# MSD's and trading-in or selling your lease



## nhman (Jan 16, 2005)

01Byte said:


> What risk are you talking about??


+1

There's no risk. Rather a question of best return on investment. A lease would carry gap insurance. Therefore any difference in value, should the car be declared totaled from a accident, would not be deducted from the MSD.

The only time I could see the MSD being at "risk" would be at lease end to account for outstanding issues such as replacement tires, damage (scratches, dents, etc) exceeding the limit, deposition fee, etc.

The other possible concern is if the lessee wanted to transfer it to a new owner. Most people want to assume a lease with a minimal cash outlay (which is correct approach on a lease). However the existing lessee did so to reduce the payment with the knowledge of getting the money back (vs. cap reduction). If transferring, it can be a hurdle for someone to pay the $3k plus even if the money will be refunded at lease end.

If my car finally is shipped to the dealer (big what-if), I may opt for a lease and MSD. The current lease rate is 3.048% (converted), minus 1.176% for max MSD's, would adjust the rent rate to 1.872%. The net savings would be $2k (rounded) over 3 years from $5k invested.


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## bmw325 (Dec 19, 2001)

Yeah- the only real risk with MSDs woudl be the risk that BMWFS goes belly up. Not sure what the risk of getting a lemon has to do with MSDs.


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## chrischeung (Sep 1, 2002)

bmw325 said:


> Yeah- the only real risk with MSDs woudl be the risk that BMWFS goes belly up. Not sure what the risk of getting a lemon has to do with MSDs.


But then you have the car. In a situation where another party has claim to a car, and you have claim to MSDs, I think the person in possession of the car may have a bigger bargaining advantage. And since deposits are so prevalent, I'm sure that a blanket approach would be taken.


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## Crzy'boutBimmer (Nov 29, 2012)

chrischeung said:


> But then you have the car. In a situation where another party has claim to a car, and you have claim to MSDs, I think the person in possession of the car may have a bigger bargaining advantage. And since deposits are so prevalent, I'm sure that a blanket approach would be taken.


Mind explaining the blanket approach? 
I am about to step into a lease, so looking for do's and don'ts

Sent from my SAMSUNG-SGH-I317 using Bimmer App


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## chrischeung (Sep 1, 2002)

You've got nothing to worry about. By saying "blanket", I mean if BMWFS gets sold/taken over, be it bankruptcy or otherwise, there will be a blanket policy (meaning applies to all) where all loans and deposits (assets and liabilities) are transferred to the new owner.


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