Hello everybody, first time poster here, I’m considering leasing a 2023/2024 BMW 3 series (regular ICE or PHEV, still debating) or an Audi S4/S5, or taking over a lease for one of these cars but 2020-2022 models, and had a few questions:
As background, my intention is to lease the car and then purchase it at lease end, and then drive the car until the wheels fall off.
1.) Assuming I don’t really care about having the absolute newest features, would it make sense to try to take over a lease that has a short (~12 month) amount of time left on the vehicle? For example something like this 2021 BMW 330 e xDrive Sedan Lease for $580.00 month: LeaseTrader.com
My thought process is that in the case of the car above, the original leasee paid the first 27 months worth of depreciation, and I’d be coming in in the final 9 months and purchasing the car at the RV. I will also be benefiting from the much lower MF for cars leased in 2020/2021, and getting an extended test ride where worst case scenario (to my knowledge) is that I test drive a car for about a year, spend maybe 6-10 grand doing so in lease payments, and then return the vehicle back to the dealer if I don’t like the car.
2.) If it does make sense, can somebody help me understand the rules surrounding this? I know BMWFS doesn’t allow transfers in the final 6 months based off what the wiki says, but do they allow the taker-over of the lease to purchase the vehicle at lease-end?
Thank you and sorry if this question has already been answered, I looked through the wiki and searched the “ask the hackrs” category but couldn’t find anything that related to my specific situation/question.
MF has no importance in your case. It’s just about monthly payments. If you like it go for it. Also there will be a transfer fee that you will need to pay to BMWFS.
Yes, you can buy the lease that you have taken over. It will be good to check if the car has been involved in an accident if you intention is to buy it later on. If you will drive until the wheels fall off it will not matter but you will probably change your mind after a year of driving.
Right I guess the MF doesn’t matter in my case, it’s about the total monthly payment like you mentioned. Thanks for the feedback, I don’t mind paying the $500 fee, and will definitely check if the car was involved in any accidents. One concern I have on that note, is that the wiki says " * Standard free maintenance does not transfer automatically to the new lessee. BMW Ultimate Care paid maintenance can be transferred to the new lessee." , which i’m not sure if that refers to the factory warranty or to some other maintenance package. Do you or anybody else know what the “standard free maintenance” is?
Also know as “Ultimate Care” (diff from “Ultimate Care+”). UC cover standard maintenance for 3 yrs, like oil and fluid changes. Does not cover wear/tear items like brakes and wipers. Most folks don’t need UC+ unless you drive it really hard or have ceramic brakes (M-cars).
Feel free to get their deal information and critique it yourself, you’ll find a lot of what is on SAL had negative equity, marked-up deals, etc. Just because someone already paid some of the depreciation and rent, they may have used more than their share of the utility (eg “you have 31/mi per month remaining for the remaining lease term).
Leases incepted under good terms with a low MF may make more sense to carry to disposition, another may make sense to buy out immediately.
You didn’t say what state you are in, but that would be more important to me: in FL I’m not leasing to buy if I can avoid it, and in TX I am probably not leasing without tax credits.
Thanks I really appreciate you taking the time to respond. All very good points about the potential drawbacks of going through SAL instead of getting my own lease. I’m in Idaho, and will likely have to swap the car over from the original leasees state if I go the SAL route, since most cars on there aren’t in ID. What is unique about FL/TX about leasing to buy, I assume there’s some sales tax at lease-end?
I agree, most leases on SAL are stupid to take over, and the one I listed in the original post is one of the few that is good (and there’s a good reason why it got snagged up so quick).
For that car it’s ~600/month for 9 months, so about 6k, and the RV is ~$30,000- can’t find a similar car with 13k miles for $36,000. I’m leaning more towards just getting my own lease or purchasing the car, since I assume there will be some extra hassle to get the vehicle/lease transferred from out of state to Idaho. Appreciate your perspective.
The thing with expensive or complicated cars is that there’s a lot of maintenance and repairs before you reach any clear point where the proverbial wheels have fallen off.
The car might keep nickle-n-dime’ing you, or there might be major repair where the repaired component should last another 100k miles, or both. But you’ll keep weighing the cost/benefit in your head, long before you get to any point where the next repair costs more than the car’s worth.
Why is this better than just buying a used car that has also taken its depreciation hit? Oftentimes, residuals are higher than market value so taking over a lease and then buying it out means i) you’re incurring extra time and hassle ii) you potentially have to pay tax twice and iii) you might end up buying a car for a price that’s higher than it’s worth.
Why is this better than just buying a used car that has also taken its depreciation hit
From what I’ve seen a used 2021 BMW 330e for example is going for >=$35,000, so if the cost of the monthly payments times the number of months remaining plus the lease-buyout amount is around that $35,000 mark, then financially it’d be a wash. With the leasing option I get a low risk (just the remaining lease balance) long-term test drive of the actual product that i’ll be purchasing. Your three points do make a lot of sense though, I think iii can be mitigated with being patient for a deal, but point 1 especially is what makes me think either leasing a new car directly or purchasing a 1-2 year old used car is the best way to go.
2021 330e’s are wholesaling for $29800. You should use the thread where you can request MMR. Your logic may work on cars with MMR above residuals but that is rarely the case with BMWs.
There is nothing wrong in your thought process I.e having an extended test drive then buy it if you like it . But just like in any complex financial transaction, numbers have to make sense AND you are competing with other potential buyers.
