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      06-13-2012, 08:15 AM   #1
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ED Lease: When does the term begin?

When taking ED under a lease, when does the actual term of the lease begin...at delivery in Munich or at your local BMW dealer once delivered in the US???
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      06-13-2012, 08:19 AM   #2
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Quote:
Originally Posted by VPM5 View Post
When taking ED under a lease, when does the actual term of the lease begin...at delivery in Munich or at your local BMW dealer once delivered in the US???
At delivery in Munich. That's when you "take ownership" and thus avoid the excise tax (hence the better ED pricing). In exchange, BMW FS waives the second lease payment for you since the car is "on the boat". However, don't go thinking BMW FS is being generous. The ED money factor is bumped .0003 to compensate for this waived payment, so in effect they are taking the second payment and spreading it over the remaining payments.
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      06-13-2012, 09:54 AM   #3
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thx for the quick response...
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      06-13-2012, 04:03 PM   #4
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Quote:
Originally Posted by AGS View Post
At delivery in Munich.
Not exactly true. The lease paperwork all needs to be signed before you pick up in Germany, and the lease term starts as of the date on the paperwork.

There was a time when dealers were asking for the paperwork to be signed 30 days before ED. Most reputable, experienced ED dealers now ask for paperwork to be signed about a week before ED. In my case, I signed my paperwork 2 weeks before ED, but my dealer post-dated the documents so that the term started a few days before ED.
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      06-13-2012, 08:13 PM   #5
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Quote:
Originally Posted by 97X View Post
Not exactly true. The lease paperwork all needs to be signed before you pick up in Germany, and the lease term starts as of the date on the paperwork.

There was a time when dealers were asking for the paperwork to be signed 30 days before ED. Most reputable, experienced ED dealers now ask for paperwork to be signed about a week before ED. In my case, I signed my paperwork 2 weeks before ED, but my dealer post-dated the documents so that the term started a few days before ED.
Thanks for the correct info. It's my first ED, but I'd thought I'd heard the lease officially started on the delivery day even though the paperwork was signed in advance. Guess I'll have to start working on my CA to post date as close to the delivery date as possible.
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      06-13-2012, 09:52 PM   #6
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Quote:
Originally Posted by 97X View Post
Not exactly true. The lease paperwork all needs to be signed before you pick up in Germany, and the lease term starts as of the date on the paperwork.

There was a time when dealers were asking for the paperwork to be signed 30 days before ED. Most reputable, experienced ED dealers now ask for paperwork to be signed about a week before ED. In my case, I signed my paperwork 2 weeks before ED, but my dealer post-dated the documents so that the term started a few days before ED.
10 prior ED's here...the information above is exactly correct. Less than 7 days prior to Munich pick-up the dealers begin to get nervous.

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      06-14-2012, 07:20 AM   #7
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Those of you leasing, how many are doing the max security deposits?
I looks like a pretty damn good investment when you look at the Cap cost of this automobile.
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      06-14-2012, 07:23 AM   #8
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Quote:
Originally Posted by philly-dee
Those of you leasing, how many are doing the max security deposits?
I looks like a pretty damn good investment when you look at the Cap cost of this automobile.
I will be doing MSD but it all depends on the money factor and residual. If it makes more sense to finance vs lease then I will go that route.
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      06-14-2012, 07:49 AM   #9
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Originally Posted by philly-dee View Post
Those of you leasing, how many are doing the max security deposits? I looks like a pretty damn good investment when you look at the Cap cost of this automobile.
Yes, doing all 7 because as you stated it is a DAMN good investment. For my particular situation it reduces my monthly payment by over $80 per month. That equates to a 10.4% guaranteed annual return after tax! Can't beat that with a stick in the current economic environment.

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Originally Posted by cmhsam View Post
I will be doing MSD but it all depends on the money factor and residual. If it makes more sense to finance vs lease then I will go that route.
Just my own opinion, but the residual should not influence your decision on finance vs. lease if you intend to buy the car at the end of the lease anyway. The deciding factor should be the difference in rate between lease and financing. However, I would argure that it is better to lease even if it's at a marginally higher rate given the put option the lease gives you. If it turns out the first model year of the F10 has a ton of bugs/mechanical issues, or if your car turns out to be the lemon of the bunch, the put option could be very valuable.
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      06-14-2012, 07:54 AM   #10
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Originally Posted by AGS View Post
Just my own opinion, but the residual should not influence your decision on finance vs. lease if you intend to buy the car at the end of the lease anyway. The deciding factor should be the difference in rate between lease and financing. However, I would argure that it is better to lease even if it's at a marginally higher rate given the put option the lease gives you. If it turns out the first model year of the F10 has a ton of bugs/mechanical issues, or if your car turns out to be the lemon of the bunch, the put option could be very valuable.
I always factor in a crash as well, in which the car has to be repaired. Just have BMW fix it and give it back at end of term. Definitely some value there.
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      06-14-2012, 08:30 AM   #11
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Quote:
Originally Posted by philly-dee View Post
I always factor in a crash as well, in which the car has to be repaired. Just have BMW fix it and give it back at end of term. Definitely some value there.
Totally agree. Another reason why the lease put option has tangible value.
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      06-14-2012, 10:26 AM   #12
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It's interesting how so many prospective M5 buyers see the value of MSDs vs. M3 buyers. I did 7 MSDs on my M3 and trying to swap out of my lease (on the forum) was painful as 99% of the responses I received were about how stupid I was to do MSDs in the first place. If I decide to lease my M5, I will surely put the max MSDs down again.
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      06-14-2012, 10:29 AM   #13
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If anyone here is using their M5 as a business vehicle, then the tax advantages to leasing over purchasing should also be considered. The advantage can be substantial.
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      06-14-2012, 10:39 AM   #14
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Quote:
Originally Posted by nv6425 View Post
It's interesting how so many prospective M5 buyers see the value of MSDs vs. M3 buyers. I did 7 MSDs on my M3 and trying to swap out of my lease (on the forum) was painful as 99% of the responses I received were about how stupid I was to do MSDs in the first place. If I decide to lease my M5, I will surely put the max MSDs down again.
The higher the cap cost; the greater the value. Maybe that is why. Did you eventually complete a swap deal and get your MSD $ back?
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      06-14-2012, 10:44 AM   #15
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Originally Posted by philly-dee View Post
The higher the cap cost; the greater the value. Maybe that is why. Did you eventually complete a swap deal and get your MSD $ back?
Agreed, the $5,950 in MSDs I put down netted a 12% return annually, good money no matter how you slice it!

Yes, my assumption was just completed by BMW FS and I'm just waiting on a check from the transferee for the MSDs and then I will release the car to him.
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      06-14-2012, 11:47 AM   #16
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Quote:
Originally Posted by nv6425
Quote:
Originally Posted by philly-dee View Post
The higher the cap cost; the greater the value. Maybe that is why. Did you eventually complete a swap deal and get your MSD $ back?
Agreed, the $5,950 in MSDs I put down netted a 12% return annually, good money no matter how you slice it!

Yes, my assumption was just completed by BMW FS and I'm just waiting on a check from the transferee for the MSDs and then I will release the car to him.
Wow anything with a 12% return in this market is a great fiscal decision. Sign me up!
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      06-14-2012, 02:06 PM   #17
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ED and 7 MSDs made the monthly payment on my $83,000 M3 within $25 of my previous $44,000 328xi.

Well, the really aggressive residual and MF rates that BMW offered last Spring helped too!

The guaranteed rate of return on MSDs makes it a no-brainer.
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      06-14-2012, 02:37 PM   #18
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Quote:
Originally Posted by 97X View Post
ED and 7 MSDs made the monthly payment on my $83,000 M3 within $25 of my previous $44,000 328xi.

Well, the really aggressive residual and MF rates that BMW offered last Spring helped too!

The guaranteed rate of return on MSDs makes it a no-brainer.
The "really aggressive residual and MF rates" are spoiling us! I'm scared of the day when we start paying real interest rates (MFs) on these high-end cars again. We just picked up a 740i for my wife for under $870/month on a 36/36 lease, and this was non-ED.
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      07-14-2012, 09:37 AM   #19
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Quote:
Originally Posted by nv6425 View Post
Agreed, the $5,950 in MSDs I put down netted a 12% return annually, good money no matter how you slice it!

Yes, my assumption was just completed by BMW FS and I'm just waiting on a check from the transferee for the MSDs and then I will release the car to him.
I'm a little slow but I can't seem to figure out how the MSD would pay anything that substantial in terms of a return.

Here in Canada we can put up to 9 MSD's which would work out to be almost $20K. In doing the rate falls from 5.9 to 5 saving $63/mo or $756 per year on $20k "investment". That's around 3.8% after tax or just under 7% before tax.

Am I missing something?
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      07-14-2012, 02:08 PM   #20
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Quote:
Originally Posted by Richard Cranium View Post
I'm a little slow but I can't seem to figure out how the MSD would pay anything that substantial in terms of a return.

Here in Canada we can put up to 9 MSD's which would work out to be almost $20K. In doing the rate falls from 5.9 to 5 saving $63/mo or $756 per year on $20k "investment". That's around 3.8% after tax or just under 7% before tax.

Am I missing something?
It sounds like you have the math right. It seems like Canadian pricing is crazy high, which is diluting the benefit. $20k divided by 9 MSD's is over $2k monthly payment?!?!

In the US we're capped at 7 MSD's. So I'm putting down $9,800 to save about $77 a month, or $924 a year. That's a 9.4% return. It's a little lower than my earlier post given the change in residual value.
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      07-14-2012, 03:29 PM   #21
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Quote:
Originally Posted by AGS View Post
It sounds like you have the math right. It seems like Canadian pricing is crazy high, which is diluting the benefit. $20k divided by 9 MSD's is over $2k monthly payment?!?!

In the US we're capped at 7 MSD's. So I'm putting down $9,800 to save about $77 a month, or $924 a year. That's a 9.4% return. It's a little lower than my earlier post given the change in residual value.
Pricing in Canada is always nutz on all cars.

M5 with Executive Package is $111k. Payment on 36 months with 15Kmiles/yr and $45K buyback puts a monthly at $1850 plus tax (with $11K down and $4500 on delivery).

It's all ugly.
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