Someone recently posted a link to BMW money factors for May. The salesman told me BMW's buyrate is .00175 and his dealership's money factor is .00215. Can someone tell me what the difference between these two numbers is? I don't want to think they are trying to take advantage and make extra money so if someone can explain the difference to me that would be appreciated. I still don't think I will do business with this particular dealership regardless.

He told me the 335 (sedan) is high in demand and they wouldn't budge on their price. I know the car is popular, but I was going to get one with everything except heated seats and active steering - they would have had to order it because they don't have a car like this on the lot.
He also told me the acquisition fee (895) was non-negotiable. I thought I read on the forum that this fee should be 695 and anything else is profit.
He also told me the amount I was getting off the car (I think it was 1200) was more than the owner's family and friends get. I find that kind of hard to believe.

BMWFS provides the base buy rate (money factor). Dealers are allowed to mark this up by .0004 to get more profit on a deal. This is purely a profit item for the dealer and some are more willing to lower it back to the BMWFS rate than others. My dealer gave me over $1200 off on my 335 Sedan and also gave me the BMWFS money factor (.0015 at the time) and didn't increase the Acquisition fee either.

The 335 Sedan still isn't nearly as in demand as the 335 Coupe so you should be able to get a better overall deal than you are currently being offered.

Is it normal for dealers to add the .0004? I spoke to another salesman, from another dealership, and he said their money factor was .00215 also.
Additionally, this guy was telling me they would only take off $800! Finally, this guy was so hung up on payment, he was telling me how many months and how many miles I needed to lease for.

Is this normal or are there dealerships/salesmen that will be straight up.

This is normal. They make money with the mark-up on the money factor and the acquisition fee. Most customers never even know it. I try to negotiate these down along with a discount off MSRP on vehicles I lease. If they won't move on these then demand more off MSRP. What is important is the net cost to you of the lease. If they want to keep the mark-ups on the lease factors then they need to discount more off MSRP. They can put the profit where ever they want in the deal. My best strategy is to know the monthly lease payment I want going in based on an appropriate discount off MSRP and using the base money factor and acquisition fee. I start with negotiating off the MSRP and then talk lease payment to get to (or near) my goal, this way they can juggle the numbers internally which may help in making the deal.

Is it normal for dealers to add the .0004? I spoke to another salesman, from another dealership, and he said their money factor was .00215 also.
Additionally, this guy was telling me they would only take off $800! Finally, this guy was so hung up on payment, he was telling me how many months and how many miles I needed to lease for.

Is this normal or are there dealerships/salesmen that will be straight up.

I had two experiences. The first was with a dealer who not only wouldn't tell me what the money factor was, he continually talked payment range and wouldn't talk about price. Result? I walked.

Second dealer I called over the phone, he quoted me BMWFS rates for Money Factor and Acquisition Fee and said they would take $1200 off sticker without me even asking. Needless to say I stuck with that dealer. Nothing like full disclosure and a fair deal with no hassles.

As to how common it is for a dealer to add the .0004 to the MF, I don't know. I wouldn't assume that all do it, but I'd guess at least half do. BMWFS allows it, so a dealer can add it and then use that as another bargaining chip when working a deal with a customer.

The second dealership's finance manager was supposed to call me, but never did.
I guess they think I'm supposed to go into a deal without knowing the real numbers. I don't know what to do at this point; I would like to lease this car, but I'm not willing to get raked over the coals in the process. Can someone tell me the name of a dealership that will deal straight up. At this point I figure paying to have a car shipped from a reputable dealer might be cheaper than what I have experienced so far.

You're getting BS'd. Of course, dealers should make money, but IMO the MF is way too high, the Acquisition Fee is way too high (you should at least be able to get the base on one of them, if not both), and the discount isn't much. Market areas are different, but I see many people getting the E90 for $1,500 over invoice- sometimes even less- with better lease terms (as I suggested above). If you were quoted those numbers on a coupe, then I'd say that's a better deal that most seem to be getting right now. However, the coupes are very tough to get, while sedans are all over (at least wherever I go). You can definately do better.

I got 1500 off msrp off a hard-to-get coupe and the lowest buy rate money factor of .00185. My pmts are about $560 per month with 2500 down on a car with sport, premium and comfort plus metalic paint (10K mile lease).

I'm in AZ. If anyone wants my salesperson's number, PM me.

Is it normal for dealers to add the .0004? I spoke to another salesman, from another dealership, and he said their money factor was .00215 also.
Additionally, this guy was telling me they would only take off $800! Finally, this guy was so hung up on payment, he was telling me how many months and how many miles I needed to lease for.

I took delivery last week of a 335i sedan, premium, sport, nav, cold weather, PDC, steptronic, metallic paint, and iPod USB -dealer agreed ahead of time to $500 over invoice (invoice included $400 MACO & $180 training cost), so go to KBB or Edmunds and add $1080 to dealer cost and that is what I paid.
Was paying cash and when closing transaction with finance manager asked about BMW leasing terms – MF.00215, and acquisition fee of $825, refundable security deposit $600, 61% residual for 15K miles, 36 months, gap insurance included. I asked if I could consider terms and get back later and he agreed to hold my check for 4 days.
I later decided to go with lease due to very competitive terms. I did ask finance mgr to lower the MF and acquisition fee, with no success, so he was willing to forgo the lease for cash deal. I am fortunate to have a very good FICO, which allowed dealer to accept and hold my check, but I was not able to use that to my advantage to obtain a lower MF or acquisition fee.
I could have made lease terms a deal breaker up front, but was treated in straight forward manner with pricing, didn’t want to jeopardize negotiated price for a smaller issue.
Yes – I think the dealership made money with signing me up on the BMW lease, but at same time it was the most competitive lease I could find with favorable terms.

BTW – I also asked about BMW Owner’s Choice and Performance Loans and was informed this was not available in this region. Knowing finance products vary by region, there may be a chance that terms may vary by region also.

One could argue that you, in effect, gave up your nice discount by accepting the .00215 money factor. They sold you two things. You went in to buy a car, and you bought a car and a lease (two things).

You're probably paying $20 more per month than if they gave you the buy rate .00175. That's like adding $1600 to the purchase price and getting the buy rate.

Too bad they didn't just give you the buy rate at your agreed sales price. Dealers tick me off.

Sometimes, the only way to negotiate MF's is on the phone with a take it or leave it offer, on the last day of the month.

I was thinking about this and I'm wondering: how do their allocations work? For me it is either I lease the car or I don't. I'm not in a situation where I have to have a car so this is something I want at this point. Also, I want a specific car which means they will have to order it. If they order a specific car for me is that one less they would normally get? If it doesn't effect how many cars they can get I don't understand the big deal. You make some money or no money - I would think a business would want to make some money unless the amount they would make from me would take away from their potential inventory.
Is it so rare to want a Whit car with black leather, aluminum, sport, premium, comfort and nav? The dealership I went to didn't have any cars (335) on their lot with aluminum. I just don't want tan leather and wood.
According to the numbers I have, their profit at MSRP would be around $4400 (vehicle + acquisition fee inflation + additional MF). I was offered $1200 off which means they still make $3200 roughly, very roughly. I know my numbers could be off one way or the other, but this doesn't sit well with me.

I was thinking about this and I'm wondering: how do their allocations work? For me it is either I lease the car or I don't. I'm not in a situation where I have to have a car so this is something I want at this point. Also, I want a specific car which means they will have to order it. If they order a specific car for me is that one less they would normally get? If it doesn't effect how many cars they can get I don't understand the big deal. You make some money or no money - I would think a business would want to make some money unless the amount they would make from me would take away from their potential inventory.
Is it so rare to want a Whit car with black leather, aluminum, sport, premium, comfort and nav? The dealership I went to didn't have any cars (335) on their lot with aluminum. I just don't want tan leather and wood.
According to the numbers I have, their profit at MSRP would be around $4400 (vehicle + acquisition fee inflation + additional MF). I was offered $1200 off which means they still make $3200 roughly, very roughly. I know my numbers could be off one way or the other, but this doesn't sit well with me.

Unless you do European Delivery, your ordered car will come out of the dealer's allocation. The sedan is not in short supply, so you shouldn't be forced to pay through the nose to get one. On the other hand, because a lot of dealers I know of have several sedans on their lots, perhaps they are trying to push the cars they have in stock by not giving you much of a deal on an ordered car. I don't know how many dealers you've dealt with, but I would definately try a one or two more. I made contact with 4 dealers, and had serious contact/negotiations with 2, before ordering my coupe. I'm sure a lot of people do even more than that.

I got 1500 off msrp off a hard-to-get coupe and the lowest buy rate money factor of .00185. My pmts are about $560 per month with 2500 down on a car with sport, premium and comfort plus metalic paint (10K mile lease).

I'm in AZ. If anyone wants my salesperson's number, PM me.

My lease payment is just a bit higher ($583), but with a few more options (sport, premium, navigation, PDC, comfort, metalic, heated seats, rear sunshade and IPod), $2k down, .00185, base acquisition fee and $1,500 over invoice (no MACO), 10k miles per year. Now if the damn thing would just get here!! (I'm a bit frustrated with the long wait, if you can't tell.)

Let me throw this out there...

My friend just picked up about a little over a month ago a 525xi, with auto, premium package, and idrive [all the aptions I saw] for $519 a month, $0 down and 15K miles a year. He got a really good deal b/c the dealer made an error on the paperwork and they held them to it. Problem is, since the new 2008 5 series is coming soon, the 5 series are not that high in demand, so it's a little different from the 335 coupe.

Let me throw this out there...

My friend just picked up about a little over a month ago a 525xi, with auto, premium package, and idrive [all the aptions I saw] for $519 a month, $0 down and 15K miles a year. He got a really good deal b/c the dealer made an error on the paperwork and they held them to it. Problem is, since the new 2008 5 series is coming soon, the 5 series are not that high in demand, so it's a little different from the 335 coupe.

Why can't those types of errors ever happen to me?!

Unless you do European Delivery, your ordered car will come out of the dealer's allocation. The sedan is not in short supply, so you shouldn't be forced to pay through the nose to get one. On the other hand, because a lot of dealers I know of have several sedans on their lots, perhaps they are trying to push the cars they have in stock by not giving you much of a deal on an ordered car. I don't know how many dealers you've dealt with, but I would definately try a one or two more. I made contact with 4 dealers, and had serious contact/negotiations with 2, before ordering my coupe. I'm sure a lot of people do even more than that.

that is correct.

dealers cannot bump the rate .0004

dealers cannot bump the rate .0004

I have talked to a few salesmen who have told me they do this.

I have talked to a few salesmen who have told me they do this.
they can bump the rate .0002, not 4

they can bump the rate .0002, not 4

OK. They are bumping the rate to .00215. It doesn't matter to me how much they bump it. What bothers me is making money in various aspects (MF, Acquisition fees, price) of the deal.

I stopped by the Mercedes dealer yesterday because I wanted to see when they would have a new C-class. Stop right there! I'm not going to get one, I just wanted to look at one. Anyway, I asked the guy I spoke to about lease rates. He told me the current residual is "Fifty something" (percent) and the money factor was ".002 something." As we were walking to the car I told my car I wish I could talk to a dealer that was straight up.

Guess what this guy's job was for the dealership? Yes, he was the finance and leasing manager AND ACTED LIKE HE DIDN'T KNOW WHAT THE RATES WERE!!

I could buy or lease a car today. I just want to an honest deal from an honest salesman. I might not ever get that in this area.

OK. They are bumping the rate to .00215. It doesn't matter to me how much they bump it. What bothers me is making money in various aspects (MF, Acquisition fees, price) of the deal.

I stopped by the Mercedes dealer yesterday because I wanted to see when they would have a new C-class. Stop right there! I'm not going to get one, I just wanted to look at one. Anyway, I asked the guy I spoke to about lease rates. He told me the current residual is "Fifty something" (percent) and the money factor was ".002 something." As we were walking to the car I told my car I wish I could talk to a dealer that was straight up.

Guess what this guy's job was for the dealership? Yes, he was the finance and leasing manager AND ACTED LIKE HE DIDN'T KNOW WHAT THE RATES WERE!!

I could buy or lease a car today. I just want to an honest deal from an honest salesman. I might not ever get that in this area.
they have to charge those fees. Also, you won't get a bump in the money factor if you are a returning customer and/or you are wise.

Some advice for you guys:

Don't try to "beat up" the sales person. They really do want to help you get into a car, and at the same time make money. By selling you a car, they get a unit and some cash. They don't have much profit to work with, so don't expect an absolutely amazing deal. Yes there are bad sales people who try to screw people over, but that is only a very small percentage.

they have to charge those fees.

Yes they have to charge a Money Factor. Acquisition fee depends if you are a returning lessee or not and you can roll it into the monthly pmt which is why some folks don't realize they've paid one.

They DON'T have to bump these fees above the BMWFS set rates.

I cold called a dealer and was quoted BMWFS MF and Acquisiton fee with NO bump and they also knocked >$1200 off the MSRP. This was without me even asking.

And in response to your earlier post, they are ABSOLUTELY allowed to bump the MF by up to .0004 this has been verified by me (asked a CA) and by other dealer folks who post here regularly.

Regarding profit, there is at least $3k-$5k profit available to a dealer on a 3-series deal (through all profit channels, not just MSRP vs Invoice). So to say they don't have much profit to work with isn't accurate.

Yes they have to charge a Money Factor. Acquisition fee depends if you are a returning lessee or not and you can roll it into the monthly pmt which is why some folks don't realize they've paid one.

They DON'T have to bump these fees above the BMWFS set rates.

I cold called a dealer and was quoted BMWFS MF and Acquisiton fee with NO bump and they also knocked >$1200 off the MSRP. This was without me even asking.

And in response to your earlier post, they are ABSOLUTELY allowed to bump the MF by up to .0004 this has been verified by me (asked a CA) and by other dealer folks who post here regularly.

Regarding profit, there is at least $3k-$5k profit available to a dealer on a 3-series deal (through all profit channels, not just MSRP vs Invoice). So to say they don't have much profit to work with isn't accurate.

You took the words right out of my mouth. If I got the deal you got when you made a cold call, I would be cool with it. What I'm not cool with is bumping up the acquisition fees (I didn't say I shouldn't pay them, I just don't want them to raise it), the money factor and an unwillingness to come down on the price. I would even be cool with something close to Edmund's TMV, but without making money in those other places.

It is about principle to me. I think it is petty for a brand like BMW to nickel and dime a consumer when we are already paying a premium price. I guess the brand isn't to blame as much as the individual dealerships.