# It is time to upgrade to a 5 series - Early Lease Termination?



## bmwguynj (Jun 12, 2002)

My lease for my 2003 330i Sport is coming to an end by next fall 2005 (3 Year Lease)

My 330i is by far the best and most fun car I have ever driven in my lifetime. She is my 3rd love, after my wife and baby of course!

However with a new 11 month year old, the car seat in a 3 series fit is possible, but tight. I just need more space and also looking for smoother and more refined ride for my little girl, which I am sure the 5 series can offer. 

The 2005 530 seems practical to me, but I am not a practical person. I keep thinking the new 535 (new 6 Cylinder Engine) will be out next fall and I keep hearing that new 530s just don't have enough power like the previous generation, so why get a 530 now?

So the obvious step is to lease a 545, which is steep in price, but as most of you agree is a better deal overall than a fully loaded 530.

My dealer tells me to bring in the car, so they can review it and then they can see if they can waive any penalty for turning the lease in early. Have any of you had success in doing this (early lease termination with no penalty to be replaced by a new lease?)

Any comments would be much appreciated.


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## SARAFIL (Feb 19, 2003)

bmwguynj said:


> My dealer tells me to bring in the car, so they can review it and then they can see if they can waive any penalty for turning the lease in early. Have any of you had success in doing this (early lease termination with no penalty to be replaced by a new lease?)
> 
> Any comments would be much appreciated.


They're lying to you. There is no way to get out of a lease without paying. You have a few options:

1) trade the car in to the dealer, and pay the difference between your trade in value and the payoff on your lease account
2) pay the remainder of the payments to BMWFS, and terminate the lease
3) utilize BMW's "auction services" program, where your car is run through a normal BMWFS auction, and you're responsible for any losses that they take.

Most likely what they are hoping to do is option 1. They want you to take the car in so they can appraise it, and hopefully the negative equity that you have at this point (difference between trade value and payoff) is less than the total of your remaining payments to BMWFS, so it would be easier/cheaper to trade it in and pay if off early. Don't let them make you think the cost is waived-- they're going to add it to the selling price of the new car, or just roll it into your new lease/loan. You're still going to have to pay quite a bit to get out of the car.


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## bmwguynj (Jun 12, 2002)

SARAFIL said:


> They're lying to you. There is no way to get out of a lease without paying. You have a few options:
> 
> 1) trade the car in to the dealer, and pay the difference between your trade in value and the payoff on your lease account
> 2) pay the remainder of the payments to BMWFS, and terminate the lease
> ...


Thank you for this good info and I appreciate the help in this matter. Either way it looks like I am going to pay some type of penalty whether out in the open or hidden in something else. Thanks again!


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## BrettInLJ (Oct 3, 2003)

Also check out LeaseTrader.com. You will have to pay a lease transfer fee of course.

Can you tell me all about the car (options, etc.) and all about your lease (payments, miles, dates, money factor, etc)? I want to sell my 540i and get a 2006 A3, 330i, or GS430 but I need another car to drive around in the short term.


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## mottati (Apr 15, 2003)

you can't make a blanket statement that you will not be able to get out without paying. On 2 occasions, i have tradded in leased bmw's with 8 mos on one lease and 14 mos remaining on the other, and got out without paying anything. I actually had a few hundred bucks equity on one of them. My local dealer used to routinely mail a flyer that advertised their "end of lease specials, for their customers with 12 mos or less on their lease". of course, i've had other occasions where they tell me i owe them 6-12k to get out of the lease, which is why i'm currently not leasing anymore.
Mike


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## Scotes (Jan 12, 2002)

One way to look at this is to find out what the current buyout for the car is versus what thee trade in or retail value is for the car irrepective of how many payments are left. If the buyout is less than the trade value (not always very likely) than yes, you'll get away with paying nothing. If the retail private party is more than or at the price of the buyout it may be advantagous to just sell the car. I am actually hoping to do this with a fellow 'fester - helps get him out of his lease and me into the car I want at a fair price ( just need to get rid of mine first). That said I have had more than a couple of friends who thought they did not get hit with a penalty for turning their lease in early but when I looked over their sales contract it was obviuos they paid dearly.


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## jvr826 (Apr 22, 2002)

I've sold 2 leased cars long before the lease was up and got out of my lease without any losses. If you can sell for the current buy-out, or close to it, you won't lose much money. Plus, you don't get under the inspection magnifying glass for dings, glass chips, and mileage. 

One leased car I sold to private party for cash, and in CA I was able to pay off the car and get the title within 10 days and didn't get double taxed, i.e. I didn't have to pay tax, but the buyer did. On the second one the credit union of the buyer handled the transaction and it was even easier - no double tax.

You can do it, plenty of options other than returning it to BMWFS early. If it were closer to your leas end, 6 months or so, and you were going for a brand new lease, they'd most likely let you out with no penalties too.


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## bmwguynj (Jun 12, 2002)

Alright, I will still give it a try, but will keep in mind if there is no penalty for some reason, maybe I will be seeing it in the new lease.

Thanks again for all you input.


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## SARAFIL (Feb 19, 2003)

jvr530i said:


> You can do it, plenty of options other than returning it to BMWFS early. If it were closer to your leas end, 6 months or so, and you were going for a brand new lease, they'd most likely let you out with no penalties too.


This is totally false. BMW will not let you out of your lease "without penalty". They'll come after you for every penny you owe them, whether or not you are getting into a new car. If you lease a new BMW and have 6 months left on your old BMW lease, they will bill you for the 6 remaining payments, plus any wear charges and excess mileage.

Also, what I said about it being nearly impossible to trade out of the car without taking a loss is also true in nearly all cases. The nature of the market means that your payoff is almost always going to be higher than the *wholesale (trade-in)* value of the car. Of course there are some exceptions to this, but generally speaking, it holds true.

What you guys are suggesting is something different. Paying off the car to BMW and then selling it private party will probably let you come out even (or ahead), since the payoff is usually close to market retail value. However, the original poster here did not say he wanted to sell it himself. He said he wanted to drop it off at the dealer and get into a new car, and that they'd "take him out of the lease with no penalty". I was true in pointing out that this will be highly unlikely, since the car's trade in value is almost definately below his payoff amount. What they'll likely do is roll in the amount of the remaining payments into the price of new lease (add it to the selling price), and then he'll pay it over the term of the lease, and they'll send the check to BMW.


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