12-11-2015, 06:11 AM | #1 |
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Questions about ED Payments
Hi everyone. My family and I are considering doing ED next year and I have some questions that hopefully you can help me answer.
My car is not up for its lease end until October 2016 but I expect that BMW will have their 6 month early turn in promotion available sometime next year. The idea is that 6 months earlier we would sign paper work and then plan the trip for mid-June, early July. Here are the questions I have that are mostly about timing: 1. Has anyone used the early turn in promotion successfully with an ED and how does that work with the timing of the trip? Specifically I read elsewhere here that your current vehicle must be returned 2 months after you sign paper work. So for those that did this, were you left without a car while you awaited your car from Europe? 2. In terms of payments I read elsewhere that you must make your first payment 2 weeks prior to leaving for Europe and that your 2nd payment is free. But doing basic math it would seem you could be paying for 6 weeks of the lease without use of the car. For instance since the first payment is 2 weeks prior to leaving, you've effectively paid for 2 weeks of non-use. Then suppose you do 2 weeks in Europe. So so far the first payment has gone towards 2 weeks of use and 2 weeks of non use. Then of the next 8 weeks of wait, you get one payment waived and another payment you must make. So overall you are down the one month during the wait plus the 2 weeks from the first payment. Am I doing that math correctly? All help is appreciated as always! |
12-11-2015, 07:51 AM | #2 | |
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1. Yes, you will be left without a car if you do not have a 2nd vehicle. Think of it this way, you have to be fully settled up and done with the transaction before you head over. It is the same as if you would be taking delivery in the US but instead you are simply taking delivery in Munich. Your dealer might be able to work with you on your current lease to allow you to turn it in when your new car arrives in the US but you would need to work that out separate from the new transaction for the M. You would end up with two car leases to your name during that time (see next). 2. You do sacrifice some time with the car doing ED. Since you complete and fund the transaction before you head over you do lose a far amount of time. BMW does try to make up for this a little by making your 2nd lease payment for you but it does not fully cover the lost time. Another thing to consider is that the lease Money Factor for an ED is always higher than for US delivery. That is their way of making a little more from you too. One thing this long wait does afford you though is the associated reduction in mileage. You will not be putting miles on the car during your wait so you may be able to go with a lower mileage lease and save a bit. That is what I did (normally do 15k but did 12k this time). In the end, you do ED for the experience. It is not about saving money. There are always tradeoffs but I feel it was totally worth all of them to be able to pick your car up where it was born and drive it on the roads it was designed for.
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12-11-2015, 09:28 AM | #3 | ||
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I fully understand the money vs experience issue but didn't realize it was pretty much a cost penalty to do ED. With the ED money factor penalty, losing UDE rebates, the 1.5 month payment donation to BMW, ED actually costs more from the get go. Based on losing the $1,000 UDE and the penalty to MF, there is only a $25 per month savings on the lease payment in my theoretical case, which is only $900 over 36 months. Weigh that against the 1.5 months of lost payments and you're actually upside down by $300 or so based on your payment. That's all ok just never have seen it presented that way as people had mentioned that there was some (even if minor) financial benefit to put towards plane tickets or something else. The bigger issue for me will be not having my car. We have my wife's car but that just leaves her without one! |
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12-11-2015, 10:45 AM | #4 | |
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12-11-2015, 10:55 AM | #5 |
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I will be doing a straight up cash purchase of an F82 ED next spring (waiting on allocation now). For me the difference of NAD MSRP to my negotiated ED price - OTD is about $10K, not including any potential incentives on one end or the other.
I estimate the cost of my trip, not including vacation time taken can either be significant or break even depending on how I manage the cost factors that go into the vacation. IMHO, you only live once. This will be my first (of hopefully more) ED trips - I figure it will be a break even venture, but I'm doing it for the experience, and not for any potential cost savings. I believe in planning for the future and living life. You can't take it with you.
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12-11-2015, 11:21 AM | #6 | |
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The discount for ED is 5% so on a $70k M3 you're talking $3,500 minus any lost earnings on that $70k since you handed it over Day 1. Anything above that you would have received on a cash purchase even if you didn't do ED. Agree on everything else though - it seems to be a great way to enjoy your car. |
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12-11-2015, 01:04 PM | #7 |
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Very good points pointed out in this thread. If you are buying the car, there is a savings for ED. If you are leasing, not so much. Perhaps that is on purpose? The whole point, as far as I can tell, of BMW providing the discounted MSRP for ED cars is to help increase customer loyalty and attachment to the brand, and they might think that is more important for owners than lessees. Just speculating.
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12-11-2015, 01:30 PM | #8 |
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My negotiated price is $1K over ED Invoice.
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12-11-2015, 04:13 PM | #9 |
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I'm not sure if your response was to my comment but the ED discount is 5 percent below the invoice of a non-ED car which on a $70k example is $3,500 maximum savings prior to calculating any lost interest on the $70k by paying up front. You also lose the UDE discount which is $1,000 so overall the savings is $2,500 before lost interest.
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12-11-2015, 06:43 PM | #10 | ||
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There are NO requirement to terminate the prior lease in any finite time-frame related to the ED transaction. None whatsoever. Note, if you are trading a car in a part of the ED purchase, that would be an entirely different ballgame. I had a choice to terminate my 335i lease upto 6 moths early (semi-permanent rolling promotion), keep lease to term (term ended roughly the time of the ED), or extend it up to additional 6 months (on original lease terms) so that I would have a car while the ED vehicle was traveling back to the US. I chose to terminate early, since I had other cars in the stable, and was not enjoying the 335i anymore (the best car I ever had that I didn't like). Quote:
If you are leasing, not so much. a
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12-12-2015, 06:48 AM | #11 | |||
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Yeah what I'm seeing now is its a financial loss for a lease. My numbers are based on the 5% reduction already. With the loss of $1,000 UDE and MF penalty and losing 1.5 months of car use while paying during the lease duration, it's overall a negative. On a purchase you would gain the $3,500 minus UDE loss so $2,500 gain. The lack of car is the real killer. Would have to figure that out. |
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12-12-2015, 07:04 AM | #12 |
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Don't forget that the MF uptick is offset by the second payment not having to be made. That is a wash. You don't have to fund till a few days before the Germany trip, so in my wife's case we had the car 36 days after the first payment. If you are alright with the delay in acquisition then (assuming a high residual) it is a hard deal to beat.
We are paying Honda Accord money for a loaded 328 sport wagon. In my world that works. Also helps that it makes my wife happy as hell. |
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12-12-2015, 08:38 AM | #13 | |
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But regardless of the above $$, reading the ED stories is one of my favorite things about these forums. Being December, there's a slow down in these so I need my fix come spring. |
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12-12-2015, 10:10 AM | #14 | |
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Using the old 7% discount on an F82 (dealers do not have the Jan-16 ED invoice prices as of yet): 7% ED Invoice $56,000 ED MSRP $60,870 US MSRP $65,400 Using the figures above, my negotiated price is $56,000 plus $1,000 minus Incentives. Since I am purchasing in 2016, the actual invoice price will be higher.
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12-12-2015, 10:38 PM | #15 | |
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12-13-2015, 11:36 AM | #16 | ||
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This may be a good time to stop reading the internet posts, and call BMW NA/your leasing dealer to explore what options are available to you. I've also heard of some dealers offering extended loaner cars for folks waiting for ED cars to arrive. Just have to ask. a
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12-16-2015, 09:36 AM | #17 |
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Thank you everyone for jumping in with helpful responses.
I have a few more questions hoping you can opine on: 1. My lease is up late October. That means in order to take advantage of the 6 month pull ahead, if active, the earliest I could close on a deal would be end of April. Knowing that , when would you begin emailing or visiting dealerships to start negotiations? Is there any benefit to starting any earlier than mid-April? 2. With ED, approximately how long is the wait between striking a deal and being able to pick up in Munich? Of course I'd like to go as early into the kids summer break so that re-delivery is early enough that I could enjoy it back here in the Northeast before the colder weather arrives. 3. With ED, there are so many dates (striking a deal, first payment just before leaving for Munich, picking up in Munich, re-delivery in the US), it's unclear to me which dates are important to see if you qualify for any active promotions that may be going on. Does anyone know which of the dates is the one that governs any incentives? Thanks again everyone! |
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12-20-2015, 10:10 PM | #18 |
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Main thing when it comes to ordering is you need to do it 4-5 months in advance of when you want to go on your trip. The important part is your dealer needs an allocation for the car. Sometimes it might take them a month or two to get one. They'll build your car about 2-3 weeks before you take delivery in Munich.
Also a lot of incentives don't apply when you do ED. You'll have to read the fine print on those.
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12-21-2015, 03:31 AM | #19 | |
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12-21-2015, 07:40 AM | #20 | |
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The key is the allocation though. If you cannot find a dealer with one available you will either have to expand your scope (start looking in other states) or wait until a fresh batch of them is released.
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12-22-2015, 06:14 PM | #21 | ||
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You lease guys are somewhat at a disadvantage since you can only rate lock for 60 days or 90 days. The best lease deals will likely be in the spring towards the end of the model year closeout. The reason I ordered 4-5 months out from when I paid for the car was that I wanted to be first in line at my dealer and needed an August delivery date. 1-2k over invoice was a good enough deal for me.
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