[Pete7_li]

Hi all - new member here and have been following this forum for a while; thinking about ordering an M40i (US Mid-Atlantic) and have a couple questions and see if y'all have any suggestions:

1. Do most folks lease or purchase? I'm leaning towards leasing. Coming from a Lexus, and never leased or had a German car before. Maintenance costs outside of Ultimate Care and repair costs out of warranty makes me a little skittish about purchasing one.

2. For folks who have ordered, what's the appropriate paperwork to sign? Never done this before either, and hesitant to sign a Purchase Agreement until the car is here just in case there are issues, etc. What does this process generally entail (e.g., refundable deposit, order form)?

3. I'm thinking about going with the 20-inch wheels, is it possible to order with all-season tires? BMW's website only shows 20s with performance run-flats; hate to have to buy new tires/wheels immediately after the car gets here in the middle of winter. Also having to get rid of winter wheels/tires after 3 years if I lease may be kind of a hassle.

Really appreciate any suggestions y'all might have on leasing, ordering, and advice about the process and the M40i in general.

Thanks so much in advance!!

[jjrandorin]

Originally Posted by Pete7_li

Hi all - new member here and have been following this forum for a while; thinking about ordering an M40i (US Mid-Atlantic) and have a couple questions and see if y'all have any suggestions:

1. Do most folks lease or purchase? I'm leaning towards leasing. Coming from a Lexus, and never leased or had a German car before. Maintenance costs outside of Ultimate Care and repair costs out of warranty makes me a little skittish about purchasing one.

2. For folks who have ordered, what's the appropriate paperwork to sign? Never done this before either, and hesitant to sign a Purchase Agreement until the car is here just in case there are issues, etc. What does this process generally entail (e.g., refundable deposit, order form)?

3. I'm thinking about going with the 20-inch wheels, is it possible to order with all-season tires? BMW's website only shows 20s with performance run-flats; hate to have to buy new tires/wheels immediately after the car gets here in the middle of winter. Also having to get rid of winter wheels/tires after 3 years if I lease may be kind of a hassle.

Really appreciate any suggestions y'all might have on leasing, ordering, and advice about the process and the M40i in general.

Thanks so much in advance!!

Hi, Welcome!

1. Lease vs purchase is a hotly debated topic. This totally depends on you. Are you a person who tends to keep cars and drive them 8-10 years? Are you a person that tends to get rid of their cars after 3=5 years

If you have never leased before, you should not consider it until you have read the leasing 101 primer here on bimmerpost (or one on bimmerfest ). You need to know what residual value means, what a money factor is, and the moving parts of a lease before you consider it. You negotiate on a lease the same way you do on a purchase (on total price of the car NOT The monthly payment).

I have 2 leased BMWs, I am not anti leasing. When you lease, you are renting the car for 3 years, and in general need to return the car in the same condition as you got it... like renting an apartment or a house.

Also, like renting an apartment or a house, if you make "improvements" the owner (in this case BMW FS) likes, they dont HAVE to make you remove them. If the owner of your apartment likes the ceiling fan you put in, they dont necessarily have to make you take it out.. but they can.

If the owner of your leased BMW likes the window tint you put in, they dont have to make you remove it, but if they dont (maybe its a poor job that is bubbled, or maybe tint doesnt sell where the dealer is ), they can.

2. What paperwork is required is up to the dealer. There is no down payment, or deposit REQUIRED by bmw fs or BMW usa, but you are not buying from them.. you are buying from a dealer. The dealer can require a deposit or not. This generally depends on what your build is, and how committed they think you are to it. If you have a fairly standard build they know they can sell if you back out, they might not require a deposit. If you get a fully loaded car they dont think they can sell, Or options they dont think people want to pay for (or DONT get options they think people want) they can require a deposit.

If you try to order an X3 stripper model with no options, expect to pay a deposit. If you order a X3 30i with every option ticked, expect to pay a deposit (if you dont have a pre existing relationship with that dealer, which you dont).

You are not PURCHASING it until it comes in. Whether the deposit is refundable or not depends on the laws in your state. In CA all deposits are refundable. I have a almost fully loaded X3 m40i on order (msrp 67,390), and no deposit. I DID put in a credit app to show I am ready (and able) to purchase the car when it comes in.

3. Check the order guides. I dont know what tires comes with the all seasons. If you order a BMW with all season tires, the top speed is limited to 130 MPH. If you order with Performance run flats, the top speed of the car is 155. Not that you need or will go that fast, but many dont like the idea of the top speed being limited even if they wont go that fast. Especially since you can always change tires on a car with the increased top speed limiter, but you cant increase the top speed limit on a car that did not have it in the first place.

I dont live in a place where I have to worry about winter tires, but from all the reading on the topic I have done online, its better to have winter tires and summer tires than all seasons year round. Many people buy a winter set and swap twice a year. There is usually a market for tires on lease turn in.

I have summer tires year round where I live, and am just careful the few times it rains during the winter (which is the only real "weather" we get.

[frank23]

I'm leasing, but with the demise of MSD (multiple security deposits, would reduce the cost of the lease) from a financial standpoint there isn't any advantage any more over buying. It's more about if you want to drive a new vehicle every 3 years, if you plan to keep it for much longer buying probably makes more sense.

About the 20" tires - you can't order all-season tires. Assuming you would need winter tires (don't know the usual weather conditions) it's probably best to have a set of winter wheels and tires. I've replaced the tires with all-season ones, partially for very occasional winter/snow driving, and because the performance tires will wear out way before the lease is over, and replacing those will be rather costly.

[dan321]

We found the one we wanted on the lot (in Florida). There were not a lot of M40i's to choose from on the lot and except for the one we purchased most didn't have much in the way of options.

This is our first BMW and we understand that finding color/options you want on the lot isn't very likely, so we were pretty lucky. This dealer spec' care had just arrived the previous day.

We purchased. Leasing terms are just not as good as the used to be, IMHO. The rise in interest rates in general, which doesn't affect you directly on a lease but does affect the dealer/BMW, is raising the payment and raising of value at the end of of lease on all car leases which have made them less attractive.

We made our decision knowing that we would probably trade in in less than 3 years.

We traded in plus cash and there was a ton of paperwork involved. But you will have do the numbers for yourself on the lease/loan/cash decision.

I know dealers vary from one to another but the one we used couldn't have made things easier. We walked in without our checkbook and the dealer said "drive it away" will come out to your house and pick up the check tomorrow.

If you order a car to build you will have put down some earnest money for sure. If you end up changing you mind for some reason it probably depends on the dealer as to whether or not you get the earnest money back. Some thing to keep in mind because depending on what you order it could take month for it to arrive.

[Pete7_li]

Originally Posted by jjrandorin

Hi, Welcome!

1. Lease vs purchase is a hotly debated topic. This totally depends on you. Are you a person who tends to keep cars and drive them 8-10 years? Are you a person that tends to get rid of their cars after 3=5 years

If you have never leased before, you should not consider it until you have read the leasing 101 primer here on bimmerpost (or one on bimmerfest ). You need to know what residual value means, what a money factor is, and the moving parts of a lease before you consider it. You negotiate on a lease the same way you do on a purchase (on total price of the car NOT The monthly payment).

I have 2 leased BMWs, I am not anti leasing. When you lease, you are renting the car for 3 years, and in general need to return the car in the same condition as you got it... like renting an apartment or a house.

Also, like renting an apartment or a house, if you make "improvements" the owner (in this case BMW FS) likes, they dont HAVE to make you remove them. If the owner of your apartment likes the ceiling fan you put in, they dont necessarily have to make you take it out.. but they can.

If the owner of your leased BMW likes the window tint you put in, they dont have to make you remove it, but if they dont (maybe its a poor job that is bubbled, or maybe tint doesnt sell where the dealer is ), they can.

2. What paperwork is required is up to the dealer. There is no down payment, or deposit REQUIRED by bmw fs or BMW usa, but you are not buying from them.. you are buying from a dealer. The dealer can require a deposit or not. This generally depends on what your build is, and how committed they think you are to it. If you have a fairly standard build they know they can sell if you back out, they might not require a deposit. If you get a fully loaded car they dont think they can sell, Or options they dont think people want to pay for (or DONT get options they think people want) they can require a deposit.

If you try to order an X3 stripper model with no options, expect to pay a deposit. If you order a X3 30i with every option ticked, expect to pay a deposit (if you dont have a pre existing relationship with that dealer, which you dont).

You are not PURCHASING it until it comes in. Whether the deposit is refundable or not depends on the laws in your state. In CA all deposits are refundable. I have a almost fully loaded X3 m40i on order (msrp 67,390), and no deposit. I DID put in a credit app to show I am ready (and able) to purchase the car when it comes in.

3. Check the order guides. I dont know what tires comes with the all seasons. If you order a BMW with all season tires, the top speed is limited to 130 MPH. If you order with Performance run flats, the top speed of the car is 155. Not that you need or will go that fast, but many dont like the idea of the top speed being limited even if they wont go that fast. Especially since you can always change tires on a car with the increased top speed limiter, but you cant increase the top speed limit on a car that did not have it in the first place.

I dont live in a place where I have to worry about winter tires, but from all the reading on the topic I have done online, its better to have winter tires and summer tires than all seasons year round. Many people buy a winter set and swap twice a year. There is usually a market for tires on lease turn in.

I have summer tires year round where I live, and am just careful the few times it rains during the winter (which is the only real "weather" we get.

Thanks so much! I've been "studying" leasing for a few months and have been running calculators and following this forum and Edmunds on residual/MF/incentives. In addition to long term maintenance and repair costs considerations, I'm leaning towards leasing because I tend to get a new car every 3-4 years; have always purchased in the past as I used to drive a lot, but not so much anymore with new work arrangements. The only "priority 1" option I'm considering is the M-differential which tends to be rare in dealer inventory, but otherwise very similar to the fully equipped ones on dealer lots. A separate set of winter tires also seems to be the way to go.

Originally Posted by frank23

I'm leasing, but with the demise of MSD (multiple security deposits, would reduce the cost of the lease) from a financial standpoint there isn't any advantage any more over buying. It's more about if you want to drive a new vehicle every 3 years, if you plan to keep it for much longer buying probably makes more sense.

About the 20" tires - you can't order all-season tires. Assuming you would need winter tires (don't know the usual weather conditions) it's probably best to have a set of winter wheels and tires. I've replaced the tires with all-season ones, partially for very occasional winter/snow driving, and because the performance tires will wear out way before the lease is over, and replacing those will be rather costly.

Thank you! I've definitely noticed that dealers tend to be more aggressive with the sales price for purchase rather than leasing. I drive an average amount (10-12k a year) these days and get the new car itch every few years. The Mid-Atlantic area tends to be a hit or miss with winter weather and I've always gotten away with all-seasons. May do as you have to replace the stock 20s with all-seasons or get a separate set of winters tires.

Originally Posted by dan321

We found the one we wanted on the lot (in Florida). There were not a lot of M40i's to choose from on the lot and except for the one we purchased most didn't have much in the way of options.

This is our first BMW and we understand that finding color/options you want on the lot isn't very likely, so we were pretty lucky. This dealer spec' care had just arrived the previous day.

We purchased. Leasing terms are just not as good as the used to be, IMHO. The rise in interest rates in general, which doesn't affect you directly on a lease but does affect the dealer/BMW, is raising the payment and raising of value at the end of of lease on all car leases which have made them less attractive.

We made our decision knowing that we would probably trade in in less than 3 years.

We traded in plus cash and there was a ton of paperwork involved. But you will have do the numbers for yourself on the lease/loan/cash decision.

I know dealers vary from one to another but the one we used couldn't have made things easier. We walked in without our checkbook and the dealer said "drive it away" will come out to your house and pick up the check tomorrow.

If you order a car to build you will have put down some earnest money for sure. If you end up changing you mind for some reason it probably depends on the dealer as to whether or not you get the earnest money back. Some thing to keep in mind because depending on what you order it could take month for it to arrive.

Thank you! Definitely agree with you on leasing vs. purchasing. The latter seems to have more aggressive pricing among local dealers. Maybe it's a BMW/German car thing...the Lexus dealer offered the same sales prices for either when I first started looking at SUVs. If I can find one with the right options combo, it's definitely easier to get one off the lot instead of waiting.

[BobsM3Coupe]

Originally Posted by dan321

If you order a car to build you will have put down some earnest money for sure. If you end up changing you mind for some reason it probably depends on the dealer as to whether or not you get the earnest money back. Some thing to keep in mind because depending on what you order it could take month for it to arrive.

The dealer (first time I ever used them) that I special ordered my X3 from didn't even ask for a deposit to place the order. In fact, we did everything by email. Every dealer is different.

[JSY]

I thought I read somewhere that about 80%-85% of new BMWs are leased.

[jjrandorin]

Originally Posted by JSY

I thought I read somewhere that about 80%-85% of new BMWs are leased.

The last time I saw a number somewhere, it was more like 56-57% were leased... but that was a couple years ago. I would imagine its a bit less right now, what with the higher interest rates, less lease incentives, etc.

[gblansten]

1. Just ordered and will finance but plan to pay off after four payments. I just couldn’t pass up the finance incentives which reduced the purchase price.

2. I was asked to place a non-refundable $1500 deposit down. No problem.

[Bob in IL]

Originally Posted by gblansten

1. Just ordered and will finance but plan to pay off after four payments. I just couldn’t pass up the finance incentives which reduced the purchase price.

2. I was asked to place a non-refundable $1500 deposit down. No problem.

Just an FYI, I financed our 2019 G01 due to the $2k financing incentive. Both the sales and finance guys said it could be paid off anytime after 4 payments. I called BMW Financial Services (twice actually) and they said it could be paid off at anytime so I paid it off after the 1st payment.

[arciga18]

Originally Posted by Bob in IL

Just an FYI, I financed our 2019 G01 due to the $2k financing incentive. Both the sales and finance guys said it could be paid off anytime after 4 payments. I called BMW Financial Services (twice actually) and they said it could be paid off at anytime so I paid it off after the 1st payment.

Both are true. You can pay them off whenever you want.

The dealer wanted you to make 4 payments so they got their kickback from bmwfs.

I don't have that kind of liquidity so I can't pay off the loan.


You should have just financed the minimum (7,500) and made the 4 payments .

[Yobyot]

Originally Posted by Bob in IL

Just an FYI, I financed our 2019 G01 due to the $2k financing incentive. Both the sales and finance guys said it could be paid off anytime after 4 payments. I called BMW Financial Services (twice actually) and they said it could be paid off at anytime so I paid it off after the 1st payment.

I paid my two loans off, for an MY18 30i and an MY19 M40i, the day that BMW FS booked the loans. It can take up to 10 business days from delivery for BMW FS to activate the loan in their system. I think I paid a total of $40 in interest between the two loans for something like $30K in principal between the two cars.

BTW, in Massachusetts prepayment penalties are illegal. So, no matter what the dealer tells you (or implores you to do), you can take the financing incentive and pay off the loan as quickly as you wish.

Some other points:
=> BMW FS will release the lien in a letter and send it to you along with a released title (if applicable) about 10 days after they get it from your state's RMV. Massachusetts is paper-based for titles, so this is an example of the slowest process.
=> In Mass, you have to send the letter from BMW FS and the released title to RMV to get a duplicate title without the lien. That costs $25.

So, if you are a cash buyer BMW FS financing incentives are money on the hood you don't want to walk away from. And the costs of doing so are minimal -- though you do have to stay on top of the paperwork.

[jjrandorin]

Originally Posted by Yobyot

I paid my two loans off, for an MY18 30i and an MY19 M40i, the day that BMW FS booked the loans. It can take up to 10 business days from delivery for BMW FS to activate the loan in their system. I think I paid a total of $40 in interest between the two loans for something like $30K in principal between the two cars.

BTW, in Massachusetts prepayment penalties are illegal. So, no matter what the dealer tells you (or implores you to do), you can take the financing incentive and pay off the loan as quickly as you wish.

Some other points:
=> BMW FS will release the lien in a letter and send it to you along with a released title (if applicable) about 10 days after they get it from your state's RMV. Massachusetts is paper-based for titles, so this is an example of the slowest process.
=> In Mass, you have to send the letter from BMW FS and the released title to RMV to get a duplicate title without the lien. That costs $25.

So, if you are a cash buyer BMW FS financing incentives are money on the hood you don't want to walk away from. And the costs of doing so are minimal -- though you do have to stay on top of the paperwork.

The dealer gets charged back whatever incentive that you received for financing. YOU dont, the dealer does. So, if (for example) there was a 2k financing incentive for financing that was included in your deal, when you paid it off, your dealer got charged back that cost.

Said another way, instead of BMW FS paying for that financing incentive as they would normally do, your dealer got charged back for it, when they were not expecting to.

Some dont care, because they dont care what happens to the dealer.. but the above is what actually happens when you do that.

The reason the dealer asks / implores / that it not be paid off until the 4th payment is because BMW FS will pay them the incentive sometime between the 2nd and 4th payment... so if you pay it off after that they wont get charged back.

The dealers definitely remember (management does anyway) who does that, because it hits their bottom line. It may not mean anything, unless one really needs that dealership to go to bat for them on something that they dont "have" to do.

Before you think I am calling you out on this, I absolutely am not. From another post you made, I followed a link to your blog (which was very cool btw ). From that, it appears to me that you are a very helpful person, and may not have intended to charge the dealer back for your incentives, so I am just passing on information.

If you knew that already, I apologize for bringing it back up.

[Yobyot]

Originally Posted by jjrandorin

The dealer gets charged back whatever incentive that you received for financing. YOU dont, the dealer does. So, if (for example) there was a 2k financing incentive for financing that was included in your deal, when you paid it off, your dealer got charged back that cost.

Said another way, instead of BMW FS paying for that financing incentive as they would normally do, your dealer got charged back for it, when they were not expecting to.

Some dont care, because they dont care what happens to the dealer.. but the above is what actually happens when you do that.

The reason the dealer asks / implores / that it not be paid off until the 4th payment is because BMW FS will pay them the incentive sometime between the 2nd and 4th payment... so if you pay it off after that they wont get charged back.

The dealers definitely remember (management does anyway) who does that, because it hits their bottom line. It may not mean anything, unless one really needs that dealership to go to bat for them on something that they dont "have" to do.

Before you think I am calling you out on this, I absolutely am not. From another post you made, I followed a link to your blog (which was very cool btw ). From that, it appears to me that you are a very helpful person, and may not have intended to charge the dealer back for your incentives, so I am just passing on information.

If you knew that already, I apologize for bringing it back up.

Sorry, I don't buy any of this. Do you own a dealership or have seen the agreement between BMW FS and a dealer? Can you upload something that's definitive evidence of what you assert? How do you know what the financial arrangement is between BMW FS and a specific dealer? In short, I think this is hearsay, possibly straight from the mouth of dealer sales people -- people well known for, ahem, exaggeration. And because it's a trope that's repeated often in fora, people believe it.

I don't accept this as accurate because businesses don't do irrational things. In my case a) the dealers knew what I was going to do and b) they took the deals. IOW, they got something they wanted out of the deals: quota achievement, loan origination targets, profit on the deal...whatever. I don't know or care what the dealer's calculation is or was. That's their business. My objective is to minimize my cost, taking advantage of all possible ways to do so.

It's perfectly normal and ethical for parties in a deal to do anything legal to maximize their side of the deal. I'd recommend, without reservation, taking BMW FS incentives and paying the loan off immediately to any cash buyer.

[jjrandorin]

Originally Posted by Yobyot

Sorry, I don't buy any of this. Do you own a dealership or have seen the agreement between BMW FS and a dealer? Can you upload something that's definitive evidence of what you assert? How do you know what the financial arrangement is between BMW FS and a specific dealer? In short, I think this is hearsay, possibly straight from the mouth of dealer sales people -- people well known for, ahem, exaggeration. And because it's a trope that's repeated often in fora, people believe it.

I don't accept this as accurate because businesses don't do irrational things. In my case a) the dealers knew what I was going to do and b) they took the deals. IOW, they got something they wanted out of the deals: quota achievement, loan origination targets, profit on the deal...whatever. I don't know or care what the dealer's calculation is or was. That's their business. My objective is to minimize my cost, taking advantage of all possible ways to do so.

It's perfectly normal and ethical for parties in a deal to do anything legal to maximize their side of the deal. I'd recommend, without reservation, taking BMW FS incentives and paying the loan off immediately to any cash buyer.

No, I am not a dealer rep, although I have very good contacts in Management at a couple of dealers.

No, I can not upload any documents that specifically point this out, but yes I can tell you that I am certain it works this way. Not sure why you would not believe it. There is no reason for a GM or SM to lie about something like this. Why do you think they would care if someone pays off a car in 3-4 months vs 1 month otherwise?

Im not saying they didnt get something they wanted out of the deals. Car dealers only make car deals that make sense for them. Maybe they needed the sales of your cars to hit their holdback numbers? I dont know. I DO know that they did not get your incentive money.

People (not you, please dont take it that way) say they are going to do things all the time and dont do it for one reason or another. Most of the time, when a person is "convinced" for some reason or another to take financing when they were going to pay cash, the dealer will "encourage"them to at least wait for 4 months to pay it off. If the salesperson doesnt, they are either green and dont know (because this is something a Sales Manager deals with, not salesperson), or were told to "get the sale" because the SM has determined that they will "deal with that later.

One thing we agree on is that the dealership will only do things that make sense for them, so if they take a "losing" deal its because its in their best interest to do so.

Where we disagree is that this is "heresay" because I have talked to several (more than a couple) dealership management personnel about this topic, and feel comfortable they would not lie to me about it.

I know I dont have as much of a "presence" here as I do on Bimmerfest, but I have a pretty decent knowledge about how BMW new car purchases work, and decent, in dealership management contacts.

As far as the ethics of it, I dont believe I addressed that . I was explaining the WHY of why a dealer asks people to wait the 4 months before they pay it off. That "why" is so that they capture the incentive from BMW FS.

[arciga18]

Originally Posted by jjrandorin

No, I am not a dealer rep, although I have very good contacts in Management at a couple of dealers.

No, I can not upload any documents that specifically point this out, but yes I can tell you that I am certain it works this way. Not sure why you would not believe it. There is no reason for a GM or SM to lie about something like this. Why do you think they would care if someone pays off a car in 3-4 months vs 1 month otherwise?

Im not saying they didnt get something they wanted out of the deals. Car dealers only make car deals that make sense for them. Maybe they needed the sales of your cars to hit their holdback numbers? I dont know. I DO know that they did not get your incentive money.

People (not you, please dont take it that way) say they are going to do things all the time and dont do it for one reason or another. Most of the time, when a person is "convinced" for some reason or another to take financing when they were going to pay cash, the dealer will "encourage"them to at least wait for 4 months to pay it off. If the salesperson doesnt, they are either green and dont know (because this is something a Sales Manager deals with, not salesperson), or were told to "get the sale" because the SM has determined that they will "deal with that later.

One thing we agree on is that the dealership will only do things that make sense for them, so if they take a "losing" deal its because its in their best interest to do so.

Where we disagree is that this is "heresay" because I have talked to several (more than a couple) dealership management personnel about this topic, and feel comfortable they would not lie to me about it.

I know I dont have as much of a "presence" here as I do on Bimmerfest, but I have a pretty decent knowledge about how BMW new car purchases work, and decent, in dealership management contacts.

As far as the ethics of it, I dont believe I addressed that . I was explaining the WHY of why a dealer asks people to wait the 4 months before they pay it off. That "why" is so that they capture the incentive from BMW FS.

If the late Ninong were here or if this was bimmerfest he would support your comments.

Cheers.

[Tchgrif]

when I sat down with my dealers finance guy back in july he was thorough in explaining how the 2k finance thru BMW FS worked and he also said I could pay it off after four payments and still keep his dealership in the loop on the 2k deal. I doubt I would have heard the same schpeel if it weren't true.

[Yobyot]

Originally Posted by Tchgrif

... I doubt I would have heard the same schpeel if it weren't true.

You call it a spiel and think repetition makes it true?

This isn't directed at you, Tchgrif, but I sure do love the way dealer people operate. Or, make that "I sure am repulsed".