Stories from the Sales Frontlines

tjc78

I've negotiated a buyout before, but, it was with an outside bank (not a manufacturer). I'm sure they lowered the price because they were selling at auction for less than what the residual was anyway.

abacomike

I've negotiated a buyout before, but, it was with an outside bank (not a manufacturer).

That's exactly what I mentioned in my post - banks tend to be a little more flexible - but still a rarity.

isellhondas

A few years ago, Bank of America tried to get into leasing of used cars and did they ever take a beating. They learned some painful lessons and got out of leasing quickly!

You better know what you are doing!

Some companies like BMW and Infiniti never seem to learn their lessons. We used to cherry pick lease returns at the auction and we bought a lot of nice cars for thousands of dollars "back of book"!

abacomike

I was planning to negotiate with the dealer, not the leasing company as I know they do not negotiate residuals.

The dealer has no leverage at all regarding the sale of a leased vehicle. The dealer usually does this (sell the leased vehicle for the manufacturer) and gets a $150.00 fee from the manufacturer for completing the paperwork. The dealer will not negotiate with the manufacturer for you and has no legal right to sell the car unless the leasing arm asks the dealer to sell the car for the agreed price. Remember, the dealer is acting only as an agent here.

If you are talking about lease returns that the dealer actually buys from the manufacturer, and then turns around and sells the car as used, that's different because the dealer is the seller, not the agent. I hope you understand and can see the differences here. Often, the dealer will sell those cars as CPO's.

The only time it makes sense to buy a car at lease end is if the residual is at or below actual wholesale value. You know the car and are happy with it. You are trying to rationalize why it is to the manufacturer's advantage to sell you the car at less than residual - but that doesn't work out since the lessor is not logical or rational - they just don't negotiate for the most part.

abacomike

Some companies like BMW and Infiniti never seem to learn their lessons

No, they don't. Infiniti leases through IFS were much higher than US Bank, Fifth Third Bank or other banks for many years. That's why many Infiniti leases were sold to banks rather than Infiniti financial services. The residuals were higher in the mid 2000's with banks. I don't know how they are now!

That's why leasing an Infiniti was more difficult because banks required better credit scores (higher Beacon scores - usually tier 1) while manufacturer leasing arms would take tier 2 beacon scores.

nyccarguy

Right, so won't the bank (BMWFS) sell the car to the dealer if they want to buy it at auction value? Then in turn, the dealer can choose to sell the car to me for a profit which will be less than my lease end buyout?

driver100

..a good friend of mine has just started a purified ice cube business.

Interesting concept. I think it depends on how much a unit costs. My friend wanted me to invest in a business that would make the inside of a car 99.9% germ free. Because of the negative remarks from here I declined. Then my friend who presented the idea crunched the numbers and we could lose our shirts as car dealers would beat us up on the price....about $200 a car.

But, you do have to take a risk at some point if you want to make big $$$s one day. I just don't want to lose what I got at this stage in life.

driver100

You know the car and are happy with it. You are trying to rationalize why it is to the manufacturer's advantage to sell you the car at less than residual - but that doesn't work out since the lessor is not logical or rational - they just don't negotiate for the most part.

That is well said and explains the problem completely.

Like the BMW dealer told me....hate to repeat it again but in case it got missed. I checked out my wifes 2008 335Xi should be worth $25k as a trade. It had 40K miles on it. I insisted on $24K. The appraiser said we can buy similar cars at the BMW auction for $20K, so we won't give you more than that....then they offered $500 more as a big deal favor.

My point is, they will throw any excuse possible at you not to give you a break on the buy back...it will ruin the whole basis of the lease system.
You make monthly payments based on the cost of the car less the predetermined value at the end of the lease.

abacomike

Right, so won't the bank (BMWFS) sell the car to the dealer if they want to buy it at auction value? Then in turn, the dealer can choose to sell the car to me for a profit which will be less than my lease end buyout?

No! They will sell the car only to you for the residual value. If the dealer wants to buy the car, they will sell it to the dealer for the residual value. So why would the dealer buy the car for residual when the can buy cars just like it for wholesale? Dealers don't buy individual cars. Let me explain:

BMWFS has every lease return inspected after the car is returned to any BMW dealer. Then, BMWFS gets all these cars coming off lease and usually has them transported to specific, designated storage lots/facilities throughout the country. Those cars that are in excellent condition with low to moderate mileage are detailed and offered for sale to BMW dealers at a pre-determined price calculated by taking into consideration mileage, condition, model, color and equipment. They may sell for residual or even more than the residual. Dealers then sell them, frequently as CPO's.

Cars that are less than good condition are wholesaled (if less than good condition, they have already collected wear and tear penalties from the lessees) at whatever they will bring at auction. Dealers usually buy 8-10 at a time. There is no deviation from this procedure.

Thus, if you want to buy your car at lease end, you must notify BMWFS 30 days prior to lease end so that paperwork can be completed.

roadburner

Sorry to be so late getting back to you, Bradd. Here goes...

Have you changed the oil on your wife's E90 328i yet?

Not yet.

Do you recommend using the BMW oil filter removal tool or can I use a regular strap wrench?

I bought this tool off of Amazon; @$20.00

If I change my oil now at 10,XXX miles (computer says 6K to go), will the computer reset itself or will the dealer do that when I take it to them in 6000 miles?

The dealer will reset it. You can also reset it yourself, but you should not do it until the CBS indicates that an oil change is required.

explorerx4

It seems many manufacturers don't negotiate the residual at the end of the lease and bring the turned in vehicles to designated locations for sale to their dealers or to move on to auction.
When my wife leased her Saab, I tried to negotiate the buy out, but wss told by corporate financial that it wasn't done.
I think the buyout was around 18k and I was willing to pay 16-16.5.
For some reason, I ended up getting a letter that they got something like 13k or 15k for it.

roadburner

Can anyone explain to me exactly WHY some car manufactures have gone to cartridge type oil filters?

The cartridge style filter are a pain when they have to be changed from underneath the car- like on older Chevrolets, pre-1992 BMW sixes, and my Mazdaspeed3. However, the cartridge filters that BMW has used since @1992 are changed from under the hood. Today you simply unscrew a plastic cap, lift it up @1" to let the canister drain for a couple of minutes, throw the old cartridge away and replace it with a new cartridge.
Here's what it looks like on my X3:

abacomike

...but was told by corporate financial that it wasn't done. I think the buyout was around 18k and I was willing to pay 16-16.5.

I'm not surprised, especially considering How poorly Saab's used to do at auction. But as you can see, they usually don't negotiate. In the past few years, wholesale values on "in demand" vehicles like Honda, BMW, Mercedes, Ford, etc., have been rising above residuals on leases so that buying a car out of lease can be, repeat "can be" to the lessee's advantage.

jmonroe

I think the buyout was around 18k and I was willing to pay 16-16.5.
For some reason, I ended up getting a letter that they got something like 13k or 15k for it.

I guess that was their way of telling you that you were offering them too much so they proved it to you. :sick:

For the dues we pay I don’t think we have learned as much as we should have here at Edmunds.

jmonroe

abacomike

For the dues we pay I don’t think we have learned as much as we should have here at Edmunds.

What do you mean "we" kimosabbee!

abacomike

Turned 68 today - don't feel I'm older than 67!

driver100

Turned 68 today - don't feel I'm older than 67!

Happy B-Day.

Good, I always say people will thing your younger than your age.....if you can immature.

Also, remember, old age is always 10 years older than you are now!

roadburner

You're only as old as the women you feel!
Or something like that...

nyccarguy

Ok. Gotcha!

Did you see that game btw?

nyccarguy

Cool. Thank-you Bailey! I'll check that out. There's an awesome how to thread on e90post about changing oil.

I don't want to reset the computer. This way I still get my freebie @ 16K

nyccarguy

MIKE - CONGRATULATIONS ON MAKING IT TO 68 & HAPPY BIRTHDAY!

graphicguy

Happy belated Birthday, Mike! Wishing you many, many more!

abacomike

Did you see that game btw?

No I didn't, but I caught up with all the games this morning in the papers. Interesting post-season so far. Some outstanding baseball!

bwia

Turned 68 today - don't feel I'm older than 67!

Seems as though you are getting younger every day. Which age are you quoting--Your chronological age, mental age, or biological age? After reading your many eloquent posts I would guess your mental age to be around 35.

Happy belated birthday Mike and have a seafood dinner on me at Legal Seafoods--my treat.

abacomike

Happy belated birthday Mike and have a seafood dinner on me at Legal Seafoods--my treat.

Thanks *BWIA, and thanks to all for your wishes and jabs!

BTW, Legal Seafood in Boca Town Center is my favorite restaurant. Great service, great ambience and stupendous food! I didn't know you were affiliated with them. We go there at least once each month.

abacomike

Happy belated Birthday, Mike! Wishing you many, many more!

Thanks graphicguy

Thanks also to all my fellow poster's wishes - appreciate your kind thoughts!

driver100

Just saw this ad for a 2012 Cadillac CTS 3.6L AWD.

Save $12,561
Just $354 Bi Weekly (tax included)
84 MONTHS
MSRP $60,584
NOW $47,988
Manager Demonstrator only 6,400 miles.

How would you like to pay over $700 a month and to take 7 years to pay it off?

abacomike

How would you like to pay over $700 a month and to take 7 years to pay it off?

You know the old saying, "...there's a sucker born every minute!"

bwia

Legal Seafood in Boca Town Center is my favorite restaurant. Great service, great ambience and stupendous food! I didn't know you were affiliated with them.

I am not affiliated with them at all, I was just joking of course. But I have been dining at Legal Sea Foods from their first restaurant in Cambridge, MA. Last month we had our anniversary dinner at the Braintree, MA location and I was surprised to see that their menu was printed in several languages including Chinese and Japanese.

Legal Sea Foods is a Great restaurant for ambience but I prefer Skip Jack's; don't know if they have any Florida locations though.

abacomike

Legal Sea Foods is a Great restaurant for ambience but I prefer Skip Jack's; don't know if they have any Florida locations though.

No, never heard of them. We have Joe's Crabhouse, but we just don't have great seafood restaurants down here like we used to. The best ones have all closed or moved out of the area.

stickguy

not that crazy (though I am just doing the rough math in my head). Well, paying that much for a demo CTS is, but the #s aren't.

assuming you are financing the whole thing, that comes out to roughly 7K/year, so ~ 600/month. Throw in taxes/fees/interest, and you could spend that much.

driver100

assuming you are financing the whole thing, that comes out to roughly 7K/year, so ~ 600/month. Throw in taxes/fees/interest, and you could spend that much.

It did include tax which is about 13%, and interest was at 4.99% which seems high to me, but for someone who only looks at payments that probably doesn't matter.

At first, I thought, not to bad getting a Caddie for $350 a month, but then when I saw payments are bi-weekly, and then I saw 84 months, that is where I lost it. If someone wants to drive a $40000 car they should find a way to pay if off faster than 7 years.

Talk about being the value being less than it is worth if you want to trade it in after 4 or 5 years :sick:

stickguy

is it any worse really than not being able to afford it, so just leasing instead?

you could do 2 42 mo. leases back to back, or this loan, and at least at the end own outright a 7 YO CTS!

robr2

I am not affiliated with them at all, I was just joking of course. But I have been dining at Legal Sea Foods from their first restaurant in Cambridge, MA.

I just looked and am surprised at how many locations Legal's has. Berkowitz must be doing very well.

I just read Legal C is going to be one of the first restaurants over at Assembly Row in Somerville.

sterlingdog

Mike, I hope that you had a nice birthday. It's funny how those things manage to come around once a year. As I get older, I have to wonder if someone is messing with the calendars. I could swear that they now come around once a month!

I have followed the posts referring to buying a leased car. I have only leased one car and will never do so again. I leased a 2000 Tahoe for three years at $400 a month with a $2K deposit. In the end, I had spent a total of $16,400. When they asked me if I wished to puirchase the vehicle, I declined. Their price plus what I had invested was more than the three year old Tahoe was worth. I loved the vehicle, but not enough to pay more than it was worth. Perhaps I didn't negotiate a very good deal in the beginning. I'm pretty good at doing deals on cars that I purchase, but leasing does not compute well in my brain. There's another thing that I don't like about leasing. When you return the car to the dealer, you suddenly realize that your garage has a hole in it. You've got to begin from scratch with no trade. That feeling just tends to leave me flat.

Richard

robr2

When they asked me if I wished to puirchase the vehicle, I declined. Their price plus what I had invested was more than the three year old Tahoe was worth.

I'd have to say you did the math wrong. What you had invested (spent actually) has no bearing on the selling price of the 3 year old Tahoe. What you should have considered is what the Tahoe was worth at that time and if the selling price was higher or lower.

sterlingdog

"Now $47,988."

Those people are lug nuts! That 2012 model with 6,400 miles has a dealer asking price of $31,244 according to Edmunds. The buyer would be paying $58,800 at the end of seven years. How bad is that? My 2009 SRX stickered at $56K+. It was a one year CPO with 8k miles when I purchased it. I only paid $24K with a $9K trade in for the Explorer. That made it right at $33k total. This dealer is definitely looking for someone to ride by and fall off the cabbage truck. As Mike says, someone will.

Richard

sterlingdog

Wrong answer. It did have an impact on the selling price. It was my money that was spent for those three years. Adding a new price to what I spent definitley made the value of the Tahoe less than the asking price. You have to start with day one as the "owner" of the vehicle. If you do an actual purchase three years later, you are now continuing to be the owner. You have to figure the total cost to you as the owner for "X" number of years---3 years plus how long you keep the vehicle based on total price spent. Definitely not worth total money spent.

Richard

verdugo

Happy birthday Mike! Hope you had a relaxing day.

verdugo

maybe even a Wrangler Unlimited

I have a 6-speed Wrangler Rubicon Unlimited. I love it. It's a great vehicle as long as you know what you're getting yourself into.

If I wasn't taking it off road in the summer I wouldn't have bought it.

Let's face it. It's lots of fun, but there are trade offs (noisier than your average car, you def. feel every little bump on the road, it gets very hot/cold b/c there is no insulation on the roof, etc.)

fezo

Late happy birthday, Mike! 68 is the new 66.....

Richard - that sounds good and I'd love to look at leasing that way but the way the dealer or bank is looking at it is that they figured out a value for the Tahoe for the period of time you leased it. They predicted what the thing would be worth as a used vehicle at end of lease which was your residual number. In theory they could get that from anyone when you turned it in. They won't sell it to you for less.

Now sometimes they guess the residual wrong and can't get that number in which case they lose but they aren't going to figure out actual market price and say "Here, we'll sell it to you for less than residual." Craig pointed out the why that is so.

There are way too many numbers to fool around with in leases. I won't go near one.

jmonroe

Turned 68 today - don't feel I'm older than 67!

I'm late too...Happy B-day.

I just had an idea, why don’t you get yourself a nice B-day gift, like a MB convertible. Do it while you’re still young enough to enjoy it. I’d say look up one of our posters buddies in here that is going to dump his Sebring convertible because he’s been complaining about getting too old too fast for it but you’d probably turn your nose up at his car. :P

jmonroe

driver100

you could do 2 42 mo. leases back to back, or this loan, and at least at the end own outright a 7 YO CTS!

Like, one 42 month lease would probably be better, and then hand the car in or buy it back at that point. The thing is, I don't think GM leases cars any more, that's why they do the monthly payment plans.

It would probably cost a lot less to lease a car with a higher resale value...bmw or MB.

driver100

you suddenly realize that your garage has a hole in it. You've got to begin from scratch with no trade

I don't like that feeling too! It is nice to buy a new car and to know you won't pay the full amount because of the value of your trade. But, there are situations where people don't have a down payment but need a car they can't afford to own, not the best but at least it gets them into a new car.

Not great for most people, but it works for others. I once took a course on running your own business, and the teacher said you should buy a nice car if you are drumming up business....people will be more inclined to give you business if they think you are successful.

driver100

That 2012 model with 6,400 miles has a dealer asking price of $31,244 according to Edmunds.

That is outrageous! Prices in Canada do run about 20% higher, but their price of $48K compared to the $31K you found one for is a lot more than that. For $48K you can get a very nice new car. My wife's Audi was less than that and I would take the Audi over a used CTS, even if it was carefully driven by the manager.

jmonroe

You know the old saying, "...there's a sucker born every minute!"

You disappoint me. For someone that was in the car biz, I was expecting a comment like, “there’s an [non-permissible content removed] butt for every seat”.

jmonroe

nyccarguy

That's right. I forgot about your Rubicon. I wouldn't get anything near that. The Rubicon's are awesome, but useless if you don't go off road (which you do). The Sahara is the perfect balance between rugged & cool, but add some options and the sticker quickly creeps to the upper $30K range. I'd look at a Sport Unlimited with a few options (hard top being one of them). The appeal of a 4 door, 4WD convertible is there. I'm sure I could get one under my $30K budget. Its something I'd buy new, because prices of used Jeeps are ridiculous (what isn't these days).

you drive with the hard top & soft top? How bad is the road noise? What did you have before the Jeep?

nyccarguy

Either from the euphoria of last night's HUGE 12th inning Yankee win or too much coffee this AM, I decided to go "all in." Ordered the Mann Filter & the oil filter cap wrench Roadburner suggested. Reports to follow in the coming days.

driver100

Ordered the Mann Filter & the oil filter cap wrench Roadburner suggested. Reports to follow in the coming days

Good luck!

jmonroe

Reports to follow in the coming days.

Hint…have Mrs. ‘nyccarguy’ double check your mileage entry on your oil log sheet. :surprise:

jmonroe