Is it not wise to purchase at lease end?

[Tonyfsu21]

My 2016 M3 comes off lease at the end of June. It's fully loaded, ZCP and only 10,200 miles out of an allotted 36,000 miles. I've never had an issue with the car so I trust it as far as maintenance goes. The residual is $54,000. I know you can get these cars all day long for less but I know my car and where she's been so I almost would consider buying it. Is this a no no? Also, will the dealer discount off the residual? I was going to drop it off and wait on an X3M but I'm considering both.

[Tonyfsu21]

Originally Posted by PureModelsOnly

Dealers won't discount the residual anymore. BMWFS might offer you a thousand or two. With that low miles you might want to even consider selling private party.

So I have a question. Is the "residual value" the value of the vehicle after lease term is satisfied? In other words, I look at my payoff quote now and it's 58k but on June 2nd (end of lease term) would it be at residual or 54k? If so, the math doesn't add up as my lease payments are not 2k per month, lol. Just wondering in private sale if I wait until June will the payoff be residual?

[aliiin]

I'm on the same boat, my lease ends June and the residual is too high in my opinion. I think I'm just gonna turn it in. My residual is 55k, and after quickly searching autotrader and numerous other sites, I can see getting the same car for a lot less (45k-50k). BMW Financial services will discount 1-2k I believe if you pay the residual. Otherwise, you can't negotiate the residual.

I'm also wondering if I can just turn in the lease and then buy it back from the dealer I turned it in to? This way I have negotiating power once it hits the market on their lot. Is this not a feasible option?

[NickyC]

Sounds like some cross country roads trips are necessary before you turn her in!

[FriedPiston]

It's okay to buy off lease, but not at that residual.

Residual is what BMW estimates to be the value of the vehicle at the end of the lease term (e.g. 3 years/36k miles). They clearly underestimated the depreciation rate, as MY16 Ms are valued more towards the mid to high 40k range.

[Tonyfsu21]

Originally Posted by NickyC

Sounds like some cross country roads trips are necessary before you turn her in!

Haha! I've got a lot of driving to do.

[coldsteelrain]

Originally Posted by nars3000

It's okay to buy off lease, but not at that residual.

Residual is what BMW estimates to be the value of the vehicle at the end of the lease term (e.g. 3 years/36k miles). They clearly underestimated the depreciation rate, as MY16 Ms are valued more towards the mid to high 40k range.

I paid off my car last month
Residual was 48k
Well worth it as I know who drove this and how this car was driven, I might have been able to find one cheaper but would have to gamble with the fact if it was abused or not.
Also maybe it was the time I paid it off but I definitely tried to get BMW financial to knock off 1-2k but they wouldn't even do a single dollar

[bzcat]

Financially speaking, it's a really dumb idea because you are paying thousands of dollars above market price to buy the car.

But people make dumb financial decisions all the time so if the car really matter to you that much, you can buy it... it's not a wrong decision. Just don't ask the internet if it is a a wise decision. It's not.

BMWFS used to let dealers buy the car at wholesale value which they can then turn around and sell it back to at or slightly over market value. It made sense to buy your leased car back that way because you are not paying way above market price. But they won't let dealers do that any more.

Originally Posted by Tonyfsu21

So I have a question. Is the "residual value" the value of the vehicle after lease term is satisfied? In other words, I look at my payoff quote now and it's 58k but on June 2nd (end of lease term) would it be at residual or 54k? If so, the math doesn't add up as my lease payments are not 2k per month, lol. Just wondering in private sale if I wait until June will the payoff be residual?

Residual value is stated in your lease contract. Just look it up.

Also remember, when you buy a car off lease, you have to pay sales tax. In states that tax lease based on the cap cost rather than monthly lease payment, this is a REALLY bad idea... you are paying sales tax twice on the same car. Not sure if FL is one of them... but something to think about.

[RickFLM4]

I turned my first one in and will also turn this one in. High residuals work great for lease economics, but not so for buying out. I wouldn't pay more than the car is worth to buy it.

If the car was worth more than the residual then sure, since you already overpaid for the lease. But that's not how the leases in these cars normally work out.

[RickFLM4]

Originally Posted by bzcat

Also remember, when you buy a car off lease, you have to pay sales tax. In states that tax lease based on the cap cost rather than monthly lease payment, this is a REALLY bad idea... you are paying sales tax twice on the same car. Not sure if FL is one of them... but something to think about.

FL pays tax on lease payments and then on residual if you buy out.

[visi107]

Originally Posted by Tonyfsu21

So I have a question. Is the "residual value" the value of the vehicle after lease term is satisfied? In other words, I look at my payoff quote now and it's 58k but on June 2nd (end of lease term) would it be at residual or 54k? If so, the math doesn't add up as my lease payments are not 2k per month, lol. Just wondering in private sale if I wait until June will the payoff be residual?

The payoff quote now likely includes sales tax that's why it's 58 but the residual of 54 is without tax.
Buying you own lease, I'm not sure I would call it a dumb idea. You will pay more money sure but like you said you know who drove the car. With these cars that might be important to consider And to some people it matters.

[SMGCFP]

I called BMWFS (lease is up May 15, 2019) in Feb. They offered me 2k off residual then, but told me to call back in late April, early May, as there may be more. My CA told me that "they will drop their drawers" to get you to buy it if you call right at the end. My residual is 57k on a 2016 (MSRP was 89k, IND paint). If I can't get it for 50k, I will re-lease for 3 months and build a new 2020, or C63S. Maybe a Cayman. BMW allows re-lease for 3 months at same terms, and another 3 months after that if you have a BMW build. We'll see...

[trey100]

I see a lot of high residuals here which is a product of higher MSRP cars. My M3 (non-ZCP) was $72k sticker (still had metallic paint, 19" wheels, adaptive, Exec for HUD, Leather, heated wheel/seats - so basically the necessities for a $70k car). My buyout is now $43k and it seems like I will be closer to $41k with some BMW incentive to buy. I've gone back and forth on this for a bit as I do drive a lot of miles, but for that price, I really can't find anything else that I really like. The car has been reliable so far and it's in the exact color and options I wanted (well except ZCP) so I'm close to just pulling the trigger on buying it.

At $50k+, I'd be hesitant but close to $40k, I'd rather buy my car than someone else's.

[Tonyfsu21]

Originally Posted by bzcat

Financially speaking, it's a really dumb idea because you are paying thousands of dollars above market price to buy the car.

But people make dumb financial decisions all the time so if the car really matter to you that much, you can buy it... it's not a wrong decision. Just don't ask the internet if it is a a wise decision. It's not.

BMWFS used to let dealers buy the car at wholesale value which they can then turn around and sell it back to at or slightly over market value. It made sense to buy your leased car back that way because you are not paying way above market price. But they won't let dealers do that any more.

Residual value is stated in your lease contract. Just look it up.

Also remember, when you buy a car off lease, you have to pay sales tax. In states that tax lease based on the cap cost rather than monthly lease payment, this is a REALLY bad idea... you are paying sales tax twice on the same car. Not sure if FL is one of them... but something to think about.

Yeah I'm just gonna turn her in and wave goodbye. Someone is gonna get a damn nice CPO M3! I should have used the car more. Oh well lesson learned.

[G35POPPEDMYCHERRY]

wait you can negotiate you buyout price from BMWFS.

my car's residual is 46204
they are offering -800 incentive (loyalty)

car is a 16 m3 with 20,400k miles....retail at like 49k
it also has an accident which hasn't made the carfax yet?
Can i use that as leverage?

How does one go about negotiating with FS

[LVI]

Originally Posted by G35POPPEDMYCHERRY

wait you can negotiate you buyout price from BMWFS.

my car's residual is 46204
they are offering -800 incentive (loyalty)

car is a 16 m3 with 20,400k miles....retail at like 49k
it also has an accident which hasn't made the carfax yet?
Can i use that as leverage?

How does one go about negotiating with FS

They won’t negotiate past the $800 they already quoted you but you can certainly try. They’re likely going to come back with “take it or leave it”. The carfax won’t matter to them but should matter to you.

[RickFLM4]

Yeah an accident is a reason to be happy you leased. Just turn it in and no worries about resale later.

[G35POPPEDMYCHERRY]

Originally Posted by lawrence1

They won’t negotiate past the $800 they already quoted you but you can certainly try. They’re likely going to come back with “take it or leave it”. The carfax won’t matter to them but should matter to you.

Originally Posted by RickFLM4

Yeah an accident is a reason to be happy you leased. Just turn it in and no worries about resale later.

Yeah I figure the 8 hundo was a solid incentive...Since I took advantage of a 1500 dollar lease credit, it only came out to a few hundred more versus .9 financing.

The accident was a tap at a stop...like someone tapping you getting iout a parking spot. Licence plate hole is only damage. So at least I know that. Should I have called cops...prolly not; but whatever...life goes on

I don't even know what I would get if turned in. Plus I'm upside down at 20k miles.


My plan is to drive is for another 2-3 years and hopefully sell it somewhere above 30k and Ill be a happy camper.

If I was willing to settle to a slushbox then I would turn in...

One thing I learned in my first car purchase; 99% CPO or used is the way to go. Why pay for depreciation. I could buy an f8x right now used drive it around for 2-3 years and only take a small hit on resale, versus new....BMW are starting to depreciate more and more