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E60 (2004 - 2010)
BMW 5-Series (E60 chassis) was first seen in the Unites States in the fall of 2003 with a 2004 Model Year designation. The E60 is now available as a 528i, 528xi, 535i, 535xi, 550i and a 535xi sports wagon! -- View the E60 Wiki

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  #1  
Old 02-23-2013, 04:43 PM
dawizard dawizard is offline
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Location: San Francisco
 
Join Date: Feb 2013
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Mein Auto: 528i xDrive
528i xDrive - Lease expiring - Need advice regarding Sales tax, buy vs sell etc

Hey guys,

Here is a brief background on my car:

Mar 2010 - Leased the BMW 528i xDrive in DC, monthly payment of $690
Jan 2012 - Moved to California, payments went up to $750 (with newly added sales tax)
Mar 2013 - Lease is ending, Payoff amount is $27,500 (I will have already paid $25,700 by then through monthly payments)

Miles on the car - 28k (so under the 30k limit) / Condition: Excellent (no smoke/pets etc)

So debating whether to keep the car or not, this was my first lease and not really sure I understood all the concepts such as Residual value, Auction price etc. I noticed that a similar CPO Bimmer is available for 32-34k which makes me wonder if it is worth my while to keep it.

Specific questions:
1. The payoff amount on my original lease was $27,450, it seems to have gone up $60 on my online account. Why? (I will call BMW Financial as well but they are closed over the weekend)

2. If I was to buy this car, I would have to pay Sales tax on this to the DMV, correct? Would they deduct the amount that I already paid since I moved to California (about $750) or would I have to pay in addition to that based on the payoff price?

3. About the sales tax, after moving from DC to California, I started paying sales tax. I will have paid $750 sales tax by the end of my lease. Is this expected and is just a California thing that they charge sales tax on leased vehicles?

4. My payoff amount was based on my monthly payments. With the addition of sales tax in California, my monthly payments went up. Is this payoff amount still correct?
(Sorry for some questions which might appear repetitive, I am struggling to wrap my head around this)

5. Based on the car condition (excellent) and mileage and cost of similar cars in the market, is this a good buy or is it not worth keeping the car? I know this is a loaded situational question but wanted to get perspective of others regarding any pro's or cons that I might be missing. For reference, I am not completely dependent on this car, I do have an older 2nd car which I rarely use now but really like this car as well. Just not sure if it makes financial sense to buy it off

6. When I spoke with the dealer, I was told to buy the car, it would involve additional costs - $500 for paperwork (optional unless I do paperwork and running around myself)
- $400 for car condition check (which is required)
- Sales tax that I'll be paying - Another $2,500 I assume
- CPO Extended warranty (which I would like for peace of mind) 6 years/100,000 miles - Another $3,000?

- Are these figures reasonable / true?
- Is paperwork really such a big hassle as the dealer described or should I be able to get it done by myself and save the $500?
- Is the CPO cost worth it?
- I was told I'd get 3.9% finance rate through BMW if I was to use them. Is that the best route to go or can I go through my own bank and see if I can get a better rate and have them buy off the car?

Since my car's buy out cost appears to be less than the cost of similar CPO cars at dealership, I assume there is no room for negotiation in the process?

I really appreciate your input going through the battery of questions! If you know answers to some and not all, that is fine too, I can use all the knowledge I can get right now!

Thanks!!

Last edited by dawizard; 02-23-2013 at 04:47 PM.
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  #2  
Old 02-27-2013, 08:15 PM
dkotanto dkotanto is offline
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Mein Auto: 2006 BMW 530i sport
I think you can reduce your costs significantly if you finance through a credit union (1.49% for 60 months) and buy a premium warranty for $1900 vs $3k for CPO (Route 66). Checkout penfed.org for the loan and mentioned warranty and yes you can become a member even if you are not a government employee . I used both in several of my cars and have been extremely satisfied. Not sure about these dealer fees, especially the condition check fees.
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  #3  
Old 02-27-2013, 08:54 PM
LivinSD LivinSD is offline
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Location: Carlsbad, CA
 
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Mein Auto: 2010 535i
Think of a lease like a loan tha you are refinancing, and it becomes much simpler. You'll be buying the car from BMWFS.

Call them to find out your payoff amount. Sometimes this is negotiable. Ask for a bettr price. they can always say no.

No, the dealer does not get to charge a $400 condition check... It would be your car. Makes no difference what condition the car is in to them. You don't need to go through the dealer. If you have aaa, just make the payoff to BMWFS and then you'll owe ca sales tax on the purchase price, and aaa will help file registration and sales tax payment.

Hope that helps.
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  #4  
Old 02-28-2013, 11:30 AM
dawizard dawizard is offline
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Location: San Francisco
 
Join Date: Feb 2013
Posts: 5
Mein Auto: 528i xDrive
Thanks guys, that was very helpful!

I did check in with a credit union, they do have a 1.9% offer but that is based on some criteria such as the KBB value of the car being 80% of the Payoff/loan amount. The dealer also mentioned getting a 0.9% APR if I get a CPO through them (and if the car passes the criteria for it).

At this point I am equally weighing the option to return the car instead of pouring more money into this and get a newer model...decisions decisions!

Atleast I have a little bit better understanding of leasing now and great to know about these 3rd party warranties.

Cheers!
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  #5  
Old 03-01-2013, 04:31 AM
andymax andymax is offline
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[/QUOTE]- I was told I'd get 3.9% finance rate through BMW if I was to use them. Is that the best route to go or can I go through my own bank and see if I can get a better rate and have them buy off the car?

Since my car's buy out cost appears to be less than the cost of similar CPO cars at dealership, I assume there is no room for negotiation in the process?[/QUOTE]

I got 2.49%/60 months on a 2008 just last month, so have the dealer shop it, or shop it yourself. I used Wells Fargo.

You only have negotiation power if the dealer has a bunch of 528s...and even then its not really up to them, its up to BMW financial. They would base that on the number of lease-return 528's currenty in inventory. If there is an overstock you may have some leverage but that's iffy. If you dont care about losing this car then it may be worthwhile to push it, but you'd need to be prepared to have them call your bluff.

If you like the car it seems like a good price, but tell the dealer they wouldnt have the cost of detailing, processing, etc, and to reduce the fees.

Good Luck.
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  #6  
Old 03-01-2013, 04:44 PM
Bremen Ben's Avatar
Bremen Ben Bremen Ben is offline
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Mein Auto: 2008 535i sport
Every time I get the newsletter from my dealership, it's always full of used 528's for sale. I think it's safe to say this trim level is pretty plentiful and therefore you should be able to negotiate a better price for buy out.

On the other hand, don't you want to try something different like a new 535 though? I mean driving a 535 would give you a whole new perspective about the "Ultimate Driving Machine" that's totally different from a much tamer 528.
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  #7  
Old 03-01-2013, 10:14 PM
Gilgorm Gilgorm is offline
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Mein Auto: 2012 535i X-drive
The only time I would buy out a lease at lease end would be if I was going to pay it off completely. Just a personal viewpoint.
If I am going to have payments why not use them for a brand new/slightly used car.
I bought out my lease on a MB that was perfect during the lease but instantly developed problems after I bought it. I didn't have a problem with a three year old car but I regretted my decision as the car aged. I paid cash for the *****out.
On a positive note, if the car was a new 2010 you should have one more year of OEM warranty so you could buy it and flip it a year later for little depreciation based on your comments concerning value.
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  #8  
Old 03-05-2013, 06:46 PM
dawizard dawizard is offline
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Just wanted to follow up with you guys since you took the time to answer my questions and give some good ideas.

In the end, we changed our minds, like some of you mentioned above, we were a little bogged down by the fact that it'd be the same car and we became keen on trying out a different car. We did test drive the X6 but weren't overly impressed, primarily because of the same/similar internal feel (casually speaking ofcourse), the SUV itself was pretty slick but we might wait a few months and watch for the 2014 models to trickle in before deciding on this car.

In the meantime, I have some really nice BMW floor mats that are for sale now =)
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  #9  
Old 03-05-2013, 09:11 PM
schpenxel schpenxel is offline
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Location: Greensboro, NC
 
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Mein Auto: 2004 545i
What color?
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