gpfarrell

At the conclusion of a lease, could I buy the car for current market value instead of the agreed upon residual? Here's why:

I'd really like a 535xi wagon with manual transmission to replace our E39 5-speed wagon.

We bought the E39 used... it was a steal because the dealer knew nobody wanted a stick-shift station wagon. But it was exactly what we wanted.

I don't want to wait another 18 months to start looking for a year-old E61 and based on the latest production figures I'm not sure I'd ever find a used manual-tranny wagon. Oh, and they all seem to be gray, and gray is just a great color for other people but not us.

So, I think I need to order a new one (can I rationalize or what!) but my very friendly & honest local dealer told me that I should be prepared for horrible resale on a stick-shift wagon. I'd keep the car so I don't care, but I think I smell an opportunity.

Since the residuals and money factors are calculated at the same rates for sedans and wagons, wouldn't I be able to get BMWFS to subsidize my ultimate driving machine by leasing it for an ordinary rate and then buying it as a discounted used-car that most folks wouldn't want?

Thanks for any insights... I'm pretty sure this is "too good to be true", but I don't know enough about leasing to see the pitfalls. Oh, and if I couldn't negotiate a reasonable price when the lease terminated I'd be fine with walking away.

Thanks!

gpfarrell

Anybody?

Rudy

I'm not an expert but I'm pretty sure that the residual value is what you'd have to pay to buy the car outright. Setting the resale values is never perfect -- sometimes it ends up being lower than the market value and sometimes it ends up being higher. The lease payments are calculated based on the residual value that was set at lease inception.

That doesn't mean you shouldn't try to negotiate a better buy-out price -- you never know what might happen...

Torquey5

Of course the best way to sell your car is to do it yourself. Even though your dealership will hit you hard on the trade in, there's always someone out there looking for a car exactly like your e39, and they will also know how hard it is to find one, so there's your advantage. Only downside is that it may take some time to sell, so if you have patience then you can find a good buyer. Put it up for sale early so that it'll give you time to shop for the 535xi wagon, speaking of which our dealership is all sold out on preorders for those wagons, they seem to be a very very hot car, even before it came out!

Good luck!

Dan

Rudy

I think what the OP is trying to avoid is buying the car at the end of the lease for the residual value then trying to sell it for market value which he's assuming will be less than the residual due to the low demand for the car as equipped...

gpfarrell

Almost.

I'm wondering if I could lease the car and then have the opportunity to buy it from BMWFS or the dealer at market value which I'm assuming will be much lower than the residual.

I'm using the lease to get just the car I want, and then hoping the used car market will make it much more affordable to buy in 2-3 years.

VERY INTERESTING that the car looks like a hot seller so far... the 530xi wagon sales really seem to have gone from slow to slower.

Thanks for the thoughts.