# BMW X3 Lease Amounts Misunderstanding



## vkaminskyi (Apr 11, 2015)

Hello,

Please help me to figure our lease amounts on my new X3. I have a feeling that they do not match. This is a first time I lease a car.

MSRP was $44,945 including destination charge. I negotiated that to $42,345.
My trade-in was $7,500. And they gave me lease rebate $2,500.
Also I paid $5300 down ($300 is first month payment).

I got monthly payments $300 (for 36 months).

When they calculated my monthly payments they took Gross Capitalization Cost as $45,352.50. That looks like sum from lease agreement (including acq fee, dealer fee, taxes).

But on the amount due I already paid for acq fee and dealer fee. IMO they included those amount twice.

Plus I do not understand why they included tax $1,123.48 to the Gross Capitalization Cost if tax already paid for Gross Cap Reduction and separately included into monthly payments.

Please advise!


----------



## Ninong (May 20, 2014)

vkaminskyi said:


> Hello,
> 
> Please help me to figure our lease amounts on my new X3. I have a feeling that they do not match. This is a first time I lease a car.
> 
> ...


Congratulations on your new BMW! 

Before I answer your questions, let me point out the obvious. Whenever you are presented any legal contract to sign, the time to ask questions is before you sign it. Always read it carefully before signing it and if there is anything you don't understand, ask. That's the time to ask, not after you have signed and it's a done deal. 

Please go back and *read every word* of that paragraph 10. A. Gross Capitalized Cost. Do you see where it says See Section 13 for an itemization of this amount? Did you read Section 13? You didn't post Section 13 yet but if you read it, it will tell you exactly what is included in that $45,352.50.

They sold you the vehicle for $42,345.00. I assume that is the price you agreed to, right?

They charged you a dealer doc fee of $799.00. Congratulations, you're in Florida. That's a very, very high doc fee but that's Florida for you. :yikes:

Your sales/use tax rate is 6%, right?

All of the cap reduction is taxed and the total monthly payment is taxed. The tax on your monthly payment is $19.63 and that's based just on your monthly depreciation and rent. The tax on everything else was included in the amount you paid in the total due on delivery (aka the drive-offs). Each state controls how they tax leases and that's correct for your state.

The tax on the cap reduction and the lease acquisition fee and the dealer's doc fee were all included in your cash due on delivery.

Besides the $799.00 "doc fee," they charged you the maximum money factor: .00175. That's something that you could have negotiated with the salesperson. They are allowed to charge .00135-.00175 -- anything within that range. You got .00175.

I have no doubt that your lease is correct based on what you agreed to at the time. If you go back and read Section 13, it will itemize that is included in the Gross Capitalized Cost. Or you can just post it if you still have questions.


----------



## vkaminskyi (Apr 11, 2015)

This is section 13 which doesn't match cash price of vehicle.


----------



## Ninong (May 20, 2014)

vkaminskyi said:


> This is section 13 which doesn't match cash price of vehicle.


Section 13 says the agreed upon value of the vehicle is $45,352.50. Was there any negative equity in your trade-in?

I'm getting a little lost here because I assumed there would be something in Section 13 that explained how they arrived at $45,352.50 but I don't see anything itemized there.


----------



## Ninong (May 20, 2014)

What was the MSRP on this vehicle?


----------



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

Yeah, I can't get the math to be exact either:

$42,345 Price
$925 Acq Fee
$799 Doc Fee

I'm $1,283 off. 

We don't normally put Tax on Cap Reduction, or any licencing or taxes into Cap Cost. 

And with $2,500 in rebates and trade equity, fees, taxes and 1st month payment should be absorbed.

Hmmm


----------



## Ninong (May 20, 2014)

MichaelBrown62 said:


> Yeah, I can't get the math to be exact either:
> 
> $42,345 Price
> $925 Acq Fee
> ...


The acquisition fee and the doc fee were paid in the total drive-offs.


----------



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

But the acq fee still rolls to the cap cost. Paying up front adjusts the cap cost down by the $925 to make it "paid up front." Net zero

I wasn't sure about the doc fee. We only have $150 DF and I agree, it's normally part of the up fronts.

I can't get the math to work. But like you said, I'm sure it does. Section 13 bothers me, though.


----------



## Ninong (May 20, 2014)

MichaelBrown62 said:


> But the acq fee still rolls to the cap cost. Paying up front adjusts the cap cost down by the $925 to make it "paid up front." Net zero
> 
> I wasn't sure about the doc fee. We only have $150 DF and I agree, it's normally part of the up fronts.
> 
> I can't get the math to work. But like you said, I'm sure it does. Section 13 bothers me, though.


Well, if you're at work today and you can't figure it out, then we're in trouble. :rofl:

I can't figure it out because I haven't done this in ages and I'm not sitting at a computer. And the contract forms have changed drastically over the years since I was last actually working. :angel:

Where's the MSRP? Is it $45,352.50? Doesn't it show up somewhere in that part of the disclosure to base the residual on??? Is the trade-in value more than its ACV and that accounts for the difference???


----------



## gohawks23 (Oct 27, 2008)

This is a great example of what not to do when leasing!:tsk:


----------



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

vkaminskyi said:


> Hello,
> 
> Please help me to figure our lease amounts on my new X3.


I assume 10,000 miles per year?


----------



## vkaminskyi (Apr 11, 2015)

So far got explanations that they raised cash price $42,345 to $45,345 by adding "products".... Like key protection, paint protection ... Nice....

And that's how things looked in dealership. I asked for a loan, they suggested to lease because I get more discounts in rebates. They didn't mention that they will use all my rebates plus some my cash to those products. Not happy at all. Will see their financial director...


----------



## vkaminskyi (Apr 11, 2015)

MichaelBrown62 said:


> I assume 10,000 miles per year?


Yes.


----------



## vkaminskyi (Apr 11, 2015)

Ninong said:


> Well, if you're at work today and you can't figure it out, then we're in trouble. :rofl:
> 
> I can't figure it out because I haven't done this in ages and I'm not sitting at a computer. And the contract forms have changed drastically over the years since I was last actually working. :angel:
> 
> Where's the MSRP? Is it $45,352.50? Doesn't it show up somewhere in that part of the disclosure to base the residual on??? Is the trade-in value more than its ACV and that accounts for the difference???


Original MSRP $44,945 negotiated to $42,345.


----------



## gohawks23 (Oct 27, 2008)

vkaminskyi said:


> Original MSRP $44,945 negotiated to $42,345.


Well dude...sorry to say but it is the truth...you got hosed because you didn't know what you were doing or signing. Pretty much nothing you can do now after taking delivery. You could complain and you may get them to give you something for free...mats, oil changes, etc. But it might be best to just move on and enjoy your car and forget how you totally got taken advantage of. Just make sure you know how to review/calculate your deal for the next time and not sign until you understand all the numbers and math.


----------



## Ninong (May 20, 2014)

vkaminskyi said:


> So far got explanations that they raised cash price $42,345 to $45,345 by adding "products".... Like key protection, paint protection ... Nice....
> 
> And that's how things looked in dealership. I asked for a loan, they suggested to lease because I get more discounts in rebates. They didn't mention that they will use all my rebates plus some my cash to those products. Not happy at all. Will see their financial director...


Do you remember any discussion of those "products" with the F&I manager and do you remember agreeing to purchase those products at a certain price and agreeing to allow them to add that to what you were paying for the lease?

If you did not give your consent to the *$3,007.50* of added "products," then you should bring that up with the F&I Director. At the same time you might ask him why none of those are disclosed in Section 13 of the lease.


----------



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

I can't replicate it. Sorry.

It basically looks like they added the amount of your cap reduction to the price so they had a net zero effect and you got the payment that you "wanted."

If in fact, no products were added to the contract/cap cost, as Ninong points out.


----------



## Ninong (May 20, 2014)

I have one more important question I forgot to ask: What is the date on this contract? When did you take delivery of this car?


----------



## vkaminskyi (Apr 11, 2015)

Ninong said:


> I have one more important question I forgot to ask: What is the date on this contract? When did you take delivery of this car?


March 5th


----------



## gohawks23 (Oct 27, 2008)

Between the add ons, the max MF, prob his trade and likely more savings off MSRP the dealership ended up making about 5K more than they would have with an educated buyer...:yikes:


----------



## erdoran (Feb 29, 2008)

I'm not an attorney so take my opinion for what it's worth. 

Bmwfs has your contract. I don't believe they or the dealership can change the interest rate or other terms now as long as you make your payments on time. 

They sold you products that came with terms & conditions. One of these is presumably that they are refundable. If you go to safeguard directly for cancellation as is your right you have not violated the contract. 

For additional peace of mind call bmwfs and ask whether anything in your lease contract changes if you cancel these coverages. Then ask how the refund is handled. I'd think they could answer those questions for you.


----------



## Ninong (May 20, 2014)

erdoran said:


> Guys, shouldn't OP contact the various vendors for these contracts in order to cancel, rather than the dealership?


The "vendor" is the dealership. The people you're thinking about are usually called the "underwriter." The "product" contract itself should explain in detail the cancelation policy. The customer usually has to submit the cancelation request to the "vendor." Then the "vendor" cancels the policy and forwards the refund to the lienholder. The lienholder usually applies the refund to the end of the contract, reducing the total amount owed, but usually having no effect on the monthly payment. It's a lot easier to see on a conventional finance contract but I'm not sure exactly how it is handled on a lease. I'm sure Michael is up to date on that.

Canceling anything that was included in a lease agreement is usually very rare, except for extended warranties. Some dealerships apply all of that extra "magic coating" stuff and window glass etching stuff to cars on their showroom floor and then include the price in an addendum sticker next to the Monroney sticker. Of course, the buyer could still insist on not paying for it when the price is negotiated. 

Anyway, anything that was added should have some sort of contract or guarantee that was provided to the customer at the time he paid for it -- on delivery. Unless there was some communication to the customer that the policy or guarantee would be mailed to him shortly thereafter. There's no such thing as a guarantee or warranty that is not in writing... that I know of.

There is no way to get a refund on anything that has already been physically applied to the car: glass etching, magic protection coatings, etc. It should be possible to cancel any policies that could be thought of as future protection: dent and ding stuff, that sort of thing. You just can't cancel anything like magic coating applied to the paint or the leather interior once they say it has already been done.



P.S. -- To clarify this a little more. When the "vendor" (aka the dealership) cancels something like that, the "vendor" makes a refund according to the cancelation terms written into the policy itself and then submits a cancelation request to the "underwriter" but that means the "vendor" is also refunding a substantial amount of his previous profit on that "product." A lot depends on whether the "product" is one sponsored by BMWFS or it's through a third-party contractor used by the "vendor" (dealership). The cancelation policies could be different.


----------



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

Ninong said:


> The "vendor" is the dealership. The people you're thinking about are usually called the "underwriter." The "product" contract itself should explain in detail the cancelation policy. The customer usually has to submit the cancelation request to the "vendor." Then the "vendor" cancels the policy and forwards the refund to the lienholder. The lienholder usually applies the refund to the end of the contract, reducing the total amount owed, but usually having no effect on the monthly payment. It's a lot easier to see on a conventional finance contract but I'm not sure exactly how it is handled on a lease. I'm sure Michael is up to date on that.
> 
> Canceling anything that was included in a lease agreement is usually very rare, except for extended warranties. Some dealerships apply all of that extra "magic coating" stuff and window glass etching stuff to cars on their showroom floor and then include the price in an addendum sticker next to the Monroney sticker. Of course, the buyer could still insist on not paying for it when the price is negotiated.
> 
> ...


:thumbup:


----------



## erdoran (Feb 29, 2008)

It really p*sses me off when someone pulls this sort of cr*p and then tries to bully their way out of it. Here's the thing (again, I am NOT a lawyer!!) - OP and the dealership signed a contract for terms & conditions of lease, including interest rate and what OP was buying. READ THE CONTRACT!! Does it say "if you cancel these products you have to give back $1k and pay a higher interest rate"? I bet it doesn't. 

Dealership says you "bought" 4 products. Where is the documentation for them? You ARE entitled!! If you don't have it, ASK FOR IT! Now, READ IT! It should contain cancellation info. If your contract with dealership said nothing about "if you cancel then you are penalized", it seems like you should be able to call the dealership and cancel, and when they threaten you, ask them to point out where in the contract it says you can't cancel--and the product you bought comes complete with whatever is in writing. I agree you can't cancel the "pack" of fabric protection, etc--but I think someone said three of the ripoffs are insurances, which should be cancellable.

If you want to stand on principle and can afford it, GET A LAWYER, share your story with him and see what results you get. For that matter, have your lawyer call the dealership to cancel - I'd love to be a fly on the wall for THAT call!

If dealership refuses to give you documentation of what you "bought" is THAT something that the state consumer protection dept or BMW could/would force the issue on? Geez, for $3k OP has got to be entitled to SOMETHING in writing, you would think!


----------



## vkaminskyi (Apr 11, 2015)

We are a bit off topic. The main question is still if the dealership faked out original lease rental charge and then sold me products reducing rental charge amount. 

I finally registered with FS web site and sent them the question over secure connection. That way they know who I am and may respond. If not, I will send a paper letter.

I asked really simple questions: 1) Is the MF is the right one for me. 2) Can dealership play with my rent charge so much. 3) How come they gave me extra rebate. 4) How that all related to purchase of the products. That's it.


----------



## Ninong (May 20, 2014)

vkaminskyi said:


> I asked really simple questions: 1) Is the MF is the right one for me.


This was already answered. The answer is "yes." The money factor on the lease contract you signed is .00175. The allowable range for Tier 1 credit is .00135-.00175.



> 2) Can dealership play with my rent charge so much.


Apparently what happened is that you agreed to a monthly payment of $300/month that was based on a lease money factor that was not the same subvened (subsidized) money factor they used to prepare the contract you agreed to signed.



> 3) How come they gave me extra rebate.


Only the dealership can answer that question because it's from them, not BMWFS. Maybe it was because they ran out of stuff to add? I don't know.



> 4) How that all related to purchase of the products. That's it.


Because they switched from the much higher money factor to a much lower money factor, there was a lot of room in the agreed upon monthly payment of $300/month to include all of the extra "products" that you agreed to include.

All of those questions were previously answered if you want to go back and read all of the answers. You are not pleased with the way things turned out and that is understandable; however, you agreed to the contract because your signature on it is all that is needed to prove that fact.

Just remember this cold, hard fact. There was no deal until you signed the contract in the F&I office. If you had any questions or didn't understand what they were doing, you could have terminated the conversation and left. The only thing that counts is what you and the dealership signed. None of the previous conversations are legally binding. Only the actual signed lease agreement itself is the legally binding contract.

I know all of that sounds harsh but that's the situation you are in right now. I don't know of any way for you to change it. You can complain about the way you were handled and not give the dealership good marks if you ever receive a customer satisfaction survey but that's about it. You can read the fine print concerning cancelation for any of the stuff they added in the lease that has not already been done to your car. You can't cancel something if it has already been done. Any paint protection or interior protection that has already been applied cannot be canceled. That same applied to any VINs that have already been etched into the glass. If there are any refunds, they will go to BMWFS to be applied against your account according to whatever is their current policy. I don't believe there is any way they can recall the lease to redo it at the higher rate once it has been funded even if you do cancel whatever can be canceled. So that may be your only option.

Sorry for your unsatisfactory experience with this dealership.



P.S. -- Do you have anything in writing describing each of the various "products" that were included in your lease cap cost? You now have a printout from the dealership telling you exactly how much they charged for each of those "products."


----------



## Ninong (May 20, 2014)

erdoran said:


> If dealership refuses to give you documentation of what you "bought" is THAT something that the state consumer protection dept or BMW could/would force the issue on? !


BMW can't really do anything unless the issue involves their own manufacturer's warranty or an issue with their free maintenance. For an issue like this all they will do is refer the customer back to the dealer.

In each state, it is the office of the State Attorney General that handles this sort of complaint. In Florida that would be Pam Bondi. Most states, including Florida, have a Department of Consumer Affairs. It's part of the AG's office. Don't expect anything much to happen. You have much better luck if it's an insurance issue and you're going through the office of the State Insurance Commissioner, because insurance issues are more cut and dry.

What this amount to is a complaint about the lease contract but it's more about the selling process itself. However, the only thing that counts is the document that was signed by both the lessee and the dealer's representative. That's the final agreement and the only binding agreement.

Yes, I know exacty what you are saying. I'm not actually disagreeing with anything you said, I'm just saying that the only thing that matters is the signed contract. Your signature testifies that *you have read the entire contract and agree to all of its terms*.


----------



## vkaminskyi (Apr 11, 2015)

Got answer from FS:

_Money factors are determined by our independently owned and operated BMW centers, not BMW Financial Services. We recommend contacting your originating BMW center, BMW of Sarasota, in order to obtain more information regarding how their money factors are determined. If you would like to escalate above your BMW center, the appropriate avenue would be BMW of North America._

At this point looks like what the dealership did is legally allowed by BMW NA.

One more thing is that credit inquiry was made by SARASOTA AUTOMOTIVE (as indicated in my CreditKarma account).


----------



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

vkaminskyi said:


> Got answer from FS:
> 
> _Money factors are determined by our independently owned and operated BMW centers, not BMW Financial Services. We recommend contacting your originating BMW center, BMW of Sarasota, in order to obtain more information regarding how their money factors are determined. If you would like to escalate above your BMW center, the appropriate avenue would be BMW of North America._
> 
> ...


All the BMW FS rep stated was that the money factors quoted and used at the dealer level are determined by them.

It is an *absolute certainty *that BMW FS sets the rates AND the available mark-up on those rates.

They are deflecting.

But again they used an arbitrary rate in your quote to get you to agree to a monthly payment. They then used the rate that BMW FS will fund (pay the dealer) based on the rate chart BMW FS provides.

What they did is a questionable business practice, but not illegal unless specific under Florida state law.

For next steps, see Ninong's last post

~M~


----------



## vkaminskyi (Apr 11, 2015)

Ninong said:


> P.S. -- Do you have anything in writing describing each of the various "products" that were included in your lease cap cost? You now have a printout from the dealership telling you exactly how much they charged for each of those "products."


You will not believe, but I have nothing for the products other than print screen from their program that lists product abbreviations. That one I got after requesting for extra 3k.

I'm trying to get in touch with the dealership so they give me contracts for the products - no luck so far  Looks like I will need to do one more personal visit.


----------



## Ninong (May 20, 2014)

vkaminskyi said:


> Got answer from FS:
> 
> _Money factors are determined by our independently owned and operated BMW centers, not BMW Financial Services. We recommend contacting your originating BMW center, BMW of Sarasota, in order to obtain more information regarding how their money factors are determined. If you would like to escalate above your BMW center, the appropriate avenue would be BMW of North America._





vkaminskyi said:


> You will not believe, but I have nothing for the products other than print screen from their program that lists product abbreviations. That one I got after requesting for extra 3k.
> 
> I'm trying to get in touch with the dealership so they give me contracts for the products - no luck so far  Looks like I will need to do one more personal visit.


Yes, that response from BMWFS is exactly what they always say and what they must say by U.S. law. They are not a retail bank. They do not deal directly with the customers in the leasing or financing of cars. Their customer is the BMW dealership. Your initial contract is between you and the dealer, not you and BMWFS. Only after the dealership sells the contract to BMWFS do you have an account with them.

However, as I stated a few days ago, you are probably stuck with the lease you signed and can only make the best of an unfortunate situation by getting copies of anything that has not yet been done to the car that can be canceled for a refund, or at least a partial refund. But first you have to know exactly what you paid for. I think you have a right to at least know what they charged you for.

Good luck!


----------



## vkaminskyi (Apr 11, 2015)

Got copies of products agreements. Then checked the cancellation policy on the Safe-Guard web site. It says: _Cancellation requests must be filed either through the selling dealership or Safe-Guard. Cancellations will be processed at Safe-Guard within 5-10 days and then sent to your selling dealership to complete. Please allow additional time for your dealership to process any additional paperwork. All refunds will be issued by the selling dealer and applied to the balance of the loan unless proof of pay-off or trade is provided._

One more products is from ResistAll (EnviroGuard Next Generation). Haven't looked at cancellation policy yet, but think it's similar.

Do you think, should I cancel through the Safe-Guard or dealership? The funny part I was told that I got extra rebate and lower rental charge because I bought the products. So now if I cancel can they change rental charge or undo the rebate? I think no. What do you think?


----------



## Ninong (May 20, 2014)

I'm sorry but I don't know what to advise you to do at this point. I think you need to decide for yourself.


----------



## gohawks23 (Oct 27, 2008)

I'd advise you to never make a major purchase without somebody who knows what they are doing helping you.


----------



## jjrandorin (May 8, 2013)

vkaminskyi said:


> Got copies of products agreements. Then checked the cancellation policy on the Safe-Guard web site. It says: _Cancellation requests must be filed either through the selling dealership or Safe-Guard. Cancellations will be processed at Safe-Guard within 5-10 days and then sent to your selling dealership to complete. Please allow additional time for your dealership to process any additional paperwork. All refunds will be issued by the selling dealer and applied to the balance of the loan unless proof of pay-off or trade is provided._
> 
> One more products is from ResistAll (EnviroGuard Next Generation). Haven't looked at cancellation policy yet, but think it's similar.
> 
> Do you think, should I cancel through the Safe-Guard or dealership? The funny part I was told that I got extra rebate and lower rental charge because I bought the products. So now if I cancel can they change rental charge or undo the rebate? I think no. What do you think?


At this point, if I were you, I would just stop worrying about it and drive my car. I would ALSO post my story everywhere on social media that could be seen by that particular BMW dealership.

One their web page, on their Facebook if they had one, etc. I would do the best job I could to publically shame them, and I am totally NOT into that... however they completely took advantage of you and there is little you can do about it, beside warn others, and drive your bmw, and learn this life lesson.


----------



## Lionnutz (Jul 24, 2014)

Just stop worrying about the non existent "rebate". Your payment during the term of the lease will not change but at the end of ur lease u will be given a prorated refund of the items that were added on to ur deal. Or u can do nothing and let someone take more money from u than they should.


----------



## Orient330iNYC (Jul 30, 2002)

vkaminskyi said:


> Do you think, should I cancel through the Safe-Guard or dealership? The funny part I was told that I got extra rebate and lower rental charge because I bought the products. So now if I cancel can they change rental charge or undo the rebate? I think no. What do you think?


i *think* in order to change anything with the lease contract itself, the payments, etc
they would need to change the contract, which i dont think they can do since bmwfs already funded the contract and you are making payments


----------



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

They can't force you to recontract, and they don't need to.

Just follow the cancellation process on the documents _directly through the provider_ (i.e. Safeguard). They will then get the dealer documentation needed.

Don't let them keep your money.

You will not get cash, but you will gave a shorter lease as it will get credited to your last payment(s).

~M~


----------



## vkaminskyi (Apr 11, 2015)

Michael @ BMW Seattle said:


> They can't force you to recontract, and they don't need to.
> 
> Just follow the cancellation process on the documents _directly through the provider_ (i.e. Safeguard). They will then get the dealer documentation needed.
> 
> ...


On Resist All Paint protection the dealer applied a rebate to my total cash as payment for this product. Does it mean I still can get a refund on cancel?


----------



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

vkaminskyi said:


> On Resist All Paint protection the dealer applied a rebate to my total cash as payment for this product. Does it mean I still can get a refund on cancel?


More shenanigans. They can't tie a rebate to a Finance product purchase.

Go ahead and cancel it. What you are cancelling is the warranty from Resistall.

~M~


----------



## vkaminskyi (Apr 11, 2015)

Final update here. I canceled everything that I could and got back $1,859.12.

Thank everybody very much for your help, especially for advising waiting until the lease agreement sent to FS and then cancelling products! That worked.


----------



## ard (Jul 1, 2009)

I miss Ninong....


----------



## jjrandorin (May 8, 2013)

ard said:


> I miss Ninong....


Man I was thinking the EXACT same thing, after seeing this thread was updated and reading through it again to see what was up.

It was kind of hard reading those posts knowing we would never get more...


----------



## vkaminskyi (Apr 11, 2015)

jjrandorin said:


> Man I was thinking the EXACT same thing, after seeing this thread was updated and reading through it again to see what was up.
> 
> It was kind of hard reading those posts knowing we would never get more...


Oh my God, just read what happened to him. I am very sorry. RIP. Best wishes for his family and his friends.


----------

