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  #1  
Old 09-12-2009, 11:30 AM
dok dok is offline
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2010 X5 35d LEASE ?????

Hello ALL, This is my first post and I am very glad to have found and joined this excellent X community. I was hoping someone could clarify some leasing questions and creative solutions.

1. the lease offer for the 2009 lists a certain MSRP and mileage among other facts to define the lease deal with money down and monthly payments. Obvioously the exact match at a dealer for these vehicles as specified (ie. third row seats) has very low odds. I calculated the money factor to be 0.00102 or (2.45%) after dividing by 2400. is the lease offer only on that specific situation or should the money factor be applied to other less or more equiped vehicles just changing the final sell price and applying the money factor.

2. How much should the residuals change between 10k miles/yr and 15k miles/yr.

3. If the residual on the X5 is say 55% and one was inclined to pay a lease all up front. Please tell me if my calculations would be correct:

MSRP $70,625.00
Sell price $62,714.50
Residual 55% ($38,843.75)

$62,714.50 - $38,843.75= $23,870.75

$23,870.75 x 6%(tax) = $1432.25 + $23,870.75 = $25,303.00

If one paid the $25,303.00 up front then there should be no money factor as no money was borrowed and no further payments for term of lease. Am I correct in this statement.

Thank you for any and everyones time on these detailed questions. By the way does anyone have a list of the 2010 X5 35d residuals yet?

dok
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  #2  
Old 09-12-2009, 02:08 PM
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BGM BGM is offline
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My head is spinning from the lease arithmetic . PM B-Line he loves lease talk .
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Old 09-12-2009, 03:24 PM
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Quote:
Originally Posted by BGM View Post
My head is spinning from the lease arithmetic .
That's what the dealer's counting on.
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Old 09-12-2009, 04:23 PM
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For 2009, the residual is what you noted at 15K. I haven't seen the 2010 numbers yet.

You can add 2% for 12K and 3% for 10K miles.

Your calculation is off though (sorry). Prepaying saves the interest on the depreciation amount, but you still pay interest on the residual amount.

BMW should offer a different money factor for a prepay. The current 2009 money factor is 00250 (6%) and I'd guess the prepay is around .00170 (4.08%).

So I'm guessing your prepay would be around $31,800 (includes 6% tax)
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Old 09-12-2009, 06:23 PM
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Hey just a thought, with so many posts on how to negotiate an invoice -4000 deal, how bout a sticky for successful lease negotiations?
Admins?
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Old 09-12-2009, 07:00 PM
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Thank you for the input everyone.
BigX5er awesome response tells me a lot. it's amazing the money to be made on a lease as we pay interest on the residual portion then they resell it again after turn in and charge interest to next buyer. The dealer mentioned to me about lowering the money factor by making security deposits... I understood that to mean you pay an agreed amount above the lease each month ($50-$100) and then BMW returns it to you at lease end??? sounds questionable to me but he said it would lower the money factor more significantly than a one pay lease surprisingly. Anyone know about this option.

dok
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Old 09-12-2009, 10:35 PM
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You can pay multiple security deposits to lower your money factor. BMW holds them and returns them once the lease it completed.

I think BMW allows up to 7 security deposits to be made, each will lower the money factor .00007. So all 7 would drop it .00049 or around 1.2%.

You can calculate your rate of return since the 1.2% applies to the entire lease, where the multiple security deposits interest lost (so to speak) is only on that. So if your payment was $800, you would give them $5600 for seven deposits. You only lose return on your $5600 for three years, but gain 1.2% off the depreciation + residual interest.
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Old 09-13-2009, 12:36 AM
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Big X5er looking closer at the final number you came up with of $31,800.00 earlier. I wanted to break it down. In Florida we only pay tax on the depreciated amount. so I would only pay interest on the residual amount and NO interest on the prepaid depreciated amount, therefore if I understand correctly the residual being:

$38,843.75 x 0.0408 (4.08% interest)= $1584.83 (residual interest)

$25,303.00 (depreciation + Tax) + $1584.83 = $26,887.83 (total prepay)

Just wondering where you came up with the $31,800.00 figure. Thx

Dok
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Old 09-13-2009, 08:54 AM
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You do pay interest (so to speak) on the depreciated amount with a prepay in how you do the calculation. The reduction in the money factor offsets that you are doing a prepay and allows you to use the money factor in calculating everything.

In other words, you would have been paying 6% interest on the residual without the money factor discount. With the discount, you are paying 4.08% on everything (once again, my discounted money factor was my best guess). The discount basically makes the calculation give you no interest on the depreciation amount.

So in your example, you need to apply the 6% rate to the residual over three years (not one) like it was a loan. The discounted money factor removes the interest from the depreciated amount automatically.

Hope this makes sense, hard to explain. Remember the discounted money factor I used was an estimate, I think it would be slightly lower than that but I'm too lazy to do all the math!
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