[MTK71]

I’m currently leasing a 2019 540i xDrive. It’s my 4th leased 5 series. It has the following options- convenience package, premium package 2, and heated steering wheel. The lease ends in September and it will have about 30k miles on it. The residual is about $39K. I’m considering buying it. What do you think? Is it a good deal?

[claykin]

Considering you'll also need to factor in paying sales tax on the purchase, not really a great deal. Your scheduled maintenance expires in September and your warranty will expire a year after that. Then, what do you do? Play Russian roulette or spend $ on an extended warranty?

Given today's inflated used car market it will cost you about $5-6K per year to drive the car in depreciation, but not including any financing cost, warranties added, or uncovered repairs. The used car market is already calming and will continue to calm in the coming months. So, that 5-6K in annual depreciation may end up being more like 6-7.5K per year over next 2 years.

Hope this helps.

[ezaircon4jc]

Originally Posted by claykin

Considering you'll also need to factor in paying sales tax on the purchase, not really a great deal. Your scheduled maintenance expires in September and your warranty will expire a year after that. Then, what do you do? Play Russian roulette or spend $ on an extended warranty?

Given today's inflated used car market it will cost you about $5-6K per year to drive the car in depreciation, but not including any financing cost, warranties added, or uncovered repairs. The used car market is already calming and will continue to calm in the coming months. So, that 5-6K in annual depreciation may end up being more like 6-7.5K per year over next 2 years.

Hope this helps.

Don't forget the option shortages on the new builds.

[claykin]

Originally Posted by ezaircon4jc

Don't forget the option shortages on the new builds.

OP's car is not heavily optioned. So, he probably can replicate it even with current constraints. But sure, OP needs to be ok with replacement options.

[MTK71]

Thanks. My concern is leasing the same car is close to 1k per month right now which is about $300 more per month than I’m currently spending. Who know what the lease rates will be in the fall but I doubt they’ll be much better. .

[claykin]

Originally Posted by MTK71

Thanks. My concern is leasing the same car is close to 1k per month right now which is about $300 more per month than I’m currently spending. Who know what the lease rates will be in the fall but I doubt they’ll be much better. .

I agree lease rates and incentives won't be much better during 2022. The increasing interest rate environment is not helping.

BMWNA will not begin to provide incentives and more aggressive residuals until dealer inventories rise in a way where dealers are asking for help. My guess is that won't occur until sometime during late 2023, if we're lucky, possibly not until 2024! My suspicion is economic conditions will force automakers into incentives well before they plan for a return to normal.

This is a huge jigsaw puzzle. Supply chain issues, inflation, general economic conditions (are we in a recession?), transitioning to electric cars, etc...

Keep in mind the used car market is very much tied to general economic conditions and the ability for manufacturers to supply new cars in volume.

[MTK71]

So there’s the dilemma. Do I lease another BMW at exorbitant rates or purchase this car at the end of the lease knowing that there will be potentially significant depreciation and out of warranty expenses. I still have 4 months to figure it out. I appreciate your input!

[scsfll]

Along with the points stated you havn't mentioned how long that you will be fiancing it for or buying it out? If you are paying cash for it and plan on keeping it for another five years it may be a viable option.
Other factors along with abov are of course the lessened options on the new models even that were once standard.
Youre brakes is an expense that you can count on. $1500-2k. If you have RFT's $1200.
The monthly on a new 540 seems high to me.

[claykin]

Originally Posted by MTK71

So there’s the dilemma. Do I lease another BMW at exorbitant rates or purchase this car at the end of the lease knowing that there will be potentially significant depreciation and out of warranty expenses. I still have 4 months to figure it out. I appreciate your input!

Look at it this way.....

If you purchase the car you'll be lucky to have a monthly OOP of $500. And this assumes no maintenance, no repairs, no extended warranty, etc... More than likely your OOP will be $650-750 / mo. Do you want to spend that on a 3+ year old car?

[ezaircon4jc]

Originally Posted by MTK71

So there’s the dilemma. Do I lease another BMW at exorbitant rates or purchase this car at the end of the lease knowing that there will be potentially significant depreciation and out of warranty expenses. I still have 4 months to figure it out. I appreciate your input!

You've got the venerable BMW I6. I've had 2 (still have 1) N55's; a 2012 F10 we traded-in in January with about 94K totally trouble-free miles and a 2014 F10 with about 77K totally trouble-free miles. The 2012 did need valve cover and OFH gaskets, but that's it. The 2014 is on all original gaskets and doesn't leak a drop of oil. There's a a guy in the F10 forums with around (IIRC just over) 300K miles on his N55. Here's his experience and list of repairs; needed or preventative.


IMHO, you're out of warranty expenses will be pretty minimal on the B58.

[kring]

Likely you are positive on residual vs actual value, and if you are paying say $650/mo on financing it you have already made it past the worst depreciacian so much of that is going toward actual value you can get back out of the car if you want to sell it in a year or three, so its not all out of pocket loss.

If the car has been good to you and you took care of it and you enjoy it, and you are positive after buyout & tax… then it’s a no brainer to keep it from a financial perspective.

[MTK71]

Originally Posted by scsfll

Along with the points stated you havn't mentioned how long that you will be fiancing it for or buying it out? If you are paying cash for it and plan on keeping it for another five years it may be a viable option.
Other factors along with abov are of course the lessened options on the new models even that were once standard.
Youre brakes is an expense that you can count on. $1500-2k. If you have RFT's $1200.
The monthly on a new 540 seems high to me.

I’m looking to buy it out and not finance.

[MTK71]

Thanks for all the replies!

[claykin]

Originally Posted by kring

Likely you are positive on residual vs actual value, and if you are paying say $650/mo on financing it you have already made it past the worst depreciacian so much of that is going toward actual value you can get back out of the car if you want to sell it in a year or three, so its not all out of pocket loss.

If the car has been good to you and you took care of it and you enjoy it, and you are positive after buyout & tax… then it’s a no brainer to keep it from a financial perspective.

Looking at Kelly and Nada, he's at best break even. With the used car market already retreating, this will be an upsidedown deal in the coming months.

Yes, OP has taken the worst depreciation in years 1-2, however as the car ages problems increase and the problems become increasingly more expensive to repair. The "value" of a car in years 1-2 are much higher to most drivers than in year 4+.

[2022M550i]

Also keep in mind he's owned the car since brand new. He knows what he has…. No stories, no mysteries. He knows the maintenance history. If you really enjoy the car, go for it.

[HowardHarlan]

1. A brand-new vehicle
2. No money down
3. Zero percent financing
4. Buy now, pay later
5. Pay only 10% interest per year
6. No security deposit

[paquet]

In today’s interest rate scenario, does it make sense to open a lease this year? (Leasing is a new concept to me, and I’m still reading)

[jsf721]

Just bought out my lease on a 2019 540 with 36k. Love the car and a new less optioned car (bc stuff is not available ) was 350 more per month. I would rather have my well equipped 2019 than a 2022 without features I enjoy for a lot more money. I’ve got the GEICO mechanical breakdown for 7/100k w/250 deductible for any big stuff.

[MTK71]

Geico’s mechanical breakdown is for cars less than 15k miles and 15 months old. How did you swing it or did you have it all along? Also, can I ask you what the residual buy out on your car was? Thanks.

[jsf721]

Buy out was just under 42k before tax. BMW wanted just about 6% if I financed the buy out with them. I got 3.24% on my own. Once I declined their offer they did come back a fair bit but I was already feeling taken advantage of and screwed on my new lease quote that forced my hand on the buyout. I’d rather have a new car (lease) but not at a rate that’s inflated and a car that’s under equipped bc stuff isn’t available. Prices now are insane. so I went with my bank for the financing.

Love my car so it’s not all that big of a deal.

I have the mechanical breakdown on all my cars since new.

Originally Posted by MTK71

Geico’s mechanical breakdown is for cars less than 15k miles and 15 months old. How did you swing it or did you have it all along? Also, can I ask you what the residual buy out on your car was? Thanks.

[jsf721]

Repairs are always a risk and I’d say it’s your biggest.

These are not cheap to service out of warranty.

Do you have a good Indy shop ?

Have you owned the car since new so you know complete history? That helps.

Get buy out quote now, rates are going up and you can rate lock at the bank for 60 days.

Originally Posted by MTK71

So there’s the dilemma. Do I lease another BMW at exorbitant rates or purchase this car at the end of the lease knowing that there will be potentially significant depreciation and out of warranty expenses. I still have 4 months to figure it out. I appreciate your input!

[MTK71]

Thanks for your comments. I have a great Indy shop down the road. The owner was a Porsche, BMW, and Mercedes mechanic before he opened his own shop. I showed him the car and he felt it had the more reliable engine and would not be a bad choice to buy. I asked him if will be as bullet proof as my wife’s Lexus, and he said no way that a BMW will ever be as reliable as a Toyota engine. I spoke with BMW financial the other day and they said that I can extend the lease for 2 months. I’m thinking about leasing it until the end of the year and then seeing what the market is like. My BMW is very lightly optioned and am not sure it’s worth buying. I doubt lease prices will be much better but you never know.