[whtbst]

I absolutely love my 2019 X5 xDrive 40i and will most likely keep it once the lease is up this December. My current buyout is $44K and I’ve received multiple offers for $56K this week. I have 18K miles on the vehicle and the original MSRP was $66K (cap cost was $58K).

My question is: does it make sense to buy out the lease now, or at lease end in December where the buyout will be $38K? Asking mainly because I’m concerned about potentially losing the current lease equity (of $12K) if I somehow wound up in a major accident this year totaling the vehicle. What is the best way to protect my lease equity?

[rpm50i]

the only way to protect that equity is to buy the lease out now and sell it right away. else, you are not really protecting anything. used car values are likely to hit downward the moment fed bumps their rate. Of course, there is no accurate prediction that can be made, but i recently sold my car after tracking prices very closely, and I can confirm that values are no longer trending up.

[DSTJ99]

Originally Posted by rpm50i

the only way to protect that equity is to buy the lease out now and sell it right away. else, you are not really protecting anything. used car values are likely to hit downward the moment fed bumps their rate. Of course, there is no accurate prediction that can be made, but i recently sold my car after tracking prices very closely, and I can confirm that values are no longer trending up.

I recently bought out our X7 with 11 months left for a few reasons. We custom ordered the car and it's exactly the way we want it, only have 17k miles after 2 years, protect roughly $20k equity in it and take advantage of cheap loans ( got 1.59% through credit union). There was recently a post in the x7 forum where guy totaled his car near lease end and lost almost $30k that insurance paid out to BMW.

The decision depends on your individual circumstances and I expect the equity will erode over next two years once the market stabilizes. But we did it to drive the car longer primarily and the lease equity helped make that decision. Also, made it knowing I would need tires and M Sport brakes within the next year or so but still made sense.

[FCX5]

Originally Posted by DSTJ99

I recently bought out our X7 with 11 months left for a few reasons. We custom ordered the car and it's exactly the way we want it, only have 17k miles after 2 years, protect roughly $20k equity in it and take advantage of cheap loans ( got 1.59% through credit union). There was recently a post in the x7 forum where guy totaled his car near lease end and lost almost $30k that insurance paid out to BMW.

The decision depends on your individual circumstances and I expect the equity will erode over next two years once the market stabilizes. But we did it to drive the car longer primarily and the lease equity helped make that decision. Also, made it knowing I would need tires and M Sport brakes within the next year or so but still made sense.

This is precisely my thinking as well. Once you decide you're going to keep a car, buying out a lease will be cheaper the sooner you do it. Also, you have to buy it to cash in any equity.

Also, as someone pointed out, used car prices might be peaking since even around here, I was checking on CarGurus, and prices are slightly lower all around and more models available, etc. An increase in rates will be significant on used cars

[The Libertine]

Originally Posted by rpm50i

the only way to protect that equity is to buy the lease out now and sell it right away. else, you are not really protecting anything. used car values are likely to hit downward the moment fed bumps their rate. Of course, there is no accurate prediction that can be made, but i recently sold my car after tracking prices very closely, and I can confirm that values are no longer trending up.

I agree.

[TurtleBoy]

You need to run the numbers and see what makes sense for you. I, and many others on here, have bought out our lease early over the last year or so because we wanted to keep it and it was less expensive to do so. Unless the cost of the funds is well over the MF then purchasing it now should be less expensive.

Forget about protecting your equity, there is no strategy for doing that if you are going to keep the car. Whether you are still leasing or have purchased it, if the used car values go down you lose it. The only way to access that equity is buy it out and sell it.

[parkstr8]

I just bought my 20 X5 only 18 months into a 36-month lease.

[deadlion]

I just bought out my 2019 lease, 11k miles, with 3 weeks remaining. I would have done so 6-8 months ago but was hoping BMW FS would throw a buyout incentive my way (not likely in this market).

Or, if I'd found a '22 in stock I'd consider extracting the ~$15K equity with a quick flip of the '19 but I've not been successful. I'm happy to hold on to if for the next 4-5 years (and perhaps with a new square set of 742M wheels).

[r20]

Originally Posted by whtbst

What is the best way to protect my lease equity?

leasing.. you paid a premium for an option. You never exercise an option early unless you are selling the option.

in this case, that would mean buying and selling immediately.

You don't know whats about to happen to car values in a few months.

who cares if you total it, and BMW gets 20k more. Just like you don't care if BMW gets your lease, and the used car market is 30% below where they can sell it.