Lease Buyout Questions

Ask the Hackrs
1

Hi LeaseHackr!

I am planning to sell my Mercedes Benz leased car to another person. He is going to wire transfer the pay-off to the MBFS and pay me in cash for the remaining balance when they come pick up the car. Then I will mail them the title once I receive the title from MBFS.

I have few questions regarding this.

  • Does the pay-off include the sales tax? Do I have to pay the sales tax if I sell the car to someone else in another state within 10 days? ( I’m in California )
  • Is there anything that I should pay attention?

Thank you guys! First time posting on this forum :slight_smile:

3

In CA you have 10 days to sell the car (your sale will be arranged upon payoff), so tax is not due. Just confirm with MBFS that their payoff doesn’t include tax. This issue was discussed here along with the difficulty with US Bank:

4

@KD6-3.7 Thank you for your inputs!

Just called MBFS, and they seem do not include sales tax into the payoff.

But I have another question though. The buyer would like to take the car away once he made the payment to MBFS and MBFS confirmed it. Is it safe to do so? Can I remove my auto insurance off from this car once the buyer take the car? I will just mail the title to the buyer once I got it from MBFS.

5

Make sure you’re paid your share too. Sign a simple bill of sale (can be found online), protects the both of you. Yeah then you can take your insurance off.

6

Line it up with the lender. FedEx a cashier’s check with buyer witnessing to lender and release car and insurance. It wouldn’t hurt to wait a few days on the insurance.

7

Hello, I am new to this.

I apoligize if I dont understand how to post properly. I need help:

I have a BWM X5 M Sport with Dynamic Driving. I need to turn in this car or trade it in. I asked BMW to trade it in early.

Owe 5 months - 905 per month
Miles over 18250
Need tires.
RV is 41,000
Pay off today is 49K
Lease Up Feb 1.
Every day I drive more miles and need tires like now.

BMW will not trade it in (today they told me no) Jupiter FL.

Maserati will take it - Pay 3 months payment at 2717.00
I pay the last three months 2717.00 and pay the miles 4,500 (ish) plus the 500 turn in fee with BMW.

Maserati will lease me : See Email from Sales Guy -

"Sarah, we will pay (3) of your lease payments$2721. If you take care of
your lease turn-in (3) payments $2721, over miles $3060 and $500 lease
return you will have $6281 total out of pocket and finished with that
Lease.

We have $78K Levante Black/Beige Interior, Panorama Roof, Blind
Spot Detection, Parking Sensors Front/Rear, Apple Car Play, Much
More…

39 month lease ,10,000 miles annual, ZERO MONEY DOWN, $1075 month.

I am here until 7pm tonight. You might want to come by and review
Our Levante and break down deal."

So how messed up am I? I love my X5 its fully loaded as MSRP 76,000 (ish) paid $64,000 - but I went over the miles.

My credit is Tier one and I know to check the money factor etc but I just cant seem to unravel this BMW where I am not getting stuck eating almost 10K.

Thanks so much everyone! I am great immigration lawyer! But terrible at numbers! If you need any free advice hit me up!

Look forward to the comments. I have every document and my old contract too ifyou really want me to paste it in.

Cheers,

Sarah

8

What kind of car do you really want next?

Does that payoff include the excess miles and everything? Has the car been inspected? Have you looked around to see what anyone will pay for it?

9

What exactly is your goal and how are you going to avoid being over miles again?

1 Like
10

I drove over the mile due a familly issue for 6 months last year. Wont happend again in fact I never road trip. It was highway miles. 19,000 mile in one year 2016 -to 2017. SC to FL once a month. I want to get into a new lux SUV and I am fine with my high car payment. I write if off and I need the deductions. I entertain clients and need the cool ride. part of the deal…

11

I wanted my my car again excat dup. But the BMW dealer tried to put me in certfied pre owned 2017 56K but would not do anything on the miles or gap in Acual cash value of 32k according to him. and the actual payoff of 46K. and another 4500 in miles…

So I left. He was nice about it but said he needs to buy my car from BMW for 28 to make sure he can sell it for 35ish…blah and that he has to commit to the actual payoff of 49K before BMW will even agree to sell him the car at discount…I think he was waiting for me to offer him money down. I did not.

I am going tomorrow to pay the max then carmax and see what they will offer.

12

by the way the cerfifed pre owned was really nice only 4000 miles and 56K if I financed it not with BWM at 3.3% from my bank I would have been very happy. But he would not budge on buying my car and getting me out of the last 5 payments or so and the miles.

13

Are you sure MBFS will not send the title to the NEW owner after he pays them? Then nothing prevents him from registering the car.

14

The value of your current X5 is below the residual, probably even if you weren’t over the miles. The cheapest way of the X5 is your remaining payments, mileage penalty, disposition fee, and excess wear and tear (tires at least) totaling 5 payments ($4,525) + miles ($4,500) + tires ($2,000?), disposition fee ($500) = $11-12K?

Your payoff right now should be $41,000 RV + 5 payments ($4,500) + disposition fee ($500) = $46K. If ACV right now is $28K, you’re $18K upside down by trading it in, which is much worse than taking your lumps on turning it in now for about $11-12K. Think of it this way- you didn’t pay down the balance enough with your lease and that’s BMW’s problem, not yours. If that lease had an accurate residual, your payments would have been a lot higher. Driving it the extra 18K miles was your personal change of circumstances- nobody owes you for that. As you said, you’re okay with high payments and write it off. So write this off, right?

The problem is that since the best exit strategy is giving it back to BMW, you’re running up another expense- excess miles at 25 cents/mile. That’s salt in the wound. You wore out the tires and put on the extra miles- that’s $6,000-6,500 of your use. Without that issue, you’d be writing a check for the remaining payments + disposition fee- approximately $5,000. The high payoff was a “gift” from BMW because you didn’t pay all the depreciation on the car. If you had normal miles on it, you could have made 5 more payments and driven it until Feb 1st, 2019 and then gotten another car with a bill of $500 plus excess wear and tear. Both BMW and you are hurting on this deal, but a lot of it on your end was due to the extra use.

On a high end SUV, you could probably roll over a lot of the $11-12K of negative equity in your BMW. Roll as much as you can into the next one as long as GAP insurance is included.

Maybe not as nice a car as you’re used to, but consider leasing a Volvo XC90 for 24 months, rolling in as much negative equity as possible. Probably the 9 month pull ahead will still be there (Volvo is leaning towards making this a fixture), so pull ahead after 15 months and those last 9 sky high payments will be forgiven. Volvo will basically eat 9/24s of your negative equity if you lease another Volvo after 15 months, assuming the 9 month pull ahead is running. If you can, lease a 2018 with (probably) a $2K incentive on it and either $750 A-Plan money or a greater than $750 discount from the dealer. A less painful payment and more negative equity could be had with an S90…

Just a thought…

2 Likes
15

Separate the two transactions.

A. Getting out of your lease: lease turn-in vs having someone buy it out. (Get the tires ASAP, like first thing tomorrow. It’s unsafe and it’s financially better for you to shop around vs being charged retail by BMWFS at lease-end).

B. Your new ride. Look at Stelvio, RR Velar or even X3. Either way, look at this deal independently to make sure it’s a good deal before you introduce the X5 situation.

1 Like
16

You are a genious! I will follow this asap.

Thanks so much!

17

I talked to MBFS and they said they could not send title to any other person other than me (as I am the one on the lease.)

The buyer made the pay-off via wire transfer. Is it safe / reliable? Can the buyer reverse the wire transfer money once he picked up the car? As he is asking to pick up the car during the weekend, and MBFS have not posted the payment to the account yet.

18

You’re okay. The buyer can’t reverse a wire transfer- they’re bulletproof. You need to call MBFS ASAP to confirm that they received the wire. Posting to your account could take a few days. Without it all you have is the buyer’s word. Once they confirm, you can release the car. If you’re owed some money, I’d ask for cash for the balance if it’s not too much. A cashier’s check could be fraudulent or possibly canceled.

It’s not uncommon for banks to send you the title or release of lien. I’d go to a local dealer and get about 3 Form 262s (in case you make a mistake) and be very careful when you fill them out, as CA DMV does not allow corrections on that form. Give the original to the buyer and make a copy for yourself and report the sale in CA DMV’s website.

19

Some fraudulent wire transfers made from accounts, which do not have the funds on them, can be called off by the bank.

20

After the wire is received by the recipient bank? Sounds truly far fetched. I’ve always been told by banks that a wire transfer is golden. It couldn’t hurt to ask MBFS when they’re satisfied that the funds are good. You may not be able to confirm anything on a Saturday.

On the Form 262- make sure you have the original beige form, not a PDF or a copy.