Need lease end advice

[calbear13]

I have a 2012 M3 coupe, fully optioned out. The lease is ending in November (start was 11/2011). I have driven about 22k miles while the lease was for 30k miles.

One option I have is to buy this car, but with the $48k residual, $4k taxes/fees, $7k with warranty and maintenance plan, the total jumps up to $59k.

The car has also been in an accident with about $11k of damages. Since I know the whole history and made sure it was repaired to like new, I'm not worried about the impact. However, if I returned the car to BMW, they would not be able to get the regular price they were expecting because of the accident, and might sent it to a dealer auction.

Is there any way that I can cut a deal with BMW, since if they send it to an auction they will likely lose much more than if they just cut me a deal on the car?

[s85e90]

Originally Posted by calbear13

I have a 2012 M3 coupe, fully optioned out. The lease is ending in November (start was 11/2011). I have driven about 22k miles while the lease was for 30k miles.

One option I have is to buy this car, but with the $48k residual, $4k taxes/fees, $7k with warranty and maintenance plan, the total jumps up to $59k.

The car has also been in an accident with about $11k of damages. Since I know the whole history and made sure it was repaired to like new, I'm not worried about the impact. However, if I returned the car to BMW, they would not be able to get the regular price they were expecting because of the accident, and might sent it to a dealer auction.

Is there any way that I can cut a deal with BMW, since if they send it to an auction they will likely lose much more than if they just cut me a deal on the car?

just a long shot here but have you tried that .... I'm sorry but I never get these type of posts. You're asking if a third party to this forum post will cut you a deal. All you will get are people's assumptions (and I wouldn't even want that).

Go to the dealer and strike a deal. No one here can really help you

[Beemdog]

The maintenance plan is not worth it for the miles you are putting on it. Warranty maybe.

$48k for a 2012 that you know well is a nice price. A 2011 with 22k miles would sell for that or more.

[aus]

I just bought my car a few months ago, and BMWFS would not cut me a deal at all. Tried a dealer, and also no go.

[Wilsel]

Personally I would let it go. They won't sell it for less than the residual minus a $1000. Which is more than I would pay for an M3 with a bad carfax.

[vdude]

Originally Posted by calbear13

Is there any way that I can cut a deal with BMW, since if they send it to an auction they will likely lose much more than if they just cut me a deal on the car?

Based on my experience, BMW FS won't negotiate the residual. This is handled at the dealer level. There are a few key factors to buying out a lease at less than the contracted residual and saving additional $:

1) Finding a dealer that's willing to charge you the smallest possible mark-up on their manheim/dealer auction cost (I think +/- $500 is fair). I highly recommend calling Robert Grass (fleet manager at Valencia BMW - he gave me the best possible deals on my ED, LBO and saved me a significant amount off residual)

2) Dealer buyback/auction pricing being significantly less than your residual.

3) Low average auction pricing. Based on average pricing methodology, lower production cars like the M3 are more sensitive to outlier auction pricing (low or high) than higher volume production cars (simple rule of averages). When I did my deal, I was counting on the auction value taking a hit based on the release of the new M3/M4. Over a 1 month period, it initially decreased, stabilized and increased slightly (probably due to the shortage of new Ms and demand for the E9x). Fortunately the auction price was still less than the residual.

4) Finalizing the deal prior to your last payment. If you do this, you forego remaining payments and can factor this into your savings. There's conflicting dealer info on this (some claimed I was contractually obligated to all payments) but I did it and it works.

Hope this helps. GL with your deal.

[calbear13]

Originally Posted by vdude

Based on my experience, BMW FS won't negotiate the residual. This is handled at the dealer level. There are a few key factors to buying out a lease at less than the contracted residual and saving additional $:

1) Finding a dealer that's willing to charge you the smallest possible mark-up on their manheim/dealer auction cost (I think +/- $500 is fair). I highly recommend calling Robert Grass (fleet manager at Valencia BMW - he gave me the best possible deals on my ED, LBO and saved me a significant amount off residual)

2) Dealer buyback/auction pricing being significantly less than your residual.

3) Low average auction pricing. Based on average pricing methodology, lower production cars like the M3 are more sensitive to outlier auction pricing (low or high) than higher volume production cars (simple rule of averages). When I did my deal, I was counting on the auction value taking a hit based on the release of the new M3/M4. Over a 1 month period, it initially decreased, stabilized and increased slightly (probably due to the shortage of new Ms and demand for the E9x). Fortunately the auction price was still less than the residual.

4) Finalizing the deal prior to your last payment. If you do this, you forego remaining payments and can factor this into your savings. There's conflicting dealer info on this (some claimed I was contractually obligated to all payments) but I did it and it works.

Hope this helps. GL with your deal.

Thanks vdude, this is exactly what I was looking for. Would you be able to PM me with how much ball park you saved? I want to make sure it is worth my time. Also do you know any friendly dealers in NorCal who might be willing to play? I take it if I use Valencia I will have to drive down to SoCal to return the car and then pick it back up later?

[dagolfpro]

Originally Posted by vdude

Based on my experience, BMW FS won't negotiate the residual. This is handled at the dealer level.

4) Finalizing the deal prior to your last payment. If you do this, you forego remaining payments and can factor this into your savings. There's conflicting dealer info on this (some claimed I was contractually obligated to all payments) but I did it and it works.

Hope this helps. GL with your deal.

V is right, BMWNA will not negotiate. Only dealers will.

How did you do #4? Did you not pay the last payment or simply incorporate it in your payoff?

Originally Posted by calbear13

Thanks vdude, this is exactly what I was looking for. Would you be able to PM me with how much ball park you saved? I want to make sure it is worth my time. Also do you know any friendly dealers in NorCal who might be willing to play? I take it if I use Valencia I will have to drive down to SoCal to return the car and then pick it back up later?

I'm working with Robert Glass as well for my lease buy back. You don't need to drive your car down, just need to send him your key FOB so they can verify mileage. Robert will tell you that as well.

Good luck OP.

[M3LISSA]

BMWNA will not negotiate on M's and they will tell you the contract was signed before you took hold of the car. I tried. Don't waste your time.

[calbear13]

Given how reliable the e92s seem to be, is it worth paying $8k for a 7 year/100k mile platinum warranty? Are there any other options?

[vdude]

Originally Posted by dagolfpro

How did you do #4? Did you not pay the last payment or simply incorporate it in your payoff?

I didn't make the last payment or incorporate it into the payoff - it was in one way or another written off. Here's my understanding of how it works. A lessee doesn't own the car, BMW FS does. Under certain circumstances (eg. a lease buyout initiated by a lessee) an authorized BMW dealer has the right to buyout a BMW FS leased vehicle at a special discounted or wholesale rate (Manheim/BMW auction etc) which could be less than the residual value. When the dealer buys a leased car from BMW FS, this supersedes the original lessees lease obligations; the account is closed and considered to be fulfilled (even if there are outstanding payments). I think this is similar to when a creditor "sells" a bad loan to a third party collections company; in order to collect, the collections company will often accept a percentage of the original loan percentage and consider it legally satisfied (but in the case of BMW FS, the lessee remains in good standing and there are no credit repercussions).

Despite conflicting info from other dealers, I made this work in my favor.

I bought my car a few days prior to my last payment, called financial services to inform them of the buyout, cancelled my auto-payment (to avoid a charge in case it took longer than expected for BMW FS to record the buyout) and followed up with BWW FS a week later to make sure the transaction went through/I wasn't liable for the final payment.

Originally Posted by calbear13

Thanks vdude, this is exactly what I was looking for. Would you be able to PM me with how much ball park you saved? I want to make sure it is worth my time. Also do you know any friendly dealers in NorCal who might be willing to play? I take it if I use Valencia I will have to drive down to SoCal to return the car and then pick it back up later?

Glad this helped. I saved $2k+ on the residual. I was counting on more but given the current retail value and savings was very satisfied with my deal. I don't know of any "friendly" NorCal dealers. I suggest reaching out to Robert Grass at Valencia to see what he can do for you.

[dagolfpro]

Originally Posted by vdude

I didn't make the last payment or incorporate it into the payoff - it was in one way or another written off. Here's my understanding of how it works. A lessee doesn't own the car, BMW FS does. Under certain circumstances (eg. a lease buyout initiated by a lessee) an authorized BMW dealer has the right to buyout a BMW FS leased vehicle at a special discounted or wholesale rate (Manheim/BMW auction etc) which could be less than the residual value. When the dealer buys a leased car from BMW FS, this supersedes the original lessees lease obligations; the account is closed and considered to be fulfilled (even if there are outstanding payments). I think this is similar to when a creditor "sells" a bad loan to a third party collections company; in order to collect, the collections company will often accept a percentage of the original loan percentage and consider it legally satisfied (but in the case of BMW FS, the lessee remains in good standing and there are no credit repercussions).

Despite conflicting info from other dealers, I made this work in my favor.

I bought my car a few days prior to my last payment, called financial services to inform them of the buyout, cancelled my auto-payment (to avoid a charge in case it took longer than expected for BMW FS to record the buyout) and followed up with BWW FS a week later to make sure the transaction went through/I wasn't liable for the final payment.

Glad this helped. I saved $2k+ on the residual. I was counting on more but given the current retail value and savings was very satisfied with my deal. I don't know of any "friendly" NorCal dealers. I suggest reaching out to Robert Grass at Valencia to see what he can do for you.

V, to my understanding, when you pay off the buyout before your last payment was made, wouldn't that be higher than your actual residual amount? i.e. let's say residual is $50,000 and your monthly is $1,000. your buyout before last payment would be $51,000. That's what I was told via BMWFS.

But it sounds like what you're saying is that dealers "DO" have a special discounted or wholesale rate price they can payoff to BMWFS, hence, some dealers are willing to sell a car back to a leasee for less than residual. Which makes total sense.

Learn something new everyday.

[vdude]

Your example is technically correct if the transaction was through FS at the full contracted value. In my case, the buyout was through the dealer at less than the contracted residual amount. The dealer bought the car from FS, owned it for a matter of minutes and sold it to me for less than the residual. Based on timing the deal before my final payment, the final payment was essentially waived (like BMW sometimes does with "pull-ahead" lease buyouts to get you into a new car). This results in extra savings.

Most dealers won't pass on the savings or will bundle in extras like CPO, extra inspections but I have a long term relationship with my dealer, referred several customers and so he basically made a few hundred to cover costs and a small profit.

[aus]

I went to 2 dealers and both said they can't improve the price from the residual on E92 M3's. I saved a ton on my wife's 335 years ago. I know someone who save a few thousand on an E93.