[GTGuy]

I placed the order for my AW w/ Coral Red M235i a few weeks ago and delivery is scheduled for the end of February in Munich. At the time when I placed the order I was set on financing, not leasing, so we never discussed lease terms. Now that the order has been placed I am debating doing a lease.

I contacted the dealer to have them work up the numbers and they simply can't get the lease numbers right. They're using Euro MSRP to figure the lease, which is wrong, it should be based on the US MSRP. Here's the numbers for the car in case anyone is interested:

US MSRP: $50,875
Euro MSRP: $47,910
Euro Invoice: $44,080
Sale Price: $44,830
Residual: 39MO/15K: 56%, 39MO/12K: 60%
MF: 0.0017

I know 15K is high and I really only need 12K, but was just putting these numbers out there to inform you of what I'm dealing with. I was under the impression it should be closer to 61% residual for the 12K lease, but that may be for a 10K lease.

Question for the forum: is there any way to get them to work up the lease numbers properly? I feel like they're trying to work both fists up my rear every time I go in there, and it's making me angry . Could I get BMWFS involved? My family is good friends with the president of the dealer, but I'd rather not have to go that route. Ideas? Thanks

[M2ALEX]

If you look at my first post here just a few days ago, I was in your exact situation. You can compare the crappy rates I got.

""I just got this quote back from my dealer ship
2015 M235i mineral white with Coral red interior
Note: I am paying 15k down to lower the monthly.

I dont know if the salesman is being straight with me.

MSRP: $53805
SELLING: $53805
RATE .00170
RESIDUALE 59% FOR 12K (BASED ON 12)
RESIDUALE 57% FOR 12K
TAG/TITLE/FEE/TIRE/DOC $558
BANK FEE $1005
PAYMENT $382.10
TAX 8% 30.57
TOTAL: $412.67
39 MONTHS TERM

Please let me know what you guys think. Everything is approved just needs a signature.""

Long story short, I decided to purchase the car. I am planning to finance 8000 dollars from BMWFS in order to get the $1000 Grad program incentive and paying it off.

[hyperzulu]

Who are you working with? Euro delivery orders can be transferred to a different dealer now that the orders do not come out of dealer allocation. Are you working with David at Steve Thomas BMW? Would be surprised as they're all pretty much straight shooters at STBMW and as far as I know, only David there works ED orders.

[GTGuy]

I was able to get the dealer to update the lease to be based on US MSRP, which dropped the payment to the following:

US MSRP: $50,875
Euro MSRP: $47,910
Euro Invoice: $44,080
Sale Price: $44,830
Residual: 39MO/12K: 59%
MF: 0.0017
Down Payment: $3000
Monthly Payment: $487 (includes 4% tax)

The dealer I'm working with doesn't do a lot of ED so they claimed they were unsure how to do the lease. They had to contact BMWFS to make sure I was right in telling them to use the US MSRP.

I didn't realize ED could be swapped to another dealer. While the dealer I'm working with is a pain, they are local and convenient, plus the salesman I've been working with is a nice guy, but the management is a pain. I would just like someone to look over the numbers and let me know if it's a decent deal. I think the sales price is pretty good, but it's the lease I'm wary of. I don't have to get the best deal anyone has seen, but I want it to be a good deal. If anyone can comment I'd appreciate then input. Thanks!

[hyperzulu]

I would really caution against it unless you're willing to do a lot of the homework yourself. Plenty of people have been in your position and ended up with a royal mess on their hands because they didn't know the ED process and neither did their CA. Crap like the dealership not sending in final paperwork so the car wasn't built and the buyer only found out after asking on the forums if it was normal that something or other had not arrived yet.

[hyperzulu]

Anyway, your numbers look fine. $750 profit for dealer. The $3000 down is for fees or for cap reduction?

I'm guessing since you quoted 4% sales tax, you're no longer in Pasadena, CA. Is the current money factor 0.0014 for US delivery? You should only get a markup that is 0.0003 over US MF for ED. If it's still at 0.0013 like it was before, then I would ask for 0.0016 MF. This can go up, but not down, from base rates. So it is good to know ahead of time so the sales person doesn't try to tell you that the base rate is X when in reality he's just trying to make a profit for the finance guy.

[GTGuy]

hyperzulu thanks for the feedback. You're correct in assuming I'm no longer in Pasadena. I originally joined the forum years back when I lived in Pasadena with my '06 330i, but since I have moved and now am in northern Alabama.

The $3000 is for cap reduction, but I have been considering dropping to $1500 as I'd like to put as little money into the car as possible if I decide to go for the lease. I need to verify the current MF for US delivery, but I believe you are right in saying it is 0.0013 - I'm not surprised the dealer bumped it a little to make some extra money. I also need to verify the residual they are using before signing anything. I thought it was 60% but they're telling me 59%. The numbers they ran for me yesterday were not done by the finance manager, but by the sales manager since the finance guy was out. I need to go back early next week and sit down with the finance guy and get the exact numbers.

I should have ironed out the leases details before ordering, but like I said in an earlier post I was initially just going to finance, but after thinking about the M2 and stuff that's coming down the pipeline in the future I decided that maybe a 3 year lease would be better. Now that I decided to lease after the car has been ordered they're trying to make some extra money by taking a little here and there.

[M2ALEX]

i am actually in the exact same position as you. And looking towards the M2 in the future, I figured leasing the vehicle would be beneficial to me. However, after crunching the numbers I found that purchasing the car and paying it off was leaving me with more money in my account.

The residual they gave me was the same as your as well. I feel that the M235i will hold its value in 3 years. Not like the 1M (best investment ever) but just enough to take the risk in purchasing instead of leasing.

[krhodes1]

Hyperzulu,

Could you explain why you would want to use US MSRP on an ED lease? Wouldn't the residual be based on whatever you negotiate for a price, which would be much lower on an ED? What am I missing?

I too am on the fence about leasing vs. buying, though some sales tax law changes in my state are making me lean towards buying.

Also need to beat the dealer up some more on the discount, they are being a bit greedy again. I'm not paying them $3K just to fill out a bunch of paperwork!

Since you know your stuff it would seem - is it safe to assume that the spread between Euro invoice and MSRP is roughly the same as between US invoice and MSRP? If Edmunds is to be believed, the spread is $4080 on a $50750 US MSRP. ED MSRP is $3K lower. I was able to get $2500 below Euro MSRP when I ordered my 328i wagon in '11, and I expect at LEAST that the 2nd time around!

[turbine50]

I'm in the process of doing this myself. So far, it's my understanding that you take the MSRP of your car as built, minus the destination charge, then apply the ED discount (5-7%.). I haven't seen where the Euro MSRP has anything to do with it.
I am about to cancel my order with Mercedes because I'm getting wind that their Euro Delivery MF is north of .002. I'm supposed to sign in mid March for an April 20th delivery.

Paying $5000 for the cost of a 3 year lease is a game changer for me. I have no problem with switching to BMW and paying A $200 penalty to get my deposit back from the MB dealer.

[hyperzulu]

Originally Posted by turbine50

I'm in the process of doing this myself. So far, it's my understanding that you take the MSRP of your car as built, minus the destination charge, then apply the ED discount (5-7%.). I haven't seen where the Euro MSRP has anything to do with it.

I got 13.4% discount off total msrp. You want to price your car using euro delivery invoice price, multiply all your options (except m performance) by .91, then add the $950 destination charge. The sum of those plus a dealer profit of say $500 should be what you're shooting for.

From what I've heard, MB discounts are similar to BMW but money factors fluctuate monthly between models so who knows what it will be in April?

[turbine50]

Yes, it's a little different with MB. We took the MSRP (car plus all options) from the website, minus the delivery then -5%. There are no ED prices on the order guide.

When you say add all options and multiply by .91 but not M-Performance, is that specific, or does it mean M-Sport Package as well?

I'm going to the BMW dealer tomorrow.

[mike@tpc]

Originally Posted by krhodes1

Hyperzulu,

Could you explain why you would want to use US MSRP on an ED lease? Wouldn't the residual be based on whatever you negotiate for a price, which would be much lower on an ED? What am I missing?

because resale value at the end of the lease is going to be the same whether or not you bought the car using ED. The residual is based on the US MSRP.

Think of it this way, if you traded in a car after 3 years, would it make a difference to the dealer how much you paid for it?

[hyperzulu]

To answer the above question which I missed, you pay monthly the difference between negotiated price (high) and the residual value (low). It is in your best interest to bring those two numbers as close together as possible. Say the high value is $50 and the low is $30. You pay the difference, $20, monthly. Since residual is a percentage of total retail value, and this ends up being the low value which we want to be as close to the high value, we want to use the bigger number to base our calculation. 60% of $50 is more than 60% of $45. So it is better to pay the difference between $50 and (60% of 50). In numbers, using US MSRP: 50 - 30 = 20 / 36 monthly payments vs using ED MSRP: 50 - 27 = 23 / 36 monthly payments. You pay more if you calculate residual based on the lower number.

Once you start negotiating price though, that 50 in my calculation drops since you're not looking to pay MSRP. If you use ED invoice and add dealer profit, you might be looking at something like 44 - 30 = 14 / 36 monthly payments, which is the best scenario of all and why ED leases are popular. You're basically paying $14,000 over 36 months before taxes, instead of $17,000 over 36 months, a savings of $83 a month!

[GTGuy]

Just a random question. My m235i is scheduled for delivery in Munich on 2/25 and on myBMW it's still showing the car hasn't entered production. In general how far in advance do they build the car? I'm guessing that the car doesn't take long to manufacture, but I just want to make sure the dealer hasn't forgot a step that's keeping things from moving along.

[hyperzulu]

Could be built as far out as a week before delivery, in general. The 2 series is built in Leipzig though, so most likely two to three weeks out, depending on production levels.

I would be more vigilant about getting the email confirmation from bmweuropeandelivery regarding your ED you should have already gotten a white package in the mail containing brochure information and hotel promotional items. You should soon be getting an email that says your European delivery experience has begun. That happens when your CA sends out the paperwork confirming your car is to be built.

[GTGuy]

I did get a European Confirmation email from BMW two weeks ago. In the letter is my delivery time, so I'm guessing everything is good to go. I have yet to receive anything in the mail yet...

[hyperzulu]

Originally Posted by GTGuy

I did get a European Confirmation email from BMW two weeks ago. In the letter is my delivery time, so I'm guessing everything is good to go. I have yet to receive anything in the mail yet...

Should have a FedEx package. Nothing useful. I think I used the luggage tags that were in it.

[GTGuy]

Neat. Thanks for all your input!

[krhodes1]

Originally Posted by hyperzulu

To answer the above question which I missed, you pay monthly the difference between negotiated price (high) and the residual value (low). It is in your best interest to bring those two numbers as close together as possible. Say the high value is $50 and the low is $30. You pay the difference, $20, monthly. Since residual is a percentage of total retail value, and this ends up being the low value which we want to be as close to the high value, we want to use the bigger number to base our calculation. 60% of $50 is more than 60% of $45. So it is better to pay the difference between $50 and (60% of 50). In numbers, using US MSRP: 50 - 30 = 20 / 36 monthly payments vs using ED MSRP: 50 - 27 = 23 / 36 monthly payments. You pay more if you calculate residual based on the lower number.

Once you start negotiating price though, that 50 in my calculation drops since you're not looking to pay MSRP. If you use ED invoice and add dealer profit, you might be looking at something like 44 - 30 = 14 / 36 monthly payments, which is the best scenario of all and why ED leases are popular. You're basically paying $14,000 over 36 months before taxes, instead of $17,000 over 36 months, a savings of $83 a month!

Perfect - thanks! Makes perfect sense, I mis-understood what you were saying originally, which is what I figured I had done.

[GTGuy]

Production finally started!!! I placed my order in early January and things are finally coming together. Signed the sales agreement and loan docs today. All that's left to do now is pick up the car in Munich!

[hyperzulu]

Originally Posted by GTGuy

Production finally started!!! I placed my order in early January and things are finally coming together. Signed the sales agreement and loan docs today. All that's left to do now is pick up the car in Munich!

Dude no! Sign the documents just before you leave for Europe. You're paying one month early on a lease and your dealer is local? Go to their office the day before you leave for Europe so the lease can begin that day, not 30 days prior. You are paying one whole month to just have your car in production... this is the kind of thing I warn about. DO NOT SIGN THE DOCS NOW!

Nevermind, it says you already signed the documents
See if they will amend the document so you're not paying for a car you won't have for 30 days. Seriously, you are not required to pay for the car 30 days in advance. There are people who signed 24 hours prior to receiving their car.