X1 lease help needed

[Untdrums]

Hello everyone,
I need some help. I am trying to get my wife into an X1 and have been talking with 2 dealers in my area. This is my first lease as I bought (financed) my 335d last summer so I have been looking to your experiences for guidance. First, here's the first offer I have been given:
2014 X1 xDrive 28i
Lemans Blue
MSport
Lighting
Ultimate
Heated seats

MSRP: $44,625
Discount: $3,205
BMW Option credit: $750
USAA/Owner Loyalty: $1,000
Vehicle selling price: $39,670

Sales Tax: $2,479.38
Tag/Registration Fees: $57.75
Title fee: $33
State insp fee: $23.75
Documentation fee: $122.50
Road and bridge: $10
Balance due: $42,486.67

Adj cap cost: $43,126.38
MF: .00165 / .00116 (w/7 MSDs)
Residual: 59% for 15K miles
61% for 12K miles
$725 acquisition fee

Option 1- 36 months / 12K miles
Cash due: $558 or
$4373 (With 7 MSDs)
Monthly payment $558 or
$524 (With 7 MSDs)

Option 2 - 36 months / 15K miles
Cash due: $581 or
$4397 (With 7 MSDs)
Monthly payment: $582 or
$548 (With 7 MSDs)

We'd like to see if we can lower the selling price but more importantly the MF. When I told the CAs that other people are getting .00125 before MSDs, he asked for a source. Does anyone have any advice?

We are planning on selling my wife's current car (2013 VW Golf TDI fully loaded) this weekend and are trying to get this settled before then.

I forgot to mention that we are changing to sDrive since we live in Dallas and don't need AWD. I figured that should lower the selling price by at least $1700. The CA said we would have to order one or be more flexible on the options since he can't find one in the BMW Southwest area. Do you the the MF problem is because we live in TX? I have found a few dealers on cars.com and Autotrader that match our options list.

Thanks in advance

[Eric5273]

I just ordered my X1 xDrive28i last week and I will be leasing as well. I'm not sure how much help I can be, because I do not know the exact money factor, residual, or even the sale price. But here are the specifics of my deal that I do know...

MSRP $37,225
36 months
10k miles per year
$360/month
no money down except for taxes and inception fees (no MSDs)

I will mention that I was not eligible for the loyalty cash as I have not owned a BMW in a few years. So the only cash applied was the $750 BMW cash. I hope that helps.

[E39lolz]

Am I reading this correctly?

2014 X1 xDrive 28i
Lemans Blue
MSport
Lighting
Ultimate
Heated seats

MSRP: $44,625

??? For the 35i that is about right but for a 28i?

[Eric5273]

Originally Posted by E39lolz

Am I reading this correctly?

2014 X1 xDrive 28i
Lemans Blue
MSport
Lighting
Ultimate
Heated seats

MSRP: $44,625

??? For the 35i that is about right but for a 28i?

xDrive35i with that equipment would be around $48k. Go to bmwusa.com and build the car and you'll see.

[E39lolz]

This is why I'm so glad I got a 35i. Yeah it's a bone stock 35i but I'll choose the performance over the luxury appointments. I apologize in advance for a minor thread jacking, though I didn't know that the ultimate package was $6k +.

[BMWrules7]

Originally Posted by Untdrums

Hello everyone,
I need some help. I am trying to get my wife into an X1 and have been talking with 2 dealers in my area. This is my first lease as I bought (financed) my 335d last summer so I have been looking to your experiences for guidance. First, here's the first offer I have been given:
2014 X1 xDrive 28i
Lemans Blue
MSport
Lighting
Ultimate
Heated seats

MSRP: $44,625
Discount: $3,205
BMW Option credit: $750
USAA/Owner Loyalty: $1,000
Vehicle selling price: $39,670

Sales Tax: $2,479.38
Tag/Registration Fees: $57.75
Title fee: $33
State insp fee: $23.75
Documentation fee: $122.50
Road and bridge: $10
Balance due: $42,486.67

Adj cap cost: $43,126.38
MF: .00165 / .00116 (w/7 MSDs)
Residual: 59% for 15K miles
61% for 12K miles
$725 acquisition fee

Option 1- 36 months / 12K miles
Cash due: $558 or
$4373 (With 7 MSDs)
Monthly payment $558 or
$524 (With 7 MSDs)

Option 2 - 36 months / 15K miles
Cash due: $581 or
$4397 (With 7 MSDs)
Monthly payment: $582 or
$548 (With 7 MSDs)

We'd like to see if we can lower the selling price but more importantly the MF. When I told the CAs that other people are getting .00125 before MSDs, he asked for a source. Does anyone have any advice?

We are planning on selling my wife's current car (2013 VW Golf TDI fully loaded) this weekend and are trying to get this settled before then.

I forgot to mention that we are changing to sDrive since we live in Dallas and don't need AWD. I figured that should lower the selling price by at least $1700. The CA said we would have to order one or be more flexible on the options since he can't find one in the BMW Southwest area. Do you the the MF problem is because we live in TX? I have found a few dealers on cars.com and Autotrader that match our options list.

Thanks in advance

Not sure if MSD is worth it. Plus, don't you lose the MSD if the car is totaled?

[iride4u]

One item when leasing is the residual value. Sometimes an option might cost more but will make the residual value far higher that the original cost of the item.

[Eric5273]

Originally Posted by iride4u

One item when leasing is the residual value. Sometimes an option might cost more but will make the residual value far higher that the original cost of the item.

Not true. The residual value is the same percentage of MSRP regardless of options. So if residual is 60% and an option added is $1k MSRP, then that option adds $600 to residual and $400 (plus interest) to your payments.

The reason more stripped cars are usually better lease deals is because the mark up on options (difference between MSRP and invoice) is not that much for most options, so adding more options does not increase the discount you can bargain on the vehicle by any noticeable amount. So you end up paying a higher percentage of the car's MSRP, and therefore your lease rate is proportionally higher.

And if you buy, when you end up selling many options will not add anything to the car's value when it's used.

So for these reasons, you are always better off getting a higher model with fewer options, than a cheaper model with more options.

[iride4u]

Originally Posted by Eric5273

Not true. The residual value is the same percentage of MSRP regardless of options. So if residual is 60% and an option added is $1k MSRP, then that option adds $600 to residual and $400 (plus interest) to your payments.

The reason more stripped cars are usually better lease deals is because the mark up on options (difference between MSRP and invoice) is not that much for most options, so adding more options does not increase the discount you can bargain on the vehicle by any noticeable amount. So you end up paying a higher percentage of the car's MSRP, and therefore your lease rate is proportionally higher.

And if you buy, when you end up selling many options will not add anything to the car's value when it's used.

So for these reasons, you are always better off getting a higher model with fewer options, than a cheaper model with more options.

Ok this is not what I was told many years ago. Thanks for correcting me. I haven't leased in many years so I am not current.

[Eric5273]

Originally Posted by iride4u

Ok this is not what I was told many years ago. Thanks for correcting me. I haven't leased in many years so I am not current.

Just to clarify, the residual percentage sometimes varies by the model type, but not the options. For example, the sDrive28i, xDrive28i and xDrive35i may all have different residual percentages. But an xDrive28i without any options would have the same residual percentage as an xDrive28i with many options. In this case the residual value would be different, but for both cars the residual value would be the same percentage of MSRP.

[Untdrums]

Thank you guys for the responses and input. We are choosing the N20 engine because it's my wife's car and she does prefer the creature comforts and the marginal fuel economy advantage.

About MSDs, we are probably not going to go that route it it is my understanding that the only way to lose that is if there is damage (not normal wear and tear) to the car when we return it at the end of the lease. If the car is totaled, doesn't insurance (required extra coverage) cover that loss? Either way, we probably won't do it.

My main question is about MF. I understand that this is determined by your credit score (much like APR) but my concern is that my CA is telling me that NO one receives the dealers buy rate of .00125. Has anyone actually gotten that rate?

[Eric5273]

Originally Posted by Untdrums

About MSDs, we are probably not going to go that route it it is my understanding that the only way to lose that is if there is damage (not normal wear and tear) to the car when we return it at the end of the lease. If the car is totaled, doesn't insurance (required extra coverage) cover that loss? Either way, we probably won't do it.

Insurance doesn't cover what you owe to the bank, insurance covers what the car is worth. So for example, if after owning the car for 6 months, it is stolen, your insurance will pay you what a 1 model year old used X1 is worth, which is probably at least a few thousand cheaper than what you paid. Since you would have only made 6 payments at that point, you would owe the bank more than the car is worth, sometimes known as being up-side-down on a car. BMW leases (and most leases) include something called gap insurance. Gap insurance covers that "gap" between what your insurance pays and what you owe on the car. This is why it's always a bad idea to put money down on a lease. Because in the event your car is stolen or totaled, your down payment will fill the gap instead of the gap insurance.

As for whether the MSDs will fill the gap, I'm don't know the answer to that. You would have to ask the finance manager.

[Untdrums]

I have done a little more negotiating with a little compromising on my part. They couldn't get us a LeMans Blue with heated seats without a transportation fee. If we would have ordered one from Germany, we would have lost out on our VW appraisal from Carmax which is more than what we owe on it. Here's the updated deal. We're hopefully signing this week.

2014 X1 sDrive 28i
Mineral Grey
Dark Crosshatch
Black Nevada leather
MSport
Lighting
Ultimate
19" wheels

MSRP: $42,925
Discount: $5,060
Rebate: $500
Vehicle selling price: $37,365

Sales Tax: $2,335.31
Tag/Registration Fees, Title fee, State insp fee: $131
Documentation fee: $125
Vehicle Inventory Tax: $68.14
Balance due: $40,024.45

MF: .00165
Residual: 59% for 15K miles - $25,325.75
$725 acquisition fee
$726 Deposit

$39,772.45
36 months / 15K miles
Cash due on delivery: $1,486 (Paying for Taxes and fees up front so I don't have to pay interest on them)
Monthly payment: $508.71

I realize that my MF is rather high.

What happened here was that I originally negotiated an offer with another dealer to get to a lower monthly payment.

Original dealer have me a higher sale price and I negotiated a .00125 MF. Monthly payment was $509

I took the deal to another dealer and they were able to match the monthly payment and in order to do so, they lowered the sale price but of course raised the MF to .00165. Monthly payment is $508.71. I would rather work with the second dealer for convenience and better service.

Do you think it's still possible to lower the MF once I get into the financial office even though I have already agreed to buy the car, I just haven't taken delivery yet? I'd rather not put MSDs since they won't really make much of a difference in our monthly payment.

Advice anyone?

[Eric5273]

Much better than before. Your car is about $5700 more expensive than mine. Given the residual rate and interest, you would end up paying about half of that amount over the life of the lease, which would come to about $2850. Add to that the extra you pay for 15k miles (instead of 10k miles which is what my lease posted above has), and that lowers the residual value by 3%. 3% of your MSRP is about $1300. So in total you are on the hook for about $4150 more than I was. Translated into 36 payments, that comes to about $115 more per month. That would put you around $475/month if you got the same deal as I did.

However.... I notice you mention you are paying taxes upfront. In your breakdown you itemize state tax at $2335.31, but then below that you say you owe only $1486 at inception. That tells me that some of the tax is being rolled into your payment. So with that being the case, it sounds like you are getting a good deal.

My deal, which I posted above in post #2, included $2200 due at inception (taxes, registration, fees, etc.) and that is after a $500 deposit. So my $360 payment did not include any tax.

I'd say go for it. Sounds like you negotiated a solid deal!

[Untdrums]

Thanks for the feedback. I'm not paying the sales tax, but rather some things that can't be altered:

$725 Acquisition fee
$131 DMV fees
$125 Doc fee
$508 First month's payment
~$1,490. This is about what I'm getting from Carmax in positive equity on my VW Golf TDI so it ends up working out OK for us. We're still going to try and negotiate a lower MF once I get into the finance office.