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Discussion Starter · #1 ·
Do any people here have experience with exchanging ED car once a year? I'm in Munich by default once every summer, and this August I'm picking up my second ED (X3). The first one was a 528 iT I got in 2000. An added bonus for me is actually having a car in Munich, although I'm very comfortable with the public transport there.

The loss of value on the first car was rather surprising, even though the mileage was extremely low. It occured to me that I may manage a lot better by reselling the car every year. I did some investigating on KBB (blue book) and it looks like something to think about. The worst part of the hit seems to be the sales tax and fees that get added to the great ED pricing.

Anyway, I would be very interested in hearing of experiences any of you may have had with this idea.
 

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baba said:
Do any people here have experience with exchanging ED car once a year? I'm in Munich by default once every summer, and this August I'm picking up my second ED (X3). The first one was a 528 iT I got in 2000. An added bonus for me is actually having a car in Munich, although I'm very comfortable with the public transport there.

The loss of value on the first car was rather surprising, even though the mileage was extremely low. It occured to me that I may manage a lot better by reselling the car every year. I did some investigating on KBB (blue book) and it looks like something to think about. The worst part of the hit seems to be the sales tax and fees that get added to the great ED pricing.

Anyway, I would be very interested in hearing of experiences any of you may have had with this idea.
There was a thread a couple years ago about this (couldn't locate it now). Theoretically, the argument went, you could break even if you do ED yearly. I am leaving for Munich on the 28th for my second ED. My first one was in 2003. I haven't sold the 03 325XiT yet, but I expect to loose about $5,000 over the E90 (not AWD and not wagon; so the loss is actually higher). But I save about $2,500 in car rental in Europe and I have a new car.
 

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Here's a great feature of BMW Financial's lease program: If you lease the car you pay only a fraction of the sales tax...and the lease is fully assumable as long as there is more than 6 months remaining.

I leased a 545 last spring and sold it this spring to a guy that assumed my lease. I put very little down to buy it and the ED savings made my lease payments low and hence attractive to a buyer. The "buyer" has to qualify and pay $450 to BMWFS as an assumption fee. And now I'm completely released from the liability of the old lease. So now I'm putting $430 down plus the first month's payment and I'm getting a 330i. My payment is super low due to the ED and a great deal from my dealer....so if I'm bored in a year I'll be able to do the same....and so on.......can you say 4 door M3???? Gotta go...my flight to Germany leaves in 9 hours!
 

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There is a guy that just got his 10th ED in about six years. He just posted a few weeks ago. I think he keeps them for about a year. My May 325i ED is still en-route, and I am considering another ED next year. It all depends on if BMW puts the new ZSG tranny in the 330, or the M3. The biggest part of ED is the travel expense. Sounds like you have to do that anyway. I would do it in a heart beat. :thumbup:
 

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The sales tax is definitely the killer. I am wondering though how the sales tax is calculated when you purchase a car by getting a loan versus pay all in cash. Is the sales tax calculated differently when you finance? Can you save some of the tax when you sell the car before the loan is paid off or you owe everything at the time of sale, including full tax?
 

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Greg220 said:
The sales tax is definitely the killer. I am wondering though how the sales tax is calculated when you purchase a car by getting a loan versus pay all in cash. Is the sales tax calculated differently when you finance? Can you save some of the tax when you sell the car before the loan is paid off or you owe everything at the time of sale, including full tax?
Makes no difference...as mentioned above, if you lease, you pay tax monthly on the payment.
 

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Me thinks you need to live in a state with no sales tax or have ties somehow to legally register your car in a state with no sales tax to skirt the that rather large eyesore of a problem of doing yearly EDs.

Leasing is one way.

I'm curious about this: Lets say you lease a car for 3 years--do the ED--then just outright sell the car when you come back home say after 3 months or so. Can you break a lease that way? I assume you have to pay BMWFS whatever is left on the lease plus the residual or something like that. However, I wonder if you could at least break even this way or even make a lil' money....

What is the skinny? Who has done this?
 

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There are a couple of ways to get out of a lease:

1) Do what they call a dealer "buyout". This means you can actually sell the car outright or even trade it in. The problem with the dealer buyout is that the "price" of acquiring the car from the leasing company is typically around the retail price of the used car off a dealer lot. In other words, private parties are unlikely to pay that amount to purchase the car from you outright and by no means would you get the dealer buyout price as a trade.

2) IMO the best option is to use a service like www.swapalease.com . As the post above mention BMWFS allows lease assumption as long as it is at leaset six months before the lease termination and swapalease creates a secondary market for lease acquisitions.

With the added savings of the ED delivery, it is likely that the actual monthly payment for your lease will be much lower than leases acquired state side. This makes acquiring your ED lease much more attractive compared to the other cars listed on swapalease. Just run your number on an ED lease and then go do a search on swapalease for the same car. You will see differences of up to a few hundred dollars depending upon the lease factors on your car.

If anyone has any questions on swapalease, just let me know.
I plan to do ED ~ once a year.
 

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Discussion Starter · #9 ·
Alstoy said:
There is a guy that just got his 10th ED in about six years. He just posted a few weeks ago. I think he keeps them for about a year. My May 325i ED is still en-route, and I am considering another ED next year. It all depends on if BMW puts the new ZSG tranny in the 330, or the M3. The biggest part of ED is the travel expense. Sounds like you have to do that anyway. I would do it in a heart beat. :thumbup:
I looked for the post you mention, as well as the thread mentioned by Marco, but no luck. Thanks for the replies anyway!

And you are right about travel expenses. Between that and CA sales tax, I think the yearly exchange would become too troublesome. But given KBB's indication of used value being above ED new price, this is a tempting proposition for me. I'll probably look carefully next year, and give it a shot.

Another interesting part of the equation for me is that I usually go to Munich in the summer. Given that the redelivery happens in October or so, the car being sold can appear to be two model years older, even though it's really only a year old.

I guess I've got to try to find out!
 

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baba said:
...... But given KBB's indication of used value being above ED new price, this is a tempting proposition for me. ...
Kelly Blue Book Value are for idiots or for Bankers and Insurance company to assess some sort of "value" when requested by their customers. People in the car biz knows that if you paid anywhere near the BlueBook Value, you paid way too much.

Good luck w/ whatever you choose to do. Just remember that, at the end of the day, pricing is a function of which, where supply meets demand.

cheers,

beewang :bigpimp:
 

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Allright,

Here is my take on KBB. My dad does 30 million in used car business every year. Never has he ever used the Kelly Blue Book. Real dealers have much more accurate tools availlable to them such as the black book and MMR ( manhiem market report). However, my dad always says that the book means nothing, if you could just buy and sell cars at the book value he would be out of business!
 

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All estimates

Obviously KBB, NADA, Edmund, Black Book, etc. are not going to give you the exact value of your car (i.e., every car & buyer is different). They all do, however, provide a good indication (when averaged) of the an estimated value of a particular make and model.
As JD Power & Assoc. currently has the BMW ranked the highest for retained value, I think it might be feasbile to turn an ED purchase over in a year and come close to getting out what you put in (and if it cost you a few $k, still not that bad).
 

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Here's an interesting fact for you to chew on: I did ED on a 545 and after a year it was getting close to needing new tires (at $1200/set). I found someone to assume my lease and instead of tires I bought my airline ticket to Germany. Either way I was spending the money. I spent $600 in sales tax to California for the year that I leased it....instead of $4,400 if I had purchased it...cash or loan.

Now I have a new set of tires attached to a new 330i. You have to look at all the costs of ownership before you come to a conclusion. Owning a second vehicle to drive is key in my opinion. I have a pickup truck anyway so it's really easy for me to ED.
 

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I posted on it a while ago, but it is gone now. I'm doing my third ED now, and in large, it seems to work.

Here in TX, we pay sales tax on the difference between the new car and the trade. With all the savings of ED (ED, BMWCCA, and perhaps some credit card rewards), it works out quite nicely. The net loss on my year old 04 330i worked out to be at most $2K.

Another benefit is expense avoidance with such things as tires, alignments...

The downside is that a second vehicle is needed while you are waiting for the car to be re-delivered stateside. Not an issue for me since I have two other cars in a two person household.
 

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TGray5 said:
Makes no difference...as mentioned above, if you lease, you pay tax monthly on the payment.
Actually, sales tax for the entire lease (not the purchase price) is either payable at the beginning of the lease or many buyers add the tax back into the lease which means you pay interest (via the lease) on the sales tax.
 

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Jspira said:
Actually, sales tax for the entire lease (not the purchase price) is either payable at the beginning of the lease or many buyers add the tax back into the lease which means you pay interest (via the lease) on the sales tax.
Actually that is incorrect. The finance charge portion of a lease is determined soley from the money factor, residual value, and net capitalized cost. You are actually paying sales tax on the 'interest' or finance charge, not the other way around. The sales tax on a lease is often thought of as a use tax, because it is calculated by taking your local sales tax rate and multiplying it by your base monthly payment. :thumbup:
 

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E90 Enthusiast said:
Actually that is incorrect. The finance charge portion of a lease is determined soley from the money factor, residual value, and net capitalized cost. You are actually paying sales tax on the 'interest' or finance charge, not the other way around. The sales tax on a lease is often thought of as a use tax, because it is calculated by taking your local sales tax rate and multiplying it by your base monthly payment. :thumbup:
Actually, your post is incorrect. Suggest you re-read NYS tax code and then try it again please. My post is quite correct.
 

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Kind of a snobbish reply, isn't it?

In California you pay sales tax on your monthly payment. So if you have a $500 payment you multiply that by your county's tax rate (8% ie) to get a total payment of $540. If you trade in the car or sell it you're off the hook for any additional sales tax. If you buy out your lease you pay sales tax on the balance owed on the lease which is essentialy the purchase price. Sales tax is never loaded onto a lease up front. Not here on the left coast anyway.
 

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MARCUS330i said:
Kind of a snobbish reply, isn't it?
Really, how so? The post prior to mine is "Actually that's incorect" and mine is "Actually your post is incorrect." Looks like several people correcting each other.

Nothing pretentious about my post - esp. since it was correct (as was my original post about how sales tax is charged up front on a lease which results in many people financing the sales tax over the lease). YMMV based on local conditions.
 
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