I guess that still doesn’t stop someone from buying the vehicle out of lease, to then sell it off. If they want to play games, there are ways around for those getting the lucrative offers.
Correct. You can still do everything that your contract allowed from the beginning. Nothing there has changed.
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But then you sacrifice up to 10% of the car value. Which is the whole point of making threads, they want that extra 10% in their equity.
If anyone at GM cares - I will not buy another subvented GM lease unless you change these business practices.
You’re going to be pretty limited in what you buy then. Most captives have now locked down 3rd party sales.
I get why everyone is upset about GM/NMAC/Name your captive here, because they’re losing out on money in their pockets. What everyone is missing though is YOU’RE JUST RENTING SOMEONE ELSE’S car. You’re not entitled to sell it to someone if the owner doesn’t allow it. And none of you leasing are owners.
Could it have been handled better…perhaps. That said, it’s still not your car.
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Based on the equal distribution of people switching brands because they feel they are entitled to rental car proceeds, it should all even out.
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Ultimately, it isn’t their equity.
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It could be if they live in a state with no sales tax.
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Just sold my LT1 back to the dealer for $41,000. Will monitor their asking price.
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So, if I write a 63 grand check for my '20 BMW m550i, and they’re going for $69,000-$71,000 now, is that allowed?
Some talk in this topic of BMW pulling the plug, but what’s stopping them from me writing the buyout check and selling on auto trader? It seems so draconian companies are doing this.
Hardly draconian. More like protecting a business interest. Yes, you can buy out the lease and resell, but you will pay taxes, except under very limited circumstances, in CA.
Yes, you can buy out your lease and then sell it to anyone you want.
Bmw still sells to 3rd party banks though, so no reason to pay sales tax to buy it out if you don’t need to.
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The bigger surprise to me is that banks ever allowed you to sell their property and pocket the equity.
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Some mid-level managers are going to eventually get fired.
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Absolutely: for not stopping 3rd party sales in 2020, when people kept extending their leases.
When the lease return rate falls below a certain % (whatever that is by the captive standards), any captive should suspend all 3rd party sales until it rebounds.
It was the right move, too late, and in some cases poorly communicated.
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Why? It was rarely ever in the favor of the customer until the last 12 months. Only now it’s become an issue due to low inventory and competition where Dealers are getting beat because they can’t stay competitive
It’s someone’s job in accounting to detect and take advantage of these trends. Otherwise, that person is not needed.
Because no bank should be in business selling their assets below fair market value.
Banks are regulated for a reason. No country wants a S&L crisis or bailouts.
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The banks aren’t the one’s profiting here. They have done this to protect their associated dealerships. The dealers are profiting from the equity.
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Captives and dealers have a symbiotic relationship; it’s hard for one to thrive without the other. More specifically it’s not uncommon for franchise agreements to have a clause allowing dealers to buy cars off lease at RV or wholesale value, whichever is lower.
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