Lease Info

[haxr4hire]

I need some help understanding this Lease business. This is going to be first time i ever lease a car. But from what i understand so far leasing provides a grate alternative to purchaseing. I am trying to buy/lease a 335i sedan with a few options. I went in to few dealers and found the car i want and this is the final deal he made me for a lease:

Orignal MSRP: $46720
He will sell the car at $44380 + FEES and a $4000 up front. with 560 /mnth

so when i asked him what this FEES are he said its the $4000 i'd be paying up front. So does that mean im actually paying $44380 + $4000 = $48380 for the car? thats more than the MSRP...

is he right for saying that the $4000 is the FEES?
I would thin the $4000 would be like a down payment and that it is a payment for the car which overall is priced for $44380. which would mean i have 40380 left to pay...

If i am right, then i think this is a preaty good deal.
if i am wrong, then it'd b like paying more for the car then the orignal msrp.

so am i right or wrong? is this indeed a good deal?

Thanks in advance for any and all help/info.

[DrDomer]

Don't forget you have to pay tax on the vehicle, there's interest (which for the 335i sedan is a money factor of 0.0015, but most dealers up this to 0.00175 or more, this equates to an interest rate about 4.5%), theres a training fee, etc... Here's a good lease calculator that might help you get a handle on what contributes to the monthly payment...

http://www.leaseguide.com/calc.htm

Good luck.

[Jhunter]

Given the monthly payment amount it seems like a portion of your $4,000 is "down payment". But your $4,000 also goes towards lots of other costs including:

Security deposit-probably $600.

Acquistion fee $625 (amount to BMW FS but can be marked up by dealer for an additional $200 profit to them).

Documentation fee $250?? (typical amount, this is all dealer profit).

State license and registration fees (varies by state).

Marketing and training fees ??? I consider these B.S. fees that just fatten the dealer's wallet. They are not part of a BMW FS lease. They are all dealer profit. I refuse to pay a training fee to have the salesman show me where the power window switch is! These should be easy to eliminate unless the particular dealer has a policy of not negotiating these. If they won't budge on a fee that is all profit to them, then just treat this in your mind as a reduction in the amount off MSRP they are giving you.

Sales tax on the portion of your $4,000 that is reducing your monthly payment (i.e. what is left over after the above that is referred to as capitalized cost reduction)

The best thing to do is research on the internet how leases are calculated and make sure that you understand this completely. There are on-line lease calculators that are helpful. They will get you close if you know all the relevant numbers to input. You might not get the exact payment the dealer is quoting because the method used to calculate sales tax varies from state to state but if you get to within $5-10 per month it is close enough.

You should not tolerate a dealer who will not disclose all the "fees" I listed above. You have to know all numbers involved to evaluate the deal you are getting. Leases sometimes get a bad rap because it is easy for the dealer to make big profits from people who don't understand them or only shop the payment. If you understand the math and know all the variables then they are good way to finance a car in certain situations.

[aftp302]

Try this thread. I was new to leasing and using the online calculators and help from folks in this group I was able to "get to the bottom of" the leasing process and their fees, etc. I posted all of the details of my deal in this thread.

http://forums.bimmerforums.com/forum/showthread.php?t=645571

The fees are most likely a cap reduction cost (down payment, which is a bad idea on a lease), security deposit (equal to your payment rounded up to the nearest $50 increment), acquisition fee sometimes also called bank fee ($625 but the dealer sometimes tries to add profit to this), training fees ($180 usually, get your dealer to remove this, mine did), first month's payment, and tags/title/registration.

Depending on your state, taxes may be collected monthly on the depreciation amount (cap cost minus residual value) or upfront. Some states tax the whole value of the vehicle too (Delaware).

Money factor for December is .0015 on a 335 sedan. Dealer may try to mark this up, try to get them not to. Mine left it at .0015 which is the BMWFS rate.

Next is multiple security deposits. BMWFS will lower your money factor by .0007 for every additional security deposit you put down. If you have extra cash you can "loan" to BMWFS (and then get back at the end of the lease) this is a nice feature. It can reduce your payment a few dollars each month and if you do the math you'd need to do pretty well in your investments to beat the overall savings (somewhere north of 9% by my calculations).

Hope this information helps!

[haxr4hire]

So i ended up getting the car, the dealer didn't seem to move from the price he said. I went to a few dealers and they said they wouldn't match that offer. I really don't know if this is a good deal or not, but here is what happen in the end:

Orignal MSRP: 46720
Agreed Price: 44385
Monthly Payment: 535 <3year/10k>
And after the 3 years i can by for 29900. (rounded, forgot the last 2 nubmers)
I need to go back to the paper and check to see what the money factor he put on, but i don no if it's too late.

Beside not being certain if its a good deal or not, i love the car, and the dealers were very nice.

This car is awsome!!!

[aftp302]

So i ended up getting the car, the dealer didn't seem to move from the price he said. I went to a few dealers and they said they wouldn't match that offer. I really don't know if this is a good deal or not, but here is what happen in the end:

Orignal MSRP: 46720
Agreed Price: 44385
Monthly Payment: 535 <3year/10k>
And after the 3 years i can by for 29900. (rounded, forgot the last 2 nubmers)
I need to go back to the paper and check to see what the money factor he put on, but i don no if it's too late.

Beside not being certain if its a good deal or not, i love the car, and the dealers were very nice.

This car is awsome!!!

Congratulations on the car! What color? Interior? Options?

When it really comes down to it, all that matters is that you're happy with the car so do yourself a favor and now that the deal is done, forget about it and just enjoy the ride!