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      01-04-2008, 04:26 AM   #1
happyparrot
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Lease negotiation

Hello everyone, I have '06 325i and my lease is going to end in July. I did a lease takeover to get this car to test out BMWs and I like it a lot, so i'm planning on leasing another one.
I'm looking to pick up an '08 328xi coupe with sprts and premium packages, the suggested price is ~ $43,100.

The salesperson (who was an asshole to me until he found out I was leasing a BMW already - awesome sales technique!!) gave me a few options, and kept saying that, "after talking with my manager, maybe BMW will cover some of the cast...)

My question is, what can I negotiate with the sales person to get the best deal? The only thing he was clear about was that if I want to turn my car in early, BMW will cover majority of the remaining lease payments.

Thanks for all your help.
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      01-04-2008, 07:23 AM   #2
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Quote:
Originally Posted by happyparrot View Post
My question is, what can I negotiate with the sales person to get the best deal? The only thing he was clear about was that if I want to turn my car in early, BMW will cover majority of the remaining lease payments.
My understanding (& 6 BMW leases background):
  • Cap Cost (how much above invoice/below MSRP) is biggest negotiation element by far. Hammer this guy on cap-cost/sales price just like you were buying an oriental carpet from a rug merchant.
  • How light/heavy you are on the options list is a major element of cap cost also, so screen your toy list carefully.
  • Money factor has about .0004 dealer flex in it - do your best to bring the deal to minimum base money factor. Ask-A-Dealer forum at Bimmerfest has current BMW lease rates, which change monthly.
  • I think (but don't know) that BMWFS has different deals based on credit rating. Unless your credit sucks, make the finance person tell you that this is the best money factor BMW has for this car.
  • Make damn sure you see the actual BMWFS deal, either on the screen or a direct print-out. You can what-if any range of options (lease length, lease miles, cap cost reduction, etc.) and the finance person should cheerfully show you the results of each of the options you ask to look at.
  • If you're coming out of a BMW lease, you should not have to pay any security deposit.
  • Don't buy any dealer add-ons like undercoating, special paint treatment, or additional warantee coverage. If your in a BMW dealership that pushes these at you, you're probably in the wrong dealership. If there is an additional dealer sheet on the car next to the Monroney sticker, tell the dealer that you will not pay for anything on that second sticker (but if you're buying an M3 the month they come out, the dealer may tell you to pack sand. Hot cars get hot prices.)
  • Ain't nothing wrong with shopping different dealers, playing one against the other, even asking for a different SA. My experience says that BMW dealerships are generally much much better to deal with than the classic American new-car dealer. BUT: some BMW dealers are way below average (check the forums) and some SAs are in the wrong line of work
  • Signing on the last day/days of the month will always get you a sweeter deal. Always.
  • Don't lease for more miles than you will probably use. BMW makes it easy to buy more up to 4 months before lease end and even without this it is generally cheaper to pay for the miles at lease end than buy extra (i.e., 15K miles/year if your driving is closer to 12K/year). If you're a high-mileage driver, all bets are off and leasing may not be a good option period.
  • Residual is set by BMW and can't be moved.
  • Check the BMW website for lease specials.
  • BMW will NOT cover remaining lease payments on early turn in. Watch this guy and maybe try a different dealer. BMW does have occasional early turn-in offers, but very model-specific, only 1, 2, or 3 months, changing regularly, and impossible to predict until they are announced. (This SA may offer to pay off some lease payments, but that's money that he has to make up elsewhere in the deal. And I'll bet that if you go down this rabbit hole, the offer will evaporate before you get to the signing ceremony.)
This is my story and I'm sticking to it...
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      01-04-2008, 09:06 AM   #3
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BMW will not cover any of the lease payment. Bottom line. Not gonna happen. What they will do is create the illusion of this by using the profit of the new car to cover the remaining owed on the old lease. The dealer will be covering this, and charging you for it. I'm going to venture a wild guess they are quoting you a near-sticker price for the car, and maybe even jacking up the money factor.

Call BMWFS and find out what it would cost to terminate the lease today. The dealer is covering that. Now, they are also offered the car from BMWFS at a substantially reduced rate from the residual quoted in the lease. In other words, when a car comes in off lease, it is owned by BMWFS, and BMWFS offers it for sale to the dealer for less than you could buy it at the end of the lease. So, the dealer may feel they can flip your car quick, and make some money that way to cover the cost of an early dispo. The dealer wants to sell the new car to you so they 1. get that profit and 2. get the volume credit. BMW works off of an allocation system, so the more new cars a dealer sells, the more they get to sell.
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      01-04-2008, 09:27 AM   #4
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BMWFS will not make any payments for you, I can guarantee that much. Only way that EVER happens is if they have a "pull ahead" which means they will typically waive a few payments to get you into a new car. Right now there are no programs running to that effect, and probably won't be for some time, and even when they do have this it is limited to certain years/models.

Only way is if your dealer pays off your account or makes your remaining payments. Trust me on this.
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      01-04-2008, 12:28 PM   #5
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Quote:
Originally Posted by Rubber Ducky View Post
My understanding (& 6 BMW leases background):
  • I think (but don't know) that BMWFS has different deals based on credit rating. Unless your credit sucks, make the finance person tell you that this is the best money factor BMW has for this car.
  • Check the BMW website for lease specials.
Mostly good advice. However, somewhat unique to BMW, they only have 1 Tier for leasing. If you qualify, you qualify. As the above poster mentioned, look up the residual and the buy rate before you go into the dealership.

What I am finding is that many dealerships are trying to make the bulk of their money through financing, so a .00020 or .00040 markup over the buy rate isn't bad if you are getting the car at invoice or near it. (assuming there are no rebates or incentives on the car, which there are not on the e90/e92.)

http://www.leaseguide.com/calc.htm is a very helpful calculator. Just keep in mind that it doesn't calculate tax on a cap reduction or license fees or the acquisition fee, you need to add that in yourself. Most dealerships will mark the $625 acquisition fee up to $825.

Good luck! I just got my E90 335i for $100 over invoice, and a 0.00040 buy rate markup in san jose CA.
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      01-04-2008, 12:52 PM   #6
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Quote:
Originally Posted by kitw View Post
Mostly good advice. However, somewhat unique to BMW, they only have 1 Tier for leasing. If you qualify, you qualify. As the above poster mentioned, look up the residual and the buy rate before you go into the dealership.

What I am finding is that many dealerships are trying to make the bulk of their money through financing, so a .00020 or .00040 markup over the buy rate isn't bad if you are getting the car at invoice or near it. (assuming there are no rebates or incentives on the car, which there are not on the e90/e92.)

http://www.leaseguide.com/calc.htm is a very helpful calculator. Just keep in mind that it doesn't calculate tax on a cap reduction or license fees or the acquisition fee, you need to add that in yourself. Most dealerships will mark the $625 acquisition fee up to $825.

Good luck! I just got my E90 335i for $100 over invoice, and a 0.00040 buy rate markup in san jose CA.

One lease tier is generally true, however for vehicles without subvented rates the money factors are credit tiered, usually on new or limited models. For example the 3 convert.
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      01-04-2008, 01:38 PM   #7
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Quote:
Originally Posted by Rubber Ducky View Post
My understanding (& 6 BMW leases background):[list]
[*]Don't buy any dealer add-ons like undercoating, special paint treatment, or additional warantee coverage. If your in a BMW dealership that pushes these at you, you're probably in the wrong dealership. If there is an additional dealer sheet on the car next to the Monroney sticker, tell the dealer that you will not pay for anything on that second sticker (but if you're buying an M3 the month they come out, the dealer may tell you to pack sand. Hot cars get hot prices.)


[*]Don't lease for more miles than you will probably use. BMW makes it easy to buy more up to 4 months before lease end and even without this it is generally cheaper to pay for the miles at lease end than buy extra (i.e., 15K miles/year if your driving is closer to 12K/year). If you're a high-mileage driver, all bets are off and leasing may not be a good option period.
Some aftermarket coverage may be useful to a consumer. The wheel and tire warranty I purchased for my last three leases saved me from having to purchase four very expensive tires. $400 a piece for ZCP M3's I had. Runflat tires aren't cheap either.

High mileage drivers may also benefit from a lease. I have a lot of real estate professionals that lease because they don't want to deal with trading in a car with higher than average miles. It's bad enough when you have a trade with average miles. The payments are closer to traditonal financing when you use 20k miles a year or more, but there is less risk of losing money to depreciation or if you get into an accident. BMW leases provide gap protection free of charge
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      01-04-2008, 01:46 PM   #8
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Quote:
Originally Posted by kitw View Post
Mostly good advice. However, somewhat unique to BMW, they only have 1 Tier for leasing. If you qualify, you qualify. As the above poster mentioned, look up the residual and the buy rate before you go into the dealership.

What I am finding is that many dealerships are trying to make the bulk of their money through financing, so a .00020 or .00040 markup over the buy rate isn't bad if you are getting the car at invoice or near it. (assuming there are no rebates or incentives on the car, which there are not on the e90/e92.)

http://www.leaseguide.com/calc.htm is a very helpful calculator. Just keep in mind that it doesn't calculate tax on a cap reduction or license fees or the acquisition fee, you need to add that in yourself. Most dealerships will mark the $625 acquisition fee up to $825.

Good luck! I just got my E90 335i for $100 over invoice, and a 0.00040 buy rate markup in san jose CA.
I agree. I just ordered a 335i Sedan from a dealer in SoCal for $400 over invoice (No Maco saved an addtl $300) but they sold the lease at 0.0002 over buy rate and $825 acq. fee. Doc fee was $45.
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      01-04-2008, 02:12 PM   #9
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Quote:
Originally Posted by david06M3 View Post
Some aftermarket coverage may be useful to a consumer. The wheel and tire warranty I purchased for my last three leases saved me from having to purchase four very expensive tires. $400 a piece for ZCP M3's I had. Runflat tires aren't cheap either.

High mileage drivers may also benefit from a lease. I have a lot of real estate professionals that lease because they don't want to deal with trading in a car with higher than average miles. It's bad enough when you have a trade with average miles. The payments are closer to traditonal financing when you use 20k miles a year or more, but there is less risk of losing money to depreciation or if you get into an accident. BMW leases provide gap protection free of charge
Good discussion. No argument.
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      01-05-2008, 05:31 AM   #10
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Thank you very much for all of you advice, this has been extremely helpful.
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