Lease return under mileage compensation?

bosco · 02-12-2010, 05:18 PM

I was reading some where that in the US they compensate lease returns that are under mileage towards your new lease. Is this something thats practiced here? Anyone heard of it? I am 25k kms under my contract it sure would be nice to get it put towards my new lease.

ct335i · 02-12-2010, 05:48 PM

Never heard of that... but it would be nice if BMW Canada offered that. As per my dealer, they dont offer compensation. Now it may vary from dealer to dealer.

w2 · 02-12-2010, 07:43 PM

I doubt they'd pay you a bonus for having low mileage, since that's not part of the contract, but at the end of the lease, you are entitled to buy the car for a set price (the residual value). This is essentially a put option: regardless of what the car is actually worth at lease end, you have the right, but not the obligation, to buy it at that pre-negotiated price. If the actual value of the car happens to be more than the residual, you might buy the car even though you don't want to keep it, because you can turn around and sell it for more than it is worth. Alternatively, if you want to buy/lease a new BMW, you could just negotiate directly with the dealer to get the difference credited as though you were trading it in.

For example, suppose your lease-end residual is $25,000 but the car's auction value at lease end happens to be $28,000. That means you could buy the car for $25,000 and offer it as a trade in, which the dealer would (theoretically) offer you $28,000 for. Or, you could just point out that the car is worth $3,000 more than BMW must sell it to you for, and therefore offer to turn in the car without buying it if they take about $3,000 off the price of a new car.

Realistically, BMW seems to deliberately over-inflate the residuals on its leased cars, so it is more likely that the car you can buy for $25,000 has an auction value that is less than $25,000, and so you will not want to buy the car and then turn right around and sell it for less than you just paid. Still, before you decide whether or not to buy your car at lease end, you should try to get a realistic estimate about what it's auction value is and compare it to the buyout price.

bosco · 02-12-2010, 07:49 PM

Thanks for the input the residual on my car is kind of high it was one of the 1st batch 335i e90 out. It has a build date of 06. Residual is $36500 all options except Navi. Back to the dealer she goes.

02-12-2010, 05:18 PM	#1
bosco New Member 0 Rep 24 Posts Drives: 335i Join Date: Jun 2008 Location: Vancouver iTrader: (0)	Lease return under mileage compensation? I was reading some where that in the US they compensate lease returns that are under mileage towards your new lease. Is this something thats practiced here? Anyone heard of it? I am 25k kms under my contract it sure would be nice to get it put towards my new lease.
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02-12-2010, 05:48 PM	#2
ct335i BMW 4 LIFE 120 Rep 467 Posts Drives: MY22 M3xDrive Join Date: Jun 2007 Location: Toronto iTrader: (0) Garage List 2022 BMW M3 [0.00]	Never heard of that... but it would be nice if BMW Canada offered that. As per my dealer, they dont offer compensation. Now it may vary from dealer to dealer. __________________ 2022 BMW M3 xDrive \| Isle Man of Green \| 19inch/20inch M Forged Wheels, Double-Spoke 825M, Orbit Grey \| Ultimate Package
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02-12-2010, 07:43 PM	#3
w2 Private First Class 1 Rep 143 Posts Drives: 335i coupe Join Date: Apr 2008 Location: Ottawa, Canada iTrader: (0)	I doubt they'd pay you a bonus for having low mileage, since that's not part of the contract, but at the end of the lease, you are entitled to buy the car for a set price (the residual value). This is essentially a put option: regardless of what the car is actually worth at lease end, you have the right, but not the obligation, to buy it at that pre-negotiated price. If the actual value of the car happens to be more than the residual, you might buy the car even though you don't want to keep it, because you can turn around and sell it for more than it is worth. Alternatively, if you want to buy/lease a new BMW, you could just negotiate directly with the dealer to get the difference credited as though you were trading it in. For example, suppose your lease-end residual is $25,000 but the car's auction value at lease end happens to be $28,000. That means you could buy the car for $25,000 and offer it as a trade in, which the dealer would (theoretically) offer you $28,000 for. Or, you could just point out that the car is worth $3,000 more than BMW must sell it to you for, and therefore offer to turn in the car without buying it if they take about $3,000 off the price of a new car. Realistically, BMW seems to deliberately over-inflate the residuals on its leased cars, so it is more likely that the car you can buy for $25,000 has an auction value that is less than $25,000, and so you will not want to buy the car and then turn right around and sell it for less than you just paid. Still, before you decide whether or not to buy your car at lease end, you should try to get a realistic estimate about what it's auction value is and compare it to the buyout price.
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02-12-2010, 07:49 PM	#4
bosco New Member 0 Rep 24 Posts Drives: 335i Join Date: Jun 2008 Location: Vancouver iTrader: (0)	Thanks for the input the residual on my car is kind of high it was one of the 1st batch 335i e90 out. It has a build date of 06. Residual is $36500 all options except Navi. Back to the dealer she goes.
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