# April residual, incentive, rebate, etc info?



## JamesR (Jul 1, 2004)

Anyone have X5 X5M numbers for April yet? $2k lease cash still available?


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

JamesR said:


> Anyone have X5 X5M numbers for April yet? $2k lease cash still available?


Yes. $2k lease cash is gone.

$1,000 purchase credit, 58% residual versus March's $2k lease credit and 55% residual.


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## Sarlynnla (Feb 8, 2016)

Is the $1k purchase credit applicable to demos and loaners as well? Also does anyone know for sure wether the loyalty credit was extended into April?


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## turpiwa (Jun 13, 2005)

3 series residuals anyone?


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## Vitacura (Jul 22, 2005)

turpiwa said:


> 3 series residuals anyone?


36 month lease:
15k 61%
12k 63%
10k 64%


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

Sarlynnla said:


> Is the $1k purchase credit applicable to demos and loaners as well? Also does anyone know for sure wether the loyalty credit was extended into April?


On purchases, yes, on leases, no, afaik. Loyalty extended.


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## turpiwa (Jun 13, 2005)

[pQUOTE=Vitacura;9606415]36 month lease:

15k 61%

12k 63%

10k 64%[/QUOTE]

Appreciated


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## drpie (Dec 4, 2012)

April MF; residual for 4 series x drive coupe anyone ????


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## Vitacura (Jul 22, 2005)

drpie said:


> April MF; residual for 4 series x drive coupe anyone ????


36 month lease:
15k 60%
12k 62%
10k 63%


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## euckersw (Sep 1, 2007)

Vitacura said:


> 36 month lease:
> 15k 61%
> 12k 63%
> 10k 64%


So, if I'm reading this right, the 3 series residuals went up 3% across the board, but the $1500 lease credit is now gone? If so, isn't that basically a wash (no change from last month)?

-Scott


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## Ninong (May 20, 2014)

euckersw said:


> So, if I'm reading this right, the 3 series residuals went up 3% across the board...


Yes.



> ...but the $1500 lease credit is now gone?


Yes.



> If so, isn't that basically a wash (no change from last month)?


That all depends on your perspective. In my opinion, April's program is worse than March's program by the amount of the Lease Credit that is now gone. That's because you should compare your total lease obligation, which is the sum of the regular payments and the residual. If you prefer to just look at the monthly payment and completely ignore the residual, then that's your personal choice.

For example, one customer just posted that he compared the monthly payment based on the March program with the $1,500 Lease Credit for his model against the monthly payment in April without the Lease Credit but with the 3% increase in the residual and he likes April better. He is absolutely sure that he won't want to get out of his lease early and absolutely sure that he won't be interested in keeping the car at the end of the lease.

Another wildcard to consider if you do hope to buy the car at the end of the lease is that quite often you can arrange to buy it at a price that is less than the guaranteed residual stated on the lease contract. Another wildcard to consider is that sometimes BMW offers pull-ahead programs on some models. Neither of those options is guaranteed.

Remember this. The money factor remained the same. The Lease Credit from March is gone but it was lockable in March. The residual is higher in April but you no longer have that cash cap reduction from BMW on a lease that you had in March. How is the lease payment lower? Because they increased your residual, which counts as your final payment but only if you try to get out early or if you try to buy the car for that residual amount.

Is your total lease obligation lower in April than it would have been in March? No. In fact, it's higher by the exact amount of the Lease Credit that disappeared. Should you care as long as your payment looks nice? That's up to you. 

One final comment and then I will shut up. I promise. When you sign a lease you are signing for a total lease obligation that includes all of the payments and the residual amount. It is only after you have completed all of the monthly payments that you are eligible to give them the car back (plus the $350 disposition fee, unless you go with them on a new contract, plus excess wear and tear, etc.) in lieu of your residual obligation. Don't look at the monthly payment. Look at your total obligation. Your monthly payment is lower only because they shifted money to the residual.


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## euckersw (Sep 1, 2007)

Ninong said:


> That all depends on your perspective. In my opinion, April's program is worse than March's program by the amount of the Lease Credit that is now gone. That's because you should compare your total lease obligation, which is the sum of the net cap cost and the residual. If you prefer to just look at the monthly payment and completely ignore the residual, then that's your personal choice.
> 
> For example, one customer just posted that he compared the monthly payment based on the March program with the $1,500 Lease Credit for his model against the monthly payment in April without the Lease Credit but with the 3% increase in the residual and he likes April better. He is absolutely sure that he won't want to get out of his lease early and absolutely sure that he won't be interested in keeping the car at the end of the lease.
> 
> ...


Hi Ninong,

No need to "shut up" - your post is interesting and informative as always. I agree, it's a matter of perspective. For me, this is my 4th lease and I've never considered buying the car at the end, so ultimately the monthly payment is what I'm keying in on. Again, you do provide points to consider, though. Thanks.

-Scott


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## Dave 20T (Apr 7, 2013)

deleted


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## AksNasZasNas (May 30, 2013)

euckersw said:


> Hi Ninong,
> 
> No need to "shut up" - your post is interesting and informative as always. I agree, it's a matter of perspective. For me, this is my 4th lease and I've never considered buying the car at the end, so ultimately the monthly payment is what I'm keying in on. Again, you do provide points to consider, though. Thanks.
> 
> -Scott


Totally echo the sentiment. To add a very small point to Ninong's fine post, I believe that higher residuals help folks looking for executive demos. When the residuals are lower but offset by other credits (like last month though the lease credits did apply to demos), then that favors those who lease new cars.


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## mhj202 (Dec 7, 2008)

euckersw said:


> Hi Ninong,
> 
> No need to "shut up" - your post is interesting and informative as always. I agree, it's a matter of perspective. For me, this is my 4th lease and I've never considered buying the car at the end, so ultimately the monthly payment is what I'm keying in on. Again, you do provide points to consider, though. Thanks.
> 
> -Scott


Agree. I've been leasing for a long time and have never purchased the car at the end and don't intend to so the monthly payments + any upfront are what I'm focused on. A higher residual does, in fact, help lower the cost of my lease-- or at least it does from my perspective.


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## Vitacura (Jul 22, 2005)

Even losing the $2k from March, I still come out ahead by about $1500 on my upcoming lease by using the April numbers. (Looking at it by total out of pocket for entire lease)


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## mhj202 (Dec 7, 2008)

Vitacura said:


> Even losing the $2k from March, I still come out ahead by about $1500 on my upcoming lease by using the April numbers. (Looking at it by total out of pocket for entire lease)


What kind of car? If picking up 3% in residual puts you $1500 ahead even after losing the $2k from March, that must be car that is over $100k.


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## Vitacura (Jul 22, 2005)

mhj202 said:


> What kind of car? If picking up 3% in residual puts you $1500 ahead even after losing the $2k from March, that must be car that is over $100k.


Indeed, F10 M5.


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## Mark287 (Mar 9, 2016)

*X3 Residuals*

Going to look at X3s tomorrow and planning on leasing. Any info on residuals? Thanks for your help in advance!


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## DJHakim (Feb 15, 2006)

I believe, for a lease, April would be better if your MSRP is sufficiently high. The bump in residual % times MSRP effectively would have to account for the total loss of the lease credit. Essentially. There are subtleties about the tax on the lease credit, etc.


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## mhj202 (Dec 7, 2008)

vitacura said:


> indeed, f10 m5.


sweet!


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## kromix (Mar 20, 2013)

any1 have info for a 6 series? trying to compare from last month to this.


(640i Gran Coupe)


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## turpiwa (Jun 13, 2005)

Same same here. I long ago resigned myself to leasing given that I like my cars too much and always upgrading. I worked out I have had about 30 cars so far in my life - obviously not in the same realm as the poster the other day I saw that was 24 years old and had already - allegedly - had 20 new cars...


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## Ninong (May 20, 2014)

DJHakim said:


> I believe, for a lease, April would be better if your MSRP is sufficiently high. The bump in residual % times MSRP effectively would have to account for the total loss of the lease credit.


That is one way to look at it and that's fine. However, the truth is that your total lease liability on the day you drive off the lot is higher in April than it would have been on March 31 by the exact amount of the March Lease Credit.

Your total obligation is the net cap cost, which is expressed in 36 regular payments and the residual. As long as you drive the car the full 36 months and then turn it in or trade it in on another one, it doesn't matter to you what your total obligation was as long as the payments worked out better for you that way. On the other hand, if your plans change a few months after you take delivery, your payoff will certainly be higher on the April deal than it would have been on the March deal.

All BMW did was move some money around. They moved it from the monthly payment to the residual. And they didn't even have to pay you that cash lease credit to make you believe you were getting something special this month. They took away your lease credit and gave you nothing for it, except to play a shell game with the amount of your total obligation. It's no longer under shell number one, the monthly payment, it's now under shell number two, the residual. And the money factor remained unchanged.

As far as BMW is concerned, they did give you something special this month because they're sticking themselves with cars that will be coming back to them at what will almost certainly be residual values unrelated to actual wholesale market values three years from now. If you change your mind and decide you would like to exercise your option to purchase the car at the end of the lease, you might very well be able to buy it for lease that the guaranteed residual value. This is truly what you could call manipulation of residuals as a marketing strategy and not setting residual values based on a realistic expectation of future market value.



P.S. -- It's always possible that if, for whatever unforeseen reasons, the prices and/or interest rates on new cars should go up much faster than expected, these cars that seem to have very generous residuals now could actually be worth more than that three years from now. It happened in the 1980's. That's when it was very hard to talk a customer into letting us have his leased car at the end of the lease. That's when the MSRP was rising so fast they had to bump it up twice a year sometimes and BMWNA advertised that their cars held their resale value better than any others. Of course, they did. Why do you think a two-year-old BMW was worth 80% of what it cost new or a one-year-old BMW was worth 90% of what it cost new? It was because the MSRP of the new ones was going up so fast. Then they started playing the game of moving money from the front (meaning the advertised MSRP) to the back (meaning the dealer's invoice) to make customers think they weren't raising prices all that much that year.


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## turpiwa (Jun 13, 2005)

Well now I want to know what May will bring already - where's that crystal ball 
By mid May I will have to pay for it so 1 more bite at the cherry. 
So far for me I think April is better.


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## mhj202 (Dec 7, 2008)

Ninong said:


> That is one way to look at it and that's fine. However, the truth is that your total lease liability on the day you drive off the lot is higher in April than it would have been on March 31 by the exact amount of the March Lease Credit.
> 
> Your total liability is the net cap reduction and the residual. As long as you drive the car the full 36 months and then turn it in or trade it in on another one, it doesn't matter to you what your total liability was as long as the payments worked out better for you that way. On the other hand, if your plans change a few months after you take delivery, your payoff will certainly be higher on the April deal than it would have been on the March deal.
> 
> ...


Interesting. I have always, perhaps incorrectly, looked at the residual value on the lease as essentially a guaranteed "put right" allowing me to know that I have a capped obligation on the lease-- basically the upfronts plus the aggregate of the monthly payments-- so the higher residual does move money around but I thought of it as BMWFS moving more of their potential financial loss/risk to the backend for them. In other words, if they discount upfront through credits, then they are losing the $2k now whereas through the residual they defer that same amount for 36 months and deal with it then (where they potentially have bought back the car at a value that is significantly higher than the market value).

The reason for my thinking had been that the lease purchase option is mine-- not BMWFS's -- so they have an absolute obligation on the repurchase/take back at a fixed price and I have an option I would not exercise unless something drastically changed.

I think maybe you're saying the risk of something drastically changing makes it my obligation.


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## [email protected] of Bel Air (Jul 3, 2014)

Mark287 said:


> Going to look at X3s tomorrow and planning on leasing. Any info on residuals? Thanks for your help in advance!


58% 15k 60% 12k 61% 10k


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## Michael @ BMW Seattle (Mar 5, 2016)

Ninong said:


> ... This is truly what you could call manipulation of residuals as a marketing strategy and not setting residual values based on a realistic expectation of future market value.


Absolutely true ... I see this on a daily basis when I'm asked to match or beat on offer on a competitor vehicle/lease. "Why is the Infiniti G37 monthly less that then 335 with a similar MSRP, price, term, miles and cash due at signing?"

Well, it's either a really low money factor, or a really high residual.

The leasing company plays with these to make marketable payments to advertise and compete.

And try not to lose their shirts if the car comes back to them in 3 years.

~M~


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## kevinf1990 (Nov 24, 2015)

what are the residuals for a 36 month lease on a 228i during April.


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## DJHakim (Feb 15, 2006)

*March vs April ($1500 Incentive vs 3% Residual Bump)*

*3% Residual Bump or $1500 Incentive?*

*Total Monthly Lease Payment 
MSRP March	April* 
$40,000 $542 $552 
$50,000 $681 $683 
$60,000 $821 $814

*MF* 0.00135 
*Sales Tax* 5% 
*Term* 36 mo 
*March Program Lease Credit* $1,500 
*March Residual* 0.60 
*April Residual* 0.63 
*April Program Lease Credit* $0	
Lease Credit assumed to be taxable Cap. Cost. Reduction 
Up-front Tax on Lease Credit is pro-rated into the monthly payment.
Sales Tax applies to monthly payment and is included in the listed monthly payments above.
No discounts.

So, $50k MSRP is about the even point. ($50k*3% = $1500)
Any lower MSRP and the March program wins in terms of monthly (or total cost to lease).

_If Ninong can more specifically define "liability", I can list that, too._


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## Ninong (May 20, 2014)

mhj202 said:


> Interesting. I have always, perhaps incorrectly, looked at the residual value on the lease as essentially a guaranteed "put right" allowing me to know that I have a capped obligation on the lease-- basically the upfronts plus the aggregate of the monthly payments-- so the higher residual does move money around but I thought of it as BMWFS moving more of their potential financial loss/risk to the backend for them. In other words, if they discount upfront through credits, then they are losing the $2k now whereas through the residual they defer that same amount for 36 months and deal with it then (where they potentially have bought back the car at a value that is significantly higher than the market value).
> 
> The reason for my thinking had been that the lease purchase option is mine-- not BMWFS's -- so they have an absolute obligation on the repurchase/take back at a fixed price and I have an option I would not exercise unless something drastically changed.
> 
> I think maybe you're saying the risk of something drastically changing makes it my obligation.


It can be looked at differently by different customers. That's the beauty of it.

This is what it actually is. After you have paid whatever you paid in drive-offs, you have a remaining total obligation. Assuming this is a 36-month lease, you have a total obligation that is expressed in 37 payments. The first 36 payments are made monthly and the final 37th payment is made after you have completed the first 36 payments. Only after you have made the first 36 payments "as agreed," do you have an option on how you would like to handle that 37th payment.

Your obligation isn't changed just because you view it differently based on your personal expectation of what you think you will do once the opportunity to choose how to handle that 37th payment becomes available to you. That reality will come crashing down on you in the unlikely event you want out of the lease after making only a few payments.

Once you do get to the end of the lease, that's when you can take advantage of BMW's generous residual offer by stuffing the car back on them or perhaps even buying it at a price lower than the guaranteed residual stated on the lease contract. But that has nothing to do with your obligation when you sign the contract.


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## turpiwa (Jun 13, 2005)

Ninong said:


> It can be looked at differently by different customers. That's the beauty of it.
> 
> This is what it actually is. After you have paid whatever you paid in drive-offs, you have a remaining total obligation. Assuming this is a 36-month lease, you have a total obligation that is expressed in 37 payments. The first 36 payments are made monthly and the final 37th payment is made after you have completed the first 36 payments. Only after you have made the first 36 payments "as agreed," do you have an option on how you would like to handle that 37th payment.
> 
> ...


Interesting.

If I lease I am leasing because I don't intend on keeping the car otherwise I would buy it so my view of the obligation is to make the 36 payments then hand the car back. I guess that is also why April's increased residual works for me. 
I'm a simple man


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## Ninong (May 20, 2014)

DJHakim said:


> _If Ninong can more specifically define "liability", I can list that, too._


I think what you may mean is total lease obligation, right? Is that what we're talking about?

Let me try to explain it this way. Your total obligation when you sign a lease is the total of the payments, including the residual payment. Right from the start you're paying a fee of $925 (+ tax) for the privilege of BMWFS giving you a lease. You're paying "interest" (rental fee) on the total of the net cap cost plus the residual but that's spread evenly in the first 36 payments even though it's not "earned" that way, as you will soon discover if you try to get out early. But I think we're getting too deep into the weeds here so let's just talk about your obligation without worrying about "interest" charges (rental fees).

You owe the net cap cost and you're paying that in a total of 37 payments: 36 regular payment plus a big 37th payment. If I offer to give you $1,500 cash as a free down payment to reduce that cap cost I'm sure you would like that. So the net cap cost will be lower by $1,500. (Forget about tax right now.) Because I gave you that $1,500 free gift, you now owe less so your payment will be lower.

Now, here's another way that we will call the April way. Instead of giving you that free $1,500 I will raise your 37th payment so that your first 36 payments will be less. Wasn't that sweet of me?

Most customers nowadays look at only the monthly payments when shopping for a lease. They want to know two things: How much money do I have to give you on delivery and how much is my monthly payment. Most of them don't even understand what the residual is. I kid you not.


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## Vitacura (Jul 22, 2005)

kevinf1990 said:


> what are the residuals for a 36 month lease on a 228i during April.


36 month lease:
15k 58%
12k 60%
10k 61%


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## DJHakim (Feb 15, 2006)

Ninong said:


> I think what you may mean is total lease obligation, right? Is that what we're talking about?


I was merely asking what number to calculate to add a "lease obligation" table to my comparison in Post #49. You indicated that a lower total cost to lease may not correlate to a "better" lease obligation.


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## Ninong (May 20, 2014)

DJHakim said:


> I was merely asking what number to calculate to add a "lease obligation" table to my comparison in Post #49. You indicated that a lower total cost to lease may not correlate to a "better" lease obligation.


Think of a lease as being the same as a loan paid off in 37 payments (36 small monthly payments and one big 37th payment).

On the day you sign the contract, after paying whatever money you paid on delivery, you still owe the net cap cost (loan amount). You owe interest on that net cap cost plus the residual. You will pay that obligation in a total of 37 payments (36 + balloon payment).

I can make your first 36 payments lower two ways. I can give you a free cash down payment (cap reduction) or I can give you nothing but instead make your first 36 payments lower by raising your 37th payment.

The beauty of a lease to most people today is that they have the option, after they finish paying the first 36 payments, to give the car back in lieu of paying that 37th payment. So they may not care that BMW didn't give them any free money as long as their first 36 monthly payments work out to be lower.

I can start out with a net cap cost of $51,500 and then give you $1,500 cash so that it becomes $50,000 or I can leave it at $51,500 and not give you that $1,500 cash but rearrange your payments so that the first 36 payments go down because I made the 37th payment go up.

Remember that you owe finance charges (rental fees) on your total net cap cost plus the residual, so obviously you're going to have more total interest/rental fees in April than you would have in March on the same deal.

Who cares as long as the first 36 payments are lower, right? This is what you mean when you say "lower total cost to lease" and wonder why I might say that does not correlate to a better lease obligation.

Your actual obligation is the full 37 payments. Your option to relieve yourself of that 37th payment becomes available to you only have successful completion of the first 36 payments. If I give you $1,500 cash on March 31 but don't give you any cash on April 1 on the exact same deal and then you want out of it six months later, your payoff on the March deal will be lower than your payoff on the April deal because your total obligation was higher in April than it would have been in March.


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## mhj202 (Dec 7, 2008)

Vitacura said:


> $1k purchase credit, not lockable and no good on a lease.
> 
> 36 month lease:
> 15k 61%
> ...


Are these correct for 550 and 535?


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## Ninong (May 20, 2014)

mhj202 said:


> Are these correct for 550 and 535?


Yes.


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## mhj202 (Dec 7, 2008)

Ninong said:


> Only after you have made the first 36 payments "as agreed," do you have an option on how you would like to handle that 37th payment.
> 
> ... That reality will come crashing down on you in the unlikely event you want out of the lease after making only a few payments... But that has nothing to do with your obligation when you sign the contract.


Really interesting points.

Your points are consistent with my statement that "absent a material change of circumstances" it is relatively straightforward. However, I am intrigued by what happens given a change of circumstances.

Are you saying that if someone were to default on a car lease, their obligation due is not based only on their commitment to make the 36 months of lease payments but also to pay the residual value? Is that true? I didn't know that.

I would think that if I wanted out of my lease one month after getting the car, the cheapest economic/financial option for me would be to make a lump sum payment equal to the remaining 35 monthly payments- and either BMWFS would take the car back now or I could it put away somewhere and give it back at the end of the term. Obviously, this isn't practical as there insurance and storage costs to factor in, etc. but my point is that what exactly would make the residual MY obligation rather than BMWFS's obligation? A casualty insurance event (total the car) would not-- as the insurance (including gap insurance) should cover it.


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## DJHakim (Feb 15, 2006)

Ninong said:


> Think of a lease as being the same as a loan paid off in 37 payments (36 small monthly payments and one big 37th payment).
> 
> ...


Ninong, your verbosity is getting to you. 
I know all that from your previous posts.
I am merely asking for what calculation to make to quantify "lease obligation".
Post #49 quantifies total cost to lease for readers to compare. For a more complete comparison, can I quantify lease obligation, too? Is it just residual amount or is it residual amount plus something or minus something, etc? My head would hurt too much to figure it out myself.


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## Ninong (May 20, 2014)

mhj202 said:


> Really interesting points.
> 
> Your points are consistent with my statement that "absent a material change of circumstances" it is relatively straightforward. However, I am intrigued by what happens given a change of circumstances.
> 
> ...


In the event of a total loss, your insurance company will pay you (meaning the lienholder) an amount based on the insurance policy you have and their own guidelines. If that payment is less than the payoff amount due, then BMWFS's included GAP insurance covers the rest and you owe nothing. I think you may still have to pony up your deductible unless the other guy was at fault.

In the event you suddenly see a new model Mercedes that you just must have and you want to pay off your BMWFS lease by trading it in on that Mercedes only 14 months after you leased it, your payoff is calculated just as it would be if it were a conventional finance contract with balloon payment. Don't forget that on any loan of any kind, your interest is really based on the balance of the principal after each payment is made (look at your home mortgage and you will understand this principal). So even though the total interest is spread out evenly between the payments that's not how it's earned. In other words, you can't sit down and say, I made x-number of payments so I'll add up that total that I already paid and subtract that from the total of my remaining payment and residual and that should be my payoff. Not. The payoff is going to be whatever BMWFS' computer calculates is the correct payoff. That's the amount of the check that the Mercedes dealer is going to have to send to BMWFS in order to get clear title to your BMW trade-in. So the Mercedes dealer shows the ACV (actual cash value) of your trade-in and then he shows the amount of the payoff and if the ACV is $12,000 less than the payoff, he simply rolls that into your new cap and your payments go sky-high and you freak out and give up on the idea.

Leases can be extremely tricky when it comes to trying to get out early by trading the car in on a different brand. Different manufacturers' captives can be more difficult to deal with than others, especially when you want out really early. Even when you have only three or four payments remaining, sometimes it easier for the dealer to just cut a check for the total amount of the remaining payments plus the disposition fee (assuming no excess wear and tear) and then have the salesman go down with you to your previous originating dealer and stuff the car back on them. They don't like that.  There used to be no way for us to even get a payoff confirmed by GMAC. Only the customer could get it. Some are more difficult than others.

The problem that most customers today do not appreciate is that they really owe 37 payments on their 36 month lease. Their option on how to handle that 37th payment becomes available at the end of the lease but their total obligation that they signed up for when they signed the lease is all 37 payments.

Another point that some of them are having a hard time with right now is that their option to purchase the car at the end of the lease can be overridden by federal law no matter what they think they have a right to do. If the dealer can't sell you the car until after he fixes your airbag, then he can't do it until after he gets the parts and fixes your airbag. People need to read every word of the fine print on the contracts they sign if they want to learn all of the outs that are in there for the people who designed the contract in the first place. Apparently the latest word from BMW on that is that they can allow those customers who want to purchase their car at the end of the lease to sign a 12-month extension with the understanding that BMW will fix the airbag as soon as possible and then sell them the car.

Yes, sometimes you car is actually worth more than the residual at the end of your lease, especially if you leased a 1M three years ago. There was actually a time when most BMWs were worth more than the residual at the end of the lease and we used to beg customers to trade them in on a new one instead of asking us to refinance the residual as a used car loan. We had to give them more than the residual as a way to talk them into a new lease. In other words, we showed the car's ACV as higher than its payoff.


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## mhj202 (Dec 7, 2008)

Ninong said:


> The problem that most customers today do not appreciate is that they really owe 37 payments on their 36 month lease. Their option on how to handle that 37th payment becomes available at the end of the lease but their total obligation that they signed up for when they signed the lease is all 37 payments.


Great stuff. And really appreciate the input.

However, I am struggling to agree with you on the concept you put forth that consumers really owe 37 payments on a 36 month lease with the 37th being the balloon. I very much get the idea of principal, interest and amortization (and amortization schedules/tables) but don't really understand why that is particularly relevant here if the consumer makes all 36 payments.

Perhaps this isn't a good analogy given that one is an appreciating asset while a car is a depreciating asset (hence the residual) but I think maybe it will work well enough to help explain why I (and some others on the board) see it so differently (and granted that we may be incorrect) from you. When one rents an apartment for 3 years, their obligation is to pay a rent stream for 36 months. Even if the lease has an option to purchase at the end of 3 years, I don't think that a default on the lease would suddenly make a renter obligated to purchase the apartment at the end of the 3rd year.

Assuming I don't change the circumstances of the lease (i.e., I don't decide to break the contract early to buy/lease an MB), the fact is that the higher residual does, in fact, lower the rent payments due from the consumer. And the consumer does not have an obligation other than to pay the 36 monthly payments and hand back the car. So, in this circumstance, where one takes a 36 month lease, makes the monthly payments and returns the car, having a higher residual does, in fact, lower the consumer's obligations.

If you are simply saying that in order to achieve the same economics, if you have a choice of higher residual vs BMWFS credit, the credit is better (despite the same economics) because it gives the consumer more flexibility given a change in circumstances, then I agree.


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## Ninong (May 20, 2014)

DJHakim said:


> Ninong, your verbosity is getting to you.


It gets to me sometimes, too, but I have an excuse. Old age and it was late at night. 



> I am merely asking for what calculation to make to quantify "lease obligation".


I can only tell you what it is. (This morning I had to fix a post I made late last night because I misspoke when I wrote that your obligation is the net cap cost plus residual. I meant to say the finance charge is based on the net cap cost plus residual. Your total obligation is the net cap cost which is paid in 36 payments plus the residual including the total finance charge spread evenly between the 36 payments.

Anyway, your obligation is the net cap cost. Which you agree to repay in 36 payments plus a final 37th payment that comes with options.

You would have to use one of the online lease calculators if you want to see the amount of finance charge included based on the minimum money factor of .00135, without worrying about taxes.

You owe the total of your 37 payments. If you pay it off early, they deduct a credit for any unearned finance charges. After you make the 36 payments, you have the option to give them the car back plus the $350 disposition fee plus any excess mileage charges and any excess wear and tear charges.


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## Ninong (May 20, 2014)

mhj202 said:


> Great stuff. And really appreciate the input.
> 
> However, I am struggling to agree with you on the concept you put forth that consumers really owe 37 payments on a 36 month lease with the 37th being the balloon.
> 
> If you are simply saying that in order to achieve the same economics, if you have a choice of higher residual vs BMWFS credit, the credit is better (despite the same economics) because it gives the consumer more flexibility given a change in circumstances, then I agree.


Your obligation is the full 37 payments (36 + residual). That is your obligation.

Only after payment of the first 36 payments do you have options to consider for how to deal with your obligation for the amount of that 37th payment.

Therefore, it's better to receive a free cash gift upfront (which will lower your payments because it gives you a lower total obligation) than to get no free cash gift upfront and instead simply rearrange your 37 payments so that your first 36 payments are lower only because your 37th payment is now higher.

I understand all of the points all of you are trying to make but none of that comes into play until if and when you have the opportunity to exercise any of the options available to you to satisfy payment number 37, aka the residual payment.

Of course there are variables at the end but none of that changes your total obligation. It changes only AFTER you have chosen to hand them the car as payment number 37 instead of the cash. And, as I'm sure all of you are tired of me saying, your real total obligation will be obvious should you want to get out of the lease early. That's when you will realize that it would have been better to take that $1,500 free cash than to simply rearrange the payments.


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## drench (Nov 19, 2002)

Are there any April residual numbers available for the X5 yet?


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

drench said:


> Are there any April residual numbers available for the X5 yet?


Yes, 58% (36/15k) residual across the board.


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## psycho (Jul 2, 2002)

My understanding is even if you make all your lease payments early you can't return the car until the maturity date. Personal experience.


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## Ninong (May 20, 2014)

psycho said:


> My understanding is even if you make all your lease payments early you can't return the car until the maturity date. Personal experience.


When and how did that happen?


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## Cal (Jan 4, 2002)

Ninong said:


> Your obligation is the full 37 payments (36 + residual). That is your obligation.
> 
> Only after payment of the first 36 payments do you have options to consider for how to deal with your obligation for the amount of that 37th payment.
> 
> ...


Great points, Ninong.

Ultimately though, if one is looking to strictly lease the car for that given period of time (and not buying it at the end, or getting out early, etc), then the lower monthly payment with higher residual is the obvious choice. (In this case, take the April numbers than the March numbers). Why care what the 37th payment is when payments 1-36 are lower than the other alternative? You're turning in the car anyways and getting a new one. As an oddball example, if BMW offered a program where I could lease X car for $100/month for payments 1-36, but payment 37 was 90% of MSRP to buy it, I'd take this program without thinking about it. Again, if I'm thinking of LEASE only without any possibility of buying it at the end (or getting out early), so why care what payment 37 is?


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## Cal (Jan 4, 2002)

psycho said:


> My understanding is even if you make all your lease payments early you can't return the car until the maturity date. Personal experience.


Very odd indeed, yet believable. Why wouldn't BMW want the car early so that they could sell it for more now than later? On the other hand, as the lessee I wouldn't want to return the car early anyways. I would rather it sit in the garage as a trophy or decoration  (albeit having to pay insurance for it.)


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## Michael @ BMW Seattle (Mar 5, 2016)

psycho said:


> My understanding is even if you make all your lease payments early you can't return the car until the maturity date. Personal experience.


The lease contract, section 33. "Early Termination of the Lease" states:

I may terminate this Lease _*at any time*_ (emphasis added) by purchasing the Vehicle (Section 30) or by returning the Vehicle to a location selected by you [BMWFS], if I am in full compliance with the Lease and satisfy all of my Early Termination obligations."

~M~


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## Ninong (May 20, 2014)

Cal said:


> Great points, Ninong.
> 
> Ultimately though, if one is looking to strictly lease the car for that given period of time (and not buying it at the end, or getting out early, etc), then the lower monthly payment with higher residual is the obvious choice. (In this case, take the April numbers than the March numbers). Why care what the 37th payment is when payments 1-36 are lower than the other alternative? You're turning in the car anyways and getting a new one. As an oddball example, if BMW offered a program where I could lease X car for $100/month for payments 1-36, but payment 37 was 90% of MSRP to buy it, I'd take this program without thinking about it. Again, if I'm thinking of LEASE only without any possibility of buying it at the end (or getting out early), so why care what payment 37 is?


Someone asked me what the total lease obligation was and I answered that question. Now everybody wants to ask me questions I have heard and answered a million times over the past 50+ years. There is no point any of you can make that I am not familiar with. It's really your personal choice. Whatever is best for you is best, period. Leasing is just one way to acquire a car.

When you drive home in that car, your total lease obligation is the sum of those 37 payments (36 monthly payments plus the residual payment). After paying the first 36 payments as agreed you will have options on how to satisfy that 37th payment. Those options are spelled out in your lease. Until that point arrives, you are on the hook for the full amount of that residual payment, as you will discover if you ever call for an early payoff.


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## jjrandorin (May 8, 2013)

The point that Ninong is making that I think a lot are missing is this:

Yes, your payments can be lower if they inflate the residual. They can even be lower than what your payments would be if they gave you the $1500 cap cost reduction.... HOWEVER, if for any reason you do not fullfil those 36 payments first, it will cost you MORE to get out of that lease under the april numbers than the march ones... $1500 more. 

Everyone is stating that "but I have no intention of buying the car etc etc" and if that ends up being the case, then yes, when you finish your 36 payments you can turn in the car. UNTIL that time, however, your total cost obligation is higher. I did not know this, but appreciate you for explaining it Ninong, it makes perfect sense to me at least.

From your point of view, you probably dealt with people in the past every day who were like " I want out of this lease because XXXX reason", so you know first hand that just because someone intends to pay those 36 payments, it does not mean that it ends up so, either because they want to, or because they HAVE to.

To Summarize:

Increasing the residual can be cheaper, in the long run, as long as you actually fulfill those 36 payments first, then give the car back (or negotiate a lower buyout). At any point before making that 36th payment, making the residual higher just makes that last payment bigger, which will effect some when they go to trade the car in early for any reason (even though none of them plan to do that now).


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## JP 99300 (Sep 29, 2004)

Ninong said:


> When you drive home in that car, your total lease obligation is the sum of those 37 payments (36 monthly payments plus the residual payment). After paying the first 36 payments as agreed you will have options on how to satisfy that 37th payment. Those options are spelled out in your lease.**


**Unless, of course, you have leased one of the x,xxx,xxx airbag recall cars....in which case you have NO option on how to satisfy that 37th payment, no matter what your contract may say. 
But I digress, as I've been reading too much of that 675+ post _other_ thread....


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## mhj202 (Dec 7, 2008)

Ninong said:


> I understand all of the points all of you are trying to make but none of that comes into play until if and when you have the opportunity to exercise any of the options available to you to satisfy payment number 37, aka the residual payment.
> 
> Of course there are variables at the end but none of that changes your total obligation.


Just looked at a form of BMW lease (maybe not the most current) and I totally agree with you, technically speaking.

The lease form does, in fact, state that if I terminate the lease early, I can either (a) purchase the car (for the Adjusted Lease Balance), or (b) if I don't purchase the car, then I must pay an amount basically equal to (i) the Adjusted Lease Balance less the market value of the car, plus (ii) fees (disposition, etc.).

As both of the choices above are determined using the Adjusted Lease Balance and the ALB starts off using the Adjusted Cap Cost and then subtracts out amounts I've paid (and neither takes into account the residual value), I would be better off having a lower Adjusted Cap Cost (through the application of BMWFS credits at lease inception) since a higher residual does nothing to affect my Adjusted Cap Cost.

However, the point I was trying to make was simply that, practically speaking, if I do not find the choices above to be the most economically efficient, I can always choose to simply keep the lease in effect and make the monthly payments through the term of the lease (and keep my car in storage or whatever) and then return the car at the end of 36 months. As long as I keep the lease in effect, I do have the right to give the car back to BMWFS without further payment (and BMWFS has the obligation to take the car). This is consistent with your point that I don't have the give back right until I've made the 36 payments-- I'm just saying that should be within my control.


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## psycho (Jul 2, 2002)

Ninong said:


> When and how did that happen?


A few months ago. I paid off a lease planning to get into another BMW. BMWFS cockblocked that, telling me I have to keep the vehicle until the end, or roll in $6k of "negative equity" if I want another BMW.


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## mhj202 (Dec 7, 2008)

psycho said:


> A few months ago. I paid off a lease planning to get into another BMW. BMWFS cockblocked that, telling me I have to keep the vehicle until the end, or roll in $6k of "negative equity" if I want another BMW.


But if you are making the full remaining payments anyway (paying off the lease), why not keep the older car through the term AND also lease the new car?


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## psycho (Jul 2, 2002)

mhj202 said:


> But if you are making the full remaining payments anyway (paying off the lease), why not keep the older car through the term AND also lease the new car?


Didn't care for the old car, and it appears that the only pull ahead programs are for cars with defective airbags (not mine). Lots of little anti-consumer moves which make me think BMW is trying to copy Mercedes a little too much.


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## mhj202 (Dec 7, 2008)

psycho said:


> Didn't care for the old car


The economics would have been the same whether or not they took the car back or you kept it in the driveway-- so why did that stop you from leasing the new car? Just didn't want to have it in the driveway or lend it to a friend to use for a few months?


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## mhj202 (Dec 7, 2008)

psycho said:


> Lots of little anti-consumer moves which make me think BMW is trying to copy Mercedes a little too much.


I have never had an issue with pull-ahead on a Mercedes. I have always ended my MB leases 3+ months early without having to roll it into the new lease. They are pretty good about the pull-ahead programs.


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## psycho (Jul 2, 2002)

mhj202 said:


> The economics would have been the same whether or not they took the car back or you kept it in the driveway-- so why did that stop you from leasing the new car? Just didn't want to have it in the driveway or lend it to a friend to use for a few months?


I try not to reward bad behavior, even by corporations whose products I love.


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## psycho (Jul 2, 2002)

mhj202 said:


> I have never had an issue with pull-ahead on a Mercedes. I have always ended my MB leases 3+ months early without having to roll it into the new lease. They are pretty good about the pull-ahead programs.


Just apparently not good about taking care of their customers in other aspects


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## Michael @ BMW Seattle (Mar 5, 2016)

Psycho ...

I'd love to have been a fly on the wall to hear how this went in person.

If you paid off your lease, then there would be no need whatsoever to trade in the vehicle. You've satisfied your lease ... you can just drop it off. 

If you tried to trade it in, then they would treat it just like a loan vehicle and call BMWFS for a payoff. Again, if you paid all your payments in advance the payoff is essentially the residual value in your contract.

Then, they determine the current market value of the car. If the contract residual, for example is $30,000, and the dealer says the current market value is $24k, then yes you have $6k of negative balance. So, just turn it in!

But you also mentioned pull-ahead programs. That would indicate that you had remaining payments, not paid in full. 

I know my email gives me away, but from the dealer side, it seems that they might have done only what they could do. 

And they neglected to tell you that you could just turn the lease in.

~M~


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## jfried1016 (Jan 31, 2016)

So which of the lease programs would be best? February, March, or April?


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## psycho (Jul 2, 2002)

Michael @ BMW Seattle said:


> Psycho ...
> 
> I'd love to have been a fly on the wall to hear how this went in person.
> 
> ...


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## DJHakim (Feb 15, 2006)

jfried1016 said:


> So which of the lease programs would be best? February, March, or April?


:yikes:
Assuming you qualified for Feb-Mar programs and you were entitled to a $1500 lease credit in March and your residual bumped up 3% in April, then the March program gives you the lowest monthly payment if your MSRP is less than about $50k.


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## DJHakim (Feb 15, 2006)

psycho said:


> The dealer told me I could not just turn it in, even though all payments had been made. So I called BMWFS on two different occasions, and both times they told me I could not turn it in until the maturity date.


Then I guess there were no walls in the room for the fly to land!:dunno:


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## Ninong (May 20, 2014)

JP 99300 said:


> **Unless, of course, you have leased one of the x,xxx,xxx airbag recall cars....in which case you have NO option on how to satisfy that 37th payment, no matter what your contract may say.
> But I digress, as I've been reading too much of that 675+ post _other_ thread....


Well, we know why but that's not what I want to ask you about. I haven't read a lease in ages so I would like you to please get out your lease and read all of the fine print disclosure pertaining to the end-of-lease options. See if you can find any reference to "as permitted by law" or any other of the obvious and less obvious exceptions to the terms of the contract. It is my recollection that virtually every contingency could be found covered by one of those general statements. You may have to read every word on the entire contract because sooner or later you will probably find a reference that voids any of the terms of the lease that are not permitted by law.

In other words, if something is not permitted by law, then all of your rights are suspended until such time as they are possible as permitted by law.

If you think you're upset, think how the car manufacturers must feel. There are approximately 60 million Takata airbags on recall already worldwide. That number could grow to close to 300 million worldwide if all Takata airbags were to be recalled. In the U.S. the number right now is somewhere around 30 million but it could grow to more than 100 million if the NHTSA agrees with certain politicians who demanded the recall of every Takata airbag in any car on the road in the U.S. By law Takata is supposed to reimburse the manufacturers for the cost of this recall. There's only one problem with that. The recall will cost more than $10 billion already and that number is climbing all the time and Takata is worth no more than $1 billion right now. Their potential liability could exceed $30 billion.

All of that expense is being absorbed by the affected car manufacturers and you know what that means. :eeps:


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## Ninong (May 20, 2014)

psycho said:


> The dealer told me I could not just turn it in, even though all payments had been made. So I called BMWFS on two different occasions, and both times they told me I could not turn it in until the maturity date.


I'm wondering if you asked them why and then what their explanation was? Obviously you can pay it off at any time and keep the car but that's not what you want to do. You want to make all of the regularly scheduled monthly payment, plus the disposition fee, plus any excess wear and tear, plus any excess mileage charges and give them the car back without paying the residual amount. I always thought that was possible with BMWFS leases, unless they use a different form for Texas?

Most states allow the lessor to charge you for negative equity if you terminate a lease early and they lose money on the car but I don't remember ever seeing that provision in a BMWFS lease and I thought they were pretty much the same nationwide, except for the various state insurance law stuff and different laws on waiting periods to notify a customer to bring the car back, etc.

If they really have the right to refuse to take the car back early and tell you that they're perfectly willing to take it back at lease maturity, then that's a new one on me. You definitely have the right to stuff the car back on them so why would they not want it now when it's worth more than a year or two (or whatever) from now when it will be worth less?


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## mikekirch (Aug 22, 2009)

Going to look at the X4 35i this weekend. Does anyone have the MF and residual for 36 months, 10k? Any additional build out cash / option credits or just the $1,000 lease loyalty for April?


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## psycho (Jul 2, 2002)

Ninong said:


> I'm wondering if you asked them why and then what their explanation was? Obviously you can pay it off at any time and keep the car but that's not what you want to do. You want to make all of the regularly scheduled monthly payment, plus the disposition fee, plus any excess wear and tear, plus any excess mileage charges and give them the car back without paying the residual amount. I always thought that was possible with BMWFS leases, unless they use a different form for Texas?
> 
> Most states allow the lessor to charge you for negative equity if you terminate a lease early and they lose money on the car but I don't remember ever seeing that provision in a BMWFS lease and I thought they were pretty much the same nationwide, except for the various state insurance law stuff and different laws on waiting periods to notify a customer to bring the car back, etc.
> 
> If they really have the right to refuse to take the car back early and tell you that they're perfectly willing to take it back at lease maturity, then that's a new one on me. You definitely have the right to stuff the car back on them so why would they not want it now when it's worth more than a year or two (or whatever) from now when it will be worth less?


I agree, but BMWFS does not.


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## Ninong (May 20, 2014)

psycho said:


> The dealer told me I could not just turn it in, even though all payments had been made. So I called BMWFS on two different occasions, and both times they told me I could not turn it in until the maturity date.


Does what you are trying to tell us hinge on the meaning of the phrase "just turn it in?" Are you trying to say that you thought you could simply hand them the keys and walk away without paying the disposition fee, plus any applicable wear and tear charges, etc.? Is that what you mean by "just turn it in?"

I'm confused here by your statement because of course you have the legal right to terminate any car lease early in any state in the United States, including Texas. The only issue is how much you have to pay when you turn it in. Since BMWFS gives the lessee the right to return the car after all regularly scheduled monthly payments have been made, the only thing you should owe would be the excess mileage, excess wear and tear, and the $350.00 disposition fee.

I just don't understand what you mean by your statement and I think none of us understands because it makes no sense. That's why we need more details.

Thanks.


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## Ninong (May 20, 2014)

psycho said:


> I agree, but BMWFS does not.


Then you didn't talk to the right person. You do have the right to terminate the lease early. The only question is how much you owe when you give them the car back. Unless Texas lease laws are even weirder than I thought.


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## psycho (Jul 2, 2002)

Ninong said:


> Does what you are trying to tell us hinge on the meaning of the phrase "just turn it in?" Are you trying to say that you thought you could simply hand them the keys and walk away without paying the disposition fee, plus any applicable wear and tear charges, etc.? Is that what you mean by "just turn it in?"
> 
> I'm confused here by your statement because of course you have the legal right to terminate any car lease early in any state in the United States, including Texas. The only issue is how much you have to pay when you turn it in. Since BMWFS gives the lessee the right to return the car after all regularly scheduled monthly payments have been made, the only thing you should owe would be the excess mileage, excess wear and tear, and the $350.00 disposition fee.
> 
> ...


I agree that it makes no sense. I have made all of my lease payments early, and obviously I was willing to undergo a lease end inspection and pay whatever wear and tear charges arose, as well as the disposition fee (which would have been eventually waived since I was getting another BMW). However, BMWFS does not allow that, and wants me to pay negative equity on a car for which I have satisfied all monthly obligations. And because I have the "unfortunate" luck of not having a car with defective airbags, I don't qualify for any pull ahead programs.:tsk:


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## Ninong (May 20, 2014)

psycho said:


> I agree that it makes no sense. I have made all of my lease payments early, and obviously I was willing to undergo a lease end inspection and pay whatever wear and tear charges arose, as well as the disposition fee (which would have been eventually waived since I was getting another BMW). However, BMWFS does not allow that, and wants me to pay negative equity on a car for which I have satisfied all monthly obligations. And because I have the "unfortunate" luck of not having a car with defective airbags, I don't qualify for any pull ahead programs.:tsk:


So you have an open-end lease instead of a closed-end lease. Assuming that is true, then I wonder if Texas is the only state where they write open-end leases? If you are responsible for the difference between the realized market value and the stated residual value then your lease does not contain a guaranteed residual value. That difference will be even greater later on.

Are you saying that it would be okay for you to turn back the car at maturity without owing any negative equity but if you pay all of the monthly payments ahead of time you cannot turn it back yet without paying the negative equity? That's absurd.

If it is an open-end lease, then that means you're on the hook for the market value of the car whenever you turn it in, not just if you turn it in early. I have never heard of that before with BMW but then again I don't know how Texas works when it comes to leases. Why would anyone lease a BMW in Texas on an open-end lease? I still don't understand????

You know, you actually have a copy of the lease contract. All of that would be spelled out in detail in your lease contract. I still think this is a matter of miscommunication somewhere.

:yikes:


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## Ninong (May 20, 2014)

I just checked BMWUSA.com and their national lease disclosure excludes only Puerto Rico, it does not exclude Texas. It is a closed-end lease. The lessee has no obligation for the realized market value of the vehicle at any time. He is only responsible for the regular monthly payments, plus the $350 disposition fee plus wear and tear. If he chooses to purchase the car, he can do so for the guaranteed residual value, or he can give them the car back.

Somebody is seriously mistaken at both the dealership and BMWFS unless we are not understanding your exact situation and there is more to it than meets the eye. BMW does not offer open-end leases.


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## Ninong (May 20, 2014)

psycho said:


> However, BMWFS does not allow that, and wants me to pay negative equity on a car for which I have satisfied all monthly obligations.


Is that a trick statement? I'm looking for the miscommunication here because I'm 100% certain that this is a matter of miscommunication. Right now I'm just trying to find where that miscommunication is.

Do you understand what "all monthly obligations" means? It means ALL of the monthly payments on your lease. If it is a 36-month lease, that means 36 payments. You're telling us that you have paid all of the monthly obligations but I think that's not exactly what you really mean. I think all you really mean is that you have paid all of the monthly payments as they have come due but now you don't want to pay the remaining monthly payments but instead would prefer to give them the car back early? Is that it?

If that's it then of course you can give them the car back anytime you feel like it as long as you "satisfy all of your monthly obligations" -- all of them, not just the ones that were due so far. You have to pay every one of the monthly payments -- 36 of them if this is a 36-month lease. Then you can turn the car back and pay the disposition fee, etc.


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## Ninong (May 20, 2014)

psycho said:


> I agree that it makes no sense. I have made all of my lease payments early, and obviously I was willing to undergo a lease end inspection and pay whatever wear and tear charges arose, as well as the disposition fee (which would have been eventually waived since I was getting another BMW). However, BMWFS does not allow that, and wants me to pay negative equity on a car for which I have satisfied all monthly obligations. And because I have the "unfortunate" luck of not having a car with defective airbags, I don't qualify for any pull ahead programs.:tsk:


Okay, that's obviously where the miscommunication lies. Michael and I understand what it means to satisfy all of the monthly obligations and to us it means you paid all of the monthly payments and now want to turn the car back and pay the disposition fee plus wear and tear. I don't think that's what you mean.

If you still owe more monthly lease payments, you can either pay all of them and then turn the car back or you can just pay them as they come due each month as scheduled. It's your choice.

Do people actually do that? Absolutely. In fact, dealers do it all the time if the customer wants to trade in a car five or six months before the end of his lease but his payoff is so high that he is seriously underwater. Let's say his payoff on his Lexus is $25,000 and his car is worth only $18,000, so he has $7,000 of negative equity. He has five remaining payments at $600 each ($3,000 total). It's a lot cheaper for us to simply cut a check for the $3,000 plus the disposition fee and then drive him over to the original dealer to stuff the car back on them so that the only negative equity we have to roll into his new lease is $3,000 plus whatever the disposition fee was instead of $7,000. That happens because manufacturers' captives set the residuals too high.

On a closed-end lease, negative equity can only exist if you want out early before you have made all the monthly payments. There is no negative equity possible once all of the monthly payments have been made. That's when you can walk away from the car.


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## psycho (Jul 2, 2002)

I'm not sure how I can be any clearer. The lease term was 24 months of payments of X. I made all 24 payments in 12 months. All payments specified in the closed-end lease have been made (except for excess mileage, wear and tear, and disposition fee). BMWFS does not care whether you make 24 payments in 1 month or 24 months; you cannot turn a car in until the end of the lease period, barring a pull ahead program. Because of the airbag fiasco, there are no more pull ahead programs for non-affected cars. I understand this is an extremely rare situation, since 99.9999% of customers either finish out their lease or want out of a car before the lease is up.


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## mhj202 (Dec 7, 2008)

Ninong said:


> I just checked BMWUSA.com and their national lease disclosure excludes only Puerto Rico, it does not exclude Texas. It is a closed-end lease. The lessee has no obligation for the realized market value of the vehicle at any time. He is only responsible for the regular monthly payments, plus the $350 disposition fee plus wear and tear. If he chooses to purchase the car, he can do so for the guaranteed residual value, or he can give them the car back.


I stand corrected- Ninong is correct.

Though one of the payment amount options in the CA form of BMWFS lease does factor in the realized value, the consumer can opt to pay the monthly payments, plus disposition plus $350 plus wear and tear.


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## mhj202 (Dec 7, 2008)

psycho said:


> I'm not sure how I can be any clearer. The lease term was 24 months of payments of X. I made all 24 payments in 12 months. All payments specified in the closed-end lease have been made (except for excess mileage, wear and tear, and disposition fee). BMWFS does not care whether you make 24 payments in 1 month or 24 months; you cannot turn a car in until the end of the lease period, barring a pull ahead program. Because of the airbag fiasco, there are no more pull ahead programs for non-affected cars. I understand this is an extremely rare situation, since 99.9999% of customers either finish out their lease or want out of a car before the lease is up.


Weird. Section 30 of the California form of BMWFS has a Option A and B, and Option A allows exactly what you are saying you were not permitted to do.

What does the Early Termination Section of your lease say?


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## visi107 (Mar 20, 2013)

I also had a similar experience to *psycho *and i know exactly what he is talking about. Small little difference mine was with Hyundai not BMW and it was 5 months ago. Oh and *ninong* why are you so surprised, this is exactly what i think you are talking about when you were explaining 'the total obligation under a lease' and the change in residual vs lease cash incentive.

My story: We were leasing a sonata(wife's car) for 36 months which would have matured on 1/4/2016. September we leased an explorer for the wife (long story why we had to get it then) so we called hyundai financial, there would have been another three payments due at that time (oct, nov, dec). My smart thinking was if I give them the car now and offer to pay them let's say 2/3 months then they will be happy and take it in early lol . . . NOPE. Talk to them multiple times, including managers. They said even if I paid all the remaining payments plus the disposition fee ('my lease obligation') I could not turn the car in. The only way to turn the car in would have been to buy it outright then see what the dealer would offer as a trade in or whatever other place you try to sell to. It sounded stupid beyond belief, and like common sense did not exist. I was only allowed to turn it in without having to buy it during the last 30 days of the lease after the final payment had been name.

For those people who say 'well just keep it in your garage' well it's gonna take up space . . not that convenient bc now you have this extra car that's not being used in your garage. And for every month you keep it, you are paying insurance on it which isn't cheap


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## visi107 (Mar 20, 2013)

mhj202 said:


> The economics would have been the same whether or not they took the car back or you kept it in the driveway-- so why did that stop you from leasing the new car? Just didn't want to have it in the driveway or lend it to a friend to use for a few months?


Economics is not the same - yes you pay all the remaining payments under both scenarios but
scenario one-they take the car=you stop paying insurance on it
scenario two-car stays in driveway, you are paying insurance on it which isn't cheap or discontinue the insurance at a risk

how do i know, look at post above lol


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## jjrandorin (May 8, 2013)

visi107 said:


> I also had a similar experience to *psycho *and i know exactly what he is talking about. Small little difference mine was with Hyundai not BMW and it was 5 months ago. Oh and *ninong* why are you so surprised, this is exactly what i think you are talking about when you were explaining 'the total obligation under a lease' and the change in residual vs lease cash incentive.
> 
> My story: We were leasing a sonata(wife's car) for 36 months which would have matured on 1/4/2016. September we leased an explorer for the wife (long story why we had to get it then) so we called hyundai financial, there would have been another three payments due at that time (oct, nov, dec). My smart thinking was if I give them the car now and offer to pay them let's say 2/3 months then they will be happy and take it in early lol . . . NOPE. Talk to them multiple times, including managers. They said even if I paid all the remaining payments plus the disposition fee ('my lease obligation') I could not turn the car in. The only way to turn the car in would have been to buy it outright then see what the dealer would offer as a trade in or whatever other place you try to sell to. It sounded stupid beyond belief, and like common sense did not exist. I was only allowed to turn it in without having to buy it during the last 30 days of the lease after the final payment had been name.
> 
> For those people who say 'well just keep it in your garage' well it's gonna take up space . . not that convenient bc now you have this extra car that's not being used in your garage. And for every month you keep it, you are paying insurance on it which isn't cheap


Do we know that the language in Hyundai's lease agreement is the same as BMWs? Also, you mention that you were trying to pay 2 of 3 lease payments, not all three.

Also, this is not what Ninong was speaking of earlier, because what he was talking about earlier was stating that a person has an obligation to pay all 36 payments of their 37 payment lease. He didnt say you had to keep the car after you made all the payments, just that you were obligated to make all of the payments.

Your description would be relevant if it was BMW you were talking about, but since it was a Hyuyndai its really not relevant (and I am not talking about class of car, etc, I am just talking about the fact that they are two different companies, with most likely 2 different lease agreements. Does Hyundai offer included GAP insurance for example?)


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## visi107 (Mar 20, 2013)

jjrandorin said:


> Do we know that the language in Hyundai's lease agreement is the same as BMWs? Also, you mention that you were trying to pay 2 of 3 lease payments, not all three.


Read everything i wrote. Even if I would have paid all three payments plus the dispo fee they still would not take the car back. I had to either buy the car outright or wait. I wrote that.



jjrandorin said:


> Your description would be relevant if it was BMW you were talking about, but since it was a Hyuyndai its really not relevant (and I am not talking about class of car, etc, I am just talking about the fact that they are two different companies, with most likely 2 different lease agreements. Does Hyundai offer included GAP insurance for example?)


It is relevant bc this is the same exact experience that psycho had with BMW. He made all his payments and BMW would not take the car back, Just like I was willing to make all the payments and hyundai would not take the car back. GAP insurance is irrelevant here in this scenario.


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## psycho (Jul 2, 2002)

visi107 said:


> I also had a similar experience to *psycho *and i know exactly what he is talking about. Small little difference mine was with Hyundai not BMW and it was 5 months ago. Oh and *ninong* why are you so surprised, this is exactly what i think you are talking about when you were explaining 'the total obligation under a lease' and the change in residual vs lease cash incentive.
> 
> My story: We were leasing a sonata(wife's car) for 36 months which would have matured on 1/4/2016. September we leased an explorer for the wife (long story why we had to get it then) so we called hyundai financial, there would have been another three payments due at that time (oct, nov, dec). My smart thinking was if I give them the car now and offer to pay them let's say 2/3 months then they will be happy and take it in early lol . . . NOPE. Talk to them multiple times, including managers. They said even if I paid all the remaining payments plus the disposition fee ('my lease obligation') I could not turn the car in. The only way to turn the car in would have been to buy it outright then see what the dealer would offer as a trade in or whatever other place you try to sell to. It sounded stupid beyond belief, and like common sense did not exist. I was only allowed to turn it in without having to buy it during the last 30 days of the lease after the final payment had been name.
> 
> For those people who say 'well just keep it in your garage' well it's gonna take up space . . not that convenient bc now you have this extra car that's not being used in your garage. And for every month you keep it, you are paying insurance on it which isn't cheap


Exactly this. For some reason, BMWFS does not want lease returns back early, and my sales manager thinks this is because they suspect customers who do this are going to jump to another brand. However, in my case, they want to annoy a customer by telling me I can't return a car that's paid for, have to keep a car I don't want, and if I really want to get rid of it, have to pay the difference between the payoff and the appraised value. And offer no solution because my car doesn't have a defective airbag.


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## DJHakim (Feb 15, 2006)

visi107 said:


> Ninog said the day you sign the contract you have an obligation for the 36 payments PLUS the 37th payment which is the residual.


Finally! A statement I can use! Updated comparison imminent.


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## DJHakim (Feb 15, 2006)

*March vs. April: March Wins*

Unless you have an MSRP >$50k, March wins in the contests below.

*Total Monthly Lease Payment 
MSRP	March April* 
$40,000 $542 $552 
$50,000 $681 $683 
$60,000 $821 $814

*Total Lease Obligation (Total Lease Payments + Residual)	 
MSRP	March April* 
$40,000 $43,508 $45,086 
$50,000 $54,524 $56,102 
$60,000 $65,541 $67,119

*MF* 0.00135 
*Sales Tax* 5% (comparison is valid up to ~10%)	
*Term* 36 mo 
*March Program Lease Credit* $1,500 
*April Program Lease Credit* $0 
*March Residual* 0.60 
*April Residual* 0.63 
_No discounts. 
Lease Credit assumed to be taxable Cap. Cost. Reduction 
Up-front Tax on Lease Credit is pro-rated into the monthly payment. 
Sales Tax applies to monthly payment and is included in the listed monthly payments above._


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## visi107 (Mar 20, 2013)

DJHakim said:


> Unless you have an MSRP >$50k, March wins in the contests below.
> 
> *Total Monthly Lease Payment
> MSRP	March April*
> ...


Yep your calculations are correct but to throw in a wrench in your equations . . *if *you qualify for loyalty credit which isn't lockable. 
By going with april rates you get the loyalty incentive . . . .if you go with march then loyalty isnt lockable and few CAs have said you can't take march rates and april loyalty. so by going with march you get lower residual and lose the loyalty.

If you are not eligible for loyalty then disregard my post.


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## Ninong (May 20, 2014)

psycho said:


> I'm not sure how I can be any clearer. The lease term was 24 months of payments of X. I made all 24 payments in 12 months. All payments specified in the closed-end lease have been made (except for excess mileage, wear and tear, and disposition fee). BMWFS does not care whether you make 24 payments in 1 month or 24 months; you cannot turn a car in until the end of the lease period, barring a pull ahead program. Because of the airbag fiasco, there are no more pull ahead programs for non-affected cars. I understand this is an extremely rare situation, since 99.9999% of customers either finish out their lease or want out of a car before the lease is up.


Okay, now we're back to square one and what we assumed from the beginning about what you were trying to tell us was correct. I'm sorry I was so confused. I'll blame it on being up too late. :angel:

You are indeed saying that you have already made ALL of the scheduled monthly payments and are ready to turn in the car and pay the disposition fee, if applicable, plus any excess wear and tear, if applicable *BUT* BMWFS is still refusing to allow you to drop it off at any of their dealerships.

You're sure you car is not subject to the Takata airbag recall, right? That's because if it were subject to the Takata airbag recall then I could begin speculating on why they don't want it too soon. Since it's not subject to the Takata airbag recall, I would have to wait for someone else to do the speculating because this is definitely something they would have to ask about.

Once again, I'm very sorry for my confusion!

Good luck!


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## Ninong (May 20, 2014)

mhj202 said:


> Weird. Section 30 of the California form of BMWFS has a Option A and B, and Option A allows exactly what you are saying you were not permitted to do.
> 
> What does the Early Termination Section of your lease say?


AFAIK, BMWFS uses the same forms nationwide but with all the various state laws incorporated in the fine print depending on which state you're in. I could be wrong about that, especially when it comes to Texas because their laws on leasing are different than almost all the other states. I still think all of his options should be the same in all states, but maybe that's no longer correct.

So this is something we need someone to ask about.


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## Ninong (May 20, 2014)

Ninong said:


> Think of a lease as being the same as a loan paid off in 37 payments (36 small monthly payments and one big 37th payment).
> 
> Your actual obligation is the full 37 payments. Your option to relieve yourself of that 37th payment becomes available to you only have successful completion of the first 36 payments.





Ninong said:


> You owe the total of your 37 payments. If you pay it off early, they deduct a credit for any unearned finance charges. After you make the 36 payments, you have the option to give them the car back plus the $350 disposition fee plus any excess mileage charges and any excess wear and tear charges.





Ninong said:


> Your obligation is the full 37 payments (36 + residual). That is your obligation.
> 
> Only after payment of the first 36 payments do you have options to consider for how to deal with your obligation for the amount of that 37th payment.





visi107 said:


> Oh and *ninong* why are you so surprised, this is exactly what i think you are talking about when you were explaining 'the total obligation under a lease' and the change in residual vs lease cash incentive.


No, it's definitely not what I said. Please read the above quotes from three previous replies to three other posters earlier in this thread and you will understand why I am surprised. I will try to see if I can find out what's going on because I don't remember that happening before.


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## psycho (Jul 2, 2002)

Ninong said:


> Okay, now we're back to square one and what we assumed from the beginning about what you were trying to tell us was correct. I'm sorry I was so confused. I'll blame it on being up too late. :angel:
> 
> You are indeed saying that you have already made ALL of the scheduled monthly payments and are ready to turn in the car and pay the disposition fee, if applicable, plus any excess wear and tear, if applicable *BUT* BMWFS is still refusing to allow you to drop it off at any of their dealerships.
> 
> ...


Yes, my car does not have a defective airbag. One would think they would want a car back that they could immediately resell, instead of one they have to store. The crazy thing is I wanted to buy another BMW.


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## Ninong (May 20, 2014)

psycho said:


> Yes, my car does not have a defective airbag. One would think they would want a car back that they could immediately resell, instead of one they have to store. The crazy thing is I wanted to buy another BMW.


I'll let you know as soon as I get a response to an email I sent a few minutes ago. I don't understand this at all.


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## visi107 (Mar 20, 2013)

psycho said:


> Yes, my car does not have a defective airbag. One would think they would want a car back that they could immediately resell, instead of one they have to store. The crazy thing is I wanted to buy another BMW.


Yeah i was puzzled too when they told me the same thing. I tried to reason with them that hey you are getting all your money and the car early(win-win) but still no. And no one would give me an explanation, they would just say, this is what the rule is. Felt like I was talking to a robot. 
Again my experience was with Hyundai just for anyone who doesn't read every message posted lol


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## saranr (Dec 22, 2006)

*X5 April*

Residual 58% 15k miles/year
Loyalty = $1000
MF =.000135

Trying to calculate lease number for X5. Are there any lockable incentives on X5 for month of April.


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## Ninong (May 20, 2014)

saranr said:


> Residual 58% 15k miles/year
> Loyalty = $1000
> MF =.000135
> 
> Trying to calculate lease number for X5. Are there any lockable incentives on X5 for month of April.


The money factor and residual are lockable. That's it. For any other incentives that apply to you personally, you will have to read the fine print to see if you can use them or not.


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## psycho (Jul 2, 2002)

visi107 said:


> Yeah i was puzzled too when they told me the same thing. I tried to reason with them that hey you are getting all your money and the car early(win-win) but still no. And no one would give me an explanation, they would just say, this is what the rule is. Felt like I was talking to a robot.
> Again my experience was with Hyundai just for anyone who doesn't read every message posted lol


Sounds like we had the same customer service rep. I just resist the idea that I have to make the equivalent of six extra monthly payments (the negative equity) just for the privilege of getting another BMW.


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## Michael @ BMW Seattle (Mar 5, 2016)

Ninong said:


> I'll let you know as soon as I get a response to an email I sent a few minutes ago. I don't understand this at all.


I'm in the same boat as you, Ninong. All I can attribute it to is lack of knowledge and training. We've certainly done this before without the airbag issue and without a pull ahead program.

We've discounted the new car the amount of remaining payments, grounded the lease turn in, and the client gets a final bill for the remaining payments.

Or, we grounded the car and assumed the remaining payments in OUR purchase of the car from FS.

Weirdness out there.

~M~


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## Ninong (May 20, 2014)

Michael @ BMW Seattle said:


> I'm in the same boat as you, Ninong. All I can attribute it to is lack of knowledge and training. We've certainly done this before without the airbag issue and without a pull ahead program.
> 
> We've discounted the new car the amount of remaining payments, grounded the lease turn in, and the client gets a final bill for the remaining payments.
> 
> ...


I don't know what's going on. Last night I even pulled up California Civil Code, Section 2987 (you have to drop down to subsection f for trade-in circumstances). You're allowed to pay off a lease early in California. BMW's lease is a closed-end lease. It doesn't provide for payment of the difference between market value and residual value at termination. Therefore, I don't understand why he owes negative equity on a closed end lease after he has paid all of the monthly payments, plus disp. fee (if applicable, it's always waived on a trade-in), plus excess wear & tear, etc.

This makes no sense. It has to involve the dealership one way or the other. You know how BMWFS always agrees with whatever the dealership told the customer (almost always) and then just bounces him back to the dealership.

I am assuming that he made all 24 payments already instead of just telling the dealer he would be willing to do that as part of the deal. That may be key. If he's hasn't done that yet, he should send in the remaining payments. Then once they are posted, go down to the dealership to turn in the car and see what happens. Or even turn it in at a different dealership. BMWFS is going to refund the $350 disposition fee as a credit against his next account if he opens an account with them in the next 30 days (I guess it's still 30 days). I think they should also credit him for unearned rental charges, too, but I don't live in Texas, so I'm not sure if they're different or not.

Basically what he is saying is that BMWFS is telling him that even if he wants to pay ALL of the monthly payments and turn in the car now, he can't do that. He has to store it in his garage, maintaining full insurance coverage on it in compliance with the terms of his lease, until the actual lease maturity date. I don't ever remember that happening before???


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## Michael @ BMW Seattle (Mar 5, 2016)

Ninong said:


> You know how BMWFS always agrees with whatever the dealership told the customer (almost always) and then just bounces him back to the dealership.


Yup



Ninong said:


> I don't ever remember that happening before???


Nope

~M~


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## psycho (Jul 2, 2002)

Ninong said:


> I don't know what's going on. Last night I even pulled up California Civil Code, Section 2987 (you have to drop down to subsection f for trade-in circumstances). You're allowed to pay off a lease early in California. BMW's lease is a closed-end lease. It doesn't provide for payment of the difference between market value and residual value at termination. Therefore, I don't understand why he owes negative equity on a closed end lease after he has paid all of the monthly payments, plus disp. fee (if applicable, it's always waived on a trade-in), plus excess wear & tear, etc.
> 
> This makes no sense. It has to involve the dealership one way or the other. You know how BMWFS always agrees with whatever the dealership told the customer (almost always) and then just bounces him back to the dealership.
> 
> ...


That is correct. All the monthly payments have been made, and the dealer will not accept the car because BMWFS will not allow them to until lease maturity.


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## Michael @ BMW Seattle (Mar 5, 2016)

psycho said:


> That is correct. All the monthly payments have been made, and the dealer will not accept the car because BMWFS will not allow them to until lease maturity.


So sorry to ask what probably has been asked and answered, but have you spoken directly with BMWFS?

~M~


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## jfried1016 (Jan 31, 2016)

DJHakim said:


> :yikes:
> Assuming you qualified for Feb-Mar programs and you were entitled to a $1500 lease credit in March and your residual bumped up 3% in April, then the March program gives you the lowest monthly payment if your MSRP is less than about $50k.


Yeah, I ordered in February and ran credit so I was under the impression i could select any month until delivery.


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## psycho (Jul 2, 2002)

Michael @ BMW Seattle said:


> So sorry to ask what probably has been asked and answered, but have you spoken directly with BMWFS?
> 
> ~M~


Yes


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## Michael @ BMW Seattle (Mar 5, 2016)

psycho said:


> Yes


Dang

~M~


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## DJHakim (Feb 15, 2006)

visi107 said:


> Yep your calculations are correct but to throw in a wrench in your equations . . *if *you qualify for loyalty credit which isn't lockable.
> By going with april rates you get the loyalty incentive . . . .if you go with march then loyalty isnt lockable and few CAs have said you can't take march rates and april loyalty. so by going with march you get lower residual and lose the loyalty.
> 
> If you are not eligible for loyalty then disregard my post.


_*Maybe these posts should be moved to the loyalty thread.*_

Actually, I hope a clarification from BMWFS about the loyalty incentive eliminates this odd restriction. If the restriction is as you repeated, then folks with pre-April locks and post-March deliveries get ZERO loyalty incentive. I can see many being in this predicament. Perhaps the restriction demands that folks submit a _new _credit application in April in order to get a loyalty incentive.

In any case, if you read the loyalty incentive wording verbatim, to me it is *not* exactly stated that pre-April credit locks do not qualify. 
"who enter into a new lease or retail finance contract with BMW Financial Services and take delivery of a new eligible BMW vehicle between April 1, 2016 and May 2, 2016." The ambiguity has to do with "and" applied to the dates. Is it (1) "who enter into a new lease or retail finance contract with BMW Financial Services" and (2) "take delivery of a new eligible BMW vehicle between April 1, 2016 and May 2, 2016"? Is applying for BMWFS credit exactly the same as entering "into a new lease or retail finance contract"? BMWFS maybe knows.

As Ninong points out, BMWFS has changed loyalty terms mid-month, so the apparent gap could be remedied.


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## Ninong (May 20, 2014)

DJHakim said:


> The ambiguity has to do with "and" applied to the dates. Is it (1) "who enter into a new lease or retail finance contract with BMW Financial Services" and (2) "take delivery of a new eligible BMW vehicle between April 1, 2016 and May 2, 2016"? Is applying for BMWFS credit exactly the same as entering "into a new lease or retail finance contract"? BMWFS maybe knows.
> 
> As Ninong points out, BMWFS has changed loyalty terms mid-month, so the apparent gap could be remedied.


What it means is that you get it if your contract is dated between April 1, 2016 and May 2, 2016 because that's your delivery date. That time that they "enhanced" the program to add the one-payment cash option in lieu of the credit against two payments they added that feature around the 6th of the month and made that feature effective on that date and not previously. So that was sort of a change but all it really did was give you an extra option that you didn't have before. Now they don't even bother with the credit against two payments and just give you the full credit upfront.

Anyway, Loyalty is one of those incentives that applies to the individual and not certain cars. As long as you are eligible and as long as it's in play when your sign your contract, you should get it unless there are specific exclusions written into the fine print of either the individual incentive or the program that is in effect that otherwise applies to you.

Absent any exclusions written into either one of them, you should be able to get it. If it's available that month when you actually sign your lease contract and pay the first payment to get yourself on the BMWFS books.

P.S. -- Always check for exclusions and restrictions in the fine print of any incentive because sometimes they exclude certain cars from your personal incentive.

P.P.S. -- Another point you should check with an Owner Loyalty credit is whether it has a starting and ending date, such as the current one. There is a possibility that you may not be able to combine it with previously locked programs. It could be that the Loyalty credit applies alright but you have to also accept whatever other programs are in effect at the time you use it.


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## Michael @ BMW Seattle (Mar 5, 2016)

There is no real way to simplify how BMW structures delivery and credit locks.

Each month we have to look at the programs in detail to determine what they entail. 

Some months it will say it can't be locked, sometimes it can. 

Some will also say it can't be used with a previous credit lock. What that means is if you apply for financing in March, and the April program is better, but it says only for current credit approvals, then you have to reapply to get the better program.

But that is not always the case.

Add to that the other potential restrictions on what types of vehicles are eligible and what types are not. Cases where people want to combine a dealer cash program with a corporate Fleet program which, in some months, can't be allowed.

For what it's worth, my binder is between one and a half to 2 inches thick. it will have CPO programs, CPO Elite programs, standard rates, sales support rates ( which has 3 Model years, all the model variants, lease and select residuals, runs about 32 pages long). add to that, are all the year-long programs, such as college graduate, domestic military, corporate Fleet, VIP, and so on.

it's a challenge.


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## Ninong (May 20, 2014)

psycho said:


> That is correct. All the monthly payments have been made, and *the dealer will not accept the car because BMWFS will not allow them to until lease maturity*.


I'm going to repeat what I said previously. I do not believe that statement is correct. I am not saying that you were not told that by the dealer and someone at BMWFS, so please don't think I'm saying that, because I'm not. I am simply repeating once again that I do not believe that *BMWFS will not allow them to (accept the car) until lease maturity*. That is the statement that I still believe is incorrect.

I am trying to determine what's going on and I suspect it is because the dealer may have gotten a special dealer payoff and all BMWFS is doing is confirming that the numbers the dealer is using are correct. However, that is not what you really want to accomplish.

For the time being, until I can get a more definitive answer, the best I can suggest is that you simply turn in your BMW at a different dealership without attempting to make a deal on a new BMW involving your present car as a trade-in. They should have it inspected for any excess wear and tear and accept it. I just don't understand why you can't do that. And I wouldn't bother talking to BMWFS about this, since they seem to be giving you the runaround.

I am still absolutely convinced that you have the right to turn in the car after making all of the monthly payments. But we'll see. I'll let you know once I figure out what the dealership is up to. I'm not sure if the dealer is totally incompetent (unlikely) or trying to pull something.


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## djjazzy (Apr 4, 2016)

Can anyone help with M4 and M5 April 2016 residuals? Thanks in advance


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## Michael @ BMW Seattle (Mar 5, 2016)

Ninong said:


> ... I am still absolutely convinced that you have the right to turn in the car after making all of the monthly payments.


I agree.

More arcane detail from the dealer-side. If the dealer is a "Full-Circle" Center, vehicles that are turned in must be taken in by the Center. There are a limited number of "mulligans" available to pass on a car (ex: car has a Carfax accident indicator.)

So a dealer can look at what that lease turn in means to them in that moment. Does it fit their stocking plan? Does it need excessive work to Certify? Is the buy value from BMWFS above an amount for their market?

When a car comes in at the true end of lease, there's not much a dealer can do. But in your case, they could pass on taking it in.

I'm NOT saying that's what they did, as it would infer that they told you an untruth. I don't know. Just offering more info.

~M~


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## Vitacura (Jul 22, 2005)

djjazzy said:


> Can anyone help with M4 and M5 April 2016 residuals? Thanks in advance


M4

36mo
15k 60%
12k 62%
10k 63%

M5

36mo
15k 61%
12k 63%
10k 64%


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## Ninong (May 20, 2014)

Michael @ BMW Seattle said:


> I agree.
> 
> More arcane detail from the dealer-side. If the dealer is a "Full-Circle" Center, vehicles that are turned in must be taken in by the Center. There are a limited number of "mulligans" available to pass on a car (ex: car has a Carfax accident indicator.)
> 
> ...


Well, that's interesting. The part about a "Full-Circle" Center, but unless something to that effect that restricts the customer's rights is spelled out somewhere in the fine print on his lease (unlikely), then it shouldn't have any effect on the customer's rights.

At first I thought there was some sort of miscommunication between the poster (psycho) and us as to what his situation actually is but he has now told us more than once that he has paid all 24 payments on his 24-month lease but both the dealer and BMWFS have told him that he must wait until the maturity date on the lease before he can turn in the car.

As far as the CarFax aspect, assuming there was an accident of any kind, as long as the work was done by a BMW-approved repair facility, how can BMWFS refuse to accept it?

I think the dealer is involved in this one way or another. We'll see...


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## Michael @ BMW Seattle (Mar 5, 2016)

Ninong said:


> As far as the CarFax aspect, assuming there was an accident of any kind, as long as the work was done by a BMW-approved repair facility, how can BMWFS refuse to accept it?
> 
> I think the dealer is involved in this one way or another. We'll see...


The CarFax aspect ... BMWFS would take it back. And the dealer takes it back, it's only whether or not the dealer has to keep it or not.

Yes, something is amiss.

~M~


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## dotmike24 (Dec 2, 2014)

Good morning everyone, what is the April lease rate for 750i or 740i 36/12k and what are the incentives? Thanks in advance


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## djjazzy (Apr 4, 2016)

Question: If the exact same configuration bmw is at two different dealers, is the MSRP always the same? I am pricing out M4's and see grossly different pricing for similar appearing vehicles in different locations.


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## [email protected] (Jan 27, 2014)

OP. Can you PM me the last 7 of your VIN and current miles. I want to take a stab at this. I have dealt with this before.


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## Ninong (May 20, 2014)

psycho said:


> ...BMWFS does not want lease returns back early...


*psycho*, David really means you, not the OP. 



[email protected] said:


> OP. Can you PM me the last 7 of your VIN and current miles. I want to take a stab at this. I have dealt with this before.


David, psycho was not the OP.


----------



## Lionnutz (Jul 24, 2014)

djjazzy said:


> Question: If the exact same configuration bmw is at two different dealers, is the MSRP always the same? I am pricing out M4's and see grossly different pricing for similar appearing vehicles in different locations.


It's possible one or both has additional dealer add ons not factory installed.


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## Ninong (May 20, 2014)

djjazzy said:


> Question: If the exact same configuration bmw is at two different dealers, is the MSRP always the same? I am pricing out M4's and see grossly different pricing for similar appearing vehicles in different locations.


There was a price increase in January. Therefore, if one dealer has a car that recently arrived and the other dealer has exactly the same car but it has been in stock for five months, their MSRPs might be different. That's one possibility. Did you run the VIN on both cars? That way you can not only compare equipment but you will see the production date and exact production plant.

There used to be ways that dealers' invoices could be different even if the MSRPs were the same but that stopped early last year.


----------



## terryn (Mar 15, 2013)

What is the residual now for an M235i ? are they the same as previously quoted for a 228i?


----------



## terryn (Mar 15, 2013)

What is the residual now for an M235i ? are they the same as previously quoted for a 228i?


----------



## Ninong (May 20, 2014)

djjazzy said:


> Question: If the exact same configuration bmw is at two different dealers, is the MSRP always the same? I am pricing out M4's and see grossly different pricing for similar appearing vehicles in different locations.


I forgot to ask you what you meant by "pricing?" Are you talking about the dealer's asking price or the actual MSRP?

Some dealers will stick an addendum sticker on a car, especially if it's for their showroom floor, that will list all sorts of magic stuff that they claim to have added to the car plus maybe some real stuff, like black grills or mirror caps, etc. Or maybe they will replace that stale old air (only 78% nitrogen) and replace it with what they claim is 100% nitrogen and charge you extra for that whether you want it or not.

Or maybe they will swap out the wheels and tires for a larger size and charge an outrageous price for that. Or maybe they will simply put a pack on the car, like when the i8 first came out.


----------



## Ninong (May 20, 2014)

terryn said:


> What is the residual now for an M235i ? are they the same as previously quoted for a 228i?


The residuals for the 228i and the M235i are the same. Their March residuals were increased by 2% in April to: 36/15k=58%, 12k=60%, 10k=61%.


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## terryn (Mar 15, 2013)

terryn said:


> What is the residual now for an M235i ? are they the same as previously quoted for a 228i?


Weird double post


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## terryn (Mar 15, 2013)

Ninong said:


> The residuals for the 228i and the M235i are the same.  Their March residuals were increased by 2% in April to: 36/15k=58%, 12k=60%, 10k=61%.


Thanks

I should be picking up my car within the next week. I should be allowed to use the new residual numbers on my lease, right?


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## Ninong (May 20, 2014)

terryn said:


> Thanks
> 
> I should be picking up my car within the next week. I should be allowed to use the new residual numbers on my lease, right?


Yes, provided you accept ALL of the April program and ignore anything you had previously locked. You cannot use the April residuals without using the April money factor (which is the same as March at .00135). If you are entitled to the current Owner Loyalty benefit (April 1 - May 2), then you can use it, too.

You can use anything that you would be able to use if you walked into the dealership today to buy a car for delivery today. You just can't use anything from your previous lock if you want to use April's residuals. You most certainly cannot use the Lease Credit from March if you intend to use the higher April residuals.


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## jjrandorin (May 8, 2013)

terryn said:


> Thanks
> 
> I should be picking up my car within the next week. I should be allowed to use the new residual numbers on my lease, right?


New residual numbers, along with the current money factors (not what you locked), and current cash incentives (or lack thereof).

My understanding of this is, its either or... either what you locked (money factor, residual, cash) OR whats currently available. You wont be able to take this residual with the cash back from whenever you locked for example, unless there is something specific / special going on.


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## psycho (Jul 2, 2002)

Ninong said:


> I'm going to repeat what I said previously. I do not believe that statement is correct. I am not saying that you were not told that by the dealer and someone at BMWFS, so please don't think I'm saying that, because I'm not. I am simply repeating once again that I do not believe that *BMWFS will not allow them to (accept the car) until lease maturity*. That is the statement that I still believe is incorrect.
> 
> I am trying to determine what's going on and I suspect it is because the dealer may have gotten a special dealer payoff and all BMWFS is doing is confirming that the numbers the dealer is using are correct. However, that is not what you really want to accomplish.
> 
> ...


No other dealership for at least 250 miles in any direction, unfortunately. BMWFS also refuses to schedule a lease-end inspection.


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## Ninong (May 20, 2014)

psycho said:


> No other dealership for at least 250 miles in any direction, unfortunately.


PM sent.


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## mhj202 (Dec 7, 2008)

Any info on April leasing for X4?


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## gpan (Nov 11, 2015)

euckersw said:


> So, if I'm reading this right, the 3 series residuals went up 3% across the board, but the $1500 lease credit is now gone? If so, isn't that basically a wash (no change from last month)?
> 
> -Scott


So in general, it looks like BMWFS took options credit away and increased residuals (I see 3, 4, 5 residuals increased) - that means it is a great time to lease executive/loaner demos since residuals are the only thing that matter for those. right?


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## patelshivam94 (Aug 31, 2013)

gpan said:


> So in general, it looks like BMWFS took options credit away and increased residuals (I see 3, 4, 5 residuals increased) - that means it is a great time to lease executive/loaner demos since residuals are the only thing that matter for those. right?


Absolutely correct.

EDIT: Any April Numbers on 2016 X3 and X4? 36 months/15k miles per year.

Thanks, in advance.


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## supakimchee (Jul 9, 2015)

Ugh, this is really bad for me. I will be in the market for a executive demo in September/October, and these awesome residuals right now are killing me. Is there a chance these rates hold, or do they drop back down traditionally as the year wears on and the 2016s get a bit "older" and depreciate on those lots.


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## gpan (Nov 11, 2015)

supakimchee said:


> Ugh, this is really bad for me. I will be in the market for a executive demo in September/October, and these awesome residuals right now are killing me. Is there a chance these rates hold, or do they drop back down traditionally as the year wears on and the 2016s get a bit "older" and depreciate on those lots.


I have been tracking 5-er residuals.. October 2015 was a good month, residual was 63% for 36/10 and there was some options credit or build out cash on deck..

Nov/Dec is when BMW shifts gear to sell new model cars and reduces residuals and pumps up the incentives (residual for 5-er dropped to 60% over the holidays).. 5-er is nearing the end of the run, so YMMV for the car you are interested in come this sep/Oct..


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## AksNasZasNas (May 30, 2013)

gpan said:


> So in general, it looks like BMWFS took options credit away and increased residuals (I see 3, 4, 5 residuals increased) - that means it is a great time to lease executive/loaner demos since residuals are the only thing that matter for those. right?


Generally speaking, yes. But March's lease credits applied to demos as well. As such, you would need to do a proper comparison between March and April programs to see which program is best for your specific demo. Scroll up and you'll see my prior similar post on the subject.


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

gpan said:


> So in general, it looks like BMWFS took options credit away and increased residuals (I see 3, 4, 5 residuals increased) - that means it is a great time to lease executive/loaner demos since residuals are the only thing that matter for those. right?


Bingo.:thumbup: And we have the largest selection of factory demo's and loaner's in the country. :bigpimp



patelshivam94 said:


> Absolutely correct.
> 
> EDIT: Any April Numbers on 2016 X3 and X4? 36 months/15k miles per year.
> 
> Thanks, in advance.


58% for both models.


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

AksNasZasNas said:


> Generally speaking, yes. But March's lease credits applied to demos as well. As such, you would need to do a proper comparison between March and April programs to see which program is best for your specific demo. Scroll up and you'll see my prior similar post on the subject.


The residual increase is more favorable.

Still, the comparison doesn't matter if you're not locked with a center for March programs and have the luxury of exercising April programs.


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## AksNasZasNas (May 30, 2013)

adrian's bmw said:


> The residual increase is more favorable.
> 
> Still, the comparison doesn't matter if you're not locked with a center for March programs and have the luxury of excersing April programs.


Agree totally with the second point and mostly disagree with the first point.  But the math to prove it isn't worth it. Lol


----------



## MustGoFast (Dec 24, 2007)

Can I get a little more clarity on the current loyalty option? I think I've picked up that it's 1k for returning leasees.. Is that correct and on all models?

Anyone have the MF for the X4?


----------



## MustGoFast (Dec 24, 2007)

Can I get a little more clarity on the current loyalty option? I think I've picked up that it's 1k for returning leasees.. Is that correct and on all models?

Anyone have the MF for the X4?


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## Michael @ BMW Seattle (Mar 5, 2016)

MustGoFast said:


> Can I get a little more clarity on the current loyalty option? I think I've picked up that it's 1k for returning leasees.. Is that correct and on all models?


You must have been in a lease or loan from BMWFS in the past 12 months to qualify. Can be used with a new BMWFS lease or loan contract. M2 and M4 GTS are excluded models. Delivery must be on or before May 2nd. Can't be used with Euro Deliveries. Can't be used with credit locks from previous months.

~M~


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## MustGoFast (Dec 24, 2007)

Cool. I'm in one now and thinking of doing a pull ahead swap to an X4 so trying to determine the rates there. Can you share the MF too?


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## mhj202 (Dec 7, 2008)

MustGoFast said:


> Cool. I'm in one now and thinking of doing a pull ahead swap to an X4 so trying to determine the rates there. Can you share the MF too?


Base MF is 0.00135


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## MustGoFast (Dec 24, 2007)

mhj202 said:


> Base MF is 0.00135


TY - Looks like it's up from 132 last I looked. Not much of a change but a few bucks.


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## mhj202 (Dec 7, 2008)

MustGoFast said:


> TY - Looks like it's up from 132 last I looked. Not much of a change but a few bucks.


I believe March was 0.00135 as well. Feb was 0.00132.


----------



## Dwala123 (Apr 9, 2016)

Can anyone share the residual and mf on a X1 with premium package/ nav business on 10k miles a year? 

The dealer is giving a 8%off msrp. Is that a decent discount?


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## mhj202 (Dec 7, 2008)

Dwala123 said:


> Can anyone share the residual and mf on a X1 with premium package/ nav business on 10k miles a year?
> 
> The dealer is giving a 8%off msrp. Is that a decent discount?


Base MF is 0.00135


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## jjrandorin (May 8, 2013)

Dwala123 said:


> Can anyone share the residual and mf on a X1 with premium package/ nav business on 10k miles a year?
> 
> The dealer is giving a 8%off msrp. Is that a decent discount?


Money factors this month for all tier 1 leases is .00135 for base rate.

There is another post in the ask a dealer section about residuals with a list of all of them. The dealer can give you the residual percentage though. Its not negotiable so they wont hesitate to give it to you (where some will hesitate to give you the money factor).


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## pony_trekker (May 26, 2003)

psycho said:


> Funny except for the buying a Camry and letting the BMW sit part.


How about leasing a Mercedes and letting the BMW sit? :rofl:


----------



## psycho (Jul 2, 2002)

pony_trekker said:


> How about leasing a Mercedes and letting the BMW sit? :rofl:


Or Audi


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## Yinzer (Jul 21, 2014)

What are x5m residuals 36/10 & 12.

Thanks


----------



## Yinzer (Jul 21, 2014)

What are x5m residuals 36/10 & 12.

Thanks


----------



## Michael @ BMW Seattle (Mar 5, 2016)

Yinzer said:


> What are x5m residuals 36/10 & 12.
> 
> Thanks


58% for 15, 60% for 12 and 61% for 10.

~M~


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## Yinzer (Jul 21, 2014)

Thanks Mike.


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## paul325740 (Jul 17, 2006)

Michael @ BMW Seattle said:


> 58% for 15, 60% for 12 and 61% for 10.
> 
> ~M~


what about X5 35i, 535i and XM40i ?

thank you in advance.


----------



## chloe92us (Apr 4, 2016)

Residuals for 2016 428i gran coupe & 328 wagon? Also, does the wagon residual include diesel as well? Thanks.


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## Dwala123 (Apr 9, 2016)

I was quoted $432/month and $3140 upfront including first months payment. Total cost of lease over 3 years to me will be $18,385 for 10k miles including all taxes doc fee accq fee etc. Is this a good deal? 

The msrp is $43495 on the vehicle and the residual being provided is 62%. This is for a X1.


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## Michael @ BMW Seattle (Mar 5, 2016)

paul325740 said:


> what about X5 35i, 535i and XM40i ?
> 
> thank you in advance.


Same for X5 35i and X4 M40i

535i/xi/d/xd: 15k = 61%, 12K = 63%, 10k = 64%

~M~


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## Michael @ BMW Seattle (Mar 5, 2016)

chloe92us said:


> Residuals for 2016 428i gran coupe & 328 wagon? Also, does the wagon residual include diesel as well? Thanks.


428i/xi GC:

60% for 15, 62% for 12 and 63% for 10.

328xi/xd Sport Wagon

61% for 15, 63% for 12 and 64% for 10.

~M~


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## Michael @ BMW Seattle (Mar 5, 2016)

Dwala123 said:


> I was quoted $432/month and $3140 upfront including first months payment. Total cost of lease over 3 years to me will be $18,385 for 10k miles including all taxes doc fee accq fee etc. Is this a good deal? The msrp is $43495 on the vehicle and the residual being provided is 62%.


What model are we talking about?

~M~


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## Dwala123 (Apr 9, 2016)

Michael @ BMW Seattle said:


> What model are we talking about?
> 
> ~M~


Sorry.. X1


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## chloe92us (Apr 4, 2016)

Michael @ BMW Seattle said:


> 428i/xi GC:
> 
> 60% for 15, 62% for 12 and 63% for 10.
> 
> ...


Thanks


----------



## chloe92us (Apr 4, 2016)

Money factor is the same across all 2016 models for April?


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

chloe92us said:


> Money factor is the same across all 2016 models for April?


Yes, it's actually the same on all models for MY 16.


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## paul325740 (Jul 17, 2006)

Michael @ BMW Seattle said:


> Same for X5 35i and X4 M40i
> 
> 535i/xi/d/xd: 15k = 61%, 12K = 63%, 10k = 64%
> 
> ~M~


thank you Michael!:thumbup:


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## Michael @ BMW Seattle (Mar 5, 2016)

Dwala123 said:


> I was quoted $432/month and $3140 upfront including first months payment. Total cost of lease over 3 years to me will be $18,385 for 10k miles including all taxes doc fee accq fee etc. Is this a good deal?
> 
> The msrp is $43495 on the vehicle and the residual being provided is 62%. This is for a X1.


So far I haven't been able to deconstruct this lease. Questions:


Are you doing MSD's?
Assume it's a 2016 X1, as the vast majority of 2015's have the airbag recall stop-sale

~M~


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## Dwala123 (Apr 9, 2016)

Michael @ BMW Seattle said:


> So far I haven't been able to deconstruct this lease. Questions:
> 
> 
> Are you doing MSD's?
> ...


No I am not doing any MSD.
This is a 2016.

So the dealer came back with an even better offer it looks like. Same numbers only now we are talking 12k miles instead of 10k.

I am basically getting about 10% off the msrp ($43495) so the selling price is $38995.

Total cost of the lease to me = $18380.

I will only pay first months payment which is 18380/36 = $510.5

Are we good to pull the trigger on this according to the experts here?


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## jjrandorin (May 8, 2013)

Dwala123 said:


> No I am not doing any MSD.
> This is a 2016.
> 
> So the dealer came back with an even better offer it looks like. Same numbers only now we are talking 12k miles instead of 10k.
> ...


I think it would help if you listed all of the particular numbers

MSRP
Cap Cost / Selling price
Any incentives applied
Money Factor
Residual
Monthly payment, with or without tax.

Also, are you trading anything in, and if so what is it, and what are they giving you for it? its all your personal business but its hard to identify if its a good deal without all of the info. Monthly payment doesnt mean anything as far as deal goes (at least to me.. I am not good enough to figure it out without all of the numbers)


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## Dwala123 (Apr 9, 2016)

jjrandorin said:


> I think it would help if you listed all of the particular numbers
> 
> MSRP
> Cap Cost / Selling price
> ...


No I am not trading in anything
MSRP - $43495
Cap Cost / Selling price - $38995
Any incentives applied - Employer discount $1000, dealership threw in $1000 an additional $1500 plus the $1000 incentive from BMW bringing the selling price down to $38995
Money Factor - 0.0015
Residual - 61%
Monthly payment, with tax etc. - $510.5 / month for 36 months 12k miles/year

Only thing I am putting upfront is my first payment $510.5.

Any feedback on the deal? Good bad ok?


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## mwm1166 (Jul 16, 2013)

Dwala123 said:


> No I am not trading in anything
> MSRP - $43495
> Cap Cost / Selling price - $38995
> Any incentives applied - Employer discount $1000, dealership threw in $1000 an additional $1500 plus the $1000 incentive from BMW bringing the selling price down to $38995
> ...


I don't think that looks like a good deal at all. What you want to do is find the invoice price of the base vehicle. That is the base msrp multipled by .92

Then take each option and multiply it by .91, then add that all together and ad 995 for delivery.

Then you want to use that as your starting point.

Tell the dealer you want the price plus $500-$1000 (your choice your negotiation) for his profit, then you want your employer benefit $1000 deducted, then any BMW incentives deducted. This should put you 1500 under the invoice of the car and your cap cost would be significantly lower than what you're being offered.

He's marking the Moneyfactor up. You want to ask for the buy rate which is .00135 (on top tier credit).

Then let the rest of the numbers work their magic, I imagine your lease will be low 400's without any real work. If they don't take it, take that exact offer and go to the other dealer in town and show them what you want.

Someone will bite.

But now your deal isn't good, it's bad but massaged to look good. X1 for X3 money basically....


----------



## supakimchee (Jul 9, 2015)

Dwala123 said:


> No I am not trading in anything
> MSRP - $43495
> Cap Cost / Selling price - $38995
> Any incentives applied - Employer discount $1000, dealership threw in $1000 an additional $1500 plus the $1000 incentive from BMW bringing the selling price down to $38995
> ...


If you really want to get a good deal, negotiate the price BEFORE you throw all the discounts/incentives from BMWNA.

You need to know EXACTLY how much the dealership is wiling to discount off the MSRP before you add those other figures in. If you don't, you just gave them a crap ton of money to make it look like you're getting a "deal". If all the money being discounted is coming from BMWNA, you're essentially getting the car for MSRP.


----------



## jjrandorin (May 8, 2013)

Dwala123 said:


> No I am not trading in anything
> MSRP - $43495
> Cap Cost / Selling price - $38995
> Any incentives applied - Employer discount $1000, dealership threw in $1000 an additional $1500 plus the $1000 incentive from BMW bringing the selling price down to $38995
> ...


Ok, thanks for putting the numbers in there to help you look at this. A couple of other people have chimed in, but here is my thoughts on it.

1. Find the invoice price of your car. Build it on Edmunds.com, with the exact options it has, and you will get the invoice price of the car.

2. Now that you have the invoice price of the car, see where your cap cost / selling price is BEFORE any incentives. This means you need to add up any real incentives, not "dealership threw in" incentives... so, your 1k from employee purchase, and the 1K from BMW. Ignore "dealership threw in" incentive at this point. They want you to think from MSRP down, and YOU want to negotiate from invoice price.

3. Now, offer the dealership between 500 - 1000 above the invoice price, PRIOR to the real incentives. THEN you deduct your incentives (the real ones, because at this price, the "dealer threw in" incentive will probably go away, as you will already be below it). Start with 500 above invoice price you found on edmunds prior to incentives.

As someone else mentioned, this would put you BELOW invoice after your inventives. Its hard to see exactly what real incentives but it appears that you have at least 2k in real incentives... so then your cap cost / selling price will be about 1500 under invoice. Depending on where you are, they may not go for that. A " fair" price is somewhere between 500 and 1k above the invoice price BEFORE the incentives.

Once you start talking to them about price above invoice and they agree to a price above invoice, ask to see the invoice to verify the numbers.

4. your money factor is .00150. This is a moderate markup on money factor, if you have Tier 1 credit. Base money factor on tier 1 credit currently is .00135. This markup is fairly small, but IS a markup. It is negotiable. One way you can make your deal easier is to ask for the $500 above invoice number, and let them know you KNOW the money factor is marked up but will let them have that money factor if they meet you on your $500 over invoice BEFORE incentives price.

Its not necessary to do this, but does show them you are not just grinding them down, if you are not in an extremely competitive area. Of course, you can also ask for base money factor, but be prepared for them to tell you they can not negotiate on that, even though they can. Could be dealership policy for example.

5. Ask for details on all drive off costs, then plug all of your numbers into a lease calculator (I used leasematic... best $1.99 I ever spent on an iOS app). It has a simple to use wizard that lets you plug in all the numbers you now have, and spits out a monthly payment. That way you can tell THEM what the monthly payment should be, or at the very least see if there is any money hidden somewhere, if your numbers dont match.

To answer your original question, its still hard for me to see exactly how good a deal it is because I dont know the invoice price of your car. My guess is, its probably an average deal. You are most likely not getting robbed, but its likely there is a decent amount of money on the table. Now its your job to go figure out how much money is still on the table and make an educated decision on how much to leave there :thumbup:


----------



## Dwala123 (Apr 9, 2016)

You guys are all rockstars.. thank you so much!! I will be going to the dealer now not sounding like a complete idiot..


----------



## Dwala123 (Apr 9, 2016)

So looks like the MSRP is $43495
The invoice price is $40945 
They were offering me $40995 when I left the first day
Then after I mentioned the incentives the final price they have offered is $38995
The residual is $26532 = 61% of the MSRP for 12k miles a year
36 month lease

Why would the dealer only try to make $50 on top of the invoice? Isnt that fishy? Or is it because they were originally going to only offer me 0.00175 MF which was the max markup?

So when i plug in the number it appears now the MF is pretty close to 0.00135

Depreciation = (38995 - 26532) / 36 = $346.19
Interest = (38995 + 26532) * 0.00135 = $88.46
Tax = (346.19 + 88.46) * 0.0712 = $39.94
Monthly payment = $465.59

Total payment = 465.59 * 36 = $16,761
Accq fee = $925
Doc fee = $75
Registration = $600

Total for the duration of the lease = $18,361

The number they offered is $18,380 .. So i think it may be the tax on the acq fee etc 

I told them i dont want to put anything down. Just take the total cost of lease and divide my 36 so 18380 / 36 = $510 is what I will pay when i drive off

The more I talk about it it keeps sounding like its a fair deal but I dont have enough exp which i why i wanted to run this by you guys. 

Are there any more numbers that will help assess the situation? 

How will you handle the current situation? Do you think the dealer has more room to go down?


----------



## Michael @ BMW Seattle (Mar 5, 2016)

Can't argue with invoice less incentives and buy rate for the MF. That's a deal .


----------



## jjrandorin (May 8, 2013)

Dwala123 said:


> So looks like the MSRP is $43495
> The invoice price is $40945
> They were offering me $40995 when I left the first day
> Then after I mentioned the incentives the final price they have offered is $38995
> ...


From what I remember you mentioning before, you have $2000 in incentives (1k in personal incentives as a corporate discount, and 1K in BMW incentives).

If Invoice is =40945, and you deduct your 2k in incentives, that would put it at 38,945. So, if they are at 38,995, that sounds like a really good deal, as Michael stated on the cap cost. If you like the car, you have done your homework and should go get it :thumbup:


----------



## Dwala123 (Apr 9, 2016)

Thanks guys!! appreciate all he input.. I wanted someone else to look at the numbers besides myself and confirm i wasnt getting robbed... I still dont understand how is the dealer making any money here... oh well!!


----------



## jjrandorin (May 8, 2013)

Dwala123 said:


> Thanks guys!! appreciate all he input.. I wanted someone else to look at the numbers besides myself and confirm i wasnt getting robbed... I still dont understand how is the dealer making any money here... oh well!!


Sometimes, they need to sell an extra car for incentives. Sometimes, the car has been sitting on the lot and they want it gone.

Sometimes you just get to the point where they have invested time in you and they want to make a sale to move product. There is some behind the scenes money they can get, but its been stated here several times that only the largest / busiest dealers can afford to do a lot of deals like "invoice + XXX".

Go get it, and enjoy it


----------



## Dwala123 (Apr 9, 2016)

ok this is my last ultimate question regarding this. I noticed the x1 i am looking at comes with run flats. All though on BMW's site there is an option to remove them for free in exchange for regular tires, the dealership said they cant do that. It comes with what it comes with. Is the option on the site only for cars that get ordered?

I have read some not so great things about the run flats so I am concerned.


----------



## jjrandorin (May 8, 2013)

Dwala123 said:


> ok this is my last ultimate question regarding this. I noticed the x1 i am looking at comes with run flats. All though on BMW's site there is an option to remove them for free in exchange for regular tires, the dealership said they cant do that. It comes with what it comes with. Is the option on the site only for cars that get ordered?
> 
> I have read some not so great things about the run flats so I am concerned.


I cant answer that question, but could completely understand the dealership not wanting to swap tires from another car. In my own personal opinion the worry over run flat tires is a little overblown, especially with the newer run flats.

Both of my BMWs have them on there, and I have not swapped them out. I would not worry about them too much personally. Of course, your mileage may vary, but it appears you are saving enough on the car to order some "go flat" tires from tire rack if you want to, and then sell your run flats.

People are always looking for OEM run flats for lease returns, so if you are into that sort of thing you will probably find a buyer.


----------



## Michael @ BMW Seattle (Mar 5, 2016)

jjrandorin said:


> I cant answer that question, but could completely understand the dealership not wanting to swap tires from another car.


We (generally) have to sell them the way it's stated on the window sticker.



jjrandorin said:


> In my own personal opinion the worry over run flat tires is a little overblown, especially with the newer run flats.


I agree ... most of us aren't tracking our BWMs.



jjrandorin said:


> People are always looking for OEM run flats for lease returns, so if you are into that sort of thing you will probably find a buyer.


Or you could keep them ... remember that if you decide not to buy the X1 at the end of the lease, you will be charged for not having run-flats on it.

~M~


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## Dwala123 (Apr 9, 2016)

Thank you all for the awesome feedback and helping me figure this out


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## mwm1166 (Jul 16, 2013)

good luck and enjoy your new ride! Just always remember this formula when leasing a bimmer....

Invoice + Dealer profit - incentives = Cap Cost
MF = Buy rate for your credit Tier

If you do that then, you narrow down the dealer profit to what you're negotiating to only the dealer profit. The rest becomes formula.


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## BMR2009 (Mar 20, 2009)

If anyone has residual on a 7 series, 36 month, 10k, I would be grateful. thx


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## Michael @ BMW Seattle (Mar 5, 2016)

BMR2009 said:


> If anyone has residual on a 7 series, 36 month, 10k, I would be grateful. thx


61% for all 2016 models.

~M~


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## BMR2009 (Mar 20, 2009)

Like to get some feedback on a lease structuring in process....

MSRP 118,145
Sales price: 110,174
Invoice: 108,576
Dealer Margin: 1,598 
Term: 36 mo
Miles: 10k
MF: .00135
PMT: 1,348
DPMT: 0 

Deal or bad deal. Your thoughts greatly appreciated.


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## Ninong (May 20, 2014)

BMR2009 said:


> Like to get some feedback on a lease structuring in process....
> 
> MSRP 118,145
> Sales price: 110,174
> ...


You didn't say if your monthly payment includes tax? You didn't say anything about the drive-offs due on delivery? You didn't say how much they will charge for their "doc fee" and whether that is already in the cap cost or if it's in the drive-offs? I assume you live somewhere in Texas, right? If so, do you always lease or have you considered the option of an Owner's Choice finance contract instead?

Texas is one of three states where BMWFS offers Owner's Choice in lieu of a lease because of the strange tax laws in Texas. For one thing, on a lease in Texas you have to pay tax on the full selling price of the car upfront (they will no doubt stick that into your drive-offs and explain it to you later). Then, if you wanted to keep your car, you would have to pay tax a second time on the selling price of the car to you. Most states don't do that on a lease. They charge tax on the monthly payment, not the full selling price. However, you would still owe tax on the sale of the car to you at the end of the lease if you wanted to buy it.

Owner's choice is very similar to a lease in that it uses the same residuals and an APR that is equivalent to the base money factor of .00135 (3.25% APR). And with Owner's Choice you do have the option to walk away from the car at the end of the contract just as you have on a lease.

I'm not from Texas, so I don't know all that much about how they operate but many customers prefer Owner's Choice instead of a lease in that state. So that's another question for you to ask your client advisor. Ask your tax advisor if he/she is familiar with Owner's Choice as it compares to a lease in your state and whether the differences are important in your situation.

Good luck!



P.S. -- The deal looks fine to me except that the payment doesn't match the MSRP, residual, money factor and selling price you show. It's about $44/mo too high unless something else is in the payment?


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## BMR2009 (Mar 20, 2009)

Got it. Agree on the leasing in Texas, and hence I have always been a cash buyer. That said, Owner's Choice would probably be preferable as there is a small chance, but a chance I may keep the car. 

Here is additional information:

Selling Price 118,145
After discounts 110,760
Doc fees 115
Tax 6,922
Reg Fees 264
Balance 118,061.80

At pick-up: ($8,649) wow. 
First month's payment
Taxes
Doc fee
Reg fees

I wonder if anything will change going to an OC lease. 

Thanks much.


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## MustGoFast (Dec 24, 2007)

AksNasZasNas said:


> Yes as to residuals minus 25 cents for each mile over 500 miles.


Is this correct? What does it all apply to?

If I'm looking at leasing a 2016 out of the Service Loaner pool at my dealer, would this apply then?


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## AksNasZasNas (May 30, 2013)

MustGoFast said:


> Is this correct? What does it all apply to?
> 
> If I'm looking at leasing a 2016 out of the Service Loaner pool at my dealer, would this apply then?


Yes. The residual is reduced by the amount of mileage over 500 times 25 cents for everything it is 30 cents for 6ers and 7ers.


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## Ninong (May 20, 2014)

AksNasZasNas said:


> Yes. The residual is reduced by the amount of mileage over 500 times 25 cents for everything it is 30 cents for 6ers and 7ers.


Yes, it's 30 cents for 6-series and 7-series and 25 cents for everything else, including all X vehicles and all M cars except the M6. The X6 is 25 cents.


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## pony_trekker (May 26, 2003)

I just got off the phone with BMW. They specifically told me that once you fulfilled your financial obligations under the lease you can return the car at anytime you don't have to wait until the exact maturity date.


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## pony_trekker (May 26, 2003)

Dupe.


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## tmchung26 (May 17, 2007)

*i3 rex residual*

Anyone can tell me the residual for the i3 rex for 15k miles?


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## GreenLantern (Mar 30, 2013)

tmchung26 said:


> Anyone can tell me the residual for the i3 rex for 15k miles?


+1

Better yet, can we have Base MF (I believe it's 0.00135), and Residuals for 24/30/36 at 10k / 12k / 15k, for April?

Much appreciated, as always!


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## Michael @ BMW Seattle (Mar 5, 2016)

greenlantern said:


> +1
> 
> better yet, can we have base mf (i believe it's 0.00135), and residuals for 24/30/36 at 10k / 12k / 15k, for april?
> 
> Much appreciated, as always!


2016
24: 59/58/56
30: 56/55/53
36: 53/52/50

2015
24: 59/58/56
30: 59/58/56
36: 53/52/50

~m~


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## GreenLantern (Mar 30, 2013)

Michael @ BMW Seattle said:


> 2016
> 24: 59/58/56
> 30: 56/55/53
> 36: 53/52/50
> ...


Michael, you rock. Thank you!


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## paul325740 (Jul 17, 2006)

*demo 2015 750*

I found a 2015 750i demo car. what is a residual for this car anyone?

thank you in advance:thumbup:


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## Michael @ BMW Seattle (Mar 5, 2016)

vanceitc said:


> Anyone got the current numbers on a lease for a 340i for 36mo with 10k year? Any lease incentives?
> 
> BONUS QUESTION: For Texas, beyond the full purchase price what else is taxable? For example Admin/Doc/Misc or Acquisition fees, Interest, etc?
> 
> I'm leasing tomorrow and I'm not comfortable with the numbers the dealer gave me, I contacted them through TrueCar which they honored the sales price but looks like they jacked the MF to 0.00175


If they showed you 175 for the MF, then they did mark-up the rate the full 40 basis points. 135 is the buy rate this month.

The residuals for 340i and xi for a 36 month term and 10k miles is 64%.

There are no lease incentives this month, just for purchases.

I'm not 100% sure but I believe you pay up front tax on the selling price, which might include the doc fee but not the rest. But I'm a Washington guy ...

~M~


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## Ninong (May 20, 2014)

vanceitc said:


> BONUS QUESTION: For Texas, beyond the full purchase price what else is taxable? For example Admin/Doc/Misc or Acquisition fees, Interest, etc?


There is no "interest" on a lease. The equivalent on a lease is called the "rental charge." It's not taxed in Texas but it is taxed in states that tax the monthly payment instead of the cap cost (selling price).

Texas applies the sales tax to the cap cost (selling price) on a lease. That's not the most favorable way to do it from the customer's point of view, which is why many Texas residents prefer an Owner's Choice finance contract in lieu of a lease. Also, on a lease in Texas, in spite of the fact that you already paid tax on the full cap cost of the car, they tax you all over again on the selling price if you choose to buy the car at the end of the lease. It's complicated but that's the basic explanation.

In general, in states that have a sales tax (usually called a use tax in states that tax the monthly payment on a lease), the tax applies to everything except "official fees." An "official fee" is something charged by a governmental agency -- actual license fees, title fees, registrations fees, etc. Stuff that the dealer has absolutely no control over. Other so-called "fees" are taxable. For starters, the BMWFS $925 lease acquisition fee is taxable because it is something charged by BMWFS (all lenders charge a lease acquisition fee) and not an "official fee" charged by the state or local government. The dealer's "doc fee" is taxable. Any other "fees" the dealer invented would be taxable.

So in Texas you are not taxed on the monthly payment, you are taxed on the full selling price (cap cost) of the car, including everything tacked onto to that other than actual "official fees."


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## Dennisis (Oct 1, 2013)

Ok I can't find it - 2017 X3 residuals? Trying to get a feel for how these lease, test driving tomorrow.


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## vanceitc (Jan 31, 2008)

Michael @ BMW Seattle said:


> If they showed you 175 for the MF, then they did mark-up the rate the full 40 basis points. 135 is the buy rate this month.
> 
> The residuals for 340i and xi for a 36 month term and 10k miles is 64%.
> 
> ...





Ninong said:


> There is no "interest" on a lease. The equivalent on a lease is called the "rental charge." It's not taxed in Texas but it is taxed in states that tax the monthly payment instead of the cap cost (selling price).
> 
> Texas applies the sales tax to the cap cost (selling price) on a lease. That's not the most favorable way to do it from the customer's point of view, which is why many Texas residents prefer an Owner's Choice finance contract in lieu of a lease. Also, on a lease in Texas, in spite of the fact that you already paid tax on the full cap cost of the car, they tax you all over again on the selling price if you choose to buy the car at the end of the lease. It's complicated but that's the basic explanation.
> 
> ...


Awsome, thanks guys!


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## Ninong (May 20, 2014)

Dennisis said:


> Ok I can't find it - 2017 X3 residuals? Trying to get a feel for how these lease, test driving tomorrow.


36/10k=53%, 36/12k=52%, 36/15k=50%.


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## Arciga18 (Mar 3, 2012)

Ninong said:


> 36/10k=53%, 36/12k=52%, 36/15k=50%.


Thanks, these numbers are clearly set up to push model year 2016


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## Dennisis (Oct 1, 2013)

Ninong said:


> 36/10k=53%, 36/12k=52%, 36/15k=50%.


Thanks. So I agree with Arciga18, still pushing 16's so I'd be a fool to go with those.

Historically where should I expect those to be in Sep? 58/57/55? Just trying to anticipate a realistic comparison with 340i numbers. As this will be the last of this model run I'm guessing residuals will be a bit higher than previous years and may make the X3 a relative bargain for year end.


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## Ninong (May 20, 2014)

Dennisis said:


> Historically where should I expect those to be in Sep? 58/57/55? Just trying to anticipate a realistic comparison with 340i numbers. As this will be the last of this model run I'm guessing residuals will be a bit higher than previous years and may make the X3 a relative bargain for year end.


Sorry, but I don't understand their residual policy at all. :tsk:


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## evrything (Apr 25, 2016)

Anyone have April residual on 2016 640i gc?


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## Ninong (May 20, 2014)

evrything said:


> Anyone have April residual on 2016 640i gc?


36/10k=61%, 36/12k=60%, 36/15k=58%.


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## Gunder (Sep 12, 2007)

Ninong said:


> 36/10k=53%, 36/12k=52%, 36/15k=50%.


Wow, those lease numbers are horrible. Are they applicable to the entire X3 line (28i and 35i)?

Do you have the rates for 2017 X4, 28i and M40i?


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## Ninong (May 20, 2014)

evrything said:


> Anyone have April residual on 2016 640i gc?





Ninong said:


> 36/10k=61%, 36/12k=60%, 36/15k=58%.





Gunder said:


> Wow, those lease numbers are horrible. Are they applicable to the entire X3 line (28i and 35i)?
> 
> Do you have the rates for 2017 X4, 28i and M40i?


Those are the numbers *evrything* asked for -- the 2016 640i GC.


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## Gunder (Sep 12, 2007)

Ninong, I quoted the X3 rates you posted. Those are the ones I was referring to that were horrible.

I'm interested in an X3 or X4. Do you have the rates for 2017 X4, 28i and M40i?


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## Michael @ BMW Seattle (Mar 5, 2016)

Gunder said:


> Ninong, I quoted the X3 rates you posted. Those are the ones I was referring to that were horrible.
> 
> I'm interested in an X3 or X4. Do you have the rates for 2017 X4, 28i and M40i?


2017 X3/X4 all models, 36 month residuals are 15k-50%, 12k-52%, 10k-53%..

~M~


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## Ninong (May 20, 2014)

Ninong said:


> 36/10k=53%, 36/12k=52%, 36/15k=50%.





Gunder said:


> Ninong, I quoted the X3 rates you posted. Those are the ones I was referring to that were horrible.
> 
> I'm interested in an X3 or X4. Do you have the rates for 2017 X4, 28i and M40i?


Oops! I didn't realize you were quoting something from three days ago. I didn't even notice the numbers. I just figured you were responded to my post of this morning about the 2016 640i GC.

Yes, those numbers that I posted on April 22 are the correct numbers for the 2017 X3, and they are the same for the 2017 X4, and they aren't horrible at all. They just aren't subvened that's all. In other words, they are based on reality and not manipulated by BMW as part of their marketing strategy.


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## Gunder (Sep 12, 2007)

Ninong said:


> Oops! I didn't realize you were quoting something from three days ago. I didn't even notice the numbers. I just figured you were responded to my post of this morning about the 2016 640i GC.
> 
> Yes, those numbers that I posted on April 22 are the correct numbers for the 2017 X3, and they are the same for the 2017 X4, and they aren't horrible at all. They just aren't subvened that's all. In other words, they are based on reality and not manipulated by BMW as part of their marketing strategy.


Can you please give me rates for 2016 X4 28i and X3 28i?

Thanks!


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## evrything (Apr 25, 2016)

Thank you would you mind posting the 535i 535d and 550i as well


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## Michael @ BMW Seattle (Mar 5, 2016)

Gunder said:


> Can you please give me rates for 2016 X4 28i and X3 28i?
> 
> Thanks!


All 2016 X3/X4 models for 36 months are 15k - 58% / 12k - 60% / 10k - 61%


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## Michael @ BMW Seattle (Mar 5, 2016)

evrything said:


> Thank you would you mind posting the 535i 535d and 550i as well


All 2016 5-series models for 36 months are 15k - 61% / 12k - 63% / 10k - 64%

~M~


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## malenky77 (Apr 24, 2013)

Are there any trunk money for 2016 X3 in April? How about 328xi / 528xi?


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## Michael @ BMW Seattle (Mar 5, 2016)

malenky77 said:


> Are there any trunk money for 2016 X3 in April? How about 328xi / 528xi?


"Trunk money?" What's that? :dunno:

~M~


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## malenky77 (Apr 24, 2013)

aka dealer incentive, profit on the back-end, etc.


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## Michael @ BMW Seattle (Mar 5, 2016)

malenky77 said:


> aka dealer incentive, profit on the back-end, etc.


Sorry, I need a "heavy sarcasm" emoji.

~M~


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## Ninong (May 20, 2014)

malenky77 said:


> Are there any trunk money for 2016 X3 in April? How about 328xi / 528xi?





malenky77 said:


> aka dealer incentive, profit on the back-end, etc.


There is an advertised Purchase Credit of $1,000 on all three of the models you asked about. That does not apply to leases because BMWFS jacked up the residuals for April instead of using a Lease Credit like they did in March. It applies to cash deals and to BMWFS finance deals.

There is an Owner Loyalty Waiver cash benefit for April (non-lockable) that would apply if you qualify (current BMWFS customer or one who had a BMWFS account within previous 12 months).

The $1,000 Purchase Credit is non-lockable and you must take delivery no later than May 2. That is the only cash incentive that is advertised. The dealer always has certain volume bonuses he can shoot for and certain back-end money (used to be called holdback but I believe it's now called AVP) but that is never 100% guaranteed and dealer participation in that definitely varies and it's all up to BMW to make up the rules (aka do what we tell you or else).


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## Dennisis (Oct 1, 2013)

Michael @ BMW Seattle said:


> "Trunk money?" What's that? :dunno:
> 
> ~M~


You've seen those Trunk Monkey videos - it's like that....


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## paul325740 (Jul 17, 2006)

Just took delivery of 535i M sport with [email protected] BMW very sweet deal! residual 64% plus MSDs discount rate plus big discount on MSRP. Good month to lease 5 series!


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## bridgebuilder5 (Mar 27, 2017)

I am looking at leasing a 2016 bmw 528i limited edition before the end of the month. Does anyone have any info on the money factor and residual valual percentage for this car for this month?


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## patelshivam94 (Aug 31, 2013)

bridgebuilder5 said:


> I am looking at leasing a 2016 bmw 528i limited edition before the end of the month. Does anyone have any info on the money factor and residual valual percentage for this car for this month?


.00140 MF and 55% residual for 36 months / 12,000 miles. 53% residual for 36 months / 15,000 miles. 
$5000 market allowance


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## bridgebuilder5 (Mar 27, 2017)

patelshivam94 said:


> .00140 MF and 55% residual for 36 months / 12,000 miles. 53% residual for 36 months / 15,000 miles.
> $5000 market allowance


Is this fixed or does it vary from state to state as well as dealer to dealer?

Sent from my SM-G920V using Bimmerfest mobile app


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## bridgebuilder5 (Mar 27, 2017)

bridgebuilder5 said:


> Is this fixed or does it vary from state to state as well as dealer to dealer?
> 
> Sent from my SM-G920V using Bimmerfest mobile app


A few others are reporting 64 % residual on 2016 5 series.

Sent from my SM-G920V using Bimmerfest mobile app


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## bridgebuilder5 (Mar 27, 2017)

How much off of the MSRP did you get as a %?

Sent from my SM-G920V using Bimmerfest mobile app


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## AksNasZasNas (May 30, 2013)

bridgebuilder5 said:


> A few others are reporting 64 % residual on 2016 5 series.
> 
> Sent from my SM-G920V using Bimmerfest mobile app


Yes, in April 2016. We are in March 2017.


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## jjrandorin (May 8, 2013)

bridgebuilder5 said:


> A few others are reporting 64 % residual on 2016 5 series.
> 
> Sent from my SM-G920V using Bimmerfest mobile app


Thats because you bumped last years 2016 thread. In april of last year the RVs were whats in this thread. I have not calculated it recently but I assume that Patel's post has the accurate numbers.


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## bridgebuilder5 (Mar 27, 2017)

OK thanks.

Sent from my SM-G920V using Bimmerfest mobile app


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