03-15-2020, 07:56 AM | #23 |
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If I were to buy my car, even though I now it is worth less, at least I know how it was taken care of, so don’t mind paying a little more. However, if i am only going to sell it in three years, then it is better off just to keep leasing. You get a new car, under warranty, newer gadgets, etc... I guess all of this is common sense though.
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03-15-2020, 11:20 AM | #24 |
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The BMW policy of not allowing a deal with the original lessee other than paying the residual (and any unmade payments of course) is very consumer unfriendly and has never been explained. It serves only to penalize the lessee versus other purchasers, when the lessee may be one of the most likely to buy at lease end. Since BMW will allow a dealer to buy the car and sell it to a third party at a discount, the policy does not seem to make economic sense.
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03-15-2020, 12:47 PM | #25 | |
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04-04-2020, 02:05 PM | #26 | |
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Again, I don't know because in Canada, there is no negotiating - if you want to buyout the vehicle, you're paying the residual. If you're a dealer and you want the lease return for your used car inventory, they're also buying it at the residual. This rarely happens as lease returns are usually worth less than their residual and dealers usually wait for it to hit Manheim auction. |
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04-04-2020, 04:11 PM | #27 | |
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04-04-2020, 05:41 PM | #28 | |
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I know that leases are structured a certain way but the disposition of the car is entirely up to BMW and perhaps the dealer. They can do whatever they feel is right with it. Its probably the same logic that has BMW selling the car to the leasee at a discount - they would be stuck with a car that has lower value anyway.... |
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04-04-2020, 05:50 PM | #29 | |
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1988 Porsche Carrera 3.2: expensive but bought out lease, got car back from friend after a while, lowest cost of ownership at that time - Private lease 1992 Mercedes 190E 2.3: effective 5 year 1.9% APR after discount - Mercedes lease 1993 Chevy Suburban: bought out the lease at end for $13K, trade-in value $18K GMAC lease 1999 Mercedes ML320: released at end, buy out $1 Mercedes lease 2016 535d: effective APR 4% after discount, lease buyout additional discount (substantial) BMW lease |
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04-05-2020, 10:19 AM | #30 | |
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BMW has done nothing wrong to the customer - they outlined everything in the lease contract that a lessee would have agreed to. Once the lease ends, they are not obligated to do anything for the customer, the transaction is complete. As for BMW dealing with the dealership about said lease return, as I said earlier, they might get a small break but it's not at auction prices. Once the lease is over, BMW is doing everything to support the used car department. |
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04-05-2020, 10:27 AM | #31 | |
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04-05-2020, 03:12 PM | #32 |
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A Ponzi scheme is a fraudulent scheme, which means deception on material facts. Leasing is not fraudulent. The terms are disclosed up front and if you choose to lease, you are getting exactly what you contracted for. It is more expensive than keeping a car for 5 years. But for BMWs, it makes sense for many (including me on one of mine) because depreciation is borne by the lessor, the car is under warranty the entire time you drive it, and you get the latest technology every three years. On my G12, I lease. For me X3, I bought. I knew exactly what I was getting into for each. If leasing is not for you, so be it. But it is not a fraudulent scheme.
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04-05-2020, 05:00 PM | #33 | |
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04-05-2020, 05:04 PM | #34 | |
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04-05-2020, 05:29 PM | #36 |
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I would too.
But I rather own a car for 6-8 years, rinse and repeat. Leasing is the most expensive way to finance and long term rent a car.
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04-05-2020, 07:57 PM | #37 |
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That is very good news. Thank you. Especially now, with many of us not using their cars very much. At the rate I am putting on miles on my G12, I could have 15,000 mi or fewer when the lease is up Oct 2022, and at that point I would be happy to buy it off of lease if the price were decent.
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04-05-2020, 09:22 PM | #38 |
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Yeah, understood. I happen to do a lot of driving, so the 200,000 comes in 6 or so years. Would be nice to change the car every 3 but I also wear out my clothes ha ha. This is logical if one understands that what I get is usually pretty good stuff to begin with. For a while we got a new car every year and kept a stable of 4 or 5 cars. Now I'm in my cheapskate phase but still have good taste, ha ha.
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04-16-2020, 09:48 PM | #39 | |
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My 540iX comes off lease on April 27. I had a lease end question for BMW FS a few weeks ago. Without me asking the BMW FS rep asked me if I would like to buy the car for $6,000 off the residual. In 2010 I negotiated a huge discount on my son's 2007 330i when it came off lease.
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04-17-2020, 01:17 AM | #40 | |
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Tried this tonight and got nowhere so asked for a supervisor. Got a snotty answer that pissed me off. I was told what are you asking for a discount ? I said I’d like a price to pay that’s less than the buy out. And to that he said we don’t negotiate on contractually obligated debts.
So o threw out a number to which he said I’m not sure if you understood what we don’t negotiate means ! So do you have Any other questions for me. Quote:
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04-17-2020, 10:15 AM | #41 | |
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BTW I say appalling not because they wouldn't negotiate, but for the way they did it. It would have been easy enough to say, "Gee sorry, but we [arenot allowed][can't][not in a position to] to that."
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04-17-2020, 10:44 AM | #42 |
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I sold BMWs for 8 years before I fully retired in 2014. There are a number of issues raised here worth thinking about. First, I am surprised that BMW FS wouldn't negotiate a reduced buy out price. You may have just gotten a bad person on the phone. If your residual was, say, $35,000 I would confidently wager that the real auction price for that car (the price BMW FS would have to sell it to a dealer) today would probably be much lower, perhaps $22-25K. So if that is really their position then I would gladly turn in my lease car and let them take the $10k hit when they sell it. As others have noted, there is a huge glut of used cars on the lots, almost no sales going on, and you you should be easily able to find an equivalent car to yours, recently turned in off lease, to buy at probably $8-$10k less than your residual. I like the peace of mind knowing how I cared for my car, but it is not worth $10k to me especially if you have a Certified warranty with the car.
Second, it is correct that BMW longer allows a lease customer to purchase his car from the dealer at lower than the residual. The dealers will get punished for that. When I was selling BMWs they allowed it, so if I had a good customer who wanted to buy his car out of lease, we would work a deal where he would turn his car into us, we would buy it from BMW FS, certify the car, add some profit and sell a Certified Pre owned car to him for considerably less than the residual for his uncertified car. And such cars also usually qualified for bargain rate financing. To use the above example, if the residual was $35k, we could probably could have bought it for about $27k from BMW FS. It would cost about $2k to certify and we would add $1,500 profit and sell it back at $31.5k, a great deal for everyone. BMW didn't see it that way and decided it wanted to encourage lessees to lease a new one at lease end. But for those who wanted their own cars it was not a good situation. Third, I don't think that leasing is a "fraud", nor even necessarily the most expensive way to own a car. As with anything in life, it depends on what the underlying facts are. Some leases are expensive, some are cheap. No matter how you finance your car purchase, with cash, a loan or a lease, the biggest cost of ownership is depreciation. It is the same no matter how you finance it. If you pay cash or get a loan, you find out what the actual depreciation is when you sell or trade the car. If you lease the depreciation is estimated on the front end, and often artificially manipulated by the finance company to encourage a lease purchase. If BMW or any manufacturer wants to move a certain model of car they can artificially set the depreciation low via a high residual. That lowers monthly payments and can make the monthly cost of ownership a great bargain--if you turn it in at the end. If you try to buy at the artificially high residual you will likely be unhappy, with similar cars retailing on used car lots at $10k less. Back in the 2008-2009 recession, people who leased a Hummer were MUCH happier than those who bought one and had to sell, when they discovered how much the actual value had fallen. So it all depends. Any of the three purchase methods also involve a cost of money. If you pay cash your cost is the loss of investment income on the cash amount. If you get a loan, interest is the cost. If you lease, there is an equivalent of interest called a money factor. My background is finance so a number of times I ran discounted cash flow calculations to compare the cost of ownership between the various financing methods. Depending on a number of assumptions and variables, I usually did not find a great deal of difference in the cost of ownership between the various financing methods. So the choice of financing methods usually comes down to personal preference. If you do not have any extra cash, or don't want to take it out of investments, a lease or a loan (depending on down payment requirements) would look good. Many, many buyers have real budget constraints and can only afford a certain level of monthly payments. That alone can dictate which method to use. I once bought a 1998 BMW M3 Sedan from a friend who was a car dealer. I wrote him a check and asked him how many actually pay for their cars in cash. He thought for a moment and said, "You". So it all depends.....And I would say that the single most important financial consideration using any method of financing is to get the lowest capital cost. The least expensive deal will almost always be the one that starts with the lowest price. My $.02 and food for thought on this discussion....Bob
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04-18-2020, 02:06 PM | #43 | |
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04-18-2020, 05:34 PM | #44 | |
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It was BMW financial.
My dealer who has been excellent so far is Rallye. They are closed now and I’ll talk to them when they re open. Quote:
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