Quote:
Originally Posted by Jono2112
I also heard that it changes the first of 2018. Dealers had special programs to get around the law. One was rather than a lease it was more like you bought the car, but financed it to pay for only the time you were going to keep it, with a huge ballon payment at the end. That way you're financing the tax rather than paying it at once. If you get out of the lease, your selling the car back to the dealer, if you buy, then you refinance the ballon payment and don't have to pay the tax again. It's a bad deal for the dealer and a worse deal for the lease holder. A real lease will be welcomed by all.
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In Canada, BMW Financial offers "Owner's Choice" which is basically what you discuss above. The big difference is that the residuals are low so that you build equity in the car and therefore have a "built-in" down payment when you come back to the dealer at the end of the term. The technique keeps the car in the BMW Financial family and therefore the dealers like the program. Especially in medium sized cities like mine where the next closest BMW dealer is a four hour drive.
Here is the perfect scenario for the CDN dealership ... Move out a new car on lease that typically comes back after three years. Now sell the car on Owner's Choice and CPO for three more years of full coverage. Then, sometime between the third and fourth year of the term, the customer comes back to the dealership to turn it in as BMW Financial owns the paper. Cash out your equity and apply it to your next vehicle.
The last thing the dealer wants to do is have you come back to the dealership and be upside down on your owners choice ... that's why the low residuals are key.