Should I buy or turn in my BMW lease with only 11,000 miles on it?

I’m having a hard time deciding on whether to buy my leased 2017 540i or just make the last payment (edit: only 1 payment left) and turn it in at the end of the lease.

My monthly payment has been $600/mo ($62,500 MSRP). My daily commute went from 35 miles to 5 miles about 3 months into the lease, so I’ve only put 11,000 miles out of the allowed 36,000.

The RV according to the BMWFS website is ~$38200, but the BMWFS website also shows a “Total Lease Payoff” of $31,936.85 and says my $4200 MSDs “can be applied towards Total Lease Payoff with Lessee’s signed written authorization”. The KBB trade-in value is ~$35500 and the private party value is ~$38500. Carvana’s offer is $35,228.

Can someone help me understand why the RV is higher than the “Total Lease Payoff” amount? If I’m reading it correctly, it’s $32000 - my $4200 of MSDs = $27,800 to buy it at the end of the lease? Does BMWFS also have incentives for buying at lease end?

I was already considering buying the car since it’s still more or less new, but the consensus here is to not buy at the end of a lease.

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No - the consensus here is to not throw money away. The only thing that matters is what the BMW is actually worth today, and what you can buy a comparable one for, versus your buyout price.

Edit: oh you ninja added it, good job. What’s carvana/vroom offer for it?

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I believe your payoff should be the the sum of your residual, amount you still owe in lease payments, and interest/tax – which is why your total lease payoff is higher than the RV

Carvana shows $35,228 and Vroom will take some time as I just submitted it.

Actually the “Total Lease Payoff” amount is lower than the RV shown on the BMWFS site.

What is the RV according to the contract you signed?

In the actual contract from when I started the lease? Wouldn’t that be the same as what’s shown on the BMWFS website?

edit: The RV shown on the paper contract is the same as what’s shown on the BMWFS website.

At the end of the day, you have to figure out what’s the best financial move for you. A few questions for you:

  1. If you buy the car, how long do you plan to keep it for? More than 3 years?
  2. If you just turn it in, would you rather buy a CPO or do another lease?

If I buy it, I plan on keeping it for at least 3 years. If I turn it in, I’ll probably try to find a new car lease around the same price.

Have a dealer or Carvana/Vroom call bmwfs and find out their payoff amount. You might have positive equity.

  1. Make sure the $31k buyout isn’t already with the MSDs applied.
  2. Purchase decision is yours, but it will continue depreciating relatively steeply. I’d guesstimate $20k’ish value when it is 6 yrs old with 22k miles. I suppose, however, if numbers hold true at about $333/mo, it is less than your current $600/mo, but it is a used car and will be out of warranty soon.
  3. If equity can be had now, consider taking it and getting a very low mileage lease for next to nothing by using that equity to make the payments.
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MSDs are not included in the payoff amount, but it looks like a “Customer Purchase Promotion” of $6700 is being applied.

$27,700 (but really $31,900) seems like a good price… Although I could buy the car even without the MSDs applied and sell it to Carvana for a ~$3300 profit before taxes. Is that also what a dealer would potentially apply towards a new lease?

It’s $31,936 …not 27,736.

The $4,200 is your own cold hard cash. And it can be easily returned to you.

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The $31,936 includes the last two payments, so really $30,700?

Seems decent but if you plan on keeping it for multiple years, the current value is a little irrelevant as it will likely drop more once it’s out of warranty. Why not just take the $4-$5k and get a new 540? You would then have an effective payment around $350-$400 for a new one.

The out of warranty costs of those BMW are very high. If you keep it I would suggest to get extended 5 yr warranty with it or whatever they offer. The car still needs to be under factory warranty in order to buy the extended warranty so keep that in mind. If I’m not mistaken if you only keep it 3 extra years and then sell it you can get a prorated amount refunded back to you from the unused warranty.

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Roll your good deal on the 5 series into a new lease. Don’t buy. They don’t hold value.

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Now that I understand what positive equity is, I think it’ll be better to put it towards a new lease if I can get 10-12% off the new one.

How do I know how much positive equity I have? Would that would be considered a down payment on the new lease?

Is loyalty included in this offer? Cos if you can get an additional $2k off, it might not be a bad deal to purchase it. However, as some have said, you might be better off leasing a new one.

True but since the car is 3 years old, hasn’t it already taken its greatest depreciating hit?

Loyalty on a buy out? I don’t think that is a thing. Of course you have loyalty, you are leasing the car.

There is another depreciation cliff for German cars after they are out of warranty… no one wants to deal with the high maintenance costs.