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      02-18-2013, 09:42 PM   #1
Surefoot
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Q on $1k rebate - applied against purchase price or drive off cash?

Quick question on the current $1,000 rebate offered by BMWFS - is the $1,000 used to reduce the purchase price of the car, or is it used as a credit/rebate against the money due at signing (first month's payment + Acquisition Fee + doc fee)?

Thanks!
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      02-18-2013, 09:55 PM   #2
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I received a quote today and the dealer used the $1K rebate to reduce my money due at signing.
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      02-18-2013, 10:10 PM   #3
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Quote:
Originally Posted by e36M61995 View Post
I received a quote today and the dealer used the $1K rebate to reduce my money due at signing.
Thanks - this is what I'd like to happen as well. Anyone else getting the same deal?
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      02-18-2013, 10:12 PM   #4
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Incentives are usually applied as a rebate against money due at signing.
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      02-18-2013, 10:13 PM   #5
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You can always make a quick call to the dealer and ask.
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      02-19-2013, 12:22 AM   #6
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Usually the incentives are used to reduce the intitial capitalized cost of the vehicle as others have mentioned.
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      02-19-2013, 12:29 AM   #7
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Originally Posted by azzurro View Post
Usually the incentives are used to reduce the intitial capitalized cost of the vehicle as others have mentioned.
Actually, the two others in this thread said that the rebate money is used as a credit against the amount due at signing. Applying the rebate to reduce the initial capitalized cost means that it is NOT applied to reduce the amount due at signing. The problem with applying the rebate to reduce the initial capitalized cost is that you then only get the benefit of the percentage of the rebate that corresponds to the depreciation percentage for your lease (i.e., February's residual on a 36 month / 12k mpy lease is 63%, meaning you pay the 37% depreciation over the life of the lease).


This is why I'm focused on this and want to make sure the dealer applies the $1,000 rebate in the proper place.
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      02-19-2013, 01:55 AM   #8
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What I'm wondering is whether there's a clause in the BMWFS finance agreement that states how long the contract must be valid for the $1000 to apply. 3.9% for tier-1 isn't exactly fantastic. Could one re-fi immediately at a lower rate with a different bank while still reaping the benefits of the cash incentive?
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      02-19-2013, 02:41 AM   #9
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Quote:
Originally Posted by Surefoot View Post
Actually, the two others in this thread said that the rebate money is used as a credit against the amount due at signing. Applying the rebate to reduce the initial capitalized cost means that it is NOT applied to reduce the amount due at signing. The problem with applying the rebate to reduce the initial capitalized cost is that you then only get the benefit of the percentage of the rebate that corresponds to the depreciation percentage for your lease (i.e., February's residual on a 36 month / 12k mpy lease is 63%, meaning you pay the 37% depreciation over the life of the lease).


This is why I'm focused on this and want to make sure the dealer applies the $1,000 rebate in the proper place.
On an 2013 F30 the Feb 36 month 12K mpy lease residual is 62%. 10k mpy is 63%
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      02-19-2013, 02:47 AM   #10
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Quote:
Originally Posted by Frzdrdhppy View Post
On an 2013 F30 the Feb 36 month 12K mpy lease residual is 62%. 10k mpy is 63%
Right - typo or I confused the two residuals when typing, but my question and the issue remain the same.
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      02-19-2013, 10:24 AM   #11
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Quote:
Originally Posted by Frzdrdhppy View Post
On an 2013 F30 the Feb 36 month 12K mpy lease residual is 62%. 10k mpy is 63%
Right - typo or I confused the two residuals when typing, but my question and the issue remain the same.
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      02-19-2013, 01:15 PM   #12
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I believe it's up to you, put as cap cost reduction or due at signing. But I suppose it could vary from one promotion to another. What rebate are you being offered?
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      02-19-2013, 07:06 PM   #13
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Originally Posted by chrisny View Post
I believe it's up to you, put as cap cost reduction or due at signing. But I suppose it could vary from one promotion to another. What rebate are you being offered?
It's the current $1,000 rebate being offered by BMWFS
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      02-19-2013, 10:09 PM   #14
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Check with your CA, but I believe you can apply it either way.
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      02-19-2013, 10:15 PM   #15
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Quote:
Originally Posted by mland550 View Post
What I'm wondering is whether there's a clause in the BMWFS finance agreement that states how long the contract must be valid for the $1000 to apply. 3.9% for tier-1 isn't exactly fantastic. Could one re-fi immediately at a lower rate with a different bank while still reaping the benefits of the cash incentive?
The dealer will usually makes you sign something indicating you'll make 3/6/? payments with BMWFS before you refi with someplace else. The dealer will get charged back some of that money if you don't keep the loan with FS for a certain period.
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      02-27-2013, 06:36 PM   #16
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Quote:
Originally Posted by Surefoot View Post
Actually, the two others in this thread said that the rebate money is used as a credit against the amount due at signing. Applying the rebate to reduce the initial capitalized cost means that it is NOT applied to reduce the amount due at signing. The problem with applying the rebate to reduce the initial capitalized cost is that you then only get the benefit of the percentage of the rebate that corresponds to the depreciation percentage for your lease (i.e., February's residual on a 36 month / 12k mpy lease is 63%, meaning you pay the 37% depreciation over the life of the lease).


This is why I'm focused on this and want to make sure the dealer applies the $1,000 rebate in the proper place.
Not necessarily - When it is applied as a cap cost reduction it simply reduces the monthly payment/amount financed. You do, in fact get all of that money as a credit just over the course of the lease and not up front. The residual is based off MSRP and does not change. Advantage of this is lower financed amount so you save a bit on interest - disadvantage is more down up front.
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      02-27-2013, 10:27 PM   #17
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Quote:
Originally Posted by lax555 View Post
Not necessarily - When it is applied as a cap cost reduction it simply reduces the monthly payment/amount financed. You do, in fact get all of that money as a credit just over the course of the lease and not up front. The residual is based off MSRP and does not change. Advantage of this is lower financed amount so you save a bit on interest - disadvantage is more down up front.
+1 These credits are like cash in your hand, apply it wherever you want, doesn't change residual, and you get the full credit no matter how you apply it. Applying it as cap cost reduction is no different what-so-ever than you taking it out of your own pocket and putting extra money down to reduce the payment, 0 impact on residual, and you certainly don't get $630 savings for your $1000 down payment (cap cost reduction is just that, down payment). Minor difference being the interest saved if you put it as cap cost reduction, as lax555 said.
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      03-01-2013, 06:53 AM   #18
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Quote:
Originally Posted by Surefoot

Actually, the two others in this thread said that the rebate money is used as a credit against the amount due at signing. Applying the rebate to reduce the initial capitalized cost means that it is NOT applied to reduce the amount due at signing. The problem with applying the rebate to reduce the initial capitalized cost is that you then only get the benefit of the percentage of the rebate that corresponds to the depreciation percentage for your lease (i.e., February's residual on a 36 month / 12k mpy lease is 63%, meaning you pay the 37% depreciation over the life of the lease).


This is why I'm focused on this and want to make sure the dealer applies the $1,000 rebate in the proper place.
$1k credit can be used to cover drive-off fees or applied as Cap Cost Reduction (not subtracted from selling price directly). But either way your math is wrong. Cap cost reduction or dealer discount both go directly into the payment. Residual is based on MSRP and has no relation to the amount if discount or cash down you have.

Simple scenario:

$50k selling price and $25k residual- your monthly depreciation is the difference ($25k) divided by 36 months.

Now use your $1k credit as cap cost reduction. Residual stays $25k. So you now have to pay $24k depreciation over 36 months. You got the full benefit of the $1k.
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