# BMWFS Improves the MSD Program!



## lilskel (Jun 10, 2005)

What do you mean the special lease rate vs a regular lease rate? If I knew there was a special incentive to pre paying the lease I would have because I hasically have a seperate account just to pay for the car automatically so it's pretty much prepaid, but if there was a .0008 reduction in the rate I paid then that would have been $2100 over 3 years..


if you prepay the lease do you still have to pay the .0003 ED adder?


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## pfitzpa1 (Dec 1, 2005)

lilskel said:


> What do you mean the special lease rate vs a regular lease rate? If I knew there was a special incentive to pre paying the lease I would have because I hasically have a seperate account just to pay for the car automatically so it's pretty much prepaid, but if there was a .0008 reduction in the rate I paid then that would have been $2100 over 3 years..
> 
> if you prepay the lease do you still have to pay the .0003 ED adder?


I think the "specials" are the ones advertised on BMWUSA website under "shopping/Lease Offers". Could be wrong though..


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## Ågent99 (Jan 7, 2002)

lilskel said:


> if you prepay the lease do you still have to pay the .0003 ED adder?


0.0003 ED adder is always present no matter what AFAIK.


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## BayAreaBMWFan (Aug 8, 2004)

BMWFS has a base money factor (currently 0.0029) which applies to all cars.
Then they have model and term specific money factors. If you look at the lease rates posted in the sticky you will see the 0.0029 MF for cars which BMWFS does not want to subsidize (e.g. the 760Li) or for terms more than 36 months. Any MF less than the 0.0029 is a special MF for the particular model and lease term.

In the pre-paid lease you take 0.0008 off the base MF. Very often it is more than the special MF in place for the car you are looking for.


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## lilskel (Jun 10, 2005)

Oh well then forget about the prepay, the monthly MF's are always better than .0029, that would be the day I leased with a MF that high! I shoot for .0010


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## NukezDoc (Mar 1, 2006)

In figuring out my lease, I'm assuming that the total MSD is subtracted from the capitalized cost?


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

NukezDoc said:


> In figuring out my lease, I'm assuming that the total MSD is subtracted from the capitalized cost?


No, it isn't. If you have 7 security deposits, it's a .00049 reduction in the money factor, not the cap cost.


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## missing23 (Feb 1, 2002)

SARAFIL said:


> The Security Deposits are refunded if the car is totalled. BMWFS will only keep a portion of the Security Deposit to pay unpaid charges at the end of the lease... excess wear and tear, mileage, late payments, etc.


This is good info...but excess wear and tear on a totalled car?:eeps:


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## NukezDoc (Mar 1, 2006)

adrian's bmw said:


> No, it isn't. If you have 7 security deposits, it's a .00049 reduction in the money factor, not the cap cost.


Oops. I figured this out after playing with MS Excel for a while. Some serious wishful thinking on my part.


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## SARAFIL (Feb 19, 2003)

greginaz1 said:


> This is good info...but excess wear and tear on a totalled car?:eeps:


It was a general statement about all cases, not just the case when your car is totalled.


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## chicagolab (Feb 20, 2006)

*MSD for Owner's Choice???*

I live in Illinois and am wondering if MSD to bring down the money factor is available for the Owners Choice(lease style)program or just with traditional leases?


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## compwhiz (Jun 17, 2004)

No. MSD applies to leases only.


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## brkf (May 26, 2003)

My sales guy tried to talk me out of the 7 msds yesterday...lol. "They really don't make much of a difference." Really? I see a $37 a month savings. That's a nice chunk of dough over 24 months. 

Weird thing is, I did 10 MSDs with the same salesguy 3 years ago. At that time he tried to talk me out of it too.


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## missing23 (Feb 1, 2002)

blueguydotcom said:


> My sales guy tried to talk me out of the 7 msds yesterday...lol. "They really don't make much of a difference." Really? I see a $37 a month savings. That's a nice chunk of dough over 24 months.
> 
> Weird thing is, I did 10 MSDs with the same salesguy 3 years ago. At that time he tried to talk me out of it too.


Probably because like most BMW salespeople he doesn't understand them...


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## brkf (May 26, 2003)

greginaz1 said:


> Probably because like most BMW salespeople he doesn't understand them...


I was told today that if I had insisted on the 7 MSDs, then the dealership would have to change my MF of 0.00245 (ED extra of 0.0003 and dealer markup of 0.0002) to something higher. Am I missing something? Can they really do that? The MSD program is through BMWFS, not the dealership. How can they change my agreed upon MF if I choose to use MSDs?

Confused...


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## schley (May 26, 2005)

blueguydotcom said:


> I was told today that if I had insisted on the 7 MSDs, then the dealership would have to change my MF of 0.00245 (ED extra of 0.0003 and dealer markup of 0.0002) to something higher. Am I missing something? Can they really do that? The MSD program is through BMWFS, not the dealership. How can they change my agreed upon MF if I choose to use MSDs?
> 
> Confused...


wow... I'm curious about that answer as well, it would be another let down if we find out that you are being deceived by a dealer. :thumbdwn:


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## twodachs (Jun 24, 2005)

Does the MSD's then affect only the "rental" portion of the lease calculation and not the "depreciation" portion? I'm assuming the MSD dollar amount for the MF buy down is paid with a separate check to BMW Financial (ex. $4200 ... for a 7 SD buydown of .00049 on a previously calcuated lease of $594.00).


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## bennett64 (Mar 9, 2006)

My SA said New York doesn't allow multiple security deposits. True?


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## brkf (May 26, 2003)

Called another dealer and asked...same run-around: nobody uses those, bmw doesn't want people to use them, they don't make much difference, it's a waste of your money. WTF?

I'm not a math expert, BUT if 7 MSDS will drop an MF 0.00049 and you can see a $700-900 savings for 3 grand down over two years, that seems like a big difference and a great ROI.

Weirdest thing, I heard about MSDs from a Beverly Hills dealership in 03. That guy got my email about a possible 330i purchase and turned me on to MSDs and leasing. Ever since all other dealers/salesguys get ansty when I mention them.


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## x3Bruin (Oct 8, 2005)

blueguydotcom said:


> I'm not a math expert, BUT if 7 MSDS will drop an MF 0.00049 and you can see a $700-900 savings for 3 grand down over two years, that seems like a big difference and a great ROI.


It about 9.5% per year ROI - but tax free so is effectively about 12-13% return per year.

I think the F&I guys find it a hassle to enter the extra data into the form. :dunno:


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## Ågent99 (Jan 7, 2002)

BayAreaBMWFan said:


> So you had to bump it up to make it UNSTUCK?


 It was never a stuck thread so I asked for it to be stuck...but after my empty bump!


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## EuroBay (Apr 22, 2005)

*MSD combined with promotional MF ?*

My dealer tells me that multiple security deposits cannot be combined with a promotional MF ! :yikes:

Is this a correct statement? Can anyone confirm ? :dunno:

Cheers !


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## Ågent99 (Jan 7, 2002)

What's a promotional MF? Is that called _the base_ MF?


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## Ågent99 (Jan 7, 2002)

EuroBay said:


> My dealer tells me that multiple security deposits cannot be combined with a promotional MF ! :yikes:
> 
> Is this a correct statement? Can anyone confirm ? :dunno:
> 
> Cheers !


Okay, did some more reading...I see that the any promotional rate is anything below the base rate (whatever that is, 0.0022 something or other, I think). I think if you look at all the MF for 2 and 3 year leases for the 5-series, you'll fin 0.00225 pretty prevalent. I think that is considered the base MF. Anything below that would be considered a "promotional" rate.

Unfortunately, from what I can tell, the dealers can say and do whatever they please in regards to how they handle the MSD program. If your dealer won't play ball, find another dealer who will or at least inform your dealer that you will be forced to find another dealer who will.


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## BayAreaBMWFan (Aug 8, 2004)

The Base Rate is the BMWFS base rate 0.00305 or something obnoxiously high. You can take the 0.0008 reduction to anything but the base rate for PRE-PAID leases. The MSD is totally different. Both Chrishcheung and I did MSDs with super-promotional Dec/Jan E60 rates with ED. Things have just gotten better.


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## lilskel (Jun 10, 2005)

What?? You can take the .0008 reduction off of promotional MF's or just the base rate of .003?


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## EuroBay (Apr 22, 2005)

*Confirmed !*

Yes, you can avail of an additional rate reduction of 0.00049 on the MF, provided you park 7 additional security deposits. It does not matter if this is on a promotional lease rate or not.

Cheers ! :thumbup:


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## lilskel (Jun 10, 2005)

BayAreaBMWFan said:


> You can take the 0.0008 reduction to anything but the base rate for PRE-PAID leases. .


I know about MSD's I have 7 of them on my car...this prepaid info I believe is incorrect, isn't is only off of the base rate and not off of promotional rates


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## BayAreaBMWFan (Aug 8, 2004)

lilskel said:


> I know about MSD's I have 7 of them on my car...this prepaid info I believe is incorrect, isn't is only off of the base rate and not off of promotional rates


That should have read "_ *can't* take the.._"


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## DJHakim (Feb 15, 2006)

*if you have the cash...*



DoubleL said:


> My 19.3% was the two year total (or 9.65 per year in simple interest). Sorry to confuse anyone.
> 
> Also "carnuts" you are not deducting the Federal & State taxes you will have to pay on your 5% compound interest if you put your $4,900 in the "bank". All the MSD savings are tax free. :thumbup:
> 
> ...


I get taxed 5% on security deposits (and monthly payments), so it gets complicated (to me) in determining the benefit of the MSD program. Maybe the feds would ding me more on my earned dividends.

To weigh in giving up cash, I calculate the total deposit to total savings ratio. I get about 22% (e.g., $650 deposits, 36 mos) for 1 deposit up to 7 deposits. So, giving up more cash may not give more bang. If I were to hold on to the cash and earn *compounded* interest, I'd need 7-8% interest rate to earn (compunded over 3 years) as much as I'd save with the MSD program (with up to 7 deposits).

Tough call...I tend to like cash, though.


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## schley (May 26, 2005)

DJHakim said:


> I get taxed 5% on security deposits (and monthly payments), so it gets complicated (to me) in determining the benefit of the MSD program. Maybe the feds would ding me more on my earned dividends.
> 
> To weigh in giving up cash, I calculate the total deposit to total savings ratio. I get about 22% (e.g., $650 deposits, 36 mos) for 1 deposit up to 7 deposits. So, giving up more cash may not give more bang. If I were to hold on to the cash and earn *compounded* interest, I'd need 7-8% interest rate to earn (compunded over 3 years) as much as I'd save with the MSD program (with up to 7 deposits).
> 
> Tough call...I tend to like cash, though.


How do you get taxed on your MSD? I have never heard of this. It should be tax free, you give them the money to hold for the term to get the MF reduction and get it back when the term ends. No tax.


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## Ågent99 (Jan 7, 2002)

schley said:


> How do you get taxed on your MSD? I have never heard of this. It should be tax free, you give them the money to hold for the term to get the MF reduction and get it back when the term ends. No tax.


Rules on taxing and leasing vary quite a bit state to state. It pays to know the rules in your state. California is very, very amenable to leasing and so the MSD program is almost a no brainer if you can muster the ca$h.


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## schley (May 26, 2005)

***197;gent99 said:


> Rules on taxing and leasing vary quite a bit state to state. It pays to know the rules in your state. California is very, very amenable to leasing and so the MSD program is almost a no brainer if you can muster the ca$h.


I know they do vary (example illinois charging tax on the full negotiated price of the car, not the payment). However I wasn't aware of any state, NM in this case, that taxes you on a security deposit. Can anyone verify this? Illinois doesn't even do this and they are the WORST state to lease in, especially chicago, where you can pay up to 12% tax on the purchase or lease of a vehicle.

If you do in fact get taxed on the security deposit, you can then write off that along with sales tax on the vehicle to accumlate a bigger deduction on local sales tax, vs. the standard deduction for purchases.


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## Ågent99 (Jan 7, 2002)

bump


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## DJHakim (Feb 15, 2006)

schley said:


> I know they do vary (example illinois charging tax on the full negotiated price of the car, not the payment). However I wasn't aware of any state, NM in this case, that taxes you on a security deposit. Can anyone verify this? Illinois doesn't even do this and they are the WORST state to lease in, especially chicago, where you can pay up to 12% tax on the purchase or lease of a vehicle.
> 
> If you do in fact get taxed on the security deposit, you can then write off that along with sales tax on the vehicle to accumlate a bigger deduction on local sales tax, vs. the standard deduction for purchases.


Sad, but true. I get taxed on the total up-front fees. When MSD kicks in, it ups the up-fronts and ups the taxes accordingly. Yuk!!:bawling:


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## schley (May 26, 2005)

DJHakim said:


> Sad, but true. I get taxed on the total up-front fees. When MSD kicks in, it ups the up-fronts and ups the taxes accordingly. Yuk!!:bawling:


so it is possible that illinois isn't the worst state in our union for tax liability in leasing? Do you have to pay tax on the total cap cost? illinois yes

do you have to pay sales tax if you purchase the vehicle at lease end, although you already paid tax on it at the outset of the lease? illinois yes

do you have to pay sales tax on the total negotiated cap cost at the lease inception when assuming a lease in illinois upon assumption? illinois yes

f'd up for sure......


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## Ågent99 (Jan 7, 2002)

Wow, maybe CA isn't so expensive after all! :rofl:


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## lisalisa573 (Jun 4, 2006)

hi there..

i was wondering if anyone can help me?? i will be picking up my car next week and ive been doing a lot of research on here for all the things i will need to know about leasing. and thanks to all of you, i got $750 over invoice on my '07 525i. but the only thing is that ive read on here that i can do MSD for promo rate. when i talked to my salesman, he said that its not possible. he said that if i can get any documentation and others are doing MSD's on the promo, he would give it to me. can anyone help me w/ this? Is MSD's better than prepaid? Can doing the prepaid be done on the promo rate??

thanks in advance to everyone! u are simply the greatest!!

lisalisa


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## schley (May 26, 2005)

lisalisa573 said:


> hi there..
> 
> i was wondering if anyone can help me?? i will be picking up my car next week and ive been doing a lot of research on here for all the things i will need to know about leasing. and thanks to all of you, i got $750 over invoice on my '07 525i. but the only thing is that ive read on here that i can do MSD for promo rate. when i talked to my salesman, he said that its not possible. he said that if i can get any documentation and others are doing MSD's on the promo, he would give it to me. can anyone help me w/ this? Is MSD's better than prepaid? Can doing the prepaid be done on the promo rate??
> 
> ...


by the promo rate I think you mean the buy rate... and the answer is yes you can combine the two.... call bmwfs , to confirm to get a name and number and then call the salesman back to get the rate........


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## Ågent99 (Jan 7, 2002)

bump


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## mclaren (Jan 5, 2005)

lisalisa573 said:


> hi there..
> 
> i was wondering if anyone can help me?? i will be picking up my car next week and ive been doing a lot of research on here for all the things i will need to know about leasing. and thanks to all of you, i got $750 over invoice on my '07 525i. but the only thing is that ive read on here that i can do MSD for promo rate. when i talked to my salesman, he said that its not possible. he said that if i can get any documentation and others are doing MSD's on the promo, he would give it to me. can anyone help me w/ this? Is MSD's better than prepaid? Can doing the prepaid be done on the promo rate??
> 
> ...


Yesterday I leased a Z4 3.0is. BMWFS buy rate is .0005. I put 7 security deposits $3850,
and got .00001 rate. Then we added .0002 for the dealer so my rate is .00021 .5%.
What a deal ! This saved $40 per month or $1440 over the 36 months. Simple interest is 480/3850 = 12.47% tax free. If I had not done this the rate would have been .0007.


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## aztecsd (Jun 7, 2006)

In working a lease deal for a Z4 3.0si I found out that BMWFS will not allow a money factor rate of less than .00005. I was offered the buy rate on my lease of .0005. I was going to put 7 msds down to get it to .00001 but BMWFS would not allow it. So I could only put down 6 msds to get it to .00008. Still a nice deal though!


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## BOMOW (Jan 4, 2006)

I need your help!!

My dealer says that they don't now any thing about MSD program. I just contacted BMW finance and they are telling me that they haven't seen any lease agreement with more than 1 security deposit.

By looking at this forum I can tell that many people have benefited from this program but in my case both dealer and BMW finance representative are denying it!

Any help is appreciated.


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## lilskel (Jun 10, 2005)

I just did 7 MSD's for a total reduction of .00049


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## Jon Shafer (Dec 15, 2001)

BOMOW said:


> I need your help!!
> 
> My dealer says that they don't now any thing about MSD program. I just contacted BMW finance and they are telling me that they haven't seen any lease agreement with more than 1 security deposit.
> 
> ...


Damn!

Who is your dealer??


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## BOMOW (Jan 4, 2006)

BMW of Santa Maria, CA


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## Jon Shafer (Dec 15, 2001)

BOMOW said:


> BMW of Santa Maria, CA


Not at all surprised. Perhaps they have never done an MSD deal before.

I was the GSM of Cutter BMW (now BMW Santa Barbara), the next closest dealer to the South from 1998-2003. During that time BMW of Santa Maria averaged approximately 3-4 new BMWs sold per month. They used to be paired with a Chevrolet point, with which they did pretty well. Since I retired they opened a new BMW-exclusive showroom, and actually sell some BMW product now. They are still (obviously) lacking in critical experience. 69 miles to the South is BMW of Santa Barbara. They should be able to help you.


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## knmol (Jul 9, 2006)

SARAFIL said:


> In a bulletin released today, BMWFS made some changes to the MSD (multiple security deposit) program.
> 
> The current program is up to 5 over the required amount, and a 0.00005 reduction in the money factor for each one.
> 
> The new program is up to 7 over the required amount, and a reduction of 0.0007 per.


Does anyone have a copy of this bulletin? We are working on a lease deal for an X3 (ED in August) and the finance person at the dealership insistst that the rule is 5 MSD's for a reduction of .00005 per, rather than 7 for .00007 per. She showed us a bulletin from December 2005 with that rule, and we'd love to find a document showing her the change.

Thanks!


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## BayAreaBMWFan (Aug 8, 2004)

knmol said:


> Does anyone have a copy of this bulletin? We are working on a lease deal for an X3 (ED in August) and the finance person at the dealership insistst that the rule is 5 MSD's for a reduction of .00005 per, rather than 7 for .00007 per. She showed us a bulletin from December 2005 with that rule, and we'd love to find a document showing her the change.
> 
> Thanks!


Let her know that the program changed in the end of February and starting with the March program it is 7x 0.0007. Ask her to call BMWFS with you present in the office and on the speakerphone. I think the only constraint is that the money factor can not be lower than 0.00005 after the MSDs. In the case of the z4 3.0si it becomes 0.00001 after 7 MSDs.


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## knmol (Jul 9, 2006)

Good idea - thanks. 

We are also going to be talking to the other local dealer on Monday, because we're pretty annoyed by how this dealership has been operating. They are also trying to insist that we need to sign/start the lease a full 30 days before pick-up in Munich (they dispute the 14 day rule) - let me get this straight, you want me to start a 24 month lease, not drive for 30 days, then after 10 days of driving, give up the car again for another 6-8 weeks?? I don't think so!  

Anyway, we really appreciate all you guys on bimmerfest. We have learned a ton about leasing and ED and BMW pricing, which has helped us immensely. When we sat down at the leasing table the payment was around $480 (for an X3, 1000 over ED invoice, with heated seats, premium sound, metallic paint, premium pkg and nav - and nothing down), and by the time we got up to leave it was $299, and this is with the wrong info for the MSD program and a couple of extra fees we are disputing. We could not have done this without your help!!  

Thanks!


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## schley (May 26, 2005)

knmol said:


> Good idea - thanks.
> 
> We are also going to be talking to the other local dealer on Monday, because we're pretty annoyed by how this dealership has been operating. They are also trying to insist that we need to sign/start the lease a full 30 days before pick-up in Munich (they dispute the 14 day rule) - let me get this straight, you want me to start a 24 month lease, not drive for 30 days, then after 10 days of driving, give up the car again for another 6-8 weeks?? I don't think so!
> 
> ...


I ran into the same ignorant or flat out untruthful (take your pick) sales advisors when I negotiated my brothers ed lease and his mother in law's x3 lease. I called bmwfs and got a representative to confirm these issues. I got her name and hours worked and she agreed to answer any questions the dealership may have. 
Give your sales advisor the name and hours of the person you spoke to and give them a chance to rectify the situation before taking further action.

If the sales advisor still says that after talking to your contact person at bmwfs, then go down to the dealership and call the person together on speakerphone.

When I gave the first of 2 SA's that agreed to my offer a chance to call on his own, he still came back with his ignorant stance (max of 5 msd/30 days lease sign before ed). I told him to call my contact at bmwfs and if he still doesn't find out the correct answers that then I would be on my way down so we can both call my contact at bmwfs. He then told me that he would email me back in a 5 minutes. He said after checking through some "paperwork" that 7 msd's are indeed correct at .00007, however the dealership won't budge on signing 30 days before pick up date.

I told him that you know bmwfs that is funding the lease requires 14 and why would you need 30? I said I want to come down so we can confirm this together. He said regardless of bmwfs policy his dealership wouldn't allow a 14 day period.

I simply told him I'm going with another dealership and good day.

Gave the 2nd dealer who agreed to my offer my bmwfs contact and hours and he said he called and couldn't confirm 7 msd's at .00007 (still said it was 5 at .00005). He also said that I cannot combine the buy rate with msd. I told him I want to come down and call the bmwfs contact with you.

Again, he said let me email you back in 10 minutes. SURE enough he magically confirmed everything, after he in fact called himself, before his finance guy said he called but actually just said he called and didn't. (I wonder why he didn't want anyone to know the truth, could it be more $ for him).

The SA told me he was too embarrassed to sell me a car now, but did agree to my entire offer.

Did all negotiation through email and NO phone calls or personal visits. Caused minimal time committment and was able to work it out in a fraction of the time it would have taken in person or on the phone, and with less aggrevation.

I highly recommend offering through email and keeping that as the only means of communication until you have to come in to sign your lease.


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## lilskel (Jun 10, 2005)

I also wouldn't recommend ever stepping foot into a dealership...negotiated two ED leases so far at a very good over invoice price, buy rates, 7 MSD's, 14 days prior to pickup...before that bought my VW over the phone by calling about 20 dealerships and going back and forth on price, then went to pick it up 3 hours later


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## mecklaiz (Mar 20, 2003)

I'm really confused... at the start of this thread there's a statement made about not being able to do MSD with a special because when you do MSD you get the "base rate" which is pretty high. On the last page I read that you get do MSD even with a promo rate. So which is it? I'm really confused.


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## schley (May 26, 2005)

mecklaiz said:


> I'm really confused... at the start of this thread there's a statement made about not being able to do MSD with a special because when you do MSD you get the "base rate" which is pretty high. On the last page I read that you get do MSD even with a promo rate. So which is it? I'm really confused.


You can do MSD w/ the advertised buy rates you see on this forum. Enjoy making the 10% return minimum):thumbup:


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## lilskel (Jun 10, 2005)

MSD with promo buy rates...prepaid lease gets base rates, not promo rates


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## 760Lifan (Oct 6, 2004)

Just wanted to let you know that I'm viewer number 6,000 of this thread....:supdude: 
You guys can continue now...:rofl:


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## EvilM3 (Jul 12, 2002)

has anyone from NY did this recently? I ask my salesperson about this today for a Z4 and she said it is not done in NY.


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## EvilM3 (Jul 12, 2002)

OK. I just got off the phone iwth BMWFS and confirmed that the MSD program is not available in NY. bummer.


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## Greg220 (Mar 31, 2005)

Where exactly can I find information on the MFs (base and promotional) for each model? The content on the BMWFS website is reduced to minimum without much detail.


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## EvilM3 (Jul 12, 2002)

Greg220 said:


> Where exactly can I find information on the MFs (base and promotional) for each model? The content on the BMWFS website is reduced to minimum without much detail.


in the ******** Captive Lease Rates July 2006..or something like that.


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## hector (Jul 14, 2003)

SARAFIL said:


> In a bulletin released today, BMWFS made some changes to the MSD (multiple security deposit) program.
> 
> The current program is up to 5 over the required amount, and a 0.00005 reduction in the money factor for each one.
> 
> The new program is up to 7 over the required amount, and a reduction of 0.0007 per.


just finalized my lease yesterday on 335 coupe, did the 7 msds bringing the mf to .00151 from .00200. just wanted to thank Sarafil for bringing this info to light! thanks also to Greginariz (if you're out there) for all his advice on leasing which i followed to a tee (particularly about not putting money down and rolling acquisition fee into cap).


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## missing23 (Feb 1, 2002)

hector said:


> just finalized my lease yesterday on 335 coupe, did the 7 msds bringing the mf to .00151 from .00200. just wanted to thank Sarafil for bringing this info to light! thanks also to Greginariz (if you're out there) for all his advice on leasing which i followed to a tee (particularly about not putting money down and rolling acquisition fee into cap).


Thanks Hector and congrats!


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## hector (Jul 14, 2003)

greginaz1 said:


> Thanks Hector and congrats!


cono, just realized i added a couple of extra letters to your handle; greginariz vs. greginaz, lol


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## Adesh (Apr 22, 2006)

It's been 2 months since I got my lease and the local BMW dealer also told me that doing MSD's was not financially beneficial. He was very firm about it. 

Not sure why they do that...if the customer has done the analysis then the dealer just looks ignorant about their product (at best) or untruthful (at the worst). 

I did the analysis (as many on this forum have) and even had my CPA-sister look at it; the MSD program makes a lot of financial sense (assuming you have the cash to throw at it). 

This actually was the "last straw" for me with that dealer and I went to a different dealer to lease my car.


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## lilskel (Jun 10, 2005)

I LOOOOVE MSD's!! It's nice knowing I have money coming back to me at the end of the lease, and I can throw that right into more MSD's on the next car and it will be like I never missed the money


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## schley (May 26, 2005)

Adesh said:


> It's been 2 months since I got my lease and the local BMW dealer also told me that doing MSD's was not financially beneficial. He was very firm about it.
> 
> Not sure why they do that...if the customer has done the analysis then the dealer just looks ignorant about their product (at best) or untruthful (at the worst).
> 
> ...


I totally agree. They are either incompetent or not trustworthy, and you don't want to deal with either. Good move.:thumbup:


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## RVD (Sep 28, 2006)

i was able to get 8 MSDs yesterday on my lease. we were all set on getting 7 MSDs but my CA came up to me and said i could do 1 more because i'm a first time leaser (at least that's what i think he said). either way, i was able to do 1 more and it brought my MF down from 0.00166 to 0.00151. i'm not sure why it's not 0.00159 but i didn't sit there and argue. i got buy rate but had to add 0.00015 b/c i'm a first time leaser then subtracted all the MSDs.

RVD.


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## missing23 (Feb 1, 2002)

RVD said:


> i was able to get 8 MSDs yesterday on my lease. we were all set on getting 7 MSDs but my CA came up to me and said i could do 1 more because i'm a first time leaser (at least that's what i think he said). either way, i was able to do 1 more and it brought my MF down from 0.00166 to 0.00151. i'm not sure why it's not 0.00159 but i didn't sit there and argue. i got buy rate but had to add 0.00015 b/c i'm a first time leaser then subtracted all the MSDs.
> 
> RVD.


You do not have 8 MSD's per se...as a new BMWFS customer an SD is required to reduce the MF by 0.00015 (returning BMWFS customers do not have to do this)...the rest of your MSD's are at 7 times 0.0007 each...


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## schley (May 26, 2005)

RVD said:


> i was able to get 8 MSDs yesterday on my lease. we were all set on getting 7 MSDs but my CA came up to me and said i could do 1 more because i'm a first time leaser (at least that's what i think he said). either way, i was able to do 1 more and it brought my MF down from 0.00166 to 0.00151. i'm not sure why it's not 0.00159 but i didn't sit there and argue. i got buy rate but had to add 0.00015 b/c i'm a first time leaser then subtracted all the MSDs.
> 
> RVD.


Greg is correct. Your CA basically added .00015 from the outset to waive the initial security deposit. It is to your advantage to put down the initial security deposit. You will have a total of 8.


----------



## RVD (Sep 28, 2006)

ah, it all makes sense now. i didn't realize i had the option to put down the initial SD to avoid the 0.00015.

RVD.


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## bmwlifer (Sep 20, 2006)

*Returning BMWFS cutomer question*

I had leased a car a few years ago through BMWFS. Does the initial security deposit waiver for returning customers apply to me on a new lease, or is the deposit required to reduce the MF by .00015 since I'm not coming immediately from one lease to the next?


----------



## Kypt (Mar 29, 2006)

If you were to transfer your lease for whatever reason to another person, what happens to your deposits? Would the new person get the money at the end of the lease, or would it still come back to you?


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## mclaren (Jan 5, 2005)

Kypt said:


> If you were to transfer your lease for whatever reason to another person, what happens to your deposits? Would the new person get the money at the end of the lease, or would it still come back to you?


This has been dicussed before, the answer was the new person would get the deposits. The exact thing happened to one of the posters and when he found out he contacted the person who took over the lease and was, luckily, able to get him to send him the money.


----------



## pciguy (Sep 5, 2006)

is the SD calculated based on the payment amount + tax or just the payment amount?

Thanks,


----------



## missing23 (Feb 1, 2002)

pciguy said:


> is the SD calculated based on the payment amount + tax or just the payment amount?
> 
> Thanks,


Total payment including tax rounded to the next $50 increment.


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## shosan521 (Nov 14, 2006)

*MSD Calculation Question*

I think this is a simple question for someone to answer...

When you calculate the money you owe up front for MSD, I get the rounding. But, do you use the payment amount before or after the discount on the money factor? I'm assuming before...but maybe they are nice....


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## schley (May 26, 2005)

shosan521 said:


> I think this is a simple question for someone to answer...
> 
> When you calculate the money you owe up front for MSD, I get the rounding. But, do you use the payment amount before or after the discount on the money factor? I'm assuming before...but maybe they are nice....


You actually use the MF after the reduction, which is another advantage :thumbup:


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## shosan521 (Nov 14, 2006)

schley said:


> You actually use the MF after the reduction, which is another advantage :thumbup:


Yup...I just confirmed that with BMWFS. Then the dealer tried to tell me no, so I had him call and sure enough...we were right! Thanks all!


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## DavidNJ (Apr 30, 2004)

Can this be combined with an aggressive cap cost reduction? If so, how aggressive a reduction is allowed? To me, borrowing money on the lease does not seem advantageous. However, the guaranteed residual does, especially in a heavily optioned car.


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## shosan521 (Nov 14, 2006)

DavidNJ said:


> Can this be combined with an aggressive cap cost reduction? If so, how aggressive a reduction is allowed? To me, borrowing money on the lease does not seem advantageous. However, the guaranteed residual does, especially in a heavily optioned car.


Good or bad idea depends on each persons own cost of capital and or opportunity cost of capital and other associated subjective judgments unique to every individual...like our cars!

However, to answer your question the MSD's and the Net Cap Cost (Cost after Cap Cost Reductions) are mutually exclusive. Don't let your dealer tell you otherwise. The MSD's are provided on behalf of BMWFS, not the dealer and do not affect their commissions. Be prepared to battle with them a bit on this as most dealers are not educated on the MSD program or do not understand it.


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## schley (May 26, 2005)

DavidNJ said:


> Can this be combined with an aggressive cap cost reduction? If so, how aggressive a reduction is allowed? To me, borrowing money on the lease does not seem advantageous. However, the guaranteed residual does, especially in a heavily optioned car.


Why would you want to lower your apr on your depreciation (mf) by using msd's and then not use the advantage of that by lowering the depreciation amount in a cap cost reduction?

If you lower your interest rate to let's say .00101, which is 2.424% apr, you wouldn't want to pay down the $ you are paying that % interest on. You can do many more things wiht that money that would be more beneficial to you then saving 2.424% interest on your depreciation payments.

See what I mean?


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## carnutfan (Oct 28, 2006)

can someone tell me what socal/orange county dealers will do MSDS? I want to put down 8 as a new BMWFS customer. My dealer is giving me heartache on this. They either don't get it or don't want to get it. Since they're the largest, I can't figure out why, but I'm at the end of my current lease and can't screw around with them anymore. Thanks.


----------



## Gianny (Nov 22, 2006)

*Los Angeles Area dealer that accepts MSD*

Check your PM.


----------



## goheels98 (Dec 12, 2006)

Hi--I am new to this site and I appreciate all of the valuable information on this thread. I ordered a 2007 525i which will be docking on 12/14 and will be ready for pick-up sometime shortly after that.

I have already negotiated the lease, but I haven't signed any documentation yet. This is the first I've ever heard of MSDs though--is it too late for me to do this? I was planning to put $2,750 down with some of it going to a cap cost reduction. Sounds like I should shift that to MSDs though... Thoughts?

Also, random question -- is gap insurance provided by BMWFS or your own insurance carrier? If BMWFS, is that included, can it be negotiated, or is there an additional fee? Sorry if these gap insurance answers are available elsewhere....haven't found it yet!

Thanks in advance!


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## schley (May 26, 2005)

goheels98 said:


> Hi--I am new to this site and I appreciate all of the valuable information on this thread. I ordered a 2007 525i which will be docking on 12/14 and will be ready for pick-up sometime shortly after that.
> 
> I have already negotiated the lease, but I haven't signed any documentation yet. This is the first I've ever heard of MSDs though--is it too late for me to do this? I was planning to put $2,750 down with some of it going to a cap cost reduction. Sounds like I should shift that to MSDs though... Thoughts?
> 
> ...


you can renegotiate your lease with MSD's factored in. Gap insurance is included with all bmwfs leases.


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## Ferrara (Dec 10, 2006)

Gianny said:


> Check your PM.


Can I get that list, please? I am considering doing MSD on my next purchase in Spring 07


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## SignHere (Apr 26, 2006)

No renegotiation is required. Just inform your CA that you intend to take advantage of the MSD program provided by BMW FS. It costs the dealership nothing and saves you money. Everybody wins!


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## goheels98 (Dec 12, 2006)

Thanks for the info, schley and SignHere!


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## BloodRedHog (Mar 9, 2004)

Guys, this is the most informative thread in some time. Can I ask a few questions...

I am no finance expert, so bear with me...

The MSD program is basically a way to lower the money factor by 1.68% per deposit, which equals the lease payment (rounded), and you are allowed up to 7?

So I could lower the money factor by 11.76%?

And I get those deposits back?

So I am making a return on money during the lease better than any CD out there, right?

If I not a current BMWFS user, then the promo money factor will be raised by .0015, but I can use an initial SD to waive that, and still have 7 more to use?

I am looking at the X5 and the lease right now is .00322. So I would one SD to keep that from being raised to .00472?


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## kyfdx (Aug 4, 2003)

BloodRedHog said:


> Guys, this is the most informative thread in some time. Can I ask a few questions...
> 
> I am no finance expert, so bear with me...
> 
> ...


You are missing a ZERO.. .00015..

.00322 would then be .00337

It is a good deal, but not quite as good as it would be with one less zero.. ;-)

The MSDs are .00007 (4 zeroes)... X 7 MSDs = .00049 reduction

regards,
kyfdx


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## BloodRedHog (Mar 9, 2004)

kyfdx said:


> You are missing a ZERO.. .00015..
> 
> .00322 would then be .00337
> 
> ...


Thanks kyfdx...let me make sure I get this.

Money factor on X5 = .00322
1 SD paid keeps MF from going to .00337.
2 SD's move the MF from .00322 to .00315...etc. up to
8 SD's move the MF from .00322 to .00273.

Effectively, buying down the lease MF from 7.728% to 6.552%.


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## schley (May 26, 2005)

BloodRedHog said:


> Thanks kyfdx...let me make sure I get this.
> 
> Money factor on X5 = .00322
> 1 SD paid keeps MF from going to .00337.
> ...


You are correct. But remember that the savings you are realizing is paid for by a temporary investment that you get back. You aren't giving bmw any addiational money for the lease as all MSD's are refunded provided no excess wear and tear or mileage. You will get a total 14-20% return if you invest the monthly savings you are realizing each month. The trick to maxing it out is that investing of the monthly savings in something like 5% account in whatever you want. Then you pick up several % on your total return.


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## BloodRedHog (Mar 9, 2004)

Well, I am attracted to the lease concept, especially with the MSD program...but, no way am I touching the X5 until they lower the MF.

I was looking to trade-in my 04 330i and was going to get the 335i for me and an X5 for the wife.

But the 335i has a MF of .0015 which makes it very attractive vs. buying through my CU (5.9% for 60 months).

However, the MF on the X5 at .00322 means higher payments vs. buy...so I guess I wait...

and I wanted to do this for Christmas...


----------



## funrevn (Nov 22, 2006)

I leasing an X3 that will arrive in Early Jan 2007. Quick question. I leased a Mini S several years ago, sold it to a friend Leased and S4 and now want to get the X3 for the wife. Do I qualify for the waiver of .00015 SD for first time BMW lease customer?

Thanks.


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## schley (May 26, 2005)

funrevn said:


> I leasing an X3 that will arrive in Early Jan 2007. Quick question. I leased a Mini S several years ago, sold it to a friend Leased and S4 and now want to get the X3 for the wife. Do I qualify for the waiver of .00015 SD for first time BMW lease customer?
> 
> Thanks.


If you are a current bmwfs customer yes. If not then most likely no. I have heard of some who were within a few months of their lease termination qualifying but not longer than that.


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## SignHere (Apr 26, 2006)

You qualify up to 6 months from the date of your last BMW FS contract ending.


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## schley (May 26, 2005)

SignHere said:


> You qualify up to 6 months from the date of your last BMW FS contract ending.


I have a question about the qualification. I will never be in this situation but if you are a bmwfs customer with a financed loan, not lease, would you still qualify for the SD waiver?


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## SignHere (Apr 26, 2006)

No, only previous lease customers qualify.


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## Luka (Aug 31, 2006)

What if you are currently lesing, and want to lease another car before your current lease ends?(sorry if this question was allready answered)

```

```


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## sengopalcricket (Dec 24, 2006)

*525 ED invoice; MF; MSD; Acquisition fee*

Hi Guys,
BMW is my dream car. I am ready to have my first before the year end. By sheer luck I stumbled upon this forum. After spending most of the last 48 hrs on this 'amazing, imformative and helpful' site, I am now leaning towards ED. A few quick questions:
1. Where can I get the invoice for ED?
2. MF for ED?
3. Is MSD possible for ED?
4. Can the acquisition fee be waived?
4. Do we get to pick the delivery date in Munich (I mean after the time frame for the production date) - the reason being, I cant travel till Mar beginning and if I place the order before year end to get the current leasing program, the car should be ready before Feb end I guess?
5. Does the lease date start from the time one takes delivery of the car in Munich?
Thanks for all the help.
P. S. The link http://www.bariaur.com/e39/EDsavings.html doesnt seem to work. Is there any other site to deal with ED?


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## BloodRedHog (Mar 9, 2004)

lilskel said:


> Are you SERIOUS!?!? My payment with $625 acquisition built into the capitalized cost is $346.79. If I take that acquisition out and bump the MF up .0003, my new payment is $341.77, that's amazing, even better if your dealer is stuck on charging $825 for the acquisition :thumbup:


Can we confirm this? I am about to lease a 335.

Lease rate is .0015
I pay one SD to prevent a first-time lease user mark-up, right?
I then allow a .0003 mark-up to roll in acquisition fee?
I'm then at .0018.
I can then pay 7 SD's (.00007 * 7= .00049) to get down to .00131?


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## lsleelee (Jan 5, 2007)

schley said:


> The buy rates can be marked up a max of .00055


I thought it was 0.0004. A recent change?


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## valdeztke (Nov 5, 2006)

Here to learn


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## schley (May 26, 2005)

lsleelee said:


> I thought it was 0.0004. A recent change?


you didn't finish the quote. it said if you waived your SD and aren't a present bmwfs customer.


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## SignHere (Apr 26, 2006)

You mean

"...aren't a present BMWFS LEASE customer."


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## TropicsX5 (Jan 14, 2007)

SARAFIL said:


> In a bulletin released today, BMWFS made some changes to the MSD (multiple security deposit) program.
> 
> The current program is up to 5 over the required amount, and a 0.00005 reduction in the money factor for each one.
> 
> The new program is up to 7 over the required amount, and a reduction of 0.0007 per.


y


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## SIILENTKARMA1 (Jan 14, 2007)

One of the sales person at Rallye Bmw in Roslyn, NY told me that in new york they only allow 3 to 4 security deposit is this right?....or is this guy bull....


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## Leasing Motors (Dec 15, 2006)

*Msd*

It was always my understanding that you could do anywhere between 2 and 7. You get 0.0007 point off for each MSD that you put down.

Best of Luck,


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## schley (May 26, 2005)

SIILENTKARMA1 said:


> One of the sales person at Rallye Bmw in Roslyn, NY told me that in new york they only allow 3 to 4 security deposit is this right?....or is this guy bull....


SD is limited by NY state law to 750 I believe thus it precludes any MSD possibility.



Leasing Motors said:


> It was always my understanding that you could do anywhere between 2 and 7. You get 0.0007 point off for each MSD that you put down.
> 
> Best of Luck,


NY doesn't allow it because of the SD cap.


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## SIILENTKARMA1 (Jan 14, 2007)

Thanks Schley.....


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## sk330i (Oct 25, 2002)

Schley is right. The security deposit is capped at a max of $749 in NY. I put down 1 MSD when I signed the new lease last night. I am a current BMWFS customer so I didn't have to pay the "mandatory" SD.


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## SIILENTKARMA1 (Jan 14, 2007)

sk330i said:


> Schley is right. The security deposit is capped at a max of $749 in NY. I put down 1 MSD when I signed the new lease last night. I am a current BMWFS customer so I didn't have to pay the "mandatory" SD.


I was told by another dealer not to long ago over the phone that security deposit would not make a difference in the money factor, the person kept saying the only thing that would decrease your payments is the cap cost reduction which is down payment. i said am not looking to put a down payment. i said it was to my knowledge security deposits will decrease your money factor. she said no. Now am thinking is she saying no because of the limit we have here in Ny, which really wont make a difference since we are not able to put down 7-9 deposits?....

and the dealer i mention in a earlier post i forgot to mention, the person said i would be able to put at most 3-4 but it will not decrease it by .00007 each, but by .00004 or .00005, since he said it has changed..would this make a big difference in my money factor which eventually would lower my lease payment per month due to lower lease interest.

Are these 2 dealers correct?


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## schley (May 26, 2005)

SIILENTKARMA1 said:


> I was told by another dealer not to long ago over the phone that security deposit would not make a difference in the money factor, the person kept saying the only thing that would decrease your payments is the cap cost reduction which is down payment. i said am not looking to put a down payment. i said it was to my knowledge security deposits will decrease your money factor. she said no. Now am thinking is she saying no because of the limit we have here in Ny, which really wont make a difference since we are not able to put down 7-9 deposits?....
> 
> and the dealer i mention in a earlier post i forgot to mention, the person said i would be able to put at most 3-4 but it will not decrease it by .00007 each, but by .00004 or .00005, since he said it has changed..would this make a big difference in my money factor which eventually would lower my lease payment per month due to lower lease interest.
> 
> Are these 2 dealers correct?


Bottom line is this: If you are going to register the car in NY then you can do a maximum total of SD of 750. Thus you don't have an opportunity to go over that meaning NO MSD under any circumstances in the state of NY. Anything in terms of you checking ot see if the dealer is truthful or not is immaterial. With that premise you can answer all questions on your own.


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## SIILENTKARMA1 (Jan 14, 2007)

schley said:


> Bottom line is this: If you are going to register the car in NY then you can do a maximum total of SD of 750. Thus you don't have an opportunity to go over that meaning NO MSD under any circumstances in the state of NY. Anything in terms of you checking ot see if the dealer is truthful or not is immaterial. With that premise you can answer all questions on your own.


No problem.


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## sk330i (Oct 25, 2002)

schley said:


> ...meaning NO MSD under any circumstances in the state of NY.


You can do MSD in NY. However, if you are REQUIRED to put down a SD (ie. new BMWFS lease customer) then you can't put any additional SD to lower the mf since it will most likely go over the limit of $749, unless your monthly payment is less than $350.

I voluntarily put 1 SD down to lower the mf since SD is not required for me as a current BMWFS customer.


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## schley (May 26, 2005)

sk330i said:


> You can do MSD in NY. However, if you are REQUIRED to put down a SD (ie. new BMWFS lease customer) then you can't put any additional SD to lower the mf since it will most likely go over the limit of $749, unless your monthly payment is less than $350.
> 
> I voluntarily put 1 SD down to lower the mf since SD is not required for me as a current BMWFS customer.


you are correct, thanks for clarifying.


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## BayAreaBMWFan (Aug 8, 2004)

BTW, just confirmed by JSpira that you can buy a car from a NJ/CT dealer and do MSDs while still registering the car in NY


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## schley (May 26, 2005)

BayAreaBMWFan said:


> BTW, just confirmed by JSpira that you can buy a car from a NJ/CT dealer and do MSDs while still registering the car in NY


wow that is a great loophole that I had never heard and should be kept in mind by anyone in the the big apple or upstate or anywhere in NY for that matter.


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## Steve Espo (Jan 15, 2007)

I have a question regarding the "special Lease offers" on the BMW website. 335i Coupe Base with Auto trans $499/mo. That equates to a .00102 MF, considering a .0003 add for Euro delivery the rate should be .00132 if you allow .0004 dealer add I should at worst get a .00172 MF on a 36 month lease with $2500 down. Is my logic correct or are the advertised deals just a sham? My rate offer was .00245 with .0003ED and .0004 dealer mark up. This would get the rate down to .00175 which is what the Captive rate is listed as on the sticky post for Jan. My head is spinnin g, HELP


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## schley (May 26, 2005)

Steve Espo said:


> I have a question regarding the "special Lease offers" on the BMW website. 335i Coupe Base with Auto trans $499/mo. That equates to a .00102 MF, considering a .0003 add for Euro delivery the rate should be .00132 if you allow .0004 dealer add I should at worst get a .00172 MF on a 36 month lease with $2500 down. Is my logic correct or are the advertised deals just a sham? My rate offer was .00245 with .0003ED and .0004 dealer mark up. This would get the rate down to .00175 which is what the Captive rate is listed as on the sticky post for Jan. My head is spinnin g, HELP


I didn't read your post except for "are the advertised deals just a sham". YES THEY ARE. You can negotiate a better deal farily easily with knowledge on this forum.


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## missing23 (Feb 1, 2002)

schley said:


> I didn't read your post except for "are the advertised deals just a sham". YES THEY ARE. You can negotiate a better deal farily easily with knowledge on this forum.


+1

Scrap trying to recreate the lease 'special' stuff you see...it is a waste of time.

By using this site you can find out what a fair profit over invoice is for the model you want...find out the buy rate MF and corresponding residual for the term you want...negotiate cap, MF and acquisition fee with your dealer...investigate ED and MSD programs...done!

Hundreds of discussions on this site regarding the above.


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## kyfdx (Aug 4, 2003)

greginaz1 said:


> +1
> 
> Scrap trying to recreate the lease 'special' stuff you see...it is a waste of time.
> 
> .


Exactly

The one piece of information that the advertisement doesn't give? Selling price. You can't reverse-calculate the other numbers without it.


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## krburrell (Aug 17, 2005)

*Los Angeles Area dealer that accepts MSD*



carnutfan said:


> can someone tell me what socal/orange county dealers will do MSDS? I want to put down 8 as a new BMWFS customer. My dealer is giving me heartache on this. They either don't get it or don't want to get it. Since they're the largest, I can't figure out why, but I'm at the end of my current lease and can't screw around with them anymore. Thanks.


I'm in the market for an 07 X5. Can someone please give me this info for socal/orange county dealers?

Thanks,

Keith


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## jtla (Jan 1, 2007)

*Los Angeles Area dealer that accepts MSD*

krburrel, check your PM.


----------



## Ant 550 (Nov 28, 2006)

*Need help with lease question*

Can you please tell me what you mean by 7SD do you mean 7 sec deposits? What is this vs a cap cost red payment? I'm not understanding this for example if a lease was 1000 a month and you put down 3000 this would reduce your payment correct. So what does this 7 SD mean in this equation if applied. I would really appreciate some insight into this I want to go into the dealer with this info.
Thanks


----------



## mason (Jun 8, 2006)

Ant 550 said:


> Can you please tell me what you mean by 7SD do you mean 7 sec deposits? What is this vs a cap cost red payment? I'm not understanding this for example if a lease was 1000 a month and you put down 3000 this would reduce your payment correct. So what does this 7 SD mean in this equation if applied. I would really appreciate some insight into this I want to go into the dealer with this info.
> Thanks


It means 7 extra security deposits, say $450X7. Capital Cost Reduction is basiaclly down payment. It goes to lower the capital value of the lease. There is nothing to do with security deposits. SD is like deposit you give to landlord when leasing a place. The purpose of extra SD is to lower the interest rate on the lease.


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## Ant 550 (Nov 28, 2006)

*Reply*

Do all manufactures do this besides BMW I might get an Audi for my wife what do I ask for how many sd can I put down to lower the interest rate? Please excuse me but I'm not that familar with leasing


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## NASA43 (Jul 19, 2003)

Ant 550 said:


> Do all manufactures do this besides BMW I might get an Audi for my wife what do I ask for how many sd can I put down to lower the interest rate? Please excuse me but I'm not that familar with leasing


Most of them do, though they don't really advertise it. I know Audi does because I was looking at them several years ago. They aren't all the same though in how much it reduces the money factor. Find an Audi board to get the specifics on their program.


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## eazy (Aug 20, 2002)

What happens to the MSDs if you total the car?


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## lilskel (Jun 10, 2005)

You get them back like any security deposit


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## newbeginnings (Mar 19, 2007)

I was also told that MSD's do not apply in NY. Any truth to this?


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## schley (May 26, 2005)

newbeginnings said:


> I was also told that MSD's do not apply in NY. Any truth to this?


Total truth limit is 749 total for deposits. You can do them outside of NY and register in NY however as a way around it.


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## ProRail (May 31, 2006)

I'll see your MSD...and I'll raise you 1. Why would anybody need more than 1 security deposit? Is that like nuclear overkill?


----------



## newbeginnings (Mar 19, 2007)

Its all explained in prior posts. thnx schley


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## tekmiester (Mar 24, 2007)

*Buying in NY but registering in NJ*

What if you life in a different state (and will register the car there) but buy the car from an NY dealer... Does the $750 limit applly?


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## Davisjl (Jun 6, 2006)

ProRail said:


> I'll see your MSD...and I'll raise you 1. Why would anybody need more than 1 security deposit? Is that like nuclear overkill?


To lower the MF and basically lower the finance charges you will encure on the lease.

If you put money down in a cap reduciton and total the car, you lose that money. If you do MSD, and total your car you get the MSD back.

I have a question...

What are the termination fee associated with the BMW lease? Do they requrie you to have Gap insurance to cover those fees in case you total or get your car stolen? If so how much does the gap cost?


----------



## The BoatMan (Apr 2, 2002)

Davisjl said:


> To lower the MF and basically lower the finance charges you will encure on the lease.
> 
> If you put money down in a cap reduciton and total the car, you lose that money. If you do MSD, and total your car you get the MSD back.
> 
> ...


Gap insurance is included with BMW Financial leases. There is a disposition fee of around 350. It is waived if you lease another BMW within 6 months of your lease end.


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## reactor (Apr 11, 2004)

I really need everyones help here since I have been away from the BMW scene for over 1 year now. I ordered a 335xi listing for 49,900. If I put a total of $8K down my payment is $648 for 24mo with 25K miles per year for a total of 50K miles. I was given a .03 money factor yet I am seeing a .0275 posted on the forum...Is the .0275 what BMWFS is offering? How can I show my dealer this? Also, how can I ask for the multiple security desposits since I am putting $8K down. The dealer waived the security deposit but added it to the totla of the money factor of .0315. Thanks for you help in advance.


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## schley (May 26, 2005)

reactor said:


> I really need everyones help here since I have been away from the BMW scene for over 1 year now. I ordered a 335xi listing for 49,900. If I put a total of $8K down my payment is $648 for 24mo with 25K miles per year for a total of 50K miles. I was given a .03 money factor yet I am seeing a .0275 posted on the forum...Is the .0275 what BMWFS is offering? How can I show my dealer this? Also, how can I ask for the multiple security desposits since I am putting $8K down. The dealer waived the security deposit but added it to the totla of the money factor of .0315. Thanks for you help in advance.


Holy shiznits I'm glad you asked! I bet your ass is happy for you won't be getting screwed now!

Bro DON"T put down the cap cost reduction down payment. Definately do MSD's and DON'T waive the initial SD, put down a total of 8 and that will keep your MF away from the potential .00015 rate adder for waiving it.

Here are the numbers for your 335xi

24 Month - Residual 71% of MSRP - .00275 Base Rate
36 Month - Residual 61% of MSRP - .00275 Base Rate

You can buy miles at .15 cents a mile from the outset above 15k or .16 a mile up to 6 months from lease termination. I would do that instead of giving them your money interest free for 18-30 months depending of if you went 2/3 year lease. You pay 1 penny more per mile but you get that money to gain interest till 6 months before lease termination and that will eclipse the 1 penny per mile.

Thus if you are doing 20k extra at the outset you are basically rolling in 3000 of extra mileage to amoritize over the lease so you will pay tax on that. If you wait until 6 months until lease termination it will be 3200 but you get 3000 to invest for 18 months and at 5% interest a year 225 return minimum. Plus if you need the cash you have it. Now you will pay tax on it but if you don't use whatever mileage you purchase you get refunded for hte unused portion as well as the tax paid on it.

You can get the buy rate and do MSD's, but considering your mileage don't lower your mileage allottment to 12k as that isn't for you needless to say.


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## reactor (Apr 11, 2004)

Can I do multiple SD in NY State? Also, if I don't put down the large amount of money ----the payment is very high...Is the SD applied in the same way as the $8000 down payment?


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## reactor (Apr 11, 2004)

Also, in my case buying the mileage upfront, lowered the residual value....So it is better to buy it at the end?


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## snohman (Feb 21, 2007)

reactor said:


> Can I do multiple SD in NY State? Also, if I don't put down the large amount of money ----the payment is very high...Is the SD applied in the same way as the $8000 down payment?


From what I've read it seems as though in the state of NY you can only put down as many deposits that would total up to $749.00. BUT, it seems like there's a loophole where NY residents would be able to lease the car from an out of state dealer and use the multiple security deposits.

check out this thread: http://www.bimmerfest.com/forums/showthread.php?t=192671

the SD's will not be applied as a down payment, but it will lower your money factor by .00007 for each SD you put down (Max of 7 except for in NY). The SD's do not affect your cap cost, but the money will be returned to you at the end of the lease (after any damages, etc are deducted, I'm sure) in return for a savings on your monthly payment.


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## fszatko (Dec 18, 2006)

*Not worth it?*

It doesn't seem that adding the 7 SDs is ultimately that huge of a savings. Here's my breakdown.

335xi sedan via ED, May 2007
US MSRP $48175
ED Invoice $41695
Cap Cost $43770 ($41695 ED invoice + $1250 dealer profit + $825 aquisition fee)

36 months, 15000 miles/year
61% residual
MF 0.00275 + 0.003 ED adder = .00305
5.1% local tax rate

Monthly payments $654.42 (first month due at signing, no money down)

If I pay 7 additional SDs ($654 rounded to $700 each) = $4900

MF reduced by .00007 x 7 = .00049 for final MF of 0.00256

That changes my monthly payment to $616.74/month - a savings of $37.68/month or $1356.48 over the life of the lease.

$1356 out of $4900 investment over 3 year least is a 27.7% return. Sounds pretty good all at once, but that's also 9.22% per year.

Although it's not guaranteed, a good 3 year investment of the same $4900 should yield more than 9.22% per year.

It's a risk - but a risk I think I'll take. I'm skipping the extra SDs and investing the money elsewhere - hoping for a 10% return per year. Most of my retirement investments have been doing this lately.

Anyone see this in a significantly different light? Thanks for your thoughts.


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## schley (May 26, 2005)

fszatko said:


> It doesn't seem that adding the 7 SDs is ultimately that huge of a savings. Here's my breakdown.
> 
> 335xi sedan via ED, May 2007
> US MSRP $48175
> ...


If you take the monthly savings from MSD's and invest THAT you will get another 1-2% on your total MSD's return. That is yet another trick to maximizing your return. Thus take that 37 bucks or whatever each month and invest that and rolled over 1 month to the next will give you some gain to help make your decision easier.

MSD's is a no brainer safe tax free investment, enjoy.


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## BayAreaBMWFan (Aug 8, 2004)

fszatko:
You have to look at your POST-TAX returns.
Assuming your marginal tax rate is at least 30***37; (state + federal), you need to earn 13***37; to break even at 9***37;. Now tell me one investment which is returning 13% backed by the credit quality of BMW and secured by a $50K car? AAA bonds are not yielding more than 6-7% so this is a no brainer investment.
Also MSDs work best with high residual leases (24 month ED leases come to mind). And before you sign up for a 36 month lease, do run the numbers for a 24 month ED lease. They are typically better than 36 month ED numbers. And also put a little bit down in cap costs to get the monthly payment to $649.99 which will get your SD to $650.


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## papitosabe (Apr 24, 2007)

Great Thread!!!!!!!!!!! :thumbup:


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## Orient330iNYC (Jul 30, 2002)

reactor said:


> Can I do multiple SD in NY State? Also, if I don't put down the large amount of money ----the payment is very high...Is the SD applied in the same way as the $8000 down payment?


you can do MSDs in NY state, but you must execute the deal with a non NY dealer.

an $8000 down payment is a very bad idea-- all you are doing is prepaying the lease, and you can lose all the money if the car is totaled. safer to leave the 8K in an interest bearing account and draw from it monthly to supplement the payments. down payments are never refunded and you can lose all of it if the insurance value of the car is less than the lease payoff amount. gap insurance pays off the lease, but doesnt repay your downpayment.

I would take the 8 SDs out of that 8K and tuck the remainder into a bank account to use to supplement your monthly payments.


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## papitosabe (Apr 24, 2007)

piku said:


> I have a question.
> 
> Let's say my monthly payment before MSD was $463 and after MSD is applied it goes down to $438. Will the security deposits be, $500 or $450 each?
> 
> .





greginaz1 said:


> It would be $450.


Is this accurate? in order to get the monthly payment(security deposit amount), the original MF is one of the variables involved. So you actually have to do the formula again with the new MF?


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## djlfp (Dec 5, 2004)

papitosabe said:


> Is this accurate? in order to get the monthly payment(security deposit amount), the original MF is one of the variables involved. So you actually have to do the formula again with the new MF?


It is accurate, but you do not have to recompute because the lower payments will not lower the sd again.


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## mgm100 (May 30, 2007)

Regarding what happens to MSDs if a car is totaled: 

There have been varying opinions on this so I did some research this morning. I got this info from calling the consumer line and speaking with the agent there as well as a specialist in the insurance department.

If you finance a car, you do not get gap insurance from BMWFS. In this case, the MSDs will be used to fund the gap in value if a car is totaled and therefore the owner will lose the MSDs.

If you lease a car, you do have gap insurance (it is built into the rate from BMWFS). In this case, the gap insurance will fund the gap in value if a car is totaled and the MSDs will be safe and returned to the lessee.

I hope this is useful. Please note that dealers/business managers sometimes do not understand this differentiation but that they can confirm it by calling BMWFS.


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## AEC (Jan 19, 2003)

MGM,

Don't MSDs only relate to leasing situations? Why would there be a security deposit for financing? Wouldn't that be a downpayment and not a security deposit?


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## missing23 (Feb 1, 2002)

papitosabe said:


> Is this accurate? in order to get the monthly payment(security deposit amount), the original MF is one of the variables involved. So you actually have to do the formula again with the new MF?


Yep.


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## BravoMikeWiskey (May 28, 2007)

mgm100 said:


> Regarding what happens to MSDs if a car is totaled:
> 
> There have been varying opinions on this so I did some research this morning. I got this info from calling the consumer line and speaking with the agent there as well as a specialist in the insurance department.
> 
> If you finance a car, you do not get gap insurance from BMWFS. In this case, the MSDs will be used to fund the gap in value if a car is totaled and therefore the owner will lose the MSDs.


There are no security deposits on finance contracts.


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## Cabby (Apr 1, 2003)

Very Informative!! I read every post as to avoid asking something stupid.

I wish there was a straight forward here are the numbers you add, multiply, and divide together to get your monthly payment type of post.

I believe I understand how this works, so check my work here:

Sample scenario:
State - VA
2007 335i Sedan

MSRP w/ options - $48795
Invoice w/ options - $45,000
Discount - $2500 (giving me $46295)
Base MF - .00175 (according to this website - 36mo.)
MSD * 7 (-.00049) = .00126
Residual (.63 for 12k mi/yr) $30740


So the payment would be something like this:
46295 - 30740 = 15555 over 36 months = 432.08/mo. before interest and taxes

(46295 + 30740) * .00126 = 97.86 -> interest per month

432.08 + 97.86 = 529.94 -> total payment per mo.

Would I add 4% sales taxes to each monthly payment (~$21) or just pay 4% of the leased value (~$15555) and pay that upfront along with the security deposits.

$550 would be my security deposit *8 (1st time leaser) = $4400 total due at signing + fees

Does that all make sense? At one point do I pay taxes and what about the other "fees" that would be due at signing?

And I would get that $4400 back at the end of the 36 months assuming no damage or overages?

TIA!! :thumbup:


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## BravoMikeWiskey (May 28, 2007)

Cabby said:


> Very Informative!! I read every post as to avoid asking something stupid.
> 
> I wish there was a straight forward here are the numbers you add, multiply, and divide together to get your monthly payment type of post.
> 
> ...


You did not account for a Bank Fee of 625. Based on your specs, your payment should be 547.27 with Bank fee financed (assuming the dealer is not marking up either MF or Bank Fee), 8 security deposits (550 x 8) and taxes upfront.


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## zombiewuff (May 5, 2006)

_Does that all make sense? At one point do I pay taxes and what about the other "fees" that would be due at signing?_

In Virginia you pay tax on the entire purchase price of the car, not just the leased amount. You could roll it into your cap cost (and pay interest on it) or pay it upfront (and loose it in the event of a total loss.)


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## ddark (May 9, 2007)

Tried negotiating this MSD deal with a Houston dealer. They marked up the rate so much that the only thing they offered was the buy rate with 7 MSD. What a joke


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## BravoMikeWiskey (May 28, 2007)

ddark said:


> Tried negotiating this MSD deal with a Houston dealer. They marked up the rate so much that the only thing they offered was the buy rate with 7 MSD. What a joke


Luckily, there's more than one BMW dealer in Houston.


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## Cabby (Apr 1, 2003)

zombiewuff said:


> _Does that all make sense? At one point do I pay taxes and what about the other "fees" that would be due at signing?_
> 
> In Virginia you pay tax on the entire purchase price of the car, not just the leased amount. You could roll it into your cap cost (and pay interest on it) or pay it upfront (and loose it in the event of a total loss.)


Am I correct that VA is 4% on the cap cost then? If this case 4% of $46295 = $1851.80?

Paying interest on taxes seems pretty silly to me, do most people do that?


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## papitosabe (Apr 24, 2007)

Cabby said:


> Am I correct that VA is 4% on the cap cost then? If this case 4% of $46295 = $1851.80?
> 
> Paying interest on taxes seems pretty silly to me, do most people do that?


do most people do that?? if you don't pay it up front, then its borrowed money... yes, you have to pay interest on that...unless, you're parents are lending it to you and they're not cheap.. oi vay.. :yikes:


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## JW_BMW (Oct 3, 2007)

pfitzpa1 said:


> Thanks for the quick and concise answers!!
> 
> One other thing, the confidential wholesale prices on the sticky for a 335i sedan are..
> 
> ...


1. Destination is part of the MSRP and invoice so it will be caculated into the lease.

Only part not included for an ED is MACO and training fee in the invoices.


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## 1985mb (Apr 2, 2008)

Great thread! :thumbup::thumbup::thumbup:

Read almost all of it and now know to look for 7 MSDs (+1 for new BMWFS lease customer) @ 0.00007 each, but only at NJ or CT dealers


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## MarcusSanDiego (Jan 7, 2002)

Great thread. I am fully armed for negotiations.

Thanks.


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## MarcusSanDiego (Jan 7, 2002)

OK. After reading this entire thread, I think I've boiled it all down to this:

***8226;The multiple security deposit (MSD) program would allow you to buy down the money factor rate by .00007 per additional deposit. The maximum allowed is 7 additional security deposits, for a total reduction of .00049 on the money factor. A customer can do as few as 1 additional security deposit to a maximum of 7 additional security deposits in the MSD program. 

***8226;The security deposit equals your total monthly payment (including tax) rounded up to the next $50 increment. Thus, if the total car payment per month is $576, your security deposit would be $600. If you made 7 MSDs, you would have to pony up $4,200 in security-deposit money when you sign the lease. 

***8226;MSDs are fully refundable at the end of the lease ***8211; minus excess wear and tear, and mileage overages (if any). 

***8226;Gap insurance is included with all BMW Financial Services (BMWFS) leases. 

***8226;In the event that your car was totaled in an accident, your MSDs would be fully refundable (since GAP insurance would cover any shortfall in the amount owed).

***8226;In New York there is a security deposit cap of $749, which would not allow you to avail yourself of the MSD program in a meaningful way. People get around this by going to neighboring states to do the deal. 

***8226;Sometimes dealerships will try and talk you out of doing MSDs. Most of them don't understand math, so they don't see the advantage of reducing the money factor (even though it seems obvious that reducing the money factor will reduce the amount of interest you'll pay over the life of the lease).

***8226;Some dealerships, meanwhile, will act as though they've never heard of the MSD program. If your dealership won't accept your MSDs, then find a dealer that will. 

***8226;The absolute lowest money factor that a customer can get is .00005, which translates into an interest rate of roughly 1/8 of 1% (almost nil). 

***8226;If you are a first-time BMWFS lease customer you will be required to put down a security deposit. (If you're taking advantage of the MSD program, you would put down a total of 8 security deposits in this scenario.)

***8226;First-time BMWFS lease customers can get the security deposit eliminated, but those customers will be assessed an extra .00015 on the money factor. 

***8226;If you are a current BMWFS customer (not a lease customer), the security deposit on your new lease is waived. No .00015 money factor increase is applied. 

***8226;BMW dealers can mark up the money factor buy rate (best published rate) by .00040 ***8211; and by as much as .00055 if you don't put down a deposit as a first-time BMWFS lease customer.

***8226;The disposition fee ($350) is waived (on the next leased vehicle) if you lease another BMW not more than 6 months after your previous lease ends. 

***8226;Finally, never put a down payment (cap cost reduction) on a lease. In the event of a total loss of the vehicle, you won't recoup that down payment.


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## travel4B (Dec 1, 2005)

Great executive summary!


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## MarcusSanDiego (Jan 7, 2002)

travel4B said:


> Great executive summary!


Thanks. I figured it would be a lot easier if everything was located in one post. Couldn't have done it without all of the great members of this forum, though.

Great information in this thread.


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## djlfp (Dec 5, 2004)

MarcusSanDiego said:


> The security deposit equals your total monthly payment (including tax) rounded up to the next $50 increment. Thus, if the total car payment per month is $576, your security deposit would be $600. If you made 7 MSDs, you would have to pony up $4,200 in security-deposit money when you sign the lease.


You may wish to clarify that if the without-MSD lease payment is $576 and the post-MSD payment is $549, then the 7 MSD's would total $3,850 (7x$550). In other words, use the MSD-reduced interest rate to determine your monthly payment. Then, round up that payment to the nearest $50 to find the amount of one SD.


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## MarcusSanDiego (Jan 7, 2002)

djlfp said:


> You may wish to clarify that if the without-MSD lease payment is $576 and the post-MSD payment is $549, then the 7 MSD's would total $3,850 (7x$550). In other words, use the MSD-reduced interest rate to determine your monthly payment. Then, round up that payment to the nearest $50 to find the amount of one SD.


My example assumed that the MSDs had brought the payment down to $576. But for clarification's sake, your point is duly noted.


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## Gremlin (Apr 14, 2008)

Ok, I have read that the minimum MF is .00196 but here is says the minimum is .00005 Which is the case, or am I missing something?


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## MarcusSanDiego (Jan 7, 2002)

Gremlin said:


> Ok, I have read that the minimum MF is .00196 but here is says the minimum is .00005 Which is the case, or am I missing something?


I think the .00005 that you are referring to is the lowest MF that anyone can theoretically get. Clearly, most MFs are nowhere near .00005 -- as evidenced by the .00196 that you are seeing for your vehicle.


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## Gremlin (Apr 14, 2008)

Right, but theoretically I can get mine down to .00184 for ED, I was really just wondering if that is below some preset threshold. If that is .00005 then I am all good.


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## STARFLEET (Dec 29, 2007)

*Too Late? Feeling Cheated...*

:yikes: What a great thing this forum is!

I am about to lease a new 328xi, and my dealer happily accepted the 7 MSD's to lower the MF. That's all good.

But, I leased an X3 2 months ago (before I knew about the MSD program.) UGH.

Is there a way to add MSD's to an existing lease?

(Why don't the dealers let you knopw about this option -- do they lose money on it?)


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## mailskobe (Jun 8, 2008)

Newbie question...
Thanks for this excellent information. I just put down my drive-off cost on a 2008 335 ci. i have not signed any lease agreement yet because the car is special order from Germany. 

I have not talked to the dealer about MSDs. The question is, when do I bring up the MSD, should I do it now or when I sign the lease? What if the dealer claims that he does not know what MSD is? Can I talk to someone from BMWFS?

Thanks,
Mailskobe


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## JRob37 (Jun 8, 2008)

*Lock in your deal!*



mailskobe said:


> i have not signed any lease agreement yet because the car is special order


It doesn't matter that it's an order, you can structure the deal and they can lock in the rate. Money factors are going up and residuals are coming down, so you want to lock in now. If it goes the other direction you can take advantage of that change (after the fact) but if you're not locked in, it's not retroactive to when you ordred your car.


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## mailskobe (Jun 8, 2008)

Thanks for the info. 

My deal is locked in as on May 31st. My original money factor was 0.00275. 
Actually here are the details of my deal:
MSRP: 47685
335ci + sports + premium + ipod + sunshade + comf access
Cap Cost (negotiated rate): 44700
Residual: 54% = 26698
Term: 36
Original MF: 0.00275
Original Monthly payment (with tax)= 755.14

Negotiated MF after 8 MSDs: ~0.0018
New monthly payment: ~ 682
MSD value: (800 + 7*700 = 5700)
Acquisition fee: 825


is this a good deal?
mailskobe


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## beemer328i (Jun 10, 2008)

*pricing?*

Mailskobe - I don't see how your MSRP on your 335ci makes sense. The price on the website shows an MSRP around $55k versus your $48.5k. The details of the lease would only make sense with the right pricing.


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## mailskobe (Jun 8, 2008)

beemer328i said:


> Mailskobe - I don't see how your MSRP on your 335ci makes sense. The price on the website shows an MSRP around $55k versus your $48.5k. The details of the lease would only make sense with the right pricing.


55K, I am talking about a 335 not a 5... here are the prices from BMWUSA

335i Coupe
Base MSRP	$41,200
Space Gray Metallic	$550
Black Dakota Leather	$0
Light Poplar Natural wood trim	$0
Premium Package	$2,650
Sport Package	$1,200
Comfort Access system	$500
Power rear sunshade	$350
iPod® Interface Adapter	$320
Destination & Handling:	$825
Total MSRP as Built	$47,595

mail


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## beemer328i (Jun 10, 2008)

Sorry for the misunderstanding. I thought you were pricing a convertible.


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## lattelady (Oct 30, 2005)

In light of today's banking environment, has anyone had concerns on the security of doing MSD's? If BMWFS ran into trouble, what level of creditor would the owner of an MSD be?


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## erdoran (Feb 29, 2008)

I would think one could hold the leased car for security???? or if leasing another and the MSDs weren't returned, could perhaps apply the value towards lease payments? (worst case scenario, I mean)


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## SARAFIL (Feb 19, 2003)

TXPearl said:


> Just did an MSD deal and that's not how they calculated my security deposit amount - they started with the pre-MSD money factor payment amount.
> 
> Good idea on your second point.


they over-charged you then. Should be calculated on the payment after the rate reduction.


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## erdoran (Feb 29, 2008)

Call bmwfs and ask how much they show you having as your security deposit. Check how much your paperwork shows as your security deposit. do they agree? Hopefully you had the dealership itemize so that your security deposit shows up as a line item.


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## TXPearl (Apr 16, 2010)

My paperwork agrees with the amount of the deposit I paid. I don't think the dealer is pulling a fast one - it seems like they just didn't understand the deposit process. If so, then BMWFS is holding $350 of my money for 24 months for "free". Given that I'd be earning about 0.01% interest on that money right now, it's not even worth a phone call to verify. But next time, I'll know better. Thanks for the clarification.


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## erdoran (Feb 29, 2008)

You really should call or email bmwfs and confirm that they have the same amount as on your contract....trust me on this one!


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## TXPearl (Apr 16, 2010)

Please elaborate for us - did you have an experience where BMWFS claimed you did not make the full security deposit?


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## erdoran (Feb 29, 2008)

I didn't because I watched my paperwork like a hawk...and I saw where the dealership had tried to bury some more $$ in the lump sum driveoff they quoted me. But in general I tend to be very cautious in business dealings, and if there is a discrepancy I make sure it isn't going to come back & bite me. A phone call to BMWFS will only take a few minutes and chances are they will have whatever the dollar amount you paid for MSDs in their records as well....but if they don't you're in a position to go back to the dealership for a refund of the excess $$. If you want until lease turn-in and there is a discrepancy you're SOL at that point most likely.

I would think that BMWFS know exactly how much you are supposed to pay in MSDs and that's why I am a little concerned that you paid too much and nothing was said. It gets my antennae going, that's all.


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## TXPearl (Apr 16, 2010)

I hear what you're saying. However, my paperwork is all clean - nothing fishy, and like you, I check it thoroughly. If there's a dispute at lease end, I want something in writing to support my position (and not what someone at BMWFS told me on the phone almost two years before). I have a lease contract and a first monthly statement (which comes directly from BMWFS) that both agree with my deposit amount. I'm not sure what I'd say to someone on the phone - my guess is they'd have no idea about the MSD deposit calculation.


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## erdoran (Feb 29, 2008)

If you have something directly from BMWFS showing your deposit amount is what you think it is then you are good to go--it may even show up on "your account" section of their website. If your statement from BMWFS shows a DEPOSIT balance of what you paid then again you are good. 

BMWFS should know the proper way to calculate the MSD, so that's why I am recommending confirming & fixing things now if they need to be fixed. It sounds like you have it under control and are satisfied that BMWFS shows the amount on deposit is what you paid. end of story. It's your $$ and if you are satisfied that you have your ducks in a row then no problem.


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## ramyar (Sep 10, 2005)

Are these msd numbers still valid for 2011?


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## Mace14 (Mar 10, 2007)

ramyar said:


> Are these msd numbers still valid for 2011?


Yes. .00007 per MSD, total of 7 additional SD's with a maximum mark down of .00049.


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## docderwood (Nov 3, 2005)

I thought I read somewhere that the lowest MF you can get is .0005 using MSD's, is this true?

Thanks!


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## jrothen4 (Mar 9, 2011)

Is it possible to only do 2 or 3 security deposits? I dont want to tie up 4900 for the next 3 years. Thanks


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## ksoze (Nov 24, 2010)

jrothen4 said:


> Is it possible to only do 2 or 3 security deposits? I dont want to tie up 4900 for the next 3 years. Thanks


You can do as many as you want up to 7.


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## sk-mia (Mar 23, 2002)

Yes, the 0.0005 is the lowest that BMW FS will allow.


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## SARAFIL (Feb 19, 2003)

sk-mia said:


> Yes, the 0.0005 is the lowest that BMW FS will allow.


0.00005 (four zeros)


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## flyingbyhere (Mar 24, 2011)

Does this reduction apply to the model specific rates? (X3 .00200) Or is it off a higher "standard" rate?


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## obi.wan (Feb 14, 2007)

Had a hard time finding it and looks as if others had similar question so bump

I always thought this was a sticky... is it... I cant tell today


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## ZoomVT (May 30, 2008)

It used to be. I dont know why it isnt anymore. But i did read somewhere else that the Admins were trying to reduce the number of sticky threads in the forums.


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## mrMTB (Jan 4, 2009)

Quick MSD question. I'm working from the Excel calculator that was posted around in one of the threads, and I'm extending it a bit to allow me to do some modeling of my options. When you apply MSDs to your lease, do you figure the deposit amounts from the initial payment amount, or the payment amount with the MSD discount applied?


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## SARAFIL (Feb 19, 2003)

mrMTB said:


> Quick MSD question. I'm working from the Excel calculator that was posted around in one of the threads, and I'm extending it a bit to allow me to do some modeling of my options. When you apply MSDs to your lease, do you figure the deposit amounts from the initial payment amount, or the payment amount with the MSD discount applied?


payment after rate reduction


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## mrMTB (Jan 4, 2009)

Excellent. OK, one more... The calculator shows the Interest Rate (from MF) as the Money Factor * 24... Should this be the Money Factor * Lease terms in months, or is 24 a constant (I'm thinking the former)?


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## SARAFIL (Feb 19, 2003)

mrMTB said:


> Excellent. OK, one more... The calculator shows the Interest Rate (from MF) as the Money Factor * 24... Should this be the Money Factor * Lease terms in months, or is 24 a constant (I'm thinking the former)?


it is a constant.... if you look at the formula for interest calculation it makes sense.


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## mrMTB (Jan 4, 2009)

Thanks for your help, SARAFIL. There's a very special 535i I have my eye on, and the CA is really making it hard for me to want to give him my business; I'm trying to get my head around the various ways this thing moves around as I tweak the various levers. (His opening was $1088/mo @36 months on a car with an MSRP of $66k. I'm looking at an invoice of $60,730 minus NAV credit plus HIS PAYCHECK and plus seven MSDs and a token amount down ($15 to drop the payment just under the $50 threshold) for a payment of $749/mo @36 mo)...


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## TXPearl (Apr 16, 2010)

SARAFIL said:


> 0.00005 (four zeros)


SARAFIL, are you sure? That works out to an interest rate of 0.12%....basically nothing. Why even have a floor at that point? Maybe to cover just the paperwork/admin costs??


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## kavel (Jun 12, 2011)

*How much should I put in cap reduction to get under the 50 boundary?*

Hi all;

Thanks to the amazing amount of information I got from this board, I decided to do the max number of SDs (7) in my deal. My monthly payment, with the MF reduction due to 7 MSD will be $416, which would mean I'd put 7*$450 ($3150) upfront as security deposit. I know it is considered a smart move to try to move under the next $50 threshold when you're close to it, but how close is close considering our effort to avoid any cap reduction?

Specifically, in my situation, it would take somewhere in the neighborhood of $425 cap reduction to get my payments down to $399.99, and hence my SD upfront to $2800 instead of $3150. Should I do it, or just stay with the $416/month payment with no cap reduction?


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## Mace14 (Mar 10, 2007)

kavel said:


> Hi all;
> 
> Thanks to the amazing amount of information I got from this board, I decided to do the max number of SDs (7) in my deal. My monthly payment, with the MF reduction due to 7 MSD will be $416, which would mean I'd put 7*$450 ($3150) upfront as security deposit. I know it is considered a smart move to try to move under the next $50 threshold when you're close to it, but how close is close considering our effort to avoid any cap reduction?
> 
> Specifically, in my situation, it would take somewhere in the neighborhood of $425 cap reduction to get my payments down to $399.99, and hence my SD upfront to $2800 instead of $3150. Should I do it, or just stay with the $416/month payment with no cap reduction?


You're too far away, don't do any cap cost reduction. Think of it, using your numbers you have to put $425 as CCR to save $350 in MSD. Your total out of pocket drive off costs would be $75higher, it makes no sense.


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## kavel (Jun 12, 2011)

Mace14 said:


> You're too far away, don't do any cap cost reduction. Think of it, using your numbers you have to put $425 as CCR to save $350 in MSD. Your total out of pocket drive off costs would be $75higher, it makes no sense.


Yep, shouldn't have even asked  I managed to confuse myself with the numbers I was running earlier that had a lower cap cost reduction. Thank you very much for bringing me back to my senses.


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## ZoomVT (May 30, 2008)

Shouldn't the 400-600 saved in payments over the term of the lease be included in the calculation?


Sent from my SAMSUNG-SGH-I997 using Bimmer App


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## kavel (Jun 12, 2011)

ZoomVT said:


> Shouldn't the 400-600 saved in payments over the term of the lease be included in the calculation?


One way of looking at it would be to add all the payments made through the lease term to the cap cost reduction (disregarding the security deposit as it is refundable in either case) and see what the difference would be. In my particular case, paying the $425 in cap reduction reduces the total cost of the lease (27 month term) by $20. I don't think this is enough of a savings to warrant putting in cap reduction, considering that it actually increases my out of the door costs by $75.


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## Matt_UKTX (Jan 9, 2006)

Guys,

Is it true that if you put down MSD's, that you lose them if you trade-in or sell or car, rather than turn it in at lease end? I've only ever turned in my lease once. The other times, I just traded it at the dealer for another BMW. It's better this way because of the way sales taxes work on leases on the State of Texas.

I'd love to do MSD's, but don't want to lose $4900 if I trade my car.

Thoughts / Comments?


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## SARAFIL (Feb 19, 2003)

Matt_330i said:


> Guys,
> 
> Is it true that if you put down MSD's, that you lose them if you trade-in or sell or car, rather than turn it in at lease end? I've only ever turned in my lease once. The other times, I just traded it at the dealer for another BMW. It's better this way because of the way sales taxes work on leases on the State of Texas.
> 
> ...


If you trade or sell, there are two payoffs... one is the gross amount (where BMW sends the MSD back to you) and the other is the net amount (where BMW reduces the payoff by the MSD amount-- you don't "lose" the MSD since your payoff is lower, and therefore it increases your equity position in the car).


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## gsfo (Oct 10, 2006)

Hello fellow lease guru´s. After perusing as much of the wisdom my mind can absorb from this forum I have but one simple question. Does the first security deposit on a lease decrease the MF by 0.00007 or not?


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## ssaq (Mar 14, 2006)

no, the reduction is on multiple security deposits. 

so for each additional deposit (up to 7) you get a 7 pt rediction, for a max reduction of .00049. (So you would have left them 8 mos worth of deposits to max out) 

They are giving you a reduction because you are reducing their risk by giving them extra deposits. The first deposit is mandatory (if you are new to BMWFS).


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## dtc100 (Jan 24, 2011)

ssaq said:


> no, the reduction is on multiple security deposits.
> 
> so for each additional deposit (up to 7) you get a 7 pt rediction, for a max reduction of .00049. (So you would have left them 8 mos worth of deposits to max out)
> 
> They are giving you a reduction because you are reducing their risk by giving them extra deposits. The first deposit is mandatory (if you are new to BMWFS).


Actually the current leases have zero security deposit requirement.


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## j3ff (Nov 20, 2011)

i just finished reading all 17 pages [!] of this thread, and i just want to thank all the contributors and, more generally, the people who founded and sponsor this incredibly informative site. :thumbup:


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## hyperzulu (Jul 12, 2011)

ssaq said:


> no, the reduction is on multiple security deposits.
> 
> so for each additional deposit (up to 7) you get a 7 pt rediction, for a max reduction of .00049. (So you would have left them 8 mos worth of deposits to max out)
> 
> They are giving you a reduction because you are reducing their risk by giving them extra deposits. The first deposit is mandatory (if you are new to BMWFS).


I can't say I know for certain, but I believe this has less to do with risk, more to do with BMWFS paying you in interest for loaning them money for a certain amount of time. They loaned you money and also charge interest, but now they have also agreed to borrow money from you, so they can use it as capital to lend out to others, possibly at a higher rate. So, they dictate the interest rate at which they are willing to borrow that money and reduce it from your rates on the car loan. You win with lower rates, they win by securing capital for 36 months to continue doing business.


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## Jon Shafer (Dec 15, 2001)

j3ff said:


> i just finished reading all 17 pages [!] of this thread, and i just want to thank all the contributors and, more generally, the people who founded and sponsor this incredibly informative site. :thumbup:


You are very welcome!

:thumbup:


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## armoredsaint (Apr 16, 2006)

SARAFIL said:


> In a bulletin released today, BMWFS made some changes to the MSD (multiple security deposit) program.
> 
> The current program is up to 5 over the required amount, and a 0.00005 reduction in the money factor for each one.
> 
> The new program is up to 7 over the required amount, and a reduction of 0.0007 per.


sorry for the re-tread, but does the .0007 still hold true today?


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## Mace14 (Mar 10, 2007)

armoredsaint said:


> sorry for the re-tread, but does the .0007 still hold true today?


Yes


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## bzcat (Sep 23, 2009)

There was some disagreement about this half way thru the thread and I don't think it was definitively answered - the security deposit amount is determined based on lease amount or month payment? Basically, is MSD a multiple of the monthly lease payment or monthly lease payment+sales tax?


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## Ptp36mia (May 29, 2013)

does the .0007 still hold true today?


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## CTSoxFan (Oct 20, 2006)

Ptp36mia said:


> does the .0007 still hold true today?


yes


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## Ptp36mia (May 29, 2013)

Great, thanks.

About to order same car you have - 2013 535i M sport, Carbon or Jet /Cinnamon, Technology, Premium Hi Fi


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## Clepto (Apr 4, 2013)

*MSD on trade in vs. return*

When trading in the vehicle at end of lease as opposed to a return, does the lessee still get the MSD refunded from BMWFS or does it transfer to the purchaser?


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## Thyrilumi (May 21, 2013)

Clepto said:


> When trading in the vehicle at end of lease as opposed to a return, does the lessee still get the MSD refunded from BMWFS or does it transfer to the purchaser?


I would assume it would go to the original party and they could do with it what they want?


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## Clepto (Apr 4, 2013)

The reason I ask is that if someone takes over a lease from the original lessee the taker over gets any MSDs... Better safe than out $3500 (;


Sent from BimmerApp mobile app


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## brianmhealy (Jun 8, 2015)

*Questions about MSD and MF*

Mace14 mentions the basic information you must have before dealing with a new lease purchase. He says "If you can't define Cap Cost, Cap Cost Reduction, Money Factor, Residual, Depreciation, Lease Origination Fee, rate lock, etc.,"

Where exactly am I going to get that information? I see the MSRP stickers, I have asked the deal for total out the door pricing, etc but I'm not getting the details everyone says I need to have. The Money Factor, Depreciation, Residual, etc. I'm looking at a 15 428i, MSRP around 50K. I like the idea of multiple security deposits but need help with the rest.


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## justinnum1 (Nov 22, 2011)

brianmhealy said:


> Mace14 mentions the basic information you must have before dealing with a new lease purchase. He says "If you can't define Cap Cost, Cap Cost Reduction, Money Factor, Residual, Depreciation, Lease Origination Fee, rate lock, etc.,"
> 
> Where exactly am I going to get that information? I see the MSRP stickers, I have asked the deal for total out the door pricing, etc but I'm not getting the details everyone says I need to have. The Money Factor, Depreciation, Residual, etc. I'm looking at a 15 428i, MSRP around 50K. I like the idea of multiple security deposits but need help with the rest.


if your dealer is unwilling to show you all the numbers, that should tell you all you need to know about them...


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## ramyar (Sep 10, 2005)

Clepto said:


> When trading in the vehicle at end of lease as opposed to a return, does the lessee still get the MSD refunded from BMWFS or does it transfer to the purchaser?


Whomever returns the vehicle to Bmwfs received the msd refund. If that's a dealer then the dealer gets its. With an msd, the stipulation is that you finish off your lease and return it. Should you trade it or swap it, make sure whomever takes the car pays you in the amount of your msd.

The only exception here is if the dealer *buys* the car (as opposed to paying off the remaining payments) and pays for it on your behalf. In such a case, it depends on how the deal is structured on whether you or the dealer would get your msd refund.


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