Automotive

Leased Vehicle Residual - in the money

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  • Nov 10th, 2020 11:13 pm
[OP]
Newbie
Aug 26, 2012
17 posts
3 upvotes
TORONTO

Leased Vehicle Residual - in the money

Coming up on our first lease maturity date in mid January 2021. The vehicle a 2018 BMW X1, M Performance, AWD, leather seats, heated seats steering wheel, sunroof, etc.

The buyout listed in the lease is $28,750 plus $1k fee to BMW and HST. Permitted to drive up to 48k km but we have only driven 30k km (blame myself for not being at the dealership when the lease was negotiated).

Comparable cars on Autotrader are selling for $32k to $35k from dealers, so believe we have somewhere in the $2200 to $5200 in "excess value" compared to the residual value.

Not terribly interested in this as a LT vehicle but could see us owning for another 6 to 12 months if really needed. It fits the bill but is a bit small for two tall adults and two kids under two that tends to haul lots of stuff on the weekend.

Just wanted to put this out there for those that have may have gone through a similar experience. Thinking of listing the car "for sale" on Kijiji and would make the transfer on the day I turn the car in so HST is paid only once. Not sure if it's worth the brain damage for potentially $2k, or less if transfer fees have to be paid.

FWIW, for the next car we're split on getting either an Outback (cheap lease takeover for $420/mo taxes in w/ less than 3yrs remaining), Volvo XC90 (another lease takeover at around $800/mo with 2.5yrs remaining) or something else (VW Atlas, Telluride/Palisade, or maybe 4-door full size pick-up).
15 replies
Deal Guru
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Oct 6, 2010
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Toronto
I don't think you can only pay hst once. You'll pay the hst to buyout the vehicle in your name as per the contract but you have to get the vehicle transferred to the buyers name which requires a sale and hst is applicable unless it's a direct family member.

Contract says either you buy it or return it.
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Sep 9, 2012
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chrisjr wrote: Coming up on our first lease maturity date in mid January 2021. The vehicle a 2018 BMW X1, M Performance, AWD, leather seats, heated seats steering wheel, sunroof, etc.

The buyout listed in the lease is $28,750 plus $1k fee to BMW and HST. Permitted to drive up to 48k km but we have only driven 30k km (blame myself for not being at the dealership when the lease was negotiated).

Comparable cars on Autotrader are LISTED for $32k to $35k from dealers, so believe we have somewhere in the $2200 to $5200 in "excess value" compared to the residual value.

Not terribly interested in this as a LT vehicle but could see us owning for another 6 to 12 months if really needed. It fits the bill but is a bit small for two tall adults and two kids under two that tends to haul lots of stuff on the weekend.

Just wanted to put this out there for those that have may have gone through a similar experience. Thinking of listing the car "for sale" on Kijiji and would make the transfer on the day I turn the car in so HST is paid only once. Not sure if it's worth the brain damage for potentially $2k, or less if transfer fees have to be paid.

FWIW, for the next car we're split on getting either an Outback (cheap lease takeover for $420/mo taxes in w/ less than 3yrs remaining), Volvo XC90 (another lease takeover at around $800/mo with 2.5yrs remaining) or something else (VW Atlas, Telluride/Palisade, or maybe 4-door full size pick-up).
Fixed that for you - what’s posted on autotrader are advertised asking prices and shouldn’t be taken as a listing of actual sale prices. Therefore, you’d have to expect that the list price at a dealer would be negotiated down before a sale is actually made. This will reduce your potential margin by several hundred dollars or more.

Also, before you go much further you should investigate if your plan to day a last day transfer is even feasible. Some (many?) leases prohibit a transfer in the last 30/60/90 days depending on the terms.
Deal Expert
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Jul 30, 2007
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Toronto
couple of clarification you may want to sort out:

- will BMWFS allow you to do such thing by having an outside buyer to step in to buy it on the day you are turning it in ?
- If BMWFS does allow, dealer will want another / extra admin fee of anywhere between $500 - $1000 + taxes for the flip transaction, that's on top of the $1,000 + taxes buyout fee.
- you may need to do the safety prior to this flip
Deal Fanatic
Aug 29, 2011
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Mississauga
Wouldn't it be a cleaner transaction if OP bought it outright at the end of the lease then flip on their own?
Deal Guru
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booblehead wrote: couple of clarification you may want to sort out:

- will BMWFS allow you to do such thing by having an outside buyer to step in to buy it on the day you are turning it in ?
- If BMWFS does allow, dealer will want another / extra admin fee of anywhere between $500 - $1000 + taxes for the flip transaction, that's on top of the $1,000 + taxes buyout fee.
- you may need to do the safety prior to this flip
Really good points.
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Deal Fanatic
Sep 1, 2004
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Have you done return inspection yet? What's the penalty there if any?

That will impact your return vs buy out decision.

Your buy out is $33.6K and dealer is listing for average of $34K average. So sounds like returning is the cheaper option unless you plan to drive it into the ground or your inspection shows up with costly damages.
mrweather wrote: Wouldn't it be a cleaner transaction if OP bought it outright at the end of the lease then flip on their own?
Not Ontarian but doesn't that incur double HST? That $4K can really sour the deal quick.

Also I assume dealer will attach CPO warranty where private sale probably doesn't.
Last edited by Xtrema on Nov 4th, 2020 3:32 pm, edited 1 time in total.
[OP]
Newbie
Aug 26, 2012
17 posts
3 upvotes
TORONTO
Inspection next week.

All have raised very good points to further research. Thank you!
Deal Addict
Dec 10, 2007
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Interested in this as well; my current lease buyout on my leased car ending next year is only $43.6k and it has ~ 26k mileage. Autotrader lists similar car at at least ~$54k at similar mileage (guesstimate roughly similar mileage by then). I guess one option would be putting up ads on autotrader and see if someone wants it.
Deal Guru
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Oct 6, 2010
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Alternatively, you can put it up on leasebusters and say that you want $$$ down and take over my short term lease.
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Jun 20, 2019
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Mississauga
Was that buy out for right now? or is it your residual at the end of your lease term? If its your residual and you want to get out of it now then find someone to take over your lease and pay the transfer fee + $$. If it is your current buyout (including residual and remaining monthly payments) then taxes will be charged once to you and then to the buyer.
Member
May 7, 2016
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chrisjr wrote: FWIW, for the next car we're split on getting either an Outback (cheap lease takeover for $420/mo taxes in w/ less than 3yrs remaining), Volvo XC90 (another lease takeover at around $800/mo with 2.5yrs remaining) or something else (VW Atlas, Telluride/Palisade, or maybe 4-door full size pick-up).
You could lease a brand new XC90 T5 Momentum for $700 with $0 down. Or even offer your X1 as trade-in, to see how much they give you to decide if it is worth buying it in. I would certainly not sell it privately as the headaches and potential financial gain won't be worth it.
[OP]
Newbie
Aug 26, 2012
17 posts
3 upvotes
TORONTO
carztoronto wrote: You could lease a brand new XC90 T5 Momentum for $700 with $0 down. Or even offer your X1 as trade-in, to see how much they give you to decide if it is worth buying it in. I would certainly not sell it privately as the headaches and potential financial gain won't be worth it.
Unfortunately due to the nature of our work w/ relocations possible, family growth and general flexibility-focused mentality, we aren't ready to take a lease for 4 or 5 years, which leaves us hanging around leasebusters and kijiji trying to find something with under 3yrs remaining. Finding decent number of good options there.
Deal Guru
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Jul 12, 2003
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Toronto
carztoronto wrote: You could lease a brand new XC90 T5 Momentum for $700 with $0 down. Or even offer your X1 as trade-in, to see how much they give you to decide if it is worth buying it in. I would certainly not sell it privately as the headaches and potential financial gain won't be worth it.
XC90 for $700

+ HST and 24 months lease?
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