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      02-15-2014, 11:43 AM   #1
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is the lease end residual value negotiable?

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do i have any leverage to negotiate my residual value when i am 10,000 miles over my lease contract at the end of my lease? is it better to negotiate with BMWNA on the phone, or should i go into my dealership to strike a deal on buying my car at lease end?
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      02-15-2014, 07:01 PM   #2
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Nope!
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      02-15-2014, 07:08 PM   #3
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Quote:
Originally Posted by trusaleen1 View Post
Nope!
well thats not very nice of BMW. i have heard of other car dealerships willing to negotiate as they don't want the car back and would happily sell at a slight discount if over miles.
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      02-15-2014, 08:11 PM   #4
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A friend of mine negotiated his. He did it at the end of his lease to buy the car.
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      02-15-2014, 08:14 PM   #5
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Quote:
Originally Posted by USC2000 View Post
A friend of mine negotiated his. He did it at the end of his lease to buy the car.
I guess the car salesman's on this forum don't want us to know the secrets
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      02-25-2014, 03:03 PM   #6
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      02-25-2014, 04:49 PM   #7
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Quote:
Originally Posted by matt_335Ci View Post
do i have any leverage to negotiate my residual value when i am 10,000 miles over my lease contract at the end of my lease? is it better to negotiate with BMWNA on the phone, or should i go into my dealership to strike a deal on buying my car at lease end?
Have you considered purchasing more miles before the return? It's cheaper than waiting until the end.

Unless you do this you could either pay the penalty per mile, or simply purchase the car based on residual value that was setup by BMW.
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      02-26-2014, 05:17 PM   #8
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Quote:
Originally Posted by swamy
Do you generally negotiate the purchase price at lease end with the dealership you originated the deal at?
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      02-26-2014, 09:48 PM   #9
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Do you generally negotiate the purchase price at lease end with the dealership you originated the deal at?
Not limited by that as you can turn in your car at any dealer. But if you have a relationship already established at a d'ship that can be a good place t o start
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      02-27-2014, 01:06 PM   #10
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Back in 2009 I was able to negotiate approx $9k off my residual for a 2006 X5 that was at the end of the lease. I did the transaction through the dealer that I leased the car from. Also, I did it approx 1 month before the end of my lease. Only catch was that I had to pay to have the car certified (CPO), extended maintenance and for new tires. At the end of it all when all the math was done it was practically a break even cost-wise but at least I had warranty, service and new tires on my old ride
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      02-27-2014, 01:29 PM   #11
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Here is the real answer: it depends.

In some cases a dealer can buy the car from BMW FS for less than residual. Then it is up to the dealer to decide whether they are willing to sell it to you at a discount, and what the discount might be. Getting the car CPO will help, because this will help the dealer to get closer to their CPO goals, and they might be willing to dip deeper into the profit.

At the end of the day - there has to be something for the dealer to go through the process, so don't expect them to give up everything and sell you the car at cost. This is not a new car, so they have to show profit on every used car transaction.
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      02-28-2014, 02:11 AM   #12
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Quote:
Originally Posted by BMWSFMico View Post
Here is the real answer: it depends.

In some cases a dealer can buy the car from BMW FS for less than residual. Then it is up to the dealer to decide whether they are willing to sell it to you at a discount, and what the discount might be. Getting the car CPO will help, because this will help the dealer to get closer to their CPO goals, and they might be willing to dip deeper into the profit.

At the end of the day - there has to be something for the dealer to go through the process, so don't expect them to give up everything and sell you the car at cost. This is not a new car, so they have to show profit on every used car transaction.
isn't there a cost associated with making my car a CPO? like an inspection/repair process?
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      03-04-2014, 07:37 AM   #13
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Quote:
Originally Posted by calpharo View Post
Back in 2009 I was able to negotiate approx $9k off my residual for a 2006 X5 that was at the end of the lease. I did the transaction through the dealer that I leased the car from. Also, I did it approx 1 month before the end of my lease. Only catch was that I had to pay to have the car certified (CPO), extended maintenance and for new tires. At the end of it all when all the math was done it was practically a break even cost-wise but at least I had warranty, service and new tires on my old ride
this is good to hear first hand. was the miles on your odometer part of the negotiation at all?
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      03-04-2014, 11:32 AM   #14
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Quote:
Originally Posted by calpharo View Post
Back in 2009 I was able to negotiate approx $9k off my residual for a 2006 X5 that was at the end of the lease. I did the transaction through the dealer that I leased the car from. Also, I did it approx 1 month before the end of my lease. Only catch was that I had to pay to have the car certified (CPO), extended maintenance and for new tires. At the end of it all when all the math was done it was practically a break even cost-wise but at least I had warranty, service and new tires on my old ride
this is good to hear first hand. was the miles on your odometer part of the negotiation at all?
Miles were not an issue as I was still within the mileage allowance on my lease
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      03-04-2014, 11:37 AM   #15
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It would be worth going through the CPO process and cost because you'd get an extended warranty out of it instead of buying a BMW that was a year away from being out of warranty. I really like my car so I may go this route in terms of looking into buying it at lease end. Thats a long ways off though so you never know.

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Nope!
Not sure where you got this from but I know people who have leased BMW's and then bought them for below residual at lease end. There are countless articles online about this re: lease end options as well and you are rarely stuck with paying residual. It's still an easier transaction for them to sell the car to you , if they have a buyer lined up, you, who most likely also has financing in place, etc.
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      03-04-2014, 01:38 PM   #16
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isn't there a cost associated with making my car a CPO? like an inspection/repair process?
Yes. There is a cost for the actual certification, out of which the service department is paid for the inspection. Even if the car is perfect - it might cost over a thousand to certify a car, depending on the model.

On top of that - there is the cost of required repairs. Most will be covered by warranty, but body work, broken pieces and tires will cost more.
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      03-06-2014, 11:35 PM   #17
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Yes. There is a cost for the actual certification, out of which the service department is paid for the inspection. Even if the car is perfect - it might cost over a thousand to certify a car, depending on the model.

On top of that - there is the cost of required repairs. Most will be covered by warranty, but body work, broken pieces and tires will cost more.
When you really add it up, its hard to imagine it being 'worth it' unless you really love the car. For example, pretend I decided to buy my car at lease end. Residual value is set around $23000. Pretend I could negotiate it down, was in the position to do so and I got them to even sell for $20000. Tack on sales tax and thats for easy math $22000. Another grand for CPO and you are back at $23000 OTD. Now say I didn't want to put money down, similar to the mindset of going into another lease as an alternative and wanting to put no money down. So for $2000 sales tax + CPO, if I financed the whole amount for 5 years w/my credit union for 1.75%, my car payment would go UP to over $400 a month whereas it is currently at $360. It would be under warranty a while, but I'd still be paying the car off once warranty ran out, not to mention maintenance etc. since free maintenance would soon be up etc.

Compare this to leasing another car. I'd have the $500 loyalty money to put toward drive offs, so my drive offs on say, a lightly optioned 328i would be almost a thousand bucks less than what sales tax would be just to buy my car. My payment would be a little over 400 a month, for a new car, which would be an upgrade from my current car, slightly, and I'd be back in the free maintenance again.

So it's hard to see the incentive to buy it at lease end really. I'd be interested to hear opposing view points on this.
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      03-07-2014, 07:23 AM   #18
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When you really add it up, its hard to imagine it being 'worth it' unless you really love the car. For example, pretend I decided to buy my car at lease end. Residual value is set around $23000. Pretend I could negotiate it down, was in the position to do so and I got them to even sell for $20000. Tack on sales tax and thats for easy math $22000. Another grand for CPO and you are back at $23000 OTD. Now say I didn't want to put money down, similar to the mindset of going into another lease as an alternative and wanting to put no money down. So for $2000 sales tax + CPO, if I financed the whole amount for 5 years w/my credit union for 1.75%, my car payment would go UP to over $400 a month whereas it is currently at $360. It would be under warranty a while, but I'd still be paying the car off once warranty ran out, not to mention maintenance etc. since free maintenance would soon be up etc.

Compare this to leasing another car. I'd have the $500 loyalty money to put toward drive offs, so my drive offs on say, a lightly optioned 328i would be almost a thousand bucks less than what sales tax would be just to buy my car. My payment would be a little over 400 a month, for a new car, which would be an upgrade from my current car, slightly, and I'd be back in the free maintenance again.

So it's hard to see the incentive to buy it at lease end really. I'd be interested to hear opposing view points on this.
Not sure if your 23k figure is pre or post-tax as the residual value is generally pre-tax & non-CPO'ed. If a similar or better optioned car but CPO'ed is listed for less than the residual, it can be negotiated down even further so it makes no sense to buy your own car but it also means you have the appropriate room to negotiate your actual buy-out price for your car if you find a dealer interested in it. if no dealer is willing, then the LBO+tax includes the premium one is paying to buy a car for knowing the history well enough to decide if its worth it. LBO is just a right to an option to buy the car but we can always choose not to exercise it if it doesn't make financial sense. Interesting calcs though would like to hear more from others thinking about it
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      03-07-2014, 07:26 AM   #19
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When you really add it up, its hard to imagine it being 'worth it' unless you really love the car. For example, pretend I decided to buy my car at lease end. Residual value is set around $23000. Pretend I could negotiate it down, was in the position to do so and I got them to even sell for $20000. Tack on sales tax and thats for easy math $22000. Another grand for CPO and you are back at $23000 OTD. Now say I didn't want to put money down, similar to the mindset of going into another lease as an alternative and wanting to put no money down. So for $2000 sales tax + CPO, if I financed the whole amount for 5 years w/my credit union for 1.75%, my car payment would go UP to over $400 a month whereas it is currently at $360. It would be under warranty a while, but I'd still be paying the car off once warranty ran out, not to mention maintenance etc. since free maintenance would soon be up etc.

Compare this to leasing another car. I'd have the $500 loyalty money to put toward drive offs, so my drive offs on say, a lightly optioned 328i would be almost a thousand bucks less than what sales tax would be just to buy my car. My payment would be a little over 400 a month, for a new car, which would be an upgrade from my current car, slightly, and I'd be back in the free maintenance again.

So it's hard to see the incentive to buy it at lease end really. I'd be interested to hear opposing view points on this.
nvr mind you make it clear its pre-tax i need to get my caffeine
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      03-07-2014, 11:05 AM   #20
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Hypotheticals that residual is pre-tax, I in theory negotiate it down a few grand and then tax and CPO cost bring the OTD cost up by three grand or so.
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      03-07-2014, 12:37 PM   #21
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Originally Posted by Kafkaesque320 View Post
When you really add it up, its hard to imagine it being 'worth it' unless you really love the car. For example, pretend I decided to buy my car at lease end. Residual value is set around $23000. Pretend I could negotiate it down, was in the position to do so and I got them to even sell for $20000. Tack on sales tax and thats for easy math $22000. Another grand for CPO and you are back at $23000 OTD. Now say I didn't want to put money down, similar to the mindset of going into another lease as an alternative and wanting to put no money down. So for $2000 sales tax + CPO, if I financed the whole amount for 5 years w/my credit union for 1.75%, my car payment would go UP to over $400 a month whereas it is currently at $360. It would be under warranty a while, but I'd still be paying the car off once warranty ran out, not to mention maintenance etc. since free maintenance would soon be up etc.

Compare this to leasing another car. I'd have the $500 loyalty money to put toward drive offs, so my drive offs on say, a lightly optioned 328i would be almost a thousand bucks less than what sales tax would be just to buy my car. My payment would be a little over 400 a month, for a new car, which would be an upgrade from my current car, slightly, and I'd be back in the free maintenance again.

So it's hard to see the incentive to buy it at lease end really. I'd be interested to hear opposing view points on this.
I see it the same way as you. If you want to purchase your car at lease end it would actually cost more per month than just leasing a brand new car. I'm fairly new to leasing and have yet to even turn one in as I'm very resistant to change but changed my mind because I was buying new cars every 2 years.

Now I've heard that sometimes things can go in your favor from older people that have leased a lot over the years such as:

1. Near lease end actual value is significantly higher than residual. Sell and keep the extra.
2. At lease end the actual value is significantly lower than residual (maybe a new body style has now come out and your car is no longer as desirable) so they cut you a good deal.

Has anyone here actually experienced either one of these scenarios?
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      03-07-2014, 01:04 PM   #22
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Hypotheticals that residual is pre-tax, I in theory negotiate it down a few grand and then tax and CPO cost bring the OTD cost up by three grand or so.
Right thats what I thought. Comparing orig residual post tax vs the negotiated one, you do end up getting a decent deal as you are paying less on top of getting the car CPO'd.
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