Early Lease Termination - Option B - Bimmerfest - BMW Forums



Go Back   Bimmerfest - BMW Forums > BMW Buyers Guide - Dealers, resources, pricing, tips and trick > Ask-A-BMW-Dealer

Ask-A-BMW-Dealer
Talk to our team of BMW Client Advisors from supporting BMW dealerships. Get all of your BMW pricing, ordering, buying, financing, and leasing questions answered here!

Reply
 
Thread Tools Display Modes
  #1  
Old 11-08-2019, 05:42 PM
beatmstrj beatmstrj is offline
Registered User
Location: So Cal
 
Join Date: Jan 2008
Posts: 73
Mein Auto: 2017 Mineral Grey M3
Early Lease Termination - Option B

I wanted to post about my experience with Option B of the early lease termination contract language. This is probably one of the lessor known options when considering an early lease termination but after reading the very few posts about option B I could find, I decided to give it a go.

You might be wondering why I'm trying to end my lease early, simply put, after owning five BMWs I've decided to make the switch to Tesla and wanted to take advantage of the federal rebates still available this year. My lease end date is May 2020, so I'm currently six months out.

Back to option B...
The actual contract states the following:
"You must pay any past due monthly payments, any official fees and taxes (if applicable in your state), the disposition fee of $350.00, plus applicable sales tax, and the difference of the Adjusted Lease Balance (payoff amount) less the Realized Value (auction sale price or market price offered by BMW Financial Services and agreed upon by you, based upon historical auction results) of the vehicle to satisfy your account. Additionally, you must return your vehicle to an authorized BMW center."

Now this was a little confusing to me, as it might be to you. But essentially what it means is that your car gets appraised and you pay the difference of the market value of the car, minus costs*, and the full balance of what is owed on the car. "Costs" might be wear and tear, prorated mileage, tires, damages and disposition fees based on the current condition of the car. (And just in case you don't know, Option A of early lease termination is pay all your remaining payments and give us the car back, which no one should EVER do).

So I read a few posts about people who have gone through this process and had some success with BMWFS telling them in some cases that they could turn in the car without anything due. This seemed promising so I gave it a shot.

The process starts with a call to BMWFS. I told them I was interested in option B for early lease termination and would like to get that started. They stated they would send AutoVin to my house to appraise my car and this could take up to 10 days for scheduling. AutoVin contacted me about a week later and told me that because of my location that I couldn't schedule an appt. They would simply tell me when the appraiser would be scheduled to be in my area and that would be my appt window (not convenient, but I didn't really have an option). Three or four days pass and I'm contacted again and told my appt will be on Nov 4th between 8am-12pm. Again, not convenient, but I accept. Appraiser shows up around 11am, spends about 30 minutes looking at my car, taking lots of pictures, making some notes and then tells me my report will be ready within 24-48 hours.

The next day I get my AutoVin report, I'm pleased to see that i'm not charged for any wear and tear despite some small dents I put in the hood accidentally. My tires all read at 4/32" and my mileage is right on par based on my lease date. This was the best possible scenario as I wasn't going to have to fork out any additional costs.

Following the report, I'm told BMW will get back to me within 5-7 days with the final numbers.

They kindly got back to me within another 24 hours.

So below are my final early lease termination numbers:


As you can see, while Option B did result in a better cost than Option A, it didn't exactly work out in my favor and thus I decided to pass and will continue making my payments until my scheduled lease maturity date. Guess that Tesla will have to wait until May.

Anyway, wanted to share this with everyone since there is limited talk about Option B from what I could find.
Reply With Quote
Sponsored Links
Advertisement
 
  #2  
Old 11-09-2019, 09:06 AM
TXPearl's Avatar
TXPearl TXPearl is offline
Officially Welcomed to the 'Fest
Location: Texas
 
Join Date: Apr 2010
Posts: 1,075
Mein Auto: 2017 X5 5.0
Option B is equivalent to selling the car at wholesale/trade value and paying off your lease balance. You could do this yourself by shopping the car to other dealers or to Carmax, etc. Going through the BMWFS process is simply limiting yourself to one bid on the car, whatever AutoVin submits.

In many states (although I don't think Calif.), a trade-in offsets the sales tax on the new vehicle. If that were the case, it would be better to trade the vehicle and get some tax savings to offset the deficit. Presumably the trade value offered would match/beat the AutoVin bid.
Reply With Quote
  #3  
Old 11-09-2019, 10:45 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
Just out of curiosity, how well does Tesla handle customers who have non-Tesla "trade-ins"? Don't they have some kind of trade-in calculator?

Last edited by 1968BMW2800; 11-09-2019 at 10:46 AM.
Reply With Quote
Sponsored Links
Advertisement
 
  #4  
Old 11-09-2019, 11:59 AM
Autoputzer Autoputzer is offline
Officially Welcomed to the 'Fest
Location: NW Floriduh
 
Join Date: Mar 2014
Posts: 8,915
Mein Auto: 2014 535i + 2018 X3 30i
Congratulations on figuring out how to minimize the haircut/scalping your in for by ~$1000. But, that's still a $5k haircut/scalping for not keeping an exceptionally nice car for the entire three years. Since you currently have an M3, stopping your CO2 emissions six months earlier to save the planet is probably not your motivation. You have what I call a "short automotive attention span."

I have a friend with a short automotive attention span. He went from a leased M235i to a leased M240i, because it has 30 more horsepower and a new iDrive. BFD. He's also flat broke, from making almost continuous car lease payments for the last 30 years. "Almost" because he actually bought one car in those 30 or so years. But, he had the car's engine tuned to the point that it exploded. He went back to leasing after that expensive lesson.

Last edited by Autoputzer; 11-09-2019 at 12:01 PM.
Reply With Quote
  #5  
Old 11-09-2019, 12:07 PM
namelessman namelessman is online now
Officially Welcomed to the 'Fest
Location: northern california
 
Join Date: Dec 2004
Posts: 10,771
Mein Auto: bimmer
Quote:
Originally Posted by 1968BMW2800 View Post
Just out of curiosity, how well does Tesla handle customers who have non-Tesla "trade-ins"? Don't they have some kind of trade-in calculator?
Tesla factory store sales said they match Carmax quote. Coworker's experience Tesla trade is $500 better than Carmax. Carmax in turn can be a $1k to $2k better than dealer trade.
Reply With Quote
  #6  
Old 11-10-2019, 08:18 PM
quackbury's Avatar
quackbury quackbury is offline
///Monkeyazz Duck
Location: Not In Kansas Any More
 
Join Date: Dec 2005
Posts: 6,979
Mein Auto: 540i; 428 GC; 340i 6MT
A missing data point in Putzer's analysis (guess he didn't have time to build a spreadsheet) is that if the OP waits till the scheduled end of his lease term, he will likely have to either replace the tires or pay the BMWFS charge for replacement. On his car, I'm guessing that could be $500 per tire? Plus another year of property tax?

Factor those in, and include the potential better outcome by selling to Carmax or Carvanna, and I think he's looking less at a "scalping" and more at a briss.
__________________
Current BMW's:

2017 540i MSport
2016 428 GC MSport

Prior BMW's
2018 340i RWD 6MT MSport
2015 X1 35i xDrive
2015 X1 28i xDrive
2014 535i MSport
2014 328i SportWagon
2011 535ix MSport
2011 X5 35D
2008 ///M3 Vert
2008 X5 3.0
2007 X5 3.0
2006 X5 3.0
2006 550iA SP
2003 540iA M-Technic
Reply With Quote
  #7  
Old 11-10-2019, 09:05 PM
jjrandorin jjrandorin is offline
Officially Welcomed to the 'Fest
Location: San Diego
 
Join Date: May 2013
Posts: 8,785
Mein Auto: 18' Tesla Model 3 Perf.
Quote:
Originally Posted by 1968BMW2800 View Post
Just out of curiosity, how well does Tesla handle customers who have non-Tesla "trade-ins"? Don't they have some kind of trade-in calculator?

They offer a valuation, and will match carmax as mentioned. Pretty much all the cars go straight to auction (since they are not going to sell them themselves), so they dont do very much inspection of them when people turn them in.

Very general, mileage etc. At least, thats what I am reading. I didnt have a car to turn in as I simply turned my leased BMW back in prior to purchase.

On the thread topic, I agree with @txpearl though. Option B seems to be selling the car. There is no tax trade in credit here in CA so, unlike some states where dealers KNOW this and price accordingly, this OP could price around if he wanted.

Still, it almost never pays to end a lease early unless there is some manufacturer support, or some other extenuating circumstances.
__________________

2019 X3 M40i Phytonic Blue |Blk Leather W/Blue Stiching | Alu. Rhombicle trim | Adaptive Suspension | Premium Pack | Drivers Assist | Drivers Assist + | Wireless Charging | 21" 718 Wheels| | Executive Pack | HK Stereo (hers)

18' Tesla Model 3 Performance

BMW CCA #477341
Reply With Quote
  #8  
Old 11-11-2019, 06:55 AM
HPIA4v2 HPIA4v2 is offline
Officially Welcomed to the 'Fest
Location: washington
 
Join Date: Mar 2006
Posts: 3,099
Mein Auto: F80, F86
Quote:
Originally Posted by TXPearl View Post
Option B is equivalent to selling the car at wholesale/trade value and paying off your lease balance. You could do this yourself by shopping the car to other dealers or to Carmax, etc. Going through the BMWFS process is simply limiting yourself to one bid on the car, whatever AutoVin submits.

In many states (although I don't think Calif.), a trade-in offsets the sales tax on the new vehicle. If that were the case, it would be better to trade the vehicle and get some tax savings to offset the deficit. Presumably the trade value offered would match/beat the AutoVin bid.
But outside TX, in other states, lesse hasn't paid for the sales tax on the residual portion so this is not correct, right?
Reply With Quote
  #9  
Old 11-11-2019, 11:29 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by quackbury View Post
A missing data point in Putzer's analysis (guess he didn't have time to build a spreadsheet) is that if the OP waits till the scheduled end of his lease term, he will likely have to either replace the tires or pay the BMWFS charge for replacement. On his car, I'm guessing that could be $500 per tire? Plus another year of property tax?

Factor those in, and include the potential better outcome by selling to Carmax or Carvanna, and I think he's looking less at a "scalping" and more at a briss.
Quak's got a point, IMHO.

I'm a big believer in giving the "dealer" (in this case the person you talk with at Tesla) an opportunity to help you out. Calculate likely costs of keeping the BMW until lease-end, including likely end-of-lease costs if another BMW isn't leased or purchased. Tell Mr. Tesla, " I'm ready to order a Tesla today. Here's my situation..." See what they can offer. Only then will OP know the actual opportunity costs of early lease termination.

As to the briss aspect...YMMV. Size matters
Reply With Quote
  #10  
Old 11-11-2019, 11:47 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
BTW, I just finished the lease-end process for a MINI. Took delivery on my new MINI, with a new lease. Turned in car had a chipped windshield ($350), and rear bumper parking lot scraped paint ($300). Received a $300 credit for being under mileage and BMW/MINI Financial discounted the lease-end damage bill after a simple, courteous telephone conversation with them. After tax, the original bill was $707. They knocked off $320, bringing it down to $387. Then the $300 under mileage credit kicks in, which was credited against my next lease payment.

The way I look at it, I paid $87 to turn in a car with a chipped windshield and, by the estimate of my mobile bumper repair guy, $389 worth of bumper damage (plus $20 tip to the repair guy if I had done the bumper repair instead of turning the car in with the scrapes).

Original run-flats with 600 miles on them were re-fitted to the turned in car as a courtesy by my local BMW dealer who did the last free annual scheduled service prior to lease turn-in.

Things can work out, proving anything can be rationalized to convince one's self that leasing is cost-effective.
Reply With Quote
  #11  
Old 11-11-2019, 03:14 PM
Autoputzer Autoputzer is offline
Officially Welcomed to the 'Fest
Location: NW Floriduh
 
Join Date: Mar 2014
Posts: 8,915
Mein Auto: 2014 535i + 2018 X3 30i
Quote:
Originally Posted by quackbury View Post
A missing data point in Putzer's analysis (guess he didn't have time to build a spreadsheet) is that if the OP waits till the scheduled end of his lease term, he will likely have to either replace the tires or pay the BMWFS charge for replacement. On his car, I'm guessing that could be $500 per tire? Plus another year of property tax?

Factor those in, and include the potential better outcome by selling to Carmax or Carvanna, and I think he's looking less at a "scalping" and more at a briss.
That monkeyazzduck…. he so funny.

I don't need a spreadsheet to figure out that an automotive attention span even shorter than a lease is going to be a haircut. Taking a $4k haircut to avoid buying $1500 in tires still doesn't make sense.

There are a few good reasons to lease a BMW, e.g. high annual mileage and putting a lease in as a pre-tax business expense. But, most of those reasons don't apply to most BMW lessees. Most BMW lessees do it because of that short automotive attention span, or to get their payments down where they can afford them, even at the expanse of making them perpetual car payments.

All the really rich people I've known keep cars eight or ten years.
Reply With Quote
  #12  
Old 11-11-2019, 03:31 PM
quackbury's Avatar
quackbury quackbury is offline
///Monkeyazz Duck
Location: Not In Kansas Any More
 
Join Date: Dec 2005
Posts: 6,979
Mein Auto: 540i; 428 GC; 340i 6MT
Well if nothing else, that Putz he so consistent. And you know what Ralph Waldo Emerson, said about consistency....
__________________
Current BMW's:

2017 540i MSport
2016 428 GC MSport

Prior BMW's
2018 340i RWD 6MT MSport
2015 X1 35i xDrive
2015 X1 28i xDrive
2014 535i MSport
2014 328i SportWagon
2011 535ix MSport
2011 X5 35D
2008 ///M3 Vert
2008 X5 3.0
2007 X5 3.0
2006 X5 3.0
2006 550iA SP
2003 540iA M-Technic
Reply With Quote
  #13  
Old 11-11-2019, 03:35 PM
Autoputzer Autoputzer is offline
Officially Welcomed to the 'Fest
Location: NW Floriduh
 
Join Date: Mar 2014
Posts: 8,915
Mein Auto: 2014 535i + 2018 X3 30i
Quote:
Originally Posted by quackbury View Post
Well if nothing else, that Putz he so consistent. And you know what Ralph Waldo Emerson, said about consistency....
Who's this Waldo guy? Engineering major here... I slept through my humanities and social studies classes.
Reply With Quote
  #14  
Old 11-11-2019, 03:51 PM
Robert A Robert A is offline
Officially Welcomed to the 'Fest
Location: Los Angeles
 
Join Date: May 2003
Posts: 5,203
Mein Auto: BMW 535d
The question is, is it worth paying more than $4,000 to have an $1,875 Tesla rebate? Keep in mind that when the rebate burns off, Tesla may offer incentives to promote sales.
__________________
Robert A
BMWCCA Member


Current
2014 535d, M Sport, Space Gray/Mocha Nappa

Prior
2007 530i, White/Black, 6MT
2001 530i, Orient Blue/Beige, 5MT
1994 325is, White/Black 5MT
1984 325e, White/Black 5MT
1983 318i, Delphin/Beige 4MT
Reply With Quote
  #15  
Old 11-11-2019, 03:51 PM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by Autoputzer View Post
Who's this Waldo guy? Engineering major here... I slept through my humanities and social studies classes.
I think Quack is callin' you "small minded," but I'm not sure. I believe the proper and courteous response to this would be, "I know you are, but what am I?" Or, in a pinch, "So's yer mama." And I say that as someone with a solid background in the humanities.
Reply With Quote
  #16  
Old 11-11-2019, 04:01 PM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
While Tesla, and the mysteries of their sales and marketing rubric, are not fully understood, they are selling cars in a world filled with people... selling cars.

Hard to know what happens day-to-day in this dynamic world, but experience informs us that, sometimes, unexpectedly good things happen when a willing buyer and a motivated seller enter into good faith negotiations.

I commend OP for taking us through the Option B drill. Most informative and, as jj points out, a reminder that early termination of a lease, absent manufacturer incentives, is rarely a good "deal." But one never knows until the waters are tested. Price is a function of many things, and varies. I say give Tesla the opportunity to make a deal. OP knows the worst case. Might get better. As I mentioned above, a $707 lease-end bill dropped to $387. Only took a 10 minute phone call, and I wasn't trying all that hard.
Reply With Quote
  #17  
Old 11-11-2019, 08:46 PM
Autoputzer Autoputzer is offline
Officially Welcomed to the 'Fest
Location: NW Floriduh
 
Join Date: Mar 2014
Posts: 8,915
Mein Auto: 2014 535i + 2018 X3 30i
Quote:
Originally Posted by 1968BMW2800 View Post
I think Quack is callin' you "small minded," but I'm not sure. I believe the proper and courteous response to this would be, "I know you are, but what am I?" Or, in a pinch, "So's yer mama." And I say that as someone with a solid background in the humanities.


He's fun to poke at, and he enjoys poking at others.

Monkeyazzduck's probably one of the few people I've heard from for whom it makes sense to lease. He has his own business, and he drives over 20k miles/year.
Reply With Quote
  #18  
Old 11-12-2019, 07:23 AM
jjrandorin jjrandorin is offline
Officially Welcomed to the 'Fest
Location: San Diego
 
Join Date: May 2013
Posts: 8,785
Mein Auto: 18' Tesla Model 3 Perf.
Quote:
Originally Posted by Robert A View Post
The question is, is it worth paying more than $4,000 to have an $1,875 Tesla rebate? Keep in mind that when the rebate burns off, Tesla may offer incentives to promote sales.

Tesla has a recent history of reducing pricing right after (within a month) of a tax credit reduction threshhold, so I would expect that, sometime in January, most teslas other than the base model 3 Standard Range will likely see SOME sort of reduction.

In fact, tesla has raised pricing recently on many models by 500 to 1k, and my personal belief is they did that during the run up to the end of the year, so they could "reduce" pricing to cover the tax credit loss without losing that much per car.

This really isnt much different than incentives going away after the end of the year sales from other brands, (like BMW for example), but people tend to look at it differently because of... shrug... something, I dont know.

To OP, dont use the motivation to get a tesla push you toward ending the lease early. The pricing difference wont likely be 1875. Unless there is some other financial driver (like those mentioned by quack) driving you to turn in early, just turn in on time and save the money, and buy your tesla (or whatever) then.

I have been exceedingly happy with mine, but they (the cars and the company) are not perfect by any stretch.
__________________

2019 X3 M40i Phytonic Blue |Blk Leather W/Blue Stiching | Alu. Rhombicle trim | Adaptive Suspension | Premium Pack | Drivers Assist | Drivers Assist + | Wireless Charging | 21" 718 Wheels| | Executive Pack | HK Stereo (hers)

18' Tesla Model 3 Performance

BMW CCA #477341
Reply With Quote
  #19  
Old 11-12-2019, 08:38 AM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by Autoputzer View Post


Monkeyazzduck's probably one of the few people I've heard from for whom it makes sense to lease. He has his own business, and he drives over 20k miles/year.
Yeah, and his cars are really nicely configured... and he makes excellent observations... and I believe his momma wears army shoes...
Reply With Quote
  #20  
Old 11-12-2019, 09:18 AM
quackbury's Avatar
quackbury quackbury is offline
///Monkeyazz Duck
Location: Not In Kansas Any More
 
Join Date: Dec 2005
Posts: 6,979
Mein Auto: 540i; 428 GC; 340i 6MT
Quote:
Originally Posted by 1968BMW2800 View Post
Yeah, and his cars are really nicely configured... and he makes excellent observations... and I believe his momma wears army shoes...
At least she doesn't swim out to the troopships.
__________________
Current BMW's:

2017 540i MSport
2016 428 GC MSport

Prior BMW's
2018 340i RWD 6MT MSport
2015 X1 35i xDrive
2015 X1 28i xDrive
2014 535i MSport
2014 328i SportWagon
2011 535ix MSport
2011 X5 35D
2008 ///M3 Vert
2008 X5 3.0
2007 X5 3.0
2006 X5 3.0
2006 550iA SP
2003 540iA M-Technic
Reply With Quote
  #21  
Old 11-12-2019, 10:58 AM
TXPearl's Avatar
TXPearl TXPearl is offline
Officially Welcomed to the 'Fest
Location: Texas
 
Join Date: Apr 2010
Posts: 1,075
Mein Auto: 2017 X5 5.0
Quote:
Originally Posted by HPIA4v2 View Post
But outside TX, in other states, lesse hasn't paid for the sales tax on the residual portion so this is not correct, right?
Correct, the rules will vary by state.
Reply With Quote
  #22  
Old 11-12-2019, 02:21 PM
1968BMW2800 1968BMW2800 is offline
Officially Welcomed to the 'Fest
Location: Southern California
 
Join Date: Aug 2016
Posts: 1,246
Mein Auto: MINI Clubman S All4
Quote:
Originally Posted by quackbury View Post
At least she doesn't swim out to the troopships.


She doesn't have to swim out 'cause the troops all know to come by yo' house.

Disclaimer: I was in the high school band with all the ghetto kids -- I got good at this. They called me Poindexter, then, one time I showed up for band practice in my mom's BMW 2800, after which the moniker "Richey Rich" was attached... so I just went back to being courteous Man's gotta know his limitations.

Last edited by 1968BMW2800; 11-12-2019 at 02:23 PM.
Reply With Quote
  #23  
Old 11-12-2019, 05:06 PM
namelessman namelessman is online now
Officially Welcomed to the 'Fest
Location: northern california
 
Join Date: Dec 2004
Posts: 10,771
Mein Auto: bimmer
Quote:
Originally Posted by jjrandorin View Post
I have been exceedingly happy with mine, but they (the cars and the company) are not perfect by any stretch.
One great contribution of Tesla is to keep new G20 and used F30 prices depressed, e.g. a friend got a 2.5-year old 2017 330i + premium + tech + [email protected] miles for $25k + tax + fees! That car even have timing chain warranty for 15 years/150000 miles. If it were with HID light it probably would be in my garage.
Reply With Quote
Reply

See More Related BMW Stories


Forum Navigation
Go Back   Bimmerfest - BMW Forums > BMW Buyers Guide - Dealers, resources, pricing, tips and trick > Ask-A-BMW-Dealer
Today's Posts Search
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On



Forum Jump


All times are GMT -7. The time now is 12:54 AM.


Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
vBulletin Security provided by vBSecurity v2.2.2 (Pro) - vBulletin Mods & Addons Copyright © 2019 DragonByte Technologies Ltd.
© 2001- VerticalScope Inc. All rights reserved.