So I have a 2022 X5M Competition right now. My payoff is about $114k. A BMW dealer has offered me $118k.
Now they are saying because they have a few large BMW dealers….that the manager was able to pull strings and get my buyout down to $102k. How is this possible? Obviously BMW no longer allows third party buyouts……but can a BMW dealer actually have a much smaller payoff than I would have if I paid the car off?
Are you sure it isn’t b/c of the fact that your buyout includes taxes where as the BMW dealer buying it wouldn’t be paying taxes on the transaction?
But my buyout doesn’t include taxes……I am in a state where we pay tax on the monthly payment, not upfront on the entire purchase price (as is the dealer).
I just bought out the lease on my other BMW in December and sold it to an online car company……I had to pay sales tax on the payoff amount I paid (since I had to register the car to get title with just my name on it in order to sell it to the online place).
It’s possible bmwfs gives preferential rates to high volume dealers on buyouts. Unfortunately, it doesn’t help you out much.
even though you pay tax on the monthly, your buyout will include the full sales tax per your buyout. Dealers payoff wont have the tax component.
@mllcb42 that is correct. they also incentivise it to clients sometimes ( usually towards the last 30-60 days on your lease)
On the 640 GT they have 10k off if you buy it out ( this was 2 years ago )
Yeah, I guess there is some confusion there…how can I structure this to advantage myself? If the dealer is giving me $118k for the car no matter what my buyout is…why would he come to me with that as if he was doing me a favor (getting buyout negotiated)?
Should I insist that the extra $12k they are getting off of the buyout be put towards the new car?
Then did I pay sales tax twice when I bought out my lease in December? I am confused…
I went to the DMV and cut them a check for the tax.
EDIT: No, I did not…I checked my account and BMWFS’ payoff quotes for both of my other cars do NOT include sales tax (at least not in states where you pay the tax on the lease’s monthly payment). It has a break down of the figures it used to get the payoff quote…residual, outstanding balance (basically total of lease payments not yet made), and for sales tax is has $0.
Whatever they buy the car for is irrelevant to you.
Dealers from the same brand usually have a different buyout figure than customers. Sounds like they just found an extra $12k to put a deal together for you.
Yeah…if they are putting the $12k towards the new car then yes.
But it’s very relevant.
You mean how much they pay BMW for the car is irrelevant? Wrong…they are paying $12k less than they originally thought they had to when they quoted me $118k…so I guess if they want me to buy their car they will be giving me that $12k savings off their car or giving me $130k for my car. I’m assuming the former…otherwise the salesperson probably should not have said anything to me about this.
Wait wait wait…I bet I know what the dealer is trying to pull.
I forgot I put $12k down for MSD’s on the lease. Let me guess, if a BMW dealer buys out your lease, you probably forfeit those, don’t you?
Kudos to you. I wish one day I will forgot about $12 grand I have stashed somewhere. As far as the tax confusion. You pay monthly tax on the car while leasing it.You are paying the monthly sales tax on your use of the car for that month. When you buy it out you pay sales tax on the total remaining purchase price of the car. You are not paying tax twice.
You’re don’t forfeit MSDs, just ask for the MSDs, back.
When I have gone back to BMW to “trade” a car in which had MSDs, they always account for the MSDs via a lower buyout amount. Im not saying they hide it…but they kinda hide it:-) So, your dealer could be doing something similar. Id just confirm that another $12k is coming back from BMWFS when you sell them the car, regardless of anything else you may buy.
BMW gives you the option to apply them to the buyout (even a dealer buyout) or receive them back via a check. There is a MSD authorization release form you would need for complete. They are shown as a separate line item in the dealer buyout but they probably just assumed you would want them applied.
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