[Thescout13]

Hey all. I figured since the ordering section doesn't get much traffic I would put this here and help those of you trying to lease a new 2 series. I have a buddy who is a finance director and I can tell you what the real deal is for the car you want and help you get the best deal.

Put the following in a PM for me:
1. MSRP:
2. Cash Due at Signing (amount you are willing to give):
3. How many miles a year: 10k/12k/15k
4. Lease length: (39 months best deal now)
5. Link to the car on dealer website OR type of car and packages you are getting on it.
6. Whether the car is on the lot or you have to order it. (Matters for net cap cost)
7. What state you are in (for sales tax)

For reference I got a 228i M Sport fully loaded (minus track handling package) MSRP of $43,270 for $1800 due at signing and $470 a month at 12k miles.

NOTE: Due to some privacy concerns, among other idiots, if you have any specific questions PM me and I will get back to you, and can show you full break downs if you want more info.

Best

M

[MrBallooKnot]

What's really behind a "pull-a-head" lease?

[BMW335iOn18s]

I think they just roll the remainder of your payments into the new lease. You're paying for it either way...

We already have a thread where we discuss the deals were being offered in the pricing section. An average deal is about $1000 over invoice which is 8% off of MSRP. A great deal is invoice price. A really good deal is anything below...

[Thescout13]

Originally Posted by MrBallooKnot

What's really behind a "pull-a-head" lease?

I love this question.

Basically the pull ahead lease is an easy way for the dealer to make you think they are giving you a hell of a "deal".

Let's play the scenario out.

You have 3 payments left at $325 a month.
Dealer offers you a "pull ahead" program and says they will pay the remaining payments for you.

They do this for a couple reasons: A. You are less likely to ask for other incentives or negotiate a lower price on the new car so they basically roll those last three payments into your new lease under the sale price guise. (Main reason) B. A more rare, but profitable reason - The car is actually worth a lot more to them in the short term then the payoff amount actually would be.

This is how B plays out. Your car after 3 years is selling for $30k, which means your trade in value is about 27.5-28k. However when the lease was signed three years earlier they were projecting the depreciation at 25k residual and thus your payoff is around this amount. Well if you negotiate it as a normal "trade in" that dealer would have to fork up the 28k and you'd be positive going into the new lease. However, if they say they will pay your last three payments, they are getting the car at a steal. They would pay the leinholder the roughly 26k payoff amount and now have a car on their lot that has the potential for a 4k profit as opposed to a 2k profit.

Basically, understand what your car is worth and what the payoff amount is before you say yes to one of these programs. And always stack more incentives and negotiate for a lower price.

[Thescout13]

Originally Posted by BMW335iOn18s

I think they just roll the remainder of your payments into the new lease. You're paying for it either way...

We already have a thread where we discuss the deals were being offered in the pricing section. An average deal is about $1000 over invoice which is 8% off of MSRP. A great deal is invoice price. A really good deal is anything below...

Yep I agree. But final negotiated price is just one part of the calculation. Where people screw up is taking BMW at their word and paying a dealer mark up interest rate. The money factor is where negotiating can happen.

Basically I created this thread for the average guy to input his numbers, I run them through my buddy for the specific car, and get back to that poster the best possible deal they can strive for in their state.

[midwest 340xi 6sp]

Originally Posted by Thescout13

I love this question.

Basically the pull ahead lease is an easy way for the dealer to make you think they are giving you a hell of a "deal".

Let's play the scenario out.

You have 3 payments left at $325 a month.
Dealer offers you a "pull ahead" program and says they will pay the remaining payments for you.

They do this for a couple reasons: A. You are less likely to ask for other incentives or negotiate a lower price on the new car so they basically roll those last three payments into your new lease under the sale price guise. (Main reason) B. A more rare, but profitable reason - The car is actually worth a lot more to them in the short term then the payoff amount actually would be.

This is how B plays out. Your car after 3 years is selling for $30k, which means your trade in value is about 27.5-28k. However when the lease was signed three years earlier they were projecting the depreciation at 25k residual and thus your payoff is around this amount. Well if you negotiate it as a normal "trade in" that dealer would have to fork up the 28k and you'd be positive going into the new lease. However, if they say they will pay your last three payments, they are getting the car at a steal. They would pay the leinholder the roughly 26k payoff amount and now have a car on their lot that has the potential for a 4k profit as opposed to a 2k profit.

Basically, understand what your car is worth and what the payoff amount is before you say yes to one of these programs. And always stack more incentives and negotiate for a lower price.

This...So this.

In my case, I had a dealer pull ahead that was 6 mos..I jumped on it as I had poured a bunch of negative equity into my previous lease and was paying that off in monthly installments.

The pull ahead allowed me to write off that debt 6 mos earlier. I was well armed on invoice, money factors too...It was a no brainer for me.

Mine is an unusual case I understand. As the op points out, do your homework before signing anything.

[Thescout13]

Originally Posted by Midwest M235i

This...So this.

In my case, I had a dealer pull ahead that was 6 mos..I jumped on it as I had poured a bunch of negative equity into my previous lease and was paying that off in monthly installments.

The pull ahead allowed me to write off that debt 6 mos earlier. I was well armed on invoice, money factors too...It was a no brainer for me.

Mine is an unusual case I understand. As the op points out, do your homework before signing anything.

Congrats man

[scottomfg]

Originally Posted by BMW335iOn18s

An average deal is about $1000 over invoice which is 8% off of MSRP. A great deal is invoice price. A really good deal is anything below...

That 8% number is quite a bit off. As a rule of thumb BMW invoice price is about 7% off MSRP.* Of course, $1k being a solid number instead of a relative %, how much a percentage it is of the total MSRP will vary by car, but for a top end 2 series, $1k is about 2% so, a deal for $1k over invoice would be right around 5% off MSRP.

*For my car the MSRP is $51,825 and the invoice is $48,100, which equals 7.2%below MSRP. You can find invoice prices at Edmunds (http://www.edmunds.com/tmv.html) but note that their invoice price does not include the MACO fee, which *is* part of invoice and varies by region (it's $245 for NW right now).

Another thing to note when negotiating sale price with dealer is that *all* incentives come from BMW corporate themselves and therefore should not be taken into consideration when negotiating price. Incentives should be subtracted after sale price is agreed upon. Dealers like to use the incentives in negotiating sales price because it make it look like they are coming down further than they actually are since that money doesn't come out of their pocket.

[Thescout13]

Originally Posted by scottomfg

That 8% number is quite a bit off. As a rule of thumb BMW invoice price is about 7% off MSRP.* Of course, $1k being a solid number instead of a relative %, how much a percentage it is of the total MSRP will vary by car, but for a top end 2 series, $1k is about 2% so, a deal for $1k over invoice would be right around 5% off MSRP.

*For my car the MSRP is $51,825 and the invoice is $48,100, which equals 7.2%below MSRP. You can find invoice prices at Edmunds (http://www.edmunds.com/tmv.html" rel="" target="_blank">http://<a href="http://www.edmunds.c...m/tmv.html</a>" rel="" target="_blank">http://<a href="http://<a href="http...v.html</a></a>) but note that their invoice price does not include the MACO fee, which *is* part of invoice and varies by region (it's $245 for NW right now).

Another thing to note when negotiating sale price with dealer is that *all* incentives come from BMW corporate themselves and therefore should not be taken into consideration when negotiating price. Incentives should be subtracted after sale price is agreed upon. Dealers like to use the incentives in negotiating sales price because it make it look like they are coming down further than they actually are since that money doesn't come out of their pocket.

You are right they vary by car that's why I'm asking for it. But you are correct in pointing out the incentives however I always negotiate with them included because it gives them the illusion of control and I'm not out to screw the dealer.

Edmunds "invoice price" is not even close to the real invoice price. I've bought 2 BMWs in the past year for $1-2k below what edmunds so-called the invoice price. That is because there are other incentives or things happening behind the scenes that the dealer doesn't publish and I've learned this through representing them at a law firm.

HOWEVER, I will say that edmunds invoice price is a great starting point. But there are also 100 other factors like how long the car stays on the lot, the popularity, the turnover, etc....

I'm just here to arm some people with the best possible position to negotiate from. Give them the best deal possible and let them decide how much profit they want the dealer to make.

Thank you again for your input to the thread. It helps spread the knowledge about leasing and not getting shafted.

Best,

M

[Rekla]

Considering European delivery on a lease: ED is -7% of MSRP, then negotiate the sale price, say another 5% off: that's a 12% discount from "sticker MSRP". The residual value of a lease is taken from "sticker MSRP". If the residual of a $40k MSRP is 50%, then the car value at lease end is $20k. The negotiated sale price was $35,200 ($40k - 12%) so the financed amount rolled up in the lease is $15,200 ($35,200-$20,000). Over 36 months, that comes down to $422+interest+taxes. The "interest" can be brought down with 7x monthly payments as a fully refundable deposit on lease end. Never put money down in a lease; if you loose the car (totaled, stolen, other) the down payment is gone. Am I missing something?

[scottomfg]

Originally Posted by Thescout13

Edmunds "invoice price" is not even close to the real invoice price. I've bought 2 BMWs in the past year for $1-2k below what edmunds so-called the invoice price. That is because there are other incentives or things happening behind the scenes that the dealer doesn't publish and I've learned this through representing them at a law firm.

Invoice Price is a fixed price just like MSRP. It has no direct relation to what the dealer's actual cost is, FYI. Edmunds is always correct as they get their info from official documents.

[Thescout13]

Originally Posted by scottomfg

Invoice Price is a fixed price just like MSRP. It has no direct relation to what the dealer's actual cost is, FYI. Edmunds is always correct as they get their info from official documents.

I apologize this post is edited, I misread what you wrote. That's exactly correct the dealers actual cost is often much less than the "invoice price". I guess what I was trying to say is that the actual invoice price = cost to the dealer and not the official invoice price.

Thanks for helping me clarify my language. Hope everyone gets what we are getting at.

Best,

M

[Thescout13]

Originally Posted by Rekla

Considering European delivery on a lease: ED is -7% of MSRP, then negotiate the sale price, say another 5% off: that's a 12% discount from "sticker MSRP". The residual value of a lease is taken from "sticker MSRP". If the residual of a $40k MSRP is 50%, then the car value at lease end is $20k. The negotiated sale price was $35,200 ($40k - 12%) so the financed amount rolled up in the lease is $15,200 ($35,200-$20,000). Over 36 months, that comes down to $422+interest+taxes. The "interest" can be brought down with 7x monthly payments as a fully refundable deposit on lease end. Never put money down in a lease; if you loose the car (totaled, stolen, other) the down payment is gone. Am I missing something?

Please don't make this a lease vs not lease or down payment vs no down payment thread. This is simply helping people out who want to know what the best possible deal for their situation. That is all. If someone is willing to put 4k down, that's there choice.

However, I appreciate your input and it spreads some good valuable information to others

[jss12636]

So generally speaking...take 7% off the sticker price (finance or lease) and that's what you should've paid for a "good deal"?

So say if the car is $50k, $46,500 would be a decent price to have paid?

[Thescout13]

Originally Posted by jaysahni2012

So generally speaking...take 7% off the sticker price (finance or lease) and that's what you should've paid for a "good deal"?

So say if the car is $50k, $46,500 would be a decent price to have paid?

I think what the above poster meant is that it's a good rule of thumb. But it really depends on a bunch of factors including demand for the car, how the car is configured, the turnover in that area, the price of the car, how long the car has been on the lot, etc....

For example, my 228 m sport was on the lot for 2 months and the demand for that kind of car in raleigh was not that great, so I got 10.5% off sticker.

But, a friend of mine was trying to buy a M235i in Miami that was decked out, and they could never keep one of those on the lot for more than a week. He couldn't get the dealer to budge on anymore than ~3% off sticker and ended up selling it to someone who offered full sticker. And that's not the only time I've heard that happen. Once and a while you get lucky with that car that's burning a hole in their books.

Best,

M

[MrBallooKnot]

2nd question.... BTW, thank you all for the responses to my other one!

In what situation would it be a good idea to buy the car after the end of the lease? Are you locked in with the residual cost or what are your options?

Thanks!

[Thescout13]

Originally Posted by MrBallooKnot

2nd question.... BTW, thank you all for the responses to my other one!

In what situation would it be a good idea to buy the car after the end of the lease? Are you locked in with the residual cost or what are your options?

Thanks!

Only buy the car if you are absolutely in love with the car. If not you are 9 out of 10 times overpaying for the car you should of bought outright.

-M

[Col-Bimmer]

Just as an aside, an easy way to save some extra money is to become a member of the BMW Car Club of America (BMWCCA). After one year ($35/year), members are entitled to rebates from the club, starting at $500. The rebate can be applied towards car purchases and leases.

I have been a member for several years, and have been able to take advantage on two occassions. The latest was $500 for an M235.

Disclaimer: Other than being a member of the club, I am not in any other way associated with it.

[Thescout13]

Originally Posted by Col-Bimmer

Just as an aside, an easy way to save some extra money is to become a member of the BMW Car Club of America (BMWCCA). After one year ($35/year), members are entitled to rebates from the club, starting at $500. The rebate can be applied towards car purchases and leases.

I have been a member for several years, and have been able to take advantage on two occassions. The latest was $500 for an M235.

Disclaimer: Other than being a member of the club, I am not in any other way associated with it.

Thanks man! Good addition. USAA gives you a $1000 rebate as well!

-M

[MrBallooKnot]

Originally Posted by Thescout13

Only buy the car if you are absolutely in love with the car. If not you are 9 out of 10 times overpaying for the car you should of bought outright.

-M

Thanks!

[bimmercar]

Here is example of the MSRP and invoice for base car and options, this is from an actual invoice sheet, for 2015 MY 2-series:

Item Invoice MSRP
M235xi coupe 41,310 44,900
Metallic Paint 500 550
Cold Weather Package 635 700
Premium Pkg 1955 2150
Tech Pkg 1955 2150
Driver Assistance Package 865 950
HK Audio 795 875


Destination Handling 950 950
MACO 300 (vary based on region or time)
Training Service Fee 180 (vary based on region or time)
(MACO and training is added only to invoice price, it is not added to MSRP price)

You may use this to calculate invoice price

[BMW335iOn18s]

Originally Posted by bimmercar

Here is example of the MSRP and invoice for base car and options, this is from an actual invoice sheet, for 2015 MY 2-series:

Item Invoice MSRP
M235xi coupe 41,310 44,900
Metallic Paint 500 550
Cold Weather Package 635 700
Premium Pkg 1955 2150
Tech Pkg 1955 2150
Driver Assistance Package 865 950
HK Audio 795 875


Destination Handling 950 950
MACO 300 (vary based on region or time)
Training Service Fee 180 (vary based on region or time)
(MACO and training is added only to invoice price, it is not added to MSRP price)

You may use this to calculate invoice price

Looks like my 8% number is spot on