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      07-05-2011, 03:57 AM   #1
mike444
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Buying out a lease

Hey guys, I'm considering leasing vs buying a 335i (or 335is if im feeling adventurous ) and looking to mod it quite a bit. A few questions:

1. Anybody know if the procedure of buying a car at the end of its lease is easy / simple to do? Will dealers give you an incentive to do this as it creates less of a hassle for them?

2. If I have a bunch of mods (for example powder coated wheels) would they not charge me to change it back to stock and just let me pay off the car and keep it modded?

Thanks so much for your help!
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      07-05-2011, 04:06 AM   #2
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If you're intending on buying the vehicle over the long run, why wouldn't you finance it or purchase outright? In general, there's a cost of the capital, why pay someone else to use it if you've got it? The argument for leasing seems to be when someone says they fully intend on driving a new car every 3 years. If you read forums sometimes people are doing it for only 2 years now...marketing has gotten really good.
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      07-05-2011, 04:10 AM   #3
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If you're intending on buying the vehicle over the long run, why wouldn't you finance it or purchase outright? In general, there's a cost of the capital, why pay someone else to use it if you've got it? The argument for leasing seems to be when someone says they fully intend on driving a new car every 3 years. If you read forums sometimes people are doing it for only 2 years now...marketing has gotten really good.
I'm not sure whether I'd get sick of the car of not after 2-3 years, so I'd like to keep my options open on keeping the car vs having the option to give it back. That's why leasing and then choosing at the end of the lease seems like a good process so far.
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      07-05-2011, 04:19 AM   #4
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No one buys leases because a) it is almost always more expensive than just buying the car in the first place and b) nobody wants to go from paying $400 a month for their newish car to $600 for what is basically a used car.

All this goes out the window if you are faced with a mileage charge of thousands of dollars. Those are the people that more frequently buy them out. Of course I wonder why they ever leased in the first place...
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      07-05-2011, 04:20 AM   #5
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I think one question that I've seen about the lease buyout is where will you get the money to do the buyout? imho borrowing it is a bad idea--now you've paid the leasing co. to use their money, and you're going to pay a bank to use theirs as well, and you could be potentially be financing the car until it's 8 years old (I have seen that on this forum). In general, the interest rate is much higher for a used car, than new, although I belong to two credit unions where the rate is the same.

What I've observed is that some people are wheelers/dealers and if they want a 2011 550i stick, they figure out how to get the money years in advance, be it push for a better job, make this or that deal work for them, etc. They never seem to lease. My buddy who saw me get the 2007 335i coupe in 12/06 is a good example--he waited all this time and finally got a 2011 550i stick. He's not thinking about replacing the car already in 2-3 years, and his downpay was substantial such that his payments are barely over $400. Personally, I like his method, be it a Sonata, or a 911 Carerra 4S, doesn't matter, principles are the same...
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      07-05-2011, 05:59 AM   #6
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My best advice is, if you're not sure whether to lease or buy, your best option is to buy. Buy/finance is usually what's best for most everyone. IMO leasing is only good for a small percentage of people, such as those who are self employed and can write off a huge chunk of the lease payments for tax savings. Now there are those who lease because maybe they can't afford the payments of a buying/finance plan, and try to get into the most car for the least amount of monthy and are stuck to the mileage. There are those who are absolutely sure that they change cars every few years so leasing provides the least hassle in changing cars, but they still have to abide by the mileage rules.
If you're not sure whether or not you'll change cars, just buy, don't lease. That was my scenario and I'm totally glad I chose to buy. If, and a big IF I do decide I want to change cars a few years down the road I can decide to sell it then and get good money for my car. BMWs right now have really good resale values. But chances are I'll be keeping my car 5+ years.
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      07-05-2011, 07:01 AM   #7
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Quote:
Originally Posted by mike444 View Post
Hey guys, I'm considering leasing vs buying a 335i (or 335is if im feeling adventurous ) and looking to mod it quite a bit. A few questions:

1. Anybody know if the procedure of buying a car at the end of its lease is easy / simple to do? Will dealers give you an incentive to do this as it creates less of a hassle for them?
No. I considered doing this at the end of my lease and they did everything possible to talk me out of it, including throwing every incentive in the book at me.
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      07-05-2011, 07:09 AM   #8
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No. I considered doing this at the end of my lease and they did everything possible to talk me out of it, including throwing every incentive in the book at me.
Probably because the car is worth much more to them by taking it back, used BMWs are worth an all time high right now. Dealerships are even offering to take back leases months before the lease expires, and paying the leaser to do so. They then turn around and sell it used for a very profitable margin.

Makes me glad I bought my car instead of leasing, makes me feel like I own a very desirable car!
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      07-05-2011, 07:31 AM   #9
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It's all based on your personal situation, for me, I like to change cars every few years so I lease.

I drive very little so I maintain lower than average miles, so leasing is great for me, why?

My last car before I leased this '11 328i was an '08 Acura TL, When the 36-mo lease was up I had only 23k miles, and drove to CarMax on my last month and was offered $21,000 for my car, and my lease buyout was $18.5k.

Needless to say I sold it to them, it was painless and took 20 minutes, they sent a check directly to Acura Financial Services for $18.5k and cut me bank draft right there on the spot for the remaining $2,500 (minus $149 processing fee). All in all I re-couped my down payment of $1000 for the Acura put it back towards the 328i and put $1,500 in the bank....

I could have of course sold it around $23-$24k maybe via Private Sale, but the hassle of people coming to my home/work driving the car etc isn't worth the extra thousand or 2, Carmax makes it hassle free, I was appraised and sold within 40 minutes.

I also did this with my Mazda RX-8 (car before the Acura). I plan on being able to easily do this with the 328i @ lease end.
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      07-05-2011, 07:43 AM   #10
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If you want to make major mods it makes little sense to lease. First of all your lease will be held by BMWNA so you will have to deal with them and will not get a great deal as used cars are hot right now.

It also makes no sense to mod a car if you think you will get sick of it in a few years. You are limiting the market by personalizing the car.

I lease because I like to get a new car every 3 years and don't drive a lot. I don't mod my cars either.
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      07-05-2011, 10:49 AM   #11
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1. You will not deal with your dealer in most cases to buy out the lease unless they are offering a better deal that BMWFS. Your dealership becomes a middle man and we already know how the middle man stuff works, they want something out of it. So unless your dealership can offer you better numbers than BMWFS, you will be talking with Financial Services.

2. Small mods on leases are ok, large mods will cost you more in the long run considering the amount of money it will take to install and uninstall the mods. If you will mod a lease, do it early in the lease so that you can re-coupe the benefits longer.

I'm not here to give you advice on leasing vs. purchasing but I did try to answer your questions
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      07-05-2011, 11:41 AM   #12
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Originally Posted by CombatNinja View Post
No one buys leases because a) it is almost always more expensive than just buying the car in the first place and b) nobody wants to go from paying $400 a month for their newish car to $600 for what is basically a used car.

All this goes out the window if you are faced with a mileage charge of thousands of dollars. Those are the people that more frequently buy them out. Of course I wonder why they ever leased in the first place...
I lease and buyout all the time for a very good reason. I lease under my company and put down enough to lower the residual significantly. When the lease expires I roll it over and sell the car to myself fo exactly the residual amount, write off any fees in the transaction thru my business and keep the car paid off as a personal asset, Saves my self the fees and interest acssociated, keeps the asset out of my personal finances until it's fully paid off and makes life very simple since I run under the radar financially for obvious reasons personally. When I add it all up I do pay about a couple thousand more than if I just bought outright but it does help keep my txable income very low. Now if only I could find a way to do that somewhat legally with my house I'd be golden.
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      07-05-2011, 11:50 AM   #13
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Quote:
Originally Posted by CombatNinja View Post
No one buys leases because a) it is almost always more expensive than just buying the car in the first place and b) nobody wants to go from paying $400 a month for their newish car to $600 for what is basically a used car.

All this goes out the window if you are faced with a mileage charge of thousands of dollars. Those are the people that more frequently buy them out. Of course I wonder why they ever leased in the first place...
Not true: I have sold 2 Audi's for the lease payoff to get out of a lease and did not loose a penny on them. Also my wife just sold a Honda Civic for $1000 more then the lease pay off and actually made money on it. All cars were within mileage and taken very well care of.

The Audi's happened to be S-Line models that were the 6 speed manual and hard to find. One of the buyers flew in from Canada to buy it and the other drove about 200 miles to pick it up in Southern California. Both of them were sold on Autotrader.com.

If you get a good deal on a lease and take care of the cars, you can do well with them.
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      07-05-2011, 12:49 PM   #14
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Not true: I have sold 2 Audi's for the lease payoff to get out of a lease and did not loose a penny on them. Also my wife just sold a Honda Civic for $1000 more then the lease pay off and actually made money on it. All cars were within mileage and taken very well care of.

The Audi's happened to be S-Line models that were the 6 speed manual and hard to find. One of the buyers flew in from Canada to buy it and the other drove about 200 miles to pick it up in Southern California. Both of them were sold on Autotrader.com.

If you get a good deal on a lease and take care of the cars, you can do well with them.

That's only because the used car market is hot right now. More and more people are buying used cars and also the recession has less and less people buying new cars, trickle down effect is less used cars on the market. Consider yourself lucky to be in the right place at the right time.
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      07-05-2011, 02:45 PM   #15
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That's only because the used car market is hot right now. More and more people are buying used cars and also the recession has less and less people buying new cars, trickle down effect is less used cars on the market. Consider yourself lucky to be in the right place at the right time.
Maybe a sign of a hot used car market or a properly structured lease with the idea of buying out. My residual for the current lease will be far below market value when it expires in January 2012, will be 23K on a an 08 with options in the sig. Not sure where you'll buy one for that price 6 months from now with those options. Leasing is not cast in stone there are a lot of ways to do it. Mine was also not based on sticker value but a tad over 5K off that to start the lease, Just need to drive the deal and bargain. I tcan work to your advantage.
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      07-05-2011, 04:19 PM   #16
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hahahah so many conflicting views! thanks for all the help so far. Ears are still open
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      07-05-2011, 04:29 PM   #17
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hahahah so many conflicting views! thanks for all the help so far. Ears are still open
haha so many views yet the time value of money is an exact science.

What is not science is the human condition always wanting something new. It's kind of like when a kid goes into a candy store, or a person of size hits the Vegas or AC buffet.

Human condition--I am sick of my 2011 335is, I can get a 2008 M3 for $145 more per month (this is a thread from the other day).

Exact science--a hybrid bus has a useful life of 12 years according to a transit authority. They don't get sick of the bus at year 3, 6, 9, 12, 15, or 18. They plan to use the bus for 20 years.
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      07-05-2011, 04:35 PM   #18
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I think one question that I've seen about the lease buyout is where will you get the money to do the buyout? imho borrowing it is a bad idea--now you've paid the leasing co. to use their money, and you're going to pay a bank to use theirs as well, and you could be potentially be financing the car until it's 8 years old (I have seen that on this forum). In general, the interest rate is much higher for a used car, than new, although I belong to two credit unions where the rate is the same.

What I've observed is that some people are wheelers/dealers and if they want a 2011 550i stick, they figure out how to get the money years in advance, be it push for a better job, make this or that deal work for them, etc. They never seem to lease. My buddy who saw me get the 2007 335i coupe in 12/06 is a good example--he waited all this time and finally got a 2011 550i stick. He's not thinking about replacing the car already in 2-3 years, and his downpay was substantial such that his payments are barely over $400. Personally, I like his method, be it a Sonata, or a 911 Carerra 4S, doesn't matter, principles are the same...
a sound financial philosophy. it comes down to managing money and ultimately spend least as possible to get most out of something.
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      07-05-2011, 04:41 PM   #19
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Ive leased 2 times in 6 years and thought Id go that route for a long time but ended up buying... ultimately you save more with buying. if money is not a issue to you, then you are much more free to do what you want.... if you are well off, which is a good thing for anyone, then lease can give you fresh car every 3 years.

well, for a average blue collar joe like me... leasing a 50k car like 335i can be a financial loss. what I put in the car will vanish and poof when the lease is over.

id rather not do a end of lease purchase. either buy a car in the first place or find the same car and buy it CPO or private transaction for lot less.
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