# Can the Acquisition Fee be Waived with a MF adder?



## BayAreaBMWFan (Aug 8, 2004)

On another thread there is a post which states that the BMWFS acquisition fee can be waived with a 0.0003 markup in the money factor. Can a dealer please confirm this? Are there any restrictions (no MSD, no ED etc.)

This will make sense with cars with lower interest rate principal (cap cost + residual) along with shorter term leases.


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## adrian's bmw (Feb 14, 2003)

Yes, it can. I think you're right regarding the .0003 bump. I'll double check tomorrow. I don't believe there's restirctions. It's basically like the SD waiver rate adder of .000150.


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## BayAreaBMWFan (Aug 8, 2004)

adrian's bmw said:


> Yes, it can. I think you're right regarding the .0003 bump. I'll double check tomorrow. I don't believe there's restirctions. It's basically like the SD waiver rate adder of .000150.


As usual, thanks Adrian. I think I just saved myself $3/month :rofl:


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## philippek (Jul 31, 2003)

I think it's actually .003 to waive the acq fee.


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## schley (May 26, 2005)

how long has this been in effect?

.003 would blow the deal IMO.

Can either of you confirm 2 zeros or 3 zeros? Thanks


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## nchd (Dec 29, 2006)

*Acquisition Fee MF Bump*

Hey,

I'm the one that originally posted my deal, where I bumped up the MF by rolling the Security Deposit and Acq. Fee in the deal. I originally heard about this in a post at Edmunds in the BMW lease questions. When I went to negotiate the lease with my dealer, he confirmed (and included the markup). It is as follows:

BMW Base MF Dec '06 for 335i: .00150
Roll in of Security Deposit: .000150
Roll in of Acquistion Fee: .00035
Total MF: .00200

My dealer marked up the base of .00150 to .00190, and he would not budge, so my deal was calculated on .00240. I'm not happy about this markup and will shop the deal while I await my vehicle's delivery from the Port at Charleston.


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## schley (May 26, 2005)

nchd said:


> Hey,
> 
> I'm the one that originally posted my deal, where I bumped up the MF by rolling the Security Deposit and Acq. Fee in the deal. I originally heard about this in a post at Edmunds in the BMW lease questions. When I went to negotiate the lease with my dealer, he confirmed (and included the markup). It is as follows:
> 
> ...


I know the SD is waived and not rolled into the lease with the MF markup. I'm assuming the same for the acquistion fee since you can roll it in with NO mf markup already.


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## nchd (Dec 29, 2006)

*Acquisitin Fee Waived with .00035 MF Bump*

You are correct.

My cap cost did not change, when I asked the dealer to bump the MF by .00035 in lieu of paying the Acq. fee up front or rolling it into the lease.

I calculated my lease both with the MF bump from the Acq fee vs. just rolling it into the Cap cost. The monthly payment comes out the same.

In summary, at least for me, it really doesn't matter if you take the MF bump and waive the fee or just roll it into the cap cost.

Try the calculation on your lease and see if your monthly payment is different.


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## lilskel (Jun 10, 2005)

nchd said:


> Hey,
> 
> I'm the one that originally posted my deal, where I bumped up the MF by rolling the Security Deposit and Acq. Fee in the deal. I originally heard about this in a post at Edmunds in the BMW lease questions.


There is a big difference between rolling the acq. fee into the cap cost and waiving it all together.

Everybody rolls it into the deal and doesn't pay upfront without any bump in MF. If it was eliminated alltogether I would take a .0003 MF bump any day


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## SignHere (Apr 26, 2006)

The difference is almost nothing on most deals and a whopping $3 per month on other deals. If the dealer is marking it up and you ask to waive it prepare to have that $200 picked up someplace else.

You got to pick your battles and this is one that isn't worth it.


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## shabbaman (Dec 16, 2002)

SignHere said:


> The difference is almost nothing on most deals and a whopping $3 per month on other deals. If the dealer is marking it up and you ask to waive it prepare to have that $200 picked up someplace else.
> 
> You got to pick your battles and this is one that isn't worth it.


It actually makes a lot of sense on a 24 month .00050 - .00075 MF deal where it gives you the opportunity to buy down the MF with SD's.

You can save the cost of the entire Aquisition fee.


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## SignHere (Apr 26, 2006)

shabbaman said:


> It actually makes a lot of sense on a 24 month .00050 - .00075 MF deal where it gives you the opportunity to buy down the MF with SD's.
> 
> You can save the cost of the entire Aquisition fee.


That is incorrect.

If you take out $625-825 and add almost a full percentage point of money factor (.84%) it is impossible to save the entire acquisition fee.


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## BayAreaBMWFan (Aug 8, 2004)

Is the adder 0.0003 or 0.00035? With 0.0003 I save $72 over the life of the lease vs rolling into my X3 ED. Good for a nice dinner for 2. 

Signhere: With MSDs you are reducing the MF anyway. The acq fee waiver enables the use of MSD when MSDs would not have been permitted.


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## shabbaman (Dec 16, 2002)

SignHere said:


> That is incorrect.
> 
> If you take out $625-825 and add almost a full percentage point of money factor (.84%) it is impossible to save the entire acquisition fee.


I'm correct. If your MF is .0005 to begin with (ie last month's 525i and 530i leases) and you add in .00035 to eliminate the bank fee you'll be at .00085. You can now do 5 SD's to get your MF back down to .0005. As I said, this works better on a 24 month lease than a 36 month lease. This strategy will also work exceptionally well for when your base MF is as high as .00064 since you can use 7 SD's to bring your MF back down to (.00064 +.00035 - .00049= .0005). Even if your base rate .00075 and you can still buy down part of your bank fee.

This will not work for everybody and it certainly doesn't make sense in all situations, however, the key to making this work is a low base rate, a 24 month lease and multiple security deposits.


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## Tiho_BMW (Jan 4, 2007)

*Acq fee, SD, ED MF*

just to get info on Lease adder to MF.
If you want to waive acq. fee dealer must add 0.00035 to MF
if you waive SD ( if requaired for first time BMW FS cust) add 0.00015 to MF
if you doing Lease for ED in Munich , add 0.00030 to MF , BMW FS will make official 2nd payment on your Lease.
MSD reduce MF for 0.00007 for each SD up to 7 SD what makes total of 0.00049 reduction on MF. For new BMW FS customers this is on top of regular SD , what will be total of 8 SD and 7 of them will make reduction on MF. All SD are refundable to customer what is awesome savings. Desposition fee might accure of $350 if you not continue to lease any other brand of BMW line.

Pre- Paid Leases , reducing MF for 0.00080 up to Maximum Term of 36 months- (critical)
The Pre-Paid Lease MF Reduction may Not be used in Conjunction with Sales Support Rates ( special rates MF on certin models offered by BMW FS )

Tax Exempt Entities- Dealer must Increase posted lease MF by 0.00035

I hope this will help you with your calculations.

tiho


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## Asteroid (Aug 17, 2005)

Are you sure about the ED rate? I think it's 0.0003


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## Tiho_BMW (Jan 4, 2007)

you are right my friend it is 0.00030 add to MF for ED


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## simplemind (Oct 28, 2006)

A :thumbup: :thumbup: :thumbup: (my highest rating for a post)! Thanks for that concise, very helpful info! 


SM


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## SignHere (Apr 26, 2006)

shabbaman said:


> I'm correct. If your MF is .0005 to begin with (ie last month's 525i and 530i leases) and you add in .00035 to eliminate the bank fee you'll be at .00085. You can now do 5 SD's to get your MF back down to .0005. As I said, this works better on a 24 month lease than a 36 month lease. This strategy will also work exceptionally well for when your base MF is as high as .00064 since you can use 7 SD's to bring your MF back down to (.00064 +.00035 - .00049= .0005). Even if your base rate .00075 and you can still buy down part of your bank fee.
> 
> This will not work for everybody and it certainly doesn't make sense in all situations, however, the key to making this work is a low base rate, a 24 month lease and multiple security deposits.


Oh! I see what you and BABF are saying now. But wouldn't it cease to be effective over a .00064 rate? Also, if you can find a dealer to make nothing on the back end, he's probably getting to you somewhere else.


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## shabbaman (Dec 16, 2002)

SignHere said:


> Oh! I see what you and BABF are saying now. But wouldn't it cease to be effective over a .00064 rate? Also, if you can find a dealer to make nothing on the back end, he's probably getting to you somewhere else.


It begins to lose value from a base rate of .00064, but is still effective under certain cirmumstances.

The .00035 has the value of 5 security deposits, so if you were able to buy down any part of this with SD's you'd likely be making out
.00064 + .00035 =.00099 -.00049=.00050 -- This is excellent. You've just used 7 SD's to eliminate your Acq. Fee (value: $625 - $825 + any inherent taxes and interest on that amount).

If the base rate is .00078
.00078 + .00035 = .00113 -.00049 = .00064 -- This is still very good. Effectively, you're losing the value of using 2 security deposits. With the base rate of .00078 you can use 4 sd's to get your MF to .00050 so by adding in the .00035 to the MF you can now use 3 more SD's to get your MF to .00064. So does this make sense? It depends on the cost of the car. .00064-.00050=.00014, or .34% interest rate. On a $40,000 res. value this would roughly equal $250 on a 24, about $370 on a 36, on a $50000 car it would be roughly $320 on a 24, $475 on a 36 so it's still beneficial.

If the base rate jumps to a .00092 then you would only be able to use one SD against the Acq. Fee drop so the real mf rise would be .00028, or .64%. On 40K that's about $500 on a 24, $745 on a 36. On a 50K car that's $630 on a 24, $840 on a 36.

These are just educated approximations, but as you can see, the answer to this is really 'It depends', and it does depend on many factors including whether your bank fee is $825 or $625, the price of the car, the base MF and the duration of the lease.

If you're leasing a 7 series for 3 years this idea may not be for you, but if you're leasing a Z4 for 24 months where the base rate is .00050 (what it was several months ago)you may reduce your payments by as much as $40 per month ($825 +tax and finance/24).


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