# One time lease payment......



## BMW29 (Mar 22, 2005)

I came here a few weeks ago, looking for advice from people who have had prior dealings with BMW. Many people have helped me tremendously, especially Jon and all the information he posts. 

I have also had much misinformation, especially when it concerned a one time lease payment. The going belief on this board is, if you get into an accident, you have lost your entire payment. That is not true! For anyone thinking of a one time lease payment, contact BMWFS and they will explain to you, as they have to me, what happens in the event of a vehicle that is totaled while under such a lease. You will be credited for the unused portion of the cars lease, after all past due payments and deductibles have been met. The up front payment is not considered a capital cost reduction, and is evenly divided up by the amount of months the term of the lease is for. 

I asked a customer service rep the following question:

If I were to make a one time only lease payment on a BMW, and 2 months later the car was totaled in an accident, would I lose the entire payment.

The answer was:

You would be responsible for any payments due before the accident and the unused portion of the lease would be refunded to you.


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## webguy330i (Jan 9, 2002)

BMW29 said:


> I came here a few weeks ago, looking for advice from people who have had prior dealings with BMW. Many people have helped me tremendously, especially Jon and all the information he posts.
> 
> I have also had much misinformation, especially when it concerned a one time lease payment. The going belief on this board is, if you get into an accident, you have lost your entire payment. That is not true! For anyone thinking of a one time lease payment, contact BMWFS and they will explain to you, as they have to me, what happens in the event of a vehicle that is totaled while under such a lease. You will be credited for the unused portion of the cars lease, after all past due payments and deductibles have been met. The up front payment is not considered a capital cost reduction, and is evenly divided up by the amount of months the term of the lease is for.
> 
> ...


 That's exactly how it should be, because insurance will pay off the value of the car, and the gap coverage is just that. Otherwise BMWFS would be basically comitting insurance fraud by taking YOUR money for the car + the extra money from the gap coverage!

Good investigative work.


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## JonMarks330i (Apr 9, 2005)

How much was a one time payment and what were the terms and vehicle specs ?
It sounds like a very interesting way to lease a vehicle.


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## Robert A (May 18, 2003)

Granted that they'll do this, but I wonder how they'll compute the amount. It's possible that they might use the straight line method (bad for you, good for them), or the accrual method (fair for everyone involved).



BMW29 said:


> I came here a few weeks ago, looking for advice from people who have had prior dealings with BMW. Many people have helped me tremendously, especially Jon and all the information he posts.
> 
> I have also had much misinformation, especially when it concerned a one time lease payment. The going belief on this board is, if you get into an accident, you have lost your entire payment. That is not true! For anyone thinking of a one time lease payment, contact BMWFS and they will explain to you, as they have to me, what happens in the event of a vehicle that is totaled while under such a lease. You will be credited for the unused portion of the cars lease, after all past due payments and deductibles have been met. The up front payment is not considered a capital cost reduction, and is evenly divided up by the amount of months the term of the lease is for.
> 
> ...


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## 01Byte (Jun 22, 2003)

BMW29 said:


> I came here a few weeks ago, looking for advice from people who have had prior dealings with BMW. Many people have helped me tremendously, especially Jon and all the information he posts.
> 
> I have also had much misinformation, especially when it concerned a one time lease payment. The going belief on this board is, if you get into an accident, you have lost your entire payment. That is not true! For anyone thinking of a one time lease payment, contact BMWFS and they will explain to you, as they have to me, what happens in the event of a vehicle that is totaled while under such a lease. You will be credited for the unused portion of the cars lease, after all past due payments and deductibles have been met. The up front payment is not considered a capital cost reduction, and is evenly divided up by the amount of months the term of the lease is for.
> 
> ...


 As one of those who thought that you would lose the whole amount.

I stand corrected!!

Thanks for the update.. :thumbup:


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## The Other Tom (Sep 28, 2002)

JonMarks330i said:


> How much was a one time payment and what were the terms and vehicle specs ?
> It sounds like a very interesting way to lease a vehicle.


I believe it's called a pre-paid lease. You make all the lease payments up front. Watch out for the interest rate,though, because I think it's a bit higher than the normal lease rate.


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## JB-From-FL (Jul 23, 2004)

*I have done these in the past with*



The Other Tom said:


> I believe it's called a pre-paid lease. You make all the lease payments up front. Watch out for the interest rate,though, because I think it's a bit higher than the normal lease rate.


Much lower rates than making monthly payments. It is great because it does not cause you to lay out all the money up front. No payment shows on your credit report, as a realtor this saves me money on mortgages. Since I do not keep cars for long period of time and I can not seem to get a dealer to give me a decent trade this is the best way to avoid paying sales tax on the unused part of the car saving more than the lease cost.


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## lilskel (Jun 10, 2005)

Do they even have a MF when it is a prepaid lease? It would be great if you could just pay the depreciation part all up front and then turn it in when your done with it


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## LA X3 (Jul 5, 2005)

> Do they even have a MF when it is a prepaid lease?


While I don't know the terms of a prepaid lease, you can be certain they do. BMWFS isn't going to put out that much money and not make interest on it.

In a lease, the leasing company basically buys the car and charges you interest on the _whole_ purchase price, plus the depreciation. Notice that the rent charge portion of your lease payment is suspiciously close to the monthly interest cost on a loan in the amount of the purchase price. It's not a coincidence.


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## kyfdx (Aug 4, 2003)

*Prepaid leases..*

Money factor: Generally, they treat it as a normal lease, only with a lower money factor.. Then, they add up all the payments and that is what you pay upfront.. As an example, I remember a 36 month lease that had a .00225 money factor, but if you did a one-pay, they calculated the lease with a .0008 money factor.. A substantial discount for the prepay..

Totaled cars: One-pay leases aren't treated the same as a 36 month lease with a large cap cost reduction.. If the lease is ended, the single payment is treated as 36 equal payments, and a pro-rated refund is made for any portion of the lease not used..

So... One-pay leases (at least from BMWFS) can be good deals.. Definitely more protection than when you make a large cap cost reduction..

My details may be a little fuzzy... I'm sure one of our dealers can make any corrections..

regards,
kyfdx


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## turpiwa (Jun 13, 2005)

I may be being a little slow but - is 1 pay lease where you pay the (e.g) 36 mths of lease payment up front?


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## Krochelli (May 9, 2005)

Yes.


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