Shellbmb

My lease is ending on my 2006 BMW M roadster in 2 months. It only has 13k miles on it and is in impeccable shape. Residual is about 31k. Termination fees and taxes bring the total to roughly 34k if I wanted to keep it; however, I don't at this point unless I could get it for a steal, say 24/25k.

The lease is through US Bank and I've heard they might negotiate 3-4k off residual. That still puts me at 30-31k buy-out. Not sure if I could get more than that on the open market or not. Autotrader has plenty of them for sale ranging from 28-37k, but none of them have as low miles as mine does. Kelly Blue Book has a "good" car private party value at 30,415.

Not sure what auction pricing would be. Back in December the dealers would have only given me 25k at most on trade in. They said at Mannheim that is what they were roughly going for. Since the lease is through a bank, wouldn't the car just go to Auction?

Has anyone had any good luck at negotiating with their leasing company? I hate to just turn it in with such low miles on it.

dan30252

I leased an 06' M3 Competition Edition thru BMW FS. I did a 2 year lease, and at the end there was no way as much as I loved that car to keep it without eating money. I was better off leasing a new one instead of keeping the one I had by thousands. BMW offered to knock off $6K total if I'd keep the car, and even finance it 1% under prime as a purchase and it still wasn't worth it. About 3 months before it was time to turn it in, they started calling with offers and the offers kept getting sweeter every time but $6K off and 1% under prime on a loan wasn't gonna cut it.

I'd say, unless you are absolutely in love with that specific car, just turn it in and walk away. There's no way to get a good deal on it not matter what you do, and next time if you think there is any chance you might want to keep it at lease end, just buy it. I'd also drive the hell out of it for the next two months and get your moneys worth on those miles. I'd beat the living **** out of that car and take it back.

If the dealer offered you $25K, its probably worth "street value to a buyer" at around $27K. They can fudge the numbers around and get you more on a new purchase trade in, but really its only worth somewhere between $22-$25K.

Usually, take KBB trade in value of "good condition" and that's all about its worth.

That experience is now why I buy my cars instead of leasing. I also learned NEVER to put any money down on a car. If I can afford to float the note on the whole car, I don't need it. Why put money down on a depreciating asset You put $15K down, and by the time you pulled off the lot, you lowered your payment only a hundred or two a month and lost your money.

Vic55

Dan when did your lease end, recently or about a year ago? I ask because my M6 is almost done but I want to release it with BMWFS only if they renegotiate the net cap to ACV... did you get an offer to release?

dan30252

My lease ended in late 07. I took delivery of one of the first ZCP edition M3's to hit the ground in the states.

They didn't offer to release. BMWFS left a bad taste in my mouth when it came to leasing or doing anything with them. It was hard to get approved (first larger car payment) even with a 755 FICO score. At first they declined because they said I've never leased a car like this and had no past record with a $1K+ a month payment. So, I put money down, and they approved. When my lease was up, they wouldn't approve me on an M6 finance even though my credit is flawless. Went an bought an GT3 with no issues and financed thru Porsche FS. I hate BMW FS. Won't buy another BMW unless they come out with something really good because of them. Didn't even look at the new M3.

dan30252

Also, now I finance all cars thru my credit union (navy federal CU) because its easy and no headache. I apply for an amount, they send me a check via FedEx, I go to whatever dealer and buy whatever I want. Its fun walking into a dealer with an "open check" to buy whatever I want. When I bought my C63, I showed the dealer a check that said "not to exceed $125K" and they broke their back trying to get the price down to get me to take it home immediately. lol

201mph

If your car will draw $25k at auction, why should the bank sell to you for less? I think if they will drop $3 to $4k and waive their fees, that's a good deal on what you know is a great, low mile car. It saves them the cost and potential loss of wholesaling it, and everybody wins.

On the other hand, if you are buying it just to resell it, dont expect an enthusiast with good knowledge of the market to pay you $30k for it.

While these are great cars, BMW put as much as $7500 incentive on them to move an oversupply of 06's. That doesnt help residual values.

Buy it if you love it, and otherwise know that someone else is going to get a great car. Then go write your next lease for fewer miles and save some money.

201mph

edit: double posting error

Childish///AMG

Wonder if the Air force Cu or 'USAA" would do the same for me

zoink

Check around w/ several dealers and see what the drive-out cost would be. I'm not an expert since I've never leased and not sure why this would even be possible (may be each dealer negotiated w/ BMWFS? )... but the fact is my friend got completely different drive-out numbers (~$3-4K difference) from 2 different dealers when his lease was about to end. He went with the lower one. Just an FYI, his car was 2006 330i.

taylorcoleman

I don't see your dilemma if you want to stay with your car. The residual on your lovely, low mileage car is $31k (which is on the low end of your $28k - $37k search. It's likely that US Bank will negotiate down your residual for a buyout ($4k seem a little much, $2k seems within reason). If you don't buy it, a bank will take it to auction, and yes, they will get a lot less than even a negotiated residual, but that keeps consistency in the market, and on average, they make more money that way.

You won't get a steal from the bank. You may get a steal from somone that is hurting to sell their car.

Also, don't compare a pre-tax and post-tax transaction as you appear to be doing here. Compare the residual only (plus any fees if any) to the purchase prices of alternatives.

From what I'm reading, sounds as if your car is one of the few that make sense to purchase after the lease is up if you want the same type of car. Of course you would likely have saved money by purchasing it from the start, but those are sunk costs.

zoink

Why? AFAIK, the only determining factor is the interest part assuming residual = market price.

Leasing would be cheaper if residuals are high and now the lessor adjusted it down. It would be as if he got the discount up front when the car was still new. Imagine you got the sale price at invoice and then now the buy-out price got adjusted down by, let's say, $2K. It would be the same as if you bought the car @ $2K below invoice, which wouldn't happen if you buy the car upfront, no? And as we all know, this case is not rare as of late.

So it's likely that leasing is cheaper unless the MF is crazy high as compared to financing and residual is crazy low (so even if you buy the car out and resell it, you'd still lose the interest on the difference between residual and sales price).

taylorcoleman

I said "likely would have saved money".

If the residual = market value, that helps a great deal of course.

Many other factors can affect the lease versus buy equation however, such as:
1) money factor (or corresponding interest rate)
2) sales tax
3) lease fees
4) payoff type

As for 1), many lease rates are higher than loan rates. Not always true, but I would be surprised if we went back in time on this M and the loan rate was higher than the lease rate. The lease rate doesn't have to be "crazy high", just higher.

As for 2), in some states/counties, there is a higher sales tax on leasing versus buying.

As for 3), some lease acquisition fees are greater than loan acquisition fees by hundreds of dollars. There are also usually lease disposition fees, even if you purchase the car.

As for 4), the lease versus buy equation depends on whether you pay cash for the residual, or finance the residual.

There are more examples, but I won't belabor the point in this post.

There's tons of old posts about lease versus buy for anyone interested.

12_03

Dan how did your M3 compare to the C63? honestly...