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leasing question
when leasing a car (i have never done it before) does one negotiate the sales prce just as if you were buying the car? and then--is the monthly payment simply a computer generated figure? or--are factors such as residual and money factor negotiable as well. do you negotiate monthly payment or just sales price?
| | Reply » leasing question |
Here's a great link to walk you through the process:
http://www.leaseguide.com/calc.htm
Look at stickies at the top of the Ask the Dealer forum for residuals(by leasecompare) and money factors(which is about 0.00195-0.00235 depending on dealer).
| | Reply » leasing question |
First and foremost when getting a car:
Always negotiate the price of the car irrespective of how you actually plan to finance the car (lease, bank loan, cash, whatever). This is always, always, always, always, always, always TRUE!! 
Now that you've negotiated the price of the car, in comes all the extra stuff piled on top depending upon how you plan to finance the car.
For leasing, you will be interested mainly in two factors: the MF (money factor, simply multiply it by 2,400 to transform it into a percentage so you can understand what this mysterious number means) and the Residual.
For a BMW, the MF is always negotiable starting from a base number set by BMWFS. The Residual is cast in stone by BMWFS and can only be changed by them and is therefore not negotiable. The MF and R also depend on the length of the lease and the miles. A 3 year lease at 36,000 miles is a very common lease. Looking at BMWs lease figures, they really encourage you to only have 2 and 3 year leases. A 4 or 5 year lease is very, very expensive and so rarely done for BMWs. The reason is that BMW wants those cars back at that time because they still hold a lot of value.
There is also the Acquisition Fee. The base for this is $625 but BMWFS allows dealer to bump this to a max of $825 if they wish. FYI!
Also, there may be a security deposit associated with leasing. BMW figures out your Security Deposit by rounding your monthly payment to the next $25. So if your monthly payment is $715.92, your SD will be $725. You get this back at the conclusion of the lease (or if you transfer the lease, you will also get this back).
There is also a disposition fee ($350 I think) that you may have to pay at the end of the lease should you decide to NOT buy the car when the lease is up.
You will also find fees for going over your alloted mileage (on the order of 20 cents/mile).
You have the ability to purchase extra miles during the lease period but 6 months need remaining to allow this. This is better than the 20 cent/mile fee if you really need them. Also, if you buy too much/don't use the miles, you will be reimbursed for the lack of miles.
You also have the ability to transfer the lease of the car to someone else. The fee for this is $450. 6 months need to be left on the lease for this to be allowable.
Another cool thing is this program known as MSD (mulitple security deposits). You can put up to 7 extra SDs down on the car to buy down the MF. Each extra SD is worth a 0.00007 reduction in your MF. So using my numbers above, I could pay a max of $725 * 7 = 5075 and have 0.00049 subtracted from the MF of my lease. Go to this link to read more about this and to see why it is actually an EXCELLENT deal:
http://www.bimmerfest.com/forums/sho...d.php?t=134206
Okay, that should cover quite a bit for you! 
| | Reply » leasing question |
Excellent summary, Agent.
Small correction:
The security deposit is rounded up the nearest $50 and not $25.
| | Reply » leasing question |
Quote: Excellent summary, Agent.
Small correction:
The security deposit is rounded up the nearest $50 and not $25. | Thanks for the correction but for whatever reason, mine was set at $725 so go figure. 
| | Reply » leasing question |
and normally, if you have ever financed with BMWFS, the security deposit can be waived - but you have to ask!
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leasing question