[Arothens]

Hello
Shopping around on a new lease on X5 40 I?
Does it make sense to head to Car Max and take a buyout offer?
Seems like BMW dealers play games when a current lease trade is involved? Leases seems high with a lease with a lot of equity- over 10k???
Hoping for payments in the 6’s with the lease trade on a new X5.

What are many doing with this weird phenomenon happening now with used car values?

Appreciate any expert advice?

[solomonshv]

the equity on the lease depends on how much you got ripped off. a typical non-M car should sell 8-12% off MSRP. i have bought 3 BMWs to date, all were sold at about 10.5% off sticker.

if you paid close to full sticker price and/or took an inflated money factor, then sure there will be equity.

we can't tell you what to do because we don't know what you want. I currently have an X6 that was assembled before options started getting deleted. there is no chance in hell i'd take a new X6 because it would be junk. half of the options that i have on my car aren't available right now. dynamic handling package, massage seats, high end sound systems, etc, are all options that aren't on new cars. i'd switch brands before getting a new X5/X6. you can get a newer car, but there is a good chance that it will be worse than what you have now. that's my advice.

[TurtleBoy]

Originally Posted by Arothens

Hello
Shopping around on a new lease on X5 40 I?
Does it make sense to head to Car Max and take a buyout offer?
Seems like BMW dealers play games when a current lease trade is involved? Leases seems high with a lease with a lot of equity- over 10k???
Hoping for payments in the 6’s with the lease trade on a new X5.

What are many doing with this weird phenomenon happening now with used car values?

Appreciate any expert advice?

Quite a few folks here, including myself, have bought out their lease recently. I didn't do it to take advantage of the equity but rather that is was less expensive to do it now since I decided to wait on the LCI before getting another.

If you are doing it just to use the equity to get a new vehicle you will have to run the numbers and consider the details to see if it makes sense. You will be paying more for less with a new one so it may not be a good idea to do so.

[rmorin1249]

Same here. I bought out my lease a couple weeks ago.

why?
1. Low miles due to pandemic only 12k.
2. Perfect condition with known history.
3. Buyout cost is about $13k less than what a similar X5 is selling for.
4. Our vehicle has several features not available on a new build and hard to find on used ones, towing package and spare tire especially.

We shopped around for over a month and could not find anything else we liked better.

[Arothens]

Shopping around - truly perplexing with a great current lease with high equity that dealers should be tickled pink to have yet the lease deals on a new X5 are high? Figured lower lease than previous terms and some cash in my pocket? Thinking of going to CarMax and just get a nice equity buy out check and then start from scratch/
Really thought turning in a great leased X5 with low miles would be a great leverage chip???? Strange times I guess....

[Dwillbimmer]

Remember that on your current lease, the buyout terms are set by the lease you signed when you got the car. BMW is only going to give you the amount written in the contract, no more no less. If you think you can get more for the car in the current market, then buy it out, sell it on your own.For leasing a new vehicle, they have to estimate what the depreciated value is two or three years from now. The current jacked up used car values aren’t expected to last.

[todd92]

You have a lot of equity because the used car market is crazy high.

The used car market is crazy high because of production shortages of new cars. New car prices are also crazy high. Lease deals suck.

Selling a used car, to a private party, to Carvana or Carmax or to a BMW dealer, has nothing to do with the value and price of a new car you might replace it with.

BMW Finance can only sell you your lease at the buyout price. A BMW dealer is free to offer you any price for your lease that you have bought out. Offering to trade in a car does not 'sweeten the deal' for a new purchase or lease. They are two separate and independent transactions. Car dealers prey on those who think they are related.

[rmorin1249]

I had several dealers offer me between $4 and $6K more for my X5 than my lease buyout. I considered them but in the end I'd be stuck buying something else and paying a premium so I am keeping the X5 for now. Maybe in about 18 months when my warranty is expiring I will find something else I like as well or better, time will tell.

[FCX5]

Originally Posted by rmorin1249

I had several dealers offer me between $4 and $6K more for my X5 than my lease buyout. I considered them but in the end I'd be stuck buying something else and paying a premium so I am keeping the X5 for now. Maybe in about 18 months when my warranty is expiring I will find something else I like as well or better, time will tell.

I think you made the right call. In a nutshell, the extra $4 or $6K only makes sense IF you can get an equivalent discount on a new car or you want to switch brands/downsize. I suspect a 2021 X5 will cost you the same or more with less content than what you paid.

[todd92]

It makes sense if you have extra cars. As long as you have something to drive, it does make sense to sell everything else now and replace later.

My daughter is selling her 2 1/2 year old 2019 Mustang GT for more than she paid for it new and driving one of our cars until things calm down.

[parkstr8]

When we recently traded our 2018 Audi Q7 Prestige with only 15k on it for a 2021 Q7 - we walked away with 10k equity. And still got over 7k off the new one, with discount and incentives (2k was Costco).

It was a no brainer.

[FCX5]

Originally Posted by parkstr8

When we recently traded our 2018 Audi Q7 Prestige with only 15k on it for a 2021 Q7 - we walked away with 10k equity. And still got over 7k off the new one, with discount and incentives (2k was Costco).

It was a no brainer.

This is mire likely with Audi since their leases are not as subsidized as BMW. The avg lease payment for the same MSRP is usually higher on Audi and Porsche than BMW - at least this was the case when I was pricing out various options in 2015 and 2018.

[mgiannetto]

Originally Posted by Arothens

Hello
Shopping around on a new lease on X5 40 I?
Does it make sense to head to Car Max and take a buyout offer?
Seems like BMW dealers play games when a current lease trade is involved? Leases seems high with a lease with a lot of equity- over 10k???
Hoping for payments in the 6Â’s with the lease trade on a new X5.

What are many doing with this weird phenomenon happening now with used car values?

Appreciate any expert advice?

In the same situation.

We obtained an offer in May for $51K on my wife's '19 X5 (buyout plus remaining payments ~$42K). Did not pursue it since the offer was made near the end of the month and we did not have time to fully vet our options.

Fast forward one month, and we got an offer from the same dealer for $53K (yes the price went up!). I went to the dealer this time for an inspection to make sure the mail offer wasn't a garbage advertisement. So, we've got $11K equity in this lease which is up in Nov '21 (20K miles on the X5).

I would add that the dealer is willing to buy the vehicle at $53K whether we lease a new X5 from him or not!

Here is the rub.

1. This dealer is offering a token $500K discount off msrp on a new X5. Says they only got 5 new X5's this past month and have no idea if they will even get that next month. Token discount only available to existing customers. We got 12.5% on our '19 X5. This one really hurts!

2. RV is terrible at 53% (this compares to 59% on my current X5) and drives the lease payment up considerably (vs. our existing lease) on its own (even if the msrp discount were the same as our existing lease).

3. MF is meh at 0.00093. Even with 9 MSD's, the MF is still 0.00048 and will cost ~$50 per month. While a savings of ~$80 vs. our current lease, it is $40 higher than I am paying on my Audi SQ5 lease I negotiated in the fall of 2020 (yes, I'm only paying $10 per month in finance charges on that vehicle).

Netting these items together and the monthly lease payment would be going up by $225 per month plus tax (call it $240 including sales tax). That's ~$8,500 more in lease payments.

So, the net equity is really $2,500 when all is said and done.

Kind of hard to get overly worked up about that since we will re-incur lots of fees with the new lease (BWM financial fee, doc fee, MV fees, etc...). Basically that savings will go to offset those fees. Of course, we will incur those fees anyway when our lease is up later this year, but why not get the full benefit of amortizing those fees paid last time over the full 36 month lease term.

Could wait till our lease is up. Maybe the new car market sorts by then and deals are there to be had? If that were to be the case, we'd almost assuredly get a lower trade-in offer on our existing lease, but the net may not be much different. Plus, we'd be in a 2022 by that time.

[jphcbpa]

Might be worth it if you find a new one with more options or options you wished you would have gotten before.

[FCX5]

Originally Posted by mgiannetto

In the same situation.

We obtained an offer in May for $51K on my wife's '19 X5 (buyout plus remaining payments ~$42K). Did not pursue it since the offer was made near the end of the month and we did not have time to fully vet our options.

Fast forward one month, and we got an offer from the same dealer for $53K (yes the price went up!). I went to the dealer this time for an inspection to make sure the mail offer wasn't a garbage advertisement. So, we've got $11K equity in this lease which is up in Nov '21 (20K miles on the X5).

I would add that the dealer is willing to buy the vehicle at $53K whether we lease a new X5 from him or not!

Here is the rub.

1. This dealer is offering a token $500K discount off msrp on a new X5. Says they only got 5 new X5's this past month and have no idea if they will even get that next month. Token discount only available to existing customers. We got 12.5% on our '19 X5. This one really hurts!

2. RV is terrible at 53% (this compares to 59% on my current X5) and drives the lease payment up considerably (vs. our existing lease) on its own (even if the msrp discount were the same as our existing lease).

3. MF is meh at 0.00093. Even with 9 MSD's, the MF is still 0.00048 and will cost ~$50 per month. While a savings of ~$80 vs. our current lease, it is $40 higher than I am paying on my Audi SQ5 lease I negotiated in the fall of 2020 (yes, I'm only paying $10 per month in finance charges on that vehicle).

Netting these items together and the monthly lease payment would be going up by $225 per month plus tax (call it $240 including sales tax). That's ~$8,500 more in lease payments.

So, the net equity is really $2,500 when all is said and done.

Kind of hard to get overly worked up about that since we will re-incur lots of fees with the new lease (BWM financial fee, doc fee, MV fees, etc...). Basically that savings will go to offset those fees. Of course, we will incur those fees anyway when our lease is up later this year, but why not get the full benefit of amortizing those fees paid last time over the full 36 month lease term.

Could wait till our lease is up. Maybe the new car market sorts by then and deals are there to be had? If that were to be the case, we'd almost assuredly get a lower trade-in offer on our existing lease, but the net may not be much different. Plus, we'd be in a 2022 by that time.

By the way, I am glad you did this calculation. It is important to consider the full financial impact to know how good a deal really is. I'll that for $2500, which is your net equity if you leased another X5, what BMW gets is another 3 years of a lease. My assumption is that the residual is lower since an LCI is expected before the end of your new lease.

[mgiannetto]

Originally Posted by jphcbpa

Might be worth it if you find a new one with more options or options you wished you would have gotten before.

Yes, we are considering this.

Also, the dealer who we leased our current X5 from is willing to deal on a new X5, but that for one "on their lot". I have them looking to find one closer to our spec (or including at least the must have options in our spec - most important to my wife is the exterior color and the color of the (merino wool) seats). Understand the discount won't be quite as good, but expect it will still decent. They won't match the purchase offer from the other dealer though.

Will post back if we are able to put a deal together (including the numbers).

[speedyman]

Originally Posted by solomonshv

the equity on the lease depends on how much you got ripped off. a typical non-M car should sell 8-12% off MSRP. i have bought 3 BMWs to date, all were sold at about 10.5% off sticker.

if you paid close to full sticker price and/or took an inflated money factor, then sure there will be equity.

we can't tell you what to do because we don't know what you want. I currently have an X6 that was assembled before options started getting deleted. there is no chance in hell i'd take a new X6 because it would be junk. half of the options that i have on my car aren't available right now. dynamic handling package, massage seats, high end sound systems, etc, are all options that aren't on new cars. i'd switch brands before getting a new X5/X6. you can get a newer car, but there is a good chance that it will be worse than what you have now. that's my advice.

A new X6 "would be junk" compared to yours? Simply amazing.
The 2021 X5 M50i that I drive has carbon fiber trim and upgraded wheels as its only 2 options. Is my vehicle "junk" also?