03-11-2016, 09:04 PM | #1 |
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Opinions about purchasing a vehicle at the end of a lease...
I have a question about experiences or opinions others have about the value or purchasing a vehicle at the end of a lease. A bit of context...
I've never leased a car and had no intention of doing so when shopping for a car late last summer. In fact, I'd never purchased a used car, but that was my intent - to find a low mileage '14 or '15 M Sport 335i to replace my '06 330i Sport/6MT that was going to my son. Ironically, after looking for MONTHS, I found a perfect car from another forum member. I had intended to buy out his lease, but BMW convinced both of us that it was much easier to pay $500 and just transfer the lease. I have no regrets about that, as he was well under his mileage, and that meant I didn't have to pay any out of pocket expense for sales tax or down payment. The lease matures this October (or about 14 months after we transferred the lease). I've studied the stated residual value at the end of the lease (45,000 miles), and frankly, it doesn't seem like a great deal to me. I guess the idea as a LEASEE is to angle for a high residual for lower payments, but reciprocally, this means the value for purchasing the car at the end is, well, high. For example, I just discovered that my local dealer has a nearly identical '14 335i MSport (except it's an 8AT and it doesn't have DHP) with ONLY 12,000 miles for sale TODAY for only $1,500 more than my residual will be in October! I've also observed quite a few options on Cars and Autotrader that seem like better values. So here's my question, since I've never leased (and really can't in the future since I put almost 20,000/year on my vehicle): Is it generally not a great deal to buy the car at the end of the lease, assuming the residual is high? What do those of you who lease generally do? I guess since you're on board with leasing, you don't care about the value and just lease another vehicle. Anyway, any feedback would be appreciated. I'm trying to decide what to do in October...turn it back in or purchase the car.
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03-11-2016, 09:17 PM | #2 |
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I purchased the car at the end of a lease, last year.
At that point in time, I was substantially behind on miles (I think 7k per year roughly vs the 12k allotted). BMW was ok to cancel the lease roughly 6months early, and cut ~1.5k from the lease residual, which, compared to what similar mileage cars on Truecar, looked like a great deal so I took it. It was also a special order car that I had waited two months for, black on black with manual transmission, which did factor into my decision making. I'd suggest asking the dealer what they can do, and you might find that you don't have to wait until October, or pay full price. |
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03-11-2016, 09:43 PM | #3 |
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Close to the end of the lease (roughly within three months) BMWFS will start posting a price on their internal system that the dealer can buy the car for. The price will be roughly the Manheim auction value, which is virtually certain to be a good deal lower than the BMWFS contracted residual. Sometime in those last three months start working with your dealer to make a deal to buy the car from them. Your dealer will buy the car from BMWFS and then sell it to you.
Last edited by tturedraider; 03-11-2016 at 11:41 PM.. |
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03-11-2016, 11:34 PM | #4 |
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You're not likely going to find a straight answer because there's a million things to consider when it comes to a lease buy out decision, it's really case by case for the most part. Some people think leasing in itself is like throwing money away so you can imagine how people will likely be just as divided when it comes to buying out a lease.
The way I see it, if you like the car enough to want to keep it and can stomach the residual, go for it. If you think you can do better for the money or you're simply not interested, walk away. Don't spend too much time debating with yourself either way or you'll likely end up unhappy with your own decision. |
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03-11-2016, 11:42 PM | #5 | |
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03-12-2016, 12:11 AM | #7 | |
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03-12-2016, 01:51 AM | #8 |
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I'm in the opposite situation of you. I own my car and I'm wondering what I should do since my factory warranty is about to expire.
Should I: a) Keep the car for another 2 or 3 years and not buy the extended warranty since I won't put more than 7000 miles per year? (Car has approx. 25,000miles now) -------------------------------------------------------------------------- b) Keep the car for 2 or 3 years and buy the extended warranty? (Cost approx. $5000 Canadian Dollars) *Does not include Service or Brake Pads or Brake Rotors BMW Canada Warranty Brochure: http://bmwwidget.ca/pdf/2014_BMW_SI_...ure_EN_Low.pdf BMW Canada Warranty Price Matrices: http://bmwwidget.ca/pdf/BMW_EW.SI_Pr...s(Oct2014).pdf -------------------------------------------------------------------------- c) Trade it in for a CPO that has 2-4 years of warranty. For example on a car like this: http://crm.bmw.ca/en-ca/PreOwned/Sea...etail/J899152# -------------------------------------------------------------------------- d) Lease a new car? -------------------------------------------------------------------------- e) Finance a new car or demo? -------------------------------------------------------------------------- Just like Emilim said, there are too many things to consider. In my situation the cost of ownership is a significant issue for me. I wonder how much it would cost me in each of the above situations when taking depreciation, repairs, maintenance and all other variables into consideration. To be honest, if I had it my way I'd probably lease a new car and never worry about repairs and driving an older car ever.
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03-12-2016, 02:48 AM | #9 |
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I think there is something to be said for buying a car that you previously leased rather than buying someone else's preowned car. Now of course if the delta is $5k+ maybe not but if it was a few thousand I would rather know it was driven and maintained by me over the first 3 years.
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03-12-2016, 09:39 AM | #10 | |
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He added that it were him, he would wait until September given the new models will be coming out and the Manheim values will be even lower making my price lower if I wanted to buy the car. He was really quite straight forward about the whole thing and said he would shoot for a dealer profit of around $1,500 on the transaction but "everything is negotiable." $1,500 for a little paperwork indicates there is plenty of room to play with. |
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03-12-2016, 09:48 AM | #11 | ||
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03-12-2016, 11:22 AM | #12 |
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ALWAYS lease a BMW, NO matter how many miles a year you drive, or plan to own it eventually.
If you can't do the math yourself to understand why the above is true, congratulate yourself on being able to afford a bimmer without knowing math If you're likely not to exceed 45k miles in 3 years, then lease for 12k/36 only. Again, if you can't do... |
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03-12-2016, 11:25 AM | #13 | |
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03-12-2016, 11:42 AM | #14 | |
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At that point just add the extended warranty to your own car and it's the same as a CPO, minus the what-ifs associated with someone else's most likely lease return (and let's face it, people often care less about a leased car because "it's a lease anyway so who cares"). But at 7k miles a year, I would just keep the car for a couple more years and skip the extended warranty, car probably only has like 20k miles or so on it now? I don't think you'd get your money's worth on a $5k CDN extended warranty, unless of course the car has been a POS up to this point, then I might consider it. |
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03-12-2016, 12:49 PM | #15 | |
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03-13-2016, 12:19 AM | #16 |
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Thanks for your advice __ and Nacho98.
AudiA4: I hope that my post and the responses I received help you in some way too.
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03-13-2016, 06:53 AM | #17 |
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335i has a HORRIBLE resale value right now after release of LCI and 340i - my 2013 335i is worth $30k at most with a $34k residual - $57k fully loaded when new.
I have 14k miles an my lease which up in 3 months, no way I'm going to purchase a car thats $5k upside down! You want to buy a lease, try Toyota as they hold their value. Only BMW that retains any value is the X3, even that is far below other manufacture cars like a 4 Runner. |
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03-13-2016, 12:19 PM | #18 |
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I treat my leases like rentals
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03-13-2016, 12:39 PM | #19 | |
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03-13-2016, 02:07 PM | #20 | ||
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03-13-2016, 03:09 PM | #21 |
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My sense is he didn't read any posts that explain buying the car back from the dealer at a price less than the residual. I'm not sure your residual is particularly high. All BMW residuals are high. For whatever reason it's what they do in their lease business.
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03-13-2016, 03:20 PM | #22 | |
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I appreciate everyone's input here! Great forum overall.
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