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2010 2011 BMW 5 Series Forum F10 BMW 5-Series (F10) Forums F10 Pricing, Ordering, and Tracking (and European Delivery) Multiple Security Deposits
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      01-16-2011, 12:38 PM   #1
ras912
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Multiple Security Deposits

Do you know how much each security deposit reduces the money factor? Is a security deposit equal to a monthly lease payment? Thank you.
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      01-16-2011, 06:54 PM   #2
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Each security deposit reduces money factor by 0.00007

- You can put maximum 7 MSDs thus maximum reduction in MF =0.00049

- A security deposit is calculated from monthly payment.

Example:

-If monthly payment is $100, then each security deposit will be $100.

-If payment is $51, then $100

-If $49, then $50.

- You can put a small amount of down payment to reduce MSD amount. Example:

if payment is $603, then may be $300 down payment will bring monthly payment down to $599. This will change security deposit from $650 to $600 ($50 stays in your pocket that way and a small down payment won't hurt)
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      01-16-2011, 11:09 PM   #3
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Well worth it to do 7 MSD's. My calculation shows that I'm saving about 11.7% annually (approximately $51 off a month on a $5,250 Deposit I put)

I'd highly recommend it!
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      01-17-2011, 08:01 PM   #4
ras912
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Is monthly payment with or without tax?

So that I can properly calculate the security deposit, is it the monthly payment inclusive or exclusive of tax? Thx
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      01-17-2011, 10:04 PM   #5
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Quote:
Originally Posted by ras912 View Post
So that I can properly calculate the security deposit, is it the monthly payment inclusive or exclusive of tax? Thx
It depends upon you and how taxes are paid in your state. Example, in NY taxes are paid upfront, so MSD is based just on monthly payment and the tax is not added, but, you can roll them into monthly payment (thus you will be paying interest on the sales tax amount and company will pay taxes upfront to the state).
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      01-18-2011, 02:03 PM   #6
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Quote:
Originally Posted by Dan335 View Post
I'd highly recommend it!
Ditto.
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      01-19-2011, 03:49 PM   #7
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bfv -- once again need your sage advice. Before I headed down the path of MSDs, dealer had quoted a mf of .00175 for a 535/36 mo/15k. They agreed to waive the security deposit and not penalize me on the MF. I am trying to close the deal and want to put down 7 MSDs. They are now showing the MF at .00126 (that's correct) but are showing amount due at delivery of the 7 MSDs PLUS the first security deposit (which was previously waived). I told them that's not correct. What is the prop way to calculate this. In my calculaiton, it's the .00126 MF with the 7 msd's due at delivery (plus registration, etc.) but not an additional security deposit. Thoughts? Thanks.
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      01-19-2011, 06:34 PM   #8
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Quote:
Originally Posted by ras912 View Post
bfv -- once again need your sage advice. Before I headed down the path of MSDs, dealer had quoted a mf of .00175 for a 535/36 mo/15k. They agreed to waive the security deposit and not penalize me on the MF. I am trying to close the deal and want to put down 7 MSDs. They are now showing the MF at .00126 (that's correct) but are showing amount due at delivery of the 7 MSDs PLUS the first security deposit (which was previously waived). I told them that's not correct. What is the prop way to calculate this. In my calculaiton, it's the .00126 MF with the 7 msd's due at delivery (plus registration, etc.) but not an additional security deposit. Thoughts? Thanks.
When you sign the lease, you should be depositing 7 MSDs and first month's payment (which is the same amount as one MSD). If they are asking to deposit total 8 MSDs, that is a no go. I would check with BMWFS or other dealers before proceeding.

Also, read your contract VERY carefully. They might use this additional MSD as down payment.
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