How to Calculate OC?

[ccchr]

I thought I had this but I don't!
I see some a really good price when I estimate a payment on bmwusa.com, but dealer quotes are horrendous!

Let's say we take a $50,900 configuration and a trade in to make up for most of the tax. For this exercise tax is 0 (zero).
- Residual for 24 mo 10K mi/yr is 63% I believe.
- $4,600 discount

Is this how this works? (I bet it is not :| ).
$50,900 - $4,600 = $46,300
$46,300 x (1 - 0.63) = $17,131

$17,131 - $7,500 (Federal credit) = $9,631
$9,631 / 24 mo = $401.29/mo

Thanks!

 

[tiburonh]

I thought I had this but I don't!
I see some a really good price when I estimate a payment on bmwusa.com, but dealer quotes are horrendous!

Let's say we take a $50,900 configuration and a trade in to make up for most of the tax. For this exercise tax is 0 (zero).
- Residual for 24 mo 10K mi/yr is 63% I believe.
- $4,600 discount

Is this how this works? (I bet it is not :| ).
$50,900 - $4,600 = $46,300
$46,300 x (1 - 0.63) = $17,131

$17,131 - $7,500 (Federal credit) = $9,631
$9,631 / 24 mo = $401.29/mo

Thanks!

I don't have the current finance and residual rates from BMW in front of me so I can't offer a full opinion on this, but I can tell you that you have made several incorrect assumptions and calculations here. To whit:

• Even if you have the correct residual rate, you have made an error in calculating the residual value: the residual is always calculated as a percentage of the MSRP, not of the sales price.

• On top of that, the federal credit on the i3 does NOT affect the sales price or the amount you finance. The federal credit comes to the purchaser, not to BMW, so BMW does not change their sales price to reflect it. And it only comes to the purchaser to the extent that the purchaser owes federal taxes up to a total of at least $7,500.

• Further more, even if $9,631 we're the amount you owed, you still have to pay BMW a finance cost for that, so your monthly cost would be more than $401.29 per month.

I would suggest you talk with a CA at a local BMW dealer (and also check out web sites on car leasing and financing) so you can get a better sense of how all this really works before you try to decide what it will really cost and before you try to make a deal with a dealer.

Best of luck to you.