11-24-2020, 05:43 PM | #1 |
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Re-lease economics
Are you guys familiar with re-lease residuals for extension above 3 years?
I have a 2018 M5 with lease expiration in May 2021 and I wouldn't mind extending for a year or two. BMW Financial Services will only quote rates within 60 days of lease expiration. Any help would be appreciated. |
11-24-2020, 07:39 PM | #2 |
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following with great interest.....
I assume they would make you buy an extended warrantee??? Mike
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11-29-2020, 07:00 PM | #5 |
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11-29-2020, 08:42 PM | #6 |
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I thought the max they can extend it is 6 months.
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11-30-2020, 11:21 AM | #9 |
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12-01-2020, 11:47 AM | #10 |
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yea i have asked that question when i returned my X6M F86 lease
it was a dealer demo so i got a awesome discount on it when i leased it i was told by BMWFS max was 6 months and no option to re-lease the same car |
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12-01-2020, 04:14 PM | #12 | |
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BMWFS also won't allow you to circumvent the buyout by getting the dealer to purchase it and selling it to you at a lower price. You can get around this if you can get someone not having the same address as you to buy it instead. |
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12-01-2020, 05:12 PM | #13 |
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Funny if the car is worth MORE than the buy out, BMW does not give you a nice check for the difference at turn in. But they want you to eat the LOST value if you choose to buy the car. Nice.
Mike
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12-01-2020, 08:18 PM | #14 |
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To be fair, you can always buy it out and sell it to Carmax if the value is higher. Sometimes individual BMW dealers will facilitate this as well for a cut.
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12-01-2020, 10:55 PM | #15 | |
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12-02-2020, 02:36 PM | #17 | |
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Mike
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12-02-2020, 04:11 PM | #18 | ||
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12-02-2020, 06:14 PM | #19 | |
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This is also what happens when you try to return a leased car early for a new car as well. Dealer buys the lease out by paying the payoff, then you roll the difference between the trade-in value and the payoff (whether positive equity or negative) into the next car loan or lease. This is probably more common in the Porsche world, where leases are not subsidized and thus have very low residuals. 911s also depreciate slowly so most leasees end up with positive equity at the end of their lease, which they can then cash out or put towards their next lease with the help of the dealer. It is basically like having a call option on your car at a set price at the end of the lease. There are leases that prevent you from doing that (e.g. Tesla's leases) where there is no buyout at all and you must fulfill the terms of the lease and must return the car at the end, but it is uncommon. Last edited by frankchn; 12-02-2020 at 06:20 PM.. |
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12-04-2020, 12:08 PM | #20 |
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I invented this kind of lease years ago, but no one would bite.
Year one. Monthly lease based on 12 month short lease, high price but if you hate the car you are out. Second year, monthly payment equal to the the total cost of a 24 month lease minus the 12 month lease you already paid divided by 12. Again, your payments higher than a 48 month lease but you can walk away if you hate the car. Third year, monthly payment equals the total of a 36 month lease minus what you already paid divided by 12. See the trend. End up with the option to walk away without a huge pay out. By the end of this you'd likely have a 4th year with a monthly payment of 20 bucks. LOL. No one looses, they get their crazy short term lease payments, but you are not stuck with a car you hate. Mike
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06-19-2021, 11:09 PM | #21 |
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To close my original question I called BMW. My residual was around $80k after 3 years. They proposed 1 year extension with residual of around $40k and monthly lease payment of over $4k. Not negotiable.
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