I have a lease expiring on August 23rd, I have made my last payment on 1/23 for the month through February 23. Which means I have 6 more months of full payment left totaling $2,952.
However, this is what’s shown in my payoff offer from BMW Financial:
I’m curious as to the “Outstanding Balance” line, which shows $2,693. I would have expected this amount to be $2,952 - which is the 6 full months of lease payment I have left on the vehicle. However, there is a difference of $259. Is the payoff offer understated here (by the difference of $259) or are these not comparable metrics?
I also read that “Unearned Amount” of $370 is the interest I would be saving by ending the lease early. So is the correct way to look at the true total cost (P&I) left to be $2,693 + $370 = $3,064? This would be closer to my calc of $2,952 up top. $100 diff prob due to some fees/taxes?
Is there any tangible advantage / difference in buying out my lease now vs. at lease end? Currently it seems like a no brainer to buy out the car now, and save the extra $630 ($370 + $259), sell it (KBB shows $33k resale value), and lease a new car?
I’m currently speaking with brokers about the Wrangler 4XE and intended to wait until my lease was closer to up, but wouldn’t mind getting the new car sooner!
p.s. yes I’m the previously the ill-informed / helpless guy who was successfully talked out of a used GMC/Mitsubishi by LH and got the Frontier deal instead! 
The ~$300 difference between ~2900 vs. ~2600 remaining balance is probably sales tax, since the remaining payments you are calculating include the tax in the monthly while the payoff from BMW is pre-tax (you will need to pay tax on top of that amount when you title car in your name - though CA does have the 10 day exception)
The unearned credit they are deducting is the interest portion of your remaining payments. So basically your remaining payments consist of ~2300 depreciation + 370 interest + roughly 300 tax.
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Got it - thanks! So no real difference it seems. Might as well get the Wrangler early!
In a similar situation. If you anticipate the value of the car being about the same 6 months later, why not just keep it till lease end since you have to pay the outstanding balance anyways? By getting out now, you gain $630 but forfeit $2693, right?
I think you’re right. But this concept is really confusing me for some reason.
So their payoff offer is saying the car is worth $27,025 both today (plus the remaining lease payments I owe) AND in August. So I think the remaining lease payments is accounting for the additional depreciation to be incurred for 6 months. So I’m actually not that better off.
But it also feels like the price I should pay now ($27k + $2.7k in remaining balance), should be off a higher residual number than $27k? As in - why should a 6 month older car in August be worth the same today?
I’m probably confusing myself for no reason…
It isn’t worth the same. That’s why your buyout now is $30k and in 6 months it’ll be $27k
So whether you buyout now or in six months you’re paying about $30k.
Let’s say the car’s value, due to the shortages, remains $33k 6 months later. If you believe that, why not keep the car for the remaining 6 months?
Assuming you can wait that long to get your next car of course.
