Haggling w/ a Lease?

[FatalError]

Situation: I'm trying to decide between a 335i for 650 a month 0 down and a 550i for 1025 a month and 2500 down. My client advisor is the guy who sold me my first car 15 months ago, i paid sticker for it but got about 2k of work done on it free. He is one of the top BMW salesmen in the country and #1 in the northeast so he can do whatever he wants within reason.

Dilema: I want the 550i but i'm having trouble passing up the price difference on the sportier/less luxury 335i. Getting a dealer to come down on price when purchasing is simple, ask for an amount. Can i do this with a lease and simply come back and ask for 975 a month instead or are leases not subject to breaking of balls.

[mc123]

Generally you can't lower the price of a car on a lease, since they calculate the depreciation off MSRP and it's pretty much non-negotiable.

I would personally go for the 335i if those two cars are your choices, the 5er in my opinion is not really worth the money like most mid-size luxury cars.

[citanul]

OK, can someone explain why everyone always says that leases are for suckers? I'm thinking about looking at them, but if they really are for suckers, I won't.

[mc123]

Lease are not for suckers, it's just a matter of the individual.

If you are the type of person who gets bored quickly or like to frequently change your ride to the latest/newest model, a lease is a much better choice for you.

If you plan on buying a car to keep for 4-5 years or more, purchasing is much better.

A lease is simply paying for xxx amount of monies that the car's value will go down in xxx amount of time.

A good way to do is buy a car that people don't generally sell and doesn't depreciate too much, and lease a second car that you can switch every 2 years for the latest model or whatever your taste buds are up for.

[citanul]

LOL, if i wanted 2 cars, i'd get 2 cars.

also, doesn't it make no sense for the dealer to make you pay no markup on the depreciation? shouldnt' you be paying yyy > xxx where xxx = expected depreciation?

[mc123]

leases are calcluated from MSRP and unless your an idiot, you shouldn't be paying full MSRP when paying cash for a car.

In the end I think it works out to be the same if you just buy and sell, as long as you get a very good deal when you purchase keep it in perfect condition and then trade in/sell privately for a good deal. But leasing is just a lot less work and simpler, since cars aren't an asset the fact you don't own the car shouldn't be an issue.

I've always purchased my cars, but I'm leaning towards leasing for my next car since I have found a car that I'm going to keep and want to be able to drive the latest models that come out.

[Osprey]

Leasing is for people who enjoy car payments. If you keep your purchased car 4-5 or more years, you come out way, way ahead of leasers. Paying for continuous depreciation from new stinks... That being said, it's a good way of having hassle free fun driving new models.

[phiphika1453]

[ QUOTE ]
Generally you can't lower the price of a car on a lease, since they calculate the depreciation off MSRP and it's pretty much non-negotiable.

I would personally go for the 335i if those two cars are your choices, the 5er in my opinion is not really worth the money like most mid-size luxury cars.

[/ QUOTE ]

THIS IS TOTALLY WRONG!!!! You have listened to a salesman tell you this.

I sold cars for quite a while.

Lease Calculation

<u>Sale Price x money factor</u> (aka lease factor)
number of months

The money factor is what you are calling the adjustment for depreciation of the car. It is a combination of this and the amount of time you will be in the car. The longer the lease the higher the money factor b/c you will devaule the car more if you have the car for 60 months as opposed to 36 months.

[phiphika1453]

[ QUOTE ]
leases are calcluated from MSRP and unless your an idiot, you shouldn't be paying full MSRP when paying cash for a car.

In the end I think it works out to be the same if you just buy and sell, as long as you get a very good deal when you purchase keep it in perfect condition and then trade in/sell privately for a good deal. But leasing is just a lot less work and simpler, since cars aren't an asset the fact you don't own the car shouldn't be an issue.

I've always purchased my cars, but I'm leaning towards leasing for my next car since I have found a car that I'm going to keep and want to be able to drive the latest models that come out.

[/ QUOTE ]

Again, the SALE PRICE is the ONLY negotiable part of a lease. The financing company has set money factors for each and every lease on each and every model. They update these monthly and are compiled in an icentives matrix. If you ask to see the incentives matrix and they flat out refuse then you should prbably not be dealing with them. Obviously you will have to ask the right person in order for them to show you but they will as long as you are a serious buyer.

By the way, it is not wise to buy a car from the #1 salesman in the region. How do you think he got this title?

As said previously leases are only good when:
1. You can stay within the terms of the lease mileage wise
2. and You usually trade purchased cars after 2-3 years anyways.

Now obviously in the big scheme trading a car after 2-3 years or leasing are both -EV when compared to buying a car and owning it for 6-7 years, but for those who can afford to trade very often a lease is a smart idea as long as you dont pay sticker for the lease.

best of luck

*Edit*
Oh yeah, the biggest piece of advice I can give a buyer is to negotiate a car deal on SALE PRICE and SALE PRICE only. NEVER negotiate in terms of payment. Just think if he bumps you $22 a month in payment on 60 months he just added a about $1000 to the price of the car.

[gonebroke]

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.