BMW MF inflation and negotiation

Hello everyone,

My current BMW lease (2018 540i) is coming to an end and I’m in the market for a 2021 540i xDrive. I contacted the local dealer here in North Carolina, same dealer that I leased my current car from, to start these conversations. Found one I’m looking at for ~$75,000.

I asked for the MF that is being offered by BMW FS and was given 0.00122. According to the BMW Leasing FAQ’s on this site (BMW Leasing Wiki), the current BMW MF for October 2020 is .00082 - however the dealer can inflate this by .0004 max. These numbers line up and I feel the dealer is inflating the MF by the said .0004 amount and to arrive at the .00122 number given to me. I asked the salesperson if the MF is negotiable since it seems higher then current leases and have not heard back since.

My question to this community is - how have people had success in the past when MF numbers are inflated? Is it best to attempt to lower the MF to a more reasonable number (either by negotiating or MSDs), or is it more effective to ask the salesperson to reduce the MSRP/Sales price of the vehicle to compensate for the higher number?

What works best when inflated MF numbers are given?

Thank you,

Yes. Negotiate the selling price; MSRP never changes

And separately also use MSD. One should not be a substitute for the other.

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I’m also in NC. What city and dealer are you speaking with?

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They will inflate MF to compensate for a larger MSRP discount. As @max_g said negotiate MSRP and then the final fight will be MF. Myself and many brokers around offer 10% pre incentives and base MF.

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Your average salesperson won’t have a clue about MF’s or MF markups or anything like that, so getting into the weeds with them about it is often a lost cause.

This is why it pays to do your homework, know what your target deal is, and use the calculator to adjust terms accordingly.

I personally never single out or try to negotiate MF, ultimately it’s the payment and DAS that matter. Others may disagree.

If my target deal is $650/mo. and they come back with $750/mo, I tell the dealer I’ll be in to sign today if they get to $650. If the dealer wants the deal, then they can decide if they want to offer a greater discount or cut the MF or whatever else they need to do.

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Thanks everyone!

I just received word back from the sales person that the base MF is their “buy rate” and using the base MF “leaves nothing for their back end.” To your point @j_e_f_f, I don’t feel the sales person has a firm understanding of how the MF factors into the lease financials, or is giving me the runaround. I have two months before my lease ends so there’s time for me to shop around. We’ll see where this goes.

Thanks @max_g and @JD81 - I’ll lay off the MF in the initial conversations and focus on the sale price, then try elsewhere if the terms are not favorable.

The base MF is their Buy Rate, so the sales person is being truthful there. Some dealers offer the buy rate and some don’t.

Whether offering the buy rate “leaves nothing for their back end” is up to the dealer’s sales/finance/accounting departments to work out.

And just to be clear, you need to focus on the entire deal (MSRP/discount/incentive/sales price/MF) not just the sales price.

Ironically I actually ran into a situation earlier this week (at a BMW dealer in NC no less) where I did bring up the MF. I’m in the same boat as you with 1.5 months left on my current lease.

The sales guy kept saying how aggressive their offer was at 9% and so on, I kindly replied that factoring in their fully marked up MF they were really at 7% pre-incentive net net.