There’s nowhere near 21k equity. What a car retails for and what he could have got from selling it are two very different things.
Ok but it doesn’t change the logic. using his numbers the equity is about 5K lower, so he bought the car with an extra 16K down. Im guessing at this point it doesn’t really cost 57K but just keeping it simple.
I see what you’re saying… it’s as though he bought the car new in 2019 and his “down payment” was his lease payments. Kind of makes sense.
But I think the point @FFox715 is trying to make is that if he was on the open market at the end of his lease, he would have had to pay much more. To state the obvious, the residuals that were set back in 2019 were set quite a bit low given what happened in the market.
He’s also making the point that the buyout process was simplified with less “gotchas” this time around. It sounds like the sales guy who helped him buy out the lease had better ethics this time.
I learned that Altra Credit Union gives rock bottom rates if you refi a loan with them instead of originate the loan. So I use BMW for the initial financing and then refinanced it immediately for a 1.9% rate on the lease buyout. Not sure why, but this little bank in the Midwest always has the best rates for autos and motos.
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I’m saying that it’s his equity and he has the option to cash out the lease and do whatever he wants with the cash. By choosing to buy out the lease he’s effectively making a down payment with the equity and keeping it in the car.
I would love to sell my leased 2021 X5 back to BMW. New circumstances in my life & can’t trade to because BMWFS won’t accept 3rd party payoffs. Get insane offers from non-BMW dealers but obviously can’t move on them.
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But he’s also keeping some “optionality” - what he can’t do is turn in the lease, then he really loses the equity. So he keeps it, pays some tax sure, takes on risk of an accident, sure, but he can still sell it at the time of his choosing.
Unfortunately he bought the car at peak pricing and took depreciation risk. I was offered a 2021 m40 for 51K last month so I’m guessing a good chunk of the equity is gone.
Why don’t you just sell it to an authorized BMW Center? That way you’re not having to buy it and pay sales tax before selling it.
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Trying. Get a lot of calls from BMW dealers with insinuations of great offers & they always back off. Been a fascinating year for cars for sure.
Dave Dealer- Because I need a car. I want an X3 M40i and will not be upcharged ~Due to the times.
Same - for all our cars. Lot’s of voicemails and mail saying they need our car and will pay! But then it’s a standard trade in value.