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      10-06-2005, 02:20 AM   #1
Dave8888
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October base money factor?

Hey guys-

I went into the dealership tonight ready to lease a 325i and the dealer would not budge from $1100 over invoice, 63% residual and a money factor of .00285. This is for a 36month/36,000 mile lease with $0 cap reduction. The $1100 over invoice I can deal with... the 63% residual is great, however the .00285 seems pretty steep since I've been reading posts of all these folks getting closer to .0025. Did the base rate increase for October? My dealer was saying that .0025 is only for BMW loyalty customers.. is that true? Any advice would be greatly appreciated. Thanks.

-Dave
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      10-06-2005, 09:38 AM   #2
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I got the .0025 factor on a 330xi that will arrive in a couple of weeks. I decided to use a Capital One instead. 5.75% ) IMO rates are negotionable. Tell them you got a lower money factor at another dealership and see what happens.

Ofcourse BWM most likely bases there parameters on a fico score, but will always deal up to their limits. Captial One Finance gives awesome rates if you are our purchasing the car. You can fill out the application online and they will fedex you a blank check you can fill out up to your limit with in 24hr
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      10-06-2005, 10:53 AM   #3
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The 330i lease program got BETTER in october.

3 years, 12k / year
Sept: 62% residual, 0.0025 MF (base)
Oct: 63% residual, 0.00225 MF (base)

Not sure about the 325 though
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      10-06-2005, 12:00 PM   #4
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I knew my dealer was smoking crack. I'll definitely check out some other dealers or look at leasing through a different institution. Thanks for the input guys!
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      10-06-2005, 12:57 PM   #5
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Can someone explain what the money factor is?
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      10-06-2005, 01:05 PM   #6
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The money factor is basically the interest rate on a lease. The reason it looks funny is because it is the rate divided by 2400. So, 6% = .0025. To calculate your monthly interest payment you add the purchase price of the car to the residual value of the car, then multiply by the money factor. If you're planning on leasing, you should definitely do some research on the boards and other leasing guides so you understand all the numbers involved.
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      10-06-2005, 01:05 PM   #7
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Quote:
Originally Posted by 06graphite
Can someone explain what the money factor is?
Your MF is used to calculate the total interest charge on your lease. It is basically the interest rate charged on your lease, expressed a different way.

The formula to calculate the total interest on your lease is:
MF * (Cap cost + Residual) * # of months of your lease

This formula simply applies your interest rate to the average value of your car during your lease. The reason you ADD cap cost + residual is because you are averaging the two, but you don't see the division by 2 because it is included in the money factor calculation.

In other words, you can arrive at the same total interest charge number by the following calculation:

[(% Interest rate / 100) / 12] * [(Cap cost + Residual) / 2)] * Term
ie: Monthly interest rate * Average value of car during lease * # of months

People use "money factor" to simplify the above equation by combining the constants:
[[(% Interest rate / 100) / 12] / 2] * (Cap cost + residual) * Term

_or_

(% Interest rate / 2400) * (Cap cost + residual) * Term

_or_

Money factor * (Cap cost + residual) * Term

In conclusion, you can calculate your interest rate from your MF by multiplying it by 2400.
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      10-07-2005, 07:15 AM   #8
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thanks pete (and dave) great explination.

I hate to admit it, but I have an MBA in finance and we never even discussed stuff like this... (My wife does too, and she's never heard of it either) Of course neither of us have ever leased a car before...
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      10-07-2005, 02:06 PM   #9
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Quote:
Originally Posted by petesamprs
The 330i lease program got BETTER in october.

3 years, 12k / year
Sept: 62% residual, 0.0025 MF (base)
Oct: 63% residual, 0.00225 MF (base)

Not sure about the 325 though
No idea where you're getting those #s but the rate INCREASED from Sept to Oct. I locked in my rates in Sept, had them re-run it before I got the car, and the MF was higher while the residual did not change at all.

So either your #s are mistaken or my dealership lied to me.

The Sept Residual was 64%, not 62%. Not sure what the MF is/was. I just remember him checking and it was higher.
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      10-07-2005, 03:51 PM   #10
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Here's an update on my situation in case anyone cares:

I ended up going through a different dealer, who was much easier and more professional to work with. He gave me a great quote and now I'm driving a 330i (premium, sport, auto, heated seats, sat prep).

The base MF in his book for October was .00225. He gave me .0024 and that waves the security deposit. The residual for 12k miles/year is 63%.

I was shocked to say the least in the difference in numbers I got from two different dealers only 30 miles apart from each other.

In any case, I'm happy now with both the car and my deal.
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