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      10-15-2008, 03:21 PM   #1
taylorcoleman
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Hosed by my BMW Dealer on 2008 E90 M3

By posting this thread, I hope to save others some coin.

On 9/20/08 I pulled the trigger on a 2008 E90 M3. BMW Financial Services Lease (36 mo, 12k miles/yr).

As we've seeen in other posts, the base rate (money factor) was .0015 and the fixed residual value was 54% for the above lease terms during that time. (yeah, i know it's dropped to .00025 since then, but that's the game as they say).

My residual was actually entered into the lease agreement at 51% with a money factor of .0015. So the next day I go a call from my dealer stating that they made a mistake on my lease, and that I needed to sign a new lease. When I arrived, they explained that good news, my payment droped because of their mistake (of course a 54% residual is better than 51%).

Here's the rub--in the new lease they simultaneously changed the residual rate to 54%, while changing my money factor to .0019. Both parameters changing did save me a little money, but from the very beginning, I should have had 54% residual and .0015 money factor. So the delta is about $1,500 over the 36 month term.

Now, granted, buyer beware. This little swich-er-oo is not illegal. In fact, I signed the original lease at terms that were even more unfavorable than the second lease. But with that said, I do believe I would not have been alerted to that original mistake if the BMW Financial Services computer had not kicked back my lease.

So next time (if there is a BMW next time for me--the brand image has been seriously damanged in my opinion) I will bring my financial calculator and crunch the numbers before I sign another lease. So this is my point:

**Before you sign a lease (as with any legal document), do your diligence to make sure the terms are what you expect. If you don't have the time or inclination to build your own spreadsheet, the following website is a great place to plug in the final numbers to confirm your lease is as expected:

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

I'm embarrased to say I'm an MBA with a fair degree of finance experience. I was swept away by what I thought was a great deal (even at the incorrect 51% residual) after pricing out an M3 lease just a couple of months prior. I let the excitement of this truly awesome car overpower my responsibility to ensure the legal documents were accurately represented. As Ronald Regan once said, "Trust, but verify".
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      10-15-2008, 03:28 PM   #2
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Taylor, I hear what you're saying. Most view what happens in the finance office as an unpleasant experience to be gotten through as quickly as possible. When I bought my truck a few years back, I didn't notice that the dealer had raised the finance rate by .15% until after I had gotten home. And I'm an attorney who sees firsthand the consequences of not reading the fine print. It was worked out, but lesson learned: check all the numbers very carefully. They may intentionally fudge the numbers, but it's far more common for them to simply make mistakes.
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      10-15-2008, 03:31 PM   #3
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Curious what your lease payment / down payment (if any) / mileage allowance is, if you don't mind telling?
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      10-15-2008, 03:41 PM   #4
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Quote:
Originally Posted by xG35c View Post
Curious what your lease payment / down payment (if any) / mileage allowance is, if you don't mind telling?
I don't mind telling. Down payment of $8,000 ($5740.86 going to cap reduction, the balance going to fees, taxes & first month's payment). Base monthly payment of 761.41 with 76.14 in taxes (love my county). Again, this is on a 2008 E90 M3, 36 month lease w/ 12k miles per year.

Using the previously mentioned calculator anyone can simulate their payments based on the going money factor (base rate) and the residual percent. I've seen other posts with current information. Just remember, the dealer CAN change the money factor from the base rate given by BMW Financial Services, but they cannot change the residual percent. Also know that the money factor is not legally required to be reported on your lease documents. You need to back into that number using the parameters on your lease. The following link will help you back into your money factor for anyone who'd like to check for themselves:

http://www.leaseguide.com/lease08.htm
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      10-15-2008, 03:42 PM   #5
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Well....is it true that they get the message when you fail to return that customer survey after the sell? I mean, I'm like the next guy and do not want to find out I got ripped off by shady people....the ol' swich-er-oo when you are not looking. Otherwise, I look for ways to let them know I did not appreciate it....it always hurts in the pocket so that is one way to do it.
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      10-15-2008, 04:50 PM   #6
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If you give them poor reviews don't return to the same place for service....
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      10-15-2008, 06:21 PM   #7
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Quote:
Originally Posted by taylorcoleman View Post
By posting this thread, I hope to save others some coin.

On 9/20/08 I pulled the trigger on a 2008 E90 M3. BMW Financial Services Lease (36 mo, 12k miles/yr).

As we've seeen in other posts, the base rate (money factor) was .0015 and the fixed residual value was 54% for the above lease terms during that time. (yeah, i know it's dropped to .00025 since then, but that's the game as they say).

My residual was actually entered into the lease agreement at 51% with a money factor of .0015. So the next day I go a call from my dealer stating that they made a mistake on my lease, and that I needed to sign a new lease. When I arrived, they explained that good news, my payment droped because of their mistake (of course a 54% residual is better than 51%).

Here's the rub--in the new lease they simultaneously changed the residual rate to 54%, while changing my money factor to .0019. Both parameters changing did save me a little money, but from the very beginning, I should have had 54% residual and .0015 money factor. So the delta is about $1,500 over the 36 month term.

Now, granted, buyer beware. This little swich-er-oo is not illegal. In fact, I signed the original lease at terms that were even more unfavorable than the second lease. But with that said, I do believe I would not have been alerted to that original mistake if the BMW Financial Services computer had not kicked back my lease.

So next time (if there is a BMW next time for me--the brand image has been seriously damanged in my opinion) I will bring my financial calculator and crunch the numbers before I sign another lease. So this is my point:

**Before you sign a lease (as with any legal document), do your diligence to make sure the terms are what you expect. If you don't have the time or inclination to build your own spreadsheet, the following website is a great place to plug in the final numbers to confirm your lease is as expected:

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

I'm embarrased to say I'm an MBA with a fair degree of finance experience. I was swept away by what I thought was a great deal (even at the incorrect 51% residual) after pricing out an M3 lease just a couple of months prior. I let the excitement of this truly awesome car overpower my responsibility to ensure the legal documents were accurately represented. As Ronald Regan once said, "Trust, but verify".
Something similar happened to my dad when he bought his vehicle a couple of years ago. They changed the financing rate on him and he went in the next day and signed a new contract not realizing what had happened. Needless to say, when he caught it, he drove the car to the dealership, dropped it off and told them to keep the used car. They fixed the error quickly.

Don't let the dealership run you, if you don't like something, go out kicking and screaming.
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      10-15-2008, 08:44 PM   #8
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Quote:
Originally Posted by canook View Post
Something similar happened to my dad when he bought his vehicle a couple of years ago. They changed the financing rate on him and he went in the next day and signed a new contract not realizing what had happened. Needless to say, when he caught it, he drove the car to the dealership, dropped it off and told them to keep the used car. They fixed the error quickly.

Don't let the dealership run you, if you don't like something, go out kicking and screaming.
O yes. I tried to keep my post factual & devoid of my defense strategy. I've already spoken to BMW Financial Services, BMW Customer Care, the sales manager and the finance manager. Needless to say, I will be collecting what is rightfully mine. It will cost more to do so in my time investment, but I just cannot let a dealer take advantage of me, or my fellow BMW friends. So I hope my post helps to inform others (though I realize many on this forum are already quite informed).
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      10-15-2008, 11:29 PM   #9
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Quote:
Originally Posted by taylorcoleman View Post
O yes. I tried to keep my post factual & devoid of my defense strategy. I've already spoken to BMW Financial Services, BMW Customer Care, the sales manager and the finance manager. Needless to say, I will be collecting what is rightfully mine. It will cost more to do so in my time investment, but I just cannot let a dealer take advantage of me, or my fellow BMW friends. So I hope my post helps to inform others (though I realize many on this forum are already quite informed).
right on. congrats on the ///M. I yearn for the day when i will call an M3 my own.
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      10-16-2008, 08:26 PM   #10
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But isn't a verbal agreement is still a legal contract in the court of law.
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      10-16-2008, 08:58 PM   #11
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But isn't a verbal agreement is still a legal contract in the court of law.
Yes. Civil Suit filed against dealer. Constable shall be showing up to serve them shortly. Given the active suit, I cannot comment further. I've never sued anyone or any company before. Many things are just not worth the hassle, but if it happened to me, it happened to someone else, and will continue to happen until someone helps to keep this dealer operating above board.
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