My M340 lease is coming to an end in a couple of months, and I’m way under mileage due to Covid.
Vehicle was $65K new, and I got a decent 10% deal with 15K miles/year at the time.
Since there is nothing comparable deal wise, I’m looking to buy out my lease and keep it for another 3 years or so, but would like a good warranty.
Local dealer is offering me this:
Residual plus remaining payments: $40K
(matches BMW FS page except unearned interest is not subtracted)
Minus MSDs: $4.9K
Minus CPO Loyalty Rebate: $500
Tax: $2K
Document Prep: $350
DMV: $230
CPO 5 (one extra year past 4 year warranty): $1150
Or
CPO 6 (2 extra years past 4 year warranty): $3000
TOTAL:
For CPO 5: $36K
For CPO 6: $38K
They’re able to offer BMW’s advertised 1.99% for 36 months, I’m looking to avoid a longer loan. 6 years total on a car seems enough, don’t want to be underwater. Just as a data point, they did also offer 60 months at 2.99%.
My questions:
Is the CPO pricing reasonable?
How strict are the CPO inspections? I’m close to tire wear limit, but would like to buy non-BMW-star tires (Michelin Pilots) once the CPO gets approved. Car came with non-RFT as custom ordered.
Not a huge deal, but they seem to be double counting interest for my last couple months - full remaining lease payments accounted, and interest on borrowed amount.
You don’t need to cpo to extend the warranty. You can just buy an extended warranty from literally any bmw dealership in the country. Plus since you are way under milage it will be cheaper and you avoid all the bs fees and taxes. If you extend a cpo warranty it’s unlimited milage, while the non cpo extensions have milage limits and I think are cheaper. There was a dealer out in ca that offered discounts from the suggested price. If interested pm me and I can look her up.
That’s a good point.
Let me DM you, it’s possible the platinum protection plan (which has the same terms as the CPO as I understand except the unlimited mileage) may be a better way to go. I don’t need more than 10-15K miles a year anyway.
I’m in a very similar boat as you. Been doing quite a bit of research as of late and ultimately the best decision is to purchase. Thanks for pointing out the 1.99% for 36 months as my dealer did not mention it.
Might I ask why are you thinking of purchasing now rather than simply waiting until the lease comes to end? You mentioned “residual plus remaining payments”. Are there any benefits to paying the extra payments into a new loan now rather than waiting?
Were you able to find a good option for the warranty? If so, would you mind either posting it or DM’ing it?
I was thinking my tires might still be ok to pass CPO inspection, but they’re close. Once it is CPO’d I may or may not get BMW star tires. That was my only reason for doing this a couple months early.
BMW’s CPO page lists 1.99% financing for 24-36 months. There’s also a $500 loyalty rebate. My local dealer is honoring both.
Local dealer is asking $1150 for CPO 5 (1 year beyond 4 year factory warranty), $3000 for CPO 6 (2 years beyond 4). A $200 inspection fee is apparently “built in” to the price. With the CPO process, I’ll have to pay for any tires/brakes/parts they need replaced/repaired, but the warranty has unlimited miles.
There’s also the option to get the platinum warranty plan instead of the CPO, which has the same coverage but has limited miles. I think that does not require an inspection, I’m 80% sure on that.
Pricing for the platinum coverage that was offered to me by my local dealer was $4350 for 7y/70K miles.
@conanohasselhof has a contact who offered me better pricing, especially for the platinum plan, but for CPO 6, they seem close enough that it makes sense to go through my local dealer.
Oh I definitely don’t need the unlimited miles.
Just going with the cheaper option out of the two warranties.
But if they come back and give me a long list of things to replace, I might pick the platinum plan so I can do them on my own time and/or at an independent shop.
Thanks @Dracarys! Reached out to my dealer about the 1.99 offer and he told me that BMW financial allows for a 1% increase and they charge the full 1%. Do you mind if I ask what your estimated monthly payments are? 36 month, zero down and it’s ~$1300/month! This is @ a residual value of upper $38,xxx.
So now I’m back to looking @ leases again but it’s a tough to cough up an additional ~$500/month for the same vehicle. This includes trade in equity and transferring MSD’s.
I’m still thinking of holding tight, extend it another 1-2 months after lease end and seeing how much the market changes. The issue with this is the supply might be more limited than it is now! Brokers are saying the wait right now is 6+ months on ordered vehicles and rates/deals are only locked in for 90 days?
Thank you. This would probably be the best option but still ~$800/month. Plus one would have to factor in warranty, certification, etc. At a certain point, it just becomes a hassle. But then again, so is the extra $500/month. Back and forth, back and forth…
I’m likely doing a couple thousand down, and will have an even $1000/month payment for 36 months.
You could do a longer term like others are suggesting.
To meet CPO, the tire tread and brake depth must have 50% life or newer (usually around 4/32nds for tires). As an alternative, the dealer probably sells similar warranties from BMW or third parties that don’t require anything other than a dealer inspection. I doubt a 1 year will be cheaper, but the 2 year might be comparable.
As far as pricing, it seems fair. Just a doc fee and the CPO costs. If you are financing, I would suggest doing it sooner rather than later. Many captive banks have hinted that rates will take a big hike next month.
As it turns out, the car ended up needing nothing - everything checked out.
They didn’t seem to notice (or disregarded) that one of the tires was a non-star version (it has a Jaguar J instead) of the Pirelli P7 that I ordered through TireRack, so I definitely lucked out there.
Overall, I’m happy with how smoothly everything went - I ended up paying $3000 for year 5 and 6 of the CPO warranty, including the $200 to do the inspection. CPO made me eligible for a $500 loyalty rebate which the dealer applied. And I got 1.99% for 36 months - I see the April rate released today is now 2.49%.
