I’d be willing to bet money that the dealer was just making stuff up here (or at least didn’t actually dive into the details). Or more than likely, they didn’t understand what the unearned amount on the buyout breakdown was.
This should all be easily resolved by looking at an actual lease contract. I’ve seen lots of dealers make these claims and then have the contract clearly contradict them.
$7500 tax credit available on leases only. I don’t want to buy out the lease immediately because I will be double taxed ($1100 for upfront lease tax and an additional $2500 in tax to buy out the lease)
I did buy my other 4 cars outright.
Dealer acknowledged he didn’t get into the details. But the customer got into the details with BMW and was fighting them on the payoff. In the end, the customer lost and the payoff used by the dealer was the residual.
I just wasted 15 minutes politely arguing with a BMWFS who is clueless. He is insisting that the dealer sets the residual, not BMWFS. And that the dealer owns the leased vehicle, not BMWFS. I can’t even get to my question about the pre-pay program because he is fundamentally clueless.
Got a separate rep and I now *think" I have the right answer. The payoff of the prepaid lease that is terminated early is the residual value. However, BMW will separately send the lessee a refund of any rent charges that were paid for but not used.
So now I’m back to the original scenario where the only downside to the prepay lease is the gap risk.
Which bmw model is this, an i4?
Sounds like a terrible candidate for your scenario for two reasons
The lease programs are pretty bad.
When you go to sell mid-lease, you’re exposed to the worst part of the depreciation curve and thus very likely to have negative equity when trying to sell it.
There is literally a bmwfs buyout breakdown posted earlier in the thread that shows how it’s handled.
That post showed the online account view listed prepaid interest as “unearned amount” but it wasn’t a certainty that BMWFS would refund that amount. You yourself stated that BMW wouldn’t refund anything and that they would lower the payoff. Now we have the answer from BMWFS.
Exactly… it lists it as part of the buyout value, not as a separate refund.
They charge the residual value, as listed, and credit the unearned rent against it.
It is an i4 and the lease is ok. $492 if taxes, fees paid upfront. $580 if rolled in. However, the cap cost after discount and rebates is $43k ($45k including fees) and the dealer would buy the car back for $49-50k. So I will have equity from day one, it will be easy to exit the lease if I find something better, and I expect my actual cost to be less than $400/month if I keep it less than 12 months. Not great but good enough for now.
You may be right but that is not what BMWFS just told me after a very detailed discussion.
On one hand, you have written documentation from bmwfs that is consistent with every other lease. On the other, you have a rep youre assuming knows what theyre talking about after just talking to a rep that didnt even know they owned the vehicle.
Ultimately though, does it matter? Both situations get you to the same finish line.
Just guessing here. The distinction may be whether the customer is buying it out directly from BMWFS or whether they are trading or selling the car to a dealer. In the former, BMWFS may deduct unearned interest from the residual. In the latter, they may use the residual as the payoff and separately send a check for unearned interest to the lessee. If this is true, then everyone is correct. 
Agreed.
I’m not telling you what to do, but if you go ahead you need to know that this means nothing.
Short term the auto market is volatile and EVs are triple or more so. Ask all the Tesla folks who went from being very green to being very red in a matter of months.
It was not… back then before BMW changed their policy I recall it was more advantageous to do 7msds.
I’m comfortable with the risk. I’ve bought/leased close to 100 cars (maybe more) including 9 in the last year alone. But if you have suggestions on something better than the i4, I’m all ears. I thought about the EQS but I’m not crazy about the car and I don’t want to be stuck for 24 months if I didn’t like it.
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