Cracking the BMW Lease Specials

As you are all well aware of, national lease promotions are used to reel you into the dealerships. However, the law has made it pretty clear that they need to disclose enough information in order for us to get a hint of what we should expect to pay. Last night, when I completed the Game Changer, I began testing it on different brands to see how accurate it was. I found that Honda and Acura discloses enough information in the fine print to get a VERY accurate residual and money factor calculator. Honda/Acura doesn’t seem to care when it comes to blurring the fine print. However, I found that BMW, Audi, Infiniti, Lexus, Toyota and Mercedes-Benz were not exactly very “upfront” with their disclosures. Toyota and Lexus are BAD! They won’t even provide the purchase option price or estimates of total payments. It’s like they pick those payment numbers out of thin air.

The good news is that I have been able to get a pretty good feel for how BMW discloses their info and how we can use it to calculate the Residual and Money Factor.
Lets take a look at the key information for the October promotion of the 2014 428i:

  • $439*/month for 36 months. $500 Loyalty Cash are included in payment.
  • $439 First months payment
  • $2,750 Down payment
  • $0 Security Deposit
  • $725 Acquisition fee
  • $3,914 Cash due at signing

Monthly Lease payments of $439.00 for 36 months based on MSRP of $43,625.00
Purchase option at lease end for $27,484.00 excludes taxes
blah, blah, blah…in excess of 30,000 miles

So what do we know about this deal?

  • Cap Reduction is $3914
  • $500 loyalty cash is available and being used as part of this promo (even though it may not apply to you)
  • 36mo/10k per year
  • $439 payment per month
  • No taxes are ever included in any of these estimates
  • MSRP $43625
  • Residual after 3yrs is $27484

Just as a reminder, we already know what the lease rates are on the 428i for October 2013: 60% at 36mo/15k, or 63% at 10k, 0.00125 base rate. It is posted on the BMW Lease Rates page.

The only key missing information here is the Net Cap Cost. We know the Cap Reduction (down payment) is $3914. We also know BMW will cover $500 of that in Loyalty Cash. That means to get to the $439 payment, we need about $3414 in cap reduction. We also know that there is absolutely no significant dealer contribution mentioned, so it’s safe to assume it’s either nil or nothing to write home about.

After looking into this further, there seems to be some dealer contribution that is minimal,  but significant enough to skew the numbers a bit.

Per @knight427 observation. We are proceeding with the assumption that you pay for the 1st month payment upfront. $2750 down is used as cap reduction in addition to the $500 loyalty cash.

You then get a cap reduction of $3250 off MSRP, putting you at $40375 NCC. Using the Game Changer, we get a MF of .00119. So how does that compare to the actual .00125 when it comes to payments? Using the RWG Lease Calculator, I get a $443 monthly payment using the .00125. On the flip side, if we use the .00119 rate, we get $439. A 4 dollar difference per month. Pretty close estimate.

I still feel this is a game-changer for us because it really gives us a realistic ballpark figure for what the MF & Residual should be.

Thanks again @knight427 for your wonderful insight. It really helps to have members participate in discussions like this!

We are getting close folks! Thoughts? Comments? Share it!

12 thoughts on “Cracking the BMW Lease Specials

  1. Thanks guys. Last night I was getting angry because of the lack of number in the disclosures. For some brands, it’s just not possible without talking to the dealer, but being able to it for BMW promos, that’s huge! BMW is probably the #1 requested brand for leasing, with Audi being the second.

  2. This isn’t making sense to me. Here is my calculation. Note that I’ll add up all costs then subtract the cash I bring to closing and loyalty cash.
    MSRP: 43625
    1st mo.: 439
    Aq. fee: 725
    Cash Due: (-3914)
    Loyalty: (-500)
    Total (Net Cap): 40375

    This gives the wrong MF (assuming 0.00125 is correct). Solving for the Net Cap Cost that most closely approximate this MF is 40240 (MF = 0.001250172). So my NCC is $135 too high (suggesting a minimal but non-zero dealer contribution) or the MF is actually 0.001192.

  3. Also , a cleaner way to get to my NCC is to recognize that the deal is saying you pay all fees and 1st month PLUS put 2750 down and get 500 loyalty. Just take the money down and loyalty against the msrp.
    msrp – cash – loyalty
    43625 – 2750 – 500 = 40375

    • Thanks for the feed back btw. I need to revised the post to address this issue. There is definitely some dealer contribution in this. We are cutting it pretty darn close though, but there a a few moving parts still that are unaccounted.

  4. Good point. I was crunching more numbers tonight and discovered some inconsistencies as well. I’m going to go through some more numbers to see if there are any similarities. The good news is that this seems to be very consistent on the Honda/Acura side. I found some issues with the NCC posted on Infiniti deals as well. We are getting close tho. Let me know what you discover. Hopefully there’s a consistent approach. It seems every manufacturer needs to be handled differently.

  5. Hello G,

    Sorry to bring back an older post, but I am new to leasing/your site. I have heard that brand’s lease promotion (like the one mentioned in this post) doesn’t have much wiggle room. Based on your experience, would you consider this offer above a decent offer for the car?


    • I could have sworn I responded to this post! Sorry about that. Per my experience, the best deal you can get is the one you can negotiate. The ones you see advertised typically require a high down payment. That isn’t always required on a lease. Or you can negotiate the that dealer pony up for a chunk of that down payment to get you to the desired payment. Also watch for the fees because that is how they make back any credit they have given you. MF and Residual are typically a fixed thing (based on your credit and the term you choose to finance), so the only wiggle room you get is on the sale price. So be aggressive!

  6. Hi there! I am trying to crack down the following BMW offer for the X1 xDrive28i. Per the website: $369*/month for 36 months. $500 Drive Credit, $500 Option Allowance are included in payment
    • MSRP: $38,475
    • Residual Value: $23,085
    • 36 months
    • $369 First months payment
    • $2,500 Down payment
    • $0 Security Deposit
    • $725 Acquisition fee
    • $3,594 Cash due at signing

    Is the Net cap cost = MSRP – 2,500 down payment – 500 drive credit – 500 option allowance?

    If that’s the case with a NCC = 35,475 and putting all the numbers in the game changer, I get a Money factor of 0.00042 (rounded) which seems incredibly low.

    Am I getting this right? Thanks

    • Actually, the NCC = 34,975 which still yields a low 0.00067 Money Factor.

      I keep asking the dealers about the offer and they don’t disclose the MF used in the add

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