Re: Haggling w/ a Lease?
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A lot of people think leasing is for suckers, but they just have not done the research to find out the truth. The most important thing to know is that when you lease a car from a dealership, the car is actually sold to a 3rd party who then leases that car to you. So from the viewpoint of the dealership, they are making a car sale. That means the price is negotiable. A lot of people recommend that you don't even hint at the fact you are looking into leasing until you negotiate a price you are willing to pay for the car. This negotiated price is known as the Base Capitalized Cost. Go to leaseguide.com for further information and a lease calculator. Great site.
The Money Factor is just a way to represent your interest rate in decimal format. You times it by 2400 to get the interest rate. The dealerships came up with the concept of "money factor" to try to confuse potential customers. When people see all these fractions and other calculations they are more easily to be duped into overpaying for a lease.
A rule of thumb is that you should be looking to pay around 150 dollars a month for every 10,000 dollars worth of car you lease. So if you negotiate to buy a car for 60,000 dollars, your monthly payment should be around (60,000/10,000 x 150) = 900 bucks. That is 900 bucks out the door, including taxes. That is for your standard 36 month, 12000 miles/yr lease.
As opposed to what the previous poster mentioned, when it comes to LEASING and not buying, you should shop around for payment. Who cares how they manipulate the numbers as long as the monthly payment is what you perceive to be fair.
Furthermore, they give you an option to purchase the car at the end of the lease. A situation might arise where you can make some cash back. Say after 3 years, BMW wants 30,000 for you to keep the car. If you find a buyer willing to pay 32,000 for it, then you can sell it to a private buyer for 32k and give the dealer 30k and keep the 2k difference.
BMW 550 fully loaded is about 69,000 MSRP. You should be able to get it around 65,000. With the rule of thumb I mentioned earlier, that is about 975/month for your payments. That is with 0 security deposit and maybe an extra 500 or so on the initial payment. So you are looking at 1500 down and 975/month payments.
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This pretty much sums up what i needed, and you are the 3rd person to say i should go in asking for 1500/975 so thats what i'll make sure i get
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