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Originally Posted by Accounting4Speed
Just to point out, I went to a top tier school and got a good degree. You must have attended some hack school like BC or an equivilant to not understand what i'm trying to say. Instead of attacking me, maybe you should re-read what I wrote until you can comprehend it. Or, I can try and simplify it for you since you seem to be at about a 5th grade reading level.
Current residual value, like username18 said, takes into account payments made and mileage based on the lease residual you were quoted. If you buy the car from BMW at that residual value and then sell the car on the open market, that is how you can exit from a lease before the end of the contract. BMWFS will not terminate a lease unless they are fulfilling the contract in some form.
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Right, BC, at least you're within 10 miles. What you said now is not what you said originally. The present value of cash flows will never equal the current market value of the car (or more importanly the value of residual at the end of the lease + the remaining payments) if you're talking about the agreed residual which is an approximate value at lease end, which BMW came up with taking into account the varaible you've mentioned. Therefore, BMW will want all the money that was agreed upon (payments + residule) that will always be greater than the price he can get for the car now having 22 more months to go. He will lose money no matter what, the only question is how much. If he were to wait for another 15 months and then buy another Bimmer, he'd lose less, because he'd pay large % of interest and would be locked in another lease with still more interest to be payed to BMWFS
The present