Lease question: (money factors)

[Optimus Prime]

How much over the buy rate should I be expecting? They tried to pass off .00285 on a 330 yesterday. I told them that was just silly, but they countered saying their buy rate was .00245, "I don't know where you're getting the .00195 number, but that's just fiction". After a little back and forth, I pulled out a spread sheet with all the residuals and MF rates from BMWNA. No less than 30 seconds later the sales manager produced the same numbers and a pretty weak story about why he was quoting the higher rate. :rolleyes:

We worked out $1500 over invoice (it's a smaller dealership and the next closest one is 100 miles away, so I'm not going to squeeze too much) and "just over" the MF buy rate. Should I figure .00205? .00200? What is a reasonable mark up?

TIA,
Jason

[TD]

Well, very recently I had no problem getting .00195 with a $1500 over invoice deal.

I do not know the "conversion factor" to translate how much a dealer makes for a given increment of MF mark-up. But by agreeing to a marked-up MF, you're simply giving him more profit.

If youd' neevr agree to giving more than $1500 over invoice if you were financing (or paying cash) why give more when you elase?

[Optimus Prime]

Well, very recently I had no problem getting .00195 with a $1500 over invoice deal.

I do not know the "conversion factor" to translate how much a dealer makes for a given increment of MF mark-up. But by agreeing to a marked-up MF, you're simply giving him more profit.

If youd' neevr agree to giving more than $1500 over invoice if you were financing (or paying cash) why give more when you elase?
:dunno:
I seem to remember reading that it was rare to get the buy rate. I've still got some room to work, so all is not lost.

[JST]

How much over the buy rate should I be expecting? They tried to pass off .00285 on a 330 yesterday. I told them that was just silly, but they countered saying their buy rate was .00245, "I don't know where you're getting the .00195 number, but that's just fiction". After a little back and forth, I pulled out a spread sheet with all the residuals and MF rates from BMWNA. No less than 30 seconds later the sales manager produced the same numbers and a pretty weak story about why he was quoting the higher rate. :rolleyes:

We worked out $1500 over invoice (it's a smaller dealership and the next closest one is 100 miles away, so I'm not going to squeeze too much) and "just over" the MF buy rate. Should I figure .00205? .00200? What is a reasonable mark up?

TIA,
Jason


I don't think that there is any magic reasonable number. Some dealers mark it up. Others don't. Some will tolerate no mark up. Others won't.

FWIW, the markup from 195 to 200 is less than $100 over the course of the lease. The markup to 205 is less than $200. I might draw the line at 205.

[clyde]

How much profit do you feel is fair for the dealer to earn? How do you want to split it up between purchase price, add-on fees, and what will come out over your pocket over time through interest or MF?

With add-on fees, you know exactly what they are trying to take you for (anything over what the state/municipality collects through them). If you know the true buy rate and they're offering something higher, you can figure out exactly how much more money they are trying to take. Same with any interest rate they may offer (and at times, you may be able to do better on your own than the dealer/BMWFS can do for you which may make them cost more, but not necessarily add to their profit.

The real question is how much they are making on the car itself. Basing on invoice price gives you a reference point, but it may or may not be representative of the true dealer cost for the vehicle.