I don't understand car dealers - terrible i3 quote

[dckiwi]

All I want to do is lease a 2016 i3 Rex for something close to the lease deal advertised on BMW's web site, which is this:

MSRP: $47,245
Downpayment: $2,500
Monthly payment (36 months): $199
TCO: $13,148

OK, my local dealer has an i3 in stock that I'd like to lease. His quote:

MSRP: $51,795 (includes GigaWorld, T&D, AP)
Downpayment: $0
Monthly payment (36 months): $527
TCO: $22,715

What? I told them I wanted to come in and lease the car this weekend. I told them about the offer on BMW's site. And this is what they come back with. Do they not want to lease me the car, or do they always throw out an offer like this first to see if the person bites?

Here's what I think is a fair offer (for a *24 month lease*) - would love everyone's feedback though:

MSRP: $51,795 (includes GigaWorld, T&D, AP)
Downpayment: $2,500
Monthly payment (24 months): $200
TCO: $10,793

Is that a fair offer? If not, what do you suggest?

Thanks in advance

 

[icanmanifest]

Never put $$ down on a lease. Take that $2400 and apply to multiple security deposits. It buys down the money factor. You don't get downpayment back. You DO get security deposits back.

That being said I got a quote on 49k starting msrp. 6% off MSRP + full $7500 tax credit.

900ish drive off plus the 2400 in multiple security deposits... 323/mo

 

[johnnylingo]

One problem I keep finding with leases: the dealers keep cooking the numbers to make something look better than it is. Even if you're smart enough to pass, not everyone else is. zero down and over $500 a month is a horrible deal, but there's a sucker born every minute.

At the end of the day lease costs come down to two major factors

1. Cap reduction - the amount the dealer agrees to "sell" the car for, prior to taking rebates like the $7500 tax credit
2. Money factor (interest rate) - this is determined by your credit rating and whatever is set by the finance company

I've found it's been easier to look for cars that already have an advertised cap reduction and work from there. Not sure where you're located but in California it should be a minimum of 10%.

 

[redbarn]

The way I've always dealt with Dealerships is to figure out what I'm prepared to pay ( has to be sensible & reasonable) and then make them an offer that is valid for 48 hours.
I then turn off my cell phone for 36 hours.
They always do call back and I have very rarely paid more than I offered.
They seem pathologically unable to reject a real customer or to turn down a real sale.

 

[freeewilly]

Go to South Bay BMW, they have great deals.
My friends and I leased 4 i3 this weekend.

 

[johnnylingo]

figure out what I'm prepared to pay ( has to be sensible & reasonable) and then make them an offer that is valid for 48 hours.

Turning the tables. I like it!

 

[savechief]

You're really not providing enough information to evaluate the quote you were given or what you think is a fair offer.

What money factor were they using in their quote?
What money factor are you assuming in your fair offer?
What residual value were they using in their quote?
What money factor are you assuming in your fair offer?
What was the assumption for the $7500 Federal EV credit in both scenarios?
What is the assumed selling price (before cap reductions like the Federal EV credit) in both scenarios?
What was the assumption for the $925 lease inception fee in both scenarios (rolled into cap cost, or paid up front)?
What is the sales tax assumption in both scenarios?
What state do you live in (will impact how sales tax is applied)?
Are there any other cap reductions involved (loyalty, corporate fleet, etc)?

Current Tier 1 money factor (buy rate) is 0.00137 for August. The dealership can mark that up a maximum of 0.0004 to 0.00177. You can buy down the money factor by 0.00007 for each Multiple Security Deposit (MSD), up to a maximum of 7 (0.00049 total reduction). If you qualify for BMW corporate fleet, you get an additional 0.0002 reduction on the money factor.

The offer on the REX on bmwusa.com is for a 30 month lease, 68% residual value, $1500 down payment, lease inception fee paid up front and the $7500 Federal EV credit applied as a cap reduction. The price quoted only accounts for the depreciation and interest payments, but does not include sales tax since that varies from state to state. I also believe that the part that says "participating BMW centers" implies that the dealer needs to be willing to sell at a discount from MSRP, but it doesn't state how much. By my calculations, it would require the dealer to match the customer's $2,634 due at signing for the depreciation + interest payment to match the $209/month advertised price.

With an MSRP of $51,795, $2,500 down payment, 30 month lease, 10k miles/year (68% residual), $7,500 Federal EV credit applied as a cap reduction, base money factor of 0.00137 and sales price at MSRP, your payment (less taxes) would be $325/month. If you don't put the $2,500 down (which would be a better idea), the payment increases to $411/month. But you should be able to get a very good discount on a 2016 i3. A very realistic 8% discount from MSRP with no down payment would give you a $268/month payment. If you pay for 7 MSD's (refundable at lease end), then the payment drops to $231/month.

 

[freeewilly]

You're really not providing enough information to evaluate the quote you were given or what you think is a fair offer.

What money factor were they using in their quote?
What money factor are you assuming in your fair offer?
What residual value were they using in their quote?
What money factor are you assuming in your fair offer?
What was the assumption for the $7500 Federal EV credit in both scenarios?
What is the assumed selling price (before cap reductions like the Federal EV credit) in both scenarios?
What was the assumption for the $925 lease inception fee in both scenarios (rolled into cap cost, or paid up front)?
What is the sales tax assumption in both scenarios?
What state do you live in (will impact how sales tax is applied)?
Are there any other cap reductions involved (loyalty, corporate fleet, etc)?

Current Tier 1 money factor (buy rate) is 0.00137 for August. The dealership can mark that up a maximum of 0.0004 to 0.00177. You can buy down the money factor by 0.00007 for each Multiple Security Deposit (MSD), up to a maximum of 7 (0.00049 total reduction). If you qualify for BMW corporate fleet, you get an additional 0.0002 reduction on the money factor.

The offer on the REX on bmwusa.com is for a 30 month lease, 68% residual value, $1500 down payment, lease inception fee paid up front and the $7500 Federal EV credit applied as a cap reduction. The price quoted only accounts for the depreciation and interest payments, but does not include sales tax since that varies from state to state. I also believe that the part that says "participating BMW centers" implies that the dealer needs to be willing to sell at a discount from MSRP, but it doesn't state how much. By my calculations, it would require the dealer to match the customer's $2,634 due at signing for the depreciation + interest payment to match the $209/month advertised price.

With an MSRP of $51,795, $2,500 down payment, 30 month lease, 10k miles/year (68% residual), $7,500 Federal EV credit applied as a cap reduction, base money factor of 0.00137 and sales price at MSRP, your payment (less taxes) would be $325/month. If you don't put the $2,500 down (which would be a better idea), the payment increases to $411/month. But you should be able to get a very good discount on a 2016 i3. A very realistic 8% discount from MSRP with no down payment would give you a $268/month payment. If you pay for 7 MSD's (refundable at lease end), then the payment drops to $231/month.

This is way too much information. I don't care 80% of the things you mentioned above. All the numbers mentioned can be manipulate by the leasing company, I have to understand every single details mentioned above perfectly or I can still get ripped off during the lease process

As long as I have zero intention to purchase the car at the end of the lease, all I need to know are
MSRP
Drive off cost
Monthly lease fee (tax included)
Miles allowed per year
# of months of lease
Return fee

These numbers give me exactly how much is the total cost of the lease, and my monthly cost. I don't care how the numbers come from, as long as I'm paying what I want to pay.

 

[savechief]

As long as I have zero intention to purchase the car at the end of the lease, all I need to know are
MSRP
Drive off cost
Monthly lease fee (tax included)
Miles allowed per year
# of months of lease
Return fee

These numbers give me exactly how much is the total cost of the lease, and my monthly cost. I don't care how the numbers come from, as long as I'm paying what I want to pay.

Your choice if you only want to know the items you've listed above. But by only knowing those numbers, and not how they were calculated, you will be an easy target for a dealership to take advantage of. I'm not sure how in the world an informed consumer would not want to know very basic lease information such as A) the residual value of the car is and B) what the money factor is.

 

[Jeffj]

IMHO - if you have no intention of buying at the end of the lease, the easiest way to compare offers is to add up the total expenses over the term of the lease - drive-off, total of monthly payments, disposition. Compare that number across several offers and decide if the difference in cost (assuming different MSRP's or configurations) is worth it to you. For example, car A might have a total cost lease cost of $10,000 and car B might have a total lease cost of $10,500. If the configuration is different (car B has a feature you want), decide if $500 is worth it to you.