Live in Texas with 2021 BMW M340i, lease ending in late March 2024.
Since the car is running really well and i have pretty low miles, 25k, i’m deciding to buy it off at lease end. My last lease payment was made.
I was reading through the Customer Payoff Document from BMWFS and found this to be very interesting:
" Third-party dealerships BMW Financial Services will not accept payoffs received from third-party dealerships. In accordance with the terms of the Motor Vehicle Lease Agreement, you may either purchase the leased vehicle or return or trade-in the vehicle to an authorized BMW Center. In the event a payoff is received from a third-party dealership, BMW Financial Services will return the payment by mail to the original sender. Please contact your preferred BMW Center for further information on your purchase options."
Does it mean if i were to sell this car to Carmax, BMW FS would not release it? I have no strong intention to do so, since I cannot find a car that drives better in this price range. Payoff is $36k.
Another question, I have about $4k in MSD, it says “BMW Financial Services NA, LLC authorization to reduce the amount of my lease payoff by the amount of my refundable security deposit. I understand that any state and local tax due on the purchase of my leased vehicle will be based on the full vehicle purchase price before subtracting the security deposit.” If i were to write BMWFS a cashier’s check for $36k and check the Security Deposit Authorization box, would BMWFS only deduct $32k out of the check?
How would i pay Texas tax if i need to register the vehicle? Funny thing is my registration expires in May 2024. Would DMW know that i’m now the title holder since BMWFS sends title directly to me and i need to pay sales tax again to register?
Update 3/4: called BMWFS on the MSD, was told i can deduct MSD off the $36 payoff amount if i check the authorization box. I’ll need to register the vehicle as soon as i receive the new title with Texas DMW and pay sales tax.
Yes, for years now BMWFS has not allowed 3rd party buyouts. During your lease you can only sell it to BMW dealers (or another dealer that has BMW dealers in their network).
I would first double check that the $36k doesn’t already include your $4k MSDs. Banks do it differently but when I pull up my payoff at MBFS the amount shown already has the MSDs included.
Whatever check you write to BMWFS should be the final amount that is already reduced by the MSDs. If the $36k doesn’t include MSDs, then if you send BMWFS $36k they are just going to cash that and send you another MSD refund check for $4k days/weeks later.
You are not…. Not until the state has issued a new title certificate in your name.
Get your title ASAP, not just BMWFS’s title assigned to you as the future owner. Imagine the car being stolen and you have no way of proving it’s actually yours.
It was part of my original question in the main post. I’ll search around and see how does the tax situation works.
My actual question was since my registration is not due till May, do i go through the registration service with DMW or just ask to update a new title?
You’ll pay tax on the payoff amount. If you do that process through a dealer they will collect the tax. Otherwise, you’ll have to go to the county tax office and pay the sales tax. (assuming you are paying the balance in full and not financing the payoff amount).
Yes, i’m planning to pay the balance in full. Does the tax collection process happens when i get a new title or when i register the vehicle again in May?
I have never bought out a BMW lease from BMW Financial. They may collect the sales tax and pay it on your behalf as part of the buyout process. I’d call them and ask if that’s how they handle it.
I know when I’ve bought used vehicles from out of state, I get them inspected, then go to tax office to register, transfer title, and pay sales tax.
Also, if you’re not wanting to hassle with any of this, you could probably go to your dealer and see if they’d handle it for you and pay some sort of processing fee.
I think it is up to the buyer who pay for sales tax. BMW FS is only charing me the residual value of the vehicle.
Haven’t talked to my dealer yet, since i leased it out of state, local dealers would probably want a few hundred for paperwork fees which i can probably take care of it myself.
If you intend on selling to a “non-BMW” dealership, you can sell to large groups that have BMW dealerships within their network eg. Lithia Motors & Autonation to name a few. So you could research dealers in the groups then walk into MB, Toyota or any other store to sell your car.
