low mileage at lease end

[UFOGUY]

i already did a search but didn't find what i was looking for.

is there any benefit to be had when ending a lease for a 328i with significant mileage under that allowed. my car will probably have only about 25k miles out of an allowed 36k.

just wanted to check with the forum before i phone my dealer this week.

thanks very much.

[mryakan]

Not sure if they reimburse for lower mileage, but somehow I doubt it. Take a long road trip before you turn it in.

[cemman]

Actually, this is probably the worst thing you can do from a financial perspective. Your monthly payments entitle you to the use of the car for a predetermined amount of miles. This factor is used in determining the residual value of the car, which in turn is a factor in determining your payment. If you don't use it all, you are paying for something you didn't get. Typically, if you have low mileage, the value of your car may be more than the residual value at the end of the lease. If this is the case, it may be a good idea to purchase the car at the end of the lease and sell it privately. If you don't, BMW will, and they will make the money, not you. This is true during normal economic times which we are certainly not in, so you may have wasted a little money.

[Takashi]

Find out how much $ you can profit by selling it privately and then paying the residual to BMW finance. You will not get any $ if the distance travelled is < distance allowed.

[mryakan]

Actually, this is probably the worst thing you can do from a financial perspective. Your monthly payments entitle you to the use of the car for a predetermined amount of miles. This factor is used in determining the residual value of the car, which in turn is a factor in determining your payment. If you don't use it all, you are paying for something you didn't get. Typically, if you have low mileage, the value of your car may be more than the residual value at the end of the lease. If this is the case, it may be a good idea to purchase the car at the end of the lease and sell it privately. If you don't, BMW will, and they will make the money, not you. This is true during normal economic times which we are certainly not in, so you may have wasted a little money.
In general what you say is probably true, but with the current economic situation and the way prices have dropped, I just wonder whether even with the lower mileage, the residual is a wash and that their may not be any $$ to be had either by BMW or the owner with the lower than allotted miles.

[KPACOTKA]

You can't get any refund for not used miles unless it 'sspecified in your lease contract. I had the same problem, 5K miles less and nothing to get at turn.

[UFOGUY]

i will watch the market and blue book value for my 328i as i near the end of the lease. i have given consideration to purchasing the car at lease end since the mileage will be low. if the low mileage gives a better resale value then i figure i could drive it another year and still get my money out of it.

we'll have to see what the market does over the next year.

thanks for your replies.

[cemman]

Sorry, the one thing I forgot is that you'll need to pay sales tax on the purchase price at lease end, so be sure to take that into account when you consider purchasing.

[mryakan]

Sorry, the one thing I forgot is that you'll need to pay sales tax on the purchase price at lease end, so be sure to take that into account when you consider purchasing.
Are you sure it is the purchase price? I understand this may vary from state to state/province. When I purchased my car at lease end (from BMW FS) and registered it here, I had to pay taxes based on the higher of the purchase price or the blue book value, it was the latter in my case, by quite a bit actually. And btw, you pay taxes when you register the car in your name to your Motor Vehicle Dept. not to BMW FS.

[cemman]

I'm sure it does vary from state but in all states I've purchased a car it is based on the purchase price. Also, you pay sales taxes to the state taxing authority and you have to register the car with the state as well. In the United states, these are different things.

[LuvMyE92]

In my case, buying a car from the leasing company, I paid sales tax based on the residual cost. North Carolina.

When you don't use all of the miles allocated for your lease, you are giving the leasing company a gift.

If you are thinking of buying (or leasing) another BMW, they quite often have unpublished deals for existing leaseholders. You may get some extra money if you turn it in before lease end. It's worth a phone call, at the very least.

[Beer Goggles]

You don't have to buy it to sell it, if you can get more than they want for the car by trading it in instead of completing the lease term....do it. You might have a hard time selling a car right now but you might make $1,000 if you sold it for a good price.

Some terms give you money back if you purchased more than the standard 12K. Ask.

Also lots of times you might lose out by turning the car in if you have high wear, you have lots of options with a lease.

You can buy it at any time, you can sell it at any time, and you can return it at the end of the lease. Figure out which is best for you.

Go on ebay or autotrader and see what you car is selling for, look what they pay off is and go from there. Also note that when you get in 90 day of the lease and you are turned over to their lease end department and they may drop the value of your car (pay off)

[Jhunter]

In the US you pay sales tax based on the purchase price. Blue Book doesn't matter. You likely have to pay tax with the purchase price to BMWFS.

Be careful trying to buy it and resell it to make moeny. Your cost is higher due to sales tax and your resale value is lower since it is a private party sale. They are pretty good at estimating residual value so usually the price is not far off. If anthing, this economy is working against you since market values are likely lower then the were three years ago when they set the residual value.

[Kernel Kurtz]

In the US you pay sales tax based on the purchase price. Blue Book doesn't matter.

Around here it is as mryakan states, based on the higher of the purchase price or the blue book value. They did this to avoid the orchestrated way undervalue bills-of-sale that often show up otherwise in private sales. Sometimes just $1.

I take it that scam still works there?

[Jhunter]

In the US you pay sales tax based on the purchase price. Blue Book doesn't matter.

Around here it is as mryakan states, based on the higher of the purchase price or the blue book value. They did this to avoid the orchestrated way undervalue bills-of-sale that often show up otherwise in private sales. Sometimes just $1.

I take it that scam still works there?

You will be questioned if the transfer price is significantly under market value. I am sure you could be prosecuted also. Years ago my dad gifted a car to my brother and had to sign an affidavit that it was a gift to make them happy. In the US, sales tax is a transaction tax so as long as you can show it is an arms length transaction you are okay.