January 2011 lease factors

[Undertow]

I hope they are wrong. Just passing along what I read.

[mgx]

i'll upload papers in a few days

[PinkFlamingo]

My CA just confirmed the loyalty program on Wednesday. It's real.

[jmzoot]

Originally Posted by jmzoot

Thank you! My lease ended Oct 1st so I guess I am eligible for my disposition fee to be refunded, no security deposits, and any loyalty lease rates.

Although if the rate is .00060 I will do 7 MSD's to drop it to .00011... basically a .25% finance charge....

If my calculations are correct even with the $500 increase and no $1,500 Holiday cash my payment would drop $20-25/month..

Hopefully they will not give me a hard time with locking in the new rates since I already ordered the car on Dec 31st... Would the CA already have this info or should I wait a few days to make a call??

I have read elsewhere that the lowest you can drop the MF is .0005... so that would mean you can only do 1 MSD to drop it to .00053...

so if I am correct then it would decrease the amount of money out of pocket on MSD.. but my monthly payment would go up since the residual dropped a point

[mgx]

7 MSDs for states participating in the MSD program. Each which will reduce the money factor by 0.00007 for a maximum of -0.00049

[jmzoot]

Originally Posted by jmzoot

I have read elsewhere that the lowest you can drop the MF is .0005... so that would mean you can only do 1 MSD to drop it to .00053...

so if I am correct then it would decrease the amount of money out of pocket on MSD.. but my monthly payment would go up since the residual dropped a point

I stand corrected... the lowest BMW will use as a MF is .00005*2400= .12%

So I guess I can drop the money factor down to .00011*2400= .264%

The person who originally told me that missed one zero

I am much happier now... but will call my CA tomorrow to confirm.... the way things are going they will try and give me some BS story...

I wanted to add 19" rims and they said my payment would go up $27/month... what a joke.. it should be no more then 12-15 a month extra

[mgx]

where are you even getting 2400 from...

[jmzoot]

Originally Posted by mgx

where are you even getting 2400 from...

MF x 2400 = Int Rate

.0006 x 2400 = 1.44%

If you do 7 MSD -.00007 x 7 = -.00049 x 2400 = -1.176%

So basically by doing 7 MSD's you are dropping the interest rate by 1.176%

1.44 -1.176 = .264% or .0006 - .00049 = .00011 x 2400 =.264%

If they allow this then you are paying about a quarter of a percent of interest... As far as I can see it is like getting almost a zero percent loan on a third of the cars value for the first 3 years.... MSD is the way to go if you have the cash lying around.. it drops my payment by approximately $65/month... so for them holding my $5600 for 3 years I save $2340... It equates to almost 14% interest on your money and is fully refundable.. I think the best I get on my money now is maybe 1.45% in a secure acct

After that if you wanna buy the car try and negotiate a lower price then the residual...

I Think they try to make leasing as confusing as possible... hence all the decimals and formula to convert it to an interest rate

[mgx]

I still don't see where you're getting 2400 from, can you post all of your work and formulas lol

[jmzoot]

Originally Posted by mgx

I still don't see where you're getting 2400 from, can you post all of your work and formulas lol

It is just the formula they use to convert it to a similar interest rate on a purchase...

basically whatever the MF x 2400 = Int Rate

Here is a link to the explanation since I am not a leasing expert... hopefully it can explain it better then me

http://www.leaseguide.com/Glossary/money-factor.htm

Per the site:

The term, money factor, or car lease money factor, is used in leasing, particularly car leasing, to specify a cost-of-money finance rate.

It is simlar, though not quite the same, as interest on a loan.

Money factor, which is sometimes called "lease factor" or simply "factor", determines how much you'll pay in finance charges over the life of a lease. The higher the money factor, the higher your monthly payment and the more you'll pay in total finance charges. Therefore, when shopping for a lease, you'll want to look for the lowest money factor.

Money factor is always expressed as a very small number, such as .00275. To convert to an equivalent interest rate (APR), simply multiply by 2400. Therefore, in our example, .00275 multiplied by 2400 yields 6.6% as the equivalent APR.

Sometimes money factor is expessed in a more readable form, such as 2.75, which actually means .00275. This can be confusing to leasing consumers because it appears to be a low interest rate, which it is not.

When visiting a car dealer for the purpose of leasing, ask them about the money factor on their leases. It is not something that is routinely discussed in lease transactions. You cannot know in advance what lease money factor will be used before you lease.

In fact, money factor is not even disclosed in most car lease contracts. If you don't ask, you'll never know. If a dealer refuses to disclose this important information to you, find another dealer.

For an extensive mathmatical explanation of how lease money factor is derived, see this page and this page.

For more information, see: The Lease Guide

[jmzoot]

Originally Posted by mgx

I still don't see where you're getting 2400 from, can you post all of your work and formulas lol

If you go to the website link I sent it has links to other sites which explain the formula... I would rather bang my head against the wall then try and understand how some expert came up with that formula !!!

All I know is MF x 2400 = Int rate

Use this lease calculator and it does it for you:

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

[mgx]

Originally Posted by jmzoot

If you go to the website link I sent it has links to other sites which explain the formula... I would rather bang my head against the wall then try and understand how some expert came up with that formula !!!

All I know is MF x 2400 = Int rate

Use this lease calculator and it does it for you:

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

lmfao that's exactly what i've been using

[jmzoot]

Originally Posted by mgx

lmfao that's exactly what i've been using

Well on step 7 it says MF.. once you put it in... it multiplies it by 2400 and fills in the interest rate for the lease

Hope you understand it now

[mgx]

Originally Posted by jmzoot

Well on step 7 it says MF.. once you put it in... it multiplies it by 2400 and fills in the interest rate for the lease

Hope you understand it now

[cloud8r]

To confirm some of the comments here, I picked up my 11.5 e90 yesterday and received both the loyalty rate and the MSD. Remember when building out your payments on leaseguide to not only consider title fees, etc. in the Lease Cost section, but also the $725 BMWFS acquisition fee and the $45 dealer documentation fee. My dealer marks up the BMWFS Acq fee for their financing department to 925. I was getting a great deal already, so I thought I throw them a bone and not negotiate it. Your mileage may vary.

[colinallcars]

Regarding owner loyalty, if I am a current BMWFS leasee, what is my MF for new 2011?

Is it .0006? Please advise...THANKS!!!!!!!!!!!

[GOLFFRR]

^^ depends on which M you are talking about. e90, e92 or e93

Owner loyalty is .0006 for e93
owner loyalty is .00175 for e90
owner loyalty is .00145 for e92

[GOLFFRR]

^^ thats for Jan and feb

[geneatals]

nice to see loyalty rate is extended into feb..

[GOLFFRR]

^^