[J BONE]

Wondering if anyone has re-leased their car? Curious as to how much lower the payments were. I spoke with BMW last week and they couldn't give me any information. Lease is up in Feb and have been thinking about leasing it for another year. Thanks!!

[jopa489]

Your payments would be significantly higher, not lower. It would be like leasing a used car, which is not cost-effective at all. The value of the car drops significantly beyond the typical 2-3 year lease. BMW will let you extend it month-to-month if you have another car on order, but that's about all they will do for you. If you want to keep it beyond the lease, you'll have to buy it. Then you can sell it when you actually want to get rid of it.

[galahad05]

That's what I did. Cash on the barrelhead to buy out my car.

But I've always wondered: just why is it more expensive to lease a used car (in terms of payments)? I always thought it would be cheaper, since the car doesn't depreciate as much.....thus the residual should be much higher.

[texas2009]

because, you're missing the win-win point of the lease. They lease you a car at a decent price, knowing they're going to get it back in pristine condition. You got the car you weanted for the time you agreeded on. They get a car with likely no more than 30k miles to sell as a CPO at top dollar. What you would have paid in three years to drive the car would have likely been higher than what you paid, and what they will make off those three years plus what they'll sell it for CPO'd is greater than just selling it new. Everyone wins as long as you understand you're only renting it.

[persian54]

you can extend your payments, sometimes at a discount or the same rate

I haven't done it with a BMW but we used to extend our Mbenz leases by a few months (until we could fine a car we wanted or other reasons)
They decreased our monthly payment.

[John 070]

That makes no sense. That's like going to the Hertz counter and saying, no, don't give me that car with 155 miles, I want the one that has 45,000. Oh, and make sure you charge me the same, no, make it more.

[saeyedoc]

They don't want a car back with 60k+ miles on it, can't CPO it, much more difficult to sell.

[dtc100]

Originally Posted by persian54

you can extend your payments, sometimes at a discount or the same rate

I haven't done it with a BMW but we used to extend our Mbenz leases by a few months (until we could fine a car we wanted or other reasons)
They decreased our monthly payment.

Can you give a little more details? How much less in payment and under what conditions? Thanks!

[J BONE]

That is interesting because my buddy leased a 911 for three years. He liked it enough to lease again and for another year. First 3 years his payments were around $1600, not sure the fourth year, but his fifth year he was paying $600/month. My car will have 48,500 miles (maybe a few more) over the 39 months I leased it.

When I spoke with BMW last week, they didn't know, however, they did say something along the lines that jopa said: "Well, we have seen payments actually increase."

Guess that is not something I wanted to hear. Def not going to pay more $ for a car with almost 50,000 miles and out of warranty! Def not with the HPFP issues. Hell, my brakes have not even been replaced yet and I have 45,000 miles on the car. Thanks guys for the posts. Interested in hearing from someone who has gone through this process

[J BONE]

Originally Posted by galahad05

But I've always wondered: just why is it more expensive to lease a used car (in terms of payments)? I always thought it would be cheaper, since the car doesn't depreciate as much.....thus the residual should be much higher.

That is what I was thinking

[jopa489]

It will be interesting to hear what BMWFS says about this. Are they going to get back to you? I still think they're not going to let you do it (or the payments are going to be so high that you would have to be crazy to do it).

What about the miles? You're at almost 49k now, did you lease with 12k or 15k? Even if they let you extend the lease (and even if you leased with 15k/yr), the high miles are going to come back and bite you at some point. Things also start to break once the warranty is up. You don't want to be paying out of pocket repairs for a car you don't even own.

In my opinion, it's just a disaster waiting to happen. I'm a big leasing proponent, but you're better off getting into a new car ASAP if you want to continue leasing. Or negotiate a good buyout and finance the car until you want to get rid of it. At least you're not continuing to dump money into an out-of-warranty car you don't own.

[J BONE]

I leased at 15K/yr for 39 months so I am a tad ahead but not by much. They won't get back to me until it is about a month away. I agree with things breaking down which is why I am nervous to do it. I can't decide what car to get at this point though. It's killing me! I was just thinking if I could re-lease for $200-300 a month less, why not. Granted, I just pulled that figure out of the sky so who knows. Have been thinking about picking up someone elses lease for a year or so until I figure it out. That way I am still covered under a warranty

[J BONE]

Good points jopa. Appreciate your feedback!

[dtc100]

Originally Posted by J BONE

Good points jopa. Appreciate your feedback!

Did you mod the car and don't want the money wasted?

[J BONE]

Originally Posted by dtc100

Did you mod the car and don't want the money wasted?

Yeah, I did some mods but don't really care about the money. I knew going into it that I wouldn't get the money back. I will sell all the wheels which are the most expensive. Some of the other things I would sell or give away to people.

Reason for possible re-lease is I don't know what car to get. Kinda torn between a few of them. Overall, been happy with the car

[SteveMD]

Your payment will likely be higher. I think it has been covered here but BMWFS lease rates on new cars are subvented to make them attractive. The MF on used cars will be much higher. This is done to encourage leasing since BMW will get a good condition car back in 36 months that they can then CPO and sell.

If you lease another BMW, you will not pay the $350 disposition fee on the old car and usually you will not be required to put down a security deposit allowing you to get in for literally nothing down. Things like out of spec tires or dings and dents that might have normally been flagged may get umm...overlooked if you are returning a lease and driving a new one away.

Most importantly, the OP lives in Illinois which is a non lease friendly state when it comes to sales tax. He has already paid sales tax on the full negotiated price of the car - it has been split across the 36 payments. If you re-lease or purchase the car, you will pay sales tax again on the deal. Not good.

My $0.02

I would just get a new BMW lease.

[J BONE]

Originally Posted by SteveMD

Your payment will likely be higher. I think it has been covered here but BMWFS lease rates on new cars are subvented to make them attractive. The MF on used cars will be much higher. This is done to encourage leasing since BMW will get a good condition car back in 36 months that they can then CPO and sell.

If you lease another BMW, you will not pay the $350 disposition fee on the old car and usually you will not be required to put down a security deposit allowing you to get in for literally nothing down. Things like out of spec tires or dings and dents that might have normally been flagged may get umm...overlooked if you are returning a lease and driving a new one away.

Most importantly, the OP lives in Illinois which is a non lease friendly state when it comes to sales tax. He has already paid sales tax on the full negotiated price of the car - it has been split across the 36 payments. If you re-lease or purchase the car, you will pay sales tax again on the deal. Not good.

My $0.02

I would just get a new BMW lease.

Well said. Yes, the taxes in illinois are totally BS. I am always amazed when I see car leases outside of IL. Amazing how much lower they are. Well, I pretty much got the answer. Now just need to figure out what car to get. Thanks for the input!

[The HACK]

The answer is a lot simpler than you think.

When BMW FS writes a lease, there are a lot of incentives involved. BMW FS's goal is to help BMW move and sell cars, so they keep the residual artificially high and keep the money factor artificially low, at least compared to the typical third party leases. The end result is, by leasing a new BMW from BMW FS you can potentially keep the monthly payment much lower than purchasing through financing, and therefore BMW can "widen" the potential customer base by getting buyers in BMWs that typically can't afford the finance payment.

Also, typical BMW FS lease stipulates a sizable down payment as a capital reduction. Meaning that $5,000 you put down goes to buy down the actual starting point of the lease. So again, both factors work in helping keep monthly payment low when you lease a new BMW.

However, when it comes time at the end of the lease, if you wish to lease your used BMW through a third party (because BMW FS's policy is NOT to offer leases to used BMWs), you will no longer enjoy the artificially inflated residual and the favorable money factor, and you'll have to pay market rate because BMW no longer has an interest in keeping you as a customer of their USED CARS. Plus, likely with no additional down payment to buy down capital cost, your used BMW lease can potentially cost you more per month than the original lease. What BMW FS will do, however, is allow you to extend your lease indefinitely, since future depreciation is slower and by keeping your payment the same, they actually recuperate some of the money they put in to subsidize your initial lease the longer you extend your lease.

The case where the Porsche guy leased a car and the re-lease per monthly payment went down, is probably because there were no subsidized money from Porsche and he probably put little to no money down, and is actually how leasing and re-leasing should work from a non-captive financier. (BMW FS is categorized as a captive financier because they're owned by BMW NA and their main goal is to drive BMW sales, not profitability)

[J BONE]

Interesting. I didn't put any money down either. Required a $900 security deposit which I will get back when I turn the car in. BMWFS is def willing to work with you if you lease a new one. Already had the dealership call me and try to get me into something.

Well, def not re-leasing, I know that much!

[dtc100]

Originally Posted by J BONE

Interesting. I didn't put any money down either. Required a $900 security deposit which I will get back when I turn the car in. BMWFS is def willing to work with you if you lease a new one. Already had the dealership call me and try to get me into something.

Well, def not re-leasing, I know that much!

Another thread mentioned a current BMW "pull ahead" promotion where if you only have three months or less left on your lease, BMW will waived the early lease return penalty and the last three lease payments, if you lease a new car frome them NOW rather wait till the lease end to return the car.

If you want to keep the 19" wheels, I would just talk to the dealer to get them to swap the wheels for you. The current BMW lease deals have no drive offs on the 3s, meaning not only no down, but all fees are rolled into the payment.

[persian54]

Originally Posted by dtc100

Another thread mentioned a current BMW "pull ahead" promotion where if you only have three months or less left on your lease, BMW will waived the early lease return penalty and the last three lease payments, if you lease a new car frome them NOW rather wait till the lease end to return the car.

Yeah it's so they keep you as a customer and you don't go elsewhere (like audi mbenz etc)

I have no personal experience dealing with end of leases with BMWs; only Mercedes.

We were able to extend our leases for X amount of months for about 10% less than what we were paying before.

[J BONE]

Originally Posted by dtc100

Another thread mentioned a current BMW "pull ahead" promotion where if you only have three months or less left on your lease, BMW will waived the early lease return penalty and the last three lease payments, if you lease a new car frome them NOW rather wait till the lease end to return the car.

If you want to keep the 19" wheels, I would just talk to the dealer to get them to swap the wheels for you. The current BMW lease deals have no drive offs on the 3s, meaning not only no down, but all fees are rolled into the payment.

Yeah, they called me last week about this. Part of the reason I asked this question as I would have the chance to jump into something new.