Leasing a Grayson BMW

I would definitely agree that one of the most common questions I hear from customers is, "Should I buy or lease?"  Now, I always have different answers for each person based on their specific wants and needs so it is pretty difficult to give a clear cut answer for the masses.  This week, I stumbled across the following article from Edmunds.com.  Edmunds is a fantastic source for auto information and this week they have tackled the lease or not to lease dilemma. 

The following are the 10 Steps on Leasing a New BMW according to Edmunds.  Now, it looks a bit lengthy, but I promise it is good information and worth the read.
 
Just jumping ahead..one of the steps deals with looking for lease specials at BMW dealers.  Here at Grayson BMW in Knoxville, TN there are always lease specials.  Always!! The absolute easiest way to navigate through different Grayson BMW new BMW specials is to choose the New Car Specials link on www.graysonbmw.com homepage.  You can check every Grayson BMW model.  If you do not see the particular BMW you were hunting for on the New Car Specials list, don't fret.  Simply call (865) 209.7273and let us know which vehicle you would like leasing special pricing for.  We can take care of many of the details before you even visit the store!  Keep in mind, though, that, as the article states, the best way to get the best deal is to visit Grayson BMW in person.
 
Article from [Edmunds.com] Article edited slightly to exclude advertisement.

Step 1: How leasing works.
Leasing a car is like renting a car - but for a longer time period. Unlike buying, you never actually own the car and you have to give it back at the end of the lease. Leasing became popular in the 1990s because cars became too expensive to buy for many people. Leasing allows a person to drive a brand-new car and make lower monthly payments, thus making the "new-car experience" more accessible to more people. Finally, leasing can offer tax breaks for certain occupations.

Remember that, while leasing might not save you money in the long run, it could fit more easily into your budget on a monthly basis. Also keep in mind that some people find leasing to be confusing since many of the terms are different. We'll do our best to quickly and clearly explain how to make leasing work for you in the following steps.

Step 2: Checking incentives and special lease deals.
Car manufacturers commonly offer lease specials. This is a good way to shop for a leased car because it can save you even more money. However, the specials might have hidden costs that are not clearly identified in the lease ad. You should always check to see if the promised monthly payment includes sales tax and fees. Also, does the advertised lease require a large down payment (sometimes called a "cap reduction payment" or "cap cost reduction"), bank fees and a security deposit? What about the annual mileage limit? These are questions you want answered long before you're closing a lease deal.

Step 3: How long should your lease be?
It is possible to lease cars for two, three, four or five years. However, the three-year lease is the best choice for most people. The majority of carmakers offer three-year bumper-to-bumper warranties. If your lease is for three years you will always be under warranty without paying extra for an extended service contract. Furthermore, a car really begins to show its age at about three years - right at the time the lease is expiring. Remember, one of the reasons for leasing is to drive a new, or nearly new, vehicle on a constant basis. Why would you lease for five years and be forced to deal with extended warranty fees and higher maintenance costs? If paying for these items doesn't bother you, maybe you should consider buying the car.

Of course, everyone wants a low lease payment, and extending the length of the lease will drop the monthly cost. But extending the lease means you're investing more and more money into a vehicle that will never be yours. It's better to shop aggressively for a competitive lease deal and keep the length of the contract to three years.

Step 4: Estimating your lease payments.
A lease payment is calculated from many different numbers and can be difficult to understand. However, you should attempt to estimate your own lease payment before you go shopping to avoid paying too much. In the old days (like, five years ago), this meant an hour or two with a calculator. Now, the process has been streamlined by the Internet.

Step 5: Finding the exact car to lease.
By this point it should be obvious which car you want to lease. This means you know the make, model, trim level, options and color. The more flexible you can be, the better the lease deal you will be able to make. For example, a shopper might be very firm about the make, model and trim level, but could accept a variety of options and colors. If another shopper definitely wants hard-to-find options and a specific color, it will be more difficult to make a great deal. Why? You have no leverage as a negotiator. You have to pay the dealer's lease rate or try to locate another identical vehicle.

In any case, locate the exact car you want by sending e-mails to the Internet managers at your local dealership.  In some cases, you may have to follow up with a phone call. Say something like: "I want to lease a 2011 BMW 535i for three years. I'm not too fussy about the color but I don't want black or white. I want heated seats and Navigation. What do you have on your lot? And can you give me a lease payment?" Often the salesperson will have to check his inventory and call you back.

As you make phone calls and exchange e-mails with the dealership's Internet manager, take careful notes about the lease quotes you receive.  Now, compare the quotes you get to your own calculated lease payments. Record the information you receive about each car you locate, including the color, options and the dealership name. This will save time as you continue to shop for a good leased car.

Step 6: Test driving the car salesman
As you call dealerships to locate the exact car you want to buy, you can also test drive the car salesman. In other words, you can determine if this is a person you want to do business with. It's a good idea to consider this issue ahead of time, before you get to the deal-making phase of the lease process.

To evaluate the salesperson, ask yourself if you feel comfortable dealing with him. Is he impatient and pushy? Or relaxed and open? When you asked him about a specific car's availability, did he respond to your needs? Or did he try to steer you toward another car simply because his dealership has too many of that model in stock? Does he return your phone calls? Does he answer your questions about leasing in a straightforward manner? Or is he evasive and confusing?

By considering these issues, you should have a sense of whether you want to lease a car with this salesperson's assistance. If you feel comfortable with the individual when researching by phone, and if the dealership has the car you're interested in, set up a time to test drive the car. Preferably, when the dealership will not be very busy, such as on a weekday morning. Before heading to the car lot, review all your notes and make sure you bring your car-buying folder. This might include your checkbook, registration and proof of insurance. Keep in mind that you're bringing these items so you'll be ready to lease a car if you get a fair deal. Don't feel obligated to lease a car simply because you have all the necessary paperwork with you.

Step 7: The final test drive.
When you arrive on the lot you will want to take a careful look at the car you are planning to lease. You should also drive the car one more time. You might have driven several other cars, and need to refresh your memory. If you specified several options - such as side airbags or ABS - check the window sticker to make sure they are on the car you are getting ready to lease.

If everything checks out, it's time to make a deal for your lowest lease payment.

Step 8: How to negotiate a lease payment.
Negotiations can be handled several ways. If the car is widely available, contact your local dealerships and solicit bids (as described in Step 5). Take the lowest bidder, call the other dealers, and see if they can beat that price. If not, you are at rock bottom.

If the car is harder to find, and you are on the lot, you can still refer to the lease payments you calculated at home. If the lease quote from your salesperson matches your estimate, you're probably getting a fair deal, but make sure the numbers and terms match your calculations. Be especially sure to check the down payment (we recommend a zero down payment), the term of the loan (we recommend three years), the monthly payment and the annual mileage allowance.

In the past, Edmunds.com recommended that the best way to get a good lease payment was to negotiate the lowest selling price for the car (using True Market Value pricing as a guide). Once that was set, you would get the salesperson to draw up a lease payment based on that figure. The thinking was that if the salesperson knew you were leasing, he would focus on the monthly payment while ignoring the negotiated price. He might even try to confuse you with leasing jargon. But the reality is, if you're happy with the down payment, monthly payment and mileage allowance, the purchase price of the vehicle is probably right. Keep in mind, however, that if you think you will want to buy the vehicle at the end of the lease, you should also check the "residual value" to make sure it is a realistic figure.

Whichever method you choose to negotiate, it is a good idea to ask the salesperson to fax you a worksheet, detailing all the costs before you go to the dealership. This will allow you to review the figures in a relaxed environment. Compare the numbers to those you have calculated and the True Market Value prices of cars listed on Edmunds.com.

Step 9: Reviewing and signing the paperwork.
At the dealership, you will be presented with the lease contract for your new car and a dizzying array of forms to sign. This might be done by the Internet salesperson you have been dealing with, or it could be done in a separate office by the finance and insurance (F&I) manager.  If you have already seen a worksheet for the lease deal you've made, the contract should be a formality. Make sure the numbers match the worksheet and that no additional charges or fees have been inserted. You will also be asked to sign various forms that register the new car for you. Understand what you are signing and what it means. Ask questions if you don't understand, and don't ever feel like you have to hurry. Leasing a car is a serious commitment and it's the F&I manager's job to ensure you understand the documents involved. Remember, once you have signed there is no going back.

Most lease cars are based on the owner driving 12,000 miles a year. If you drive farther than this, you are charged from 10 to 15 cents for each mile over the limit. If you think you are going to drive farther than the allowed mileage, you may be able to buy extra miles up front. Usually, you can buy extra miles at five cents per mile and have this rolled into your lease payment. This pay-as-you-go approach prevents any unpleasant surprises at the end of the lease.

One last thing, check to make sure the contract you are buying includes "gap insurance," which is recommended when leasing. If your leased car is stolen or totaled in an accident, there might be a gap between what your insurance company will pay you for the loss and the amount you now must pay to the leasing company. If you take out gap insurance (it is included in some lease contracts), this will cover you for this loss.

Step 10: Successfully managing your leased vehicle.
As you drive your leased vehicle, you need to remember that the car will have to be returned in good condition. Have all the scheduled maintenance performed at an authorized dealer and keep your eye on the odometer to avoid exceeding the mileage limit.

When the time approaches to end the lease, you will have several alternatives. You can turn it back in and lease a new vehicle. You can buy the car for the residual amount stated in your contract and continue driving it. In some cases, you can even extend your lease term on a month-to-month basis while you decide what your best course of action will be. Whatever you decide to do, take the time to consider each avenue carefully. Check current market values of the cars that interest you (using Edmunds.com True Market Value prices) and shop for lease deals from manufacturers.

You've reached the end of the final step. Now, it's time to go out and put your knowledge into action. Just remember, the time you take to research your leasing decision will pay dividends over the years. You'll not only be driving a car that suits your needs, but you'll be saving money in the process. That's a big payoff for a little bit of work.