Before I understood more about leasing cars, I financed to own ($0 down on the transacction) a CPO 2011 328i sedan (base package with only the cold weather package and premium package) on 12/31/14 from the used car lot at a BMW dealership in Dallas. Now I am upside down, owing $16,683.87 and I am unsure of what options would be best to consider.
The car has ~47k on the odometer right now (from 25k when I acquired). Previous drivers of the vehicle actually leased it. I thought I was the bright one by buying the car after some depreciation was paid off. Now I am the one upside down with the continuous monthly pay feeling larger than what I need compared to a lease. I am comfortable with a monthly payment, I just dont like the uncertainty of ‘owning’ a used car that will be less predictable for maintenance and expense.
So I am wondering what angle I may be missing for the best course of action (keep in mind I will most likely be moving from Texas to the Bay Area in March). I would look to lease in California since Texas leasing involves paying tax on the total sales price, not depreciation.
Have carmax evaluate car to buy off me (right now there are some damages from vandalism that insurance will be repairing in January - would this make a difference if I brought the car before or after the repairs? - key marks)
Roll the negative equity (could be anywhere from $2-7 -ish thousand into a new lease in CA
Sell the car on the private market (most hassle and time commitment) then walk into a lease deal
ride out the monthly payments until I am even on car value and loan amount (I think this gap will keep widening with inevitable repairs that will have to occur and eat into total cost of car ownership)
wondering if there are any other options I have missed??
Do you have any ideas what it might be worth? probably around 10k? The obvious answer (others might have other opinions!) if you are determined to get out would be sell privately but depending on value you might be able to work something out on a trade, but youll likely roll in a lot, which would equate to 200/month added to the payment. If you can get a killer bmw exec demo lease it might not be terrible but, again, id only consider it if you just have to get out of the car.
@mergulator
since you bought a CPO, you should have extended warranty to cover you until 100k i believe ? If not i would recommend buying extended warranty because once you hit 50k miles.
Don’t take it to carmax until it’s been fixed, no reason to get a smaller buyout offer because of vandalism damage if you are getting it fixed anyway.
If you want a new 328 BMW lease in CA (which can be had in the mid $300s) and tag on $200 for neg equity which would put it in the $500-$550 range then by all means get out and save yourself the headache.
if that’s too much you could contact Lobrant who works for a large auto group that sells all kinds of brands incl mini. You could probably get into a nicely equipped Mini for around $200 and roll the $200 in and be at a $400 payment and wash your hands from the old car.
It really all depends on your budget, there are def ways out of your car if you want to.
youre right that the CPO warranty covers the car until 100k miles. Although, not to sound ignorant on my part, I do not know for sure when the time limit on that runs out. To best I can tell is that it is for two years after the manufacturers warranty expires. In my case, that means 12/31/16 as I bought the car on 12/31/14 and the manufacturers warranty expired that day. So even though I am less than half way through the mileage coverage, I will not benefit from the warranty any longer.
If anyone can weigh in here that would be great. I really dont want to consider adding an additional warranty to the car, although at this point it may be in my best interest. Although to to V’s point below - I may try to sell it while still leaving in TX, then get new wheels on a lease out in CA (hopefully by using Loberants lists)
Take the car in about 2 weeks before the extended warranty expires. (Like now). Have them make sure all the maintenance that is due or very close to being due has been done. There are lists of common items to have them check…that list can be found on the forums. This way if you keep it you are minimizing your cost, if you sell it then you are maximizing the benefits for the buyer and hence improving your ability to sell.
A 328i doesn’t have that many issues that can go wrong. Mechanically it’s a pretty solid car as long as you aren’t having electrical issues.
If you are determined to sell. Try your hand at selling it via private party sale. You’all get more for it.
Really evaluate why you need to get out of this. Yes, you may be upside down on your loan. However, will rolling negative equity be better 3 years from now vs having a paid of car?
In the end, this is a lease forum. Just make sure that leasing is in your best interest (especially if finances are the reason you’re worried about being upside down)
If you want to keep it, a good option is to refi through PenFed or another CU, and get the Route 66 warranty through them (search the name on bimmerfest.com)
monthly payment on the purchase is $470.52. I feel like in CA a payment of half of that would be possible with less to worry about.
I think I am more upside down than I should be since sedans were worth more when gas prices were higher. With gas prices lower now, SUV’s and such are more desirable and have driven sedan/car prices lower. There was a wall street journal article about it.
Most of the low BMW lease payments mentioned here involve the payment of multiple MSD. Essentially, you need a few thousand to put down in order to lower the interest rate. You get the money back at the end of the lease but you still need to come up with it when you sign the deal.
No way you get a low lease payment when you roll negative equity into the lease.
If you have $200/mo of negative equity then it’s extremely hard to get another BMW at $250 or less with tax and without MSDs…that combo will basically be equivalent to your current payment. Also at the end of the lease you will have no equity.
If you have the money for the MSDs then you might as well payoff the negative equity so you start your lease at par.
You are comparing apples to oranges. I don’t know the duration or balance of your loan, but regardless at the end of it you will own a car. Whether it’s worth $2,500 or 5k or $7,500. That is equity. At the end of a lease (with a couple exceptions) you will have no equity. And it will be a perpetual cycle until you decide to own something. So do not compare a monthly payment on a purchase loan to a monthly payment on a lease.
So run the numbers on refi’ing your loan. If you have X months left, and you refi for 2X months (hopefully at a slightly lower APR), you are effectively halving your monthly payment. In terms of “stuff to worry about” there are solutions to that as well.
If you like the car just extend the warrant from BMW or a third party. You buy for 1 or two years just so that you get more even on your loan. No reason the waste money and eat the negative equity.
