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      12-04-2021, 08:13 PM   #1
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DO I have the only Car in the World That Isn't Worth More Than I owe?

For months we have all seen numerous stories of people getting $1k, $2k, $5k, or even $10k more than they owe, and even full MSRP for trades or outright sales to dealers. My 2018 340i M-Sport ZHP had an MSRP of $62k and I had a 3-year lease through BMW. My current payoff is around $36k, I've checked with the major dealers:

Carvana - $26000.
Vroom - $29000
CarMax - $33800
GiveMeTheVin - $33700

BMW Dealers in my area advertise similar cars used for $40-45k. Even asked my dealer about a trade vs a lease turn in and they said they couldn't give me over payoff, could that be a game to put more $'s in their pocket? I feel like I'm the only one who can't walk away from my car with a pocket full of bills.
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      12-04-2021, 08:29 PM   #2
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      12-04-2021, 10:25 PM   #3
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If it were a 3 year pickup, you'd probably get $20k over its "real" value. Unfortunately it's a sedan and one that's plagued by that famous BMW depreciation.
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      12-04-2021, 10:25 PM   #4
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How many more payments can you possibly have on a 2018 lease before maturity where you can just walk away?
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      12-05-2021, 02:24 AM   #5
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"They couldn't give me more than the payoff"

OMG they actually told you that? Call another dealer and get a number, then call these idiots back and ask them how dealer "B" is offering you more.
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      12-05-2021, 08:29 AM   #6
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Quote:
Originally Posted by BMWCCA1 View Post
How many more payments can you possibly have on a 2018 lease before maturity where you can just walk away?
I'm in my 3rd month of extension on my lease waiting for mt M240 to arrive. I could've walked anytime since the end of Sept.


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Originally Posted by KevinC View Post
"They couldn't give me more than the payoff"

OMG, they actually told you that? Call another dealer and get a number, then call these idiots back and ask them how dealer "B" is offering you more.
The funny thing is I did talk to Dealer B and they basically said the same thing as Dealer A. They'd go as high as $35k, which is less than the lease payoff. so I'll just end up turning it in and walking away, I was just hoping to make a few bucks off of it.
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      12-05-2021, 08:34 AM   #7
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Quote:
Originally Posted by Lightngsvt View Post
I'm in my 3rd month of extension on my lease waiting for mt M240 to arrive. I could've walked anytime since the end of Sept.
. . .

I'll just end up turning it in and walking away, I was just hoping to make a few bucks off of it.
Life really sucks, doesn't it?
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      12-05-2021, 09:14 AM   #8
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Are the numbers you listed close to the original residual?

If financed, it would have been close to some equity. This is assuming no discounts, nothing down and a term that is similar to leasing payments.
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      12-05-2021, 03:13 PM   #9
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Originally Posted by BMWCCA1 View Post
Life really sucks, doesn't it?
I know, its really rough.


Quote:
Originally Posted by omasou View Post
Are the numbers you listed close to the original residual?
Yes they are. But my payments with taxes were under $700.
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      12-05-2021, 03:47 PM   #10
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Perhaps you should consider it a badge of honor. It means that if these were normal times, you would have been much better off than most as you would have paid far less in depreciation, assuming you got a good discount on the front end.
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      12-05-2021, 05:59 PM   #11
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Is it even possible to make out with profit/cash on a lease? Even if the car is worth more during turn in time? Isn't it basically a rental unless you purchase it out right at the end of lease?
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      12-05-2021, 09:28 PM   #12
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Quote:
Originally Posted by quakerroatmeal View Post
Is it even possible to make out with profit/cash on a lease? Even if the car is worth more during turn in time? Isn't it basically a rental unless you purchase it out right at the end of lease?
I agree with many of the salient points/notions you mentioned above.

Well I think there is 2 perspectives in this situation. At the end of a lease, if your car is worth more than the residual value of the car (aka what you owe on it), you can opt to sell it for a higher price as opposed to turning it back in. Then just pay off the residual amount and you get to keep the difference. Now there are new rules in place that make this process a little harder - for instance, BMW financial may make you outright buy the car first, before allowing you to flip it.

The notion of a rental is similar to a lease, yes. You can look at it as you’re “borrowing” the car for X amount per month.

The other perspective is to define “profit” - when you lease a depreciating asset, such as a car, and you pay interest (in the form of money factor), taxes, registration, gas, lease payments, insurance, maintenance, accessories, etc you are 100% losing money. Making the little extra on the equity you may have over the residual is not profit in a financial sense. Turning $30000 dollars into $3000 at the end of 3 years is not profit, it’s money lost/spent on a car.
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      12-05-2021, 11:50 PM   #13
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excellent point. But who wouldn't rather walk away at the end with an "extra" $3k in pocket instead of $0? . The other $25k + gas and insurance are already gone.
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      12-06-2021, 12:26 AM   #14
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That means you have a good lease. Even in this inflated market, you haven't paid more than the actual depreciation.

OR you could try selling direct to your dealer, you might be surprised how much they offer. I got a $10k more at the dealer than I did at Carvana or Vroom for my M3 CS.
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      12-06-2021, 07:16 PM   #15
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I tried selling to my delaer and another and both offer roughly $33k, same as Vroom and GetMeTHeVin.

Thanks for the positive spin, I hadn't thought of it that way.
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      12-06-2021, 07:18 PM   #16
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All of my cars are worth more than I owe on them.

Because I buy them for cash.
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      12-06-2021, 07:53 PM   #17
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Quote:
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All of my cars are worth more than I owe on them.

Because I buy them for cash.
Smart man.
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      12-06-2021, 10:10 PM   #18
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Kind of sucks, but I can believe it. I had a daily driver 2018 Mazda 6 whose lease was up in October. It had a lease that any dealer could buy the car, etc for a trade. BMW, and Audi would not even give me an offer, and book on the car was 6K over the buy out. Seems if you have a lease, the brand wants you to stay in the brand. You can buy it and flip, but you have to wait for the title transfer, etc.....in my case I ended up leasing another Mazda (CX9)...got 8K for equity, 2800 discount and 750 loyalty. 48k car came down under 37K, reasonable residual at 52% and lease payment less than the Mazda 6. Drove out a happy camper.
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      12-06-2021, 10:30 PM   #19
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Quote:
Originally Posted by Killramos View Post
All of my cars are worth more than I owe on them.

Because I buy them for cash.
You can get financing for 0.9% nowadays. That's basically free money. I'd rather put $40k in an ETF like VOO with an average annual return of 15%.

So let's say I finance $40k at 0.9%. I'd pay $360 in interest the first year, but get a $6k return on investment on the ETF.

If I paid cash, it save that $360 but lose $6k in potential earnings. It's a huge net loss.
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      12-07-2021, 07:30 AM   #20
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If you are going to borrow money to invest you might as well do that in a way so as to write off the interest.

Promotional below prime rate interest rates often come at the expense of the choice of lower up front cash incentives that make a huge hit in your perceived loan-return arbitrage (the people who set the rates aren’t stupid).

Beyond that, I doubt many of the people financing BMW’s are doing it at actually doing it at hypothetical 0.9% interest rates. Often not even close.
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      12-07-2021, 09:34 AM   #21
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Quote:
Originally Posted by Killramos View Post
If you are going to borrow money to invest you might as well do that in a way so as to write off the interest.

Promotional below prime rate interest rates often come at the expense of the choice of lower up front cash incentives that make a huge hit in your perceived loan-return arbitrage (the people who set the rates aren't stupid).

Beyond that, I doubt many of the people financing BMW's are doing it at actually doing it at hypothetical 0.9% interest rates. Often not even close.
I'm not talking about borrowing money to invest, I'm talking about using the cash you might put into a depreciating car to an investment instead.

Sub prime car financing rates are just the norm today, as car prices are inflated. However, the same cash incentives, or lack thereof, are applicable to both cash and financing. There is no real advantage to paying cash as it is a loss of investment opportunity.

I have triple A credit and a low DTI so I qualify for 0.9%. Not sure what the cutoff is, but people are getting it.

I get it though, paying cash is probably what most people should do, because they tend to overlook overall cost of ownership over a monthly payment. However, that's not always the case especially when interest rates are so low.
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      12-07-2021, 10:18 AM   #22
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Quote:
Originally Posted by jmg View Post
I'm not talking about borrowing money to invest, I'm talking about using the cash you might put into a depreciating car to an investment instead.

Sub prime car financing rates are just the norm today, as car prices are inflated. However, the same cash incentives, or lack thereof, are applicable to both cash and financing. There is no real advantage to paying cash as it is a loss of investment opportunity.

I have triple A credit and a low DTI so I qualify for 0.9%. Not sure what the cutoff is, but people are getting it.

I get it though, paying cash is probably what most people should do, because they tend to overlook overall cost of ownership over a monthly payment. However, that's not always the case especially when interest rates are so low.
Had this exact same conversation with a newly "monied" friend who was looking to drop $75K on a pick up before these shortages messed the market up. Dude has smoking credit and the offers were there. I hate telling the wrong people to take on debt, but he hates debt and invests well, so let that $ make you a lot of money, not save you a little. With the recent market gains he made doing so - he could pay it off now if he wanted and still be way ahead.

If you are disciplined and smart - it's a solid option. I hate debt too, but not enough to lose $ over it. I always stay semi-liquid enough to always be able to be debt free at the drop of a hat if need be, so not a ton of risk for me.
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