Did I just get seriously ripped off?? (Car lease)

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Topic Author
Panople
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Did I just get seriously ripped off?? (Car lease)

Post by Panople »

I admit I should have taken more time with this...

My 9 year old bimmer was starting to bite the dust, so I took it in to the dealership where I originally bought it, hoping for some loyalty.

They offered eventually $5k for the car. Check.

Then they knocked that amount off the price of a new 230i PLUS fees for the new purchase (freight, pdi, admin fee, tire stewardship, etc.).

It was broken down like this:

$48,195 (car) + $3,406.18 (fees) - $2,308.18 (negotiated discount) - $5,000 (trade-in) - $249.40 (additional discount) = $44,042.88 (total lease amount)

Lease rate was 2.9% for 48 months.

They calculated the residual at 45%, or $21.687.75 with 15,000 miles/year.

My monthly cost of ownership is now $544.92 plus taxes (Ontario, Canada), equalling $615.75 monthly.

----------------

Somehow I feel like I'm paying way too much, especially with the $5,000 trade-in. Can anyone help me figure out where I get [ripped off --admin LadyGeek]?
mhalley
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Re: Did I just get seriously ripped off?? (Car lease)

Post by mhalley »

Loyalty to the bottom line? Maybe get a quote on the same car from a car buying service like truecar? Looks like it says the average is 3.46% below msrp. plus price your car as a trade in at kbb.com
runner3081
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Re: Did I just get seriously ripped off?? (Car lease)

Post by runner3081 »

If you already signed the lease and can't get out of it now, maybe you don't want to know if you got ripped off or not?
Jags4186
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Jags4186 »

Panople wrote:I admit I should have taken more time with this...

My 9 year old bimmer was starting to bite the dust, so I took it in to the dealership where I originally bought it, hoping for some loyalty.

They offered eventually $5k for the car. Check.

Then they knocked that amount off the price of a new 230i PLUS fees for the new purchase (freight, pdi, admin fee, tire stewardship, etc.).

It was broken down like this:

$48,195 (car) + $3,406.18 (fees) - $2,308.18 (negotiated discount) - $5,000 (trade-in) - $249.40 (additional discount) = $44,042.88 (total lease amount)

Lease rate was 2.9% for 48 months.

They calculated the residual at 45%, or $21.687.75 with 15,000 miles/year.

My monthly cost of ownership is now $544.92 plus taxes (Ontario, Canada), equalling $615.75 monthly.

----------------

Somehow I feel like I'm paying way too much, especially with the $5,000 trade-in. Can anyone help me figure out where I get [ripped off --admin LadyGeek]?
Yes you got ripped off. The $5000 from the trade in was cash in your pocket. If you had been purchasing the car this would have been fine but when you lease a car you're only paying a percentage of the value of the car.

You're paying for 55% depreciation. You just lost 55% of your $5000.

What you should have done was taken the $5000 in cash, then used it to subsidize your lease payment. That works out to about $104/month. If you run the numbers on your lease without the $5k in there it doesn't raise your payment $104/mo.

Now there's another possibility--your trade in could only have been worth $2600 (doubtful on a 9 year old car) and the dealer structured it to look better.

Also, one other thing to consider is if they used the $5000 to offset the purchase price of the car (as you show) or if they used it as a Cap Cost Reduction, which is basically a partial prepayment of the lease. If it's cap cost reduction, while not my favorite way to structure a lease, you got full value. If it simply reduced the sell price of the car, you got burned.
Topic Author
Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

Jags4186 wrote:
Panople wrote:I admit I should have taken more time with this...

My 9 year old bimmer was starting to bite the dust, so I took it in to the dealership where I originally bought it, hoping for some loyalty.

They offered eventually $5k for the car. Check.

Then they knocked that amount off the price of a new 230i PLUS fees for the new purchase (freight, pdi, admin fee, tire stewardship, etc.).

It was broken down like this:

$48,195 (car) + $3,406.18 (fees) - $2,308.18 (negotiated discount) - $5,000 (trade-in) - $249.40 (additional discount) = $44,042.88 (total lease amount)

Lease rate was 2.9% for 48 months.

They calculated the residual at 45%, or $21.687.75 with 15,000 miles/year.

My monthly cost of ownership is now $544.92 plus taxes (Ontario, Canada), equalling $615.75 monthly.

----------------

Somehow I feel like I'm paying way too much, especially with the $5,000 trade-in. Can anyone help me figure out where I get [ripped off --admin LadyGeek]?
Yes you got ripped off. The $5000 from the trade in was cash in your pocket. If you had been purchasing the car this would have been fine but when you lease a car you're only paying a percentage of the value of the car.

You're paying for 55% depreciation. You just lost 55% of your $5000.

What you should have done was taken the $5000 in cash, then used it to subsidize your lease payment. That works out to about $104/month. If you run the numbers on your lease without the $5k in there it doesn't raise your payment $104/mo.
I don't fully understand this.

When I calculate the finance option (at 1.9%), the total cost of ownership over 4 years is $52,015

When I calculate the total cost of the 4 year lease and add the residual, it's $51,244

CORRECTION: I forgot to add the tax on the residual - after the four year lease, and the residual, the cost would be $54,063.64.

I'm not particularly money-savvy, but these figures seem to jive?

If they don't - is there any ONE thing I can do to re-organize the deal when I retrieve the vehicle this Friday?

I've put a $1000 deposit down, but I don't see that as fatal to renegotiating just yet...
Last edited by Panople on Wed Jun 21, 2017 10:18 pm, edited 1 time in total.
Topic Author
Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

Jags4186 wrote:
Panople wrote:[...]

Also, one other thing to consider is if they used the $5000 to offset the purchase price of the car (as you show) or if they used it as a Cap Cost Reduction, which is basically a partial prepayment of the lease. If it's cap cost reduction, while not my favorite way to structure a lease, you got full value. If it simply reduced the sell price of the car, you got burned.
How do I determine which of these two they did?

The ledger reads:

MSRP: $48,195
Options (fees): $3,406.18
Total list: $51,601.18
Adjustment: ($2,308.90)
Trade downpayment: ($5,000)
DIFFERENCE: $44,292.28
Other: ($249.40)
FINANCED AMOUNT: $44,042.88

Based on my research this evening, this looks like a cap cost reduction???

(Very grateful for the input, by the way).
ncbill
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Re: Did I just get seriously ripped off?? (Car lease)

Post by ncbill »

iirc, one should shoot for a monthly payment of 1% or less (before tax) of the negotiated selling price, according to leasehackr.com.

EDIT: 1% including taxes. This lease is almost 1.5%, so no deal. Get out of it if possible and re-negotiate, or find another dealer.

and never, ever, pay any capitalized cost reduction - always $0 down, since gap insurance doesn't repay you that CCR if the vehicle gets totaled.
Last edited by ncbill on Thu Jun 22, 2017 2:43 pm, edited 1 time in total.
rallycobra
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Re: Did I just get seriously ripped off?? (Car lease)

Post by rallycobra »

It's not a bad deal. In the US, BMW dealers make about 7% on cars. You got 5% off. It's not like you paid full MSRP. You got your 5k for your 'busted' car (not 55% like someone said) The 2.9% interest rate is not the greatest, but not not a killer. If you could get really good financing like .9 or 1.49% from a credit union for a new car, it might be worth just paying off the lease outright and purchasing the car. If you keep the lease the way it is, you can buy the car for the 45% of MSRP or turn it in. If the car is worth more than the buyout, you can make back what you overpaid by purchasing the car. If the car is worth less than the buyout, you underpaid and made out. You win either way!

Leasing cars is expensive, if you got an amazing deal, maybe your monthly payment would have been $575 a month with taxes? What did you expect? You leased a 50k car. A 50k purchase over 48 months at 2.9% interest is $1105 a month. How much would it have cost to fix your old car?
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Topic Author
Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

rallycobra wrote:It's not a bad deal. In the US, BMW dealers make about 7% on cars. You got 5% off. It's not like you paid full MSRP. You got your 5k for your 'busted' car (not 55% like someone said) The 2.9% interest rate is not the greatest, but not not a killer. If you could get really good financing like .9 or 1.49% from a credit union for a new car, it might be worth just paying off the lease outright and purchasing the car. If you keep the lease the way it is, you can buy the car for the 45% of MSRP or turn it in. If the car is worth more than the buyout, you can make back what you overpaid by purchasing the car. If the car is worth less than the buyout, you underpaid and made out. You win either way!

Leasing cars is expensive, if you got an amazing deal, maybe your monthly payment would have been $575 a month with taxes? What did you expect? You leased a 50k car. A 50k purchase over 48 months at 2.9% interest is $1105 a month. How much would it have cost to fix your old car?
The car was starting to become a money pit. Between $2-$4k per year to fix.

More importantly, I am in an industry where having a nice car is an asset; and because I am a sole proprietor, I can write the lease off.

Thanks for helping me feel a bit better... ;) but I imagine there's a penalty built into trying to pay off/out a lease?
Jags4186
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Jags4186 »

Panople wrote:
Jags4186 wrote:
Panople wrote:[...]

Also, one other thing to consider is if they used the $5000 to offset the purchase price of the car (as you show) or if they used it as a Cap Cost Reduction, which is basically a partial prepayment of the lease. If it's cap cost reduction, while not my favorite way to structure a lease, you got full value. If it simply reduced the sell price of the car, you got burned.
How do I determine which of these two they did?

The ledger reads:

MSRP: $48,195
Options (fees): $3,406.18
Total list: $51,601.18
Adjustment: ($2,308.90)
Trade downpayment: ($5,000)
DIFFERENCE: $44,292.28
Other: ($249.40)
FINANCED AMOUNT: $44,042.88

Based on my research this evening, this looks like a cap cost reduction???

(Very grateful for the input, by the way).
Yes it is capcost reduction I was a little confused with how you put it but it's also been a while since I've leased.

What are $3406 in fees? If those are options (navigation, leather, etc) that should increase the cost of the car meaning the residual value should be 45% of $48195 + $3406 not just 45% of $48k.
rallycobra
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Re: Did I just get seriously ripped off?? (Car lease)

Post by rallycobra »

Oh, you haven't signed the papers yet? What are the 24, 36 and 39 month residuals? The 48 month seems really high. Did you budget for a set of tires? Maybe look at a 2 yr lease if you think you won't have to buy tires for it, check the price on tirerack.com

And yes, take the 5k in your pocket up front. Don't roll it into the lease in case the car gets totaled. Never put any money down on a lease, including any taxes, costs, etc.
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Topic Author
Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

Jags4186 wrote:
Panople wrote:
Jags4186 wrote:
Panople wrote:[...]

Also, one other thing to consider is if they used the $5000 to offset the purchase price of the car (as you show) or if they used it as a Cap Cost Reduction, which is basically a partial prepayment of the lease. If it's cap cost reduction, while not my favorite way to structure a lease, you got full value. If it simply reduced the sell price of the car, you got burned.
How do I determine which of these two they did?

The ledger reads:

MSRP: $48,195
Options (fees): $3,406.18
Total list: $51,601.18
Adjustment: ($2,308.90)
Trade downpayment: ($5,000)
DIFFERENCE: $44,292.28
Other: ($249.40)
FINANCED AMOUNT: $44,042.88

Based on my research this evening, this looks like a cap cost reduction???

(Very grateful for the input, by the way).
Yes it is capcost reduction I was a little confused with how you put it but it's also been a while since I've leased.

What are $3406 in fees? If those are options (navigation, leather, etc) that should increase the cost of the car meaning the residual value should be 45% of $48195 + $3406 not just 45% of $48k.
Whew. Feeling a bit better. We are waaayy outside the 1% of total price mentioned above, but at least it's something honest...

The fees are all the nonsense dealership costs - freigh/pdi, wax, nitro, etc.

I think they wound up reducing the price of the car by $1,000, and writing off a bunch of those fees to the tune of $1,308. So not exactly a 5% reduction, but also something...
Topic Author
Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

rallycobra wrote:Oh, you haven't signed the papers yet? What are the 24, 36 and 39 month residuals? The 48 month seems really high. Did you budget for a set of tires? Maybe look at a 2 yr lease if you think you won't have to buy tires for it, check the price on tirerack.com

And yes, take the 5k in your pocket up front. Don't roll it into the lease in case the car gets totaled. Never put any money down on a lease, including any taxes, costs, etc.
I've signed. But...it's a car on a lot, in a high-end market. I'm sure they wouldn't take me to court over it.

And if worse comes to worst, I could let them keep the $1000 or roll it into another deal. They're affable people.

Honestly, a 55% depreciation on a bimmer with up to 96,000km doesn't seem outlandish. Though I do wish the depreciation were a bit lower...
Topic Author
Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

By the way, extremely grateful for all your sage input.

Between my work tasks and the lure of summer I've barely had time to wrap my head around this. I really should have done more research up front - mea culpa
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Vanguard Fan 1367 »

Panople wrote:
rallycobra wrote:Oh, you haven't signed the papers yet? What are the 24, 36 and 39 month residuals? The 48 month seems really high. Did you budget for a set of tires? Maybe look at a 2 yr lease if you think you won't have to buy tires for it, check the price on tirerack.com

And yes, take the 5k in your pocket up front. Don't roll it into the lease in case the car gets totaled. Never put any money down on a lease, including any taxes, costs, etc.
I've signed. But...it's a car on a lot, in a high-end market. I'm sure they wouldn't take me to court over it.

And if worse comes to worst, I could let them keep the $1000 or roll it into another deal. They're affable people.

Honestly, a 55% depreciation on a bimmer with up to 96,000km doesn't seem outlandish. Though I do wish the depreciation were a bit lower...
If a 9 year old Bimmer is only worth 5k then the depreciation must be pretty significant!! Sorry that they don't hold their value better.
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Panople
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Panople »

Vanguard Fan 1367 wrote:
Panople wrote:
rallycobra wrote:Oh, you haven't signed the papers yet? What are the 24, 36 and 39 month residuals? The 48 month seems really high. Did you budget for a set of tires? Maybe look at a 2 yr lease if you think you won't have to buy tires for it, check the price on tirerack.com

And yes, take the 5k in your pocket up front. Don't roll it into the lease in case the car gets totaled. Never put any money down on a lease, including any taxes, costs, etc.
I've signed. But...it's a car on a lot, in a high-end market. I'm sure they wouldn't take me to court over it.

And if worse comes to worst, I could let them keep the $1000 or roll it into another deal. They're affable people.

Honestly, a 55% depreciation on a bimmer with up to 96,000km doesn't seem outlandish. Though I do wish the depreciation were a bit lower...
If a 9 year old Bimmer is only worth 5k then the depreciation must be pretty significant!! Sorry that they don't hold their value better.
Hah. Well it does have just over 200,000km on it, and 2 car proofs, and the need for new front shocks :sharebeer
weltschmerz
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Re: Did I just get seriously ripped off?? (Car lease)

Post by weltschmerz »

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Last edited by weltschmerz on Tue Jan 01, 2019 2:03 pm, edited 1 time in total.
FoolStreet
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Re: Did I just get seriously ripped off?? (Car lease)

Post by FoolStreet »

Panople wrote:I admit I should have taken more time with this...

My 9 year old bimmer was starting to bite the dust, so I took it in to the dealership where I originally bought it, hoping for some loyalty.

They offered eventually $5k for the car. Check.

Then they knocked that amount off the price of a new 230i PLUS fees for the new purchase (freight, pdi, admin fee, tire stewardship, etc.).

It was broken down like this:

$48,195 (car) + $3,406.18 (fees) - $2,308.18 (negotiated discount) - $5,000 (trade-in) - $249.40 (additional discount) = $44,042.88 (total lease amount)

Lease rate was 2.9% for 48 months.

They calculated the residual at 45%, or $21.687.75 with 15,000 miles/year.

My monthly cost of ownership is now $544.92 plus taxes (Ontario, Canada), equalling $615.75 monthly.

----------------

Somehow I feel like I'm paying way too much, especially with the $5,000 trade-in. Can anyone help me figure out where I get [ripped off --admin LadyGeek]?
I find that most people that complain about being ripped off are the kind of people who don't do homework, who don't take responsibility for their own decision-making. It was a business transaction which you should take 100% ownership for. Another pet peeve phrase is "getting screwed." As in, "I made a lot of money on overtime, but got screwed on taxes." Let's save those terms for getting ripped off by credit card skimmers or something where the person really is just an innocent bystander.


I think you got a great deal. The salesperson did you a huge favor of coordinating this complex scenario and hooked you up with a very sweet ride. A 230i is a really nice car. You should sleep well at night, turn the radio a little louder, take your corners a little harder and don't spend another second of your time even thinking about it.
BruDude
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

That deal sounds awful. Do your research. Plenty of leasing info on BMW message boards. Generally speaking, a good BMW lease deal is a monthly payment equal to 1% of the car's MSRP with $0 down and $0 due at signing with all taxes and fees rolled into the lease. 45% is also a horrible residual.
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Nate79
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Nate79 »

Did you get ripped off? Probably. Did you make a bad financial decision? Most definitely. Leasing rhymes with fleecing.
denovo
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Re: Did I just get seriously ripped off?? (Car lease)

Post by denovo »

Yes, you're best off canceling the deal and starting from scratch if you haven't taken delivery. Going on a whim to a car dealer and trying to negotiate is a horrible idea.
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Stormbringer »

Panople wrote:$3,406.18 (fees)
I would say if you got ripped off, it was here.
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dcd72
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Re: Did I just get seriously ripped off?? (Car lease)

Post by dcd72 »

My monthly cost of ownership is now $544.92 plus taxes (Ontario, Canada), equalling $615.75 monthly.
Ownership? I do not think that word means what you think it means.
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N1CKV
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Re: Did I just get seriously ripped off?? (Car lease)

Post by N1CKV »

Panople wrote: The fees are all the nonsense dealership costs - freigh/pdi, wax, nitro, etc.

I think they wound up reducing the price of the car by $1,000, and writing off a bunch of those fees to the tune of $1,308. So not exactly a 5% reduction, but also something...
*If you are paying for some special "sealant" or wax then you are getting ripped off. You are not buying this car, it's nothing more than a long term rental. If the paint won't look good for 4 years it's a crappy car, if they want to protect the paint to be sure it looks great longer than that it's on them.
*Atmospheric air is 78% nitrogen. If you are paying for it you are getting ripped off. I guarantee they are not squeezing out all of the air from the tires before refilling them, at best (if even) they are releasing the pressure to atmospheric, then re-airing the tires. Then they put those snazzy (ugly) green valve stem caps on. Those little caps must be pricey.
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Re: Did I just get seriously ripped off?? (Car lease)

Post by deltaneutral83 »

BruDude wrote:That deal sounds awful. Do your research. Plenty of leasing info on BMW message boards. Generally speaking, a good BMW lease deal is a monthly payment equal to 1% of the car's MSRP with $0 down and $0 due at signing with all taxes and fees rolled into the lease. 45% is also a horrible residual.
I thought it was pretty typical for a $50k car to be worth right around half after 4 years?
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Kenkat
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Kenkat »

Pretty sure you are talking CAD, not USD, correct? So a $48k car CAD is $36k USD.

I don't think you got ripped off on the terms of the lease or the way it was put together. And I think the residual is generally a pre-defined value that is not directly negotiable. Whether or not you could have negotiated a better deal on the price of the car or the trade is the primary question. That's hard to say for sure without a lot more research. You are probably talking a few thousands of dollars worst case.

Short of invoking a cancellation provision - not sure of Canadian law or the lease terms - I would just put it behind you, enjoy a very nice car and do more research next time.
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sunny_socal
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Re: Did I just get seriously ripped off?? (Car lease)

Post by sunny_socal »

Stormbringer wrote:
Panople wrote:$3,406.18 (fees)
I would say if you got ripped off, it was here.
^^^ This.

But you're leasing a car, which is a ripoff anyway (you're just subsidizing a future purchase of a luxury car for a fellow Boglehead!)
ddurrett896
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Re: Did I just get seriously ripped off?? (Car lease)

Post by ddurrett896 »

Panople wrote: The car was starting to become a money pit. Between $2-$4k per year to fix.
If I had a car that was 9 years old that depreciated to $5,000 AND was $2-$4k to maintain, I would never buy from the manufacture again!
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Re: Did I just get seriously ripped off?? (Car lease)

Post by michaeljc70 »

Stormbringer wrote:
Panople wrote:$3,406.18 (fees)
I would say if you got ripped off, it was here.
This. What are all these fees?
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

deltaneutral83 wrote:
BruDude wrote:That deal sounds awful. Do your research. Plenty of leasing info on BMW message boards. Generally speaking, a good BMW lease deal is a monthly payment equal to 1% of the car's MSRP with $0 down and $0 due at signing with all taxes and fees rolled into the lease. 45% is also a horrible residual.
I thought it was pretty typical for a $50k car to be worth right around half after 4 years?
Probably, doesn't change a bad lease though. I leased a $55k 335D for $450/month with $0 down payment and $0 paid at signing other than first payment, all taxes and fees were rolled into the lease. I believe the residual was around 63% on a 36-month lease and the money factor (interest rate) was very low. BMW also allows the dealers to mark up the acquisition fee and money factor as pure profit to the dealer, which I'm sure they did here. I would never lease a car for more than 1% of MSRP as a monthly payment including all taxes and fees.

You can find some incredible lease deals on BMWs if you know how the payments are calculated, what incentives are on the car, how to negotiate the best lease with them, etc. A few years ago you could lease a $75k M3 for under $650/month with the right deal. I was able to get a friend a Mini Cooper S (owned by BMW) with $28k MSRP a lease with all taxes and fees rolled into it for $260/month, their original offer was $400/month with $4k paid up front. You just really need to know what you're doing.
BruDude
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

For the OP, you can learn a lot about BMW leasing and what a good deal is here on the Bimmerfest "Ask a Dealer" forum - http://www.bimmerfest.com/forums/forumdisplay.php?f=20
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Vanguard Fan 1367 »

The Dan wrote:If you can afford a $50k car, then you don't need to worry about every nickel and dime. Go enjoy your new car!

By the way, the standard Boglehead response is "Of course you got ripped off, you could have bought a used beige Camry!"
I bought a new Fusion S (the simplest model) for under 20k in 2011 for my last car. (I have bought a Boglehead truck since then). I sort of was thinking what you said about the beige Camry since this is a Bogleheads forum. :wink:
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Re: Did I just get seriously ripped off?? (Car lease)

Post by weltschmerz »

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Last edited by weltschmerz on Tue Jan 01, 2019 2:02 pm, edited 1 time in total.
WhiteMaxima
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Re: Did I just get seriously ripped off?? (Car lease)

Post by WhiteMaxima »

9 Year old BMW for 5K and 45K for another BMW. You best bet would be a certified 2 or 3 year old BMW (knock 30% off list) with extended warranty. Now it's already too late since you signed contract.
deltaneutral83
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Re: Did I just get seriously ripped off?? (Car lease)

Post by deltaneutral83 »

The Dan wrote:In this recent thread, it was mentioned that BMW makes a lot of engines that have a built-in "acceptable" level of oil consumption:

http://www.consumerreports.org/cro/maga ... /index.htm
"Audi, BMW, and Subaru stick firmly to the statement that oil consumption is a normal part of a car’s operation. Subaru considers a quart burned every 1,000 to 1,200 miles to be acceptable. Certain Audi and BMW cars’ standards state that a quart burned every 600 to 700 miles is reasonable."

Where does the oil go? Doesn't the residue gunk up the internals? Why own a car like this?...better to lease them and let someone else deal with the maintenance issues.
I most definitely had my 2004 Audi A4 consume a quart of oil every 800 miles once it got to 70k miles. Was the most annoying thing I'd ever come across. One thing I always wondered as a novice to cars, was that if i was putting a quart in every 700 miles, did I effectively need to change my oil more than once every 15k miles since I was revolving the oil every 4000 miles (5 quarts). I used to stock up when Walmart had the specific oil I wanted on rebate. I used to leave a 5qt Mobil jug in my trunk. It was pretty insane.
dbr
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Re: Did I just get seriously ripped off?? (Car lease)

Post by dbr »

deltaneutral83 wrote:
The Dan wrote:In this recent thread, it was mentioned that BMW makes a lot of engines that have a built-in "acceptable" level of oil consumption:

http://www.consumerreports.org/cro/maga ... /index.htm
"Audi, BMW, and Subaru stick firmly to the statement that oil consumption is a normal part of a car’s operation. Subaru considers a quart burned every 1,000 to 1,200 miles to be acceptable. Certain Audi and BMW cars’ standards state that a quart burned every 600 to 700 miles is reasonable."

Where does the oil go? Doesn't the residue gunk up the internals? Why own a car like this?...better to lease them and let someone else deal with the maintenance issues.
I most definitely had my 2004 Audi A4 consume a quart of oil every 800 miles once it got to 70k miles. Was the most annoying thing I'd ever come across. One thing I always wondered as a novice to cars, was that if i was putting a quart in every 700 miles, did I effectively need to change my oil more than once every 15k miles since I was revolving the oil every 4000 miles (5 quarts). I used to stock up when Walmart had the specific oil I wanted on rebate. I used to leave a 5qt Mobil jug in my trunk. It was pretty insane.
I don't think current model Subarus consume oil this way.
dguad4
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Re: Did I just get seriously ripped off?? (Car lease)

Post by dguad4 »

I don't know if you have it backwards or not, but according to the Edmunds lease forum, the residual should be 55% not 45%...

"Hello,

I'm looking for the MF, RV, and any incentives and rebates on a 2017 BMW 230i. 36 months and 15K a year. I'm in Texas if that makes a difference.

Thanks!


.00150 MF and 55% residual"
jtdavid
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Re: Did I just get seriously ripped off?? (Car lease)

Post by jtdavid »

Usually BMW adjusts the residuals so that the monthly payment on a 3 year lease is cheaper than a 4 year. You might check that.
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Kenkat
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Kenkat »

dguad4 wrote:I don't know if you have it backwards or not, but according to the Edmunds lease forum, the residual should be 55% not 45%...

"Hello,

I'm looking for the MF, RV, and any incentives and rebates on a 2017 BMW 230i. 36 months and 15K a year. I'm in Texas if that makes a difference.

Thanks!


.00150 MF and 55% residual"
This is a 48 month lease so it will have a lower residual than a 36 month lease.
RudyS
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Re: Did I just get seriously ripped off?? (Car lease)

Post by RudyS »

My 2015 Subaru Outback (now at 32K miles), and the 2008 before it, never consumed ANY oil between the recommended oil change intervals. Might just be lucky, but that's what it is.
denovo
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Re: Did I just get seriously ripped off?? (Car lease)

Post by denovo »

BruDude wrote:For the OP, you can learn a lot about BMW leasing and what a good deal is here on the Bimmerfest "Ask a Dealer" forum - http://www.bimmerfest.com/forums/forumdisplay.php?f=20

Asking a dealer seems like the worst thing to do. That sticky thread's first comment reads like a warmed-over sales pitch.

http://www.bimmerfest.com/forums/showth ... p?t=895604

Leasing can be a financially advantageous way of driving a BMW. Perhaps that's why more than half of BMW drivers lease. Leasing does not require the same cash commitment as you only pay for the value of the vehicle you use during its lease. And, at the end of lease term, you have the flexibility to turn in your BMW for another, re-lease for additional term, buy at set agreement price, or turn in and walk away.
Needless to say this is baseless nonsense. It's not financially advantageous, but it's great business for car dealers since they get repeat business every 3 years.
"Don't trust everything you read on the Internet"- Abraham Lincoln
BruDude
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

denovo wrote:
BruDude wrote:For the OP, you can learn a lot about BMW leasing and what a good deal is here on the Bimmerfest "Ask a Dealer" forum - http://www.bimmerfest.com/forums/forumdisplay.php?f=20

Asking a dealer seems like the worst thing to do. That sticky thread's first comment reads like a warmed-over sales pitch.

http://www.bimmerfest.com/forums/showth ... p?t=895604

Leasing can be a financially advantageous way of driving a BMW. Perhaps that's why more than half of BMW drivers lease. Leasing does not require the same cash commitment as you only pay for the value of the vehicle you use during its lease. And, at the end of lease term, you have the flexibility to turn in your BMW for another, re-lease for additional term, buy at set agreement price, or turn in and walk away.
Needless to say this is baseless nonsense. It's not financially advantageous, but it's great business for car dealers since they get repeat business every 3 years.
You don't have to ask a dealer anything....just read the threads and gain knowledge about how BMW leases work and what's a good deal. If someone wants to NOT get a crappy lease deal and they are intent on leasing, that forum can provide plenty of valuable info. Not everyone wants to buy a car and drive it for 15 years.
denovo
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Re: Did I just get seriously ripped off?? (Car lease)

Post by denovo »

BruDude wrote: You don't have to ask a dealer anything....just read the threads and gain knowledge about how BMW leases work and what's a good deal. If someone wants to NOT get a crappy lease deal and they are intent on leasing, that forum can provide plenty of valuable info. Not everyone wants to buy a car and drive it for 15 years.
The forum is sponsored by BMW car dealers, who have no incentive to provide an informational advantage to consumers. Their sub-forum on negotiating car deals has a sticky on LEASES, that provides a warmed over sales pitch about how great leases are. There could be kernels of good advice in a form that recommends stock picking and buying and selling mutual funds every month, but I wouldn't link to it, since the overwhelming volume of information would be bad.

If it was about helping out the consumer, there would be a sticky suggesting consumers send inquiries to multiple dealers and have them bid for the best deal. I wonder why that's not there. :twisted:
"Don't trust everything you read on the Internet"- Abraham Lincoln
Maverick3320
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Re: Did I just get seriously ripped off?? (Car lease)

Post by Maverick3320 »

BruDude wrote:
deltaneutral83 wrote:
BruDude wrote:That deal sounds awful. Do your research. Plenty of leasing info on BMW message boards. Generally speaking, a good BMW lease deal is a monthly payment equal to 1% of the car's MSRP with $0 down and $0 due at signing with all taxes and fees rolled into the lease. 45% is also a horrible residual.
I thought it was pretty typical for a $50k car to be worth right around half after 4 years?
Probably, doesn't change a bad lease though. I leased a $55k 335D for $450/month with $0 down payment and $0 paid at signing other than first payment, all taxes and fees were rolled into the lease. I believe the residual was around 63% on a 36-month lease and the money factor (interest rate) was very low. BMW also allows the dealers to mark up the acquisition fee and money factor as pure profit to the dealer, which I'm sure they did here. I would never lease a car for more than 1% of MSRP as a monthly payment including all taxes and fees.

You can find some incredible lease deals on BMWs if you know how the payments are calculated, what incentives are on the car, how to negotiate the best lease with them, etc. A few years ago you could lease a $75k M3 for under $650/month with the right deal. I was able to get a friend a Mini Cooper S (owned by BMW) with $28k MSRP a lease with all taxes and fees rolled into it for $260/month, their original offer was $400/month with $4k paid up front. You just really need to know what you're doing.
Doesn't leasing an M3 kind of defeat the purpose?
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

denovo wrote:
BruDude wrote: You don't have to ask a dealer anything....just read the threads and gain knowledge about how BMW leases work and what's a good deal. If someone wants to NOT get a crappy lease deal and they are intent on leasing, that forum can provide plenty of valuable info. Not everyone wants to buy a car and drive it for 15 years.
The forum is sponsored by BMW car dealers, who have no incentive to provide an informational advantage to consumers. Their sub-forum on negotiating car deals has a sticky on LEASES, that provides a warmed over sales pitch about how great leases are. There could be kernels of good advice in a form that recommends stock picking and buying and selling mutual funds every month, but I wouldn't link to it, since the overwhelming volume of information would be bad.

If it was about helping out the consumer, there would be a sticky suggesting consumers send inquiries to multiple dealers and have them bid for the best deal. I wonder why that's not there. :twisted:
You are making a lot of assumptions. There are multiple forum sponsored dealers. Of course they have an incentive to provide an information advantage to consumers - they want more business and they have to compete with the other forum-sponsor dealers! They are known for providing very good deals to forum members, usually $1000 over invoice with no add-on fees will get a lease deal done with one of them, which is a hell of a lot better than what OP wound up with. If someone spends 30 minutes reading that forum they will save thousands of dollars versus just walking into a lease deal blind at a dealer.
Maverick3320 wrote:Doesn't leasing an M3 kind of defeat the purpose?
When you lease a car you can beat the crap out of it while under full warranty and free maintenance, then hand it back to the dealer and do it again. A lot of people don't want to own a car like an M3 out of warranty, they are very expensive to fix. I had one, ask me how I know :D

Most people buying luxury cars don't keep them very long either. Buying and selling after only a few months or a year is extremely common with Porsches and other limited-edition high end cars. They are expensive toys and people that have money want to try them all. There's always another upgrade out there.
denovo
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Re: Did I just get seriously ripped off?? (Car lease)

Post by denovo »

BruDude wrote:
There are multiple forum sponsored dealers. Of course they have an incentive to provide an information advantage to consumers - they want more business and they have to compete with the other forum-sponsor dealers! They are known for providing very good deals to forum members, usually $1000 over invoice with no add-on fees will get a lease deal done with one of them, which is a hell of a lot better than what OP wound up with. If someone spends 30 minutes reading that forum they will save thousands of dollars versus just walking into a lease deal blind at a dealer.
Invoice pricing is utterly worthless as a reference point.

http://clark.com/cars/eye-opening-truth ... ice-price/
As a result, the invoice price has become a bloated imposter, a big chunk of which is allocated to secret “below-the-line” incentive programs in which multi-month sales objectives are set dealer-by-dealer and typically based on total sales, not sales of individual models. And the visible gross profit at the sticker price has been cut to the point that no dealership could keep its doors open if the invoice price were a real cost number.
OP didn't get a good deal, but it's a fallacy to say the only options are between two bad choices. That forum, on balance, would not be helpful to OP. It falsely promotes leasing as a great option. The only effective way to negotiate is to pit them against each other in a bidding war. I wonder why they don't promote that on their dealer-sponsored site? :?:
"Don't trust everything you read on the Internet"- Abraham Lincoln
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M_to_the_G
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Re: Did I just get seriously ripped off?? (Car lease)

Post by M_to_the_G »

Used luxury vehicles are such a steal because of the extremely high maintenance costs, which the OP alluded to. watch:

https://www.youtube.com/watch?v=XV9rJwEOCus
https://www.youtube.com/watch?v=u_8VueuEtH8
"It’s basically the plot of 'Charlie and the Chocolate Factory.' If you stick around, doing nothing, while everyone around you ****s up, you’re going to win big." - John Oliver
BruDude
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

denovo wrote:
BruDude wrote:
There are multiple forum sponsored dealers. Of course they have an incentive to provide an information advantage to consumers - they want more business and they have to compete with the other forum-sponsor dealers! They are known for providing very good deals to forum members, usually $1000 over invoice with no add-on fees will get a lease deal done with one of them, which is a hell of a lot better than what OP wound up with. If someone spends 30 minutes reading that forum they will save thousands of dollars versus just walking into a lease deal blind at a dealer.
Invoice pricing is utterly worthless as a reference point.

http://clark.com/cars/eye-opening-truth ... ice-price/
As a result, the invoice price has become a bloated imposter, a big chunk of which is allocated to secret “below-the-line” incentive programs in which multi-month sales objectives are set dealer-by-dealer and typically based on total sales, not sales of individual models. And the visible gross profit at the sticker price has been cut to the point that no dealership could keep its doors open if the invoice price were a real cost number.
OP didn't get a good deal, but it's a fallacy to say the only options are between two bad choices. That forum, on balance, would not be helpful to OP. It falsely promotes leasing as a great option. The only effective way to negotiate is to pit them against each other in a bidding war. I wonder why they don't promote that on their dealer-sponsored site? :?:
Again, you are making a lot of assumptions when you really aren't familiar with BMW leasing. Invoice pricing is not a worthless reference point, it is THE reference point when it comes to leasing. BMW dealers only make profit from leases on the price over invoice, the add-on fees (acquisition fee and money factor markups), and overall sales volume. Any "trunk money" should be included in the sale price. For example, if a car has a $3k incentive on it and $1000 over invoice with no add-on fees is a fair deal, then it would be $2k under invoice with no add-on fees/no markups on acquisition fee and money factor.

BMWs also have a limited number of allocations available for leasing. When a hot new car like the M2 becomes available and the dealer only gets 3 allocations per month, they aren't going to do $1000 over invoice, they are going to want full MSRP or close to it (or over MSRP, which M2's were selling for). When a car that's tough to sell like a 650i is leased, they will be much more willing to work with it at $1k over invoice. A lot of dealers won't even do $1k over invoice/no markups on leases because it's a lot of work for the salesman to get a "mini commission" of $200 or whatever and they aren't interested in the hassle unless the buyer knows exactly what they want/what they will get and it just becomes a paperwork transaction.

Trying to get dealers to bid against each other is the worst way to approach a lease deal. The best way is to KNOW YOUR NUMBERS, approach the dealer with exactly what you are going to pay, know the residual, know the money factor, know your taxes and fees, and tell them to take it or leave it. I have done this several times with BMW already and it is far more effective than "I'm going to bid you against 10 other dealers". If you want to bid them against another dealer they are probably going to say "no thanks, this is a waste of time. Here's our price, let me know if you want it" which is not going to get you a good deal.
michaeljc70
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Re: Did I just get seriously ripped off?? (Car lease)

Post by michaeljc70 »

BruDude wrote:
denovo wrote:
BruDude wrote:
There are multiple forum sponsored dealers. Of course they have an incentive to provide an information advantage to consumers - they want more business and they have to compete with the other forum-sponsor dealers! They are known for providing very good deals to forum members, usually $1000 over invoice with no add-on fees will get a lease deal done with one of them, which is a hell of a lot better than what OP wound up with. If someone spends 30 minutes reading that forum they will save thousands of dollars versus just walking into a lease deal blind at a dealer.
Invoice pricing is utterly worthless as a reference point.

http://clark.com/cars/eye-opening-truth ... ice-price/
As a result, the invoice price has become a bloated imposter, a big chunk of which is allocated to secret “below-the-line” incentive programs in which multi-month sales objectives are set dealer-by-dealer and typically based on total sales, not sales of individual models. And the visible gross profit at the sticker price has been cut to the point that no dealership could keep its doors open if the invoice price were a real cost number.
OP didn't get a good deal, but it's a fallacy to say the only options are between two bad choices. That forum, on balance, would not be helpful to OP. It falsely promotes leasing as a great option. The only effective way to negotiate is to pit them against each other in a bidding war. I wonder why they don't promote that on their dealer-sponsored site? :?:
Again, you are making a lot of assumptions when you really aren't familiar with BMW leasing. Invoice pricing is not a worthless reference point, it is THE reference point when it comes to leasing. BMW dealers only make profit from leases on the price over invoice, the add-on fees (acquisition fee and money factor markups), and overall sales volume. Any "trunk money" should be included in the sale price. For example, if a car has a $3k incentive on it and $1000 over invoice with no add-on fees is a fair deal, then it would be $2k under invoice with no add-on fees/no markups on acquisition fee and money factor.

BMWs also have a limited number of allocations available for leasing. When a hot new car like the M2 becomes available and the dealer only gets 3 allocations per month, they aren't going to do $1000 over invoice, they are going to want full MSRP or close to it (or over MSRP, which M2's were selling for). When a car that's tough to sell like a 650i is leased, they will be much more willing to work with it at $1k over invoice. A lot of dealers won't even do $1k over invoice/no markups on leases because it's a lot of work for the salesman to get a "mini commission" of $200 or whatever and they aren't interested in the hassle unless the buyer knows exactly what they want/what they will get and it just becomes a paperwork transaction.

Trying to get dealers to bid against each other is the worst way to approach a lease deal. The best way is to KNOW YOUR NUMBERS, approach the dealer with exactly what you are going to pay, know the residual, know the money factor, know your taxes and fees, and tell them to take it or leave it. I have done this several times with BMW already and it is far more effective than "I'm going to bid you against 10 other dealers". If you want to bid them against another dealer they are probably going to say "no thanks, this is a waste of time. Here's our price, let me know if you want it" which is not going to get you a good deal.
But the invoice price doesn't take into account the popularity of the vehicle and therefore current discounts on the vehicle.
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Re: Did I just get seriously ripped off?? (Car lease)

Post by BruDude »

michaeljc70 wrote:But the invoice price doesn't take into account the popularity of the vehicle and therefore current discounts on the vehicle.
This only matters if there is "trunk money" or if the car is in extremely high demand like an M2, in which case you probably won't get $1000 over invoice anyway. If there is no trunk money and it's not a specialty/high demand car, $1000 over invoice with no markups/add-on fees is a very good deal on a BMW lease. If a dealer is desperate for an end-of-month sale you might even be able to get $750 over or $500 over, but that's kind of splitting hairs on an expensive car and 36-month lease. If they sold you a car at invoice with no markups, they would literally make $0 on the deal (except counting towards sales volume) and could possibly even lose money if their satisfaction scores aren't 100% 5 out of 5.
Last edited by BruDude on Thu Jun 22, 2017 7:32 pm, edited 1 time in total.
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