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My lease is up in August, should I turn it in or buy it?

1003008gl1003008gl Posts: 11
I have a 2 year lease on 528i, which is up in August. I am about 10,000 miles over milage. The residual value is $34119.75. Should I turn it in and lease a new one? If I lease a new one, what kind of incentive does BMW have now? Any help is greatly appreciated.

Comments

  • I turned in my 535i in Feb after a 2 year lease. I was a bit below my mileage allowance (22K out of 24K miles). I was a bit surprised to learn from the lease end consultant that I can negotiate on the residual value if I wanted to buy it out. My residual was $43K. they offered $36K which was $7K off my residual. The lease end consultant says that BMW Financial allowed the dealer to purchase the car at $34K and the dealer added $2K on top for BMW CPO certification and profit. Although the discount was pretty good off the residual (which is inflated anyway) and my total car cost would have been cheaper than if I had bought the car in the first place (amazing for a lease to buy), I still turned it down because the local region auction value of the car was about $28-30K (that was the most I was willing to pay for the car), the engine broke down twice (big reason for not keeping the car), and I was intrigued by the 2011 535i.
    Also, they had a customer loyalty lease to lease rebate at the time. Maybe they still do and that can help with paying for your overmileage if you lease a new BMW.
  • 1003008gl1003008gl Posts: 11
    Thanks for your reply. Just curious, what kind of deal were you able to get on the new 2011 535i? I talked to the fleet manager today and he is working on giving me a quote if I want to buy my existing car or trade in for the new 535i. Thanks
  • I haven't gotten a new car yet and I am also curious to find out what kind of deals are available if any on the 2011.
  • leon_0905leon_0905 Posts: 17
    Just curious. If you decide to buy your car after lease do you have to pay sales tax on the purchase? I leased mine in MD, and it's one of the states where you pay sales tax on full cap price of the vehicle, not the leased part. Now if I decide to purchase it after lease, do they collect tax again? If so, isn't it a double tax practice?
  • shiposhipo Posts: 9,152
    I cannot speak for Maryland, however, I used to live in Illinois (another state that nails you on sales tax for the full CAP cost of the car on a lease), and they don't (or at least didn't) hit you again for the sales tax. My bet is that they don't.
  • carnaughtcarnaught Posts: 1,579
    You only paid tax on the total of your lease payments not on the whole price (cap cost) of the car. If you bought it, you'd also pay tax on the residual amount paid for your car.
  • Not really, I did pay 6% tax on full selling price of the car, not on the leased part (which was around $3200 for $54000 cap). MD is one of the 6 states that has this law which makes expensive luxury car leasing quite unattractive. Even if I get car in NY or NJ I still pay 6% sales tax according to MD law for full price.
  • toekneechin05toekneechin05 Posts: 9
    My lease for my audi is up and I am about 9,000 miles under. Someone mentioned for me to trade-in the lease car instead of turning it in. What is involved in a trade-in on a leased vehicle?
  • kyfdxkyfdx Posts: 27,901

    @toekneechin05 said: My lease for my audi is up and I am about 9,000 miles under. Someone mentioned for me to trade-in the lease car instead of turning it in. What is involved in a trade-in on a leased vehicle?

    If your car is actually worth more, wholesale, than the residual, then a dealer may purchase the vehicle from you, allowing you to realize some equity. This isn't a usual situation, though... Many people confuse retail asking prices with the worth of the vehicle they are trading in.

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • toekneechin05toekneechin05 Posts: 9

    kyfdx@Edmunds the dealer was telling me how people usually just turn in their car and walk away instead of trading it in. I guess I am just confused as to how I can "trade in" a car when it isn't mine to begin with. Also, if I decide to not buy from this dealer, can I still "trade in" the leased car?

  • kyfdxkyfdx Posts: 27,901

    All leased vehicles have a "payoff". If you wanted to buy your car out of the lease, you could do it at any time, subject to the contract. That payoff drops over the term of the lease (down to the final residual). You can also sell that car (or trade-in) to a dealer. The bank might have different rules for an Audi dealer vs. another make dealer (meaning: different payoff price), but the process is the same. The dealer pays off the bank, and credits you with any equity.

    Just keep in mind, that having equity in a lease doesn't happen all that often. You really need to know the wholesale value of the car, so if you do have that equity, the dealer you are trading it into, doesn't try to take advantage and keep some of it (just like trading in any other car).

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • kyfdx@Edmunds what is the best way of finding out the wholesale value? I was thinking about going to CarMax and getting an appraisal from them to see if there is a difference. I just know CarMax low balls it too.

  • kyfdxkyfdx Posts: 27,901

    CarMax is a good place to go, because you are getting an actual offer to buy the car, regardless of purchase at their dealership.

    You can also post a full description, here:
    http://forums.edmunds.com/discussion/1212/general/x/real-world-trade-in-values#latest

    One of our other members can check auction values for you..

    MODERATOR
    Prices Paid, Lease Questions, SUVs

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