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From digest.v7.n507 Tue Oct 28 20:49:57 1997
From: Ben Liaw <>
Date: Tue, 28 Oct 1997 21:50:05 +0000 ( )
Subject: BMWCC Additional Security Deposit Lease (fwd)

Got a very educated reponse to my question from a very knowledgeable source (whom many of you know)...Thanks...


Ben Liaw Applications Programmer / Webmaster Advanced Techology Corporation / / From: *** withheld to protect the innocent ***
To: Ben Liaw <>
Subject: BMWCC Additional Security Deposit Lease

Ben Liaw wrote:
>Just got back from Wide World of Cars in Spring Valley with two friends
>shopping for BMW's and I discovered something pretty cool that apparently
>only NY state BMW dealers can do...
>Apparently, there is a "multi payment" option where you can prepay 9
>payments in a lease, reducing the overall cost of the car (reducing the
>payment) and it saves you on percentage points, too. It is viewed as a
>"security" unlike a CAP reduction which if you total a leased car, you
>don't get back.
>Anyhow, my friend is looking at a '98 540ia with sport package with a
>lease payment of around $750.
>Is this advantage true or can other states do this, too?


The regulations in NY are strange as they apply to leasing. While each state has a contract specific to it, NY required a different wording for the security deposit, referring to it as the "last payment".

In all other states, BMWCC will accept up to 9 additional security deposits each deposit reduces the "money factor" (effective interest rate) by a fraction of a point. As an example, I had a customer interested in leasing a '98 M3 Sedan with $10,000 cash to put down. One dealer quoted him $438/month. I quoted him $523/month but saved him almost $2500. How? I applied $6000 of his $10,000 as extra security deposit resulting in a higher payment but he gets the $6000 back at lease termination. He pays $85/month more times 36 months (=$3060) but gets back his $6000 deposit for a savings of about $2900 or almost 15% return on his investment, tax free and completely legal.

Most dealers are too stupid to explain the program and the F&I manager must manually manipulate the computer to calculate a payment under the program. The dealer makes no more money, if they are honest, but has a few minutes more work to do. That's why you haven't heard of it. I've been doing these with our high-demographic population base in Charlottesville for over 15 years.

  • name withheld to protect the innocent ***
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