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Car Forum / BMW Cars / April 2004

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Lease Question

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Stuart - 03 Apr 2004 17:41 GMT
I am 30 months into a 36 month lease on a 525. I need a wagon or X5, so I
went to my dealer today and asked about an early out. I was told that there
is no early out and that if I bought a new vehicle from them they would roll
the unpaid balance of the lease into the price of the new car. I almost sure
that when I signed the lease the salesman told me that after 2 years,  if I
bought new there would be no pre-payment penalties, Of course I didn't get
this in writing. Is this standard BMW policy?
Thanks,
Drew
Jim - 04 Apr 2004 02:57 GMT
Most likely their policy is to follow the lease agreement to the letter.
So, what does it say about your options of early lease termination?
Jim
> I am 30 months into a 36 month lease on a 525. I need a wagon or X5, so I
> went to my dealer today and asked about an early out. I was told that there
[quoted text clipped - 5 lines]
> Thanks,
> Drew
Princess Morgiah - 04 Apr 2004 12:39 GMT
> I am 30 months into a 36 month lease on a 525. I need a wagon or X5, so I
> went to my dealer today and asked about an early out. I was told that there
[quoted text clipped - 3 lines]
> bought new there would be no pre-payment penalties, Of course I didn't get
> this in writing. Is this standard BMW policy?

Alas, if you did not get it in writing, it's pretty much standard policy for
every shop, dealer, whatever out there.

Princess Morgiah
Jack Baruth - 05 Apr 2004 14:40 GMT
> I am 30 months into a 36 month lease on a 525. I need a wagon or X5, so I
> went to my dealer today and asked about an early out. I was told that there
> is no early out and that if I bought a new vehicle from them they would roll
> the unpaid balance of the lease into the price of the new car. I almost sure
> that when I signed the lease the salesman told me that after 2 years,  if I
> bought new there would be no pre-payment penalties

Ah, the old "we'll get you out early" chestnut, beloved lie of short-
term salesmen everywhere. Let's start by noting that you are likely
dealing with three different entities:

1) BMW. They made the car.

2) The dealer. They are independent and can do what they like,
  within reason and law.

3) The leasing bank, which *could* be BMWFS and *could* be another
  bank. Either way they are independent for the purposes of this
  discussion.

The 2) folks lied to you. 3) has a contract with you and will hold you
to it. 1) doesn't care.

At the risk of being needlessly bitchy, if you wanted to get out in two
years you should have signed a two year lease. If you wanted a 30 month
contract, you could have gotten a 30 month contract.

When making a $45,000 commitment, it's useful to read the contract and
then expect said contract to operate in that fashion. Nothing you can
do now, but if you learn from this experience to get it all in writing
then it was a relatively cheap lesson... probably a $3600 lesson or so,
right? :)
Stuart - 06 Apr 2004 01:43 GMT
Right. It's no big deal and I am more than willing to complete the terms of
the lease.
I wanted to trade up to an X5. I will do that, when my lease is up. But it
will not be from that dealership.

> > I am 30 months into a 36 month lease on a 525. I need a wagon or X5, so I
> > went to my dealer today and asked about an early out. I was told that there
[quoted text clipped - 28 lines]
> then it was a relatively cheap lesson... probably a $3600 lesson or so,
> right? :)
Jess Englewood - 09 Apr 2004 19:36 GMT
> Ah, the old "we'll get you out early" chestnut, beloved lie of short-
> term salesmen everywhere. Let's start by noting that you are likely
[quoted text clipped - 11 lines]
> The 2) folks lied to you. 3) has a contract with you and will hold you
> to it. 1) doesn't care.

I can only speak of BMWFS, but they did indeed short a lease for me when I
wanted to pickup a 2001 E39. They lopped of the last 4 months without charge
or penalty on the 1997 528 I was currently leasing. I am not suggesting this
is standard and I knew from the beginning that my original lease was for the
entire 36 months, but at our request they did make an exception. I just
bought a 545 and they have also agreed to return my last lease payment from
the extension lease on the 2001 E39, because the E60 was delivered to us in
the middle of the month term for which we had already paid (might have been
because this was a lease extension while waiting for the E60 to arrive in
the US, the original 36 month term was paid in full). Again, this isn't
standard or expected but we made the request and it was granted.

It has been my experience that you lease according to the contract you sign,
but given certain circumstances and timing it does seem like BMWFS will work
with people on a selective basis. And that basis may be nothing more than
the luck of the draw with regard to who at BMWFS you end up speaking with. I
think that is the point to consider though, speak with BMWFS directly,
rather than through the dealership.

Obviously there are no guarantees but they have been decent to me on two
separate occasions.
Jack Baruth - 09 Apr 2004 20:20 GMT
>> 3) The leasing bank, which *could* be BMWFS and *could* be another
>>    bank. Either way they are independent for the purposes of this
[quoted text clipped - 5 lines]
> I can only speak of BMWFS, but they did indeed short a lease for me when I
> wanted to pickup a 2001 E39.

> It has been my experience that you lease according to the contract you sign,
> but given certain circumstances and timing it does seem like BMWFS will work
[quoted text clipped - 5 lines]
> Obviously there are no guarantees but they have been decent to me on two
> separate occasions.

As a former BMWFS employee (should have made that clear) I should have
mentioned that the Remarketing Department has the power to alter the
terms of the lease to make it more favorable to the buyer, but as Jess
notes you should deal with BMWFS directly and not the dealer.

I rather suspect that the original poster's lease was not with BMWFS,
as the "shady" dealers tend to prefer to lease through banks which then
get to play the "bad guy" later on to the customer.
Jess Englewood - 09 Apr 2004 20:49 GMT
> As a former BMWFS employee (should have made that clear) I should have
> mentioned that the Remarketing Department has the power to alter the
[quoted text clipped - 4 lines]
> as the "shady" dealers tend to prefer to lease through banks which then
> get to play the "bad guy" later on to the customer.

I believe your FICO score, credit record and internal credit record (that
with BMWFS), also plays a part in their willingness to do something nice for
a customer. This was implied to me by a BMWFS agent. I guess it makes sense
to me that a company might give costly concessions to what they perceive to
be their highest quality customers only. But maybe Jack can confirm or deny
that because I am not certain it is accurate.
Jack Baruth - 13 Apr 2004 18:53 GMT
>> As a former BMWFS employee (should have made that clear) I should have
>> mentioned that the Remarketing Department has the power to alter the
[quoted text clipped - 11 lines]
> be their highest quality customers only. But maybe Jack can confirm or deny
> that because I am not certain it is accurate.

Signature

--
/~` _ | _  _ _  _  _ _ _   Jack Baruth - Calamarco Free Systems
\_,(_||(_|| | |(_|| (_(_)  jack@calamarco.com    ~~~ jack@baruth.net

Jack Baruth - 14 Apr 2004 13:13 GMT
A little Emacs buffer idiocy on my part caused me to post a
blank response yesterday... This is what I *meant* to post:

The mechanisms by which customers are "given" to various finance
companies by dealers deserve their own book, which I'll write some day
:) but here's part of it.

Some customers are "automatics" and some are "stones" and some are
in-between. The fifty-five-year-old man with a 790 beacon score,
ten years as an executive officer under his belt, and plenty of
equity in his home is an "automatic". Everybody wants his business.

The twenty-seven-year-old woman with an entry-level job, a couple of
maxed-out credit cards, and some iffy college loans is a "stone". Not
absolutely "unwritable" but not desirable either.

While I was at Ford Credit and BMWFS I would see a lot of "deals" cut
between the F&I guys at the dealers and our loan officers.

"I'll write this stone but I want two automatics in the next week
or so, at a sharp (i.e. higher than what they would normally qualify
for) rate."

"Thanks for this guy - send me a stone and we'll try to work it."

When the lease is up, we don't want anything to do with the stones.
They won't get a remarketing call, they won't be offered any further
financing on the same car... we pretty much wanted them to turn the
car in and leave. That's because we try to minimize risk.

A "good" customer, on the other hand... we'd like to keep them and
do more financing business with them... so they will see a better
incentive.


Dan Krueger - 14 Apr 2004 00:31 GMT
Pre-payment just means YOU make the last six payments.  If the miles are low and
the car is in excellent shape, you may be able to trade it in or sell it to a
private buyer for a price near the payoff amount.

Dan

> I am 30 months into a 36 month lease on a 525. I need a wagon or X5, so I
> went to my dealer today and asked about an early out. I was told that there
[quoted text clipped - 5 lines]
> Thanks,
> Drew
 
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