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uter
07-04-2005, 10:38 PM
Someone in my family is turning in an E60 in February and I'm contemplating buying it as a used car.

2004 E60 3.0 with 6-spd, sport package, premium, active steering, xenon, TiAg with grey. The kicker is that it will have fewer than 10,000 very gentle miles.

The *****out is about $39K.

Having never done this, I assume the lease holder would have to buy it, then turn around and sell it to me.

Any thoughts on if this is an option worth pursuing?

LA X3
07-05-2005, 12:30 AM
In California, I believe that would mean paying the tax twice. Check with your local motor vehicle department.

You could also see about transferring the lease to you toward the end. I believe BMWFS will allow a lease transfer up until, but not during, the last six months of the lease for a fee of $450. Then you could choose to buy it at the end.

You could also ask your relative to check with BMWFS to see if they can simply let you buy the car. BMWFS should be happy to get it sold one way or the other with no effort on their part.

kyfdx
07-05-2005, 06:59 AM
In California, I believe that would mean paying the tax twice. Check with your local motor vehicle department.

You could also see about transferring the lease to you toward the end. I believe BMWFS will allow a lease transfer up until, but not during, the last six months of the lease for a fee of $450. Then you could choose to buy it at the end.

You could also ask your relative to check with BMWFS to see if they can simply let you buy the car. BMWFS should be happy to get it sold one way or the other with no effort on their part.


Don't let BMWFS know that it has very low miles... That won't strengthen your hand, at all..

01Byte
07-05-2005, 07:35 AM
If you are really interested in buying the car you should first see if you can assume the lease. This will be the easiest path towards ownership. If you can't, you will have two choices. First, the original family owner will need to buy the car (and pay tax) and then you will buy it from him (and pay tax again). Second, find a dealer (doesn't have to be a BMW one) that will flip the sale for you (you might have to pay several hundred dollars, which is still cheaper than paying the full tax). This means that your family member will sell the car to the dealer and then you will buy it from them. In this scenario, you will only pay taxes once.

BMW FS will not allow the sale or transfer of title to a third party unless it's a dealer.

Hope this helps...

SARAFIL
07-05-2005, 07:37 AM
Someone in my family is turning in an E60 in February and I'm contemplating buying it as a used car.

2004 E60 3.0 with 6-spd, sport package, premium, active steering, xenon, TiAg with grey. The kicker is that it will have fewer than 10,000 very gentle miles.

The *****out is about $39K.

Having never done this, I assume the lease holder would have to buy it, then turn around and sell it to me.

Any thoughts on if this is an option worth pursuing?

Buy it through the dealer-- it'll save you having to pay sales tax twice and having to do all the paperwork. They'll pay it off to BMWFS and sell it to you directly.

You could even get it CPO'd if you wanted to.

uter
07-05-2005, 12:35 PM
Buy it through the dealer-- it'll save you having to pay sales tax twice and having to do all the paperwork. They'll pay it off to BMWFS and sell it to you directly.

You could even get it CPO'd if you wanted to.

Thanks for the replies, folks.

Sarafil, should the lease holder and I just go to the dealer salesman that we know? Or, will he want me to pay more than the buyout?

The CPO option is attractive, especially if I could even swing the 'CCA rebate :)

1Dreamer
07-05-2005, 12:46 PM
A friend of mine just bought a car coming off a lease and the seller had a friend who was a car broker flip the sale and handle all the paperwork - which I'm assuming avoided the double tax issue. It went very smoothly and my friend had a check in his hand less than 3 hours after he walked into his credit union to apply for the loan.

But since you are buying the car from a family member, perhaps they would be willing to buy the car and sell it to you for a lower price that would make your full cost including tax $39k and then you could buy a bottle opener or some dental floss from them for the amount they paid in taxes. Dollar-wise, it would work out the same as flipping the sale through a dealer or broker. Your cost would be exactly the same as buying it for $39K plus tax, they still get $39K and the state still gets their money.

TGray5
07-05-2005, 11:54 PM
In California, I believe that would mean paying the tax twice. Check with your local motor vehicle department.

You could also see about transferring the lease to you toward the end. I believe BMWFS will allow a lease transfer up until, but not during, the last six months of the lease for a fee of $450. Then you could choose to buy it at the end.

You could also ask your relative to check with BMWFS to see if they can simply let you buy the car. BMWFS should be happy to get it sold one way or the other with no effort on their part.

Sales between family members incur no tax in California. Not sure about AZ. And if you are lucky you might be able to get away with no tax as I know someone that did...DMV was confused by the family transfer/lease buyout combination and charged no tax. Get the lease paperwork...Find out the purchase option fee if there is one and call finance co. and find out the cost to transfer the lease. Do whichever one is cheaper. Typically though there is about a $400 lease transfer fee with BMWFS and then a purchase option fee at the end, so this wouldn't be a good way to go. Also, you may not be able to transfer the lease unless there is 9 months remaining. Just do a straight buyout at lease end...I've done it on my last two leases...its very easy. If you want the car before lease end, just make the payments for your family member until lease end. But, you won't be able to insure the car in your name until the transfer is complete.

Be aware that if you go to a dealer, they are going to want a markup to do the transaction, so you will be paying a lot of money for the luxury of them doing the very minimal paperwork involved. The CPO could be an attractive option, but they will charge you to replace the tires, brakes, etc to bring them up to cpo spec. (if necessary), plus the cost of cpo $1,000 at least, plus at least $1,000 to do the transaction...so its not a cheap proposition. BTW, Sarafil should disclose that he works for a dealer, so his opinions are a little bit biased.

TGray5
07-06-2005, 12:05 AM
BMW FS will not allow the sale or transfer of title to a third party unless it's a dealer.



This is not true. Lots of misinformation in this thread.

LA X3
07-06-2005, 12:30 AM
Dreamer -- I can't quite work out the math you suggest. Let's say tax rate is 10%. If my aunt buys the car at 39k, she pays ~4k in tax (total cost is $42,900). So I now owe her $43k.

Now we work it out so my "after tax cost" is $39k: so I pay her 35,455 (39,000 / 1.10) and the state 3,545 (35,455 * 0.10), for a total of 39,000. She has spent 42,900, and I have paid her 35,455, a difference of 7,445. So now I buy dental floss from her for 7,445 -- not quite twice the tax, but pretty darn close. It's a little less because my aunt sold it to me for a lower price than she paid -- but tax must still be paid on each transfer. I have now paid $46,445 for the car.

TGray is right -- transfers between certain relatives are tax-free in CA: http://www.dmv.ca.gov/pubs/brochures/howto/htvr1.htm. Oddly, apparently not between brothers and sisters over 18. I'd like to know what my legislators were thinking at the time....

Lastly...I looked at the AZ MVD site (http://www.azdot.gov/mvd) ... this must surely be one of the least helpful and informative web sites in government.

SARAFIL
07-06-2005, 05:36 AM
Be aware that if you go to a dealer, they are going to want a markup to do the transaction, so you will be paying a lot of money for the luxury of them doing the very minimal paperwork involved. The CPO could be an attractive option, but they will charge you to replace the tires, brakes, etc to bring them up to cpo spec. (if necessary), plus the cost of cpo $1,000 at least, plus at least $1,000 to do the transaction...so its not a cheap proposition. BTW, Sarafil should disclose that he works for a dealer, so his opinions are a little bit biased.

Sure, I might be a bit biased.

The point is that buying it through the dealer is always another option. It never hurts to call the dealer and get a price quote to buy it out, with or without the CPO. They'll tell you what they are going to charge for the process either way. In most cases, the transaction costs are minimal if any. Believe it or not, your dealer makes a good bit of profit just by selling it for your residual value, since 9 out of 10 times their payoff is less than the residual. Because of this, they probably won't charge much of a fee since that would otherwise just push people away.

1Dreamer
07-06-2005, 12:43 PM
Dreamer -- I can't quite work out the math you suggest. . . . It's a little less because my aunt sold it to me for a lower price than she paid -- but tax must still be paid on each transfer. I have now paid $46,445 for the car. You're right! I thought of the idea while typing, but running it quickly through my head I simply deducted 39K plus tax from about $36K plus tax which is wrong. The real difference is $39K plus tax minus $36K (duh), so it doesn't work. See? I can admit when I'm wrong. ;) So much for me thinking I had a brilliant idea. LOL.

However, it's true that transfers between certain family members are exempt from CA tax, but only transfers from parents, grandparents, children, grandchildren and domestic partners or a spouse. Transfers from aunts, ucles, cousins, etc. are not listed as exempt. The info can be found on the CA gov't website under "Vehicles and Vessels - How to Request a Use Tax Clearance for DMV Registration."

Krochelli
07-06-2005, 02:46 PM
I have heard dealerships will do this for as low as $299.

It's practically pure profit for them, so why wouldn't they? Especially if your family member might lease another :)

TGray5
07-06-2005, 03:23 PM
I have heard dealerships will do this for as low as $299.

It's practically pure profit for them, so why wouldn't they? Especially if your family member might lease another :)

You're not going to get CPO for $299, so you are essentially getting a DMV form filled out for $299. And if you think you can get that price without an hour or so of haggling, I think you are mistaken. If that sounds like a good deal to you, be my guest.
:dunno:

LA X3
07-06-2005, 04:07 PM
If it is the only way to get the car sold from the original lessee to a third party, $299 is cheap if you know the car's history. Certainly no CPO warranty for that, but compared to the risk of an unknown used car, even with CPO, it could be a good way to go.

No need to haggle. Call the dealer, ask for the finance manager, and don't bother going in until they tell you whether they'll do it and at what price. If they won't, politely hang up and call the next one.

Robert A
07-08-2005, 11:34 PM
Not so. The purchaser of a lease buyout has 10 days to resell it to avoid sales tax.

In California, I believe that would mean paying the tax twice. Check with your local motor vehicle department.

You could also see about transferring the lease to you toward the end. I believe BMWFS will allow a lease transfer up until, but not during, the last six months of the lease for a fee of $450. Then you could choose to buy it at the end.

You could also ask your relative to check with BMWFS to see if they can simply let you buy the car. BMWFS should be happy to get it sold one way or the other with no effort on their part.

uter
07-10-2005, 08:30 AM
Well, I did speak with the sales associate who leased the car. He saw options as:

1. Pay the lease buyout amount. No wiggle room on that price. Car would still have its original 4 yr/ 50 K mile warranty.

2. CPO the car at an additional cost of $1100 for the warranty PLUS whatever came up at inspection. His recommendation to come buy a month before the lease was up and get an estimate as to what it would cost to have it CPO'd. He seem to think that cost would be high enough that the "good deal" of buying this particular car would be less attractive.

I guess the final question to answer is whether 39K is a good or a great price for a 2004 E60 6-spd with sport package, premium, active steering, cold, satellite radio and less than 10000 miles.

LA X3
07-10-2005, 11:15 AM
Not so. The purchaser of a lease buyout has 10 days to resell it to avoid sales tax.
Really? Where do you find this information? Could make for some profitable after-lease sales if the terms are right. But, I don't see it as one of the valid reasons for use tax exemption at either the DMV or BoE sites.