# Dealer says can't sell you the car you just turned in



## 640GC (Mar 22, 2012)

Our 2013 640i GC went off lease and we returned it today, Saturday. I inquired about purchasing the car. I was told that BMW Financial Services would ding the dealership $2,500.00 if they sold me the car. So they didn't want to do it.

It makes sense as the residual is $62,000.00 but the Mannheim Auto Auction quote is only around $45,000.00 and BMW Financial Services would like me to purchase the car at $62k. (I think they get the Mannheim quote as in Texas, you pay the sales tax up front but can apply the taxes paid on a new lease. The amount of tax paid that rolls over into the new lease is based on the current value of the vehicle ($45k) and not on the $62 residual. So in this case, I lose $1,062.50 in taxes paid. $62 - $45 = $17k x .0625. Convoluted system.)

I looked into replacing the vehicle with a 2016 640i GC but the residual this month is only 52%, when I leased in 2012, the residual was 62%. So on a $100k vehicle, this means I will have to pay an additional $10k on my 3 year lease.

Since the residual on the new lease is this bad, the better option is to purchase our off lease vehicle. I would be ok with a new ED purchase if the residual goes back to 62% at some point.

Thoughts, as we're without either option at this point?


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## Arcane.Host (Sep 8, 2006)

Can one of your family members not buy it? If not, just verify this $2500 info and after verification bear the extra $2500 cost.

52% residual sucks for BMWs as we've come to expect inflated residuals. If you want a new GC, why not look at 2015 GC?


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## 640GC (Mar 22, 2012)

shogunman said:


> Can one of your family members not buy it? If not, just verify this $2500 info and after verification bear the extra $2500 cost.
> 
> 52% residual sucks for BMWs as we've come to expect inflated residuals. If you want a new GC, why not look at 2015 GC?


So let's say my mom buys the car. She pays 6.25% sales tax. How does she transfer the title to us without having to pay the sales tax for the 3rd time? Paying sales tax on the same car add's insult to injury. It will end up being 18% tax!

How do you verify the $2,500.00 info? I think my dealer shoots pretty straight.

Can't do an ED delivery on 2015 GC as the 2016 is now in production.


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## Ninong (May 20, 2014)

Here is what I think the dealer is trying to explain. Obviously you could exercise your right to purchase the car for the guaranteed residual value of $62,000 but that would be foolish. What the dealer is saying is that if they ask BMW to give them a lowered payoff because you want to purchase the car, BMW won't offer the same price they offered the dealership when they were told you weren't interested in keeping it. BMW then told the dealership, hey, why don't you guys keep it and we'll give you this super-duper low price.

At least that's what I think is going on but that's just a guess on my part. This doesn't really change things all that much. Just decide if you still want to purchase it even if the price is a little higher. It's still a lot lower than the residual.


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## Ninong (May 20, 2014)

640GC said:


> So let's say my mom buys the car. She pays 6.25% sales tax. How does she transfer the title to us without having to pay the sales tax for the 3rd time? Paying sales tax on the same car add's insult to injury. It will end up being 18% tax!


In California it would be a simple "donation" between a parent and son, which is tax-free. You have to check with Texas DMV to see if they have the same rules.


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## 640GC (Mar 22, 2012)

Ninong said:


> In California it would be a simple "donation" between a parent and son, which is tax-free. You have to check with Texas DMV to see if they have the same rules.


Interesting, I'll check into it.


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## Ninong (May 20, 2014)

640GC said:


> How do you verify the $2,500.00 info? I think my dealer shoots pretty straight.


You can't verify it. You have to simply take their word for it. You just have to find out if it's possible for them to sell it to you a couple of weeks from now by claiming you changed your mind and decided you wanted to buy it or if it would be easier to sell it to your mother. In that case, check with Texas DMV to make sure you can avoid the sales tax. Find out how long your mother has to own it before she can "donate" it to you just to make sure that's not a complication. Obviously it goes without saying that she has to claim on the bill of sale that it was a donation and that no consideration of value was given.


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## Arcane.Host (Sep 8, 2006)

Ninong, is it possible that his mom add him as a co-owner after purchase?

The donation idea is brilliant if applicable in Texas.


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## 640GC (Mar 22, 2012)

Ninong said:


> You can't verify it. You just have to find out if it's possible for them to sell it to you a couple of weeks or if it would be easier to sell it to your mother.


We would like a new GC, but the 52% residual is killing my dream. We looked at a MB GLE today that my wife liked.


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## Ninong (May 20, 2014)

shogunman said:


> Ninong, is it possible that his mom add him as a co-owner after purchase?


The owner of a car (that has no lien) can always ask DMV to add another party to the title. Be sure to check with your insurance agent for an explanation of the complications that will add to your insurance and check with your tax adviser to see if you have to file a gift tax form with the IRS for the value above the $14,000 annual gift tax exclusion. In other words, if you are gifting a 50% interest in a $28,000 car, then it would not be required but if the value of the car is $48,000 then maybe it technically should be. I seriously doubt that anyone bothers with that even if it is required.

The same would apply if he has his mother buy the car and then gift it to him. Technically she should file an IRS gift tax form for the amount of the gift over $14,000. If she is gifting it to a married couple, then the threshold goes up to $28,000 ($14,000 each). If his mother is married and the gift is from her and her spouse, then the limit is $28,000 ($14,000 from each) and if the gift is to a married couple, then it goes up to $56,000 total.

In my experience virtually no one bothers with complying with that when it comes to gifting cars from parents to children but technically you're supposed to report gifts of cash or merchandise in excess of the annual allowance. The exclusion amount now (gift tax and/or estate tax) is more than $5 million per person. So you would have to report a total amount more than that before you start owing gift tax. Obviously there is no limit on gifts between spouses because there is no estate tax due when a spouse inherits upon the death of their partner.

Too much info, I know. :yikes:



> The donation idea is brilliant if applicable in Texas.


It's probably something available in many, if not all, states. Just be sure to check for the complications because I suspect there could be some complications. Most of the time what we're talking about is a parent owning a car for a few years and deciding that instead of trading it in on their new car, they will give it to their son or daughter because he or she would like it. They fill out the bill of sale and show $0.00 as the sale amount and note that it's a donation from parent to child. Just make sure it's available in your state. We know it's available in California.


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## Arcane.Host (Sep 8, 2006)

For donation to work as well, there must be no lien, right?


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## djsaad1 (Sep 3, 2012)

640GC said:


> We would like a new GC, but the 52% residual is killing my dream. We looked at a MB GLE today that my wife liked.


The residual might not go back up, but if you wait for December there will most likely be some cash buildout incentive, and you have a good chance of getting tax credit in Texas.

Another option would be to lease a 2015 that you find somewhere in the country. You can probably get $20k off the price plus the residual is one point higher. You could get an m6 for close to what you were paying for a 640.


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## Arcane.Host (Sep 8, 2006)

djsaad1 said:


> The residual might not go back up, but if you wait for December there will most likely be some cash buildout incentive, and you have a good chance of getting tax credit in Texas.
> 
> Another option would be to lease a 2015 that you find somewhere in the country. You can probably get $20k off the price plus the residual is one point higher. You could get an m6 for close to what you were paying for a 640.


I concur. OP has 640i GC which is more expensive than the 640i. I agree that for the lease payment of the 2016 GC, he may be able to get a similarly equipped 2015 M6 (not GC). Losing the four doors maybe a deal breaker for the OP though.


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## Ninong (May 20, 2014)

shogunman said:


> For donation to work as well, there must be no lien, right?


You cannot give away something you don't own. If there is a lien, the lienholder is still the "legal owner" and you're just the "registered owner" or "registered lessee" on a lease. You have to pay it off in full first before you can donate it.

For the same reason, you cannot add anyone to the registration/title on a car that still has a lien. You have to wait until the lien is paid in full and you become the "legal owner" first.


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## namelessman (Dec 23, 2004)

Ninong said:


> You cannot give away something you don't own. If there is a lien, the lienholder is still the "legal owner" and you're just the "registered owner" or "registered lessee" on a lease. You have to pay it off in full first before you can donate it.
> 
> For the same reason, you cannot add anyone to the registration/title on a car that still has a lien. You have to wait until the lien is paid in full and you become the "legal owner" first.


The freedom to transfer and/or give away is a nice bonus of cash purchase.


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## djsaad1 (Sep 3, 2012)

shogunman said:


> I concur. OP has 640i GC which is more expensive than the 640i. I agree that for the lease payment of the 2016 GC, he may be able to get a similarly equipped 2015 M6 (not GC). Losing the four doors maybe a deal breaker for the OP though.


I have seen people get $20k off 2015 m6 gc's. Shouldn't be too hard to get right now.


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## Kamdog (Apr 15, 2007)

Just FYI, in NY there is no sales tax on a family transfer. I gave my daughter a couple of my cars.


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## German Expat (Sep 29, 2006)

How strict is BMW? What if one spouse leases and the other buys it? How would they even know? Same address?


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## Cavi Mike (Apr 15, 2007)

How about next time, just buy the friggin car in the first place.


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## Ninong (May 20, 2014)

German Expat said:


> How strict is BMW? What if one spouse leases and the other buys it? How would they even know? Same address?


I'm still trying to wrap my head around where the number $2,500 came from? This deal was consummated yesterday, a Saturday. BMWFS is closed Saturday, Sunday and Monday this weekend. The client adviser told OP that the reason they didn't want to sell the car back to him was because BMWFS would ding them $2,500. Did they call BMWFS Friday to ask for a dealer payoff? Were they given two different numbers: one for the customer keeping it and a lower number if the customer didn't keep it?

OP says he trusts the dealership to give him the straight answers and I accept that, I'm just wondering where we got that exact figure of $2,500. Did the dealership give the customer the exact number quoted by BMWFS? If so, I haven't seen it posted anywhere, just an estimate of it's true market value based on current auction prices.

In answer to your particular question, it was never a problem registering the car in the name of the spouse when the customer who leased the car exercised his option to purchase the car at the expiration of the lease. At least that was never a problem in California. YMMV.

I understand the reason for your question is based on the assumption that somehow BMWFS and/or the dealership won't see the car back to the customer on the lease for some unknown reason. I'm still a little confused about that myself.


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## Ninong (May 20, 2014)

Cavi Mike said:


> How about next time, just buy the friggin car in the first place.


The reason leasing is so popular lately is that BMW (and MB, and Audi, etc.) sometimes (meaning certain times of the year) set unrealistically generous residuals in order to arrive at low monthly payments. In other words, the manufacturers are using low lease monthly payments to sell cars even if they, the manufacturers, are going to be stuck with a lot of cars that aren't worth nearly as much as their true market value at lease-end.

If BMW is offering to lease you a car for 36 months based on a $62,000 residual when the car's actual market value is only $45,000 at lease-end, then that's a better deal financially than buying the car and having it depreciate that much on you for the same period of time.


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## TXPearl (Apr 16, 2010)

640GC said:


> Our 2013 640i GC went off lease and we returned it today, Saturday. I inquired about purchasing the car. I was told that BMW Financial Services would ding the dealership $2,500.00 if they sold me the car. So they didn't want to do it.
> 
> It makes sense as the residual is $62,000.00 but the Mannheim Auto Auction quote is only around $45,000.00 and BMW Financial Services would like me to purchase the car at $62k. (I think they get the Mannheim quote as in Texas, you pay the sales tax up front but can apply the taxes paid on a new lease. The amount of tax paid that rolls over into the new lease is based on the current value of the vehicle ($45k) and not on the $62 residual. So in this case, I lose $1,062.50 in taxes paid. $62 - $45 = $17k x .0625. Convoluted system.)
> 
> ...


The $2500 story sounds like more dealer BS. They probably want you to lease a new one since you showed interest. Search this forum for "buyout" or something like that and you'll find plenty of stories of end-of-lease purchases from a cooperative dealer (perhaps making a fair profit on the transaction).

Are you sure the dealer is even keeping your lease return? Maybe they already declined to take it, so they can't sell a car they don't own.

I don't follow any of your sales tax logic, but no matter which route you take, you'll pay sales tax in Texas, even if you buy your old lease for $62,000.


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## Squeak (Sep 13, 2014)

Greg Poland has a 640GC sitting on his lot right now as an executive demo.

http://www.pacificbmw.com/used/BMW/...-angeles-730484df0a0e0ae770a424f2b6cdf7e4.htm

Given the way those lease out, you could probably get a payment close to, if not cheaper, than what you were paying now for your 2013.


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## 640GC (Mar 22, 2012)

Cavi Mike said:


> How about next time, just buy the friggin car in the first place.


I hear you but this way, BMW FS eats the $18,000.00 in depreciation that I didn't have to pay. That's a whole lot of clams! That is $500.00 a month less on the lease payment.


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## 640GC (Mar 22, 2012)

Ninong said:


> I'm still trying to wrap my head around where the number $2,500 came from? This deal was consummated yesterday, a Saturday. BMWFS is closed Saturday, Sunday and Monday this weekend. The client adviser told OP that the reason they didn't want to sell the car back to him was because BMWFS would ding them $2,500. Did they call BMWFS Friday to ask for a dealer payoff? Were they given two different numbers: one for the customer keeping it and a lower number if the customer didn't keep it?
> 
> OP says he trusts the dealership to give him the straight answers and I accept that, I'm just wondering where we got that exact figure of $2,500. Did the dealership give the customer the exact number quoted by BMWFS? If so, I haven't seen it posted anywhere, just an estimate of it's true market value based on current auction prices.
> 
> ...


So I'm not exercising my option to purchase the car as that privilege would cost me almost $63k. The current retail on the vehicle is $45k and my guess is that the dealer is purchasing the car for around $40k from BMW FS based on the edmonds.com trade in value.

My guess is that the dealer called on Friday for the payoff and mentioned to BMW FS that I was interested in purchasing the vehicle. They probably told the dealership that this was a no no as I declined to purchase the car at the higher price.

At lease turn in, the dealer inspector came back within 5 min and said everything was perfect. Others have conjectured that this is because BMW FS made the dealership a good offer and the car was clean and so the dealership wanted the car to sell themselves.


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## 640GC (Mar 22, 2012)

Ninong said:


> The reason leasing is so popular lately is that BMW (and MB, and Audi, etc.) sometimes (meaning certain times of the year) set unrealistically generous residuals in order to arrive at low monthly payments. In other words, the manufacturers are using low lease monthly payments to sell cars even if they, the manufacturers, are going to be stuck with a lot of cars that aren't worth nearly as much as their true market value at lease-end.
> 
> If BMW is offering to lease you a car for 36 months based on a $62,000 residual when the car's actual market value is only $45,000 at lease-end, then that's a better deal financially than buying the car and having it depreciate that much on you for the same period of time.


Yup, that's why this was the first time we had ever leased vs. purchased a car. BMW was willing to subsidize the purchase. Too hard to pass up.

It's not the same story currently which is why we would like to buy back our leased car. Since lots of cars are coming off lease, this drives the price of used cars down, so advantageous to purchase a used car. Since I know the history of my car, I would like it over an arbitrarily selected used car.


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## 640GC (Mar 22, 2012)

Squeak said:


> Greg Poland has a 640GC sitting on his lot right now as an executive demo.
> 
> http://www.pacificbmw.com/used/BMW/...-angeles-730484df0a0e0ae770a424f2b6cdf7e4.htm
> 
> Given the way those lease out, you could probably get a payment close to, if not cheaper, than what you were paying now for your 2013.


Not a good deal for me. Our car has the Bang and Olufsen Stereo and the Individual Amaro Brown Merino leather. Plus when you do the European Delivery, the car is built with exactly what you want, color, options, etc. And you get to drive it on the Autobahn where it was born.


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## Ninong (May 20, 2014)

Is it possible the dealership wasn't interested in selling your leased car back to you because they wanted to keep it? I have never heard anything about "being dinged $2,500" before. That's a new one.

If you asked them for a selling price, they should have given you one. They get a reduced payoff from BMWFS because BMWFS would prefer that the dealer not send the car back to them. Therefore, they give the dealer a wholesale price to entice the dealer to keep it. The dealer has seen your car, BMWFS hasn't. "Clean" cars are worth more than average cars, especially if they have eye appeal.

When you're exercising your option to purchase the car for the guaranteed lease residual shown on your lease agreement, the dealer has to sell it to you for that price plus a reasonable inspection fee, plus tax & license. It's not marked up. When the residual is higher than the car's current market value, the dealership can usually get a reduced payoff from BMWFS. The dealer is allowed to charge you more than that payoff amount. So I'm still wondering why the dealer didn't quote you a selling price? That's the part that confuses me. That's why I'm confused by the title of your thread: "Dealer says can't sell you the car you just turned in." Of course he can.

P.S. -- You might want to call BMWFS Tuesday morning and ask for an explanation of why the dealer can't sell you the car back and maybe ask them what the dealer meant when he said he would be "dinged $2,500 by BMWFS." Just to see what they say.


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## 640GC (Mar 22, 2012)

Ninong said:


> "Dealer says can't sell you the car you just turned in." Of course he can.
> 
> P.S. -- You might want to call BMWFS Tuesday morning and ask for an explanation of why the dealer can't sell you the car back and maybe ask them what the dealer meant when he said he would be "dinged $2,500 by BMWFS." Just to see what they say.


We'll they didn't exactly say they can't, they said they won't as they didn't want the dealership owner to get dinged for the penalty.

I called BMW FS a couple of days before lease expiration and they said that I could only keep the vehicle if I paid the $63k residual that was on the books. No reduction.

The car does have eye appeal with a Carbon Black paint job and Amaro Brown Marino leather. Has about $20k of options which don't really figure into wholesale prices making the vehicle a good deal for the dealership.

I will check with BMW FS on Tuesday per your suggestion.


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## Ninong (May 20, 2014)

Unless things have changed a lot since I retired, the dealer calls BMWFS and gets a reduced payoff for a lease turn-in and then he turns around and offers the car to you at a much more favorable price than the inflated residual value shown on the lease. Whether BMWFS has added some sort of restrictions when the dealer sells the car back to you or not I wouldn't know. I just don't understand the part about the dealer not wanting to sell you the car if you expressed an interest in buying it if the price was reasonable and in line with market conditions.


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## bmw325 (Dec 19, 2001)

So even if you agreed to pay the 2500 extra they won't sell it to you? I'm confused


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## ard (Jul 1, 2009)

if you want to clarify, let's assume the dealer is lying or making crap up, just to jack 2500 from op...if yo do that, diesnt it make perfect sense?


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## chrischeung (Sep 1, 2002)

Dealerships are in business to sell cars. There should be a reason why they don't want, or can't sell it to you. Often profit on a used car is more than a new.


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## djsaad1 (Sep 3, 2012)

I think you saw this in the other thread, but just in case you didn't. My solution to the low 6 series residual was to do a 2 year lease and do a single pay to avoid Texas taxes. 

Residual is currently 61% on a 2 year lease 10k miles.


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## 640GC (Mar 22, 2012)

djsaad1 said:


> I think you saw this in the other thread, but just in case you didn't. My solution to the low 6 series residual was to do a 2 year lease and do a single pay to avoid Texas taxes.
> 
> Residual is currently 61% on a 2 year lease 10k miles.


Doesn't this mean that you only have 24 months to pay the 40% depreciation instead of 36 months increasing the monthly payment by 33%?


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## Ninong (May 20, 2014)

640GC said:


> Doesn't this mean that you only have 24 months to pay the 40% depreciation instead of 36 months increasing the monthly payment by 33%?


The 40% depreciation is based on MSRP but you're not paying MSRP for the car. You're getting it at a discount. For example, there is a dealer in the Bay Area who has a 2015 750Li on his showroom floor that he is advertising with a discount of more than $15,000. It has an MSRP of more than $119,000. BMWFS is offering a 24-mo lease with a 66% residual. That makes the residual more than $78,000 on a car that you got for more than $15,000 below MSRP.

It's the cap cost that is the true "selling" price, not the MSRP, on a lease. The MSRP is used to calculate the residual, which is a great idea, especially if you're getting the car for a lot less than MSRP. Using MSRP to calculate residual gives you a higher residual, which is great for you if you want lower monthly payments.


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## 640GC (Mar 22, 2012)

Ninong said:


> The 40% depreciation is based on MSRP but you're not paying MSRP for the car. You're getting it at a discount. For example, there is a dealer in the Bay Area who has a 2015 750Li on his showroom floor that he is advertising with a discount of more than $15,000. It has an MSRP of more than $119,000. BMWFS is offering a 24-mo lease with a 66% residual. That makes the residual more than $78,000 on a car that you got for more than $15,000 below MSRP.
> 
> It's the cap cost that is the true "selling" price, not the MSRP, on a lease. The MSRP is used to calculate the residual, which is a great idea, especially if you're getting the car for a lot less than MSRP. Using MSRP to calculate residual gives you a higher residual, which is great for you if you want lower monthly payments.


But your payment would still be lower on 36 months if the purchase price and residual were the same. My residual was 62% for 15,000 miles. Now it's 52% for 10,000 miles. That difference will show up as an increase in monthly lease payments. Or on a $100,000.00 vehicle, it would need to be discounted by an additional $10,000.00 to make up the 10% difference. I was getting around a 12% discount so the new discount would have to be 22% to make everything else equal.


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## Ninong (May 20, 2014)

640GC said:


> But your payment would still be lower on 36 months if the purchase price and residual were the same. My residual was 62% for 15,000 miles. Now it's 52% for 10,000 miles. That difference will show up as an increase in monthly lease payments. Or on a $100,000.00 vehicle, it would need to be discounted by an additional $10,000.00 to make up the 10% difference. I was getting around a 12% discount so the new discount would have to be 22% to make everything else equal.


The residual for 36 months will be lower than the residual for 24 months. You're never going to have a 24-mo lease payment that is equal to a 36-mo lease payment but the higher residual helps and you're getting another new car in 24 months instead of 36 months.


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## Ninong (May 20, 2014)

640GC said:


> But your payment would still be lower on 36 months if the purchase price and residual were the same. My residual was 62% for 15,000 miles. Now it's 52% for 10,000 miles. That difference will show up as an increase in monthly lease payments. Or on a $100,000.00 vehicle, it would need to be discounted by an additional $10,000.00 to make up the 10% difference. I was getting around a 12% discount so the new discount would have to be 22% to make everything else equal.


Did they tell you the residual for a new 2016 640i GC is only 52% for 10,000 miles? Because it's not 52% for 10,000 miles on a new 2015, it's *56%* for 10,000 miles on a 36-mo lease. I don't know what it is for 24 months because that doesn't show up on BMW's website, just their special lease offer on the 2015 models. The dealer has $4,000 in trunk money from the factory on the 2015's plus whatever he's willing to discount the car himself, which should be a ton. Obviously they want to unload the remaining 2015's now that the 2016's have been in production for six months already.

You have to compare apples and apples, so you can't compare your previous lease against what is available now, three years later. You should compare what they are offering on a new 2015 vs a new 2016. Or you could compare a 24-mo lease vs a 36-mo lease on the same car.

On the car you gave back to the dealership, I will say this. It's worth more than the dealer paid for it or he wouldn't be keeping it. If he's willing to sell it to you for $2,500 more than he actually paid, that might be a good deal, but that's for you to decide. You can't decide that if he didn't give you a firm selling price. Instead of pretending that it was somehow against the rules of the game to sell the car back to you, he should have offered you a selling price _as-is_ and a selling price fully reconditioned and with a BMW CPO warranty, if you wanted that. Obviously you would have to pay sales tax and license fees, as applicable to your location.


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## bmw325 (Dec 19, 2001)

I now vaguely recall BMW instituting a policy where they charge the dealer more to buy out the car if it will be resold to the original lessee. Regardless they should be able to quote you a price.


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## 640GC (Mar 22, 2012)

Ninong said:


> It's *56%* for 10,000 miles on a 36-mo lease.


We were looking at a 2016 as we enjoy the European Delivery experience and they are only building 2016's at the factory.


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## djsaad1 (Sep 3, 2012)

It's 55% on the 2016 at 10k miles


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## JTDM (Jul 22, 2014)

Honestly OP seems to be set on ED if he was buying a new BMW. If I were you, I would pursuit the route of ordering an ED then hope 6 series RV goes up a bit. Yet since I start tracking RV last July, I had never see 62% on a 6, even when it went through LCI this March. 

Just order the car and hope when you take delivery (probably have to wait until Nov now) the RV and cash incentive went up


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## ddeliber (Jan 31, 2013)

there is a newly listed 2013 640i gc for sale in lubbock TX (Alderson group). No pics or description yet so it is hard to tell if it is yours (the VIN is listed and they say it has 37,617 miles on it). They are asking $60k even for it. If they paid $40 or even $45k for it that is some profit that they are hoping for.


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## tturedraider (Nov 11, 2005)

ddeliber said:


> there is a newly listed 2013 640i gc for sale in lubbock TX (Alderson group). No pics or description yet so it is hard to tell if it is yours (the VIN is listed and they say it has 37,617 miles on it). They are asking $60k even for it. If they paid $40 or even $45k for it that is some profit that they are hoping for.


That's the OP's car. Pulled a VIN report and it is the same color outside and inside and has all the same options. The CarFax shows the car was sold two months before it was imported and went through customs and then the Texas state inspection was done after that (OP did ED).


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## 640GC (Mar 22, 2012)

We'll I'll be dammed. No wonder they didn't want to sell me the vehicle when the Mannheim quote was $45k and they listed the vehicle at $60k. They probably would have see the incredulous look on my face when they asked for a 25 - 33% profit margin. Man, makes my head spin.


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## tturedraider (Nov 11, 2005)

640GC said:


> We'll I'll be dammed. No wonder they didn't want to sell me the vehicle when the Mannheim quote was $45k and they listed the vehicle at $60k. They probably would have see the incredulous look on my face when they asked for a 25 - 33% profit margin. Man, makes my head spin.


If I were in your shoes I'd go in there and light them up. I'd also let them know they could either make me a deal in the $50k +/- range or permanently lose my future business and my recommendation to anyone and everyone I might have the opportunity to talk with about how they do business.


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## 640GC (Mar 22, 2012)

We'll I'm not sure how I feel about that. I did have the option to purchase at $62k which I declined. That was the contractual obligation. Having a 62% residual with 15k miles per year already saved me $300-$500 a month in lease payments for 3 years.

I am a little miffed that the dealership benefits to this extreme due to my foresight. I can understand them not quoting me a price as I'm sure they don't want customers to know their markup. They are in business to make money.

Maybe on the next lease I work out an end of lease buyout in advance at a set price over their buyout price to prevent this from happening again.


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## ChrisF01 (Aug 21, 2012)

640GC said:


> We'll I'm not sure how I feel about that. I did have the option to purchase at $62k which I declined. That was the contractual obligation. Having a 62% residual with 15k miles per year already saved me $300-$500 a month in lease payments for 3 years.
> 
> I am a little miffed that the dealership benefits to this extreme due to my foresight. I can understand them not quoting me a price as I'm sure they don't want customers to know their markup. They are in business to make money.
> 
> Maybe on the next lease I work out an end of lease buyout in advance at a set price over their buyout price to prevent this from happening again.


It just sucks for you that the current residual is so ****ty. Hopefully the end of the year as the '15s become gone from dealer lots they'll prop up the residual again? The car is in the middle of its life, not exactly selling like hotcakes?


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## Northcar (Sep 21, 2005)

Just because they are asking $60,000.00 does not mean they expect to get it. You know it was well taken care of but to a prospective buyer it is a used car worth $45,000.00 wholesale with questionable care. Offer them five to ten percent over wholesale and you might find yourself the owner. The least they should do for you is to confirm what they paid for the car. Since they have now put it on the market to the public I do not see how BMW Financial can penalize you as they may have been able to do initially before the dealer offered it for sale to the public. 

(Not a bad idea as suggested above to let them know that if you end up leasing another car it will probably not be with them so they don't see you as a captive customer and thus be less likely to deal on the subject car.)


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## 640GC (Mar 22, 2012)

Northcar said:


> The least they should do for you is to confirm what they paid for the car.
> 
> (Not a bad idea as suggested above to let them know that if you end up leasing another car it will probably not be with them so they don't see you as a captive customer and thus be less likely to deal on the subject car.)


Why would they tell me what they paid for the vehicle? That would show their hand. It seems like car dealers provide as little information as possible. It would be nice to know if they paid $40k or $45k.

The dealership is the BMW, Mercedes and Lexus dealer in our town. Only Volvo is someone else. No Range Rover, Porsche or Audi dealer. We have always bought from them but will look elsewhere.


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## kyfdx (Aug 4, 2003)

Looks like you made out like a bandit on that last lease... if the residual is $62K and the car is really worth $45K-$50K.. Aren't you glad you didn't buy it to begin with?


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## djsaad1 (Sep 3, 2012)

640GC said:


> Why would they tell me what they paid for the vehicle? That would show their hand. It seems like car dealers provide as little information as possible. It would be nice to know if they paid $40k or $45k.
> 
> The dealership is the BMW, Mercedes and Lexus dealer in our town. Only Volvo is someone else. No Range Rover, Porsche or Audi dealer. We have always bought from them but will look elsewhere.


Since you are really wanting another ed, forum sponser might be your best bet. You could do ed and performance center delivery.


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## Arcane.Host (Sep 8, 2006)

kyfdx said:


> Looks like you made out like a bandit on that last lease... if the residual is $62K and the car is really worth $45K-$50K.. Aren't you glad you didn't buy it to begin with?


This is what comes to my mind as well - you did well OP.

As regards fixing a price for your next car, you can try that nut it's too much in advance IMO. One way to accomplish a lease end buyout could be to shop dealers prior to turning in the car ($X over their price) and you just turn it in to the one you like or just walk away if no one's playing ball.


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## ddeliber (Jan 31, 2013)

640GC said:


> Why would they tell me what they paid for the vehicle? That would show their hand. It seems like car dealers provide as little information as possible. It would be nice to know if they paid $40k or $45k.
> 
> The dealership is the BMW, Mercedes and Lexus dealer in our town. Only Volvo is someone else. No Range Rover, Porsche or Audi dealer. We have always bought from them but will look elsewhere.


The reason I looked for the car was because I never heard of restrictions on BMW leasers buying cars at the end of their leases. In fact it is often encouraged - or at least common practice - here on bimmerfest - BMW FS won't negotiate residuals but dealers will after they buy it after turn in. It just seemed to me like a bold faced lie. The fact that they are listing it at such a high price is not proof of this, but is sure begs the question of what really went on. It really looks like the dealer simply didn't want to sell it to you because they thought they could get more on the open market, and the "restrictions" were BS. I was just reluctant to say so earlier because people that know a lot more about the process than I do didn't call this out.

Has anyone here ever heard of a situation where BMW FS said that a leaser is not allowed to buy a lease turn in from the dealer they bought it from?


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## TXPearl (Apr 16, 2010)

ddeliber said:


> The reason I looked for the car was because I never heard of restrictions on BMW leasers buying cars at the end of their leases. In fact it is often encouraged - or at least common practice - here on bimmerfest - BMW FS won't negotiate residuals but dealers will after they buy it after turn in. It just seemed to me like a bold faced lie. The fact that they are listing it at such a high price is not proof of this, but is sure begs the question of what really went on. It really looks like the dealer simply didn't want to sell it to you because they thought they could get more on the open market, and the "restrictions" were BS. *I was just reluctant to say so earlier because people that know a lot more about the process than I do didn't call this out. *
> 
> Has anyone here ever heard of a situation where BMW FS said that a leaser is not allowed to buy a lease turn in from the dealer they bought it from?





TXPearl said:


> The $2500 story sounds like more dealer BS.....


.



ard said:


> if you want to clarify, let's assume the dealer is lying or making crap up, just to jack 2500 from op...if yo do that, diesnt it make perfect sense?


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## Squeak (Sep 13, 2014)

640GC said:


> We'll I'm not sure how I feel about that. I did have the option to purchase at $62k which I declined. That was the contractual obligation. Having a 62% residual with 15k miles per year already saved me $300-$500 a month in lease payments for 3 years.
> 
> I am a little miffed that the dealership benefits to this extreme due to my foresight. I can understand them not quoting me a price as I'm sure they don't want customers to know their markup. They are in business to make money.
> 
> *Maybe on the next lease I work out an end of lease buyout in advance at a set price over their buyout price to prevent this from happening again.*


Will never happen. The lease payout is already determined in advance (via the residual), and a dealer is not going to give up one of their revenue streams up being able to pick up cars like this (part of why BMW sets the residuals as they do)

Sounds like you want your cake, and eat it to. You got a great deal from the ED, plus the awesome residual, so you only paid for a small part of the car.


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## Ninong (May 20, 2014)

Northcar said:


> Just because they are asking $60,000.00 does not mean they expect to get it.


+1

Plus the fact that they have to recondition the car and CPO it. You really don't know what they paid for it, just what the average auction prices have been. And you don't know the price they would have quoted you for the car because they avoided that topic, which I think was not all that nice of them.


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## Ninong (May 20, 2014)

Look at it this way. If the residual is 52% for a 36/15K lease on a new 2016 640i GC, that is probably a realistic expectation of the market value of the car three years down the road. There is no subvention of the residual on BMW's part. Since almost all cars usually depreciate over time, the next residual change -- probably November -- should be down, not up. If it goes up, it means BMW is subvening the lease terms as part of their marketing strategy.

There was a time when it was quite common for lessees to choose to keep their cars at lease-end or even trade them in with the dealer giving them an appraisal higher than the payoff amount, but that was before BMW got into the business of setting overly generous residuals as a way to boost sales.


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## namelessman (Dec 23, 2004)

Ninong said:


> There was a time when it was quite common for lessees to choose to keep their cars at lease-end or even trade them in with the dealer giving them an appraisal higher than the payoff amount, but that was before BMW got into the business of setting overly generous residuals as a way to boost sales.


My wild guess is that BMWNA has another 20%-25%(wrt to MSRP) margin below factory invoice. 10% of that is for 5% AVP and drive event credits and monthly/quarterly/year-end sales bonus, while the remaining 10%-15% is profit, plus buffer for inflated RV. For example, a 52% RV sub vented at 62% requires some reserve to take the hit at lease end. Unfortunately the cash buyers need to pay for that too, but the hope is the increased volume will drag down invoice far enough to benefit lessees and purchasers alike. And for lessees to catch up with cash purchase at lease end buyout, there has to at least a drop of 10% from the RV(from 62% to 52%) to break even(and cover the acquisition/disposition fees and interest paid).


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## nilfinite (Mar 12, 2012)

This is an interesting thread. I've always thought it was easy to buy the car back at the end of the lease. Heard plenty of advice on these forums that if you want to keep the car after the lease, you can work with any BMW dealer. Contact a couple before the lease ends and agree on a price you can pay the dealer for their help. I guess BMW is making it harder now? $2,500 fee + dealer profit?

Anyway, definitely made out like a bandit on that residual difference! Great job. If you want to do another ED, it's going to be quite a long time to wait. Assuming you don't need another car ASAP.


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## Ninong (May 20, 2014)

nilfinite said:


> This is an interesting thread. I've always thought it was easy to buy the car back at the end of the lease. Heard plenty of advice on these forums that if you want to keep the car after the lease, you can work with any BMW dealer. Contact a couple before the lease ends and agree on a price you can pay the dealer for their help.


Your lease has a guaranteed residual value. If you choose to exercise your option to purchase the car at the end of the lease, you pay that price for it plus the small cost of a safety inspection and, if necessary, smog certificate (Calif.). Plus sales tax (in most states) on the sale of the car from the dealership to you. Plus license and registration fees required by your state. Perhaps you will ask the dealer how much he would charge you to CPO the car.

The idea of shopping around among different dealers to perform this transaction for you comes into play if you know that your car is not worth the guaranteed residual value. That's because BMWFS often sets overly generous residuals as part of BMW's marketing strategy. If that's the case in your situation, you ask the dealer to call for a dealer's payoff on your lease, which is not the same as the payoff you would get if you called. Your payoff is the residual value plus any late fees that might have been tacked on to the end of your lease, assuming you were ever late. The dealer's payoff is based on the market value of the car to BMWFS if they were to get stuck taking it back. It's possible that BMWFS now charges the dealer an extra charge if he sells the car back to you? At least that's what this dealership told the OP. His problem was that he let his car go back the dealership and didn't tell them no thanks and just drive off. His other problem is that his BMW dealership is the only game in town.

Maybe BMWFS will give the dealer a payoff that is thousands of dollars below the guaranteed residual value stated on your lease? Now that dealer will offer to sell the car back to you for a price. If you agree with the dealer that it sounds like a good deal, you go for it. If you think you can do better at another dealership, you tell the dealer that even though it sounds like a pretty good deal, you think you can do better and will try another BMW dealer. At that point the dealer either offers you a slightly better deal or he lets you walk.

This assumes you want to buy the car, you know its wholesale value is much less than the guaranteed residual value and you intend to shop two or three local BMW dealers for the best offer. It also assumes that there are at least two or three local BMW dealerships.


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## Northcar (Sep 21, 2005)

Ninong said:


> Your lease has a guaranteed residual value. If you choose to exercise your option to purchase the car at the end of the lease, you pay that price for it plus the small cost of a safety inspection and, if necessary, smog certificate (Calif.). Plus sales tax (in most states) on the sale of the car from the dealership to you. Plus license and registration fees required by your state. Perhaps you will ask the dealer how much he would charge you to CPO the car.
> 
> The idea of shopping around among different dealers to perform this transaction for you comes into play if you know that your car is not worth the guaranteed residual value. That's because BMWFS often sets overly generous residuals as part of BMW's marketing strategy. If that's the case in your situation, you ask the dealer to call for a dealer's payoff on your lease, which is not the same as the payoff you would get if you called. Your payoff is the residual value plus any late fees that might have been tacked on to the end of your lease, assuming you were ever late. The dealer's payoff is based on the market value of the car to BMWFS if they were to get stuck taking it back. It's possible that BMWFS now charges the dealer an extra charge if he sells the car back to you? At least that's what this dealership told the OP. His problem was that he let his car go back the dealership and didn't tell them no thanks and just drive off. His other problem is that his BMW dealership is the only game in town.
> 
> ...


That is all very helpful information to someone in the OP's situation. I still have to question though the veracity of the dealer's representation that there would be a $2500 fee if the purchaser is the original leasee. That smells of price fixing and other frowned upon practices that have been the subject of lawsuits such as excessive documentation fees that have been the subject of litigation in some states. I would think BMWFS would want to keep a safe distance from anything that would suggest they are interfering by dictating price between a dealer and a customer.


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## Ninong (May 20, 2014)

Northcar said:


> That is all very helpful information to someone in the OP's situation. I still have to question though the veracity of the dealer's representation that there would be a $2500 fee if the purchaser is the original leasee.


The OP could have simply gone to the dealership and told them he was "thinking about" buying the car but only if the dealer could offer him a price better than the guaranteed residual shown on his lease. He could have asked them for a price including CPO. Then he could have told them he would "think about it." You just don't show up on the last day of your lease and start that process.



> That smells of price fixing...


No, not at all. BMWFS is not telling the dealer anything about the selling price to the customer. What they are doing is telling the dealer the price they are willing to sell the car to him for instead of simply taking it back themselves. Now, according to the OP, the dealership told him that BMWFS will hit them with an additional charge if they're selling the car back to the original customer. I'm not familiar with that but it does make sense when you think about it. What has been happening with a lot of those BMW leases with overly generous residuals is that the dealership tells the customer they can call BMWFS and get him a better price if he wants to buy the car.

The OP still had the option to refuse to turn his car in at that dealership. He could have simply walked out and gone to another BMW dealership, except that in his case, I think the nearest BMW dealership is 125 miles away. In his case, I think it's obvious that the dealership wanted his car for their lot. He still had the option to walk out and not let them have it.



> ...and other frowned upon practices that have been the subject of lawsuits such as excessive documentation fees that have been the subject of litigation in some states. I would think BMWFS would want to keep a safe distance from anything that would suggest they are interfering by dictating price between a dealer and a customer.


BMW does "keep a safe distance from anything that would suggest" price-fixing on their part. When "doc fees" were first invented they were $20. Then they were raised to $25. Then they were raised to $40. In some states the legislatures, responding to their constituents, decided to pass laws regulating these new "doc fees." California was one of those states that decided to regulate them. At least one Chevy dealership in California was sued back when the "doc fee" was $40. I don't remember if he was the only dealership named or not but I do remember the basis for the suit and the result. The claim was that he sold cars to some customers without charging them the $40 "doc fee" that he charged to others. The court ordered him to refund the $40 "doc fee" to all customers who paid it since the California statute required that he charge all customers the same fee if he chose to charge a "doc fee."

Right now the "doc fee" in California is "up to a maximum of $80" but if you choose to charge a "doc fee," you must charge the same "doc fee" on every single deal without exception or run the possibility of having some hotshot lawyer file a class action lawsuit against you. Today there are only 10 or 12 states that regulate the "doc fee" at all. In the other states, it's open season on the customers. Just look at the situation in Florida. In general, the "doc fee" situation is crazy anywhere along the East Coast. Just check the "doc fee" charged by some Rolls-Royce and Bentley dealers out there.


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## 640GC (Mar 22, 2012)

So I seen now that my mistake was that I didn't provide the VIN # to multiple BMW dealers prior to lease end and ask them to quote me a price. I had asked my local dealer a couple of months before lease end and their answer was to pay BMW FS the residual value. I thought that was my option. I thought that the dealer would get first dibs to purchase the vehicle, locking out all other BMW and other brand dealers from the transaction. So I figured that once the dealer purchased the vehicle, I could go in and negotiate the price at that time, while I was turning it in. This is the point where they told me they would incur a $2,500.00 penalty and that they wouldn't sell it to me.

I didn't understand that I could shop my lease around and have multiple dealers check on the payoff amount and then see how much each dealer could decide to mark up the vehicle. Very interesting.

FYI: The car no longer shows for sale as of two days ago. Any way to figure out what the dealer payoff amount was from BMW FS and what the vehicle was sold for to the new owner? Could I find out the new owners name? I could call them and ask. I would like a peek behind the curtain on how all this stuff works!


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## mclaren (Jan 5, 2005)

There was a time when a dealer had to pay more for a car coming off lease if he was selling it to the person who was currently leasing the car but that changed about a year ago. So the $2500 is BS unless it was changed again recently. My guess is they are buying the car in the low forties and don't want to sell it to you for that plus a small profit or they don't know about the change. Honestly my dealer and I suspect any board sponsor would sell you the car for what they have to pay BMWFS plus $500.


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## Ninong (May 20, 2014)

640GC said:


> I figured that once the dealer purchased the vehicle, I could go in and negotiate the price at that time, while I was turning it in. This is the point where they told me they would incur a $2,500.00 penalty and that they wouldn't sell it to me.


That's one of the benefits of hobbyist forums like this one. You find out stuff you didn't know before.

In my humble opinion, it was unethical for the dealer to not offer you a selling price if they knew you were interested in buying it back. It's not unethical for them to want it but they should have made you an offer and without telling you anything about being "hit with a penalty" by anybody. Even if that's true, it has nothing to do with them quoting you a fair price before putting it up for sale and it's not something they should put out there anyway.



> FYI: The car no longer shows for sale as of two days ago.


I noticed that. It could have been sold to anybody but when a used car sells that fast, probably before it was even frontline ready, it probably sold to a dealership employee or a relative of a dealership employee. Or maybe one of the salesmen called up somebody he had been working and told them he had the perfect car for them but they would have to act fast because it wouldn't last long.



> Any way to figure out what the dealer payoff amount was from BMW FS...


Not that I know of.



> ... and what the vehicle was sold for to the new owner? Could I find out the new owners name? I could call them and ask. I would like a peek behind the curtain on how all this stuff works!


Whether you can find out who purchased it or not probably depends on the privacy laws in your state. You would not be able to obtain that information from the California DMV although you could many years ago before the law changed. Only a limited few dealership employees have access to that DMV information and they would be in deep doo-doo if they pulled a VIN from DMV just for the hell of it or just to provide someone else with that information. It's useful for dealers in determining whether the customer attempting to trade in the car he's driving is really his or not when he can't provide you with complete proof of ownership at the time you're trying to make the deal. Sometimes it turns out the car is still registered in his mother's name and she knows nothing about this trade-in situation. Or maybe it's in his girlfriend's name.

Of course, if you drive by the dealership and see your old car parked where the dealership's employees usually park, you will have your answer.


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## 640GC (Mar 22, 2012)

mclaren said:


> There was a time when a dealer had to pay more for a car coming off lease if he was selling it to the person who was currently leasing the car but that changed about a year ago. So the $2500 is BS unless it was changed again recently. My guess is they are buying the car in the low forties and don't want to sell it to you for that plus a small profit or they don't know about the change. Honestly my dealer and I suspect any board sponsor would sell you the car for what they have to pay BMWFS plus $500.


Good to know.


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## 640GC (Mar 22, 2012)

Another point that I just got that might be useful to others. When turning in the vehicle, the reason you call other dealers is to see who will sell you the vehicle for the best price. Like the above statement that a board sponsor would most likely sell it back to the lessee for $500 over the BMW FS price. You would drive the vehicle to that dealer and then purchase the vehicle at the previously negotiated price. We could have driven to multiple BMW dealerships within six hours of us which is nothing when living in Texas.


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## Ninong (May 20, 2014)

Northcar said:


> I still have to question though the veracity of the dealer's representation that there would be a $2500 fee if the purchaser is the original leasee. That smells of price fixing...


You have a point about "price fixing." I wouldn't call it that since the factory isn't telling the dealer who he can sell to or at what price but it is interfering with his right to determine that without interference from the factory. If it's true, as someone said, that this was a policy instituted by the factory and then later discontinued, then that might be the reason. The dealer association's lawyers might have objected on the grounds that it either violated US law or violated the dealer agreement.


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