I just did a lease deal yesterday on a BMW xDrive 50e. I’ll provide the details taken directly from the lease agreement below. I have just a couple of questions that I’m hoping the forum can provide me answers on. Thanks!
What is CPA, INC under 11. Gross Capitalized Cost Calculation? Unfortunately I missed that $1,899 charge until I was reviewing the lease agreement after picking up the car.
I’m having trouble determining how the dealership arrived at the capitalized cost reduction, item 10.B. My original intention was to simply pay the dealer fees and the state sales tax. I provided a total of $5,000 down, $1,000 when I placed the order and $4,000 at signing of the lease. Therefore I think the cap cost reduction should have been $5,000 or perhaps $4,505 after deducting the $495 lease disposition fee not included in 11. Gross Capitalized Cost Calculation. Any ideas here?
Details taken directly from the lease agreement: 9. Amount Due at Lease Signing
1. Capitalization Cost: $3,459.07
2. First Monthly Payment: $1,540.93
Total: $5,000
10. Monthly Payment Calculation
A. Gross Capitalized Cost: $92,743.76
B. Capitalized Cost Reduction: - $3,459.07
C. Adjusted Capitalized Cost: = $89,284.69
D. Residual Value: - $44,398.90
E. Depreciated and Amortized Amount: = $44,885.79
F. Rent Charge + 10,587.69
G. Total of Based Monthly Payments: = $55,473.48
H. Lease Payments: / 36
I. Base Monthly Payments: = $1,540.93
J. Monthly Sales Tax: + N/A
K. N/A: + N/A
L. Total Monthly Payment: = $1,540.93
11. Gross Capitalized Cost Calculation
Cap Cost Itemized: $92,743.76
A. Purchase price: $85,107.50
B. Title, License, registration: $60.00
C. Sales Tax: $3,757.20
I. Acquisition Fee: $925.00
K. CPA, INC: $1,899.00 <— ?
L. Processing Fee: $995.00
Total: $92,743.76
That’s not really a charge though. What happened was once you agreed to $5,000 DAS and $1,541 per month = $58,935. They can get there any number of ways; obviously they are going to structure it in such a way that hits their internal targets for F&I product sales.
DAS is going to go to first month payment first. The remainder they used for CCR. It doesn’t really matter if $3,549.07 here is earmarked for CCR or for taxes/fees; mathematically it’s the same.
I think I left out some critical information needed to solve this puzzle. Though the amount due at signing (DAS) says $5,000, we actually put down $1,000 when we placed our order, a $4,000 credit card transaction at lease signing, and second credit card transaction of $1,540.93 (1st month’s payment) also at lease signing. So total put down was $6,540.93.
I think the Cap Cost Reduction should be $5,000 not $3,459.07. I think this was an error on the Finance guys part. I’ve notified the dealership and am waiting to hear back from them.
Concerning a review before signing rather than after, I just signed the lease Saturday. If it contains an error and I notify the dealership, and they agree, we can changed it. I haven’t e-signed the final version yet.
I’m simply trying to best understand the numbers. Worse case, I pick up additional knowledge for the next time I need to lease.
It’s a bad deal, combined with a really bad lease program. Our advice would be “walk away” but not much you can do about it now, other then enjoy the vehicle. You can check in Marketplace to see what a more competitive deal would look like.
Can you be more specific on what aspects of the deal are bad? Money factor, residual, lack of incentives, etc.?
Mind you that I know that the current BMW X5 is not particularly well suited for leasing but my wife wanted the car and I have no desire to purchase as I’m sure we’ll replace it in 3 years. I also have no desire to outright purchase the car as I don’t think it is wise to have a lot of equity in a depreciating asset.
But you are willing to pay full tax on the purchase price every 3 years? 60k to drive this car for three years seems like pretty steep depreciation to me.
Crazy loaded MSRP (more then a M50).
Pre-incentive discount not big enough (target 8%)
$2894 in fees, way too much.
MF appears to be at maximum markup.
No loyalty rebate?
No use of MSD to reduce rate?
Full tax state?
I don’t think it is wise to have a lot of equity in a depreciating asset.
I understand your concern, but this lease will cost $60K over 3 years. Even if you pulled every lever properly, it’s $50K. How is that not investing alot of equity into a depreciating asset?
x9kt3c, thanks so much for providing specifics. I appreciate that.
I focused on lowering the purchase price before focusing on the lease aspects. I received a 5% discount along with a $500 veterans discount. I thought that discount level was decent.
I agree that the fees were too high. No loyalty rebate as I haven’t owned a BMW in the last year. Virginia requires the taxes to be paid up front rather than monthly. Money Factor was not at maximum as I negotiated it down. Of course there may have been more room to negotiate to get closer to their Buy Rate. I don’t know what MSD stands for.
