Automotive

Decision on End of Lease - BMW X1 - Buyout or walk away?

  • Last Updated:
  • May 27th, 2019 9:50 pm
[OP]
Newbie
Dec 9, 2018
23 posts
Montreal

Decision on End of Lease - BMW X1 - Buyout or walk away?

Hi,

Last year I leased a BMW X1 with a somewhat hefty down payment (around $8.5k) for 24 months.
I did not have a credit history in Canada before, therefore the down payment. It helped to have much lower monthly payments, so don't cry for me.

It's been a year and we're standing at 6.000 km on the clock. I hardly think it's going to be more than 15.000 km at the end of lease (compared to 40k allowance).
The car will still be in pristine condition, and still under warranty for two more years after it becomes mine.

However, I personally did not like the space in the car/trunk, and should have been looking for a larger crossover / SUV (maybe a Santa Fe?).
Also the tech in the car (safety kit etc.) is not the latest. But it's also not the end of the world.

The thing that bothers me is what to do at the end of lease.
The buyout price is $28k (excluding taxes).

There's one other important element in the equation, and it's the QST exemption.
Even though I'm new to the country, I think I'm exempt from the Quebec Sales Tax (I mean I'm eligible for reimbursement).

So, in short:
  • I leased a BMW X1 for 2 years, but it's expensive
  • It's rather small for me
  • It's going to be pristine and under warranty at the end of lease
  • Buyout rate is $28k
  • $28k is still a big lump of money, and I could look for other options to buy / finance using this amount
  • I'm exempt from the QST

Do you think there's benefit in buying out the X1 and re-selling it, considering the QST exemption?
Or should I just walk away, and use the money to finance, buy or even lease something larger (not a BMW though)? Considering I'm not really happy with the car, and don't think of keeping it with me for long.
9 replies
Deal Expert
User avatar
Jul 30, 2007
28596 posts
14000 upvotes
Toronto
2 yrs leasing is the worst choice to make as the car’s deepest depreciation occurs in the first 2-2.5 yrs, hence you are paying a hefty monthly payment (effectively with the down).

Is it worth to buy it out ? Given your answer as suggested, it’s the wrong car to begin with and it’s really a no brainer to just move on to another car. For sure, dealer will buy it out from bmwfs and probably make a good profit from it (little wear and low mileage)
Member
User avatar
Jan 8, 2015
373 posts
319 upvotes
Mississauga
If you dont want it, see if you can find someone to take the buyout with a fee for yourself.
I see these all the time on leasebusters
[OP]
Newbie
Dec 9, 2018
23 posts
Montreal
How much do you think I can sell it for, what would be a possible price in a private sale?
Deal Expert
User avatar
Jul 30, 2007
28596 posts
14000 upvotes
Toronto
take a look at the autotrader and see what's the general asking price. Since yours is low mileage and pretty clean, you can ask a bit more than the current listings and go from there.
Newbie
May 6, 2019
60 posts
91 upvotes
I would actually posted it on leasebusters now, and have someone take over the lease and maybe ask for $1000 back from the buyer. Since you will have a lower monthly payment than average.

This way you can pocket the $1000 and stop making payments on the X1.

And then you can go pick a car that actually fits your need.
Member
Jan 14, 2008
450 posts
250 upvotes
Toronto
How much is the monthly lease payment?
[OP]
Newbie
Dec 9, 2018
23 posts
Montreal
Thanks for the advice so far, the monthly payment is around $490.
Jr. Member
Mar 3, 2019
149 posts
126 upvotes
General rule of thumb is to not put a significant down payment on a lease because the nature of depreciation you will never see that money again.
You're already in it for $8.5K, plus 2 years worth of payments ($11,760) = $20,260

Buyout is $28,000 + hst = $31,640. Financing at a rate likely over 3%-4% it will likely be closer to $33,000 - $35,000 total.

So hypothetically this car will have cost you $55,260 (roughly).

My advice is to walk and go lease something else for 4 years instead of 2. Buyout is too high and you haven't leased it long enough to have any equity.
Deal Addict
Jul 26, 2018
1346 posts
2147 upvotes
Canada, eh?
The residual value determined by BMW Financing are also often higher than the market value. So that’s something for you to consider as well.

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