MSD Rate Reduction Program Returns for BMW Leases In Eastern Region, Florida, Hawaii

Alan l. · 06-08-2018, 11:32 PM

Typically MSD's aren't allowed for NY dealers. Are they included this time around?

Alan

trey100 · 06-08-2018, 11:39 PM

Quote:

Originally Posted by Alan l.

Typically MSD's aren't allowed for NY dealers. Are they included this time around?

Alan

I always thought that was a State issue, not BMW.

IB M · 06-09-2018, 12:32 AM

Quote:

Originally Posted by trey100

Quote:

Originally Posted by ginginha

Quote:

Originally Posted by Lovegreatcars

Why would I give them $2,800 upfront to reduce my payment by $25 a month? The time value of money, plus the whole reason for doing a lease (at least in my mind) would negate any reason for doing so.

That's about 10.7% a year, no?

Looks like they lowered it from .07 per MSD? At .07 it used to work out to like $50 per month - roughly a 10-13% rate of return over 3 years (not compounded) guaranteed.

Very low risk but Not guaranteed. Technically BMW could go out of business.

rocke29 · 06-09-2018, 01:00 AM

Quote:

Originally Posted by jmg

Quote:

Originally Posted by rocke29

Can anyone explain this to me in plain English? Been a long day...

I got a lease price of $225. How can I use this program to reduce that number?

An MSD is an upfront one time deposit that basically lowers the interest rate. You get that deposit back at the end of the lease term. It's a VERY good deal.

Got it. I was getting pricing on a one time lease payment for a 24 month term, so the security deposit are a moot point, correct?

jmg · 06-09-2018, 03:36 AM

Quote:

Originally Posted by rocke29

Quote:

Originally Posted by jmg

Quote:

Originally Posted by rocke29

Can anyone explain this to me in plain English? Been a long day...

I got a lease price of $225. How can I use this program to reduce that number?

An MSD is an upfront one time deposit that basically lowers the interest rate. You get that deposit back at the end of the lease term. It's a VERY good deal.

Got it. I was getting pricing on a one time lease payment for a 24 month term, so the security deposit are a moot point, correct?

I'm not entirely sure honestly, I've never done that before.

Who's on first · 06-09-2018, 05:11 AM

Quote:

Originally Posted by rocke29

Quote:

Originally Posted by jmg

Quote:

Originally Posted by rocke29

Can anyone explain this to me in plain English? Been a long day...

I got a lease price of $225. How can I use this program to reduce that number?

An MSD is an upfront one time deposit that basically lowers the interest rate. You get that deposit back at the end of the lease term. It's a VERY good deal.

Got it. I was getting pricing on a one time lease payment for a 24 month term, so the security deposit are a moot point, correct?

That is a pre-paid lease. Doubly not eligible.

nikman011 · 06-09-2018, 06:58 AM

What exactly is a security deposit for a lease? Is that basically giving them cash for the value of the car while leasing it? Why would you do that when paper was so cheap last year?

Dog Face Pony Soldier · 06-09-2018, 09:35 AM

I'm stuck wondering why Florida is listed separately from the Eastern region. How is this not repetitive? What am I missing ?

spuntyb · 06-09-2018, 09:39 AM

Quote:

Originally Posted by Lovegreatcars

Why would I give them $2,800 upfront to reduce my payment by $25 a month? The time value of money, plus the whole reason for doing a lease (at least in my mind) would negate any reason for doing so.

I mean, as a pure investment strategy, it isn't mind-blowing, but at worst, it still represents about 10% return. At best, the money sits there and is yours in case anything happens to the car, while also saving you money. It's not the end-all of lease strategies, but I don't see the real downside to the average lessee.

ted99 · 06-09-2018, 10:30 AM

What States are in which regions?

PABrian · 06-09-2018, 10:41 AM

Quote:

Originally Posted by spuntyb

6 weeks after I got my F80. Fantastic.

Quote:

Originally Posted by ericbilt

4 weeks after my F30 340i, but it doesn't apply to Southern California and I'm sure it will soon.

Yeah, always stinks with programs like this...any time they could ever possibly come out with a program will frustrate people that just took delivery, so it's always going to happen.

Quote:

Originally Posted by Fender150

The finance person at my dealer told me
Its not true, i dont know who’s wrong yet

Seems you're from MI, which I believe is considered Central Region.

Quote:

Originally Posted by Fender150

I guess PA doesnt count

It does. PA is considered Eastern Region.

Quote:

Originally Posted by rocke29

Got it. I was getting pricing on a one time lease payment for a 24 month term, so the security deposit are a moot point, correct?

Correct. You cannot combine MSDs and Pre-Pay Leases. Would be nice to double dip with these discounts, but you can't.

Quote:

Originally Posted by Alan l.

Typically MSD's aren't allowed for NY dealers. Are they included this time around?

Alan

Per the bulletin, NY dealers aren't excluded, but security deposits can't exceed $749.

Quote:

Originally Posted by glennQNYC

I'm stuck wondering why Florida is listed separately from the Eastern region. How is this not repetitive? What am I missing ?

FL is considered Southern Region. Not sure how the decision was made to re-introduce this to the whole Eastern Region then picking two states...must have been plenty of calculations and projections involved.

JayPichardo · 06-09-2018, 11:32 AM

I think eastern region is north of VA

PABrian · 06-09-2018, 12:02 PM

It is, but includes VA. Oddly enough it seems to exclude Pittsburgh.

rocke29 · 06-09-2018, 12:59 PM

Dumb question time: spread the lease out over 24 months for me would be better so would not doing an all at once 24 month payment and doing seven security deposits be a better move? I get it back correct? I am pretty sure it will be a bit more than the $225 I was quoted but how much more?

PABrian · 06-09-2018, 04:57 PM

When MSDs droped your money factor 7 basis points each, it was a bit cheaper cheaper to do that than it was to do a one-pay lease as your money factor reduction was 49 points, compared to 30 points for the one-pay. At 5 basis points each now, you're still better off, but only by a bit.

And yes, you do get all of your security deposits back at the end of the lease, OR you can roll them into the next lease if they're still offering it then.

If you can afford the initial outlay, it's a great idea to max out your MSDs. It's less lucrative now than it was before, but it's still a good deal.

adc · 06-10-2018, 10:56 AM

Quote:

Originally Posted by ah3nyc

This looks like Bmw canceling the msd program must have affected bmw cash flow. I can imagine the issues giving back money to customers returning leases. Bmw took many months to give back msd money to my father who returned lease back few months back. This is bmw trying to stop leaking of sale losses.

I turned in my lease on May 29 and received the check on June 8.

rich8566 · 06-10-2018, 11:19 AM

Quote:

Originally Posted by Alan l.

Typically MSD's aren't allowed for NY dealers. Are they included this time around?

Alan

NY is limited to a total MSD of $749 so NY customers cannot take maximum advantage of the program. .

kmarei · 06-13-2018, 07:58 AM

Quote:

Originally Posted by jmg

An MSD is an upfront one time deposit that basically lowers the interest rate. You get that deposit back at the end of the lease term. It's a VERY good deal.

So this is basically BMW borrowing money from its customers in return for the decrease in their lease payments ?

adc · 06-13-2018, 08:06 AM

Quote:

Originally Posted by kmarei

So this is basically BMW borrowing money from its customers in return for the decrease in their lease payments ?

Indeed. It’s worked very welll for me in 2015.

Vitacura · 06-13-2018, 09:48 AM

Even though I live in FL, I had to go with a dealer in CA that was able to get one of the very last allocations for a MY18 2 series. Very bummed I can't take advantage of the MSD program.

jmg · 06-13-2018, 01:01 PM

Quote:

Originally Posted by kmarei

So this is basically BMW borrowing money from its customers in return for the decrease in their lease payments ?

Basically. You are giving them a loan with x% interest based on the lease interest reduction.

LuisBoston · 06-13-2018, 10:11 PM

Quote:

Originally Posted by spuntyb

6 weeks after I got my F80. Fantastic.

I inked my lease 5/31. Think I could ask to re do? Drat.

06-08-2018, 11:32 PM	#23
Alan l. Major General 5823 Rep 9,052 Posts Drives: 2020 F95 X5M Competition Join Date: Jun 2009 Location: United States iTrader: (9)	Typically MSD's aren't allowed for NY dealers. Are they included this time around? Alan __________________
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06-09-2018, 06:58 AM	#29
nikman011 Lieutenant 175 Rep 479 Posts Drives: '24 m240i xDrive Join Date: Sep 2017 Location: Pittsburgh iTrader: (1)	What exactly is a security deposit for a lease? Is that basically giving them cash for the value of the car while leasing it? Why would you do that when paper was so cheap last year? __________________ Everyone LOVES clowns!
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06-09-2018, 09:35 AM	#30
Dog Face Pony Soldier 2006 TIME Person Of The Year 9705 Rep 6,445 Posts Drives: M Sport 335i Join Date: May 2013 Location: North Jersey iTrader: (0) Garage List 2014 335i [9.74]	I'm stuck wondering why Florida is listed separately from the Eastern region. How is this not repetitive? What am I missing ? __________________
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06-09-2018, 10:30 AM	#32
ted99 Lieutenant 257 Rep 539 Posts Drives: former i3>330e, 528i>X5>530e Join Date: Jan 2015 Location: Houston, TX iTrader: (0)	What States are in which regions?
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06-09-2018, 11:32 AM	#34
JayPichardo BMW Client Advisor 3504 Rep 2,503 Posts Drives: 2020 M340i Join Date: May 2017 Location: Tulley BMW Nashua, NH iTrader: (0) Garage List 2020 BMW M340i [0.00]	I think eastern region is north of VA __________________ Contact me for all your BMW needs in the New England area. jpichardo@tulley.com Top M Client Advisor in New England.
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06-09-2018, 12:02 PM	#35
PABrian Second Lieutenant 151 Rep 233 Posts Drives: BMW Join Date: Feb 2014 Location: Berks County, PA iTrader: (0)	It is, but includes VA. Oddly enough it seems to exclude Pittsburgh.
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06-09-2018, 12:59 PM	#36
rocke29 Private First Class 109 Rep 190 Posts Drives: 2018 LBB M2 M/T Join Date: Jul 2016 Location: New Jersey iTrader: (0)	Dumb question time: spread the lease out over 24 months for me would be better so would not doing an all at once 24 month payment and doing seven security deposits be a better move? I get it back correct? I am pretty sure it will be a bit more than the $225 I was quoted but how much more?
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06-09-2018, 04:57 PM	#37
PABrian Second Lieutenant 151 Rep 233 Posts Drives: BMW Join Date: Feb 2014 Location: Berks County, PA iTrader: (0)	When MSDs droped your money factor 7 basis points each, it was a bit cheaper cheaper to do that than it was to do a one-pay lease as your money factor reduction was 49 points, compared to 30 points for the one-pay. At 5 basis points each now, you're still better off, but only by a bit. And yes, you do get all of your security deposits back at the end of the lease, OR you can roll them into the next lease if they're still offering it then. If you can afford the initial outlay, it's a great idea to max out your MSDs. It's less lucrative now than it was before, but it's still a good deal.
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06-13-2018, 09:48 AM	#42
Vitacura Ich Liebe mein BMW 414 Rep 887 Posts Drives: 21 M240i CV, 23 X1 Join Date: May 2007 Location: Tampa Bay iTrader: (0)	Even though I live in FL, I had to go with a dealer in CA that was able to get one of the very last allocations for a MY18 2 series. Very bummed I can't take advantage of the MSD program.
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