Automotive

Understanding lease breakdown from BMW dealership, I don't see why it's so high. Help?

  • Last Updated:
  • Dec 1st, 2017 1:04 pm
[OP]
Newbie
Nov 27, 2017
40 posts
9 upvotes

Understanding lease breakdown from BMW dealership, I don't see why it's so high. Help?

I went to a BMW dealership to get a quote on a lease, could someone explain how they came up with their calculations?

Here's the sheet they gave me: https://imgur.com/a/30o2l

MSRP is $49185

Using a site like this to calculate it: http://www.bimmerfest.com/forums/showth ... p?t=895604

I'm getting a monthly depreciation fee (MD) as $560.16 and a monthly lease fee (ML) as $94.63, for a total monthly fee (pre taxes) of $654.79 and (post taxes) $753.01 given 15% tax rate.

Where are they coming up with $895 from? And yes I do intend to negotiate below MSRP.
70 replies
Banned
Oct 14, 2015
264 posts
106 upvotes
Markham, ON
hopintobuyacar wrote: I went to a BMW dealership to get a quote on a lease, could someone explain how they came up with their calculations?

Here's the sheet they gave me: https://imgur.com/a/30o2l

MSRP is $49185

Using a site like this to calculate it: http://www.bimmerfest.com/forums/showth ... p?t=895604

I'm getting a monthly depreciation fee (MD) as $560.16 and a monthly lease fee (ML) as $94.63, for a total monthly fee (pre taxes) of $654.79 and (post taxes) $753.01 given 15% tax rate.

Where are they coming up with $895 from? And yes I do intend to negotiate below MSRP.
Freight, PDI, fees and other scam charges probably?
Newbie
Nov 17, 2017
42 posts
12 upvotes
You'll need to know the MSRP + Residual Freight and the net capitalized cost to figure out the numbers.

Here is an example:

Sticker Price of the car + residual Freight $37,346.35
Times the residual value percentage X 37%
Equals the residual value = $13,818.15
Net capitalized cost $38,341.15
Minus the residual (from line 3) - $13,818.15
Equals the depreciation over 48 months = $24,523.00
Depreciation (line 6) divided by term in months ÷ 48
Equals the monthly depreciation payment = $510.90
Net capitalized cost (From line 4) $38,341.15
Plus the residual (From line 3) + $13,818.15
Equals = $52,159.30
Times the money factor X 0.0008291667 (1.99 percent)
Equals money factor (interest) payment portion = $43.25
Monthly depreciation payment (from line 8) $510.90
Plus money factor payment portion (from line 12) + $43.25
Equals bottom-line monthly lease payment = $554.15
Don't forget that you haven't paid sales tax yet. To account for tax, multiply the monthly lease payment by the state sales tax. For this example, in Ontario the sales tax is 13.0 percent. (For a more precise preview of your payments, you can also factor in any local sales taxes at this stage.)
$554.15 X 1.13 = $626.19
Member
Jan 22, 2017
200 posts
132 upvotes
GTA
I'm interested in this as well since I've run into the same confusion with VW.
Member
Jan 22, 2017
200 posts
132 upvotes
GTA
User729596 wrote: You'll need to know the MSRP + Residual Freight and the net capitalized cost to figure out the numbers.

Here is an example:

Sticker Price of the car + residual Freight $37,346.35
Times the residual value percentage X 37%
Equals the residual value = $13,818.15
Net capitalized cost $38,341.15
Minus the residual (from line 3) - $13,818.15
Equals the depreciation over 48 months = $24,523.00
Depreciation (line 6) divided by term in months ÷ 48
Equals the monthly depreciation payment = $510.90
Net capitalized cost (From line 4) $38,341.15
Plus the residual (From line 3) + $13,818.15
Equals = $52,159.30
Times the money factor X 0.0008291667 (1.99 percent)
Equals money factor (interest) payment portion = $43.25
Monthly depreciation payment (from line 8) $510.90
Plus money factor payment portion (from line 12) + $43.25
Equals bottom-line monthly lease payment = $554.15
Don't forget that you haven't paid sales tax yet. To account for tax, multiply the monthly lease payment by the state sales tax. For this example, in Ontario the sales tax is 13.0 percent. (For a more precise preview of your payments, you can also factor in any local sales taxes at this stage.)
$554.15 X 1.13 = $626.19
Assuming there are no manufacturer discounts or trade in, shouldn't net capitalized cost be the same as Msrp+freight/PDI?

In your example it seems as if the car sold for more than Msrp?
Member
Jan 22, 2017
200 posts
132 upvotes
GTA
hopintobuyacar wrote: I went to a BMW dealership to get a quote on a lease, could someone explain how they came up with their calculations?

Here's the sheet they gave me: https://imgur.com/a/30o2l

MSRP is $49185

Using a site like this to calculate it: http://www.bimmerfest.com/forums/showth ... p?t=895604

I'm getting a monthly depreciation fee (MD) as $560.16 and a monthly lease fee (ML) as $94.63, for a total monthly fee (pre taxes) of $654.79 and (post taxes) $753.01 given 15% tax rate.

Where are they coming up with $895 from? And yes I do intend to negotiate below MSRP.
OP, This article may help.

how car lease payments are calculated...
Newbie
Nov 17, 2017
42 posts
12 upvotes
papermate2 wrote: Assuming there are no manufacturer discounts or trade in, shouldn't net capitalized cost be the same as Msrp+freight/PDI?

In your example it seems as if the car sold for more than Msrp?
Depends, but there are typically other fees on top of the freight that factor into the net cap. cost (admin fee, tire tax, a/c tax, etc.).
Deal Addict
Jan 8, 2007
2451 posts
967 upvotes
Calgary
hopintobuyacar wrote: I went to a BMW dealership to get a quote on a lease, could someone explain how they came up with their calculations?

Here's the sheet they gave me: https://imgur.com/a/30o2l

MSRP is $49185

Using a site like this to calculate it: http://www.bimmerfest.com/forums/showth ... p?t=895604

I'm getting a monthly depreciation fee (MD) as $560.16 and a monthly lease fee (ML) as $94.63, for a total monthly fee (pre taxes) of $654.79 and (post taxes) $753.01 given 15% tax rate.

Where are they coming up with $895 from? And yes I do intend to negotiate below MSRP.
Use this Calculator. Make sure to include all the fees over msrp, including freight/pdi, admin fee, air, tire tax, AMVIC etc in the appropriate sections. There are 10 steps. You should be able to match the result to within a few cents.

http://lease.guide/advanced_calc/
Deal Expert
User avatar
Jul 30, 2007
25741 posts
10785 upvotes
Toronto
Your quote is $0 discount
It has est. $3000 of fees and $1400 of excess wear & tear fees rolled into the payment

depreciation for use of car during term $680 + 15% taxes
Finance/Interest $100 + taxes

$780 + 15% taxes = $897 OTR
Due on delivery: first + license admin fee ? + PPSA ?
Deal Expert
Feb 29, 2008
23718 posts
2884 upvotes
Montreal
There is only one answer. The price you are being charged is higher than the MSRP you gave us. There are at least 4k of additional charges you are not showing us.
Banned
Aug 22, 2017
367 posts
161 upvotes
Maybe that's why BMW stands for Broke My Wallet..lol
[OP]
Newbie
Nov 27, 2017
40 posts
9 upvotes
I called back and there's some extra "protection" things they added on that inflated the price a fair bit, which explains it mostly.

Second question, they offered me a potential of two last year "demo" models that were used by the dealership, one with 9K km and one with 13K km. Those don't sound like demo to me but rather "used", haha. Should I not even look at those?
Deal Addict
Oct 17, 2010
1618 posts
332 upvotes
South Western Ontari…
Kinda hard to break down your lease payment when we dont know the added cost and vehicle model. Perhaps 330i?
Deal Addict
Oct 17, 2010
1618 posts
332 upvotes
South Western Ontari…
You didnt add any premium packages? Final negotiated price is 49k and change? +Freight, pdi, admin, etching bs?

You now know they arent giving any discounts so need to do your own math that you think its fair and offer them your number

I bet you can shoot for 7% off from msrp with some haggle and i would wait at least till next month to see dec promo or feb when rebates are higher or in summer when 2018 clearout starts

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