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  #1  
Old 09-27-2012, 11:28 AM
Wraith. Wraith. is offline
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WAAAY under mileage on my first lease

SO I'm in the last 12 months of my 3/36K lease of my beloved Z4 35iS. As Im starting to think about another trip to Welt next September it dawned on me that unless something drastically changes I'll be about 20,000 miles under on turn in. Yes, I grossly over estimated my anticipated miles on what essentially is a weekend cruiser but I'm trying not to dwell. What I'm wondering is there any potential benefit in turning in such a low mileage car (for me not the dealership)?
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  #2  
Old 09-27-2012, 12:21 PM
Kar Don Kar Don is offline
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You could see if you could "trade-in" the car instead of lease return. They would give you market value which is hopefully higher than the payoff and you would end up with cash in your pocket. Otherwise it is money lost.
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Old 09-27-2012, 01:02 PM
Wraith. Wraith. is offline
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Trade in on another lease? Was going to buy next round but with a good deal I'd consider leasing again. Is this something I would shop around to different dealers?
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Old 09-27-2012, 01:04 PM
335Fanatic 335Fanatic is offline
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What was the residual for your car when you leased it?

About a year ago, BMW had unrealistically high residuals on them. In that case, the market value of the car is going to be way below the residual.

Last edited by 335Fanatic; 09-27-2012 at 01:07 PM.
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Old 09-27-2012, 01:16 PM
dzaborn dzaborn is offline
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I guess the concept is the contracted payoff amount was based on the car having 36K when returned. Since it only has 16K, the re-sale/trade value may be higher than the payoff amount. You could buy the car at the payoff amount from BMW and then trade in the on another lease/purchase assuming the trade value is higher, thus pocketing the difference.

If the gap is enough to take that risk, I would assume selling the car yourself at market value would net the most profit, as the market value should always be more than the trade value offered by a dealership.
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  #6  
Old 09-27-2012, 01:22 PM
chrischeung chrischeung is offline
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You can consider selling the lease now with money down to you, and save yourself 12 months of payments. And if BMW has an end of year blow out, you can get a new car then.
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  #7  
Old 09-27-2012, 03:10 PM
Wraith. Wraith. is offline
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Looks like the residual is $40,224
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  #8  
Old 09-27-2012, 03:44 PM
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Quote:
Originally Posted by Wraith. View Post
Looks like the residual is $40,224
What will be the lease end purchase amount to you? not the current residual.

You could also swing by carmax and say "what will you give me?"..I would not buy the car and THEN try and sell it...I'd have a buyer in hand before going through the hassle.

Finally, sometimes you can do a 'dealer buy out' where the dealer buys it from BMWFS, then you can buy it- HOWEVER, with the lower miles, BMWFS will likely price it higher than if you were at 36k.

(Aren't leases so good and easy? Not a care in the world, just toss the keys and move on without a care in the world... yes, I dont like leases becuase they are predicated on assumptions that can change, yet the terms are immutable.)

A
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Old 09-27-2012, 05:02 PM
dong4ce dong4ce is offline
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Question on the same topic. If I went with a 36k/3 year lease, but ended up with around 15k. Would I essentially be screwing myself if I were to lease to own?

So BMWFS can see the mileage on the car and readjust the value to make it the new sale price?

Still trying to figure out the in's and out's of leases.
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  #10  
Old 09-27-2012, 09:24 PM
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miamiboyca miamiboyca is offline
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Originally Posted by ard View Post

(Aren't leases so good and easy? Not a care in the world, just toss the keys and move on without a care in the world... yes, I dont like leases becuase they are predicated on assumptions that can change, yet the terms are immutable.)

A
I disagree, leases are great but like any deal you have to understand them.

The lease end residual is what BMW agrees to buy the car back at the end of the lease. This is based on a number of factors one of which includes the miles expected on the car. Think of it as insurance (assuming good condition and under miles they guarantee to buy it back at this price, it does not mean you have to sell it to them (return).

The idea mentioned about is simple -

Right now (or at any time in the lease) you have the payoff value which is what is would cost to buy the car outright. The residual or Lease End Buy out is the same thing. Its the payoff at the end. Like with any deal purchase or lease - if your car is worth more than you owe you can pocket the difference in a variety of ways. Selling it, trade in etc.

Toward the end of the lease, it works the same - lets say a month before your car is due back your residual/buyout is $50,000 but the car is worth $55,000 you can get the difference either via trade in or selling, etc. (various options)

My suggestion is go to a car max and 1 or 2 BMW dealers, and they will tell you what the car is worth now to them and you compare this to the buy out. Then you can start to weigh your options.

Also, take a lesson from this especially with BMW that lets you buy miles at any point in the lease (up to a few months) at a discounted rate. Always go low and then add from there.
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  #11  
Old 09-27-2012, 09:26 PM
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miamiboyca miamiboyca is offline
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Quote:
Originally Posted by dong4ce View Post
Question on the same topic. If I went with a 36k/3 year lease, but ended up with around 15k. Would I essentially be screwing myself if I were to lease to own?

So BMWFS can see the mileage on the car and readjust the value to make it the new sale price?

Still trying to figure out the in's and out's of leases.
Yes, you would lose those miles. No the value does not get adjusted - you would simply lose the equity in the car (if there was equity based on the low mileage) and BMW would be the beneficiary of a low mileage vehicle they can now resell for more.

make sense?
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  #12  
Old 09-28-2012, 12:05 PM
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May I suggest a road trip? Drive down I5 to I10 and take that east to I95, then drive up to I76 or so (Philadelphia) and make your way back. I wouldn't go too far north this time of year in your (gorgeous) Z4...

Try tapping your bimmerfest resources to make it less burdensome. I'm in SJ, and you can have my couch for a night if you like. Might be able to make quite the adventure this way.
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  #13  
Old 09-28-2012, 06:15 PM
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Originally Posted by miamiboyca View Post
I disagree, leases are great but like any deal you have to understand them.
Might I point out that "understanding" this lease does NOTHING to help the OP, does it?

Understanding any 'deal' is essential- and sometimes it is not a good idea. Glad you like them, and fine for some purchases.
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Old 09-29-2012, 09:33 AM
z51vette z51vette is offline
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Quote:
Originally Posted by dong4ce View Post
Question on the same topic. If I went with a 36k/3 year lease, but ended up with around 15k. Would I essentially be screwing myself if I were to lease to own?

So BMWFS can see the mileage on the car and readjust the value to make it the new sale price?

Still trying to figure out the in's and out's of leases.

Call up BMW FS and ask them what the current buyout on the car is. Then ask them what the residual is. The "buyout" includes sales tax. The residual does not. I think you may have substantial equity at turn in. You have three options.

1. Give back the car and loose your equity.
2. Buy the car at the end, pay sales tax and then sell it for a small profit.
3. Trade it in, get wholesale value, but still make money on the trade in.

and last, if you have a friend that is an auto dealer, he can avoid paying the sales tax, takes it in as a trade-in, you sell it (E-bay) and he transfers the title to the new owner. You don't pay tax.
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  #15  
Old 09-29-2012, 10:27 AM
ard ard is online now
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Originally Posted by z51vette View Post
C.


and last, if you have a friend that is an auto dealer, he can avoid paying the sales tax, takes it in as a trade-in, you sell it (E-bay) and he transfers the title to the new owner. You don't pay tax.
OP...Know the rules in your state

For example, in CA a lessee can BUY the car from the lessor and NOT pay sales (technically 'use' tax) tax if they then sell it within 14 days to a subsequent purchaser.... Many folks don't know this, dealers like you to think you are trapped into a (profitable to them) trade...
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  #16  
Old 09-29-2012, 05:05 PM
zetabetatau zetabetatau is offline
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Quote:
Originally Posted by ard View Post
OP...Know the rules in your state

For example, in CA a lessee can BUY the car from the lessor and NOT pay sales (technically 'use' tax) tax if they then sell it within 14 days to a subsequent purchaser.... Many folks don't know this, dealers like you to think you are trapped into a (profitable to them) trade...
In California it's 10 days, not 14. But that is true... Have used that before.

http://www.dmv.ca.gov/pubs/reg_hdbk_pdf/ch4_usetax.pdf
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  #17  
Old 09-29-2012, 07:57 PM
z51vette z51vette is offline
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Many folks don't know this, dealers like you to think you are trapped into a (profitable to them) trade...
I didn't get that comment
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  #18  
Old 09-30-2012, 05:10 PM
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Originally Posted by ard View Post
Might I point out that "understanding" this lease does NOTHING to help the OP, does it?

Understanding any 'deal' is essential- and sometimes it is not a good idea. Glad you like them, and fine for some purchases.
Understanding his deal and leases in general absolutely helps OP. Just because you don't like leases, does not mean they are not great vehicles - provided you understand them (both how they work, and how you get out of them.

Many people understand getting into leases but not necessarily how to get out of them early.

Quote:
Originally Posted by z51vette View Post
Call up BMW FS and ask them what the current buyout on the car is. Then ask them what the residual is. The "buyout" includes sales tax.
Lease buyouts do not typically included the sales tax. Depends on your state, ask when you get your "buyout: amount

Wraith - if you have more questions post away or feel free to PM me, I would be happy to help.
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Last edited by miamiboyca; 10-01-2012 at 08:51 AM.
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  #19  
Old 10-01-2012, 03:16 PM
Wraith. Wraith. is offline
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Thank you
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  #20  
Old 10-01-2012, 06:00 PM
ard ard is online now
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zeta- thanks for correcting me. I oft complain of people posting innaccurate info, and I should have qualified mine


Quote:
Originally Posted by z51vette View Post
I didn't get that comment
What I mean is that people know the dealer is lowballing them on a trade..., they tell people "Sure you can buy it from BMWFS, but YOU'LL pay tax, and then your sister-in-law (or any other buyer you might find) who buys it from you will ALSO pay tax."

Basically without this law, the dealer has an automatic price advantage of X% over all other parties, where X=tax rate.
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Old 10-02-2012, 05:09 AM
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Originally Posted by ard View Post
Might I point out that "understanding" this lease does NOTHING to help the OP, does it?

Understanding any 'deal' is essential- and sometimes it is not a good idea. Glad you like them, and fine for some purchases.
In the case of the OP, how would things be any different now if he had purchased instead of leased?
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Old 10-02-2012, 05:58 AM
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Originally Posted by z51vette View Post
Call up BMW FS and ask them what the current buyout on the car is. Then ask them what the residual is. The "buyout" includes sales tax. The residual does not. I think you may have substantial equity at turn in. You have three options.

1. Give back the car and loose your equity.
2. Buy the car at the end, pay sales tax and then sell it for a small profit.
3. Trade it in, get wholesale value, but still make money on the trade in.

and last, if you have a friend that is an auto dealer, he can avoid paying the sales tax, takes it in as a trade-in, you sell it (E-bay) and he transfers the title to the new owner. You don't pay tax.
Slim chance on any equity now or at the end of the lease.
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  #23  
Old 10-02-2012, 06:14 AM
z51vette z51vette is offline
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Originally Posted by ard View Post
What I mean is that people know the dealer is lowballing them on a trade..., they tell people "Sure you can buy it from BMWFS, but YOU'LL pay tax, and then your sister-in-law (or any other buyer you might find) who buys it from you will ALSO pay tax."

Basically without this law, the dealer has an automatic price advantage of X% over all other parties, where X=tax rate.

Yes, exactly my point.
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  #24  
Old 10-02-2012, 06:20 AM
z51vette z51vette is offline
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Originally Posted by David1 View Post
Slim chance on any equity now or at the end of the lease.

Why do you say that? If you are 20K under mileage you should have some good equity in there. Unless it was a super subsidized lease with artificially high residuals by BMW FS.
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  #25  
Old 10-02-2012, 06:48 AM
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miamiboyca miamiboyca is offline
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Slim chance on any equity now or at the end of the lease.
I disagree. If you have a good combination of a good deal, right market conditions and low miles you can absolutely have some equity. I will give it to you that with BMW high residuals it makes it difficult but not impossible.

I have been leasing for quite some time and have had equity in 3 out of the last 7 cars. Mostly due to low mileage, since I used to travel quite a bit.
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