[Séve]

I was hoping to get some information from the board regarding how to best go about purchasing my brother's car at the end of his lease.

- 228i M-Sport, 20k miles, couple dings that BMW would charge him
- Lease ends March 28, 2017
- Residual is approximately $24,500

My questions/concerns:
1. I've called BMW FS. They are unwilling to let me assume the lease since there's less than 6 months remaining. I can arrange financing and have the check sent to BMW FS. They would only be willing to send my brother the title. Then he'd transfer ownership to me.
2. I'm concerned about being taxed twice by my state. Once when my brother receives the title and then on the transfer to me. I would be fine with being gifted the car for $1, but there's probably tax implications when I'd want to sell the car.
3. Could we arrange for me to purchase the car from a dealership at a pre-negotiated price? Residual or lower? This would raise my tax basis in the car, but I'm wanting to avoid damage fees / lease terminations fee.

Any advice would be greatly appreciated!

[BEM-S4]

The easiest way to do this BY FAR is to get your dealer to work on this with you. They buy car from BMWFS then sell to you. Only extra thing is you'll have to give them $100 or so to do an inspection on the car since they will t cynically own it and then sell it to you. If something major is wrong that they don't catch you could come after them.

That said it's basically a pass through deal and they help you out and eliminate all of the bullshit with BMWFS, title, taxes, everything.

Need to have a dealer willing to help though. I just did this when selling my 235 coupe to a third party to get my convertible. Was super easy.

If you do within 120 days of lease end dealer may be able to get car at less than buyout.

Feel free to PM me if you have questions.

[Séve]

Originally Posted by BEM-S4

The easiest way to do this BY FAR is to get your dealer to work on this with you. They buy car from BMWFS then sell to you. Only extra thing is you'll have to give them $100 or so to do an inspection on the car since they will t cynically own it and then sell it to you. If something major is wrong that they don't catch you could come after them.

That said it's basically a pass through deal and they help you out and eliminate all of the bullshit with BMWFS, title, taxes, everything.

Need to have a dealer willing to help though. I just did this when selling my 235 coupe to a third party to get my convertible. Was super easy.

If you do within 120 days of lease end dealer may be able to get car at less than buyout.

Feel free to PM me if you have questions.

Great info; thanks! Did the dealership charge you a lease termination fee or any damage charges?

[BEM-S4]

No. you can buy lease out for buyout literally whenever you want. If you wait until 120 days out dealer can negotiate a better price. Again not all dealers will work w you on this so need to find someone who is cool. Easier if your bro is getting another car with them most times.

[BMW F22]

Originally Posted by BEM-S4

No. you can buy lease out for buyout literally whenever you want. If you wait until 120 days out dealer can negotiate a better price. Again not all dealers will work w you on this so need to find someone who is cool. Easier if your bro is getting another car with them most times.

How much lower is the buyout for buyer vs the residual? Curious as I'm in similar boat so very much interested in this thread.

[BEM-S4]

Originally Posted by BMW F22

How much lower is the buyout for buyer vs the residual? Curious as I'm in similar boat so very much interested in this thread.

Depends on a variety of factors. Dealer can buy close to wholesale most times so just check that. Depends on your residual, miles etc.

[Pparana]

Originally Posted by Séve

I was hoping to get some information from the board regarding how to best go about purchasing my brother's car at the end of his lease.

- 228i M-Sport, 20k miles, couple dings that BMW would charge him
- Lease ends March 28, 2017
- Residual is approximately $24,500

My questions/concerns:
1. I've called BMW FS. They are unwilling to let me assume the lease since there's less than 6 months remaining. I can arrange financing and have the check sent to BMW FS. They would only be willing to send my brother the title. Then he'd transfer ownership to me.
2. I'm concerned about being taxed twice by my state. Once when my brother receives the title and then on the transfer to me. I would be fine with being gifted the car for $1, but there's probably tax implications when I'd want to sell the car.
3. Could we arrange for me to purchase the car from a dealership at a pre-negotiated price? Residual or lower? This would raise my tax basis in the car, but I'm wanting to avoid damage fees / lease terminations fee.

Any advice would be greatly appreciated!

The buyout is close or below wholesale for a 2015 with those miles. Retail is high 20s to low 30s
If you trust your brother why not just title in his name and you could call it a loan. Transfer.the title when it is worth much less. There would.be federal gift tax implications for your brother if he gives it to you.

Any dealer bmw, Ford , Joe's used cars can buy car whenever from bmwfs for the buyout that month. You may find someone who will pass it through there books for 500 - 1000 bucks.

[BEM-S4]

Originally Posted by Pparana

The buyout is close or below wholesale for a 2015 with those miles. Retail is high 20s to low 30s
If you trust your brother why not just title in his name and you could call it a loan. Transfer.the title when it is worth much less. There would.be federal gift tax implications for your brother if he gives it to you.

Any dealer bmw, Ford , Joe's used cars can buy car whenever from bmwfs for the buyout that month. You may find someone who will pass it through there books for 500 - 1000 bucks.

There is no tax benefit to doing this. Brother will have to pay tax when he buys out lease. You will pay tax whenever the car becomes yours - if he gifts the car to you and you don't pay taxes he still paid the tax you would have and the gift tax. If he sells car to you for anything beyond a nominal amount you're paying double tax on a portion of value between the two of you.

For all involved it's best if you do the pass through deal using the dealer and put the car in your name. Highly likely that they will do it for no fee beyond inspection if brother is getting another car.

[Séve]

Thanks for the information, guys. I went to the dealership today to make sure my sales guy was good with everything. He was, and the buyout offer is less than the residual. He then went on to offer that since my brother is eligible for the Pull Ahead Program, we could do the deal before the end of the month. This would save 2 months of lease payments.

My question: is the buyout offer likely to fall as I get closer to the lease end or is this something I should go ahead and accept? I plan on negotiating the offer some as it is.

[Pparana]

Originally Posted by Séve

Thanks for the information, guys. I went to the dealership today to make sure my sales guy was good with everything. He was, and the buyout offer is less than the residual. He then went on to offer that since my brother is eligible for the Pull Ahead Program, we could do the deal before the end of the month. This would save 2 months of lease payments.

My question: is the buyout offer likely to fall as I get closer to the lease end or is this something I should go ahead and accept? I plan on negotiating the offer some as it is.

Buyout should fall, but brother pays more for the two months and also I am guessing he is leasing another bmw? Is the car a 14 or 15?

[Séve]

Sorry, I should have included it. It's a 2014. We're actually switching cars. We like both too much to get rid of them.

Yeah, my gut says it'll fall but not by $400x2. He got a steal of a deal on the lease initially.

[Pparana]

Used car wholesale values are high at this time.of year (tax season). My calcs were on a 15, 14 is below.
I added m sport not sure what other options on car. That is national, dealer price is prob close to.wholesale depending on condition


2014 BMW 2-Series 228i 2D Coupe


State: Miles:
20000
Click to Change Mileage
Add/Deducts:
M Sport Package +$2,200
Technology w/Nav +$950
w/o Auto Trans -$800
w/o Moonroof -$700
Refresh with New Criteria

2014 BMW 2-Series 228i 2D Coupe

Show Vehicle Photo Show Vehicle Colors
VIN: WBA1F5C5E
UVC: 2014100178
VIN + UVC: WBA1F5C5E178
MSRP: $32,100
Finance Advance: $23,925
Model#: 142A
Price Incl: AT AC ES
Mileage Cat: G
Weight: 3,300
Wheelbase: 105.9
Base HP: 240 @ 6500
Taxable HP: 17.4
Tire Size: 205/50R17
Drive Train: RWD
Transmission: A
Fuel Type: Gas
Cylinders: 4

Black Book Retail as of 01/30/2017
Extra Clean Clean Average Rough
Base $25,025 $23,625 $21,200 $18,525
Options $2,200 $2,200 $2,200 $2,200
Mileage $1,450 $1,900 $2,350 $2,375
Total $28,675 $27,725 $25,750 $23,100

Black Book Trade-In as of 01/30/2017
Clean Average Rough
Base $19,760 $18,000 $14,090
Options $2,200 $2,200 $2,200
Mileage $1,900 $2,350 $2,375
Total $23,860 $22,550 $18,665

[Séve]

So we're about ready to pull the trigger on the deal, but the dealer is stating my brother's minimum security deposit refund will be reduced by the two remaining lease payments. Does this sound right? He isn't buying a new car from them.

For reference, the residual was $25,162. We negotiated a purchase price of $21,217.