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BMW 5-Series (G30) Forum G30 Pricing, Ordering, Tracking, European Delivery Single Payment Lease

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      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.
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      03-08-2017, 12:34 PM   #2
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Quote:
Originally Posted by TimeFor View Post
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.
I haven't done it but would be interested in seeing others' response. I also wonder if its even offered by BMW (I know MB has it) and if it lowers the MF even further or not).
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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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Quote:
Originally Posted by PhoenixWolf View Post
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.
Are you basing your claim on losing the entire payment on facts and contractual language? Is there no escrow account used as the OP mentioned? If you have good insurance coverage and gap insurance, you're still screwed on that payment?
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      03-09-2017, 08:59 AM   #5
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Quote:
Originally Posted by FadyDizzle View Post
Quote:
Originally Posted by PhoenixWolf View Post
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.
Are you basing your claim on losing the entire payment on facts and contractual language? Is there no escrow account used as the OP mentioned? If you have good insurance coverage and gap insurance, you're still screwed on that payment?
The way how leases work is the out of pocket money that goes into the lease (with the exception of MSD) is locked into the lease after delivery. Meaning that monies that you paid to get to your monthly payment, or in this example you have one payment, cannot come back to you. In order to get the same deal you have to pay out the same amount of money again.

All leases have gap insurance built into the payment so the cost of the loss does not fall onto you.
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      03-11-2017, 09:42 AM   #6
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I'm sorry, I don't understand what you just wrote. Please explain "Single payment leases for Dummies"
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      03-12-2017, 05:34 AM   #7
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Quote:
Originally Posted by PhoenixWolf View Post
All leases have gap insurance built into the payment so the cost of the loss does not fall onto you.
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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Quote:
Originally Posted by ZigmundUK View Post
Quote:
Originally Posted by PhoenixWolf View Post
All leases have gap insurance built into the payment so the cost of the loss does not fall onto you.
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...
My apologies. Everything I said was specifically for US car leases. I know nothing about other regions and I did not check which region the OP is from. It doesn't tell me on my phone.
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      03-13-2017, 08:25 PM   #9
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Quote:
Originally Posted by PhoenixWolf View Post
Quote:
Originally Posted by ZigmundUK View Post
Quote:
Originally Posted by PhoenixWolf View Post
All leases have gap insurance built into the payment so the cost of the loss does not fall onto you.
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...
My apologies. Everything I said was specifically for US car leases. I know nothing about other regions and I did not check which region the OP is from. It doesn't tell me on my phone.
Your facts are wrong for US too. On a one pay lease, the amount you pay is not treated like cap reduction. Instead it works like escrow, your account will show a credit balance and they will draw a payment each month. If the car is totaled, they will refund the unused portion.

(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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Quote:
Originally Posted by sarafil View Post
Your facts are wrong for US too. On a one pay lease, the amount you pay is not treated like cap reduction. Instead it works like escrow, your account will show a credit balance and they will draw a payment each month. If the car is totaled, they will refund the unused portion.

(I've actually done a one pay lease through BMW so very familiar with how the billing worked and what the contract said)
I'm sorry but respectfully what you said is not true for the USA. If the car is totaled you do not get any unused money back. I called BMW finance and asked them this question last year and they told me so.

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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Quote:
Originally Posted by FadyDizzle View Post
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.
MF wouldn't be 0 because you still have to pay interest of the residual portion of the lease. So that would be at least 50-60% of the MF cost.
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      03-14-2017, 08:32 PM   #14
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Quote:
Originally Posted by PhoenixWolf View Post
Quote:
Originally Posted by sarafil View Post
Your facts are wrong for US too. On a one pay lease, the amount you pay is not treated like cap reduction. Instead it works like escrow, your account will show a credit balance and they will draw a payment each month. If the car is totaled, they will refund the unused portion.

(I've actually done a one pay lease through BMW so very familiar with how the billing worked and what the contract said)
I'm sorry but respectfully what you said is not true for the USA. If the car is totaled you do not get any unused money back. I called BMW finance and asked them this question last year and they told me so.

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!
Have you ever done a one pay lease through BMW? I have. I also worked for a BMW dealer for 8 years and did them for many other people. I'll trust my knowledge over yours, but thanks.

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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Quote:
Originally Posted by sarafil View Post
Quote:
Originally Posted by PhoenixWolf View Post
Quote:
Originally Posted by sarafil View Post
Your facts are wrong for US too. On a one pay lease, the amount you pay is not treated like cap reduction. Instead it works like escrow, your account will show a credit balance and they will draw a payment each month. If the car is totaled, they will refund the unused portion.

(I've actually done a one pay lease through BMW so very familiar with how the billing worked and what the contract said)
I'm sorry but respectfully what you said is not true for the USA. If the car is totaled you do not get any unused money back. I called BMW finance and asked them this question last year and they told me so.

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!
Have you ever done a one pay lease through BMW? I have. I also worked for a BMW dealer for 8 years and did them for many other people. I'll trust my knowledge over yours, but thanks.

One pay is very different from a cap reduction. You are right that you risk losing cap reduction, but a one pay works differently.
Trust whatever you want. I'm saying anyone that wants to know about this should ask BMW financial and their insurance company. I trust them more than your word.
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      03-15-2017, 08:52 PM   #16
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Quote:
Originally Posted by TimeFor View Post
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.
Last I saw was a 30 base point (.00030) reduction. While not as good as max MSD, the residual would swing it in favor of one or the other.

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:
Originally Posted by PhoenixWolf View Post
The way how leases work is the out of pocket money that goes into the lease (with the exception of MSD) is locked into the lease after delivery. Meaning that monies that you paid to get to your monthly payment, or in this example you have one payment, cannot come back to you. In order to get the same deal you have to pay out the same amount of money again.

All leases have gap insurance built into the payment so the cost of the loss does not fall onto you.
This is incorrect when a true One Advance Pay format is offered and properly administered.

Quote:
Originally Posted by FadyDizzle View Post
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.
It's not 0, but can effectively achieve 0 since the Interest is only charged on the remaining residual - this is key to assessing any benefit compared to an inception only lease.
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      03-18-2017, 01:10 PM   #17
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Quote:
Originally Posted by sarafil View Post
Your facts are wrong for US too. On a one pay lease, the amount you pay is not treated like cap reduction. Instead it works like escrow, your account will show a credit balance and they will draw a payment each month. If the car is totaled, they will refund the unused portion.

(I've actually done a one pay lease through BMW so very familiar with how the billing worked and what the contract said)
+1 - this is the correct answer.
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      11-09-2020, 04:27 AM   #18
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+1 - this is the correct answer.
Great, so to clarify, if car is lost or totaled, the remaining balance of the 1 pay is fully refunded? Can you do a 1 pay PLUS MSDs, to further lower the rate?
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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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