# Mulitple Security Deposits 101: What Are They & Why Are They So Popular Here?



## Jon Shafer (Dec 15, 2001)

*MSD Primer*

*I. History*: back in the last century, before leasing became the most popular way to "get" a new BMW, corporate execs and dealers alike marveled at just how many buyers simply walked in and stroked a check for their new cars. Realizing that cash buyers meant no back-end profit (called "Finance Reserve") or essentially lost profit opportunity, captive lenders like BMW Financial Servces and Mercedes-Benz Credit Corp pioneered a new way to get buyers into cars. In the 1970's and early 1980's we had "open-ended leasing" which had turned many prospects off to the concept of leasing altogether. A newer type of leasing, closed-ended (fixed residual, with guaranteed future value) began to gain in popularity, but still, too many high-end buyers were paying cash for their luxury cars. This meant longer buying cycles, as well as lost profit opportunities (no reserve/interest). It was then that the Brain Trust in NJ thought up what came to be known as the Multiple Security Deposit Program - a tool designed to convert traditional cash buyers into lessees. This would have the ultimate effect of shortening the buying cycle to 3 years, and afford both the lender and dealers to earn additional profit.

*II. Why are MSDs so popular here on Bimmerfest* (while the average salesperson has never heard of them, let alone knows how they are calculated or why anyone would want to use them)? Back when I started this forum I was a big fan of MSDs - stemming from my years in Finance and General Sales Manager I considered it my duty to share with our members the "Smart Money" way to get a car. Needless to say, our members quickly saw the light, and soon the MSD program became a part of the culture and forum folklore of our membership body. A whole legion of "MSD Warriors" was born. And they, in turn, posted about it, and before long, everyone was hooked (and rightfully so).

*III. How do they work? *Participating BMW retailers are allowed to reduce the customer lease rate (a.k.a. "Money Factor") under the BMWFS Multiple Security Deposit ("MSD") Program. The MSD program offers the unique advantage of "refundable security deposits" being used to lower a monthly payment quit effectively. A lease rate factor reduction of .00007 is applicable for up to seven security deposits beyond the conventional requirement. Currently security deposits are no longer a required lease element, but that could change again. Seven deposits would make .00049 the maximum rate reduction. For example, let's say that the confidential dealer buy rate is a lease money factor of .00130. If a lessee were to do the full seven MSDs, that would reduce the rate to .00081 (a reduction of .00049, or 00007 x 7. In my opinion, the MSD Program really only makes sense if (a) the lessee is sitting on sufficient liquid assets, and (b) if the lessee goes all the way doing all seven MSDs. To do just one or two, it probably isn't worth it. Your extra cash would be better served applied as capitalized cost reduction ("down payment" in the vernacular of leasing).

*IV. And just how does this really benefit the buyer?* Why would a person who could or would otherwise pay cash for a car (or a "conventional" lessee) want to do a MSD lease? Well, if you were to compare the savings of the MSD lease with a conventional lease, and then factor in the fact that the lessee gets their security deposit back, the MSD lease could actually be construed as an "investment vehicle". Seriously. Try it yourself. With a MSD "investment", the ROI is often 10% or greater, at a time when traditional bank yields are about half of that. Back when the MSD program was first conceived, the rate factor reduction was a full .0001 for each deposit, and lessees could do, get this, a maximum of 10 SDs! In the early 2000's the program got so popular that BMW cut the rate factor reduction back in half to .00005 and at the same time, limiting the maximum number of deposits to five. Needless to say, the MSD Program's penetration dropped off the chart. It just wasn't attractive any more. A couple of years later, BMWFS effectively revived interest, "enhancing" the program. They inflated the rate factor reduction to .00007 and allowed a maximum of seven deposits. A far cry from the original conception, but still a valuable tool for customers and dealers alike.

*DECEMBER 2019 UPDATE:* the current MSD Program allows for a rate factor reduction of .00005 and still a total of seven security deposits (for a mex reduction of .00035 of the lease money factor).

Click here for the 12/2019 Full Update: https://www.bimmerfest.com/forums/showpost.php?p=13195487&postcount=182

.


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## Jon Shafer (Dec 15, 2001)

*Today's Tidbit*

Many times over the years I have seen posts from Bimmerfest Members asking how to convert a Lease Money Factor ("LMF") to an annual percentage rate of interest ("APR").

It's really quite simple. Simply multiply the LMF (which is expressed as a decimal) by 2400. Why do we do this? Save for a lengthier discussion, it has to do with the fact that the interest in a lease is based on an average daily balance.

So, let's look at an example.

Say the LMF is .00130. If we multiply that by 2400, the product is 3.12, so the functional equivalent as an APR is 3.12%!

:thumbup:


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## PAtime (Nov 11, 2014)

Thanks for this great info. I used it yesterday for my new X3. I will save almost $1,500 over the course of my 3 year lease. Can't beat a MF of .00081 !!!


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## EatonZ26 (Jun 27, 2014)

PAtime said:


> Thanks for this great info. I used it yesterday for my new X3. I will save almost $1,500 over the course of my 3 year lease. Can't beat a MF of .00081 !!!


Love MSDs. Combine that with BMW Fleet and I got a .0006 on my lease.


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## whazupkids (Dec 29, 2012)

Thanks to some great advice by some wonderful people here, I leased a 2013 535i 2 years ago and max'd out my MSD's. The lease expires in a couple days, and I may lease another similar vehicle from the same dealer. On the actual contract from two years ago it doesn't list "multiple security deposits"; it just lists "refundable security deposit" of $4,900. How does this refund work exactly? Do they write me a check for $4,900? If I lease another car with the same max'd out MSD's, do they just forward that credit to the new lease? 

FYI, I did buy the protection plan, and I do believe all the small stuff that is "wrong" with the car as I return it will be covered by the plan, based on my research.

Any help is appreciated.


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## alewifebp (Sep 20, 2008)

If you lease another BMW, you will fill out paperwork that will roll over your security deposit to your new lease. They give you a loyalty discount on the security deposit. On a first time lease, you paid 8 MSDs. You will get that money back for one security deposit. Now if your lease price is much more than your last lease, you will only get part of that back. But most likely you will get a lot of it back in the form of a check.


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## sam5935 (Jan 25, 2015)

Thanks for the information. One thing about this I don't understand.....is the security deposit a set amount? Or is it one payment? And if it is one payment, is this payment based on the "before" MSD amount or the "After?"

Thank you!


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## Squeak (Sep 13, 2014)

sam5935 said:


> Thanks for the information. One thing about this I don't understand.....is the security deposit a set amount? Or is it one payment? And if it is one payment, is this payment based on the "before" MSD amount or the "After?"
> 
> Thank you!


MSD is the payment after lower MF, rounded up to nearest $50.


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## gm1963 (Jan 20, 2015)

Are there any other consequences to using max MSD's, for example is there anything in the contract that says the MSD's can be applied to deficiencies in the event of a gap between insurance claim payments and residual balances on vehicles or any other examples of negative consequences for doing multiple security deposits, I get the positives...if not it looks like a really good use of liquid assets as you say over a 36 or 39 month period as long as there are no other inherent contractual risks for leaving the money with BMW

Thanks for the post!


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## CTSoxFan (Oct 20, 2006)

gm1963 said:


> Are there any other consequences to using max MSD's, for example is there anything in the contract that says the MSD's can be applied to deficiencies in the event of a gap between insurance claim payments and residual balances on vehicles or any other examples of negative consequences for doing multiple security deposits, I get the positives...if not it looks like a really good use of liquid assets as you say over a 36 or 39 month period as long as there are no other inherent contractual risks for leaving the money with BMW
> 
> Thanks for the post!


No, they are separate and should you have a total loss would not be factored into the payoff/potential gap liability...this is one of the main reasons people suggest doing MSDs vs. a Cap Cost reduction


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## xraydoc97 (Jun 17, 2011)

Great info, thanks! I paid cash for my previous 335i convertible and will be looking at leasing a new 435iConv soon. Do I just ask the Finance people about the MSDs if the salespeople don't know? After negotiating the sales price? 
Thanks!


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## smithh35 (Jul 2, 2014)

Can someone tell me if MSDs are allowed NY? Also how are MSDs calculated


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## Squeak (Sep 13, 2014)

smithh35 said:


> Can someone tell me if MSDs are allowed NY? Also how are MSDs calculated


No. Not allowed in NY.


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## CTSoxFan (Oct 20, 2006)

smithh35 said:


> Can someone tell me if MSDs are allowed NY? Also how are MSDs calculated


Most people in NY that want to take advantage of the MSD program just buy the car from someone in a neighboring state.


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## smithh35 (Jul 2, 2014)

Thanks for the clarification. The saving is significant enough that I may go to NJ for my next car.


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## mauicoug (Apr 20, 2009)

You would be best served to tell your CA that you want to use MSD's...when I went in to finance to complete my deal, the finance guy had a cow, even though I had advised the CA that I would be using MSD's. The sales mgr gave me a hard time too and I told him go look at the emails I sent the CA. Just to make the Finance guys day, I told him no to all the add insurance BS they wanted to sell me.

BTW, there are a vast number of CA's that don't have a clue about MSD's and they will try to get you to decap the lease instead.


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## mhrir (May 17, 2010)

We did a lease yesterday on a 528i x-drive. 7 MSDs totaled $3850. I calculated the difference between the monthly at .0013 and .00081 which worked out to $44.25 or $1593 saved over 36 months. 

That works out to an effective interest rate of 13.8%. Thank you Bimmerfest forums! :thumbup:


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## RaslDasl (Jan 3, 2015)

I have a paid off car that I'm selling or trading in. Even with 7 MSDs I will have several thousand dollars left. I was thinking of putting that towards cap cost reduction. I figure that since it will lower the payment it also lowers the amount needed for MSDs and lower payment saves on the 9% tax. Otherwise the money goes in savings where it's not earning much. Bad or good idea?


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## EatonZ26 (Jun 27, 2014)

RaslDasl said:


> I have a paid off car that I'm selling or trading in. Even with 7 MSDs I will have several thousand dollars left. I was thinking of putting that towards cap cost reduction. I figure that since it will lower the payment it also lowers the amount needed for MSDs and lower payment saves on the 9% tax. Otherwise the money goes in savings where it's not earning much. Bad or good idea?


You won't save money on tax since the cap cost reduction will be taxed. Problem with using money for cap cost reduction is that given the MSDs the effective interest is so low that the interest saved by paying the cap cost reduction is minimal while at the same time you waste the GAP insurance that comes with all BMW leases (part of why there is an acquisition fee upfront).


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## RaslDasl (Jan 3, 2015)

I should have realized this was not a way to escape the tax! It didn't occur to me that the cap cost reduction would be taxable. If I trade in do I get credit for the tax paid on the trade like I would on a purchase? I am in PA if it matters.


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## malenky77 (Apr 24, 2013)

I signed the new lease on May 2nd, had the MSDs rolled over. Received the check for excess MSDs on o5/20. MSD rollover is a simple form: xx amount from existing MSD's from account 123 are rolled over to a new lease VIN: xx321. That is it!


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## Cantona (Mar 25, 2006)

Maybe California is different.... no rollover and still waiting for $$$$ from 4/21... BMWFS says "it takes time...we don't really know how long it will be" Unacceptable in my mind.


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## Ninong (May 20, 2014)

Cantona said:


> Maybe California is different.... no rollover and still waiting for $$$$ from 4/21... BMWFS says "it takes time...we don't really know how long it will be" Unacceptable in my mind.


BMWFS would have the same policy nationwide. It's much more likely that the differences reported by some Bimmerfesters are tied to specific dealers. Obviously some dealers do not seem to have a problem doing it.


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## Weaselboy (Jul 7, 2002)

Cantona said:


> Maybe California is different.... no rollover and still waiting for $$$$ from 4/21... BMWFS says "it takes time...we don't really know how long it will be" Unacceptable in my mind.


I picked up my car on 8/27/15 and got my MSD check on 9/12 on a California car., so yeah, I'd say yours is lagging a bit there.

According to my CA, he can roll over MSDs, but has had difficulty doing so, resulting in mistakes on BMWs end and frustrated customers, so he prefers not to do it. But it can be done in California.


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

Weaselboy said:


> According to my CA, he can roll over MSDs, but has had difficulty doing so, resulting in mistakes on BMWs end and frustrated customers, so he prefers not to do it. But it can be done in California.


Same here.

~M~


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## malenky77 (Apr 24, 2013)

Cantona said:


> Maybe California is different.... no rollover and still waiting for $$$$ from 4/21... BMWFS says "it takes time...we don't really know how long it will be" Unacceptable in my mind.


I call BS! Their policy is to refund the difference in 30 days. I would call them and ask to speak to a supervisor who should be able to straighten things out right away. I had a problem having MSD's refunded, with Lexus I think - it's been a while, and after the call that resolved everything on the spot, they overnighted the check!


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## jamkor (Apr 24, 2015)

When I punch in numbers to leasehackr for MSD's it doesn't appear to be calculating them on the payment after msd discount applied.

for example - 

0 MSD monthly payment: $726
7 MSD monthly payment: $679 - Total for 7 MSDs: $5250 = $750 per MSD.

From what I can tell, it should be 7 MSD for a total of $4900 ($679 rounded up to $700)

If you need the other numbers, let me know.


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## jamkor (Apr 24, 2015)

Just a bump even though it is a stick and won;t actually move.


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## Squeak (Sep 13, 2014)

The MSD will be whatever your payment is rounded to the nearest $50. Not sure why leasehacker is not calculating it correct.

As long as it is taking the right money factor deduction to calculate your payment, you should be fine. When BMWNA does the paper work, it will be correct.


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## Ninong (May 20, 2014)

Squeak said:


> The MSD will be whatever your payment is rounded to the nearest $50.


Not exactly. The multiple security deposit will be whatever your payment is after adjusting the money factor for the number of MSDs you wish to apply *rounded up to the next higher $50 increment*, not the nearest. In other words, if your payment is $701.15, your multiple security deposits will be $750.00 each. If your payment is $653.44 or $688.57 or $700.00, it will be $700.00 each. It's not rounded up or down to the nearest $50 increment, it's always rounded up only.


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## Squeak (Sep 13, 2014)

Sorry, meant rounded up to the nearest.


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## Ninong (May 20, 2014)

Squeak said:


> Sorry, meant rounded up to the nearest.


I figured that but I just wanted to clarify it for newbies reading it.


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## tahoejoe (Dec 25, 2006)

Appreciate all of the expertise here. I am planning to lease an x5 40e and have a few questions. I live in California.
1) What is the current money factor rate? I can't seem to find it anywhere online.
2) I have asked for 7 MSDs on a lease quote, and I would expect the MF to come down by .0049 (.0007 per MSD). However, one dealer has only quoted a reduction of .0040 and one has quoted a reduction of .0029. Are these instances of the dealer trying to not reduce the MF by the full amount they should be? Seems a bit sketchy but I will negotiate this if they are wrong.
3) Is the residual value of the car negotiable, or is that set by BMW and not alterable by the dealership and by me?
4) Does BMW have a lease disposition fee (or some other fee that is mandatory and will surprise me at the end of the lease)? I understand I will be charged for excess wear and tear.
5) If I have a trade in, should I just take that as a check from the dealer? Or should I try to roll it into the lease as a reduction of the capitalized amount? Or something else? I don't need the cash up front so prefer to do whatever maximizes my money over the life of the lease.
6) How does sales tax work in California with a lease? From everything I have read, I don't need to pay sales tax on the full amount of the car, only on the capitalized cost. However, in the lease quotes the dealers have given me, they are factoring in tax on the full purchase price and rolling the full tax amount into the cost of the car. For example, MSRP = $70K. Sales tax is estimated at $6650. I would have that that if the residual is 50%, then I should be paying tax on $35K (or $3325 in tax). Am I wrong about that?

Thanks in advance!


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## jjrandorin (May 8, 2013)

tahoejoe said:


> Appreciate all of the expertise here. I am planning to lease an x5 40e and have a few questions. I live in California.
> 1) What is the current money factor rate? I can't seem to find it anywhere online.
> 2) I have asked for 7 MSDs on a lease quote, and I would expect the MF to come down by .0049 (.0007 per MSD). However, one dealer has only quoted a reduction of .0040 and one has quoted a reduction of .0029. Are these instances of the dealer trying to not reduce the MF by the full amount they should be? Seems a bit sketchy but I will negotiate this if they are wrong.
> 3) Is the residual value of the car negotiable, or is that set by BMW and not alterable by the dealership and by me?
> ...


This is a thread about MSDs, and you have specific questions on your deal, not just MSDs so I would suggest making another thread if you have further questions. I will try to answer what I can here though..

1. You would not be able to just find the MF rate online without some searching because manufacturers consider that privileged information (so its not just "posted"). With that being said, we normally find it out every month here at bimmerfest and its normally in a thread started for that months incentives.

This month its .00134 to .00174 negotiable between you and the dealer (for tier 1 credit, which is 675+ CAR credit).

2. The MF is negotiable between the values I gave you in point 1. 7 MSDs reduce the value by .00049 as you said. All your quotes mean is that the dealers are not starting with the base rate, which they dont have to do. Its negotiable between the rates I stated above which is through december. It just means those dealers did not start at .00134. The MF discount for MSDs is set in stone, so you need to add .00049 to where they ended up to see what they start with.

3.RV is non negotiable and is set by BMW NA. The percentage is set for each model and is different for different models. You cant negotiate this value at all.

4. BMW lease end disposition fee is $350, which is waived if you lease or buy a new BMW at the end of your current lease.

5. You should remove the trade in from the lease entirely, and sell it completely outside of the process of leasing with BMW (if you are trying to maximize your money). You would not be getting a check from the dealer for your vehicle to my knoweldge, unless there is cash left after they use the money they offer you for the trade in as a cap cost reduction. We do not advise that here in general on bimmerfest, so go sell your trade in auto trader or other personal website, or take it to car max.

6. You pay tax monthly in california, on each payment, based on your location and tax rate. For example, if you move partway during the lease, and move to a city that has a 1/2 percent higher sales tax, your monthly payment will go up because of the increase in tax. Since you pay taxes monthly, you pay tax for the 36 months of the lease if you negotiate a standard 36 month lease.


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## MJBrown62 (Jun 15, 2016)

Only one addition to JJ's post, regarding the trade in.

If you have a loan on a trade in, but have equity, some states allow you to you use a value of the trade to waive monthly use tax, to the amount of the sales tax credit. You might have a certain number of payments, or all, that are tax free. State rules apply, it's different everywhere.

If you own the trade outright, you cab have cap reduction tax waived in a similar fashion.

If you don't want to use all of the trade vale/equity in the lease, dealers can assess a value in the deal and cut you a check for the balance of the equity position.

MJB


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## Luvs2Run (Nov 15, 2009)

Friends,
I live in TX and I have read this whole thread and I am truly enlightened! Wish my luck, headed to the dealer tomorrow in hopes of working some MSD magic! Thank you all so much!!

K8Luvs2Run


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## Luvs2Run (Nov 15, 2009)

Friends,
I live in TX and I have read this whole thread and I am truly enlightened! Wish my luck, headed to the dealer tomorrow in hopes of working some MSD magic! Thank you all so much!!

K8Luvs2Run


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## UFC_Logistics (Mar 12, 2017)

Can you please explain....

If I have 7 MSD's for a total of $5950 and I go to a more expensive lease I would need to contribute more to get the full MSDs. SO I was told I would need to contribute another $2450 on the new lease. 
Aside from writing a check to BMW or the dealership am I going to get any "credit" or something from the previous MSDs totaling $5950?

Thanks


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## jjrandorin (May 8, 2013)

UFC_Logistics said:


> Can you please explain....
> 
> If I have 7 MSD's for a total of $5950 and I go to a more expensive lease I would need to contribute more to get the full MSDs. SO I was told I would need to contribute another $2450 on the new lease.
> Aside from writing a check to BMW or the dealership am I going to get any "credit" or something from the previous MSDs totaling $5950?
> ...


Not sure exactly what you mean but if you have MSDs "on file" I believe a dealership can handle them in a couple of different ways if you turn in and get a new car and want to use MSDs again.

1. They can make you give them ALL of the money for the new MSDs and tell you that you will get a refund from BMW FS. You will get a refund, but it will take some time (not sure how much time but have seen people report 30-60 days).

2. They can roll over what you have in MSDs toward MSDs on the new car. If the new car is more expensive, AND you want to "max out" the MSDs, you would have to pay the difference between whats on file / in your account, and what is needed to max out the MSDs for the new car (provided you wanted the full discount).

It sounds like your new car would require 5950+2450 in MSDs (which makes it look like your new car is somewhere between 1150 and 1200 a month, where your old car was somewhere between 800 and 850 a month. Is that correct? I am getting those figures strictly from the amount of MSDs you have to put down.

If your new car is between 1150 and 1200 and you are wanting to do the max MSDs, that is why they are asking you for the difference in deposits (which has nothing to do with your "other" drive offs, like first month, doc fee, registration, etc.

Make sense?


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## UFC_Logistics (Mar 12, 2017)

Your amounts are correct!!! Your explaination does make sense. 

So can driveoffs be rolled into MSDs or are they different ledgers?


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## namelessman (Dec 23, 2004)

chrischeung said:


> I don't think so. Because if it was, BMW would be doing it. You also should take into account historical background. You can't suddenly flip your model upside down without upsetting the market. The change needs to be gradual. For example, if you drop MSRP by $10K and Residuals by say $7K, that would potentially be more realistic. But would kill confidence in the brand, real residual values, profitability, market share etc.
> 
> I expect BMW does what it does for a reason. And it's likely 55% cons, 45% pros. There rarely is a win-win situation. Almost always a balance.
> 
> Usually ground breaking changes are made by new market entrants - eg. Tesla and Lexus (back when they were starting).


Were RV's for 3-series and 5-series around 55% back in 2000? The flip(not that gradual) to inflated RV occurred somewhere in 2005-2007, no?

The interest "penalty" of inflated cap cost and RV is significant, e.g. a drop of $5k on both cap cost and RV implies reduced $10k to pay 3% on, or $4500 over 3 years, or $125 per month!


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## beware_phog (Mar 7, 2003)

namelessman said:


> The interest "penalty" of inflated cap cost and RV is significant, e.g. a drop of $5k on both cap cost and RV implies reduced $10k to pay 3% on, or $4500 over 3 years, or $125 per month!


Exactly!!!


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## namelessman (Dec 23, 2004)

beware_phog said:


> Exactly!!!


My bad, $5k drop on RV and cap cost, @3%, should be $450 extra total interest, or $12.5/month.


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## 1968BMW2800 (Aug 13, 2016)

Perhaps a tangential or trivial point here, but my many experiences with leasing different makes have taught me that, at some point during the negotiation, I become a monthly payment buyer. Meaning, while I have a sense of the cap cost that will be acceptable to me, and I have a narrow acceptable band for total drive off amount, I also have a payment range -- usually a fairly narrow range. And my numbers are always low, but reasonable and well-researched. I try to never propose a deal a dealer cannot do -- they just might prefer not to if they don't have to go as low as I want.

So let's say I'm comfy with $2,000 total drive off and a total monthly payment of between $500 & $525, and the dealer does the calculations and, to meet my $2,000 drive off limit, the dealer says the payment needs to be $550. In this instance, even if the agreed upon cap cost was within my range, I would refuse to get bumped on the drive off amount and would suggest to the dealer that he/she needed to find a way to hold the drive off at 2 grand, keep the mileage and lease length as agreed, but they would need to make an adjustment somewhere to get my payment down to within my range. The dealer's job is to figure out how to get the numbers aligned without taking away the parts of the deal that I need to remain static.

So far, regardless of incentives or subvented rates or any other variables, dealers have found the way to get the payment right without changing my drive off and lease term/mileage requirements.

No great magic involved.

My mantra is "I'm giving the dealer an opportunity to sell me a car." If they can meet my low, but reasonable numbers, they will succeed. If they can't, or won't, I can choose to pay more than I had planned, or not. So far, after many leases of many brands, dealers have found a way to do the deal within my parameters. 

And while MSD's have been nice, other than return on investment derived through pleasure of enjoying the car at the right price, I've never viewed a car acquisition as a wise financial investment. MSD's were just a perk -- not a reason to, or not to, acquire a car.

My point is, MSD's or no MSD's, if BMW wants to move the metal, and customers remember they have many choices, good lease deals will continue to exist -- they just might come together in new and different ways.


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## justin42 (May 16, 2011)

Apologies if I missed this reading through the thread, but how long does it typically take for BMW to refund the MSDs after the lease is turned in? I did 7 MSDs on my previous lease (435xi cv) that I just turned in yesterday. We went with a Mercedes E300 for our next car, so nothing to roll the MSDs into with BMW. No excess wear and tear noted during lease turn in. Thank you!


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## jjrandorin (May 8, 2013)

justin42 said:


> Apologies if I missed this reading through the thread, but how long does it typically take for BMW to refund the MSDs after the lease is turned in? I did 7 MSDs on my previous lease (435xi cv) that I just turned in yesterday. We went with a Mercedes E300 for our next car, so nothing to roll the MSDs into with BMW. No excess wear and tear noted during lease turn in. Thank you!


Likely a few weeks, after they deduct from any lease end charges you may owe (like that $350 lease end disposition charge you will owe, even if there are no other charges).


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## justin42 (May 16, 2011)

jjrandorin said:


> Likely a few weeks, after they deduct from any lease end charges you may owe (like that $350 lease end disposition charge you will owe, even if there are no other charges).


Thank you! I'll post when I receive it to provide a data point for others in similar situation.


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## jjrandorin (May 8, 2013)

justin42 said:


> Thank you! I'll post when I receive it to provide a data point for others in similar situation.


Thanks, that would be helpful, as I would imagine there will be a large portion of bimmerfesters in a situation where they will be looking for their MSDs back since they cant roll them forward anymore.

You could also call BMW FS and ask them as well. If you decide to do that, ask them what the normal turn around time on that is. I have seen some people complain that it actually took a couple of months, and I have seen others say "a few weeks"... so I bet it has something to do with when your payment was done, when the dealer processes everything on the car, etc.

thanks in advance for closing the loop on your experience.


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## justin42 (May 16, 2011)

jjrandorin said:


> Thanks, that would be helpful, as I would imagine there will be a large portion of bimmerfesters in a situation where they will be looking for their MSDs back since they cant roll them forward anymore.
> 
> You could also call BMW FS and ask them as well. If you decide to do that, ask them what the normal turn around time on that is. I have seen some people complain that it actually took a couple of months, and I have seen others say "a few weeks"... so I bet it has something to do with when your payment was done, when the dealer processes everything on the car, etc.
> 
> thanks in advance for closing the loop on your experience.


I called BMWFS a few minutes ago, and they said the process usually takes "a week or two." We'll see, but fingers crossed!


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## Robert A (May 18, 2003)

Mine took about 2 weeks as I recall. If you are on auto-debit with the lease payment, they can auto-credit the deposit refund.



justin42 said:


> Apologies if I missed this reading through the thread, but how long does it typically take for BMW to refund the MSDs after the lease is turned in? I did 7 MSDs on my previous lease (435xi cv) that I just turned in yesterday. We went with a Mercedes E300 for our next car, so nothing to roll the MSDs into with BMW. No excess wear and tear noted during lease turn in. Thank you!


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## RaslDasl (Jan 3, 2015)

If I purchase next time can the money on deposit be applied to my down payment or do I have to wait for a refund after the return?

BMW is apparently very interesting in converting more of us to buyers. I just did a survey from BMW where they literally presented 9 different scenarios and asked what would make me most likely to purchase instead of lease. 
Some of the most interesting ideas they are considering:
3% discount
5 years free maintenance with full warranty 
BMW-run trade in portal 

I’m currently in Texas so leasing is trickier already due to the taxes. Owners Choice is an option but frankly I’d rather have a discount on MSRP up front rather than a guaranteed trade-in value that’s only valid at exactly 3 years. 


Sent from my iPhone using Bimmerfest


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## Squeak (Sep 13, 2014)

RaslDasl said:


> If I purchase next time can the money on deposit be applied to my down payment or do I have to wait for a refund after the return?
> 
> BMW is apparently very interesting in converting more of us to buyers. I just did a survey from BMW where they literally presented 9 different scenarios and asked what would make me most likely to purchase instead of lease.
> Some of the most interesting ideas they are considering:
> ...


You have to wait. The entire lease return deal has to clear all hurdles and close out before they return it.


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## AksNasZasNas (May 30, 2013)

**RUMOR**

MSDs may be back with a lesser per deposit reduction in the MF. This per a colleague so still needs to verified. Can the CAs confirm the details (if possible)? Thanks.


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## MJBrown62 (Jun 15, 2016)

AksNasZasNas said:


> **RUMOR**
> 
> MSDs may be back with a lesser per deposit reduction in the MF. This per a colleague so still needs to verified. Can the CAs confirm the details (if possible)? Thanks.


Nothing that I've seen. Nothing in the various bulletin sources (for CAs).


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## chromi (Oct 20, 2016)

Rumblings that it's only 0.00005 x 7 reduction, and for those who are currently using MSDs only...


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## Squeak (Sep 13, 2014)

chromi said:


> Rumblings that it's only 0.00005 x 7 reduction, and for those who are currently using MSDs only...


That would suck for those of us forced to get off the MSD train the last 5 months. I would have been happy to still have down them this time.


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## HypnoticS (Sep 27, 2009)

chromi said:


> Rumblings that it's only 0.00005 x 7 reduction, and for those who are currently using MSDs only...


I confirmed this earlier

Sent from my iPhone using Bimmerfest mobile app


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## Squeak (Sep 13, 2014)

HypnoticS said:


> I confirmed this earlier
> 
> Sent from my iPhone using Bimmerfest mobile app


Yeah?!! Confirmed it is coming back?


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## AksNasZasNas (May 30, 2013)

*Mulitple Security Deposits 101: What Are They & Why Are They So Popular Here?*



HypnoticS said:


> I confirmed this earlier
> 
> Sent from my iPhone using Bimmerfest mobile app


Is it limited to "rolling over" from one car to the next? Or, can you do MSDs with a new lease (say, to add a second car to the household) so long as you've already got a lease that has MSDs?


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## HypnoticS (Sep 27, 2009)

Squeak said:


> Yeah?!! Confirmed it is coming back?


BMW F.S. will honor MSD's for customers who currently have MSD's....not new customer's.
0.0005 x7

Sent from my iPhone using Bimmerfest mobile app


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## AksNasZasNas (May 30, 2013)

rkinra said:


> I just tried to do that and was told that BMWFS wont allow MSDs on a second vehicle (unless of course its a roll over).
> 
> I was really hoping that I could do it, because it would have dropped by lease by $30/mo.


Thanks for info. I'll report back if I get a different result.


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## Jon Shafer (Dec 15, 2001)

MSDs are back, btw. The rate reduction is .00005 for each up to a total of 7. Max reduction is .00035.

Still worthwhile!

:thumbup:

*BMW FINANCIAL SERVICES*
*New Multiple Security Deposit Program*

BMW of North America in conjunction with BMW Financial Services are pleased to announce that the Multiple
Security Deposit (MSD) Rate Reduction Program will continue through January 2, 2020 *and will be available
for all customers who choose to either put down multiple security deposits on their new lease, or
transfer the balance from their existing lease at lease end.*
The structure for the program will be a money factor reduction of 5 points for every security deposit, with a
maximum of 7 security deposits and a .00035 rate reduction. The contracted rate may not go below 0.00005.










*Security Deposit Calculation*
***8211; Security Deposit are calculated by rounding the customer's payment up to the nearest $50
increment.
***8211; For example, if the customer's monthly payment is $425, each security deposit should
be $450. If the customer transfers $3,150 (7 x $450), they will receive the maximum
rate reduction of 35 points.
***8211; The monthly payment should be calculated with the rate reduction first. If the
customer's payment is $425, but calculated at $399 once the 35 point reduction is
applied, then the security deposit maximum is $2,800 (7 x $400).
***8211; If the customer's current security deposit amount exceeds the maximum needed for
the rate reduction, the surplus can be remitted to the customer at lease end.
***8211; Security Deposits cannot exceed $749 for New York lessees.

.


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## MauiSteve (Apr 3, 2019)

Well January 2, 2020 has come and gone... Is this program still available to new lease customers or not? 

Does asking for the inclusion of this program in your new lease contract tend to ruffle the feathers of the F&I guy?


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## GreenLantern (Mar 30, 2013)

MauiSteve said:


> Well January 2, 2020 has come and gone... Is this program still available to new lease customers or not?
> 
> Does asking for the inclusion of this program in your new lease contract tend to ruffle the feathers of the F&I guy?


:thumbup: Curious to know myself. I've always loved doing 7 MSDs.


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## mffalrrel (Jul 1, 2011)

So why would I lease a BMW if I can***8217;t write it off, and I have the capability to pay cash? I tend to keep my cars for at least 10 years.

Thanks!


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## Jon Shafer (Dec 15, 2001)

mffalrrel said:


> So why would I lease a BMW if I can't write it off, and I have the capability to pay cash? I tend to keep my cars for at least 10 years.
> 
> Thanks!


Because if you max out your MSDs you can actually make money, at least beat what you might earn if you compare to interest rates banks are paying nowadays.

And, if you are a returning/loyal BMW owner, you qualify for both Lease Credits and Owner Loyalty credits that you would *not* be entitled to if you simply stroked a check for your new BMW,. If *for example you were getting a 2020 X3 or X4 M40i, you would miss out on $4,750.00 in FREE MONEY*.


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## jw (Dec 21, 2001)

Anyone know if the MSD program is still active? It's been nearly 350 days since I turned in my 550xi lease. One year without a car is enough! Got my eye on a new M550xi, owners loyalty is still valid and the MSD program could save me a pretty penny like it did last time.


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## MauiSteve (Apr 3, 2019)

I just did 7 MSD's at a Hawaii dealership 3 weeks ago. Might possibly be a Regional thing, but most likely you're gonna be fine. The money factor buy rate has been creeping up a bit, so good you buy it down with MSD's. December MF= .00128 , January MF= .00137 , February MF= .00142

For an ordered car, I believe you can lock-in at the lowest rate for 60 maybe even 90 days from time your financial application gets submitted to BMWFS. So insist on the lowest MF month from the time of financial application (assuming all other monthly promotions constant), then buy it down further with up to 7 MSD's.


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## mffalrrel (Jul 1, 2011)

What***8217;s the financial return on a MSD these days?


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## MauiSteve (Apr 3, 2019)

I believe somewhere between 9 and 11% effective return based on cost savings. Beats the hell out of being in the market right now unless you're short. Seen the Dow futures this evening?


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## jw (Dec 21, 2001)

MauiSteve said:


> I just did 7 MSD's at a Hawaii dealership 3 weeks ago. Might possibly be a Regional thing, but most likely you're gonna be fine. The money factor buy rate has been creeping up a bit, so good you buy it down with MSD's. December MF= .00128 , January MF= .00137 , February MF= .00142
> 
> For an ordered car, I believe you can lock-in at the lowest rate for 60 maybe even 90 days from time your financial application gets submitted to BMWFS. So insist on the lowest MF month from the time of financial application (assuming all other monthly promotions constant), then buy it down further with up to 7 MSD's.


Thanks. Good to know it was still valid recently.

Any chance they'll grandfather my prior MSD buy down of .0007 per deposit? It's been less than a year since my prior lease ended.


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## Shon528 (Oct 3, 2003)

jw said:


> Thanks. Good to know it was still valid recently.
> 
> Any chance they'll grandfather my prior MSD buy down of .0007 per deposit? It's been less than a year since my prior lease ended.


That would be a hard and fast no.


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## MauiSteve (Apr 3, 2019)

jw said:


> Any chance they'll grandfather my prior MSD buy down of .0007 per deposit? It's been less than a year since my prior lease ended.


I'd say not a snowball's chance in hell, at least IMHO. I believe you will get the standard 0.00005 MF reduction per deposit.


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