I
posted this guide before, it was well received and helped a few people get their leases cheaply. With the recent discussions about discounts going down, it will be helpful to have a dedicated thread on lease negotiations. Feel free to ask questions, crowdsource tips, and share dealer/broker information. I will update
comment #2 with links to most helpful comments to create a kind of wiki.
Overview
I ended up getting 2 similar deals from 2 Bay Area dealers: (1) 10% off MSRP with MF of 0.00111, and (2) 11.65% off with MF of 0.00151. These appear to be among the best terms I’ve seen online in July/August 2023 for a custom orders, but these terms are absolutely replicatable. Dealers are more motivated to sell the incoming cars and cars already on the lots, so for them discounts can reach 12-13% at base MF. Details of the deal (1):
- 10% off MSRP, so selling price is 108K, down from 120K, for a custom order M60.
- “Base” money factor (MF) of 0.00111, which is equal to APR 2.6%
- $9900 lease credits and an extra $1000 for having a graduation from Stanford GSB later this year (it's just a certificate, not even a degree, but it did work)
- Complete zero drive-off. Dealer asked for 1K refundable deposit.
- Payment at almost exactly $1400 per month, inclusive of taxes and fees. This is 36/7.5K miles lease.
- Promise that if BMW financial improves terms while the car is being built, I get the better terms (typically, it's both MF and lease rebate)
- Dealer said it's ok if I return the car with different tires, so I can change to all-season tires right away. Not clear if this will work in the end, but getting this from dealer in writing might be useful if returning the car to the same dealer.
Process
You should definitely reach out to brokers first and see what they have, and decide whether you're willing to go with them. Most brokers work with multiple dealers across the country, and will have access to stock at each of those dealers and/or can place an order at them. One of my brokers was going to deliver my car to a dealer at Idaho: it would be a 800 mile flight + road trip for me, and I was OK doing this adventure to save a few thousand. To find brokers, go to
Leasehackr forum, select your state and BMW as the make. I personally messaged all the brokers who were active in the last month. If you don’t see too many brokers who work in your region, you can also check the ones who list neighboring states as well, if you’re ok picking up your car there. When messaging, explain your situation and what you're looking for. They all prefer to sell you stock, but if they don't have what you want, also ask for a custom order and what kind of deal they can do. Most brokers will still give you a good discount on orders, but usually they are better for stock.
For local dealers, suggest you test drive with a few of them (as many as you care, maybe pick different models), ideally identify the cars in stock you like. They all suffer from the “sunk cost fallacy” and will give you a better deal if they have already spent time with you. Mine wanted to push stock at first and didn't offer too much of a discount. Tables turned when I texted them something like: "FYI, got a couple of offers from brokers at 9-10% off MSRP, so will have to go that way. Would love to buy locally, but the price difference is too much. Thank you for test drive and getting me sold on the car”.
I was only doing it not to be rude, and didn't expect anything, but there was some magic in what I said and both local dealers promised to give me 10% off on an order. One in the end didn't follow through, but the other one did.
With both brokers and dealers, remember that you can only get the best deal if you're absolutely willing to buy today, but you’re also willing to walk away - they'll keep giving you better offers until they can no longer go lower, and then they let you walk. You can always come back to the best deal they had offered before you walk away, even if they claim that deal is "dead if you walk out the door" or something.
Zero drive-off was the last thing I negotiated. You usually start with the big items and you continue to smaller ones. Biggest items are: 1) discount 2) MF 3) specific car or order. Smaller are 4) money down 5) additional discounts (e.g. college grad discount for me - extra work for dealer) 6) extra favors (e.g. returning the car with another set of tires)
To summarize
1) Text all brokers who had activity on Leasehackr within ~1 month and see what deals / offers they have. Ideally you'd find something you like in stock for the best deal.
2) Cross-shop with brokers, tell everyone what the best deal you got, they're going to all progressively improve. Eventually, you should find a few you can actually go with, e.g. the drive is not too far to pick up and return the car, or you're ok with delivery fees.
3) Schedule test drives with BMW dealers nearby. They will only give you their best deals if you test drive. Counter-intuitive but true.
4) Hopefully by the time you test drive, you get some decent offers from the brokers, and can present them to your dealers. You’ll see if any of them are motivated enough to offer you a deal.
Worth it?
I did all that while still deciding which car and configuration I wanted, so didn’t really spend much extra time. But if this all sounds like too much work for a few thousand dollars of discount - maybe it is, for you. Everyone is always free to pay any price they want and be happy with the car, and the price is surely not the only factor. Build timeline, trade-in value, time spent, relationship with the dealership, fees, positive and negative extras, and other factors also matter. I personally hate the car buying process, but find it helps me master my negotiation skills. In addition, getting this kind of deal was essential for me to consider BMW - it would be too much outside of my target budget otherwise.
If you’re trying to understand if a dealer is giving you a good deal - plug the numbers in
Leasehackr calculator and see what payment you’re supposed to get with the canonical best terms, and/or the terms they're offering. If something looks way off, dealer/broker is probably trying to hide something.