# Big Changes in lease buyout pricing



## Squeak (Sep 13, 2014)

ted8715 said:


> Ah! This right here is the part that get's me, as you said better than I did, after lease turn in, it becomes an "open market transaction". I am baffled by this new policy:
> 
> *A) Once I fulfill the lease contract how I can be held to their policies, unless this stipulation was outlined in the lease agreement I signed*.
> B) What business turns away a paying customer?
> ...


You are not being held to anything -- the dealer is. It is the price which they have to buy it at.


----------



## shaftwhy (Feb 19, 2010)

Doesn't this open a bit business opportunities for third party company (carmax?) that buy a lease return at MV then resale to original lease owner with some markup?


----------



## jjrandorin (May 8, 2013)

shaftwhy said:


> Doesn't this open a bit business opportunities for third party company (carmax?) that buy a lease return at MV then resale to original lease owner with some markup?


Carmax would have to buy the car from a BMW dealer. If they were to buy it from the person leasing it (well from BMW for the person leasing it ) they would be paying RV, not market value.


----------



## Ibiza (Jun 15, 2007)

namelessman said:


> Even though CA sales tax is saved on purchase, the back-to-back 3-year leases still need to pay tax on depreciation repeatedly, so the net savings get eaten away gradually.


BMW purchasing will no longer have the option of "dating" with a lease for 3 years, then "marriage" afterwards with purchase. The new norm will be either date and dump or marriage at first sight.

This policy will probably shift more customers to financing at the beginning and purchasing an extended vehicle warranty ($1,000 Center profit per policy sold). Maybe BMWFS wants to reduce the percentage of leases by influencing customer behavior with this new policy? Otherwise, you'll be a serial leaser and need to factor in the $925 bank fee every 3 years. With lease prices increasing due to raising interest rates, customers will probably dropping to lower level model for a similar lease payment. BMW AG has a higher profit margin with the higher priced vehicles and it will take a few quarters to see how this business model plays out.


----------



## CTSoxFan (Oct 20, 2006)

bzcat said:


> Upset is a strong word. I'm just able to see through what they are doing because I understand lease finance and I don't like it because it's rather pointless. BMW is going to take a loss on my car at lease end no matter what I do.
> 
> Irrelevant. I didn't set the RV, BMW did when they lease the car to me. They didn't have to set the residual so high if they believe they could lease the car for more money.
> 
> ...


You missed my original point, which was whether or not it makes logical sense (and I agree with your point, not letting you buy it for MV but selling it to someone else for that doesn't seem to make sense on the surface), you can't be (upset, pissed, disgruntled...whatever word you want to use) when you signed a deal saying you can buy the car for X at the end of the lease, and then they hold you to that (again, irrespective of whether or not it makes financial sense for you to do so). It is a business deal, and you can walk away with no loss. I think one thing we have to remember is that although we want to think there is loyalty to a brand, and brand appreciation to loyal customers, at the end of the day they are a business, and they are in it to make money for them, not for us.

My secondary point is that for some reason BMW inflates their residuals. This makes leasing more attractive for all leasers, but especially benefits the continual lease consumer, as buying out the car makes less financial sense. It has been that way for quite some time. This change furthers that ambition to keep people on the leasing hamster wheel. I don't know if that is because they want to push new metal, or maybe they want the lease turn in cars to attract buyers who couldn't afford (or don't want) a new BMW, and figure the new lease customer will just lease again, but I am sure that they have done an analysis on it.

I agree that it is kind of a $hi!!y thing to do to customers, and another change in BMW policies that are less customer friendly over the past few years.


----------



## CTSoxFan (Oct 20, 2006)

One additional thought on this. I wonder what % of customers this really impacts. I would venture to guess that were are in the minority here when it comes to knowledge of insider information like being able to negotiate the purchase price lower than the RV. I wonder if centers actually promote this or they try to just push them to new metal?


----------



## namelessman (Dec 23, 2004)

Ibiza said:


> BMW purchasing will no longer have the option of "dating" with a lease for 3 years, then "marriage" afterwards with purchase. The new norm will be either date and dump or marriage at first sight.


That is an interesting analogy, esp. in the context of lease buyout discount.


----------



## Alpine300ZHP (Jan 31, 2007)

namelessman said:


> That is an interesting analogy, esp. in the context of lease buyout discount.


Ibiza makes valid points and I said pretty much the same thing earlier with less colorful verbiage. FWIW, I suspect that I will remain in the date and dump category. I have no desire to own complex M cars out of warranty and buying the car while paying inflated prices on limited coverage extended warranties does not appeal to me. If I decide to buy and hold, I ll get something cheaper to maintain.

Sent from my iPhone using Bimmerfest mobile app


----------



## namelessman (Dec 23, 2004)

Alpine300ZHP said:


> Ibiza makes valid points and I said pretty much the same thing earlier with less colorful verbiage. FWIW, I suspect that I will remain in the date and dump category. I have no desire to own complex M cars out of warranty and buying the car while paying inflated prices on limited coverage extended warranties does not appeal to me. If I decide to buy and hold, I ll get something cheaper to maintain.


Yes my strategy is to *****and-hold the cheapest BMW product with the basics that fit my needs.

M/AMG/RS cars are toys and should be leased.

Porsche is in its own league, it is a well built toy that is very expensive to lease, so my choice is to *****and-hold Porsche.


----------



## rice_rocket88 (Apr 18, 2014)

I'm new to the BMW lease experience myself, as I have always leased other cars in which their RV value is LOWER than the market value.. ie when the lease is over it would be in my advantage to buy the car. I get it if BMW is trying to get me to start up a new lease, but I don't see why they would be willing to make the hit. I have always bought used cars for myself, and the wifey/kids get the new car/lease. The last 3 cars were lease, and when I decided to get a new one, they offered me MORE money than the buyout to roll it into the new lease which was always refreshing. BMW set the RV high, which helped my payments go down. I also negotiated the purchase/starting price as if I were going to buy it.

So at this time, the X1 m sport has everything we wanted, and frankly we enjoy the car (except not having blind spot detection). The plan was probably to keep the X1, and maybe this time I get the new fancy pants car, as my E60 is still ticking at 160K soon and I'm starting to get bored. If the RV is too high than the market value, I honestly think the wife would be happy to just give it up and get a brand new CRV (as it has maybe more tech, but no HUD). But that would mean I don't really get a new car.. bummer! I agree with what someone else mentioned, wouldn't this open up a market for some 3rd party service, or "in house" service to buy the car, and then "gift" transfer (only to avoid being double taxed) it back to the same owner? First I thought.. fine, my wife has her maiden name still, she should buy it.. but then I noticed the same household caveat. I would even say now to get my brother, or just a good friend to "buy it" and again gift transfer it. Seems crazy since owning the same problem free car that I added in some of the rock blocker etc would be better than just going to the lot to find a "similar" unknown car to save $$. 

Quite disappointing BMW.. maybe when the current lease is up they'll change their minds.. I guess we have one more year to go until the lease is up. Oh I forgot to add, my friend recently had her lease end on her Mercedes and had the same issue happen. However, she got a car with a "spoiler" and lower mileage by like 10K so although she was grumpy, she said at least she has those two things... and they threw in an extended warranty.


----------



## alex2364 (May 8, 2006)

Maybe this is their first step towards not subsidizing high residual values... :dunno:


----------



## Art234 (Jun 25, 2011)

About a year ago I wanted to buy my leased 535dx. The residual was ridiculous so I asked my dealer to buy the car then sell it to me and I***8217;d give him $1k over his purchase price. He did, and I saved almost $7k. Now that deals like this are off the table, I doubt I***8217;d buy or lease another BMW.
I understand that BMW is trying to stop the bleeding but in the back of my head I think it***8217;s an odd form of discrimination to prevent you from buying your own leased vehicle at fair market value when someone else can do it. It would be interesting to see what an attorney would do with that...


----------



## Rusty34 (Feb 3, 2017)

In some cases you really don't want to own the car without knowing what it is first. Leasing allows you to decide later after you've thoroughly experienced everything about the car over the longterm. Probably lots of folks who leased a V8 several years ago who are very thankful they didn't buy it instead.


----------



## Ibiza (Jun 15, 2007)

Art234 said:


> I understand that BMW is trying to stop the bleeding but in the back of my head I think it's an odd form of discrimination to prevent you from buying your own leased vehicle at fair market value when someone else can do it. It would be interesting to see what an attorney would do with that...


There are no damages to file a complaint, as there is no breach of contract. Customer signs binding lease agreement for end of lease buy out price of $X. Dealership could complain via the national BMW forum, but all these back office deals have been circumventing the true intention of the lease and RV buy out price. BMW FS/NA just closed a 'loop hole', just like the new vehicle orders that were being punched as demo's with 5 miles so the customer could quality for 0.9% financing last year and has also been closed since.

What brand are you going to move onto? As its all talk unless your wallets walks (this is reference to all the previous upset posters that have been gaming the system).


----------



## CTSoxFan (Oct 20, 2006)

Art234 said:


> I understand that BMW is trying to stop the bleeding but in the back of my head I think it's an odd form of discrimination to prevent you from buying your own leased vehicle at fair market value when someone else can do it. It would be interesting to see what an attorney would do with that...


He's the issue though. BMW will say that the original purchaser can buy his car back at whatever they are selling it for now. It is the center that will get charged back, which is internal BMW politics and has no bearing on the customer (and the center won't want to get charged back). Or they may set the price at whatever the RV less the discount was but be willing to negotiate with other customers but hold firm on original owner.

the point...I am sure BMW has figured out a way to cover themselves from discriminatory practice claims.


----------



## jsublime (Mar 4, 2009)

Art234 said:


> About a year ago I wanted to buy my leased 535dx. The residual was ridiculous so I asked my dealer to buy the car then sell it to me and I'd give him $1k over his purchase price. He did, and I saved almost $7k. Now that deals like this are off the table, *I doubt I'd buy or lease another BMW.*


But why though? You got a great deal on the lease because the RV was so high. You can't tell me you knew going into the lease that you would also save 7 grand by purchasing at lease end. So if BMW continues to offer very high RV thereby creating low lease payments, why wouldn't you get into another lease?

If it's for other reasons that's fine as I'm also thinking about moving on - it just seems silly to rule out the brand for this. I can tell you that if the next gen M3 is again available for 6xx lease payments, I will happily get another one. Option to purchase at lease end be damned.


----------



## CTSoxFan (Oct 20, 2006)

jsublime said:


> But why though? You got a great deal on the lease because the RV was so high. You can't tell me you knew going into the lease that you would also save 7 grand by purchasing at lease end. So if BMW continues to offer very high RV thereby creating low lease payments, why wouldn't you get into another lease?
> 
> If it's for other reasons that's fine as I'm also thinking about moving on - it just seems silly to rule out the brand for this. I can tell you that if the next gen M3 is again available for 6xx lease payments, I will happily get another one. Option to purchase at lease end be damned.


Exactly. As I stated before, you can't complain about inflated residuals as it is fully benefitting the customer. It would be interesting to have a significant enough sample of lease turn in vehicles to see where they sat on RV vs. market at turn in, what the disposition was (original owner buy vs. turn in), and for those that were turned in, what the initial and final sales prices were on the now-used car, adjusting for any CPO impacts.

Ibiza hit it on the head. This move is splitting BMW's customers in 2 camps, either purchase up front, or get on the leasing hamster wheel, and it is obvious this is their intention.

I think what upsets people the most is this is another BMW change that is less favorable for the customer.


----------



## kjboyd (Apr 13, 2006)

Ibiza said:


> what brand are you going to move onto? As its all talk unless your wallets walks (this is reference to all the previous upset posters that have been gaming the system).


That's rich coming from you.


----------



## bzcat (Sep 23, 2009)

CTSoxFan said:


> Exactly. As I stated before, you can't complain about inflated residuals as it is fully benefitting the customer. It would be interesting to have a significant enough sample of lease turn in vehicles to see where they sat on RV vs. market at turn in, what the disposition was (original owner buy vs. turn in), and for those that were turned in, what the initial and final sales prices were on the now-used car, adjusting for any CPO impacts.
> 
> Ibiza hit it on the head. This move is splitting BMW's customers in 2 camps, either purchase up front, or get on the leasing hamster wheel, and it is obvious this is their intention.
> 
> I think what upsets people the most is this is another BMW change that is less favorable for the customer.


This I agree. They want people who keep the car for 5+ years to buy not lease.

Basically, they've eliminated the loophole that many financially savvy customers had figured out. If you intend to keep the car for longer than 3 years (let say 5 years), the best way to do it was to lease it and take advantage of the artificially high RV and save thousands upfront. And at lease end, you buy it at MV. The savings is time value of money... plus you have the option of walking away if the car is a lemon. Net-net, it is usually cheaper than financing it for 5 years.

I'm a finance guy... I push a financial calculator all day at work. I figured this out about 15 years ago before I even found this forum. I feel like BMW is specifically targeting me because they ate $10k on each of my last three BMWs :rofl:


----------



## Robert A (May 18, 2003)

This. I'm also in finance and figured it out as well.


bzcat said:


> This I agree. They want people who keep the car for 5+ years to buy not lease.
> 
> Basically, they've eliminated the loophole that many financially savvy customers had figured out. If intend to keep the car for longer than 3 years (let say 5 years), the best way to do it was to lease it and take advantage of the artificially high RV and save thousands upfront. And at lease end, you buy it at MV and save thousands again.
> 
> I'm a finance guy... I push a financial calculator all day at work. I figured this out about 15 years ago before I even found this forum. I feel like BMW is specifically targeting me because they ate $10k on each of my last three BMWs :rofl:


----------



## namelessman (Dec 23, 2004)

bzcat said:


> This I agree. They want people who keep the car for 5+ years to buy not lease.
> 
> Basically, they've eliminated the loophole that many financially savvy customers had figured out. If you intend to keep the car for longer than 3 years (let say 5 years), the best way to do it was to lease it and take advantage of the artificially high RV and save thousands upfront. And at lease end, you buy it at MV. The savings is time value of money... plus you have the option of walking away if the car is a lemon. Net-net, it is usually cheaper than financing it for 5 years.
> 
> I'm a finance guy... I push a financial calculator all day at work. I figured this out about 15 years ago before I even found this forum. I feel like BMW is specifically targeting me because they ate $10k on each of my last three BMWs :rofl:


So each of your previous bimmers had $10k RV discount? Were those 100k-150k MSRP bimmers?

My math says given BMWFS charges 3% above risk-free rate, the lease premium is about 10% of MSRP per 3-year lease for a $50k MSRP car. As long as the RV discount is 10% or more, the lease buyout pulls ahead of cash buy at year 1.


----------



## namelessman (Dec 23, 2004)

Robert A said:


> Could very well be a 5 Series.


$10k off RV for a MSRP $60k-$80k 5-series is a good deal, it is 12%-15% haircut from RV.

5-series RV is a bit lower than 3-series though, say, 59% versus 65% from the heydays?


----------



## bzcat (Sep 23, 2009)

namelessman said:


> So each of your previous bimmers had $10k RV discount? Were those 100k-150k MSRP bimmers?
> 
> My math says given BMWFS charges 3% above risk-free rate, the lease premium is about 10% of MSRP per 3-year lease for a $50k MSRP car. As long as the RV discount is 10% or more, the lease buyout pulls ahead of cash buy at year 1.


Just a rough example.

MSRP $80,000
RV 63% $50,400
Sales price at invoice + $500 ~ $75,000
MV after 3 years 50% or $40,000

If you buy, you pay $75,000 + time value of money on higher payment vs. lease.

If you lease, you pay $29,600. And if you want to buy at the end of the lease, it's $40,000 MV so total of $69,600.

In this case, the difference is +$5,400 on my side, plus time value of money if I end up buying this car and keep it for 5 years. But BMW has to take the loss on RV of -$10,400 at year 3.

In case you are wondering, I didn't cherry pick the numbers... They are a composite example of my last 2 leases.

My previous BMW MSRP was $72k (335i convertible with a lot options). The RV was 65% so BMW definitely ate $10k in RV loss, maybe a bit more. I think I walked away +$4,000 after buying the car vs. financing it from the beginning with a conventional 5 year loan.

My current BMW MSRP is $81k (M3 with lots of M performance parts). The RV is 64%... the RV loss remains to be seen (I have another 12 months left on the lease) but it should be around $10k as well.


----------



## Robert A (May 18, 2003)

This is an example why I believe BMW looses money on every lease turn in. They obviously make it up somewhere else, but leg of the transaction is a looser for them.



bzcat said:


> Just a rough example.
> 
> MSRP $80,000
> RV 63% $50,400
> ...


----------



## namelessman (Dec 23, 2004)

Robert A said:


> This is an example why I believe BMW looses money on every lease turn in. They obviously make it up somewhere else, but leg of the transaction is a looser for them.


The only way this has not bankrupted BMWNA yet is the MSRP/invoice is padded at least 10% for lease end loss.


----------



## kjboyd (Apr 13, 2006)

In other words they are 15-20% overpriced from the get go? Again


----------



## namelessman (Dec 23, 2004)

kjboyd said:


> In other words they are 15-20% overpriced from the get go? Again


Yes, without upfront padding, it won't make sense BMWNA can take the loss at lease return.

So it is imperative to get 15-20% off MSRP for cash buy to normalize with lease prices. 

In fact, BMWFS these days is transparent about their lease costs, namely, cash/finance can at times get $3k-$6k additional incentives than lease.


----------



## namelessman (Dec 23, 2004)

bzcat said:


> Just a rough example.
> 
> MSRP $80,000
> RV 63% $50,400
> ...


It is unclear what discount is like for MSP $80k car.

For $50k car, $10k-$11k is doable with local President's members.


----------



## Ibiza (Jun 15, 2007)

namelessman said:


> It is unclear what discount is like for MSP $80k car.
> 
> For $50k car, $10k-$11k is doable with local President's members.


No way a $50,000 MRSP vehicle can have a 20% discount unless CA/Center is giving away hold back and taking a loss on the vehicle. Base invoice is 7% less MSRP- how is this $50,000 vehicle built meaning what is the base, is it a $50,000 striper or fully loaded $50,000 (options are 9% less MRSP for invoice). Possible $1,000 loyalty based on model, $2-3k incentives, and additional $500 fleet or CCA rebate.


----------



## hooligan_clt (Nov 29, 2017)

bzcat said:


> This I agree. They want people who keep the car for 5+ years to buy not lease.
> 
> Basically, they've eliminated the loophole that many financially savvy customers had figured out. If you intend to keep the car for longer than 3 years (let say 5 years), the best way to do it was to lease it and take advantage of the artificially high RV and save thousands upfront. And at lease end, you buy it at MV. The savings is time value of money... plus you have the option of walking away if the car is a lemon. Net-net, it is usually cheaper than financing it for 5 years.
> 
> I'm a finance guy... I push a financial calculator all day at work. I figured this out about 15 years ago before I even found this forum. I feel like BMW is specifically targeting me because they ate $10k on each of my last three BMWs :rofl:


Sure, but they're not "fixing" this by accurately setting RV. BMW still takes a beating on that lease turn-in and resale at MV, it's just a sale to someone other than the original owner.

That beating might be somewhat offset by the original owner leasing another new car, but it's not fixing the root cause. Nothing stopping the original lessee from buying an equivalent lease turn-in at MV, which is what I would do if I found myself in that situation. Sure, you don't know "how it was treated", but you can pull maintenance records, by CPO, etc as mitigation for that.


----------



## Ibiza (Jun 15, 2007)

hooligan_clt said:


> Sure, you don't know "how it was treated", but you can pull maintenance records, by CPO, etc as mitigation for that.


Issue is that the CPO program was changed last year to 1 yr unlimited miles. 100% mitigation would require to purchase a Platinum Extended Vehicle Protection policy, which is an additional $3,000+ (5 yrs from in-service date) to $4,000 + (7 yrs from in-service) based on model and desired milege coverage of 75,000/100,000.


----------



## hooligan_clt (Nov 29, 2017)

Ibiza said:


> Issue is that the CPO program was changed last year to 1 yr unlimited miles. 100% mitigation would require to purchase a Platinum Extended Vehicle Protection policy, which is an additional $3,000+ (5 yrs from in-service date) to $4,000 + (7 yrs from in-service) based on model and desired milege coverage of 75,000/100,000.


Yes, agreed, which is why I didn't say "fully mitigate". 

However, those extended warranties are over and above where you'd be buying your own lease turn-in. Just because it has been trouble free for the first 3 years doesn't mean it will continue to be so. Right? So, still not exactly apples/apples.


----------



## namelessman (Dec 23, 2004)

Ibiza said:


> No way a $50,000 MRSP vehicle can have a 20% discount unless CA/Center is giving away hold back and taking a loss on the vehicle. Base invoice is 7% less MSRP- how is this $50,000 vehicle built meaning what is the base, is it a $50,000 striper or fully loaded $50,000 (options are 9% less MRSP for invoice). Possible $1,000 loyalty based on model, $2-3k incentives, and additional $500 fleet or CCA rebate.


The local dealer can easily do invoice 7-9% off.

There has been $3000 cash back on finance/cash back from BMWNA, and early this year there was $3000 corporate fleet on top.

These days $500 BMWCCA and $3000 new grad credits can now be stacked on top as well(it is unclear what's July's corporate fleet amount).

So conservatively, for a $50k MSRP 330i:

7% off MSRP for invoice - $3500
cash/finance credit - $3000
corporate fleet/new grad - $3000
loyalty credit - $1000

The above is already $10500 off MSRP. :thumbup:

Also note that there seems to be no $3000 BMWFS lease credit in July, plus corporate fleet lease credit has been $2500-$3000 below corporate fleet cash/finance credit. *When this type of disparity exists, BMWFS and BMWNA are directing customers to buy, and it makes no sense to lease*.


----------



## jjrandorin (May 8, 2013)

namelessman said:


> The local dealer can easily do invoice 7-9% off.
> 
> There has been $3000 cash back on finance/cash back from BMWNA, and early this year there was $3000 corporate fleet on top.
> 
> ...


That statement is incorrect, at least as far as the southern california market is concerned. I was in a dealership yesterday looking at both a 440 and possibly an M3 (MY 2018) and they both have 3k lease credit + 1k loyalty, so 4k lease credit.

I also got an out of market finance / lease quote on an M3, and the lease credit was more than the finance credit (for july). For a few months prior to that, the finance credit was more however.

Maybe northern california is different?

On a side note, I am actually surprised it took until page 3 for "lease vs buy" to come up in this thread.

Side note 2... the M3 was a BEAUTIFUL Avus Blue. an M3 is out of my comfort zone from a price perspective... I would have to compromise a LOT to swing that payment, and have never really been drawn to do so like I was looking at that car in that color. Stunning.. Was looking at raiding savings account, etc.. I just cant justify it at all, and wife also said "no" to it from what it would do to our finances. Shes right, but man... I really was looking at leasing (or even buying) it. The Avus Blue was free on it too.


----------



## Greg @ East Bay BMW (Jul 6, 2013)

Yes, Nor-Cal programs are different than So-Cal.

It's all region based now.


----------



## jjrandorin (May 8, 2013)

Greg @ East Bay BMW said:


> Yes, Nor-Cal programs are different than So-Cal.
> 
> It's all region based now.


Ahh :thumbup: I knew about the region based programs but did not know that california was also split into multiple regions.


----------



## namelessman (Dec 23, 2004)

jjrandorin said:


> Ahh :thumbup: I knew about the region based programs but did not know that california was also split into multiple regions.


Yes NorCal/Bay Area has different market# compared to SoCal. Ibiza posted those a while back.


----------



## quackbury (Dec 17, 2005)

Wait. I'm late to this thread. Did I get this right?

OP has learned that he can buy someone else's low mileage 335 lease return, PLUS a Platinum warranty, for less than what BMW FS told him 36 months ago his 328 would cost? And he's COMPLAINING?

I mean, we seriously considered buying our 340 6MT at lease end, but we might have to buy an M3 instead?

My God do I feel hosed.

Sent from my HTC 10 using Bimmerfest mobile app


----------



## namelessman (Dec 23, 2004)

jjrandorin said:


> TMaybe northern california is different?


OK on bmwusa.com, a zip code in orange county versus SF/bay area shows different incentives:

OC - lease credit $3k, finance credit $2k
SF - lease credit $2k, finance credit $3k


----------



## jjrandorin (May 8, 2013)

quackbury said:


> Wait. I'm late to this thread. Did I get this right?
> 
> OP has learned that he can buy someone else's low mileage 335 lease return, PLUS a Platinum warranty, for less than what BMW FS told him 36 months ago his 328 would cost? And he's COMPLAINING?
> 
> ...


I am the OP of this thread. I dont recall complaining (and I dont have a 328 ). As a matter of fact, I believe I said:



jjrandorin said:


> One thing I want to make clear, at least for me, I am not blaming the dealer, etc. They also have to play the hand that is dealt. They obviously have some influence with BMW, and if this hurts the bottom line of their business, I would guess they will address it with BMW. BMW has to make decisions based on their business desires, and I get to decide how I want to react to that.
> 
> *As I said, I dont know what I will do, but in any case I wont be "raising a pitchfork" or anything. I will make my decision based on what I want, and what I am willing to pay for, or not.. but that doesnt mean I am going to go into a dealer and yell at them (or yell and scream here)*.


So I believe that you must be talking about someone else in this thread?


----------



## Maxwagen (Mar 17, 2017)

Ratman009 said:


> My '16 X5 got rear-ended at a stoplight to the tune of about $7,000 (even though they only damaged the left corner of the rear bumper cover and cracked the exhaust). Lease is up in October and being that I can't get the Dynamic Handling Package on a new '19 X5 40i, I'm seriously considering keeping this one off of lease. However, given that a clean car fax '16 is only worth about 34-35K, no way in hell am I going to pay the 40K buyout ($73,220 MSRP) price on my non-clean CarFax.
> 
> So will this new "no-negotiations" policy also be applied to cars that have been in accidents and hence cannot be CPO'd?
> 
> ...


I'm going through this exact situation right now. Granted my lease isn't up for two years, and trying to decide NOW how much extra mileage I'm willing to put on in case I do end up turning it in. My car was hit to the tune of over $12k, and right from the getgo I was interested in keeping it due to my plan of being able to shop the buyout around well below the RV. With disposition fee plus mileage fees and whatever else the Center can throw at me, I'm looking at a big chunk of change just to turn in my lease and then shop for a used car, so even if the RV is a few thousand higher than MV (irregardless of post-accident value), makes it worth it to me.

This is a nasty wrench in my plans.


----------



## Squeak (Sep 13, 2014)

Maxwagen said:


> I'm going through this exact situation right now. Granted my lease isn't up for two years, and trying to decide NOW how much extra mileage I'm willing to put on in case I do end up turning it in. My car was hit to the tune of over $12k, and right from the getgo *I was interested in keeping it due to my plan of being able to shop the buyout around well below the RV*. With disposition fee plus mileage fees and whatever else the Center can throw at me, I'm looking at a big chunk of change just to turn in my lease and then shop for a used car, so even if the RV is a few thousand higher than MV (irregardless of post-accident value), makes it worth it to me.
> 
> This is a nasty wrench in my plans.


And that is unfortunately probably one of the reasons they instituted the new policy -- people bought cars fully expecting BMWFS to take the full hit of the their aggressive residuals and get a huge discount over the full life of the car.


----------



## bzcat (Sep 23, 2009)

Squeak said:


> And that is unfortunately probably one of the reasons they instituted the new policy -- people bought cars fully expecting BMWFS to take the full hit of the their aggressive residuals and get a huge discount over the full life of the car.


As I have already explained several times in this thread, BMWFS is going to take that hit no matter what. If we return the car, BMWFS gets wholesale auction price on the cars. If they let us buy it, they get retail market value. Both are below residual value but retail market value is higher than wholesale auction price...

So BMWFS will lower its losses if they let us buy our own car at market value rather than send it to auction. This policy makes zero financial sense for BMWFS... If they are going to subsidize the RV to sell new cars, the best financial move for BMWFS is to prevent as many cars from going to auction as possible where they will realized the lowest possible return.


----------



## Squeak (Sep 13, 2014)

bzcat said:


> As I have already explained several times in this thread, BMWFS is going to take that hit no matter what. If we return the car, BMWFS gets wholesale auction price on the cars. If they let us buy it, they get retail market value. Both are below residual value but retail market value is higher than wholesale auction price...
> 
> So BMWFS will lower its losses if they let us buy our own car at market value rather than send it to auction. This policy makes zero financial sense for BMWFS... If they are going to subsidize the RV to sell new cars, the best financial move for BMWFS is to prevent as many cars from going to auction as possible where they will realized the lowest possible return.


If it becomes well known that anyone a leasing car can negotiate down the buyout price and let BMWFS take the residual hit, who would buy a car outright anymore (especially finance one)? Everyone would just lease them and then capture the 5-10% discount by buying out at the end.

There is a tremendous emotional hurdle to get someone to buy a different used BMW at lease end, versus buying THEIR used BMW -- and thus people are more prone to just lease a new car, and then BMW can CPO the lease turn in


----------



## Robert A (May 18, 2003)

Yes, but then they don't get to lease you another new car.


bzcat said:


> As I have already explained several times in this thread, BMWFS is going to take that hit no matter what. If we return the car, BMWFS gets wholesale auction price on the cars. If they let us buy it, they get retail market value. Both are below residual value but retail market value is higher than wholesale auction price...
> 
> So BMWFS will lower its losses if they let us buy our own car at market value rather than send it to auction. This policy makes zero financial sense for BMWFS... If they are going to subsidize the RV to sell new cars, the best financial move for BMWFS is to prevent as many cars from going to auction as possible where they will realized the lowest possible return.


----------



## bzcat (Sep 23, 2009)

Squeak said:


> If it becomes well known that anyone a leasing car can negotiate down the buyout price and let BMWFS take the residual hit, who would buy a car outright anymore (especially finance one)? Everyone would just lease them and then capture the 5-10% discount by buying out at the end.
> 
> There is a tremendous emotional hurdle to get someone to buy a different used BMW at lease end, versus buying THEIR used BMW -- and thus people are more prone to just lease a new car, and then BMW can CPO the lease turn in


It was well known (that's why we have a 7 page thread on the topic) and despite that BMWFS never had any problem leasing new BMW to people who just want new cars every 3 years.

No one made BMW hike up the residual value to move metal. But once they did that, it makes no sense to take the only outcome off the table that will minimize the inevitable residual value loss. BMWFS is cutting its nose off to spite itself. The only one losing is BMWFS. I don't have to buy my car at lease end.



Robert A said:


> Yes, but then they don't get to lease you another new car.


We talked about this before as well... This is generally not true. Most people who want to buy their leased car are the types that keep the car for 5+ years. Had we known BMW would not let us negotiate the buy out, we would structure the deal differently (i.e. a bigger discount upfront). I kept my last 2 BMW for 7 years each. I lease then buy because BMW set it up that way.

I understand why they changed it. It just sucks that I'm in the middle of my lease right now. I would be less annoyed if the no-buy out negotiation clause applied to only new lease going forward.

We'll see how long BMWFS keeps this up... they've already reversed position on other stupid things like taking away MSD.


----------



## Squeak (Sep 13, 2014)

bzcat said:


> It was well known (that's why we have a 7 page thread on the topic) and despite that BMWFS never had any problem leasing new BMW to people who just want new cars every 3 years.
> 
> No one made BMW hike up the residual value to move metal. But once they did that, it makes no sense to take the only outcome off the table that will minimize the inevitable residual value loss. BMWFS is cutting its nose off to spite itself. The only one losing is BMWFS. I don't have to buy my car at lease end.
> 
> ...


Ahh! I get it now -- you are upset because you were counting on being able to push the residual hit back on BMWFS, and they wised up. 

It sucks, and I appreciate the fact that you realize why they did it (if they didn't think it was an issue and would be better for them to switch they wouldn't do it).


----------



## Robert A (May 18, 2003)

He got to push the residual hit back on BMWFS anyway. He just didn't get to keep the car.



Squeak said:


> Ahh! I get it now -- you are upset because you were counting on being able to push the residual hit back on BMWFS, and they wised up.
> 
> It sucks, and I appreciate the fact that you realize why they did it (if they didn't think it was an issue and would be better for them to switch they wouldn't do it).


----------



## Squeak (Sep 13, 2014)

Robert A said:


> He got to push the residual hit back on BMWFS anyway. He just didn't get to keep the car.


You know what I meant.

Also, why do you post all of your replies above the quote (like in email) versus below, like standard convention for forums? Just curious....


----------



## Robert A (May 18, 2003)

Yes, of course I know what you mean. Some posters don't realize they're capturing the benefit regardless of the purchase decision.

I was not aware of the convention. Will have to pay closer attention.



Squeak said:


> You know what I meant.
> 
> Also, why do you post all of your replies above the quote (like in email) versus below, like standard convention for forums? Just curious....


----------



## bzcat (Sep 23, 2009)

Squeak said:


> Ahh! I get it now -- you are upset because you were counting on being able to push the residual hit back on BMWFS, and they wised up.
> 
> It sucks, and I appreciate the fact that you realize why they did it (if they didn't think it was an issue and would be better for them to switch they wouldn't do it).


Yep :rofl: But remember, BMWFS is going to take the residual hit one way or another. The cake was baked when they agreed to lease me a car with ridiculously high RV.

The only way this change makes financial sense for BMWFS is if they also stop hiking up residual value above market value. But they are not really doing that either. I'm really not sure what they are thinking. I'm in the finance business... this is what I do. If I can't figure out the upside for BMWFS, I don't think they have either. Like I said, I believe this is a spiteful decision to punish people who lease then buy, not a financially motivated decision to minimize RV loss or encourage new sales. If you think about it logically and unemotionally, BMWFS should be begging people to buy their cars at ANY amount above the auction price.


----------



## Squeak (Sep 13, 2014)

bzcat said:


> Yep :rofl: But remember, BMWFS is going to take the residual hit one way or another. The cake was baked when they agreed to lease me a car with ridiculously high RV.
> 
> The only way this change makes financial sense for BMWFS is if they also stop hiking up residual value above market value. But they are not really doing that either. I'm really not sure what they are thinking. I'm in the finance business... this is what I do. If I can't figure out the upside for BMWFS, I don't think they have either. Like I said, I believe this is a spiteful decision to punish people who lease then buy, not a financially motivated decision to minimize RV loss.


Yes, the hit is baked in for that car -- no denying it.

But it is really straight forward on the upside here: they will get more turns of new car purchases, and more high-quality used cars for their dealers to CPO and sell (where dealers really make their money).

The more new car metal they move, the more they can afford to subvert the residuals, which has a compounding benefit for them. And they have cut out one of the last real loopholes that let people work the system to get a new car for 7+ years (like you) for a drastic discount.

Also, BMWFS was one of only a very select few (possibly the only) that allowed for negotiation on the buyouts. Most companies won't even begin to think about it.


----------



## bzcat (Sep 23, 2009)

Again, I didn't set the rules, I just played by the rules BMWFS setup before.

You could argue that BMW will sell more cars if they stop me from buying my car at lease end but I tend to disagree. I would just buy the car upfront but extract more discounts if I knew I have to finance another $10k in depreciation. I went into the initial lease with intent to own for 5+ years. The lease provides a good put option to get out if the car turns out to be a lemon. So I would not have been in the market more often to shop for new BMWs. This change at best, would produce a one-time lift in sales pulled ahead but at the risk of damaging customer goodwill.

The other argument about dealer making more money also doesn't hold water. I was buying my car at lease end from the dealer at *market value*. Dealers can't sell my car at above market value. The max profit they can make is the same regardless of who they sell the car to. CPO is the same... I could have CPO all my cars thru the dealers too (in fact, it is the only way). Earlier in the thread, you had a dealer posting that he lost a sale because BMWFS wouldn't let him sell the car at market value to the customer that was leasing it. So this rule is in fact hurting dealers ability to wheel and deal used cars. What's the best outcome for dealers? A customer that walks in the door to buy his own car at market value! That's the best and most profitable sale a dealer can make - no advertising cost, no need to detail and recondition, and no financing cost to hold the car in inventory etc.

And one of the reason why I lease then purchased 3.5 BMW (the 4th one is probably going back at lease end) over the last 15+ years is because BMWFS was one of the few captive bank that "gets it". It does them no good to take a leased car back to dump it at auction.

I've also purchased an Audi at lease end by negotiating with the dealers. I'm not sure if AudiFS still allow that... may have to find out.


----------



## Squeak (Sep 13, 2014)

bzcat said:


> Again, I didn't set the rules, I just played by the rules BMWFS setup before.
> 
> You could argue that BMW will sell more cars if they stop me from buying my car at lease end but I tend to disagree. I would just buy the car upfront but extract more discounts if I knew I have to finance another $10k in depreciation.


How exactly are you going to do that? Most people are getting invoice +-$1000 with all incentives these days -- are you just going to say "give me another $10k off now"? The limits have been pretty well reached on how to push sales prices, except in rare cases where this a bunch of trunk money hiding.



> The other argument about dealer making more money also doesn't hold water. I was buying my car from the dealer at market value. They can't sell my car at above market value. The max profit they can make is the same regardless of who they sell the car to. CPO is the same... I could have CPO all my cars thru the dealers too (in fact, it is the only way).


I don't think that is true -- most people doing these types of "buy my own car deals" are finding dealers that are selling it to them for ~$1-2k over the dealers wholesale pricing, as a sure sale. Whereas if a dealer is buying it for CPO inventory, their mark up is going to be materially larger.

Also -- more CPO cars mean more entrants into the brand, which leads to more people buying new cars, which means more leveraging of fixed capacity and high contribution margerins. It is all about getting new people into, and staying with, the brand.

Yes, they might lose you in particular, but given your past, you are a lower dollar value customer to them (you turned 4 cars on them in ~18 years, where as a serial leaser would have had 5-6) and you removed their ability to get someone else into the brand through your CPO.


----------



## bzcat (Sep 23, 2009)

Squeak said:


> How exactly are you going to do that? Most people are getting invoice +-$1000 with all incentives these days -- are you just going to say "give me another $10k off now"? The limits have been pretty well reached on how to push sales prices, except in rare cases where this a bunch of trunk money hiding.


What do you ask rhetorical questions if you already know the answer? 

BMWFS is shifting more incentives into hidden trunk money across the board. So it's show me the money time now the lease game is pretty much over.



> I don't think that is true -- most people doing these types of "buy my own car deals" are finding dealers that are selling it to them for ~$1-2k over the dealers wholesale pricing, as a sure sale. Whereas if a dealer is buying it for CPO inventory, their mark up is going to be materially larger.


I edited my previous post to provide more context. BMW dealers were not doing me charity favors when they sold me my own car. They were making a profit. Sometimes a quick sale is better than letting a CPO sit on the lot. Because time is money.



> Also -- more CPO cars mean more entrants into the brand, which leads to more people buying new cars, which means more leveraging of fixed capacity and high contribution margerins. It is all about getting new people into, and staying with, the brand.


I don't think people buying their car off lease has a meaningful impact on the supply of CPO cars. The vast majority are grind thru the auctions. Only a fraction of cars coming off lease end up as CPO either as direct dealer purchase or auction.



> Yes, they might lose you in particular, but given your past, you are a lower dollar value customer to them (you turned 4 cars on them in ~18 years, where as a serial leaser would have had 5-6) and you removed their ability to get someone else into the brand through your CPO.


The churners are not buying their cars at the end of the lease anyway. So again, this policy change doesn't affect them. I'm "buy and hold" buyer. I'm not likely to buy more often because of this policy change either.


----------



## jjrandorin (May 8, 2013)

bzcat said:


> Yep :rofl: But remember, BMWFS is going to take the residual hit one way or another. The cake was baked when they agreed to lease me a car with ridiculously high RV.
> 
> The only way this change makes financial sense for BMWFS is if they also stop hiking up residual value above market value. .


But they HAVE changed (lowered) RVs pretty much across the board. I was looking at a M3 as a dream car, and found out they decoupled the RV of the M3 from the rest of the 3 series. Its 57% for 10k, which is pretty accurate for where it actually IS right now (much closer than the 62% to 64% the 3 series used to enjoy.

4 series RVs are in the higher 50s. New 5 series is 61, not going to bother with the 3 series because its outgoing.

I have not seen Rvs in the 63-64 range for a while now, so one can argue that the RVs are not nearly as inflated as they were, and I believe they are slowly walking them back to high 50s (57 ish), when the car should be around 53-55, so not nearly as far out of whack.

As you said, you are in finance, but I doubt there is the difference in your strategy in trunk money. Could be, but unlikely.

I believe this is all part of their strategy to increase profit per unit, instead of "moving metal"... AND discouraging sales here in the US for places where there is more profit, like china etc. I kept saying that last year and no one wanted to hear it.

The argument was always "BMW NA must care".. and sure they likely do, but BMW AG is still setting sales records monthly even with weak BMW NA sales, so, they are doing something right for their bottom line even if WE dont like it.


----------



## X5done (Feb 21, 2014)

This is a very simple problem to solve. I was planning to buy my car at the end of the lease, but now I will just turn in this overprices noise cracker and never buy a bmw again. NJ is infested with BMW and if other people have so much money to afford these ***8220;extra***8221; cost of ownership, they are fueling the bmw bubble. Over priced maintenance, over priced cars, over priced parts. 

What for? So that you get an old stale baggle when you bring it for service?? 

They can take their new strategy and shave it down one of the 4 tail pipes of the m vehicle I was going to buy.


----------



## deenx (Nov 11, 2011)

X5done said:


> This is a very simple problem to solve. I was planning to buy my car at the end of the lease, but now I will just turn in this overprices noise cracker and never buy a bmw again. NJ is infested with BMW and if other people have so much money to afford these "extra" cost of ownership, they are fueling the bmw bubble. Over priced maintenance, over priced cars, over priced parts.
> 
> What for? So that you get an old stale baggle when you bring it for service??
> 
> They can take their new strategy and shave it down one of the 4 tail pipes of the m vehicle I was going to buy.


While I'm not nearly as frustrated as you... (yet).... I could not agree more. I received my first two quotes on '19 X5's and who are they kidding. Did BMW not see Daimler's earnings report this week? When you raise praises, raise interest rates, and decrease incentives it's going to cost you. Goodbye BMW.


----------



## dkreidel (Aug 24, 2005)

I haven't set foot in an American car dealership in years, but just purchased a 2019 Bullitt Mustang from the local Ford Dealer. I was expecting a "white shoe and belt" routine, but couldn't have been more pleased with the dealer's willingness to bring a fair deal to the table, and found a few rebates that I didn't think applied to a Bullitt. It reminded me of the old days when the BMW dealers were easy to work with to obtain an equitable and transparent deal.

It was a purchase, but surprisingly the dealer found 2.99% APR for 60 months when the best I could do from my bank was 3.47%. Ford Credit was almost 5% :rofl:

It's not screwed together as well as a BMW, but it's definitely more fun than any non-M Bimmer. 480 HP of naturally aspirated goodness, manual trans only can't be all bad. I'm still going to order a new 8er, but only when the smile is off my face from the Bullitt.



http://imgur.com/xzaM3o9




http://imgur.com/NuhbFUW




http://imgur.com/jwEuTcg


----------



## caswcu (Feb 20, 2005)

I shopped the 2019 mustang convertible before deciding on my purchase. The fit, finish and styling just wasnt there. You sure that mustang isnt a fusion with a body kit?












dkreidel said:


> I haven't set foot in an American car dealership in years, but just purchased a 2019 Bullitt Mustang from the local Ford Dealer. I was expecting a "white shoe and belt" routine, but couldn't have been more pleased with the dealer's willingness to bring a fair deal to the table, and found a few rebates that I didn't think applied to a Bullitt. It reminded me of the old days when the BMW dealers were easy to work with to obtain an equitable and transparent deal.
> 
> It was a purchase, but surprisingly the dealer found 2.99% APR for 60 months when the best I could do from my bank was 3.47%. Ford Credit was almost 5% :rofl:
> 
> ...


----------



## 1968BMW2800 (Aug 13, 2016)

kpytoi9 said:


> I guess my question is how does BMWFS know that the person buying it is the previous owner especially if I am paying cash? IF I am doing a loan, I am sure the dealer can finance me through another entity/bank.


Answer: Big Data. Remember, when a BMW dealer sells a car, the Mother Ship receives information on the new owner. In addition, national data bases of car registration track all that stuff. And BMW has access to as much of that data as it wants to scoop up.

During my long life I have often found that the karma forces do, in fact, come back around. So let's not try to figure out how to scam. IMHO it's more productive to learn the rule book and play the game within those rules -- there's plenty of legit ways to win, YMMV.


----------



## DTRJ (Jan 20, 2007)

Question. MY lease is up in December. It is now almost October I want the car as it has only 5000 miles. Called BMWFS and they offered $800 under residual and if f I pay off the car now and pay the residual plus the last 2 payments they will give an additional $200 off. Since I am purchasing at 34 months not 36 do I loose the free maintanence which is good usually for 36 months and not transferable to a new owner


----------



## Robert A (May 18, 2003)

DTRJ said:


> Question. MY lease is up in December. It is now almost October I want the car as it has only 5000 miles. Called BMWFS and they offered $800 under residual and if f I pay off the car now and pay the residual plus the last 2 payments they will give an additional $200 off. Since I am purchasing at 34 months not 36 do I loose the free maintanence which is good usually for 36 months and not transferable to a new owner


What are you driving and what's the residual?


----------



## DTRJ (Jan 20, 2007)

Robert A said:


> What are you driving and what's the residual?


This is my parents car. They want to keep it . It's a 2017 330 sedan Xdrive. Mint condition, in the garage most of the time. Original MSRP was about 53k, residual is, 31500


----------



## Robert A (May 18, 2003)

DTRJ said:


> This is my parents car. They want to keep it . It's a 2017 330 sedan Xdrive. Mint condition, in the garage most of the time. Original MSRP was about 53k, residual is, 31500


It'll be worth $20k by next year, if that.


----------



## 1968BMW2800 (Aug 13, 2016)

DTRJ said:


> This is my parents car. They want to keep it . It's a 2017 330 sedan Xdrive. Mint condition, in the garage most of the time. Original MSRP was about 53k, residual is, 31500


This is an excellent example of a one-off situation where the subjective value may be higher than the market value of the car.

If the TOTAL cost of the car is residual minus the $800 discount minus $300 bucks back from BMWFS for low miles plus tax and tags plus lease payments made plus any original drive off costs, plus future maintenance costs, and all of that lumped together is near the original MSRP, and the car has thus far been issue-free, and it will continue to be driven low miles, and the driver(s) are familiar with and really like the car, and the plan is to keep the car for another 5 years or more....

Well, then, the few thousand dollar purchase premium may be worth it.

First, look hard at new BMW lease deals, especially 2019 clear um out deals with incentives and compare starting over with new warranty, maintenance and all the rest.

I would sit down with the Sales Manager at my local dealer, lay out all the numbers, and, knowing what purchasing off of lease will cost in total, compare that to starting over. Then it comes down to numbers and whether a new car is more or less appealing, given what those numbers look like.

Sometimes, unless it has to be a BMW, people in this situation, where the car isn't driven much, look hard at Toyota or Subaru or even Korean or domestic cars and end up taking advantage of conquest deals designed to get customers to switch brands.

FWIW, I, too, was tempted to keep my low mileage, pampered leased car. Could not make the numbers work.


----------



## DTRJ (Jan 20, 2007)

This situation is a little unique. The leasee are almost 90 years old. Currently in excellent health and able to drive with no issues. I am not sure if that will be the case in the next 3 years. Do not want to lock in another 3 year lease. Also does not like change and is very happy with this vehicle. If for some reason a year from now they can no longer drive or we do not need the vehicle any longer I can give the vehicle to one of my adult children or just keep it as the value would have depreciated more


----------



## Robert A (May 18, 2003)

Completing your sig block and geographical location would allow us to help you better.

My Mom is 94 and is in the exact same situation. If you buy the car and your father loses his ability to drive, you still have to consider the sales taxes, which you paid on the entire vehicle, not just the lease payments. Plus there's a huge price differential if trade-in values are much less than your buyout.



DTRJ said:


> This situation is a little unique. The leasee are almost 90 years old. Currently in excellent health and able to drive with no issues. I am not sure if that will be the case in the next 3 years. Do not want to lock in another 3 year lease. Also does not like change and is very happy with this vehicle. If for some reason a year from now they can no longer drive or we do not need the vehicle any longer I can give the vehicle to one of my adult children or just keep it as the value would have depreciated more


----------



## 1968BMW2800 (Aug 13, 2016)

DTRJ said:


> This situation is a little unique. The leasee are almost 90 years old. Currently in excellent health and able to drive with no issues. I am not sure if that will be the case in the next 3 years. Do not want to lock in another 3 year lease. Also does not like change and is very happy with this vehicle. If for some reason a year from now they can no longer drive or we do not need the vehicle any longer I can give the vehicle to one of my adult children or just keep it as the value would have depreciated more


Right. My mother drove her last BMW until she decided to stop driving at age 91. That car was in the family from 1990 until 2016, so full value was realized by 2 generations during twenty-six years.

If your parents' car stays in the family and has a 10+year useful life, then paying a few grand more than its current market value might be a bargain.

Other option is to have "the talk" with your parents. Maybe lease end is the time to stop driving altogether, before anything tragic happens.

We were fortunate in that my mother decided on her own to hang up the keys... as she said, after a lifetime of accident-free driving she didn't want to harm anyone that late in the game. With age comes wisdom....


----------



## quackbury (Dec 17, 2005)

Can the son (who almost certainly has a different address) purchase the car, for less than the contracted residual? I mean, technically, he's not in the same household, right?

Of course, there could be a huge downside to that: if 90-year-old mom mistakes the accelerator for the brake pedal, drives into a 7-Eleven and kills a couple people, the son is going to be sued if he owns the car. It's not something I would do, but it would be interesting to know if this works.


----------



## DTRJ (Jan 20, 2007)

quackbury said:


> Can the son (who almost certainly has a different address) purchase the car, for less than the contracted residual? I mean, technically, he's not in the same household, right?
> 
> Of course, there could be a huge downside to that: if 90-year-old mom mistakes the accelerator for the brake pedal, drives into a 7-Eleven and kills a couple people, the son is going to be sued if he owns the car. It's not something I would do, but it would be interesting to know if this works.


My client advisor whom I know for 10 years says the car if I returned it would go back to BMW. He is a large dealer and says BMW picks up almost all of the cars he takes back off lease. He said BMW would want a very high price from him for this car because of the condition and mileage and would not make sense for him to buy it. I would not know where the car would go and won't take a chance on loosing it.


----------



## philbake1 (Jun 11, 2012)

They can do it because you agreed that the purchase price would be the residual stated for that specific vehicle. That promise survives the expiration of the lease. If the dealer buys it at their discount and turns around and sells it back to you, they owe BMWFS the original residual plus a penalty. Your only option is to see if BMWFS will give you a discount ahead of the lease expiration. The dealer may or may not buy the car, depending on what they have to pay BMW and what their inventory looks like. If the numbers don’t make sense, they just send the car back to BMW. They have no obligation to buy it. Dealers used to be able to buy at their discount, adjust the sale price to market and resell to the original leasee. Evidently they cannot do that anymore. It can only be sold to another party residing at a different address. 


Sent from my iPhone using Bimmerfest


----------



## DTRJ (Jan 20, 2007)

Thanks for the reply, but I am aware of most of the info you mentioned as I have been on this site for many years and have read this entire post. As I mentioned earlier BMW offered me $800 off the residual and an extra $200 if I paid off the car 2 months early which I accepted.
I just paid the residual less the $1000 discount they offered, and paid the last 2 payments. In my situation it makes. If you read my other posts in this thread you can see what I am talking about.


----------

