Re: Has anybody ever traded out of a lease? (archive)

I trade out in the middle of leases all the time. It's a matter of how bad you want the next car. First, hwta you will owe is simply a calcualtion of the balance of payments due, minus the taxes and lease service charges, plus an early-out penalty. On a 3 year lease, you are generally OK to bail at 24 months or better without getting skinned. However, before that, they tan you pretty good. At one year in a 36 month lease you get slaughtered.

Forget the down and all that stuff. Essentially, it was absorbed in the payment calculations. That's why you should avoid putting money down on a lease. The residual on a 43,000 lease is identical regardless of your putting money down. The down payment just lowers your monthly payment a little, which makes getting out early slightly less of a trauma.

Anyway, with BMW, they are more than happy to roll over the screwing into the new car and just pass on the higher new payments, until the next cars lease expires. The best bet is to not bail on two leases too early in succession (like getting out of two 36 month leases in a 24 month period). You'll have to write a check at that point to clear the mess up.

In your case, if you're at least 20 months in on a 36 month contract, you should escape with a sore rectum, but heal quickly on a car like an E46 328is, if you keep it to maturity.

Next best thing is to put the car up for sale for the amount of the residual due (call BMW financial services, they will give you the exact number). If you find a buyer, then it's simple enough for you to buy out the lease and sell the car off, starting on the new car with a clean sheet. You may get hosed if the residual is higher than fair market value, but you have a good chance of saving a few grand this way, with the right buyer anyway, as the transaction may take a week or so to square away.

Hope this is helpful. I've blown through 32 cars in the 22 years I've been married. I know from exiting financing and lease contracts early... it's the only way I do it! My wife, however, paid off her 318ti and insists on leaving it bone stock and driving it untill it will not longer roll under its own power... where is the fun in that?!

Follow Ups:

Thats gotta be expensive right?? VJ 19:32 6/25/2000 (1)
- Yes and no kwillmorth 23:56 6/25/2000 (0)

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