Originally Posted by Piobaire
What do these cars retail for? Let's round "high $500s" to $600 a month for easy math.
36 months x $600 / month = 21600.
Say the interest rate, converted into a money factor, was 3% so you get .00125
Figure out carry cost by (actual cap cost - residual) x money factor. Have no idea what those first two numbers are but obviously it would be subtracted off the 21.6k and then you'd divide that by 36 and get your monthly depreciation.
Btw, what is an "actual money factor" and to junior varsity what fees are these you paid to bring down the money factor? I mean, residuals and money factors are set by the leasing entity. Every lease I've ever done, and I've done a lot, the action is in the actual cap cost and pretty much nothing else. For instance, Mercedes Financial tells the dealerships what the residual and money factor is for the quarter, and that's not hard to find on the Net. The thing to work on is the cap cost, which is part negotiating the sales price the dealership sells the car to MB Financial, and part knowing dealer incentives, such as available "dealer dolalrs," bonuses for a car on the lot 30 days or less (dealership doesn't have to pay floor plan on it either), etc.
I checked the forums and found the original thread about the E93s that I remembered. Guy actually got $502/mo for an E93. Retail IIRC was around $75k at the time. Of course the deal doesn't exist anymore but it shows the virtue of waiting for the right opportunity.
Actual money factor = usually dealers mark up the money factor at least in my experience. I get the number in advance (ridewithg) and ask for it specifically.
I remember going in to my local dealer when I first started shopping for the M3. Money factor at the time IIRC was .00156. Asked for what kind of deal they would make me and when they came back monthly payment came out to something like $950. Asked to see the deal sheet. After a lot of "we don't share those numbers" finally got a look at it and saw the MF marked up to .00260. Dealers will throw in all kind of mark ups - bogus doc fees, mark up lease acquisition cost (base rate for BMW is $725), and so on.
BMW offers a multiple security deposit (MSD) option where each deposit brings down the MF by .0007. You can use a maximum of seven. A starting MF of .00156 then becomes .00107. MSDs are fully refunded after lease disposition and gap coverage is included in any BMWFS lease. MSDs are your lease price rounded upwards to the nearest $50, so $627/mo means you pay 7x MSDs at $650.
All in all reading and following the leasing advice on internet forums saved me around $300/mo and I'm so bad at math I can't even add two double digit numbers in my head.
Keys to BMW leasing:
- Do European Delivery at European Delivery invoice + small markup ($500). Take 7% off from MSRP to get invoice, another 7% off of that for ED invoice.
- When you lease via European Delivery cap cost is at ED invoice but residual is calculated at US MSRP
- Use 7 MSDs for MF reduction of .00049
- Ensure MF not marked up, no doc fee or state minimum, no training/MACO fees (not needed for ED lease), and lease acq. fee at base rate
- TIme purchase to coincide with biannual incentives. Usually a $1000/$1500 loyalty or holiday cash incentive twice a year used as cap cost reduction.Edited by username79 - 4/26/12 at 11:49am