What's a good lease price on this i3?

[ThreeEyes]

Hi all, I'd like to know what the magic number is that you think I should accept for a lease on an i3 REx as follows:

Los Angeles, CA
Car spec: http://goo.gl/DwP8pI (REx, Tera, Park Assist, Drive Assist, White)
MSRP $53,245
36 months
$3,000 out the door
12,000 miles
They get the $7,500 rebate
I get the $2,500 CA rebate

What's the magic number per month? You fill in the blanks:

$___.__

 

[mungosocal]

Please consider putting 0 down and instead paying multiple security deposits to buy the money factor down.

Looks a lot like the car I will want to buy in about 12 months unless the new model 330e is compelling.

I would hope you could get your monthly payment down to the low 400s including tax if it is a 2015, and a bit less if it is a 2014. That is what I would find attractive next year and about what I am paying for a modestly optioned F30 328 (ICE).

You shopping at Crevier? Pacific?

 

[ThreeEyes]

Could you clarify about the security deposits idea? How does that work?

Not sure where we're shopping yet.

 

[mungosocal]

How to use multiple security deposits (MSDs) on any BMW lease:

http://www.bimmerfest.com/forums/showthread.php?t=809480

The gist of it is that money you put down as cap reduction on a lease can be lost if the car is wrecked. You get similar benefit by using your money to reduce the money factor instead of reducing the amount you are financing, and the key difference is that it is fully refundable. It is a BMW thing.

Another BMW thing is that membership to BMW CCA gets you a big rebate every time you buy / lease a BMW. E.g., right now a BMW CCA member would get $1000 mailed to them if they bought a i3 BEV or $500 if they bought a i3 REX (one rebate per year). Only catch is that you have to have been a member for 365 days prior to delivery. If you are a serial BMW leaser, then it is a fantastic deal. Five year membership in CCA is about $200, and you can do the math. All it takes is one BMW lease or purchase to make it worth your while, and that doesn't even take into account the other membership benefits which you can read up on their site.

If this was helpful to anyone, when you sign up for CCA you can use my member # as a referral which gives us both an oppty to win a free performance driving class. #504871

 

[mungosocal]

Let me add that using MSDs is an advanced financing technique that BMW doesn't advertise very aggressively, and many of the dealership sales people won't even be aware of it. If they aren't aware of it, that can be a signal that you're not dealing with the right people.

 

[ThreeEyes]

It looks interesting but I'm struggling to get my head around it as a new concept.

What would be most helpful is if you could talk me through the actual process very briefly.

I could spare $2500 - $4500 cash over 36 months.

E.g.

1. On day 1 you pay $0.
2. On day X... (What happens next with the 7 MSDs? How much are they? When are they paid? I get them back?)
3. Etc...

 

[mungosocal]

Leases have finance charges just like conventional financing does, and they are referred to as the money factor (MF). The better your credit, the loweryour financing cost. A security deposit is a method of reducing the cost of financing as well. Basically, if you damage the car they keep your money, and in turn that lowers their risk and they reward you by lowering the finance cost. Giving them several security deposits further lowers the finance cost.

You might need to read up on the basics of leasing before this makes sense. First post of the link I provided explains it all as well.

Happy shopping.

 

[ThreeEyes]

Thank you. I had read the entire thread but your summary above makes things a lot clearer now. What is the average security deposit payment for a car like in my scenario? In other words I would usually expect to pay 7 payments of how much?

 

[mungosocal]

There is a equation for the security deposit amount and I think it is something like an amount equal to one payment rounded to the nearest $50, with a maximum of 7 MSDs allowed.

Some people get nervous about the security deposits, especially if they haven't leased before with BMW, and I can understand why. Perhaps the first one is a bit like making a leap of faith. In purely investment terms, I think folks have worked out that it is similar to making an investment that pays over 10 percent which is hard to get these days.

 

[ThreeEyes]

OK, so let's say our payment is $497 on the $53k MSRP vehicle.

We would pay approximately:
7 x $500
= $3,500

And this would reduce the overall financing to a better deal.

1. If that's correct, my query is when are the 7 MSDs actually paid? At regular intervals through 35 months? All up front?

2. Do we get the MSDs back if we don't crash the car and it's our fault?

 

[mungosocal]

Yes, MSDs are due upfront at driveoff. IMO the best way to lease a BMW is for the MSDs to be your only payment at signing, pay no "cap reduction" and roll every other cost into the lease. If you give every competing dealer that structure, it also allows you to simply compare monthly lease costs and not play their multi-variable game of selling price, MF, acquisition fee, blah blah blah.

If you don't destroy the car or damage it beyond normal wear and tear, you get the security deposits back. Of course, you're kinda on the hook for hypothetical damage whether you pay the MSDs or not, so I don't find that it matters. You can also just roll your MSDs into a new lease.

Another nice BMW quirk is that if you lease another car, they waive the lease disposition fee ($395?) on the ending lease. You can see they do a lot of things (waived disposition fee, loyalty discounts, CCA rebate, etc.)to entice you into making it a habit to lease BMWs. If it fits your lifestyle, it is pretty compelling.

 

[ThreeEyes]

Thanks. We have a good broker who's done a few MSDs this week, but he says we still have to pay a drive off fee of around $1000 in CA, although this can be rolled into the lease. Does that sound correct?

 

[mungosocal]

I never heard of having to do anything. Maybe that is how the broker gets paid.

When I am ready to buy I am going straight to Greg Poland at Pacific BMW in Glendale. He will give you rock bottom or as close as you can get to it without any of the work. Folks who broker are usually just another middle man, but if you are convinced the broker is worth it suit yourself.

 

[ThreeEyes]

I'm very open to not using a broker. Initially he got me a better price than any dealer that's all.

Could Greg Poland locate any i3 in the system, even at another dealership?

And are you Greg Poland? :lol:

 

[mungosocal]

I am not in the business, just passing along what the other folks over at bimmerfest already know. Not sure about locating other cars for you. With all the other models folks would just custom order the car exactly like they wanted and still get a great price. The i3 is conceivably different.

 

[i3atl]

Could Greg Poland locate any i3 in the system, even at another dealership?

Yes, Greg can search dealer inventory nationally, including cars that are still at the port - any dealer can do this, although many won't.

I've never bought a car from Greg, but he has been very helpful with some of my pricing research over the years, so I would recommend contacting him as well.

 

[ThreeEyes]

No reply from Greg by email, but I have found the exact car I want. Reminder of the spec and MSRP:
http://goo.gl/DwP8pI
White 2015 i3 REx, Park Assist, Drive Assist, Tera World, HK Stereo

What do you feel about this deal I have so far managed to negotiate?:

36 month lease
12,000 miles/year
$0 downpayment
7 x MSDs = $3,800

$528 per month

They're dropping the retail price to $49,370 - $1,000 Drive Team coupon they say they can apply for me.

 

[i3atl]

$3,875 discount off MSRP on a 2015 isn't bad, but you could get closer to $10K off (or more) on a 2014.

 

[ThreeEyes]

Do you mean new or used?

We have specific spec so I haven't seen either yet. But if you know of one I'm happy to cut you into the commission :lol:

 

[i3atl]

New. Are you set on white, or do you have a couple of alternate colors that are acceptable?