i3 Giga BEV Lease Sanity Check

[Bperrella]

Hi everyone,

I'm looking to pick up an i3 within the next few days and was hoping that you could help check my expectations. The model I'm looking at is a 2014 White BEV with Giga, Tech, DC fast charge, and heated seats. MSRP is $47,550. I'm located in central NJ.

24 month lease @ 12k/year
Target selling price 17% below MSRP = $39,467
5,500 lease credit + 2,000 build out + 1,000 UDE certificate = 8,500
Residual @ 62% = 29,481

Would the credits come off of the cap cost, or do they count as a down payment?

What should I realistically expect in terms of money factor/ bank and dealer fees?

Thanks!

 

[czarmar]

My guess is that most dealers will apply the $2K build out cash as part of their ~17% discount, but you should be good getting the lease credit and UDE rebate.

Unfortunately the lease credit seems to be applied as a down payment rather than a cap cost reduction, making your MF calculations higher than if it was calculated as a cap cost reduction. I'm not sure whether you then have to pay sales tax on the $5500. So assuming that you negotiate the selling price to $39.5K, your MF would be calculated as MF*(39.5+29.5K)=Interest paid per month. In some ways this makes sense, as the lease credit replaces to some extent the federal tax credit that you would get to claim later if you purchased it. (I personally think federal EV incentives should be paid up front like the UK, rather than making you file for it).

I think the UDE counts as a cap cost reduction, because you would apply this after finishing all your negotiations, and if you were to purchase the car, it should reduce your selling price.

Assuming you have great credit, I would hold out for the base MF of .00125, and consider waiving your lease acquisition fee with a .00035 adder, then pay max MSDs to reduce your MF by .00049 to .00111. You can strategically put money down to bring your payment to close to, but not over $50 increments after tax, as the security deposit will be based on your payment rounded up tot he nearest $50. You get the MSDs back at lease conclusion, and don't lose them in a total loss situation as you would a down payment.

Make the dealer negotiate the sale price rather than the lease terms. Dealers have more profit dials to turn with a lease if you're not careful.

<edit - there needed to be some extra zeros in some of the figures>

 

[Bperrella]

My guess is that most dealers will apply the $2K build out cash as part of their ~17% discount, but you should be good getting the lease credit and UDE rebate.

Unfortunately the lease credit seems to be applied as a down payment rather than a cap cost reduction, making your MF calculations higher than if it was calculated as a cap cost reduction. I'm not sure whether you then have to pay sales tax on the $5500. So assuming that you negotiate the selling price to $39.5K, your MF would be calculated as MF*(39.5+29.5K)=Interest paid over term. In some ways this makes sense, as the lease credit replaces to some extent the federal tax credit that you would get to claim later if you purchased it. (I personally think federal EV incentives should be paid up front like the UK, rather than making you file for it).

I think the UDE counts as a cap cost reduction, because you would apply this after finishing all your negotiations, and if you were to purchase the car, it should reduce your selling price.

Assuming you have great credit, I would hold out for the base MF of .0125, and consider waiving your lease acquisition fee with a .00035 adder, then pay max MSDs to reduce your MF by .0049 to .0111. You can strategically put money down to bring your payment to close to, but not over $50 increments after tax, as the security deposit will be based on your payment rounded up tot he nearest $50. You get the MSDs back at lease conclusion, and don't lose them in a total loss situation as you would a down payment.

Make the dealer negotiate the sale price rather than the lease terms. Dealers have more profit dials to turn with a lease if you're not careful.

This is extremely helpful, thank you! I understand using the MSD to decrease the MF, but can you explain the acquisition fee waiver?

 

[czarmar]

Basically the lease acquisition fee is another way that the finance company gets paid, but it makes sense, and is simpler to have that rolled into the interest you pay over the term of the lease. If you total your car driving off the dealer's lot, any money down you've paid for the car is gone, most certainly the acquisition fee. For the MF increase of .0035, you can waive this fee. Another strategy is to just roll the fee amount into the lease cap cost, but I'd prefer to pay it as interest.

http://www.bimmerfest.com/forums/showthread.php?t=182349

 

[victorM]

UDE certificate is not available for the i series