[BimmerBoi88]

Is the security deposit on a new lease negotiable as in can you request they leave it off?

So background, I am a new-to-BMW customer. This will be my first car with them. I am looking at a fairly loaded 320xi. When I started looking, my CA said that if I got the wear and tear coverage warranty, that the security deposit would be waived (aka no security deposit required at delivery). However if I dont get the wear and tear warranty, they require the security deposit. It seems a bit odd that getting a wear and tear package warrants not putting a security deposit.

So my question is this: When I submit my offer for the car, is it possible to put in the offer that I do not want to pay the security deposit???

[bobblehead]

usually bmw canada dictates how much s.d. they require which may be based on your credit history. it can be negotiated and be waived ... just need a bit of convincing with the dealer.

In the end, the dealer is trying to make some $ off you on those warranty pkg .. simple as that.

[JimmersBimmer]

It sounds like a sales track they use to sell the W&T Package, it sounds identical to how the W&T was presented to me by the 'finance adviser' at my dealership. I didn't think to ask for the S.D. to be waived though.

[BimmerBoi88]

Its definitely a sales tactic!!!! Just wasnt sure if the S.D. can be waived.

I havent even done the credit check yet!

Do you get the security deposit back at the end of the lease?

[JimmersBimmer]

I believe you do get the S.D. back.

I used the S.D. to lower the amount I owed when I returned my e90 in 2010 (I was over the lease km's.) But, I have to say, that my lease return went very smooth and I was only charged for the extra km I (knowingly) put on the car.

Cheers!

[BimmerBoi88]

Originally Posted by JimmersBimmer

I believe you do get the S.D. back.

I used the S.D. to lower the amount I owed when I returned my e90 in 2010 (I was over the lease km's.) But, I have to say, that my lease return went very smooth and I was only charged for the extra km I (knowingly) put on the car.

Cheers!

Ya I hope I get this back! Or that they use it for last months lease payment. But I cant see how adding wear and tear warranty would make a difference in not paying or paying a security deposit.

Definitely seems like a sales tactic to me!!!!

I'm also wondering if I should do some MSD to reduce my monthly payment.

[bobblehead]

I say no need to do MSD. the lease rate is at 0.9% for 36 months.

Keep your extra $ and take that and invest it. Say buy some bank stocks and get a dividend yield of about 2-3% instead + a bit of capital growth too.

[JimmersBimmer]

The benefits and rate of return MSDs are discussed thoroughly in the forums, just do a search.

Do the math yourself after reading these and see if the investment makes sense.

Compare the MSD return on investment to the return you'd get in a TFSA, invested in stocks/mutuals/etc.

Choose the one you are most comfortable with as an investment, considering your risk tolerance. Also, analyze your need to access the money over the term of your lease.

[aspiring335]

The wear and tear is probably one of the highest margin items the dealer sells. Offering it as a way of offsetting the security deposit is a bit of a scam, since you get the SD back at the end of the term anyway.

It amazes me that people are asking if you get the deposit back or not. Educate yourself about this stuff, people, it's not that hard to understand!

[JimmersBimmer]

Keep in mind too that S.D.'s change with the monthly cost of your lease.

They round the S.D. up to the next $50.

I mention this because a lease of $649 would have a S.D. of $650 and a $651 lease would have a $700 S.D., for example. So when you are considering MSDs, keep this in mind, it could "save" you extra money that you wouldn't need to tie up in MSDs.

It is a matter of balancing your downpayment, lease amount and M.S.D.s, if you decide to go that route, in my opinion.

[JimmersBimmer]

Aspiring 335: "It amazes me that people are asking if you get the deposit back or not. Educate yourself about this stuff, people, it's not that hard to understand!"

>>>

That's why we are here: reading and posting to help one another understand. Isn't that the whole point of a forum? Getting direct peer/consumer feedback is usually the most accurate source of information.

[aspiring335]

That is true to an extent, but we're not here to learn the definition of basic words. "Security deposit" is a pretty widely understood term well beyond the world of discussing BMWs.

Originally Posted by JimmersBimmer

Aspiring 335: "It amazes me that people are asking if you get the deposit back or not. Educate yourself about this stuff, people, it's not that hard to understand!"

>>>

That's why we are here: reading and posting to help one another understand. Isn't that the whole point of a forum? Getting direct peer/consumer feedback is usually the most accurate source of information.

[greengoose]

BMW Financial Services will always require a Security Deposit before funding the deal if no excess wear is purchased- unless there is a specific promotion in place. If you are successful in negotiating this out, the dealership is essentially paying the security deposit to FS, which will be calculated by the dealership as further discount - meaning they will only agree to this if there is some decent money left on the table.

[bobblehead]

... of course there are still decent $ left on the table. One have to look at all these bogus fees you guys are charging. An uneducated buyer may think they are all mandatory fees when in fact, these up-sell is against the OMVIC guidelines & regulations.

One good example, Nitrogen air or dealer calls it 'Ride Green fee' ... some dealer charge $100 while another dealer charges $300 ...

[F87_LCI]

FYI...you don't necessarily get the SD back at the end of the lease. In fact, it's very rare that you get the entire amount back. Example, I just handed back a C350 before I got my 335. SD was $650. At lease end inspection, they wanted to charge me $300 each for two tires they say had not enough tread left on them and $150 each for two rims that had some slight curb rash (don't let your wife park the car!!!). In the end I was able to get two used tires with enough tread left on them to pass for $100 balanced and installed. I didn't bother with the rim repair as I got quoted about the same price so I just left it. And I can almost guarantee that Mercedes never repaired those rims before they sent the car for auction. In the end I got a check back for $350 of my original $650 SD.

The moral...if you think you can get through a 3/4 year lease and NOT have any sort of excess wear to the car, then go with the SD and you should get it back. If your past history (i.e. you have a wife and kids, lol) has told you that you will most likely have excess W&T, then buy the W&T package. Keep in mind however that you don't get any of the W&T returned to you at the end of the lease if you don't have any excess W&T on the car. It's basically insurance...and yes, in most cases largely profit for the dealership as they will only fix the most obvious signs of W&T before sending the car for auction after you hand it back in.