Calculating Residual Value

[Zipforia]

I'm trying to figure out the residual of my X5. Do I include the $925 Destination and Handling fees or not? I've heard that BMWFS includes these fees with the MSRP to calculate the residual value....but I just wanted to be sure.

Z.

[chrisny]

Yes. It's part of the total MSRP

[someguy]

Originally Posted by chrisny

Yes. It's part of the total MSRP

good thread.

so if I negotiated the price of my vehicle to $70K (including $925 destination and handling fee) and there is $5K tax and the residual is 60%, then will the purchase price at the end of the lease be 60% of 70K or 60% of 75K?

[bigblue99]

Originally Posted by someguy

good thread.

so if I negotiated the price of my vehicle to $70K (including $925 destination and handling fee) and there is $5K tax and the residual is 60%, then will the purchase price at the end of the lease be 60% of 70K or 60% of 75K?

Neither. 60% of MSRP. Not off the negotiated price or negotiated price plus fees. This also is why executive demos are sweet deals if you can live with few thousand miles on the odo when you pick it up. You get the residual off of full msrp when new with the money factor for new cars and you can take off $ from the selling price (net capitalized cost).

[Zipforia]

Thanks, guys. One more question....aside from Destination and Handling, any other fees that are included with the MSRP prior to calculating the residual value? For example, MACO and Training fees?

Z.

[chrisny]

I could be wrong but I don't think those fees get added to MSRP. I know they're considered part of the invoice price, but pretty sure not a factor in the residual (or already in the margin I guess).

[Zipforia]

Originally Posted by chrisny

I could be wrong but I don't think those fees get added to MSRP. I know they're considered part of the invoice price, but pretty sure not a factor in the residual (or already in the margin I guess).

I'll give BMWFS a call Monday and find out and let you know. Hopefully I'll speak to a competent person and get the right answer.

Z.

[SteveMD]

Originally Posted by Zipforia

Thanks, guys. One more question....aside from Destination and Handling, any other fees that are included with the MSRP prior to calculating the residual value? For example, MACO and Training fees?

Z.

No. MACO is added to the invoice price, not MSRP. MSRP is just that, MSRP.

Don't forget your lease acquisition fee. I haven't leased a BWM for a long time but it used to be $725 which could be marked up to $925 by the dealer.

You can't get out of it. You can roll it in or just pay it up front.

[Zipforia]

Originally Posted by SteveMD

No. MACO is added to the invoice price, not MSRP. MSRP is just that, MSRP.

Don't forget your lease acquisition fee. I haven't leased a BWM for a long time but it used to be $725 which could be marked up to $925 by the dealer.

You can't get out of it. You can roll it in or just pay it up front.

I see. So, residual value is ONLY based on MSRP and Handling/Destination charges.

I believe BMW acquisition fee is $825.

Thanks!

Z.