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      01-12-2021, 01:43 AM   #1

Drives: X5, 530e
Join Date: May 2013
Location: US of A

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DAS $0 or pay upfront fees

In the past 8-9 years of leases, I always paid first-month payment, Doc, DMV, and taxes on rebates/incentives up front to keep the monthly installment low.

Now the new dealer Iím working with does DAS $0 to roll everything including first-month payment in cap cost and my first installment due is from Feb (next month) which makes my monthly installment significantly higher.

Which one is the prefer? Would like to know the pros and cons. To go with DAS $0 or pay upfront fees to keep monthly installment low? Thanks a lot for the advice.

This is just an example:
Drive-Off: $1,548

First Month Payment: $765
Down Payment: $0
Upfront Fees: $515
Upfront Taxes: $268

With DAS$0 - monthly $860
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      01-12-2021, 09:02 AM   #2
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Drives: Ordered:‘21 X5 M50i
Join Date: Dec 2020
Location: Philly Burbs

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Without ALL of the numbers, it is hard to tell but something seems way off here. Usually, every $1,000 of cap cost reduction/increase should change your payment about$30/mo. In this case, you are increasing your cap cost by $1,500 but your payment is going up almost $100. That ‘feels’ like there is an extra $2,000+/- that might be slipped in there somewhere.

Could be a mistake, could be some extra warranty or something you’re paying for, could be some dealer slight of hand.

One big piece we don’t know since we don’t have all of the numbers - maybe your ‘base’ monthly payment without monthly tax is $765 and the $860 includes the higher cap cost and monthly tax.

Can you share some more of your numbers? Might be easier to help with all of this.

Generally speaking, the main reason people don’t ever want to put any money upfront into a lease is because you would lose all of that money if there was a total accident of the car. Rates are so low that this does make sense for the upfronts but the interest on a lease is calculated a bit differently so you have to figure out your actual return on that money to see if it makes sense.

In all reality, people that make a big deal about not paying the upfront costs (ie not paying 1st payment & inceptions) rarely do any actual ROI calculations and just like to tell people that this makes sense on principle. Putting money down is another story as well as multiple security deposits. MSDs are more limited now than in the past so, while still a decent option, the ROI is nowhere near as good as it has been in the past.

Back to your question - a bit more info would help because it will be hard for anyone to truly help you without knowing some add’l info.
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      01-13-2021, 11:05 AM   #3
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Drives: 2019 X5 40i
Join Date: Jan 2019
Location: Colorado

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All you need to do is compared the cost with each option. This of course is assuming you verified the numbers for each deal to make sure you are getting the same MF, selling price, fees, etc. In general, $0 DAS will be more expensive since you are financing more.

As far as paying upfront, remember you are not talking about a down payment but rather taxes and fees that would have to be paid no matter what. Those are always acceptable, and many times encouraged, to be paid upfront and not rolled not the lease.

For your example, the total cost of option 1 would be $28,323. and the cost of option 2 would be $30,960. Even if you take into account an opportunity cost on paying that small amount up front it surely will not make up for that $2,637 difference.
2019 BMW G05 X5 xDrive40i - Phytonic Blue/Cognac - 07/2020.54
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