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Purchasing at the End of Your Lease

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Comments

  • dwynnedwynne Posts: 4,018
    I purchased my S2000 off lease direct from Honda, no problems.

    I did find out there is no $500 incentive / discount for a dealer to handle this, so every dealer I talked to was going to charge me their full doc fee to handle the transaction (most were not really interested in handling it).
  • dwynnedwynne Posts: 4,018
    " I've been offered a residual value of 21,000"

    If this is a closed end BMWFS lease the buyout terms are spelled out in your lease agreement. What is the residual buy out price lited there? Who "offered" you the $21,000?

    Most all the lease banks carry residual insurance these days, so there is no incentive for them to discount the buyout to you.

    What a lot of BMW lessees do so is turn it in and buy it back from the dealer as a CPO car. BMW has no other factory extended warranty you can buy, so this can be smart deal. You would work with the used car manager (usually) at your BMW dealer. After you turn it in, that dealer will get an offer to buy the car (before it rolls to auction), if you agree to that price plus dealer markup, CPO cost, and cost to fix anything to get the CPO wearranty, then you would buy it back CPO. The offer would be residual or less but not more than residual (AFAIK). You should shop several BMW dealers to compare prices and markups to do this type of deal.
  • bmwleaserbmwleaser Posts: 17
    Thank you dwyne for your detailed response.

    The dealer lowered the residual from 22K to 21K. As I understand the residual value + tax should be my buy-out price ?

    Doesn't BMW sell extended warranty and maintenance packages seperately. I'm considering buying one or maybe both of the above.

    Why should I have to pay to fix anything or for the CPO inspection when I've been the only owner ?

    In my particular case, does CPO offer any benefit? I'm not looking to sell the car in the near future and already have competitive financing.
  • dwynnedwynne Posts: 4,018
    edited July 2011
    BMWFS or the dealer lowered the price? Correct, the residual as listed on your contract (or lower, if BMWFS makes you a deal) plus dealer fees and taxes and maybe a final fee (I can't remember if BMW has one or not) would be your price.

    BMW sells extended maintenance plans (pre-paid maintenance) to take you past the factory free period. They (BMW) does not sell any factory backed extended warranties - many of the dealers do but they are not BMW backed and accepted everywhere and perhaps a waste of money. That is why folks do the CPO trick - to get the long CPO warranty.

    CPO warranty is not free, the dealer has to pay BMW for it, Maybe $1k or more for a 3 series CPO - this is the cost of the warranty only. They also have to pay techs to do the inspection an pay for parts and labor to fix anything not right on the car. For example: Your car may have had enough tread to not cost you on lease turn in but the BMW CPO rules require more tread - so the dealer has to install new tires to get the CPO warranty - so your cost goes up by CPO + inspection + tires + labor.

    "Every Certified Pre-Owned BMW has coverage for up to 6 years or 100,000 miles" and free roadside assistance for that same period.

    If you are a BMWCCA member (and have been for at least a year before purhase) you get $250 or $500 back (m models) when you buy a CPO BMW.
  • asolare1asolare1 Posts: 31
    In the end the car manufacturer will do whatever is in their best interest at the time.

    Years ago I had a BMW 740IL coming off lease at a time that they were apparently choking on many others coming off lease. Someone at the company called me to try to interest me in purchasing my car instead of turning it in. I hadn't even been considering doing that but the deal they agreed to ($5000 below my residual plus an extension of the warranty to 100,000 miiles) was too good to pass up.

    I realize this was undoubtedly an unusual moment that I happened to fall into but I just point out that if you happen to find yourself with a car coming off lease at a time that the used car market (for that vehicle) is weak it may certainly be worth the effort to try to negotiate aggressively.
  • dwynnedwynne Posts: 4,018
    >> Years ago I had a BMW 740IL coming off lease

    Years ago, that was the case. Now, most all the lease banks carry residual value insurance and / or use third party remarketers to handle the end of lease. With either, the odds go way down that you can get any sort of a discount or deal.

    I agree that there is no reason not to try for a better deal, but that is just not very common these days.
  • Hi,

    My car has no special options. My lease ends Sept. 16th. Mileage is 24,698, but have damage to car in excess of $1500 allowance for 3 separate instances. Payoff amount is $15,704.53. Am trying to negotiate a financing deal with dealership I originally leased car from, and submitted my application 2 days ago, but haven't heard back from them as yet.

    What is the best way to negotiate the best financing available? Should I also reach out to other dealerships in my area? I realize that my rate would be based on my credit standing.

    Thanks for you help.

    Dorothy
  • igozoomzoomigozoomzoom Waleska, GeorgiaPosts: 790
    I would suggest applying for a loan at your bank (or if you have access to a credit union, even better). Lending Tree is also worth a shot. Then you'll have a few loan offers to compare against what the dealership offers!
  • kyfdxkyfdx Posts: 27,652
    Is your lease through Honda Finance? If so, have you contacted them directly, to see if they will finance your car?

    You may not even have to use the dealership.

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • I have contacted Honda Finance and they told me I had to go through a dealership which surprised me. I'm going to contact at least two other dealers in my area, but it's frustrating to even have to deal with one, since I have 3 solid years of payments with Honda Finance.

    I planned on checking with banks/credit union for comparison, but am surprised that no one has gotten back to me as yet.

    Any other ideas are welcome
  • dwynnedwynne Posts: 4,018
    Check with your bank or credit union, or check with Capital One auto financing online. C1 current rates are 3.99% to 5.09% for used cars and 4.19% for refinance. My CU (PenFed) is doing 2.49% for new / used / refinance. Membership is a $5 share if you are / were in the military or have a relative that is/was or work for various government agencies and contractors. Everyone else can join one of 2 support groups for a one time fee of $15 or $20 (plus the $5 CU share) and become a member. The low rates (if you qualify) will more than make up for the small cost to join. They sent me a check made out to me and Honda Finance, which I endorsed and mailed off to Honda. Since I wanted to finance my sales tax, they sent me a separate check (make out to only me) for the taxes. I deposited that, then used that money to title the car with a lien to Penfed once they sent me the title.

    Once you have a check in hand (or money in the bank) you just do an odometer statement and mail it in with the payoff check to Honda Finance and they send you (or the bank) the title. Otherwise, you have to go through a dealer who will likely have a higher rate and may charge you doc and other fees. You can go through any Honda dealer, not just the one you leased from. You could also try to sell your to any dealer, like Carmax, if the value exceeds the buy out. Having damage to it may preclude this option.
  • Hi everyone, I am going to leave out the make and model of my new vehicle purchase and trade in experience but this story is 100% true. Yesterday I went down to a local dealer to purchase a new car and trade or close out my lease. Long story short, I agree on a price for a new car and a trade in value for my leased vehicle, where the dealer would purchase the car from me and remit the payoff to the financing company. I was very pleased until this point. I agreed to a trade in value of my leased car of $14,900 which they said would match the payoff balance of 14,900 at the leasing company (they called to confirm the payoff).

    So I complete the bill of sale, purchase and financing contracts on 8/31 that show trade in of 14,900 and pay off of 14,900. However, it was the end of the day and for some reason the dealer had a computer glitch and I was unable to sign the electronic "Dealer trax" system they use. So as it was around 10pm, I agree to comeback on my lunch break for 5 minutes and finish it up. I went home with the new vehicle and turned my old vehicle over to them. Afterall, I did have the bill of sale contract and all the other paperwork.

    When I went back today, I was there for more than I bargained for. Because I had made a payment on my lease on 8/31 the payoff had apparently dropped to around 14,000.00 with the leasing company. And I was told that I need to sign another bill of sale for the updated payoff amount. When I looked at the new bill of sale the trade in price was now knocked down to 14,000.00 again matching the lease payoff.

    I refused to sign the new bill of sale and told them we have a done deal and they can work the accounting out themselves. I was rather livid.

    I did not request the difference at the time, but the more I think I believe I am entitled to the difference between the original 14,900 on the bill of sale as the TRADE IN VALUE, versus the 14,000 that was the lease payoff amount. Am I wrong in thinking this way? and what would be the best approach to getting my money back? I feel like I should hire a lawyer or write a letter myself to recoup the difference. Any advice?? Thanks in advance.
  • qbrozenqbrozen Posts: 17,148
    They can work it a few ways. One would be to give you the difference. Another, and possibly most likely, is that they will send the original agreed upon $14,900 to the leasing company and they will turn around and refund you the difference. This will probably take a month or so. The 3rd way would be that they apply the $900 towards your loan balance on the new car, which would lower your payments.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • dwynnedwynne Posts: 4,018
    You have yourself to blame, you made a deal with a pending payment and did not check to see that it cleared.

    That said, if they were willing to give you $14,900 before they should honor that. It is what is in your sales contract. If they will not, then give them back their car and unwind the deal and start over with another dealer.
  • why would I blame myself? I told them I had a pending payment, they said the finance co. would send me the difference.

    Then the next day they tried to change the paper work.

    Why would I unwind the deal at this point? I have the new car, I like the new car. I'm not going to hold there feet to the fire over the difference, it's just unprofessional to make a CUSTOMER sign a second bill of sale after agreeing on numbers and executing a contract the day before.
  • I paid off a Honda Pilot lease by buying the car from Honda Finance at the lease's end. Now how do I get them off of the title as lienholder? Do I have to pay taxes etc. at the DMV to become the sole owner of a car that I have always owned?
  • sebring95sebring95 Posts: 3,231
    First off, you have not always owned the car. Honda Financed owned the car (lessor) you were renting it (lessee). Now that you've bought it from Honda Finance you should have a title from them that you take and get transferred into your name. Depending on your state laws, you most likely owe tax on the sales price. This is really no different than buying any other used vehicle at this point.

    You say Honda Finance is on the title as lienholder? I don't really understand that part unless you financed the buy-out from Honda Finance as well.
  • I have a lease with BMWFS. I want to pay it off early and then turn around and do a private party sale to a guy at my office. For tax purposes, there must be two sales - one from BMWFS to me and one from me to the guy - the guy cannot buy direct from BMWFS.

    Putting aside all tax issues, what is the quickest way of doing this. If I FedEx a certified check to BMWFS for the full buyout amount, will they FedEx me the signed title the next day? And, if they do, can I sell the car to the guy that day - even though I havent yet had DMV transfer the title to my name?

    Any help is appreciated
    thansk
  • kyfdxkyfdx Posts: 27,652
    It might be cheaper for him to assume the lease, then do the buyout... That way, just a $500 transfer fee, then he pays the tax....

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • Even if you FedEx them a certified check, in my experience expect a title to take a week to get to you.

    Second, you CANNOT just sign the title over to your buyer, you first must title the car in your name, pay tax and reg fees on it, and then sell the car to your buyer.

    If nothing else because BMW FS is almost certainly not going to send you an open title, it will be reassigned to you.

    Jumping title is illegal in any state that I am aware of.
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