque. But decided that I needed a car that could accommodate a car seat plus 2 other passengers in the back comfortably for some annual road trips and cargo space to go with it.
You’re right, but given the influence and size of the dealer lobby in NJ, I’m surprised they can’t do anything about it. There’s not even any noise. I test drove a bunch of EVs from Ioniqs to Polestars to EQS, not a single salesperson was even aware that the exemption was being phased out.
Even if you’re a dealer who hates selling EVs and they don’t move on your lot, surely you want to help preserve something that helps make your product cheaper? Idk.
Definitely. Biggest roadblock here is the lack of public fast charging. We have such high pop density and so few places to fast charge, especially in places where you can grab food or something quickly.
It’s really hard to recommend buying a $90k+ MSRP EV right now considering how cheap a lease is on a close competitor such as the Mercedes EQ*
And in a couple years you maybe won’t need the same backseat space if your kid is in a booster instead of a full child seat.
And give BMW a year to iron out any kinks in their transition to integration of NACS ports and Tesla supercharger compatibility. Buy a 2026 or 2027 model year to hold long term.
I like the incentives but I personally don’t think it plays as much of a factor as it’s made out to be particularly on higher priced vehicles.
It certainly has lead to some conversions in my experience as both a driver and seller of BEV’s but at the end of the day the heart wants what the heart wants and we have clients willing to pay 50% more for an X5 over an iX that will attest to that.
Car/environmentalist groups and the NJ Senate Energy committee chair don’t like the EV sales tax exemption being removed but my guess is they need something to refill the NJ EV rebate coffers considering how it dried up in Nov '23 plus other zero emission transportation pet projects. Hopefully they use it to build up the charging network like you said.
Given depreciation and anticipated China price wars maybe it makes sense still to simply lease still + buy CPO/reduced prices later. Prices are already falling on the low end of cars (Ariya, Ioniq) and I would be surprised if we didn’t see movements in the future.
Surely that will be worth the 6% or 2/year or whatever you’d have to pay at that time
Agreed which is the reason why I’m trying to figure out the MSRP discount plus EV lease credit to reduce the i5 xDrive bite. The $90k+ price tag is what made me exclude the iX even though I came around to its radically different look.
I wish I could like the Mercedes EVs but the rounded/jellybean look and some of the interior design choices made me pass on them. If they had kept something like the E-Class design choices, it may have been in contention.
The $90k+ price tag is what made me exclude the iX even though I came around to its radically different look.