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!