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      04-24-2015, 04:43 PM   #1
tingy
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Breaking my lease into a new m3

Hey everyone -- Hoping to get thoughts on what my dealer offered me to get out of my lease and into a new M3

I'm currently in a 39 month lease on a 2014 435xi - current buyout is about $52000 with about 26 months to go.

They are offering me to get out of this lease free and clear and offer a 2015 m3 for MSRP. They claim my car is worth about $45k wholesale, so they are essentially pulling me ahead $7k. They were pretty adamant they wouldn't entertain additional discount on the car, but I didn't bother to put in an offer yet.

A couple of questions - Is this a good deal? Should I still expect a discount on the car? When is generally the optimal time to break a lease early? Would the security deposit on my current lease still be returned to me? Part of me wants someone to talk me out of doing this deal, as it pains me pay MSRP for any car, although they are helping me out with the trade (or so it seems). They are acting like they are doing me a favour just to get me into the M brand, but I'm always wary of stealership-speak

I'm in GTA. Thanks in advance!
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      04-24-2015, 05:27 PM   #2
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From what I've seen, M3/4 have been selling like hotcakes over the past month in my area. My dealer sold all of its DCT M3s from inventory and only has a few manual ones left.

That said, at this point in the year, you should easily be getting some sort of discount off MSRP especially since we're very late into the model year and MY 2016 is around the corner.

With a trade-in of $45k, you're also getting a credit for HST so really, you're trade in is worth $45k x 1.13 = $50,850 - a $1,150 "discount" (far from the $7k).

I'd put you in touch with my sales advisor but I see you're from Toronto
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      04-24-2015, 10:17 PM   #3
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Quote:
Originally Posted by CASM3 View Post
From what I've seen, M3/4 have been selling like hotcakes over the past month in my area. My dealer sold all of its DCT M3s from inventory and only has a few manual ones left.

That said, at this point in the year, you should easily be getting some sort of discount off MSRP especially since we're very late into the model year and MY 2016 is around the corner.

With a trade-in of $45k, you're also getting a credit for HST so really, you're trade in is worth $45k x 1.13 = $50,850 - a $1,150 "discount" (far from the $7k).

I'd put you in touch with my sales advisor but I see you're from Toronto
Sorry, I should clarify, my buyout is around $52k +HST so about $58,760
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      04-25-2015, 08:14 AM   #4
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so, it costs you $52K to buy it out now and dealer will give $45K to you for the trade in. Net negative equity $7K + taxes = $7900 out of pocket

No discount (dealer and factory) on a particularly 1 year old car M3. Lease interest rate for April remains relatively high at 4.9%. If leasing, residual has came down .. meaning, you are still paying a relatively high monthly payment. In about 3 months or so time, MY2016 will be out and you are stuck paying such crazy high monthly payment.

Also, for the m3, you will also be paying the fees + freight + Excessive wear & tear up front which you can ball park the cash outlay to around $4500 range.

Lastly, for the M3, I am sure you are going to need winter tires for this beast, which can easily be around $2.5 - 5K, depending if you go with factory wheels package or aftermarket cheapo wheels package.

So, in all, the known cash outlays just based on known # from above have now topped at near $18K. If you are okay with this big chunk of change and wanting to get into your dream machine, then you can go ahead.
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      04-25-2015, 11:25 AM   #5
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Quote:
Originally Posted by bobblehead View Post
so, it costs you $52K to buy it out now and dealer will give $45K to you for the trade in. Net negative equity $7K + taxes = $7900 out of pocket

No discount (dealer and factory) on a particularly 1 year old car M3. Lease interest rate for April remains relatively high at 4.9%. If leasing, residual has came down .. meaning, you are still paying a relatively high monthly payment. In about 3 months or so time, MY2016 will be out and you are stuck paying such crazy high monthly payment.

Also, for the m3, you will also be paying the fees + freight + Excessive wear & tear up front which you can ball park the cash outlay to around $4500 range.

Lastly, for the M3, I am sure you are going to need winter tires for this beast, which can easily be around $2.5 - 5K, depending if you go with factory wheels package or aftermarket cheapo wheels package.

So, in all, the known cash outlays just based on known # from above have now topped at near $18K. If you are okay with this big chunk of change and wanting to get into your dream machine, then you can go ahead.
Well, the whole premise of the deal is the dealer is going to "eat" that negative equity in lieu of a discount on the car. The fees + winter wheels, etc. are understood (gotta pay to play). My real question is if this is fair, or should I be pursuing more off MSRP in addition.

The car on the lot is a relatively new build, as it just arrived and is equipped practically exactly as I would have ordered myself. When I asked if they'd do the same deal on a factory order, they said "probably not" as I'm sure they want to move it before the 2016's start rolling in. It's an M3 in a manual transmission, which they have told me demand has been extremely low in this market compared to M4s with DCT.

I was leaning towards waiting another 6-8 months, paying more into the equity in my car and try to break the lease then and ordering a 2016 for next year. I am very happy with my 435, but if someone tells me this is a great opportunity to drive the M3 all summer, then I'd jump on this.
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      04-25-2015, 12:02 PM   #6
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It does sound like dealer is offering you at around 67-70% of the car's listed price (if your car back then was listed at $65,000 (closed to loaded)). Is this fair offering from dealer? It's certainly in the wholesale pricing neighborhood but really can't say unless you go and try out a few other bimmer dealers quote. In most likelihood, you may get another $1K more (thus $46K) at most.

Right now, you are hitting the upper end on the depreciation scale on brand new car, that is in the first 12-18 months time slot. Therefore, if you do go ahead, you will be penalizing your own wallet but then you already factored in this situation.

The ultimate decision can only be made by you. Some people do the swap because of wanting, rather than for financial implication. Like you said already ... "Gotta pay to play". For sure, you should press on for discount on the M car, if the dealer does not budge on price, then press for the factory winter wheels & tires package at the min. as inclusion on the deal. (the typical markup on this factory package would be around 35% by the dealer)

I change car every 1.75 to 2 yrs time span and I am in that "Gotta pay to play" group of drivers. I know exactly how much it costs me every time I do the swap.

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      04-25-2015, 01:39 PM   #7
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Quote:
Originally Posted by tingy
Quote:
Originally Posted by bobblehead View Post
so, it costs you $52K to buy it out now and dealer will give $45K to you for the trade in. Net negative equity $7K + taxes = $7900 out of pocket

No discount (dealer and factory) on a particularly 1 year old car M3. Lease interest rate for April remains relatively high at 4.9%. If leasing, residual has came down .. meaning, you are still paying a relatively high monthly payment. In about 3 months or so time, MY2016 will be out and you are stuck paying such crazy high monthly payment.

Also, for the m3, you will also be paying the fees + freight + Excessive wear & tear up front which you can ball park the cash outlay to around $4500 range.

Lastly, for the M3, I am sure you are going to need winter tires for this beast, which can easily be around $2.5 - 5K, depending if you go with factory wheels package or aftermarket cheapo wheels package.

So, in all, the known cash outlays just based on known # from above have now topped at near $18K. If you are okay with this big chunk of change and wanting to get into your dream machine, then you can go ahead.
Well, the whole premise of the deal is the dealer is going to "eat" that negative equity in lieu of a discount on the car. The fees + winter wheels, etc. are understood (gotta pay to play). My real question is if this is fair, or should I be pursuing more off MSRP in addition.

The car on the lot is a relatively new build, as it just arrived and is equipped practically exactly as I would have ordered myself. When I asked if they'd do the same deal on a factory order, they said "probably not" as I'm sure they want to move it before the 2016's start rolling in. It's an M3 in a manual transmission, which they have told me demand has been extremely low in this market compared to M4s with DCT.

I was leaning towards waiting another 6-8 months, paying more into the equity in my car and try to break the lease then and ordering a 2016 for next year. I am very happy with my 435, but if someone tells me this is a great opportunity to drive the M3 all summer, then I'd jump on this.
Won't comment on the financials but saying an MT M3 is hard to sell is very suspect. M3s have generally flown off shelves (lower production volume and higher than expected demand). If anything, M4s are a bit tougher to sell.....strange. Strange.....
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      04-25-2015, 01:48 PM   #8
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Quote:
Originally Posted by myzmak View Post
Won't comment on the financials but saying an MT M3 is hard to sell is very suspect. M3s have generally flown off shelves (lower production volume and higher than expected demand). If anything, M4s are a bit tougher to sell.....strange. Strange.....
It was strange to me too. The only reason I found my way into the dealer to look at M3s were the ridiculous residuals going on in the States. Turns out that just isn't the case up here. M3s actually have about 3% lower residuals than M4s, which is actually about the same as the 435xi I leased last year. As for manuals, they say they just don't order very many for inventory because the take rate is so low. Out of the ~8 or so M3/4s in stock, only one has the MT
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      04-25-2015, 02:16 PM   #9
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Quote:
Originally Posted by myzmak View Post
Won't comment on the financials but saying an MT M3 is hard to sell is very suspect. M3s have generally flown off shelves (lower production volume and higher than expected demand). If anything, M4s are a bit tougher to sell.....strange. Strange.....
Agreed. From the 6 or so M3s (DCT+manual), my dealer had in stock at the beginning of April, only the ones with a manual transmission remain unsold.
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      04-25-2015, 02:18 PM   #10
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Quote:
Originally Posted by tingy View Post
It was strange to me too. The only reason I found my way into the dealer to look at M3s were the ridiculous residuals going on in the States. Turns out that just isn't the case up here. M3s actually have about 3% lower residuals than M4s, which is actually about the same as the 435xi I leased last year. As for manuals, they say they just don't order very many for inventory because the take rate is so low. Out of the ~8 or so M3/4s in stock, only one has the MT
You can check out the April M4 residuals here:

http://f80.bimmerpost.com/forums/sho...51&postcount=9
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      04-27-2015, 11:01 AM   #11
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Quote:
Originally Posted by Potakis View Post
From what I've seen, M3/4 have been selling like hotcakes over the past month in my area. My dealer sold all of its DCT M3s from inventory and only has a few manual ones left.

That said, at this point in the year, you should easily be getting some sort of discount off MSRP especially since we're very late into the model year and MY 2016 is around the corner.

With a trade-in of $45k, you're also getting a credit for HST so really, you're trade in is worth $45k x 1.13 = $50,850 - a $1,150 "discount" (far from the $7k).

I'd put you in touch with my sales advisor but I see you're from Toronto
Not the case.
He is not trading in the car, so he gets no HST credit. The dealer is buying back the car and taking a bit of a hit on it if they wholesale it...but if it is in amazing condition, they will most likely throw it on their lot and sell it for the buy back anyway.
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      04-27-2015, 04:55 PM   #12
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Quote:
Originally Posted by bobbyz
Quote:
Originally Posted by Potakis View Post
From what I've seen, M3/4 have been selling like hotcakes over the past month in my area. My dealer sold all of its DCT M3s from inventory and only has a few manual ones left.

That said, at this point in the year, you should easily be getting some sort of discount off MSRP especially since we're very late into the model year and MY 2016 is around the corner.

With a trade-in of $45k, you're also getting a credit for HST so really, you're trade in is worth $45k x 1.13 = $50,850 - a $1,150 "discount" (far from the $7k).

I'd put you in touch with my sales advisor but I see you're from Toronto
Not the case.
He is not trading in the car, so he gets no HST credit. The dealer is buying back the car and taking a bit of a hit on it if they wholesale it...but if it is in amazing condition, they will most likely throw it on their lot and sell it for the buy back anyway.
I did not know that. Thanks for the info!
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      05-13-2015, 04:00 PM   #13
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Its a big hassle to find someone to take over your lease.
You want the M3, dealer will eat the take over, what's the problem?

I had same experience about 4 years ago.
I had leased 128i and wanted to get 335 so I went to the dealer and they gladly took my lease over and I bought 335. Yes no discount were given, yes I got my security deposit back. The point is I went to like 5 non BMW dealership and they all wanted me to shell out at least $4000~5000 for them to take over.

Go see your dealer, leave your 435xi and pick up the M3 asap!
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