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      02-20-2018, 12:58 PM   #1
EEBreh
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Who here bought out their Lease?

Who here bought out their lease? Did you end up paying less than the residual? Did you get your car CPOd? Thanks
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      02-21-2018, 07:12 PM   #2
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My lease is up in June. I know its really early but I deicded to see what CarMax would offer me...

25k.

For a 2015 M235 Auto, Premium, Cold weather, Mineral white, 26.5k miles. Current payoff is north of 30, residual is just above 29k.
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      02-22-2018, 01:02 PM   #3
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Quote:
Originally Posted by opfreak View Post
My lease is up in June. I know its really early but I deicded to see what CarMax would offer me...

25k.

For a 2015 M235 Auto, Premium, Cold weather, Mineral white, 26.5k miles. Current payoff is north of 30, residual is just above 29k.
This sounds familiar. Mine is a nearly fully loaded M235xi, auto, only option it's missing is Driver Assistance Plus. Lease is up in April, and CarMax offered 26k two weeks ago. My residual is $32,768.

I called a couple of BMW dealers, one basically said the residual is the price. The other one said they could sell it to me for $1,000 under residual, and I could skip my last two payments.

Neither of those options are appealing...but as I look at other cars, the 235 has the best mix of everything I want.
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      02-22-2018, 01:22 PM   #4
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Quote:
Originally Posted by rjroch View Post
This sounds familiar. Mine is a nearly fully loaded M235xi, auto, only option it's missing is Driver Assistance Plus. Lease is up in April, and CarMax offered 26k two weeks ago. My residual is $32,768.

I called a couple of BMW dealers, one basically said the residual is the price. The other one said they could sell it to me for $1,000 under residual, and I could skip my last two payments.

Neither of those options are appealing...but as I look at other cars, the 235 has the best mix of everything I want.
Yup. But for me, its going to be hard to pay residual when I know if I was going to trade it in/sell it, I'd be underwater by 5-6 grand from the day I signed.

Also gives everyone a data point as to why the residuals on new ones are so much worse then 3 years ago. BMWFS doesnt want to lose 5grand at lease turn in time.
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      02-22-2018, 01:54 PM   #5
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Quote:
Originally Posted by opfreak View Post
Yup. But for me, its going to be hard to pay residual when I know if I was going to trade it in/sell it, I'd be underwater by 5-6 grand from the day I signed.

Also gives everyone a data point as to why the residuals on new ones are so much worse then 3 years ago. BMWFS doesnt want to lose 5grand at lease turn in time.
Yeah, there's no way I'm buying my car for the residual, or even for ~$30,500 after factoring in the two payments (which I didn't do). There are a few CPO models available for roughly that price. Despite all that, it's really hard to believe the real off-lease value of these cars is only mid 20s.

Also, while I really do love the car, it did have a weird electrical issue last year. Some voltage regulating component in the charging system malfunctioned and several systems were getting 18+ volt spikes and going into protective shutdown. They had to replace several things in order to ultimately fix that. Nothing's happened since, but it is one more thing giving me pause.

No matter what happens I am quite glad I leased, that much is certain.
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      02-22-2018, 03:17 PM   #6
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Quote:
Originally Posted by rjroch View Post
Yeah, there's no way I'm buying my car for the residual, or even for ~$30,500 after factoring in the two payments (which I didn't do). There are a few CPO models available for roughly that price. Despite all that, it's really hard to believe the real off-lease value of these cars is only mid 20s.

Also, while I really do love the car, it did have a weird electrical issue last year. Some voltage regulating component in the charging system malfunctioned and several systems were getting 18+ volt spikes and going into protective shutdown. They had to replace several things in order to ultimately fix that. Nothing's happened since, but it is one more thing giving me pause.

No matter what happens I am quite glad I leased, that much is certain.

Its not an SUV, and has 2 doors. Thats pretty much a killer right now.
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      02-23-2018, 07:16 AM   #7
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Has anybody tried hardballing the dealer with these real world numbers - If the car is only going to lose them money, surely they would rather put together a quick paperwork sale than take the hit on time and floor space? Or is this one of those budget shuffles, where BMWUSA is the one taking the hit on depreciation?
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      02-23-2018, 08:15 AM   #8
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Quote:
Originally Posted by Maynard View Post
Has anybody tried hardballing the dealer with these real world numbers - If the car is only going to lose them money, surely they would rather put together a quick paperwork sale than take the hit on time and floor space? Or is this one of those budget shuffles, where BMWUSA is the one taking the hit on depreciation?
Dealer has nothing to do with it, not their problem.

They only get involved bc within 120 days they can buy the car from BMW for a negotiated price if they thing they can move it - not the pre determined residual. They can then sell to original lease holder or put on lot as either used or CPO. Entirely at their discretion.

You turn your car in and no one buys it - BMW eats whatever the difference is between residual and what they get at auction.
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      03-06-2018, 06:19 AM   #9
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Quote:
Originally Posted by rjroch View Post
This sounds familiar. Mine is a nearly fully loaded M235xi, auto, only option it's missing is Driver Assistance Plus. Lease is up in April, and CarMax offered 26k two weeks ago. My residual is $32,768.

I called a couple of BMW dealers, one basically said the residual is the price. The other one said they could sell it to me for $1,000 under residual, and I could skip my last two payments.

Neither of those options are appealing...but as I look at other cars, the 235 has the best mix of everything I want.
That doesn't sound like too bad of deal to me. I just paid $34k for the exact same car(+CPO) that has 23k miles. You know the history and if it's been a good car, I don't see anything wrong with that price assuming you want to stick with the same model.
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      03-06-2018, 06:25 AM   #10
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Originally Posted by rjroch View Post

No matter what happens I am quite glad I leased, that much is certain.
Kind of an off topic question but did the numbers actually work better with the lease? How much did you actually pay to drive your car for those 3 years? Could I assume something like $22k? Is that actually better than if you would have paid cash and just sold it to Carmax 3 years later?
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      03-06-2018, 08:14 AM   #11
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Quote:
Originally Posted by dsmclone View Post
Kind of an off topic question but did the numbers actually work better with the lease? How much did you actually pay to drive your car for those 3 years? Could I assume something like $22k? Is that actually better than if you would have paid cash and just sold it to Carmax 3 years later?
It's pretty straight forward - if the residual is greater than market value, you did good for the duration of the lease. If the residual is less than market value you overpaid while you were driving the car.
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      03-06-2018, 08:50 AM   #12
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Quote:
Originally Posted by dsmclone View Post
Kind of an off topic question but did the numbers actually work better with the lease? How much did you actually pay to drive your car for those 3 years? Could I assume something like $22k? Is that actually better than if you would have paid cash and just sold it to Carmax 3 years later?
If you read one of my earlier posts in the thread, I mentioned how much Carmax offered: $26k. That is the exact reason why I am glad I leased. The car's actual market value is nearly $7k less than what BMW said it would be after 3 years.

Also, while the car has been mostly reliable I did have some weird electrical problems. The charging system developed an issue last year where it was spiking to ~18.5V, causing several systems to go into protective shutdown (airbags, ABS, power steering). Some part of the audio system was replaced as a side effect of this issue. After the alternator and some kind of battery cable were replaced it was fine for a while. It had the same issue again a couple of months later, at which time BMW replaced the battery. It hasn't happened again in around 6 months, but it certainly doesn't give me confidence regarding keeping the car.

So I will certainly not keep the car without any kind of extended warranty. At this point I would not consider any price above $30k, and would only consider $30k if it included a warranty that covers all electrical systems including iDrive. As far as I know CPO doesn't do that, you can only get that level of coverage from the Platinum extended warranty.
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      03-06-2018, 09:00 AM   #13
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Quote:
Originally Posted by rjroch View Post
If you read one of my earlier posts in the thread, I mentioned how much Carmax offered: $26k. That is the exact reason why I am glad I leased. The car's actual market value is nearly $7k less than what BMW said it would be after 3 years
What I'm asking is how much did it cost you to lease for 3 years?


Lets say you would have bought the car for $48k and after 3 years Carmax would have paid you $26k for it. So over 3 years it would have cost you $22k right? These are just rough numbers since I have no clue what you could have bought the car for outright and I have no clue what the total cost of your lease was but I'm not getting how the lease is such a good deal even with the lousy resale value.
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      03-06-2018, 09:02 AM   #14
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Quote:
Originally Posted by BEM-S4 View Post
It's pretty straight forward - if the residual is greater than market value, you did good for the duration of the lease. If the residual is less than market value you overpaid while you were driving the car.
Is it really that straightforward? For me, it's what costs me less over a time frame.
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      03-06-2018, 09:32 AM   #15
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Quote:
Originally Posted by dsmclone View Post
What I'm asking is how much did it cost you to lease for 3 years?


Lets say you would have bought the car for $48k and after 3 years Carmax would have paid you $26k for it. So over 3 years it would have cost you $22k right? These are just rough numbers since I have no clue what you could have bought the car for outright and I have no clue what the total cost of your lease was but I'm not getting how the lease is such a good deal even with the lousy resale value.
Do I really have to break this down all the way? Okay, here goes:

When I bought the car, the M235xi was still very new and $48k would have been an out of this world good price. I negotiated the price from $53.5k down to $50k. The residual at the time was 61%, which now turns out to have been the height of fantasy.

With BMW lease start/end fees factored in, my lease will have cost me roughly $22.5k. The only numbers I'm excluding from that total are dealer doc fees and yearly registration fees because they would be the same regardless of purchase/lease/finance choice.

That $22.5k includes roughly $1,100 in sales tax. In your world of an up front cash purchase, I would have paid sales tax on the full price of the car, which would have been $3,250. Yes, when I trade it in I would not pay tax on the first $26k of the replacement car, but that only saves me $1,690.

So had I bought the car outright, I would have paid $50,000+$3,250-$26,000-$1,690=$25,560 to drive the car for 3 years. I also could've (but shouldn't have) done a single pay lease, which would have also saved me the interest on the financed $17.2k depreciation amount, another roughly $800.

Because I leased, and because I live in a state that only taxes the depreciated amount of a lease, I saved over $3,000. I can also walk away from this weird electrical issue. If something else even worse had happened I'd be all the more grateful not to be stuck with the car.
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      03-06-2018, 09:36 AM   #16
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Quote:
Originally Posted by rjroch View Post
Do I really have to break this down all the way? Okay, here goes:

When I bought the car, the M235xi was still very new and $48k would have been an out of this world good price. I negotiated the price from $53.5k down to $50k. The residual at the time was 61%, which now turns out to have been the height of fantasy.

With BMW lease start/end fees factored in, my lease will have cost me roughly $22.5k. The only numbers I'm excluding from that total are dealer doc fees and yearly registration fees because they would be the same regardless of purchase/lease/finance choice.

That $22.5k includes roughly $1,100 in sales tax. In your world of an up front cash purchase, I would have paid sales tax on the full price of the car, which would have been $3,250. Yes, when I trade it in I would not pay tax on the first $26k of the replacement car, but that only saves me $1,690.

So had I bought the car outright, I would have paid $50,000+$3,250-$26,000-$1,690=$25,560 to drive the car for 3 years. I also could've (but shouldn't have) done a single pay lease, which would have also saved me the interest on the financed $17.2k depreciation amount, another roughly $800.

Because I leased, and because I live in a state that only taxes the depreciated amount of a lease, I saved over $3,000. I can also walk away from this weird electrical issue. If something else even worse had happened I'd be all the more grateful not to be stuck with the car.
That's perfect. Looks like it worked out for you.
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      03-06-2018, 10:02 AM   #17
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Quote:
Originally Posted by dsmclone View Post
Quote:
Originally Posted by BEM-S4 View Post
It's pretty straight forward - if the residual is greater than market value, you did good for the duration of the lease. If the residual is less than market value you overpaid while you were driving the car.
Is it really that straightforward? For me, it's what costs me less over a time frame.
It is and it isn't. If you turn car in you can easily see if you did well or not. When you buy it the math starts to get more complicated.

Say your residual is way under market value, so you overpaid for your lease. If you buy the car cheaply now and keep it, you come out ok. However if you got 10% off from dealer and your residual is 50%, you really only got 5% off from dealer.

The way to "win" is get a cheap lease with high residual, get dealer to play ball and buy out below residual and sell back to you.
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      03-06-2018, 12:11 PM   #18
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Originally Posted by BEM-S4 View Post
The way to "win" is get a cheap lease with high residual, get dealer to play ball and buy out below residual and sell back to you.
Yep. Which is exactly what I would consider doing, if I could get a reasonable number out of a dealer.
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      03-06-2018, 12:17 PM   #19
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Quote:
Originally Posted by rjroch View Post
Yep. Which is exactly what I would consider doing, if I could get a reasonable number out of a dealer.
That's the ideal situation for sure. An OK compromise situation which is often times easier to accomplish, some dealers will let you do your residual buyout and have it include the cost of a CPO.

Unfortunately it's all work for the dealer without a huge amount of $ involved, so a lot of it comes down to a simple how much they like you / want to help you out. And not unlike women, some things are OK or not depending on what time of month it is.
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      03-07-2018, 06:43 PM   #20
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Just curious, what are current residuals running on the m240i and why are they so much lower than a few years ago?
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      03-08-2018, 09:50 AM   #21
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Based on what I have read on other BMW forums, BMW usually sells it back to the dealer for a little bit more than the auction value - at least that is the case with the 3/4 series cars. Does anyone here have auction access and can pull up recent auctions of the F22 cars? Thanks
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      03-08-2018, 11:06 AM   #22
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Originally Posted by mblaucoupe135 View Post
Just curious, what are current residuals running on the m240i and why are they so much lower than a few years ago?
For a 3 year, roughly 50%. They're lower because a few years ago this was a brand new car, and BMW didn't know what it would be worth in the used market. Residuals were in the low 60s at that time. To say they were optimistic would be putting it mildly.
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