# European delivery lease question



## Bagay65 (Mar 24, 2013)

I believe I read Bmw picks up the first lease payment as part of ED delivery.
Is this accurate.


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## bruza (Sep 3, 2010)

BMW actually picks up the second monthly payment (and adjusts the Money Factor to reflect that). 

In both of my ED's, the first payment was included in my amount due at signing.


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## tim330i (Dec 18, 2001)

Welcome to Bimmerfest! I moved your question to the ED forum, you will get more help in here.

Tim


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## visi107 (Mar 20, 2013)

It seems to me though that you end up making lease payments for a significant amount of time when you have no car to drive.
It takes 6-10 weeks for the car to come back to the states (east vs west coast) right? Lets pick an average of 8 weeks. BMW makes one payment but raises your MF in return so you could argue this might even be a wash but regardless. 
Also what is the minimum amount of time that you have to sign the lease and make the first payment(here in the US) before the pick up in Germany? I have read that it is 2 weeks

So then 2 weeks (ahead of pickup) + 8 weeks(waiting for car to come back) means 10 weeks total that you don't have a car but making payments. If you want to count the payment BMW makes then 10 weeks - 4 weeks= 6 weeks; So in reality then you are paying for you car for at least 6 weeks even thought you don't have a car? (If buying this wouldn't be an issue because you don't have to return the car at a certain date as you do with a lease)

Is this something that is just widely known and accepted because this seems kind of unfair?


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## frank325 (Dec 29, 2005)

Take into account the significant discount you're getting on the car, I don't have many complaints.


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## Ninong (May 20, 2014)

visi107 said:


> It seems to me though that you end up making lease payments for a significant amount of time when you have no car to drive.
> It takes 6-10 weeks for the car to come back to the states (east vs west coast) right? Lets pick an average of 8 weeks. BMW makes one payment but raises your MF in return so you could argue this might even be a wash but regardless.
> Also what is the minimum amount of time that you have to sign the lease and make the first payment(here in the US) before the pick up in Germany? I have read that it is 2 weeks
> 
> ...


It's not unfair at all. Whether you finance or lease or pay cash for your car, you still have to finish that process a couple of weeks before you take delivery at the BMW Welt. If you finance the car, the finance charges start the day you sign the contract even though your first payment may not be due for 60 days. If you pay cash for the car, you are still withdrawing the full purchase price of the car from your brokerage account (or similar) a good two months before the car will back in your garage.

Don't forget that you also have the use of the car during your vacation in Europe, which saves you a lot of money compared to renting a comparable car over there. And you're saving thousands of dollars on the purchase price compared to what it costs you for the same thing off the dealer's showroom floor.

With a lease, the first payment is due the date of the lease and the second payment is due 30 days later. You may still be in Europe 30 days after the date you signed the lease, so BMW makes that payment for you, then adjusts the MF a little higher. If you finance it with them, they make your first payment due 60 days from the date of the contract -- interest charges still start with the date printed on the contract.

No matter whether you lease it, finance it or pay cash for it, you still don't have the use of the car during the 6-10 weeks it takes to get it from Europe back to you here in the states. Remember that on a lease the mileage is just as important as the number of months and you will still have the benefit of all of the remaining miles once you get it back in your hands. You're not just contracting for x-number of months but also x-number of miles.


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## visi107 (Mar 20, 2013)

Ninong said:


> It's not unfair at all. Whether you finance or lease or pay cash for your car, you still have to finish that process a couple of weeks before you take delivery at the BMW Welt. If you finance the car, the finance charges start the day you sign the contract even though your first payment may not be due for 60 days. If you pay cash for the car, you are still withdrawing the full purchase price of the car from your brokerage account (or similar) a good two months before the car will back in your garage.
> 
> Don't forget that you also have the use of the car during your vacation in Europe, which saves you a lot of money compared to renting a comparable car over there. And you're saving thousands of dollars on the purchase price compared to what it costs you for the same thing off the dealer's showroom floor.
> 
> ...


Good point on the miles I hadn't thought about that part but still you are paying for at least 6 weeks (I would argue longer bc the BMW 2 second payment is offset by the increased MF). IF you need to rent a car here in the states while waiting that adds to it as well. Once you take all of that into account the saving is not a full 7% off US MSRP at least in my opinion. Others may disagree. 
And just to make it clear, I'm not arguing against Euro Delivery. I think It would be a great experience and I am planning to do that for my next car but it's important to take everything into account before deciding.


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## frank325 (Dec 29, 2005)

visi107 said:


> Good point on the miles I hadn't thought about that part but still you are paying for at least 6 weeks (I would argue longer bc the BMW 2 second payment is offset by the increased MF). IF you need to rent a car here in the states while waiting that adds to it as well. Once you take all of that into account the saving is not a full 7% off US MSRP at least in my opinion. Others may disagree.
> And just to make it clear, I'm not arguing against Euro Delivery. I think It would be a great experience and I am planning to do that for my next car but it's important to take everything into account before deciding.


Even if the savings gets cancelled out in the end, including much of your travel cost, you still paid the same amount and got a car plus a European vacation and great experience out of it.


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## Hound Passer (Feb 2, 2007)

visi107 said:


> Also what is the minimum amount of time that you have to sign the lease and make the first payment(here in the US) before the pick up in Germany? I have read that it is 2 weeks
> 
> So then 2 weeks (ahead of pickup) + 8 weeks(waiting for car to come back) means 10 weeks total that you don't have a car but making payments. If you want to count the payment BMW makes then 10 weeks - 4 weeks= 6 weeks; So in reality then you are paying for you car for at least 6 weeks even thought you don't have a car? (If buying this wouldn't be an issue because you don't have to return the car at a certain date as you do with a lease)
> 
> Is this something that is just widely known and accepted because this seems kind of unfair?


1. Payment time depends on dealer and CA. I've never paid sooner than a week and as late as two days prior.

2. Unfair is a poor word choice. Whatever the situation is its purely at buyer's option. BMW isn't coercing anyone to do an ED so by definition it can't be "unfair."

3. Buyers are every bit as affected b/c they are either also making payments on a car out of reach or already paid for it (lost opportunity cost b/c they don't have that $ or a car). Also depreciation cost and for many like me who will p/u in April, May, or June, by the time our car is redelivered the new model will soon be out -- additional depreciation w/o having used the car much.

4. ED isn't for everyone, but it popular enough b/c it's fun even if it's a break-even proposition. No one is going half way around the world to p/u a car just to save a couple extra grand.


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## Value shopper (Mar 6, 2013)

Why are leases set up to begin 2 weeks or more before the car is picked up at welt? I understand signing paperwork in advance but I don't understand making the consumer pay for a lease before picking up the car?

I have read that some dealers will set the lease to begin when the car is picked up. Is that a common option and something that is at the dealer's discretion?


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## soheilk (Feb 23, 2015)

Value shopper said:


> Why are leases set up to begin 2 weeks or more before the car is picked up at welt? I understand signing paperwork in advance but I don't understand making the consumer pay for a lease before picking up the car?
> 
> I have read that some dealers will set the lease to begin when the car is picked up. Is that a common option and something that is at the dealer's discretion?


Well, it really depends on the dealer and the relation between you and your CA. 2 weeks is a general timeframe. We did it a week before, some have done it a day before and I'm sure some had to do it 3 weeks before. Maybe not! But my point is that the dealer wants to make sure that you will absolutely sign the deal and your check clears up and your CA has enough time based on how busy he is and his work/vacation schedule to submit the paperwork to BMWNA, BMWFS and Welt. Remember that there are a lot of extra paperwork needed for an ED deal both on the US side and German side: ordering the EU plates, EU insurance, etc. They want to make sure that everything goes smoothly because you really don't want to show up at the Welt finding out that your car is not ready for pick up.


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## Ninong (May 20, 2014)

Value shopper said:


> Why are leases set up to begin 2 weeks or more before the car is picked up at welt? I understand signing paperwork in advance but I don't understand making the consumer pay for a lease before picking up the car?
> 
> I have read that some dealers will set the lease to begin when the car is picked up. Is that a common option and something that is at the dealer's discretion?


The lease begins the date you sign the lease agreement. You should sign the lease agreement a week before you depart for Munich but some dealers allow you to wait until just a couple of days, or even a couple of hours, before you leave. Your first payment is due when you sign the lease agreement and the second payment is due 30 days later but it is paid by BMWFS. You then start paying with the third payment one month after that.

There is no legal way to date the lease agreement on the date you pick up the car at the Welt.


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## soheilk (Feb 23, 2015)

And to the OP, as others have mentioned, ED might not be the best option financially, specially if you add in the travel cost to it. I've read that some festers were able to get a better deal on their cars than ED after all the incentives and corporate discount and BMWCCA and other event vouchers and etc. Think of ED as an experience and a nice two week vacation for you (and your family) in a badass ultimate driving machine


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## AggieKnight (Dec 26, 2008)

Ninong said:


> The lease begins the date you sign the lease agreement. You should sign the lease agreement a week before you depart for Munich but some dealers allow you to wait until just a couple of days, or even a couple of hours, before you leave. Your first payment is due when you sign the lease agreement and the second payment is due 30 days later but it is paid by BMWFS. You then start paying with the third payment one month after that.


I'm not following you here, Ninong.

There is absolutely no reason to sign the paperwork earlier than is convenient for the buyer.

I'm aware of many of the reasons that dealers have used to convince buyers to sign earlier, but have not yet seen one that is anything more than an excuse to close the sale earlier.


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## JTDM (Jul 22, 2014)

Ninong said:


> There is no legal way to date the lease agreement on the date you pick up the car at the Welt.


Seems foolish but that 's the cost of doing business with car makers. If I could date the closing date of a real estate transaction, rental agreement for an apartment in heart of New York, all without being present to the other party. Why cant I date my lease agreement on the exact date of picking up my car in Welt, where all party involve know months in advance.


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## Ninong (May 20, 2014)

JTDM said:


> Why cant I date my lease agreement on the exact date of picking up my car in Welt, where all party involve know months in advance.


Maybe it's because it would be difficult to prove you signed the lease agreement on that date if you weren't physically in this country on that date? How could the dealer consummate a sale on a date you were out of this country if the dealer isn't even licensed to conduct business out of state, much less out of the country? How could the dealer's representative who signed the lease testify in court that he/she witnessed your signature on a date you weren't even here?

The lease begins on the date you sign the lease agreement -- or at least that's the way it's supposed to work -- because that's the date the deal was completed. The fact that you are travelling out of the country to pick up the car doesn't affect the date your contract took effect. Dealers who conduct business by mail would have to explain how they arrange dates and witness signatures but I assume they require that the signatures be witnessed by a local notary or a representative of a local BMW dealership. The fact that the car isn't even legal to operate in this country yet doesn't seem to be a problem because if, for whatever reason, it fails to clear US Customs, the lease contract would simply be rescinded or a different vehicle would have to be arranged as a substitution (it has happened in the case of the entire transport ship being lost at sea).

Dealers who date lease contracts after the customer has left the country, or even after he has already picked up the car in Germany, would have to explain why they think that is allowed by BMW. It's a complete mystery to me.


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## JTDM (Jul 22, 2014)

Contract doesn't become invalid because the signature date and the good/services delivery date are different, does it? What's the harm when I signed a paper notarized, but only date the agreement of lease starting on a later date? I actually have no idea why it has to work that way, and would like to learn the rational behind it.


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## Ninong (May 20, 2014)

JTDM said:


> Contract doesn't become invalid because the signature date and the good/services delivery date are different, does it? What's the harm when I signed a paper notarized, but only date the agreement of lease starting on a later date? I actually have no idea why it has to work that way, and would like to learn the rational behind it.


I guess it has to do with the wording of the lease contract itself. Read it and you will see what I'm talking about. There may be other complications since BMW does business in every state and each state separately regulates everything having to do with cars, dealers, licensing of vehicles, the way taxes are applied to vehicles, etc. It would be so much simpler if there were one central authority regulating all of that nationwide but there isn't.

Don't forget that every word of that contract is in compliance with a variety of federal and state laws. Actually it's in compliance with federal law and the various local state laws result in their own little hidden paragraphs somewhere in the fine print. I remember when the Truth in Lending Act was passed in the 1960's. Good old Regulation Z. It has been amended and changed repeatedly since then. Not only the wording but the size of type, whether it must be in bold or italics or underlined or in red ink is all spelled out in the various versions of that regulation over the years.

When you think about it, you have more than one important date at play when you enter into a European Delivery contract. The effective date of your financial obligation is the date you sign the contract and pay for the car. If it's a lease, then you are paying for the car with that contract that the dealer cashes with BMWFS. The effective date of your factory warranty and free maintenance is the date you sign for the car at the Welt. And the date your vehicle registration begins in this country is the date you take redelivery here in the US once the car has cleared US Customs and is actually legal to operate on the roads of this country. So there are three different important dates involved.

I would be surprised if there are too many dealers interested in cutting corners or bending the rules on anything having to do with a finance or lease contract when there are more than enough young lawyers already dreaming up ways to invent a new class-action lawsuit against any of them who stray.



P.S. -- You're welcome to petition your congressman to ask that the TILA be amended once so that Reg. Z would allow for wording that would accommodate what you would like. It's all codified into law and enforced by Reg. Z. At least that's the way it worked when I was working and I believe it still works the same.


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## Ninong (May 20, 2014)

JTDM said:


> Contract doesn't become invalid because the signature date and the good/services delivery date are different, does it? What's the harm when I signed a paper notarized, but only date the agreement of lease starting on a later date? I actually have no idea why it has to work that way, and would like to learn the rational behind it.


I forgot to emphasize in my previous response that it may have something to do with paying for the car before you actually pick it up in Munich. You either pay cash for it before you depart or you pay for it by signing a cashable finance or lease contract that the dealer uses to pay for it.


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## The Sage (Nov 27, 2014)

Also take into consideration on a lease you are paying for miles driven. Even if you don't physically have the car for 8 weeks, you are not driving any miles on it. So if you are paying for a lease with 10,000 miles a year, you are still getting your 10,000 miles of driving it, yet in a slightly shorter period. Time behind the wheel of the Ultimate Driving Machine has not really been reduced.


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