HELP: From the Financial Experts Here-Lease Issues
11-28-2004, 01:41 PM
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(Apologize first as this is a little off topic.)
I've read the FAQ and done my homework re. lease (negotiate buy price first, monthly payment is bottom line, cap reduction not necessarily a good idea, etc., etc.). I still have a couple questions please. Among varous factors, it seems to me, it comes down to the residual and the money factor.
MONEY FACTOR: For the month of November, I have seen 2 interest rates mentioned by other members of this forum: 3.6% and 4.2% (I assume both form BMW Finacial Service.). Shouldn't these numbers be the same? If yes, is the dealer quoting 4.2% not being up front? That said, could I negotiate to number below 3.6%?
RESIDUAL VALUE: Once the 2 parameters of duration of lease and annual mileage are set, is this residual a fixed value (as in, provided by a lookup table from the bank)? Do BMW Dealers' Lease Officers have the authority to bring this higher than what the bank gave him?
Thanks and regards,
Can
BTW, I like this site:
http://www.leaseguide.com/calc.htm
I've read the FAQ and done my homework re. lease (negotiate buy price first, monthly payment is bottom line, cap reduction not necessarily a good idea, etc., etc.). I still have a couple questions please. Among varous factors, it seems to me, it comes down to the residual and the money factor.
MONEY FACTOR: For the month of November, I have seen 2 interest rates mentioned by other members of this forum: 3.6% and 4.2% (I assume both form BMW Finacial Service.). Shouldn't these numbers be the same? If yes, is the dealer quoting 4.2% not being up front? That said, could I negotiate to number below 3.6%?
RESIDUAL VALUE: Once the 2 parameters of duration of lease and annual mileage are set, is this residual a fixed value (as in, provided by a lookup table from the bank)? Do BMW Dealers' Lease Officers have the authority to bring this higher than what the bank gave him?
Thanks and regards,
Can
BTW, I like this site:
http://www.leaseguide.com/calc.htm
11-28-2004, 01:50 PM
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Here is a reply I gave on a similiar topic...it's not exactly what you're looking for but it should help:
Negotiate your price up front and then negotiate your lease terms. Terms that can (and should) be negotiated on a lease, once your purchase price has been established are: fees (some they throw at you are legit and some typically are not) and most important the money factor. All dealers will try to mark up the money factor over the buy-rate. Buy rate can be obtained from Edmunds.com in the "leasing" forum...make a post and the moderator (car_guy) will get back to you. A post there may go like this....I want to lease an 05 545 for three years with 12k miles per year...what is the buy-rate and residual. Once you obtain the aforementioned info you can start to calculate your lease payments.
This site sells a great calculator (http://www.autoleasingsoftware.com/)...I use it to run all my own lease numbers before I ever sit down with the GM or Fleet Manager.
I typically call the dealer and speak with the GM or Fleet Manager...I then get their markup over invoice (negotiate if you need to / take trunk money and any rebates into consideration)...I then get a run down on all their fees (making sure they are legit). And my final question is...what is your mark up over buy rate, if any, on the money factor. Remember the dealer can't control the residual...that is a function of the term and miles. So you need to work with the variable that can be controlled at the dealer level. And those are the ones I have outlined for you.
Hope this helps
__________________________________________________ __________________________________________________ ____________________________________
And here's a similiar response that I posted on the same subject on the allroad forum I visit:
Be aware of whether or not the dealer is marking up the buy-rate...they probably are...and that's OK as long as you know what the buy-rate is and the mark up is acceptable to you. I demand buy-rate when I'm leasing
A good cap cost is worthless if the dealer is sticking it to you on the back end with a hyper inflated money factor.
You should be negotiating purchase price (take rebates, trunk money etc) AND "fees" (make sure they are not putting unnecessary ones into the start up costs of the lease), AND money factor. Term and residual are not negotiable (they are what they are depending on the institution). Negotiate the best deal on the three items that I mentioned and the payment will come from there.
As an example:
YIPEE! Mr. car-buyer negotiated an honest to god deal at $1500 back of invoice WOW he feels great!! He must have achieved the best possible lease payment...after all after 6 hours of talking to the dealer...he got them down to 1500 back...there's no possible way he could get a better paymeny, right? Wrong...
The dealer feels even better than Mr car buyer because he loaded the lease with $1000 in unnecessary lease start up fees...is getting $2000 in trunk money from the manufacturer and marked up the money-factor.
Obviously this is an exaggerated example but you get my point.
Buy rate, trunk money etc...can be obtained by posting a question in the leasing forum on Edmunds.com
I hope this helps...
Negotiate your price up front and then negotiate your lease terms. Terms that can (and should) be negotiated on a lease, once your purchase price has been established are: fees (some they throw at you are legit and some typically are not) and most important the money factor. All dealers will try to mark up the money factor over the buy-rate. Buy rate can be obtained from Edmunds.com in the "leasing" forum...make a post and the moderator (car_guy) will get back to you. A post there may go like this....I want to lease an 05 545 for three years with 12k miles per year...what is the buy-rate and residual. Once you obtain the aforementioned info you can start to calculate your lease payments.
This site sells a great calculator (http://www.autoleasingsoftware.com/)...I use it to run all my own lease numbers before I ever sit down with the GM or Fleet Manager.
I typically call the dealer and speak with the GM or Fleet Manager...I then get their markup over invoice (negotiate if you need to / take trunk money and any rebates into consideration)...I then get a run down on all their fees (making sure they are legit). And my final question is...what is your mark up over buy rate, if any, on the money factor. Remember the dealer can't control the residual...that is a function of the term and miles. So you need to work with the variable that can be controlled at the dealer level. And those are the ones I have outlined for you.
Hope this helps
__________________________________________________ __________________________________________________ ____________________________________
And here's a similiar response that I posted on the same subject on the allroad forum I visit:
Be aware of whether or not the dealer is marking up the buy-rate...they probably are...and that's OK as long as you know what the buy-rate is and the mark up is acceptable to you. I demand buy-rate when I'm leasing
A good cap cost is worthless if the dealer is sticking it to you on the back end with a hyper inflated money factor.
You should be negotiating purchase price (take rebates, trunk money etc) AND "fees" (make sure they are not putting unnecessary ones into the start up costs of the lease), AND money factor. Term and residual are not negotiable (they are what they are depending on the institution). Negotiate the best deal on the three items that I mentioned and the payment will come from there.
As an example:
YIPEE! Mr. car-buyer negotiated an honest to god deal at $1500 back of invoice WOW he feels great!! He must have achieved the best possible lease payment...after all after 6 hours of talking to the dealer...he got them down to 1500 back...there's no possible way he could get a better paymeny, right? Wrong...
The dealer feels even better than Mr car buyer because he loaded the lease with $1000 in unnecessary lease start up fees...is getting $2000 in trunk money from the manufacturer and marked up the money-factor.
Obviously this is an exaggerated example but you get my point.
Buy rate, trunk money etc...can be obtained by posting a question in the leasing forum on Edmunds.com
I hope this helps...
11-28-2004, 02:04 PM
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LeaseWizard.com
AutoLeasingSoftware.com
Check out the above links that will explain everything. You may want to buy the software to get your exact numbers.
Btw, the residual is usually set by the lender and may not be negotiable.
Keep us updated on your progress. Be sure and get multiple offers.
Good luck.
Welcome to the forums!
AutoLeasingSoftware.com
Check out the above links that will explain everything. You may want to buy the software to get your exact numbers.
Btw, the residual is usually set by the lender and may not be negotiable.
Keep us updated on your progress. Be sure and get multiple offers.
Good luck.
Welcome to the forums!
11-28-2004, 02:12 PM
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That Edmunds site is great. Thank you!
Who are those guys (car_guy, etc.) and how do they provide such valuable service for free?
Do I just post a question, they'll find out and reply?
Thanks.
Can
Who are those guys (car_guy, etc.) and how do they provide such valuable service for free?
Do I just post a question, they'll find out and reply?
Thanks.
Can
Originally Posted by ch7656' date='Nov 28 2004, 03:50 PM
Here is a reply I gave on a similiar topic...it's not exactly what you're looking for but it should help:
Negotiate your price up front and then negotiate your lease terms. Terms that can (and should) be negotiated on a lease, once your purchase price has been established are: fees (some they throw at you are legit and some typically are not) and most important the money factor. All dealers will try to mark up the money factor over the buy-rate. Buy rate can be obtained from Edmunds.com in the "leasing" forum...make a post and the moderator (car_guy) will get back to you. A post there may go like this....I want to lease an 05 545 for three years with 12k miles per year...what is the buy-rate and residual. Once you obtain the aforementioned info you can start to calculate your lease payments.
This site sells a great calculator (http://www.autoleasingsoftware.com/)...I use it to run all my own lease numbers before I ever sit down with the GM or Fleet Manager.
I typically call the dealer and speak with the GM or Fleet Manager...I then get their markup over invoice (negotiate if you need to / take trunk money and any rebates into consideration)...I then get a run down on all their fees (making sure they are legit). And my final question is...what is your mark up over buy rate, if any, on the money factor. Remember the dealer can't control the residual...that is a function of the term and miles. So you need to work with the variable that can be controlled at the dealer level. And those are the ones I have outlined for you.
Hope this helps
__________________________________________________ __________________________________________________ ____________________________________
And here's a similiar response that I posted on the same subject on the allroad forum I visit:
Be aware of whether or not the dealer is marking up the buy-rate...they probably are...and that's OK as long as you know what the buy-rate is and the mark up is acceptable to you. I demand buy-rate when I'm leasing
A good cap cost is worthless if the dealer is sticking it to you on the back end with a hyper inflated money factor.
You should be negotiating purchase price (take rebates, trunk money etc) AND "fees" (make sure they are not putting unnecessary ones into the start up costs of the lease), AND money factor. Term and residual are not negotiable (they are what they are depending on the institution). Negotiate the best deal on the three items that I mentioned and the payment will come from there.
As an example:
YIPEE! Mr. car-buyer negotiated an honest to god deal at $1500 back of invoice WOW he feels great!! He must have achieved the best possible lease payment...after all after 6 hours of talking to the dealer...he got them down to 1500 back...there's no possible way he could get a better paymeny, right? Wrong...
The dealer feels even better than Mr car buyer because he loaded the lease with $1000 in unnecessary lease start up fees...is getting $2000 in trunk money from the manufacturer and marked up the money-factor.
Obviously this is an exaggerated example but you get my point.
Buy rate, trunk money etc...can be obtained by posting a question in the leasing forum on Edmunds.com
I hope this helps...
Negotiate your price up front and then negotiate your lease terms. Terms that can (and should) be negotiated on a lease, once your purchase price has been established are: fees (some they throw at you are legit and some typically are not) and most important the money factor. All dealers will try to mark up the money factor over the buy-rate. Buy rate can be obtained from Edmunds.com in the "leasing" forum...make a post and the moderator (car_guy) will get back to you. A post there may go like this....I want to lease an 05 545 for three years with 12k miles per year...what is the buy-rate and residual. Once you obtain the aforementioned info you can start to calculate your lease payments.
This site sells a great calculator (http://www.autoleasingsoftware.com/)...I use it to run all my own lease numbers before I ever sit down with the GM or Fleet Manager.
I typically call the dealer and speak with the GM or Fleet Manager...I then get their markup over invoice (negotiate if you need to / take trunk money and any rebates into consideration)...I then get a run down on all their fees (making sure they are legit). And my final question is...what is your mark up over buy rate, if any, on the money factor. Remember the dealer can't control the residual...that is a function of the term and miles. So you need to work with the variable that can be controlled at the dealer level. And those are the ones I have outlined for you.
Hope this helps
__________________________________________________ __________________________________________________ ____________________________________
And here's a similiar response that I posted on the same subject on the allroad forum I visit:
Be aware of whether or not the dealer is marking up the buy-rate...they probably are...and that's OK as long as you know what the buy-rate is and the mark up is acceptable to you. I demand buy-rate when I'm leasing
A good cap cost is worthless if the dealer is sticking it to you on the back end with a hyper inflated money factor.
You should be negotiating purchase price (take rebates, trunk money etc) AND "fees" (make sure they are not putting unnecessary ones into the start up costs of the lease), AND money factor. Term and residual are not negotiable (they are what they are depending on the institution). Negotiate the best deal on the three items that I mentioned and the payment will come from there.
As an example:
YIPEE! Mr. car-buyer negotiated an honest to god deal at $1500 back of invoice WOW he feels great!! He must have achieved the best possible lease payment...after all after 6 hours of talking to the dealer...he got them down to 1500 back...there's no possible way he could get a better paymeny, right? Wrong...
The dealer feels even better than Mr car buyer because he loaded the lease with $1000 in unnecessary lease start up fees...is getting $2000 in trunk money from the manufacturer and marked up the money-factor.
Obviously this is an exaggerated example but you get my point.
Buy rate, trunk money etc...can be obtained by posting a question in the leasing forum on Edmunds.com
I hope this helps...
[snapback]61698[/snapback]
11-28-2004, 02:16 PM
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My Ride: 2008 535i: June 6th start build, complete June 17th, at NY Port July 5th, at dealer July 10th, took delivery Friday July 13- Plantimum Bronze/Natural Brown Leather/Light Poplar, Sport Package, Sport Auto, Active Steering, Premium Package, CWP & PDC. Dinan Performance Software 384hp & 421 ft/lbs.
Originally Posted by cannga' date='Nov 28 2004, 05:41 PM
(Apologize first as this is a little off topic.)
I've read the FAQ and done my homework re. lease (negotiate buy price first, monthly payment is bottom line, cap reduction not necessarily a good idea, etc., etc.).? I still have a couple questions please.? Among varous factors, it seems to me, it comes down to the residual and the money factor.
MONEY FACTOR:? For the month of November, I have seen 2 interest rates mentioned by other members of this forum:? 3.6% and 4.2% (I assume both form BMW Finacial Service.).? Shouldn't these numbers be the same?? If yes, is the dealer quoting 4.2% not being up front?? That said, could I negotiate to number below 3.6%?
RESIDUAL VALUE:? Once the 2 parameters of duration of lease and annual mileage are set, is this residual a fixed value (as in, provided by a lookup table from the bank)?? Do BMW Dealers' Lease Officers have the authority to bring this higher than what the bank gave him?
Thanks and regards,
Can
BTW, I like this site:
http://www.leaseguide.com/calc.htm
I've read the FAQ and done my homework re. lease (negotiate buy price first, monthly payment is bottom line, cap reduction not necessarily a good idea, etc., etc.).? I still have a couple questions please.? Among varous factors, it seems to me, it comes down to the residual and the money factor.
MONEY FACTOR:? For the month of November, I have seen 2 interest rates mentioned by other members of this forum:? 3.6% and 4.2% (I assume both form BMW Finacial Service.).? Shouldn't these numbers be the same?? If yes, is the dealer quoting 4.2% not being up front?? That said, could I negotiate to number below 3.6%?
RESIDUAL VALUE:? Once the 2 parameters of duration of lease and annual mileage are set, is this residual a fixed value (as in, provided by a lookup table from the bank)?? Do BMW Dealers' Lease Officers have the authority to bring this higher than what the bank gave him?
Thanks and regards,
Can
BTW, I like this site:
http://www.leaseguide.com/calc.htm
[snapback]61694[/snapback]
11-28-2004, 02:19 PM
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Can-
I'm not sure who car_guy actually is but he is an amazing help
Sometimes it take 24-36 hours to get a reply back...but he always comes through. You can also simply ask your dealer to come clean with you..tell them you'll have the info within a couple days...so it would be much easier on you if they would just shoot straight with you and give you info on the buy-rate etc...
I'm not sure who car_guy actually is but he is an amazing help
Sometimes it take 24-36 hours to get a reply back...but he always comes through. You can also simply ask your dealer to come clean with you..tell them you'll have the info within a couple days...so it would be much easier on you if they would just shoot straight with you and give you info on the buy-rate etc...
11-28-2004, 03:08 PM
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Originally Posted by ch7656' date='Nov 28 2004, 04:19 PM
Can-
I'm not sure who car_guy actually is but he is an amazing help
Sometimes it take 24-36 hours to get a reply back...but he always comes through. You can also simply ask your dealer to come clean with you..tell them you'll have the info within a couple days...so it would be much easier on you if they would just shoot straight with you and give you info on the buy-rate etc...
I'm not sure who car_guy actually is but he is an amazing help
Sometimes it take 24-36 hours to get a reply back...but he always comes through. You can also simply ask your dealer to come clean with you..tell them you'll have the info within a couple days...so it would be much easier on you if they would just shoot straight with you and give you info on the buy-rate etc...
[snapback]61726[/snapback]
BTW, a quick search showed 36 months/ 10000 annual miles for 545i at .0015 MF and 61% residual. The lease calculator "seems" to say 780 plus tax per month.
I got the dealer down to about 1500 to 1800 over invoice for ordering the 545 here in Los Angeles. Unfortunately it's the one close to my home, South Bay BMW, that doesn't want to budge from 1800, yet.
I now just have to go out and do the actual "dirty" work to conclude this.
Regards,
Can
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