03-07-2017, 06:51 PM | #1 |
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Single Payment Lease
Has anyone done a G30 lease with single upfront payment option yet? What is the MF reduction we're looking at?
Just to confirm, it works like MSD right? In that its basically an escrow account and we're not losing the pre-payment money in the event of a total loss correct? I've done MSD but wondering if upfront lease payment is a better option if I had the cash. |
03-08-2017, 12:34 PM | #2 | |
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03-09-2017, 08:21 AM | #3 |
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A single lease payment is the most risky transaction you can do with a lease. If your car is totaled after you drive off from the dealer you just lost all those thousands of dollars. I would never do a single lease payment unless money was flowing to me like the Niagara falls.
But to answer your question yes you get a big discount on it upfront.
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03-09-2017, 08:24 AM | #4 | |
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03-09-2017, 08:59 AM | #5 | ||
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All leases have gap insurance built into the payment so the cost of the loss does not fall onto you.
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03-12-2017, 05:34 AM | #7 |
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Maybe this differs according to region. In the UK when I got a lease in 2013 it didn't and I had to cover myself for the potential gap between invoice price and depreciated value during lease period...
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03-12-2017, 06:42 AM | #8 | |
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03-13-2017, 08:25 PM | #9 | ||
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(I've actually done a one pay lease through BMW so very familiar with how the billing worked and what the contract said)
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03-14-2017, 10:19 AM | #10 |
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Thanks--this I understand. So one advantage of a single-pay lease is that I'm not paying any finance charge, but losing the opportunity cost of the escrow. With FDIC-insured rates today, that's a win for me provided that I'm unwilling to put any of the amount of the escrow at risk.
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03-14-2017, 01:07 PM | #11 | |
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I would suggest anyone that needs clarification to please call BMW finance and their insurance company to an official answer. As far as I know paying the full lease upfront is not a good idea for the reasons I alluded to earlier. Cheers!
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03-14-2017, 01:45 PM | #12 |
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Does anyone know what the money factor is on a single pay lease? A question we haven't really delved into is whether or not the money factor is 0 and you get to save all the interest charge. If you're paying the money up front, then it makes sense to have a 0 money factor. However, if the money goes into escrow and BMW doesn't control that money (thereby they are unable to invest it and get a return on it), then the money factor might be lower than a regular lease but not 0...so the saved interest might be negligible.
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03-14-2017, 04:32 PM | #13 | |
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03-14-2017, 08:32 PM | #14 | ||
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One pay is very different from a cap reduction. You are right that you risk losing cap reduction, but a one pay works differently.
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03-15-2017, 12:09 AM | #15 | |||
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03-15-2017, 08:52 PM | #16 | |||
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The payment is held in the lease trust and withdrawn each month. Unless the lease is residual incentive heavy, your exposure in the event of loss is no worse than a cash purchase. Quote:
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03-18-2017, 01:10 PM | #17 | |
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11-11-2020, 07:15 AM | #19 |
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This is why I love the Internet. Everyone is an expert, and no one is 100% correct.
Honestly folks, asking for opinions is great, but you shouldn't trust anything that anyone tells you, via forum or on the phone or in person. The only thing that matters is what is in the lease agreement, which is a legal document. And as noted, it varies between countries and can even vary between states (in the USA). Go to your BMW center and ask for a copy of the lease so that you (or your lawyer) can review it and see how it really works.
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