The three year lease on my 550 is up in 30 days. I talked to the fleet manager at my dealer and he offered me a good buyout price- about 20% below my residual. They want an additional 2K for CPO. Has anyone waited and bought the CPO right as their warranty were to expire? I don't want to pay for it now if I don't have to.

 

I say buy the CPO coverage now. For 2k you can't lose.

That having been said, I don't recommend buying your lease. If you d the math, it never works out.

You figure you just spent 700-800 a month for 36 months. (Plus inceptions.)

Now you have 25-30000 miles on a car on which you've spent 25200. (plus inceptions)

If you buy the car now for, say 30,000 you're going to have another 600 dollar payment for 5 years (if you're average). That's another 36000 bucks.

Not only will you have paid 60k Plus on a car you've financed over 8 years, but when you make your last payment you will have roughly 80k miles on the car.

I don't know about you, but making payments on a car with 60,70,80k miles isn't for me.

Obviously, these numbers are general in that I don't know what you're paying, what you put down, or how long you finance. The problem is, you are basically financing and paying for the depreciation when you lease it and nothing else.

Just throwing it out there as something to think about.

 

Thanks- I understand what you're saying.

The other side is this-

30K or 32K w/CPO is a good price for a 550. I know the car, it's history, I broke it in etc...

My lease is up, and I willl have to buy a car from someone/ somewhere. This is a pretty good deal based on my research.

I don't plan on financing it, although they do happen to have a 0.9% financing option if I get the CPO.

 

It's an excellent price. I would take it.

 

i think its a good price too. And you're right, you'll have to buy something either way, why not the car you know the history of. I don't think you could find a 2007 CPO that you trust and know as much as your's for that price.

Numbers are funny things, you can make them show you whatever you want to see. They can support the rational and the irrational. Go with your gut and do what YOU think is the best.

GL!

 

What you paid previously for your lease is sunk, and therefore irrelevant. As long as 20% below residual is a good deal compared to competitive product, you're in pretty good shape it seems to me. Add to the fact that you know the history of the car and it's also less risky than buying another used vehicle.

At 60k miles it's barely broken in! And yes, getting it CPO'd for $2k sounds like a good deal. I paid $3k when I got mine, although it also included new tires, as they needed replacement to pass CPO inspection. As far as getting a better deal when you actually do the trade versus now, it seems to me your leverage is lower than it is now, as you have fewer choices.

 

ummm, just a quick question.
I never leased cars before and I'm just curious. It seems that you want to buy out the car you leased, correct?
I thought the car belongs to BMW financial not the dealership you leased from. So that means you can't get CPO but rather
extended warranty which is just like the words, it extends for 2 mor years or 100k. CPO doesn't cover a lot of things that
original warranty covers. Doing CPO means, you will return the car(theoratically) then let the dealership CPO then resell it back to you.
Not only that's a troublesome but the dealership can mark up the price.

Why would you go that hassle if you can simply negotiate the buy out price with BMW financial and add extended original warranty(in negotiation or you pay out of pocket)? Or am I missing something?

 

I did this once with a 1989 MB E Class. I bought the car for cash for a reduced price off the residual. Monetarily the deal was great for me but I wish I had bought or leased something newer. To justify the great price I always felt I should keep the car a few years but as it got older I grew tired of the same old thing for an extended period.
Emotionally I always felt unhappy since I paid a large sum of money and yet was still driving the exact same car the next day. Personally I will never do it again, but that just me. BTW the car was flawless both before and after the deal.
If you don't care about driving the latest and greatest then be happy with your deal. Sounds good for you.

 

BMWFS owns the car. They want to get rid of it. They let any BMW dealer buy the car for wholesale price which usually much, much lower than the residual value. They will sell you the car at residaul (exception apply).
Now the delaer buys the car from BMWFS, certifies it, adds reasonable or un-reasonable profit and sells it back to you. You need to ignore the residaul value and compare the price to the current market proce for similar cars. Additional benefit, y9ou know your cars history.

 

BMW Financial Services will not negotiate the price of a residual at the end of the lease. The number they quote will always be residual adjusted for the specific mileage of the vehicle and will vary minimally from the stipulated end value as stated on your contract. They leave it up to dealers to do any negotiation of buy out price which we call a "pass through". Basically, yes we are buying your car from BMWFS and reselling it to you. The CPO warranty they offered is a nice deal as is the purchase price. As the OP wrote, the interest rate on a CPO vehicle is always lower then a non CPO vehicle and will probably come close to paying for itself over the duration of the lease, not to mention the obvious benefits of the inspection and warranty.

That said, I would never buy a car off lease. The reason I lease in the first place is so that I can have a fresh car every few years and be spared the chore of either selling it myself or taking a hit on trade in. In the case of BMW, I also love the free service/maintenance and don't want to own the car a minute after it expires. However, different people have different view points. There is no correct answer as to whether you should or should not buy your off lease vehicle.