Lease questions..... 330i into an X3

[Unit74]

Here is the scoop.....


We have an 03 330i now. We moved and live on a dirt road now and the poor 330 can't take it, especially in weather. It's too low profile and bottoms on everything.


I went to Riverside BWM in SoCal and this is what I can do:


I will "trade in" rather than terminate the lease. The lease pay off is $32k and trade value is $28k resulting in $4k in negative equity. We are looking at a 2004 X3 which stickers at $41k. The fleet manager is dropping the price of the X3 to $37k and rolling the $4k from the 330i into the price of the new X3 bringing it back to $41k, or sticker price. Total out of pocket at signing is $2k and includes the first payment. I assume they will recover some or most of this reduction on sale of my 330i.


The 330i lease till full term is another 15 months at $545/mo. The new payment would be $523/mo. Over the 15 month term, the net savings is a mere $300, not even worth considering really....


Can someone blow holes in my logic and see the missing link I am not, if any? I don't know if I am being taken for a ride or actually getting hooked up here. It's one of those to good to be true things as far as getting out of the car we almost can't use now.

The only thing I don't understand at this point is the term "Money Factor", which is 0.85 referenceing the printout he gave me. Please explain what this is. There is a $725 bank fee as well which has yet to be explained to me.

I realize the negative $4k is the where I am taking it in the shorts, but at this point, we don't really care.

Any guidance you can provide would help greatly! Thanks

Jeff

 

[codex57]

They often do this as a "courtesy."

 

[Unit74]

What kinda irritated me was when we leased the car, we were told by the finance manager, that we could terminate up to 6 mo early if we repurchased a new BMW......


I asked about this and was told this does not apply to my car. We would stick it out till then, but with that door closed, why wait?.....

So do you think this is something worth going after or should I wait?

 

[sly]

The only thing I don't understand at this point is the term "Money Factor", which is 0.85 referenceing the printout he gave me. Please explain what this is. There is a $725 bank fee as well which has yet to be explained to me.

Money factor is the interest rate they are charging you, and it is always determined by multiplying the decimal number X 2400. The decimal number in your case is probably .0085. So when you multiply that by 2400, you get 20.4% which is ridiculously high. A good money factor would be about 25% of that number or around .0025.

 

[sly]

By the way, here's a good reference site for auto leases:

http://www.leaseguide.com/lease08.htm

 

[Unit74]

Excelent. Thank you


Heres a little food for thought though.......

The money factor is . 085, and by my calculations, this equates to 204%..? Most certainly must be wrong.


$41,200 selling price, $23,577 residual, depretiation $17,293.71 term 36 months, rent 5.48.


Shouldn't the rent be about $9 based on this? Total leased price is $523.51/mo.


Something is not working out here. I read the leasing guide and it sounds like there might have been a mistake made somewhere in the quote they gave me......

 

[sly]

Unit74: Make them explain every detail to you. As you can see the calculation is very simple. Dealers like to make it seem complex by using technical terms and throwing in lots of other fees to get the monthly payments down. In its simpliest terms the fee you pay is the depreciation cost divided by the term of the lease plus the interest (money factor) on both the negotiated price and residual price. BMWs are typically great cars to lease because they command such great residual values.