That’s part of the problem. Your answer isn’t based on practical reality or what actually happens. Sometimes when people see mathematical equations, they dismiss them as not being practical… HUGE MISTAKE. One way to determine your lease payoff is to create a lease amortization schedule like the one above or, you can use the following equations to determine the adjusted lease balance…
I’ve always used them to determine my lease buyouts and my calculations have always been spot on.
It’s not a question of winning or losing. It’s a matter of accuracy and correctness that mirrors reality.
This doesn’t sound right and am willing to bet that the BMW contract states something different than what you’re describing. I believe you may be misinterpreting the language. You’re not accounting for the time-value of money (e.g., present value of unearned interest charges) There are many ways to compute the lease balance. One way to do it is to calculate the present value of the remaining base payments and add that to the present value of the residual. Another way to do it is to add the remaining depreciation payments to the residual. I’ve computed BMW buyouts every which way to midnight and, with all due respect, what you’ve described doesn’t seem accurate to me. If you post an BMW lease contract with the description of how the adjusted lease balance is calculated, I’ll be happy to go through it with you step by step. The language may be different among fund providers, but they are all equivalent and result in the same adjusted lease balance based on my experience.