Positive early lease termination experience!

[jimf15e]

(I hesitate to write this thread because I know 90% of the responses will be unrelated comments about why one should/shouldn't lease. I'll give a virtual $0.25 to the first post that does so! Anyway, on with the story...)

After decades of wanting an M3 I finally decided to pull the trigger in August 2012 and leased a 2013 E92 JZB, ZCP, DCT, etc. My goal was a short term, 30 month/15k lease with absolutely nothing out of pocket in order to set myself up for a new F80 in February 2015. We've bought and leased several BMWs from the same SA so felt I'd be helping my pricing case by doing so. Anyway, as you can imagine a 15k/30 month lease had a relatively high MF and the monthly lease cost reflected that. Still, it was perfect for my situation (I invested the money I would have put down on a sale, the mileage was perfect, and as those who lease know even though the MF was relatively high it was still dirt cheap compared to leasing a similarly priced Audi or MB... BMW LOVES to lease!)

Fast forward 18 months and I find our family situation is going to change dramatically thanks to the blessing of a new baby boy enroute. Since the E92 isn't exactly great for a rear-facing seat, my wife and I thought it best to look into getting out of the lease. As those of you who lease know, leasing is really just another way of financing a car. (Those who insist on thinking you're just 'renting' better ask who maintains the title on their traditional bank-financed car!) Anyway, BMW makes it relatively easy to terminate a lease early compared to other auto makers. Look on your lease agreement for instructions. I chose to try option 'B' (pay the lesser of the difference between payoff and realized value OR the total of your remaining payments plus excess wear and tear). In order to compare I also asked for a trade-in value on my car AFTER I negotiated the final selling price on our replacement ML350 4Matic.

The trade in offer was laughable at best, I didn't even respond. I told the dealer as much when I went to pick up my new car. For my 2013 loaded with 24k miles they offered $49k! Exactly what I expected from your typical crook of a dealership. Enough said on that.

For the lease termination I first had to do the normal lease-end inspection. I wash and baby our cars religiously, so when I showed up for the inspection with the car dirty and dingy from a recent snow I was embarrassed and said as much. The funny part is the lease inspector said to NEVER get a turn-in inspection done with a clean car because dirt hides scratches and dings! He said they can't deduct for dirt, but they also can't deduct if they can't see the scratches! I also showed up knowing that 3 of 4 tires were worn well below the required 4/32". Excess wear and tear charges for those 3 19" P-Zero's?? BMW FS charges only $200!! That's a steal! The rest of the inspection was a piece of cake - turn on wipers/lights, start the engine, that's about it. He didn't even drive it.

The inspection report only showed the $600 wear/tear deduction. However, here's the trick - the only time you get charged the wear and tear on an early termination is if the total of your remaining payments PLUS wear and tear is LESS than the difference between the car's value and its payoff, ie you flex to option A. Confused yet?

So 2 days after the inspection I received BMW FS's offer... they calculated my cars value as EXACTLY equal to the payoff, ie a net difference of $0.00 and I owed nothing. That was, ummm, quite a bit less than the total of my remaining payments plus wear and tear (approx. $11k)! I'll let you do the math, but BMW's estimated realized value for my car was $6k higher than the dealer trade in offer.

To turn the car in I just dropped it off at the dealership and walked across the street to pick up our new car. Piece of cake.

So, the end result was absolutely ZERO dollars out of pocket for terminating my lease 12 months early. Again, there are a lot of factors involved in this and YMMV, but in my opinion it solidifies my thinking that the only way to buy a new BMW (if you're not paying cash and can live with the mileage restriction) is to lease. You have so many more options on what to do with your money if you do so. Since BMW makes a ton of money off their CPO program they artificially jack up residuals, which results and a significantly lower monthly lease cost for the buyer.

[drexplode]

thanks for sharing your story! I didn't know that option B existed...

[ZEEM3R]

We only lease our cars so this is interesting to know. Thanks!

[jimf15e]

Originally Posted by drexplode

thanks for sharing your story! I didn't know that option B existed...

Yeah, you can read all the legal-ese details on the back of the lease agreement - it was good info and worked out very well for me in the end.

[aus]

Congrats. You got lucky in that the E9x M3 is hard to find now since BMW is getting ready to release the F8x. This shortage has driven up the cost of the current M3 and this has worked out to your advantage right now.

.

[Ezio]

Originally Posted by aus

Congrats. You got lucky in that the E9x M3 is hard to find now since BMW is getting ready to release the F8x. This shortage has driven up the cost of the current M3 and this has worked out to your advantage right now.

.

Just wondering. Wouldn't this be the time to sell a e9x m3? Before the next generation comes out.

[lve2xlr8]

The m3s are currently selling for quite a bit more than their predicted residual value so it's a win/win situation for you and the dealership. Congrats.

[highmodulus]

Originally Posted by Ezio

Just wondering. Wouldn't this be the time to sell a e9x m3? Before the next generation comes out.

Yes, you want to sell those pumpkin futures before November.

[aus]

Originally Posted by Ezio

Just wondering. Wouldn't this be the time to sell a e9x m3? Before the next generation comes out.

If you're thinking of sell, do it now.

[AirbusPilot]

Originally Posted by aus

Congrats. You got lucky in that the E9x M3 is hard to find now since BMW is getting ready to release the F8x. This shortage has driven up the cost of the current M3 and this has worked out to your advantage right now.

.

There's nearly 1000 for sale just on Autotrader. There's a glut, and the only ones selling have to be aggressively priced (2011's for less than $50k, no matter the miles driven). Sellers holding out for higher prices are still sitting on their cars months later.

I've been watching the market closely for several months.

[The Automotive Enthusiast]

My situation changed also, so I sold my 2013 e92 and made $ after a year and three months of blissful ownership.

[aus]

Originally Posted by AirbusPilot

There's nearly 1000 for sale just on Autotrader. There's a glut, and the only ones selling have to be aggressively priced (2011's for less than $50k, no matter the miles driven). Sellers holding out for higher prices are still sitting on their cars months later.

I've been watching the market closely for several months.

He may have missed the boat then.
There was a time a few months ago when the cars were going for higher than their residuals.
Now with the official release of the F8x, people maybe starting to look forward to that car, and prices usually start dropping quickly.

.

[Need4Speed_Motorsports]

Love hearing things like this. Good luck with your next car!

[slicer]

Thanks for sharing. I wasn't aware that BMW FS offered that option. I have gotten out of BMW leases early with cash in my pocket by selling the car. I have also extended a BMW lease 6+ months. BMW really does have a great leasing program. I agree that leasing is only a different form of financing; especially when you have all of the early termination options that BMW offers.

[jimf15e]

Originally Posted by Need4Speed_Motorsports

Love hearing things like this. Good luck with your next car!

Thanks!

[jimf15e]

Originally Posted by slicer

Thanks for sharing. I wasn't aware that BMW FS offered that option. I have gotten out of BMW leases early with cash in my pocket by selling the car. I have also extended a BMW lease 6+ months. BMW really does have a great leasing program. I agree that leasing is only a different form of financing; especially when you have all of the early termination options that BMW offers.

Yeah, you really can't beat it with BMW. Just don't try leasing an Audi or M-B!

[Jamesomania]

thanks for sharing, yes i agree BMW is very easy to get along with, I've terminated 2 leases with them within a year of owning to upgrade to better cars, the last one i had was a 335is 2012, after owning for 9 months i ended the lease to upgrade to an M3, they bought it off completely with no loss on my end.

[Gac101177]

Thanks I have started early termination 10 months prior to lease end, dealer low ball me told me about 8,000 dollars will have to go over to my new lease M4,I have 3 series sedan 18,000 miles, autovin did the inspection today and send me a copy of the paperwork total due wear and tear was 0 now waiting on BMW to send me the car value fingers cross.

[motoringobsession]

Wow, really helpful information! Just read my lease agreement and noticed Option B. I'm still kind of confused of how this process starts. Do I call BMW FS first and tell them I want to initiate Option B? Have an inspector come look at the car and then BMW does math on the value of my car? If the value they give you equals the payoff or more $ you can just use that towards your payoff and walk away from the car/lease?

[Gac101177]

Originally Posted by alpinemsport

Wow, really helpful information! Just read my lease agreement and noticed Option B. I'm still kind of confused of how this process starts. Do I call BMW FS first and tell them I want to initiate Option B? Have an inspector come look at the car and then BMW does math on the value of my car? If the value they give you equals the payoff or more $ you can just use that towards your payoff and walk away from the car/lease?

Yes I believe that it's correct but it could also be less, my car was inspected on Friday and BMW financial will let me know around Wednesday finger cross it's close to the payoff so I could get my M4 now and don't have to wait until June 15, will keep post it.

[Gac101177]

Got the email from BMW it will cost me 6,000 dollars to terminate early 🔫 with 8 months to go 🔪🚬 I can't wait that long I guess this will only work If you have and m car, my car only has 18,000 miles out 36,000, even the inspector told me the car it's new you should have no problem returning the car without paying specially if I was getting another Car