Quote:
Originally Posted by AHall
I have a question for all those who lease cars. If at the end of the lease the residual value is lets say $60K but the market value is $50K, will the dealer sale you the car for $50K if you want it?
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From my experience you can only buy it at residual through BMWFS. If you don't buy it the dealer can at a "special" price but what they will sell it for is up to the them. Most likely they will CPO it and sell it at market value.
Having said this I am really surprised by all the messages here and misconceptions. Leasing is nothing more or less than another form of financing - it is not renting. You can buy the car at any time during the lease, or at the end, at the amount owed at that time. Each monthly payment you make decreases the amount you can buy it for from BMWFS, exactly the same way a loan would do. You always have a payoff that decreases as payments are made. Renting would not do that.
If you want to get out before the lease end and cannot do a lease swap, you can always buy it at the amount owed then and sell it. Have done it plenty of times.
If at end of lease (or at any time during) market value is more than what you owe (the residual is what you still owe at the end or the balance after the monthly payments are subtracted during - similar to a loan balance) you can trade it in a pocket the difference instead of returning it.
If you want to keep it at lease end you can buy it at residual. You can also keep it for several more months if you order another BMW.
The big difference is that it gives you insurance (beyond tax advantages for some) that if anything happens, or you no longer want it, you can get out of it in 2 or 3 years (based on lease term) and you transfer all risk to BMWFS. Unlike buying it, where there is no exit no matter what happens without a lot of sweat. Plus leasing is a much less risky financial method.
The main issues with leasing are that people don't understand it and are making up stories about it. But because of not understanding it they can pay way more than what they should (money factor/interest etc.). Plus there is an acquisition fee but you can think of it as an insurance payment again.
So unless a $120k+ is an accounting error based on your finances, I would seriously recommend leasing for $100k+ cars.