Buying 330ci coming off friend's lease?

I've been looking for a used 3 series and talked to a friend of mine about his 2003 330ci that is coming off lease in May. He was probably just going to turn it in and hadn't thought much about the buyout price until I asked him. His car will have under 40,000 miles at the end of the lease, is fully loaded w/ everything but nav and park distance control. The end of term purchase price is only $24,600!

Has anyone purchased a vehicle in a similar fashion? I am hoping there is some way I could purchase the car directly to avoid sales tax issues if my friend were to purchase and then resell to me. Given that you can assign a lease to someone else, it seems there has to be some way to to this!

Has anyone purchased a car in a similar fashion? Thanks!

This is easily done and BMWFS is very accommodating with signing over the title. I've sold 3 leased BMWs over the years to private buyers, but in California. BMWFS was well aware of the procedure for California, that being, if the car is paid off and the title transfer happens within 10 days, only the new buyer is responsible for sales tax. They mailed me the title in all cases with the "sold" date blank to give me extra time to transfer to the new owner, in case of mail delays or whatever. I just filled it in once I got it and delivered to the new owner. They are then responsible for registering the vehicle.

Have your friend call BMWFS and ask their very helpful representatives about this. You'll have your answer in a few minutes I'm sure. It's a great way to buy a car - you get a great price and your friend avoids the lease end inspection (and possible repair costs), plus possible excess mileage charges.

I 'just' did this back in late January:

I paid the exact value of the lease buy out so the process was quick and easy. If the buyer is going to pay more than the buy out value - The buyer could simply make out two checks. One for the buyout value, the other for the difference to you.

Here is what I did:
The previous owner and I called BMW Financial Services, USA and got the value of the buyout. (1-800-578-8000) We agreed that I would simply pay that price.

They (BMW) gave me an address to BMW USA and I simply sent them (BMW) a check for the buyout value. I was asked to include an envelope with my return address so they (BMW) could send me the Title.

The title came to me 3 days later and I then took it to the previous owner to have him sign it.

I then took that title to DMV and registered the car in my name. BMW USA did not charge me taxes - those were collected at DMV at the time when I registered the car.

Call BMW - they will walk you through the process - it's basic.

Ted

Originally Posted by TRP

I 'just' did this back in late January:

I paid the exact value of the lease buy out so the process was quick and easy. If the buyer is going to pay more than the buy out value - The buyer could simply make out two checks. One for the buyout value, the other for the difference to you.

Here is what I did:
The previous owner and I called BMW Financial Services, USA and got the value of the buyout. (1-800-578-8000) We agreed that I would simply pay that price.

They (BMW) gave me an address to BMW USA and I simply sent them (BMW) a check for the buyout value. I was asked to include an envelope with my return address so they (BMW) could send me the Title.

The title came to me 3 days later and I then took it to the previous owner to have him sign it.

I then took that title to DMV and registered the car in my name. BMW USA did not charge me taxes - those were collected at DMV at the time when I registered the car.

Call BMW - they will walk you through the process - it's basic.

Ted

Be careful... tax laws are different in each state. This obviously works in California, but it won't work in many other states.

In Rhode Island, for example, the only person that can transfer ownership on a title is a licensed car dealer or the original owner of the vehicle. In this case, the bank is the orignal owner of the vehicle. BMWFS can only directly transfer the title to the leaseholder, since they are not a car dealer. After they do this, the car has to be taxed and titled in order to have a new title made before any other transfer of ownership can take place.

Check your local tax codes before you make a mistake that you'll regret!

It seems that in FL where my friend has the car this may not be a tax friendly transaction. In fact, I believe its the exact same situation as in Rhode Island based on what my friend (current lessee) heard from BMWFS.

The buyout price of $24,300 plus the tax (probably 6 or 7 percent) is still below KBB, but its much less of a deal than just $24,300 as I had hoped. Also, I'd have to either ship the car from the Miami area to Philadelphia or fly down and drive it back which further adds to the total bill.

FL has no income tax from what I understand, so I guess they have to collect revenue somehow.

Depending on how much time your friend still has on the lease (May should be plenty), you might try to assume the lease. BMWFS permits this, though it takes 30 days or so. Once you assume the lease, the buyout option is yours, so no duplicate sales tax would accrue. BMW charges around $450 for the assumption.

The other option that occurs to me is to negotiate with a local dealer for them to take a return of the leased car, then sell it to you at the residual. He may make a profit if his wholesale price is less than the residual, but may be convinced to do it anyway as a good faith gesture to your friend. This again would avoid duplicating sales tax.

If you find a dealer friendly to the latter approach, you might also ask if they'll CPO the car for you as part of the trade. Presumably you'd be willing to pay a little extra for this benefit, which then makes it work out for the dealer too. See some other discussions on CPO of off-lease cars, but I think I recall some dealers doing this for $1,500 or so.

Good luck.

Originally Posted by CPS

Depending on how much time your friend still has on the lease (May should be plenty), you might try to assume the lease. BMWFS permits this, though it takes 30 days or so. Once you assume the lease, the buyout option is yours, so no duplicate sales tax would accrue. BMW charges around $450 for the assumption.

The other option that occurs to me is to negotiate with a local dealer for them to take a return of the leased car, then sell it to you at the residual. He may make a profit if his wholesale price is less than the residual, but may be convinced to do it anyway as a good faith gesture to your friend. This again would avoid duplicating sales tax.

If you find a dealer friendly to the latter approach, you might also ask if they'll CPO the car for you as part of the trade. Presumably you'd be willing to pay a little extra for this benefit, which then makes it work out for the dealer too. See some other discussions on CPO of off-lease cars, but I think I recall some dealers doing this for $1,500 or so.

Good luck.

I don't think you can assume the lease in the last six months..

Why don't you have your friend call BMWFS, and tell them that he wants to get rid of the car, and has a willing buyer, and can they sell the car directly to you for the payoff? Maybe they will..

Originally Posted by kyfdx

I don't think you can assume the lease in the last six months..

Why don't you have your friend call BMWFS, and tell them that he wants to get rid of the car, and has a willing buyer, and can they sell the car directly to you for the payoff? Maybe they will..

BMWFS can only sell the car to a dealer or to the original lease client... they are not a licensed car dealer and can not sell it to any other party.

You might check and see if he can extend the maintenance and warranty and how much it would cost and whether he can transfer it to you.