Obviously, a risk of leasing is if you cannot abide by mileage limits…
Best plan for exit on 2023 BMW 330i where my wife will be over mileage by ~19,000 miles. 18 months into 36 month lease.
Job changed 6 months ago and since she has put ~1,600 miles on the care monthly- current mileage 20,700.
1.) Lease turn in- ~$4750 in mileage (obviously only worth it if upside down >$4750 at lease end)
2.) Try to time the market to sell to Driveway or Givemethevin before lease end without buying out vehicle. Currently offers are about $9,000 below buyout. Wait it out and see if it gets closer.
3.) Plan on buying out the vehicle at lease end and sell it privately. Cons are obviously owning a vehicle out of warranty and having to pay taxes (Los angeles ~10%)
4.) Eat the negative equity now and roll it into new lease?
Probably hard to say what is best for now, 18 months into 36 month lease.
BMW used to let you add additional miles to the lease at a discounted rate if you buy them a certain amount of time before lease end. You could wait until it is closer and see what you buyout is vs the milage penilty. Once you are in this deep, it is like a divorse, no good options- but it’s cheaper too keep her.
If she is driving that many miles, the reality is that anything she has will depreciate fast. The penilty may be the lowest cost of exit.
Next car, look for something with a lower cost of over miles fee. If you can build it in up front, they are also cheaper.
You would be paying for the extra mileage somehow no matter whether you leased or bought…larger payment at 15K/yr lease and paying overage…or buying and having a high mileage car which will have lower value.
You could almost think of it as a interest free loan…
Best option is probably just plan to eat the $4750 at lease end, but hope that trade in value is higher than buy out closer to the end of the lease.
With her new job, she’s driving 19-20k miles per year. If you don’t have plans on moving closer and she doesn’t have plans on getting a job closer, leasing might no longer make sense for you. Buying an unlimited mile warranty CPO car (e.g., Lexus or Volvo) probably makes the most financial sense financially in the long term.
Ride it out until the end - pay the over mileage charge. That’s going to be the cheapest way out. You don’t want to have to buy out and own a BMW out of warranty. It’s going to be underwater. It’s not ideal. Nobody likes giving the car back AND giving the bank a few thousand dollars.
Pay the milage overage. You should be able to buy discounted miles on your bmwfs account online as you get closer to lease end… I think its $.2/mile instead of $.25
You can add BMW warranty to a new car before factory warranty expires. If OP buys out car I would consider that an essential add on.
What is your buyout price at least end? If it’s under $30k, it makes it a hard call. Paying 15%-25% of buyout in mileage overage is a tough pill to swallow. Especially since what comes next is most likely going to need to be a purchase due to how much your wife drives.
As an aside, mileage charges tend to be more punitive for cheaper models. You could be driving a X5, with a MSRP close to double that of your car and the per mile overage charge would be the same. For cheaper models buying extra miles up front via higher annual allotment is more important. For more expensive models, with the same overage rate, there is much less difference buying the miles up front versus paying at the end if you go over.
Yeah-- Should’ve said it makes most financial sense for any premium/lux brand car
Regular maintenance is more dealer by dealer in my experience – In Houston, my Volvo is quite a bit cheaper to maintain than my Lexus was (oil/fluid changes, spark plugs, etc). In Dallas, the Volvo is significantly more than Lexus. Brakes/tires are generally similar cost unless you have larger wheels/uncommon size tires on one car versus another or high performance brakes.
One additional point on Volvo, their unlimited mile warranty prices have increased significantly most likely due to their rule change last year of CPO extension has to be bought from dealer selling car. Quoted $6500 the other day for something that was $3500 a year ago with both quotes being from Steingold Volvo (previously cheapest national dealer for Volvo’s warranties).
Wonder how much of that $6500 is markup. My selling dealer offered it to me for around $6k, but came down to $4200 to match Steingold (December 2022). I know that there was a big cost increase in 2023.
In 18 months and 40k miles, warranty paid out $13k so far
Lexus. paid out about $18k between 11/2016 and 12/2022. I sold it privately, and talk with the buyer occasionally… They paid out another $24k in the last 18 months for him. Warranty is good through 11/2024 and it has over 200k miles on it. I originally bought the warranty for $3100 from what I remember.
Ah my post is not clear, both my quotes were from Steingold ($6500 now and $3500 a year ago). The $3500 was actually $4000 but Mike Bernardo had sent me a $500 discount code. Still a big jump and dealers might negotiate but probably not to the extent before.
With the higher cost warranty, Lexus/Toyota and maybe other brands would be more appealing.
Big issue with extended warranty costs has been changing state laws. Hopefully that link around the paywall works.
Dealers in some states are able to charge more for warranty work than they used to be able to do. OEMs used to pay far less than retail (price you see on work invoice) for the warranty work performed. In the states that are changing the laws to make OEMs pay retail rates for dealership warranty work it’s not an incremental cost increase, it’s a massive redistribution of resources from OEM to dealers.
And the OEMs are locked into franchise agreements that force them to give dealerships exclusive rights to perform warranty work. Extended warranties don’t bother me much cause I lease/rarely hold a car for more than three years. However, these legal changes result in cost of all warranties to OEM going up and getting passed onto consumers.
