# The Ultimate Multiple Security Deposit (MSD) Thread



## XJSChris (Jun 28, 2007)

I wanted to start a thread on Multiple Security Deposits (MSD). There is so much mis-information out there on them and most dealers have no clue on how to calculate them.

I spent the last 38 minutes on the phone with BMWFS with a 2-tier supervisor. Unfortunately, my lease is not in their system yet and I cannot be given or told anything concrete until they have my lease details in front of them.

My ultimate goal is to have a definitive and concrete answer (read: A FAX) from BMWFS stating what their policies are in regard to Multiple Security Deposits.

Here is what I _know_ is the truth...

*Facts*
Fact 1) Security deposit decrease the money factor by 0.00007

Fact 2) You can have a total of (7) Multiple Security Deposits, for a total money factor discount of 0.00049.

Fact 3) Security deposit is based on the total monthly payment with taxes that will appear in your lease contract.

*Steps*
Step 1) Determine your total money factor *with all Loyalty Discounts and MSD discounts applied*.

Step 2) Calculate your total monthly payment with taxes with the money factor from Step 1.

Step 3) Your Security Deposit amount is based on the amount in Step 2) and is round to the nearest $50. So, a total monthly payment with taxes of $303 would equate to a security deposit amount of $350.

Step 4) Determine your total, refundable security deposit amount. You have to pay an initial security deposit and then have to pay the determined number of security deposits used to derive your MSD MF discount.

*Example*
_This example is based on the lease of a 2007 X3 3.0si for 24 months, with 12,000 miles per year (77% residual), a total Adjusted Capitalized Cost of $42,924, 6% sales tax, and 7 Multiple Security Deposits._

*Step 1: Determine Total Money Factor*
Base MF: 0.00214
Dealer MF Mark-up: 0.00000
Loyalty MF Discount: 0.00000
MSD MF Discount: -0.00049

Total MF: 0.00166

*Step 2: Calculate Total Monthly Payment with Taxes*
Total Monthly Payment with Taxes: $497.04

*Step 3: Calculate Deposit Amount*
Security Deposit in this example (total monthly payment with taxes of $497.04) is $500.

*Step 4: Calculate Total Security Deposit Amount*
Total Amount of Security Deposits: $4,000.. First Security is $500 and then there are - in this example - 7 Deposits @ $500 each: $3,500.. $500 + $3,500 = $4,000


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## cvb (May 10, 2006)

Looks good...note that returning BMW Leasees do not have to pay the inital security deposit (BMW waives it without a corresponding increase in MF).


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## Trey100 (Nov 23, 2006)

I understand that you are supposed to get those MSD back, but is there a chance now that they are actually holding an additional $4000 of your money that when you return the lease, they will find more things to deduct from your deposits? Basically, if you leave them 1 $600 security deposit, are you less prone to them more than the $600 (because it costs money to chase you down)? I understand if your car is flawless, there is nothing they can do - but my friend just returned his car and even though he cleaned it up, it wasn't flawless. The guy asked for almost all of the $600 (left him something like $200). Still, $400 was not too bad considering the condiiton. Anyone with MSDs get ALL of it back?


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## schley (May 26, 2005)

Trey100 said:


> I understand that you are supposed to get those MSD back, but is there a chance now that they are actually holding an additional $4000 of your money that when you return the lease, they will find more things to deduct from your deposits? Basically, if you leave them 1 $600 security deposit, are you less prone to them more than the $600 (because it costs money to chase you down)? I understand if your car is flawless, there is nothing they can do - but my friend just returned his car and even though he cleaned it up, it wasn't flawless. The guy asked for almost all of the $600 (left him something like $200). Still, $400 was not too bad considering the condiiton. Anyone with MSDs get ALL of it back?


They take out excess wear and tear from the amount of all your SD's. There is a 350 disposition fee as well if you don't roll into another bmw lease.


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## j0n (May 9, 2003)

NVM, done the search and found out all the info about OLP.

thanks!


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## AgsWin (Apr 30, 2007)

schley said:


> They take out excess wear and tear from the amount of all your SD's. There is a 350 disposition fee as well if you don't roll into another bmw lease.


However, if you sell your car to a private party for the payoff, all your MSD's will be mailed to you correct?


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## Trey100 (Nov 23, 2006)

schley said:


> They take out excess wear and tear from the amount of all your SD's. There is a 350 disposition fee as well if you don't roll into another bmw lease.


I was just wondering if BMW is more prone to take more money from your SD's since they are holding $4,000 of your money. In other words, be more picky because they know they can easily take more out of the pot of money you gave them. Things that they might overlook if you only handed them 1 security deposit ($600 or so). It's obviously harder to ask you to cough up more money than it is to just take it from the up front money you handed them.


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## Andrew*Debbie (Jul 2, 2004)

What makes it harder? You get a final statement in the mail no matter what your end balance is.


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## philippek (Jul 31, 2003)

So XJSChris, did you get your money back? And did you have to recontract?


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## XJSChris (Jun 28, 2007)

philippek said:


> So XJSChris, did you get your money back? And did you have to recontract?


I'll let you know on Monday. I spoke to my sales guy on Friday and asked that he call the Retail Communications Center at BMWFS to confirm the amount.

I'll get the money back if the amount was incorrect. I don't know what'll happen in regard to the contract (i.e., if I'll have to go there and re-write it., etc.)

I honestly don't blame my sales guy.. I asked him about it when I closed the paperwork last weekend and he, in turn, asked the finance person who told him it was the correct amout.

Either way, I rated him a "5" on all counts when BMW called my house yesterday.

That's the thing that sucks.. The sales guy could kick butt, but has to take all of the heat if someone else (finance department, detail department, et al.) messes up.


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## philippek (Jul 31, 2003)

XJSChris said:


> Either way, I rated him a "5" on all counts when BMW called my house yesterday.


:thumbup:


XJSChris said:


> That's the thing that sucks.. The sales guy could kick butt, but has to take all of the heat if someone else (finance department, detail department, et al.) messes up.


Don't even get me started on that...:eeps:


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## mclaren (Jan 5, 2005)

Step 3) Your Security Deposit amount is based on the amount in Step 2) and is round to the nearest $50. So, a total monthly payment with taxes of $303 would equate to a security deposit amount of $350.

In a case like this figure out a small cap reduction to get the payment down to $300.


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## XJSChris (Jun 28, 2007)

mclaren said:


> In a case like this figure out a small cap reduction to get the payment down to $300.


that's an excellent strategy.. *schley* recommended this as well. :thumbup:


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## XJSChris (Jun 28, 2007)

philippek said:


> So XJSChris, did you get your money back? And did you have to recontract?


Too funny..

Earlier today, I spoke with the sales manager of the dealership where I leased my X3. At first, he told me that he's always based the security deposit on the payment before discounts :dunno:

I asked him to call BMWFS RCC (retail communications center) to verify this information because I asked other people I know and was told different. He agreed to verify because he couldn't find the exact details in his dealer handbook.

Well... I just got off the phone with him and he told me that BMWFS did in fact change the security deposit program, but "they [BMWFS] never sent out a bulletin or anything informing us." Sorry, buy my bullsh*t flag is flying high with this one, especially from a dealership with large inventory turnover.

Now, in order to get the money back, the Mrs. and I have to drive back to the dealership and re-contract :tsk:

It took *me* several calls to get this situation fixed. It's only $400, but that's not the point. It's the principle: 1) I raised the question a couple of times to two different people while executing the paperwork and was told the wrong information, 2) I did the foot-work to find out the correct information, and 3) now I am the one who has to go out of my way to get my money back.

I don't want to be a complete prick, but I feel like they should compensate me somehow for this obvious error.

Suggestions??


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## schley (May 26, 2005)

XJSChris said:


> Too funny..
> 
> Earlier today, I spoke with the sales manager of the dealership where I leased my X3. At first, he told me that he's always based the security deposit on the payment before discounts :dunno:
> 
> ...


#1 I think the sales manager is either incompetent or dishonest and you want to be involved with neither. This error really doesn't help the dealer in any way as I see it for it is simply 400 more dollars you are giving bmwfs for the lease term. I'm sure even if one of our board sponsors knows a way this would benefit the dealer they wouldn't want to reveal the complicated incentive that maybe in place. But I find it hard to believe the dealer "didn't know or wasn't given a bulletin". This policy has been in place for over a year that I personally am aware of and probably for much longer.

#2 I wouldn't count on the dealer giving you anything for this IMO. He has alleviated the blame from himself by blaming bmwfs not notifying the dealer so in his mind there is no way you can prove otherwise. BMWFS will simply say finance decisions vary by dealership ect ect. I don't see you being able to place blame on the dealer in a way that will get you something in return.

Now what you should do is rework your lease terms to what is best for you, either using a small cap cost reduction or playing with your residual to get under the next lowest 50 increment. Let us know what happens.


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## XJSChris (Jun 28, 2007)

schley said:


> #1 I think the sales manager is either incompetent or dishonest and you want to be involved with neither.


I think it's a bit of both: incompetence & dishonesty



schley said:


> This error really doesn't help the dealer in any way as I see it for it is simply 400 more dollars you are giving bmwfs for the lease term.


Exactly.. That's what's strange about the entire situation.



schley said:


> But I find it hard to believe the dealer "didn't know or wasn't given a bulletin". This policy has been in place for over a year that I personally am aware of and probably for much longer.


I threw my bullsh*t flag immidiately when I heard him say this. The sales manager is the guy, it's his job to know this stuff...



schley said:


> #2 I wouldn't count on the dealer giving you anything for this IMO. He has alleviated the blame from himself by blaming bmwfs not notifying the dealer so in his mind there is no way you can prove otherwise.


He may not have a choice.. read on..



schley said:


> BMWFS will simply say finance decisions vary by dealership ect ect.


As fate would have it, a BMWFS representative called me last night to confirm my lease details and to congratulate me for the lease. I asked about the MSD and was told it was, in fact, calculated incorrectly.

I explained the entire situation, include the sales manager's excuse of he didn't know or wasn't told about the MSD program.

The BMWFS rep was shocked, to say the least. The rep informed me that BMWFS has regional sales and marketing people who travel to the dealerships in their area - on a regular basis - to conduct training and to disseminate new program details, etc.

The rep took down my work and mobile numbers and is going to put me in touch with the BMWFS Sales and Marketing person who handles my region so I can speak with them directly.

I'm not going to call back the dealership until I speak with the BMWFS regional rep.

I'll keep everyone posted..


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## schley (May 26, 2005)

XJSChris said:


> I think it's a bit of both: incompetence & dishonesty
> 
> Exactly.. That's what's strange about the entire situation.
> 
> ...


wow I'm surprised bmwfs contacted you. Let us know.


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## XJSChris (Jun 28, 2007)

schley said:


> wow I'm surprised bmwfs contacted you.


I was under the impression that BMWFS contacted every new lessee to "thank them" and confirm details?


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## schley (May 26, 2005)

XJSChris said:


> I was under the impression that BMWFS contacted every new lessee to "thank them" and confirm details?


uhhhhhhh no.


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## The BoatMan (Apr 2, 2002)

For our past leases we never received a call.

But for our lease this past May we received a call a few weeks after we signed. They confirmed details and actually cleared up a billing issue. Very helpful I might add.

Maybe its something new.


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