[harshjadia]

Hello Friends,

I am new here, and will a first time BMW owner in ~2 weeks! Picking up my 2024 X5 50e from BMW of South Austin in Texas.

I am pretty average in the world of finance and wanted to seek y'alls expert guidance to see how I can get the best deal for the car. (This is my 2nd ever car purchase), so here are my questions-

1. Leasing vs Financing - How do y'all make a decision on this? I am willing to put $10-15k as down payment towards the car, and would like a monthly payment of ~1 to 1.3k. I was thinking of going with the BMW financing option, as I hear that would provide the best interest rate in the market (correct me if I am wrong!). Would like to know about the pros and cons of each. This is our dream car, and looking forward to driving this for at least 5 years minimum!

2. Negotiating the best price on MSRP - The MSRP is $80,095, and I was able to negotiate a discount of $3,299, as we cannot claim the govt. rebate towards this vehicle prior to ordering it. Any additional ways/techniques to be able to bring this cost down? I have attached my build spec and price estimate below.

3. Getting add ons like vehicle maintenance packages, tinting windows, others - What are your thoughts about this? Is it worth it and can we negotiate with the dealer to get this added w/o paying for it ;-)

4. Addressing potential issues reported by other owners- Being new to this forum, TBH I am a bit concerned with the CEL, Drivetrain, charging or battery related, or road noise related issues with this model reported by others. Can I caveat/ set expectations with the dealership if I happen to find any of these issues? Like getting a loaner/ fixing this on stat/ replacing the model? Any guidance here would be appreciated.

5. Would love to connect with folks from ATX who own this model, so I can learn more about the awesome tech and the ultimate driving machine!

Again, I am new to this world so really looking for you guidance here! Thanks in advance for your help, and help this novice.

[johnonroad]

Congrats on your 50e. I'm still waiting for mine.

Here are my thoughts

1) Leasing makes sense if you want a new car every few years and the imbedded interest rate (Money Factor) is competitive.

If you plan to drive a lot (over 10k per year) and will keep the car for at least 5 years, then financing makes more sense considering the BMW Financial interest rate for buying in March is 2.99% (unless your dealer has marked it up). This is probably the best rate available.

However, to truly compare financing vs lease, you'd need the MF for a lease, any downpayment and the residual value at the end of the lease. You can try to use Leasehackr to see if a proposed lease is a good option.

Based on your desire to own a car for at least 5 years and BMW Financials low rate, financing would make the most sense.

2. Seems like you already negotiated a price with the dealer. Unless you have BMW loyalty or military (those are paid by BMW and not dealer), would be hard to get something more from your dealer now.

3. You can always ask nicely but you are getting a 4% discount so don't expect you have much leverage here unless you are a repeat buyer. Perhaps negotiate a better price on tinting.

4. Lets hope you have a carefree vehicle.

Best of luck

[TurtleBoy]

Welcome to the forum. Why are you looking at leasing? Except for some business reasons or large lease cash, it will almost always be more expensive to lease and then purchase than purchase from the beginning. There are certainly valid reasons for leasing such as always wanting a new vehicle, not having a vehicle out of warranty, trying a new brand, leery about a new vehicle type, etc. If you fall into one of those categories then leasing may be the way to go. IF you do lease, do not put anything down. It will obviously result in a higher payment however your money won't be at risk should you total the vehicle, have it stolen, etc.

You should shop around for rates as BMW is not the lowest depending on what you qualify for. The current special APR should not available on ordered vehicles so you wouldn't be able to take advantage of the 2.99%.

Considering you are getting a 50e which is scarce given the limited production you did pretty well on the discount. Since you already made the deal you likely won't be able to get any more off.

I suggest skipping everything from them but doesn't hurt to try and get free window tinting. If they don't give it don't buy it form them but rather shop around for it.

No need to even discuss having issues at this point as odds are you won't plus the dealer won't really entertain anything about them at this point. Should something happen then you can contact them and see how things go.

Good luck and congratulations on your soon to be 50e!

[G05BMWFNG]

If a dealer modifies a previously ordered allocation to stock to match what I want - and the vehicle is later sold to me from “inventory”, isn’t that a fair work around for the finance offer? Is this possible if you select factory delivery experience? If not - that might make that experience very expensive for us.

[TurtleBoy]

Originally Posted by G05BMWFNG

If a dealer modifies a previously ordered allocation to stock to match what I want - and the vehicle is later sold to me from “inventory”, isn’t that a fair work around for the finance offer? Is this possible if you select factory delivery experience? If not - that might make that experience very expensive for us.

Welcome to the forum. No it is not. Some dealers cheat the system but run the risk of getting caught on audit. The terms of the offer say it is only available on existing dealer inventory so PCD vehicles would no be eligible. Your best bet is to contact your CA and get the finance rate they intend on giving you in writing. That still doesn't mean it won't get rejected in the finance office but at least you may know for sure whether you have a chance or not at getting it.

[johnonroad]

Originally Posted by TurtleBoy

The current special APR should not available on ordered vehicles so you wouldn't be able to take advantage of the 2.99%.

Is this correct if he takes delivery within month? I was told by my broker that you can't lock in rates but you can take advantage of the rates at time of delivery assuming your credit qualifies.

The BMW Financial special rate is through April 1st so he is cutting it close if delivery is in 2 weeks.

[TurtleBoy]

Originally Posted by johnonroad

Is this correct if he takes delivery within month? I was told by my broker that you can't lock in rates but you can take advantage of the rates at time of delivery assuming your credit qualifies.

The BMW Financial special rate is through April 1st so he is cutting it close if delivery is in 2 weeks.

According to BMWFS the rate is only available on vehicles from dealer inventory. As I said, some dealers will let it go through anyways or the wording on the offer is incorrect. We have had quite a few folks being told that they could get it though but so far we have had no one post that they were able to get that rate on a vehicle they ordered.

[G05BMWFNG]

Is it safe to assume that PCD carries more risk that finance will reject whatever offer is available at the time of delivery? I did add that after dealer told me we could use the promo rate “from inventory” since it was just an edit of their stocking allocation. If the risk is similar - maybe I’ll still do the PCD and I’ll deal with the cost of capital another way if it becomes a problem. Dealer also thinks the 2.99 will be extended. Maybe that’s a wild guess or deception- IDK

[TurtleBoy]

Originally Posted by G05BMWFNG

Is it safe to assume that PCD carries more risk that finance will reject whatever offer is available at the time of delivery? I did add that after dealer told me we could use the promo rate “from inventory” since it was just an edit of their stocking allocation. If the risk is similar - maybe I’ll still do the PCD and I’ll deal with the cost of capital another way if it becomes a problem. Dealer also thinks the 2.99 will be extended. Maybe that’s a wild guess or deception- IDK

I would think so but you need to talk to your dealer. They may be one that plays with inventory and it will go through.

[G05BMWFNG]

Thanks for the advice!

[Mattl0806]

Never put substantial money down on a lease. If you total the car you don’t get back any of the limited equity you might have created with that initial large down payment…. That money is just completely gone.

10k down financing 60m with 2.99 pits you at 1311 (73k financed). If you plan on holding the car - this would get you to your target.

That being said - talking pure finances here - getting to borrow at 2.99 when money markets is 5% - it’s financially unwise to put a large amt of cash down. Put 0 down. Put the down payment in a money markets and capture 2% risk free. Put that down payment into something more risky and get to capture > 2%. Long story short with current interest rates. They are paying you to borrow money for to buy the car at 2.99 %.

[eluded]

What about other options?

DAP - if you drive on the freeway this is a game changer
MSport - so all those plastic pieces are painted.
Multi Zone Climate - those rear passengers will enjoy that.
M-Sport Brakes - bigger is better

Caution: CELs, many members have issues with this myself included. With the latest SW upgrade I have not experienced the issue since the last update.

Overall the car is awesome.

[crackerjack15]

My 2024 50e was $85,145. I got an $8,000 discount plus $1500 rebate and then they added back on a $995 processing fee. So basically $8500 off, which is 10%. Back in November 2023.

Leasing is not usually the best deal. You are going to pay an inflated interest rate, have limited miles and pay fees when turning it back in ect. Unless you own a business I don't see how leasing is ever the better deal. Only advantage to me with leasing is if you get in an accident. The car then has diminished value, but you don't own it, so it's the leasing companies problem.

[LDT]

Never, ever make a down payment on a leased vehicle. Most leases include GAP and the max one should invest is acquisition fee and dealer doc fee.

[harshjadia]

Wow! Thank you so much for the guidance everyone! I will definitely share the leasing/financing terms offered by the dealer here to get some thoughts on the final route to proceed.

Current train of thought-
- Leasing - No downpayment, will wait to hear back on the residual value and MF from the dealer. My wife does own a business, that I will be a part of this year. So maybe reap some benefit off that? However, its the less preferred option due to potentially higher monthly payment.

Financing- I will push the salesperson to provide the 2.99% APR offered by BMWFS, will share how it goes. This is the preferred option with the expectation of a lower monthly payment.

Need a negotiation masterclass from crackerjack15 on how they scored such a good discount on their vehicle! And a finance one from Mattl0806 to understand the invest in money market vs down payment suggestion! :-D

[TurtleBoy]

Originally Posted by harshjadia

- Leasing - No downpayment, will wait to hear back on the residual value and MF from the dealer. My wife does own a business, that I will be a part of this year. So maybe reap some benefit off that? However, its the less preferred option due to potentially higher monthly payment.

If your wife owns a business that can purchase the vehicle then going that way will allow you to take the $7,500 commercial clean vehicle credit.

[Mattl0806]

Best of luck. Here to help more when ready!

[mhrir]

Originally Posted by harshjadia

Current train of thought-
- Leasing - No downpayment, will wait to hear back on the residual value and MF from the dealer. My wife does own a business, that I will be a part of this year. So maybe reap some benefit off that? However, its the less preferred option due to potentially higher monthly payment.

Definitely never do a capitalized cost reduction (down payment) on a lease. However really surprised no one has mentioned MSDs (multiple security deposits). Can do up to seven MSDs and each one lowers the money factor by .00006. This also effectively provides a nice return on your money.

[LDT]

Originally Posted by mhrir

Definitely never do a capitalized cost reduction (down payment) on a lease. However really surprised no one has mentioned MSDs (multiple security deposits). Can do up to seven MSDs and each one lowers the money factor by .00006. This also effectively provides a nice return on your money.

Unless I’m missing something (it’s likely), Seven MSDs provide about 1% break on the effective interest rate. Not being critical but I’ve never understood how this is better than many other investment options.

[mhrir]

Originally Posted by LDT

Unless I’m missing something (it’s likely), Seven MSDs provide about 1% break on the effective interest rate. Not being critical but I’ve never understood how this is better than many other investment options.

That's not how to think about it. MF is not an interest rate but for discussion, a reduction in the "interest rate" doesn't equal the effective rate of return. So a 1% break doesn't mean your earning 1%.

Here are some quick/dirty numbers :
$75,000, 36 months, .0018 MF, 52% residual works out to approx $1214/month.

Seven MSDs at .00006 each = .00042
.0018 - .00042 = .00138 MF

$75,000, 36 months, .00138 MF, 52% residual works out to approx $1166/month.

The monthly payment is reduced by $48/month or $1,728 over 3 years.

Each MSD will be $1,200 ($1,166 rounded up) x 7 = $8400

In summary, you pay $8,400 in MSDs up front. At the end you get back your $8,400 plus you've "earned" $1,728. That works out to an effective rate of return of roughly 6.5%.

[LDT]

Originally Posted by mhrir

That's not how to think about it. MF is not an interest rate but for discussion, a reduction in the "interest rate" doesn't equal the effective rate of return. So a 1% break doesn't mean your earning 1%.

Here are some quick/dirty numbers :
$75,000, 36 months, .0018 MF, 52% residual works out to approx $1214/month.

Seven MSDs at .00006 each = .00042
.0018 - .00042 = .00138 MF

$75,000, 36 months, .00138 MF, 52% residual works out to approx $1166/month.

The monthly payment is reduced by $48/month or $1,728 over 3 years.

Each MSD will be $1,200 ($1,166 rounded up) x 7 = $8400

In summary, you pay $8,400 in MSDs up front. At the end you get back your $8,400 plus you've "earned" $1,728. That works out to an effective rate of return of roughly 6.5%.

Like I said I’m likely missing something. I was a sales exec. Math was optional !

[Mattl0806]

Originally Posted by mhrir

That's not how to think about it. MF is not an interest rate but for discussion, a reduction in the "interest rate" doesn't equal the effective rate of return. So a 1% break doesn't mean your earning 1%.

Here are some quick/dirty numbers :
$75,000, 36 months, .0018 MF, 52% residual works out to approx $1214/month.

Seven MSDs at .00006 each = .00042
.0018 - .00042 = .00138 MF

$75,000, 36 months, .00138 MF, 52% residual works out to approx $1166/month.

The monthly payment is reduced by $48/month or $1,728 over 3 years.

Each MSD will be $1,200 ($1,166 rounded up) x 7 = $8400

In summary, you pay $8,400 in MSDs up front. At the end you get back your $8,400 plus you've "earned" $1,728. That works out to an effective rate of return of roughly 6.5%.

This is the right way of thinking about it. I was going to do the same.
To me, the 1.5% spread over my money markets account doesn’t make sense for this cash to be locked up with bmw financial. I’m in NY as well where I believe they are often not allowed. Regardless, I would not do them in this rate environment. Made more sense when rates were 0.