# Early lease termination (Is this a good deal?)



## salehk (Nov 2, 2020)

Hello everyone, I am currently leasing a 2018 430i fully loaded @ $587/month. My lease ends in July 2021 so I have nine months remaining yes that is NINE months. I have currently maxed out my miles on the car at 30k. I'm currently 1k over the limit at 0.25 cents a mile. I went into the BMW dealership that I leased my car from they told me the best deal they could give me, is to turn in my lease early, and all I would have to pay is the remaining balance on my lease 9 * $587 = $5,283, plus the miles that I have driven over. 

The dealer said he would put me in a new 2020 330i M-sport package, Harman Kardon sound, all packages except the HUD for $550/month with 12k miles per year.

Is this a good deal? Family and friends have told me I should not be paying off the rest of the lease balance. Is this true? Is there any way I can get out of paying the $5283?


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## ctorrey (Mar 17, 2007)

You can call BMWFS and ask them if they can help you with the buyout - not sure what they can do, but many of us with leases expiring were offered significant credits for buying our cars as opposed to turning them in. I was offered a $6k credit for '17 340i, which I declined. Anyway, you're in a tough situation here, but folks on this board may have some creative ideas. With respect to the 2020 330i at $550/mo, that seems super high for last year's model. I'm thinking that your payment should start with a 3, maybe a low 4 before taxes. But you'll need to post the lease details here for people to evaluate...

MSRP
Applicable Incentives
Negotiated Cap Cost
Money Factor
Cap Cost Reduction
Residual (36/12k lease)


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## salehk (Nov 2, 2020)

ctorrey said:


> You can call BMWFS and ask them if they can help you with the buyout - not sure what they can do, but many of us with leases expiring were offered significant credits for buying our cars as opposed to turning them in. I was offered a $6k credit for '17 340i, which I declined. Anyway, you're in a tough situation here, but folks on this board may have some creative ideas. With respect to the 2020 330i at $550/mo, that seems super high for last year's model. I'm thinking that your payment should start with a 3, maybe a low 4 before taxes. But you'll need to post the lease details here for people to evaluate...
> 
> MSRP
> Applicable Incentives
> ...


Thank you for the info. I'll ask the salesman for the details and post them. I currently live in the Bay Area, CA if that makes a difference. Cars here tend to be more expensive.


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## bzcat (Sep 23, 2009)

The short answer is no, there is no way to avoid paying the lease and the mileage penalty. You signed a contract so BMWFS is not going to let you out of it just because.

But there are things you can do yo try to minimize the hit.

1. Call BMWFS and purchase more miles. Since you have 9 months left, you can purchase more miles at lower rate than at lease turn in (I believe it is 20 cents instead of 25 cents if you do it before you reach 4 months on your contract - but that maybe old data).

2. You can try to buy the car from BMWFS but you are too early for that. You probably have to wait until you are 3 months from end of the lease to get an offer from BMWFS. To be clear, if you buy the car, BMWFS will still charge you the mileage penalty but may give you a discount to make it less of a bad deal. Or it may not... the trick here is to know exactly how much is the market value of your car. If the buyout price offered by BMWFS (residual + penalty - discount) is close to the market value, you may want to do it... but don't forget the sales tax. But generally, when you are over mileage, the math doesn't work on buyouts.

3. You can try to sell it or trade it in. Carvana will give you a quote how much they will buy your car for. If you end up losing at lot less than $5,238, you may want to consider it. 

And the offer on that 2020 330i is horrifically bad. They are pretending to help you by keeping your monthly payment the same. Don't be a sucker.

Also, I think you need to rethink the reason why you want to get out of the lease. Why would you pay 9 months of your lease and not drive the car? Remember, there is no getting out of it so why the panic now? Just wait.


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## rounderman (Apr 26, 2016)

also contact Jon Shaffer board originator (he is all over this section) as you get closer to lease end he will give you a fair deal. Also if you search the threads for Autuputzer he has numerous spreadsheets on what it costs to drive a car. 20 cents is mile is way less than actual wear and tear, deprecation etc. relax, don't rush into anything do soem research. you are in much better shape financially than you realize


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## 1968BMW2800 (Aug 13, 2016)

rounderman said:


> also contact Jon Shaffer board originator (he is all over this section) as you get closer to lease end he will give you a fair deal.


+++
OP, you are lucky to be in California, not that far from Jon Shafer. Reach out to him directly. He will lay out your best options.


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## 1968BMW2800 (Aug 13, 2016)

And don't panic about being over miles. You're still under warranty.


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## salehk (Nov 2, 2020)

bzcat said:


> The short answer is no, there is no way to avoid paying the lease and the mileage penalty. You signed a contract so BMWFS is not going to let you out of it just because.
> 
> But there are things you can do yo try to minimize the hit.
> 
> ...


I want to get rid of it now because in 9 months I'll have to pay the mileage penalty. Which lets say I drive over by 10k miles I'll pay up to 2500 on top of everything I've already paid.

The 330i is $550 with taxes, if that makes a difference.

You made a good point I didn't think of. I'm gonna pay off the car and not drive it, I didn't think of it that way.

If I get a better deal on the 330i is it worth it?


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## salehk (Nov 2, 2020)

Thank you for the replies! This is very helpful!


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## ard (Jul 1, 2009)

amazing. This isnt a hard problem.

You will pay the 5283 one way or the other.

So the ONLY thing you can avoid is the mileage penalty.

If you buy 1000 miles each month, it will cost your* $250 a month* to keep driving the "fully loaded" 430.

VERSUS...

*$550 a month* to start the hamster wheel on the new 330.

Simple. 250 or 550? Thats it.

You are the PERFECT BMW customer: a monthly payment customer. I bet you have no idea what the MSRP is, the money factor or the sale price is on that 330, right?

You are paying 2700 MORE to avoid what your brain is telling you is a 'extra 2500'. Its crazy.

And here a BIG hint: just because you live in the bay area you dont need to buy the car in the bay area. Shocker I know. Lemme guess, the guy at the BMW store told you it was best?


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## Infosec (Feb 11, 2014)

ctorrey said:


> You can call BMWFS and ask them if they can help you with the buyout - not sure what they can do, but many of us with leases expiring were offered significant credits for buying our cars as opposed to turning them in. I was offered a $6k credit for '17 340i, which I declined. Anyway, you're in a tough situation here, but folks on this board may have some creative ideas. With respect to the 2020 330i at $550/mo, that seems super high for last year's model. I'm thinking that your payment should start with a 3, maybe a low 4 before taxes. But you'll need to post the lease details here for people to evaluate...
> 
> MSRP
> Applicable Incentives
> ...


Can you pls. explain what is this credit which BMWFS offered to you?

I have two leases expiring in Dec. 18' 530e MSRP 63K with 7K miles pristine condition. It will be replaced by 21 530ix. I would like to get some credit to the new lease if possible.


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## jjrandorin (May 8, 2013)

Infosec said:


> Can you pls. explain what is this credit which BMWFS offered to you?
> 
> I have two leases expiring in Dec. 18' 530e MSRP 63K with 7K miles pristine condition. It will be replaced by 21 530ix. I would like to get some credit to the new lease if possible.


He was talking about a credit BMW was offering to buy out the current leased car ( and keep it), not a credit toward a new car.


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## quackbury (Dec 17, 2005)

Listen to ard. His advice is spot on. You screwed yourself 2 years and 3 months ago by opting for a 10,000/year lease. Rookie mistake. Own it an move on.

Build a spreadsheet. Run the numbers. It is FAR cheaper to buy additional miles on your current car than to lease a new car, complete with acquisition fee, document fees, etc. etc. etc.

Currently, between 4 and 6 months prior to lease expiration (not before) BMWFS is offering a discounted price to buy your car at lease end. The actual discount varies based on model, equipment, colors, geographical area, and phases of the moon. Basically, BMWFS is looking at your specific car and estimating what it would be worth at the Mannheim auction when you are done driving it. If their crystal ball says there will be low demand, they will offer you an incentive to take it off their hands.

This is an informal program and could end at any time. But if you like your car and would consider buying it at lease end, it is worth exploring. In the OP's case *there are no additional mileage charges baked into the price, so if you are over-miles on your lease, it is certainly worth exploring.*


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## ard (Jul 1, 2009)

Oh, I forgot the most important part in support of holding the current lease and paying for mileage when you turn it in:

If, the day before you are set to turn it in, someone T bones you and totals it, you dont need to pay ANY mileage fees!!!!!

So you have that potential upside to look forward to.....


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## wcr3d (Jul 17, 2012)

Wouldn’t that be true from now until then?
That increases the odds


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## ard (Jul 1, 2009)

wcr3d said:


> Wouldn't that be true from now until then?
> That increases the odds


True.

But you will get the most bang for your buck getting T-boned on the way to turn in.

(Pun intended)


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## gohawks23 (Oct 27, 2008)

It is obvious the OP is clueless about leasing/negotiating/calculating own payment, etc.

Other than just keeping car and paying mileage penalty at lease end (best option)...my recommendation is he should engage\hire a good car lease broker/consultant in his area...or work with Jon for his next car otherwise he will get hosed again.


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## ard (Jul 1, 2009)

what I told him 10 months ago..... its not that difficult to figure out




ard said:


> amazing. This isnt a hard problem.
> 
> You will pay the 5283 one way or the other.
> 
> ...


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## SteveinArizona (Sep 12, 2016)

ard said:


> amazing. This isnt a hard problem.
> 
> You will pay the 5283 one way or the other.
> 
> ...


Ard,,,Your reply is accurate but the tone is harsh. Give the OP some slack.


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## ard (Jul 1, 2009)

SteveinArizona said:


> Ard,,,Your reply is accurate but the tone is harsh. Give the OP some slack.


Im confused...which of the two responses are 'too harsh'? the one 4 days ago or 11 months ago?!?

But in all seriousness...are these really fully grown adults with the financial ability to sign notes for ~$50k cars?!?


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## 1968BMW2800 (Aug 13, 2016)

ard said:


> Im confused...which of the two responses are 'too harsh'? the one 4 days ago or 11 months ago?!?
> 
> But in all seriousness...are these really fully grown adults with the financial ability to sign notes for ~$50k cars?!?


Without wading into questions of appropriate bluntness vs. unnecessary harshness vs. _courtesy_....
as to the question about "fully grown adults with the financial ability," it is always a reminder that the reason we get the deals we do is because of all of the people who don't do well negotiating car deals. The entire industry sales model, developed over the decades, is a "process" designed to work customers and extract maximum "all the money" profits. Those who take the time to become informed and maintain the necessary discipline to complete a satisfactory deal are in the minority for sure.

My suggestion is that we patiently share our accumulated wisdom with those who are ready to receive it. Everyone else pays full retail. YMMV.


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## crazy4trains (Mar 30, 2011)

I'm not sure it's wisdom but it's definitely my opinion, and we all know what "they" say about opinions.

DON"T LEASE!!!

Buy your cars. If you can't pay cash then finance for a reasonable period of time. Keep the car for 10 years. Put the money you save from NOT making loan/lease payments in the bank or invest it otherwise. Once you get into the habit of doing this getting into another loan/lease payment will create a pit in your stomach. That's a good thing. That's your stomach telling your brain not to make a bad decision.


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## 1968BMW2800 (Aug 13, 2016)

crazy4trains said:


> I'm not sure it's wisdom but it's definitely my opinion, and we all know what "they" say about opinions.
> 
> DON"T LEASE!!!
> 
> Buy your cars. If you can't pay cash then finance for a reasonable period of time. Keep the car for 10 years. Put the money you save from NOT making loan/lease payments in the bank or invest it otherwise. Once you get into the habit of doing this getting into another loan/lease payment will create a pit in your stomach. That's a good thing. That's your stomach telling your brain not to make a bad decision.


Depends on where one is on life's trajectory and how one wishes to enjoy the finite number of heartbeats which, once spent, cannot be retrieved or refunded. One solution does not fit all cases.

crazy4trains, you clearly are not a New Car Smell addict. That's fine. Good on you. The least economical thing to do is to buy a new car. Second least economical thing is to lease (apologies to Autoputzer and his spreadsheets that show what a fool I've been  ). Either way, they get your money. I've done buy and drive until the wheels were about to fall off and I've serial leased. All good/always felt privileged to be in a position to choose. My stomach has never been turned by the New Car Smell but it has been turned more than once by shady car dealers! 

Get a good deal, then drive what you love -- purchased, or leased. Life's too short not to.


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## LogicalApex (Aug 5, 2019)

1968BMW2800 said:


> Depends on where one is on life's trajectory and how one wishes to enjoy the finite number of heartbeats which, once spent, cannot be retrieved or refunded. One solution does not fit all cases.


As I always say, be honest about what you're optimizing for. Once you're honest about this then making the best decision becomes very easy.

But it is important to point out the negative aspects of leasing. I think the majority of us here on this forum are on the ball enough to have a solid handle of why we're acquiring our vehicles a certain way and are aware of the negative aspects of our financing choice. There are a lot of people in the wider market who lease luxury marques for vanity reasons that can become a serious problem for them. They're trying to get the cheapest monthly payment they can afford for the brand leading them down some dark rabbit holes.

I never pass judgement on any of us and I expect we'll all continue give the best advice we can to each other while recognizing that it carries with it our desired optimizations.


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## 1968BMW2800 (Aug 13, 2016)

LogicalApex said:


> As I always say, be honest about what you're optimizing for...
> 
> I never pass judgement on any of us and I expect we'll all continue give the best advice we can to each other while recognizing that it carries with it our desired optimizations.


Yup. Daddy always reminded us that having nice things is a dividend -- an earned dividend. A reward for after the basics are well covered and there's ample surplus stuffed away. Sadly, many do use leasing or other manufacturer teasers to get into rides they really can't afford. As they say, "never good to get the 'manure' before you get the horse."


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## quackbury (Dec 17, 2005)

The biggest problem - and also the greatest opportunity - with leasing is that it's a black art, and most folks (like the OP) are utterly clueless and get fleeced. If you understand how the system works and know how to game it, and if you drive a lot of miles, it is by far the least expensive way to drive a bespoke luxury vehicle with absolute certainty as to what your financial outcome will be. No wondering "what expensive repairs will I incur out-of-warranty?" or "what will my analog V8 be worth 5 years from now when the roads are full of self-driving EV's?" but truly quantifiable precision.

The masses who can't run their own lease calculations and get fleeced (like the OP) subsidize the rest of us. Sort of economic Darwinism. Which is half the fun of leasing.


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