Quote:
Originally Posted by Thrak
Apologies if this is the wrong thread, but I thought I saw somewhere that there's a max the dealer can mark up the MF. I know they're allowed to mark up the acquisition fee by $200 to $995, but what about the MF? Is there a limit other than what they convince someone to pay?
I ask because a friend of mine got royally screwed by one of our local dealers, and being inexperienced, I could have easily fallen into a similar trap. Thankfully I spoke to some other friends and then found this forum.
The dealer didn't disclose his MF, but by reverse calculating from his lease agreement, it appears as though his base rate was .00329 and his 7x MSD bought him down to .0028. His overall rent charge is essentially tripled from what it should be.
This was of course on a fully optioned MSRP car as well :/
Needless to say, after hearing about my significantly better deal via an out of state dealer, he went back to the dealer and was able to get a lease unwind and a much better, although still outrageous deal. He's also contacted BMW directly to express his displeasure, so we'll see how that goes.
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This is an appropriate thread for your question.
Yes there is a cap on the MF markup. Currently BMW allows a dealer to mark up lease rates up to 0.0004
MF markup is a hidden profit center for many dealerships. Thankfully we have access to the base number.
There are circumstances where paying a higher MF is tolerable (huge discount on price of the car, lots of reduced price/free aftermarket parts, etc), but the general rule is try to always pay the base rate.