lawguy

I am in the early stages of negotiations for the 2010 550i and pondering leasing again.

My question is about putting money down to lower the monthly payment. I have a pal who works for a dealership (legal dept) and was adamant NOT to put any money down, as it goes straight into the dealer's pocket and doesnt really affect the deal much. He said they will rework the numbers to lower the monthly payment to suggest that the money down is lowering the payment, but he said its really that the dealer is making less on the financing to move the numbers, but making a killing on the money down.

I will admit to not being savvy enough to figure it out myself.

Can someone help educate me on the effect of money down on a lease?

I have heard that the best idea is to use BMW's "extra security deposit" and put down the equivalent of 7 security deposits to lower the montly. Thoughts?

luigi524td

This is a very complicated topic .. .. do your homework FIRST!!! BE AN INFORMED CONSUMER! This is a good, comprehensive set of tips from my Credit Union < http://www.dcu.org/streetwise/auto/leaseguide/home.html > . Your bank may have similar information. Your dealer is selling cars to make money ... financing is one of the ways they make money. Some dealers are honest enough to admit how they do that so you don't have to be on the defensive. BUT YOU DO HAVE TO BE INFORMED!

Run the numbers to understand the TOTAL COST OF ACQUISITION using every available finance option ... Most leasers focus on the MONTHLY PAYMENT. IMHO = WRONG WRONG WRONG ...

Not going to apologize for the "shouting" ... It's not how much $$$ you make, it's how you spend it!

sdg1871

I have written many many posts here on this topic. Bottom line is never ever put any oney down on a lease. If the car is totaled or stolen, you lose that money. A lease payment is a product of the selling price of the car, the residual value and the money factor. You are not paying less on the total cost of a lease by putting money down. What you are doing is basically ensuring that if the car is lost or stolen, all that money down will be lost. For the same reasons, roll your sales taxes and acquisition fee into the lease. Again, this way if the car is totaled or stolen, you will not have lost that share of it which you haven't paid out yet over time in the monthly payments.

There are tons of good sources of information on the exact money factor and residual value that BMWFS is charging for that month for that model. I usually get mine from LeaseCompare.com which posts that information on the Ask-A-Dealer forum on Bimmerfest.com. You also need to know if BMW has any incentives such as marketing support and trunk money. You can find these out on Edmunds.com and from the Ask-A-Dealer forum I mentioned.

When negotiating your lease you want to negotiate the selling price of the car up from the dealers' cost (the invoice price minus any incentives/trunk money + MACO and training fee). I do my lease negotiations by email directly with the general sales manager of whatever dealership I am contacting and my written offer contains all of the terms. Don't let a dealer mark up the money factor (they are allowed to do that) or give you a lower residual value than the BMWFS program.

To further reduce your month;y payment, you can lowe the MF by making payments of multiple securiity deposits (MSDs).

JeffNNJ

+1

Rudy

$0 money down on a lease...period.

Frank5er

+1 right on the money! Well said, Scott!