BMW M3 and M4 Lease Rates (36 months)

[WilliCO]

Originally Posted by doug_999

They can not screw with the residuals and the invoice and eventual residual value are clear as day on the contract (you just have to question it).

When I leased the F10 I'm driving now last August, the dealer initially presented me with a residual two points higher than what Jon Shafer had told me. I pointed out the error, the guy re-checked, agreed, and was apologetic. It might have been an honest mistake, hard to tell.

[doug_999]

Originally Posted by WJGreer

When I leased the F10 I'm driving now last August, the dealer initially presented me with a residual two points higher than what Jon Shafer had told me. I pointed out the error, the guy re-checked, agreed, and was apologetic. It might have been an honest mistake, hard to tell.

Well that was the right thing to do -let them know (Even if it was in your favor). I wonder if the lease would have been rejected by BMWFS? However on that note, all of my comments pertained to BMWFS - with another leasing company who knows!

I do know that when I helped my mother in-law buy her Kia Soul, they tried to charge sales tax at .25% higher than it should have been. I suspect the dealer had been doing this for a long while and maybe pocketing the difference? My attorney told me I should have just paid it and then notified the IL Dept of Revenue. But like you said, maybe it was an honest mistake...(except it took me 20 minutes to convince them they had the wrong rate...).

[GrussGott]

Originally Posted by doug_999

Well that was the right thing to do -let them know (Even if it was in your favor). I wonder if the lease would have been rejected by BMWFS?

No! SOP for most dealers. Leasing is NOT a good finance option for people who don't have a background in finance and/or don't fully understand EVERYTHING in the contract. Dealers have about 20 different standard methods to sneak in fees ("documentation fee"), add points, or bake in services.

I have NEVER seen a lease contract without at least 5 of these scams in it including from dealers on these boards who swear they don't do that.

EDIT: I'm not dinging any dealers here, and many of the salespeople might not even know what their finance dept is doing - nevertheless why it happens is kind of irrelevant to the buyer

[GrussGott]

Originally Posted by OatmealRocks

Besides invoice, MF, residual and the standard fees. What else are we to watch out for? 20 methods to sneak in fees? Please share. Thanks.

Way too big of a topic for a forum ... ideally you need to understand the law in the state you're leasing the car, the terms the lessor is enforcing vs what the dealer may be tacking on, and any/all risks/liabilities associated with the contract, such as termination fees, and how you might want to cover them such as gap insurance.

You should be able to generate every number in the contract on your own (including all fees!!) and compare them between multiple lessors to ensure you're getting the best deal, and you need to understand the tax implications especially if you're buying in a different state. And you have to factor the monthly payment with other costs such as down payment, acquisition, and security deposit fees to determine the total the dealer charging you.

There's a 90% chance that nobody at the dealership understands the contract so you'll need to be prepared to explain it to them and/or have "pre-wired" the lessor so they can help you too; I've yet to work with any dealer that understood their leasing contracts - many times they've not even fully read them ("huh, I've never seen that before!")

Of course all of this depends on how much you want to leave to chance and/or you getting taken vs doing your homework to know you're not.

We once had a dealer bet us $50 we were wrong as he'd "been doing this for 20 years". 3 weeks later we got a check for $50 and a revised contract. Most people seem to just pay the $5k-$10k up front and think it's great they have a lower payment.

If you want to go deep, start googling and then get an example contract, read it, understand it end-to-end, get good at it. Then ask for your lessor or dealer for a blank contract and get good at that one. Then start negotiations.

[WilliCO]

Originally Posted by GrussGott

Way too big of a topic for a forum ... ideally you need to understand the law in the state you're leasing the car, the terms the lessor is enforcing vs what the dealer may be tacking on, and any/all risks/liabilities associated with the contract, such as termination fees, and how you might want to cover them such as gap insurance.

You should be able to generate every number in the contract on your own (including all fees!!) and compare them between multiple lessors to ensure you're getting the best deal, and you need to understand the tax implications especially if you're buying in a different state. And you have to factor the monthly payment with other costs such as down payment, acquisition, and security deposit fees to determine the total the dealer charging you.

There's a 90% chance that nobody at the dealership understands the contract so you'll need to be prepared to explain it to them and/or have "pre-wired" the lessor so they can help you too; I've yet to work with any dealer that understood their leasing contracts - many times they've not even fully read them ("huh, I've never seen that before!")

Of course all of this depends on how much you want to leave to chance and/or you getting taken vs doing your homework to know you're not.

We once had a dealer bet us $50 we were wrong as he'd "been doing this for 20 years". 3 weeks later we got a check for $50 and a revised contract. Most people seem to just pay the $5k-$10k up front and think it's great they have a lower payment.

If you want to go deep, start googling and then get an example contract, read it, understand it end-to-end, get good at it. Then ask for your lessor or dealer for a blank contract and get good at that one. Then start negotiations.

Good post. I also recommend that anyone considering leasing download the Leasematic app and try to put together a lease deal using it.

All the things you don't understand the first time you try that are the things to brush up on before you walk into the dealer's finance office. Once you can confidently understand how each factor in Leasematic affects the payment, pretty much the only lever for dealer profit you don't know about is documentation fees.

[IS350]

Another great free resource:

http://www.edmunds.com/calculators/car-lease.html

Do to forget the acquisition fee is $725, but some charge more.

[GrussGott]

Originally Posted by IS350

Another great free resource:

http://www.edmunds.com/calculators/car-lease.html

Do to forget the acquisition fee is $725, but some charge more.

yeah and those little tricks like doc & acq fees always come with the ole "I have no control over that - that's just a requirement of the lease"

For the us the trick in these negotiations has been to use principled vs positional negotiation for stuff like that. We'll usually say "ah, ok..." then we'll note it, but move on knowing we're going to come back to it. That leaves room to not directly challenge the sales person's knowledge.

Then you "review your list one last time" and when you come back it's great to be prepared with the docs that says it's NOT required because you "knew I"d read something about that at some point ..."

[GrussGott]

Originally Posted by WillInDenver

Good post. I also recommend that anyone considering leasing download the Leasematic app and try to put together a lease deal using it.

Yeah, great app! I'd never seen that ...

One other thing to note is, at least with BMWFS, you can buy down the MF with multiple security deposits. This is fantastic because you always get them back vs a down payment and, of course, it lowers the interest rate.

[alg200]

I just want to clarify before I place an order for an M3 this month (July)....

If I'm on the east coast the July MF and Residual are locked in for 60 days?
If the residual or MF get better during the next 60 days I can get the better rate?
If my car does not come in 60 days I'm forced into whatever the rates are that month?

Thanks!

[spiney]

Spoke with dealer this week and they said that they have no control over the MF and its set by BWM financial. currently set at .00170. Is this subject to change at all?

[DrtyJrze]

Originally Posted by spiney

Spoke with dealer this week and they said that they have no control over the MF and its set by BWM financial. currently set at .00170. Is this subject to change at all?

They are not telling the truth. It is .00130. If doing ED there is a mandatory .0003 added (.00160). Anymore than that is dealership added.

[bigsid05]

Originally Posted by DrtyJrze

They are not telling the truth. It is .00130. If doing ED there is a mandatory .0003 added (.00160). Anymore than that is dealership added.

Why is an ED lease more expensive than US delivery?

[DrtyJrze]

Originally Posted by bigsid05

Why is an ED lease more expensive than US delivery?

Because the second lease payment is "waived" for the month it's being shipped back to the states. But you really end up paying more than your monthly lease payment missed due to the MF increase. Kinda sucks.

[ah3nyc]

my 2013 ah3 lease is up 6/2/16-hope m3 rates get better by then!!!!

[J50]

Originally Posted by ah3nyc

my 2013 ah3 lease is up 6/2/16-hope m3 rates get better by then!!!!

.00130 is not that bad of a rate for a new model M car. Its the residual that could use some improvement.

[ah3nyc]

Originally Posted by J50

.00130 is not that bad of a rate for a new model M car. Its the residual that could use some improvement.

That's what I meant! I got a steal on my ah3! 59k msrp with ED with full MSD and taxes in payment $399/ month. I know the m3 won't be anywhere near that but I see 600-750 in near future with msd's and ed.

[BMWJ]

All this info is great about how and where dealers can add in money to the lease. However I don't think you need to overly concern yourself with it all.

No dealer is going to lease you this car unless they are making some profit.

So in my opinion the best and simplest thing you can do is get two quotes from different dealerships. Let them fight each other for the business and let them figure out what they have to do with this fee and that fee to earn your business.

[WilliCO]

Originally Posted by BMWJ

All this info is great about how and where dealers can add in money to the lease. However I don't think you need to overly concern yourself with it all.

No dealer is going to lease you this car unless they are making some profit.

So in my opinion the best and simplest thing you can do is get two quotes from different dealerships. Let them fight each other for the business and let them figure out what they have to do with this fee and that fee to earn your business.

I guess that one thing about leasing, unlike traditional financing, is that you can shop for a monthly payment. If you like the payment it doesn't really matter how you get there.

As long as they aren't asking for a lot of money up front.

As long as you understand how many miles per year you get.

As long as you know how long the lease term is.

As long as you understand what they've done with your trade, if you have one.

On second thought, maybe it does make sense to understand how leases work before you try to negotiate one.

[BMWJ]

Originally Posted by WillInDenver

I guess that one thing about leasing, unlike traditional financing, is that you can shop for a monthly payment. If you like the payment it doesn't really matter how you get there.

As long as they aren't asking for a lot of money up front.

As long as you understand how many miles per year you get.

As long as you know how long the lease term is.

As long as you understand what they've done with your trade, if you have one.

On second thought, maybe it does make sense to understand how leases work before you try to negotiate one.

Of course it's not just about monthly payment, never said it was. But you don't need to be an expert in leases to negotiate successfully.

[doug_999]

Originally Posted by GrussGott

No! SOP for most dealers. Leasing is NOT a good finance option for people who don't have a background in finance and/or don't fully understand EVERYTHING in the contract. Dealers have about 20 different standard methods to sneak in fees ("documentation fee"), add points, or bake in services.

This is not true. I've leased cars for the last 14 years and NEVER have had them try and sneak anything in. Also, there are not 20 different "standard" methods for them to sneak in fees. The leasing contract is pretty darn clear and no, I don't have a background in finance. You may be dealing with some sneaky people - but I have yet to encounter them with BMW FS or Lexus FS.

Originally Posted by GrussGott

I have NEVER seen a lease contract without at least 5 of these scams in it including from dealers on these boards who swear they don't do that.

EDIT: I'm not dinging any dealers here, and many of the salespeople might not even know what their finance dept is doing - nevertheless why it happens is kind of irrelevant to the buyer

You are dinging all dealers, not just the ones here.

[WilliCO]

Originally Posted by doug_999

This is not true. I've leased cars for the last 14 years and NEVER have had them try and sneak anything in. Also, there are not 20 different "standard" methods for them to sneak in fees. The leasing contract is pretty darn clear and no, I don't have a background in finance. You may be dealing with some sneaky people - but I have yet to encounter them with BMW FS or Lexus FS.

Yes, the lease contracts are clear and standard. I bet, though, that 95% of the people who walk in the door of a BMW dealership do not know, for example, what BMWFS' money factor buy rate is. So they sign a contract with a markup in that area, and many didn't even know it was negotiable.

[doug_999]

Originally Posted by WillInDenver

Yes, the lease contracts are clear and standard. I bet, though, that 95% of the people who walk in the door of a BMW dealership do not know, for example, what BMWFS' money factor buy rate is. So they sign a contract with a markup in that area, and many didn't even know it was negotiable.

Wouldn't you say that is the exactly the same as financing? Probably each and every dealer marks up the finance rate and the customer doesn't know what the dealers "buy" rate is. Thoughts?