MSD discount question

[aoysgelt]

For Multiple Securities Deposit - do you get rate reduction off nominal money factor 0.00129 bmw offers now or off some other rate? Dealer tells me it is off some yet higher rate - so it ends up not making sense to me. Any comments? Thank you

[Jive]

When i was speaking to a BMW finance manager last month, rates were 0.00130, however this would be considered an "invoice" rate for BMW FS (according to him). He said they technically can use the invoice MF and subtract the MF reduction from it, but BMWFS doesn't like it usually. Not sure how true or accurate this is but take it with a grain of salt.

In my case, they would subtract the MF reduction from a higher rate, it was 0.0129 + 0.0020 - 0.0007*7. Maybe Golfrrr can chime in and clear this up...

[NHman]

Originally Posted by aoysgelt

For Multiple Securities Deposit - do you get rate reduction off nominal money factor 0.00129 bmw offers now or off some other rate? Dealer tells me it is off some yet higher rate - so it ends up not making sense to me. Any comments? Thank you

It is subtracted from the base money factor. For the month of April the base rate is .00129. Each MSD reduces the base rate by .00007. The maximum amount allowed is 7 (MSD's) or .00049.

The base rate could be higher for two reasons. If the applicant dosen't qualify for tier 1 (675 or higher for auto enhanced) and/or the dealer is marking up the rate. The latter is commonly done to generate back-end profit.