FleeingFox

Long timer lurker, first time posting.

Please be kind if this is not the appropriate place to post this!

Back story:

Got myself into a BMW 3 series in August 2013. Was my first new car, and while I didn't love it - I got it anyways. It was my commuter car, but also the family car/weekend car and "fun car".

Car stickered at $50,0000, and I pay about $440 monthly. However, what really sucked is that my insurance went up 30% for no reason other than I am male and less then 25 years of age and now drive a BMW

Now I am looking to save money, but also get a new car.

I would really like to get a Lexus, specifically the RC, for a variety of reasons.

1) LA roads SUCKS and the BMW ride while sharp is incredibly uncomfortable. Morning bumper to bumper traffic to get to law school and feeling every dang hole in the road is killing my back and my patience.

2) I have seen people on these forums leasing RCs equipped almost exactly as I would like for ~ $399. Thats nearly $500 a year (a lot in my opinion).

3) My insurance company (family friends - would never switch because the customer service is amazing) quoted me at nearly $57 LESS a month for a RC v. what I currently pay for BMW.

This + the smaller payment is nearly $1200 a year in savings (not to mention I believe the RC would use regular and BMW requires premium).

4) Lexus seems to have a lot of the luxury features I am now looking for - ventilated seats, heated seats, comfortable yet sporty ride, premium sound, and safety features which either aren't available on the BMW or cost an extreme amount of money.....

My lease would traditionally end in August 2016....

In your experience what is the earliest you think I could get out of it, and switch to a Lexus without suffering significant financial penalties?

What options would I have to get out of the lease ~6 months early?

6 months because at that point I could use BMW pull ahead, save $3000 worth of payments and fees and jump into a 228i. But would not be saving much money, and would not be getting the luxury features I really want.

Your advice in this matter is appreciated!

FrankReynoldsCPA

that's a lot to spend on any car while still in school....

FleeingFox

Didnt think it was relevant to the post, but I have a job and go to school.

IT director at a small medical corp.

Earn enough that I can have a decently nice car for commuting to work & school, eat out sometimes, and put some money away at the same time.

But yea, the idea here is that I would like to save a bit more money in the long run.

Fizzboy7

You will not be "saving" anything by getting into a fresh, new debt. Everytime you make a new purchase, you are digging the hole of debt all over again. Instead of having a shorter debt, which you have now, you will be getting into a longer debt. That is not saving money. Got to look at the big picture and not just what you are paying each month. In the grand scheme of things, if saving money is your goal, you are almost always better off keeping what you have, paying it off as soon as possible, and gaining as much equity with that item.

FleeingFox

I feel that the need to clarify has arisen.

I am not wanting for money, I am not in the situation where I feel I have stretched my limits of what I am fiscally capable of responsibly saving.

I am young, but also successful with a career of my own that I started at the age of 17, based upon a hobby of mine (computers) that I had since the age of 14. It has led me down a career path that while I enjoy, am not set upon for the rest of my life.

My original post was not one of "please help me to figure out how to save money" because If I was in that situation I would have bought a used car and kept it til it broke down - Like I had done previously with a 1999 Ford Explorer that I maintained until 2013.

I like the idea of the Lexus because it appears to offer more for less - and that should attract any savy buyer.
There is no belief that this would remedy my financials or somehow put me on a path to equity. However the idea of my next lease costing me ~ $3000 less for a car that has more features does indeed tickle my fancy.

Rather my question, and here is where I feel the need to clarify, is:

I have learned that many manufacturers offer a "lease pull" program in which they are willing to take in your lease early.

BMW will allow you to turn their own cars in 6 months early with no penalty.

My local Mercedes dealer Informed me of manufacturer incentives for "conquests" that gives them $2,000 playing room to cover costs associated with ending a competitors lease, and that this is outside the realm of the Cars MSRP.

My question is whether Lexus offers such things, and in your opinions when an optimal time to approach this would be.

SPECIFICALLY asking for people who have come from a competitor brand, with a lease, and ended that lease early to get into the new car - what was the experience? How bad were the penalties? What were the ups/downs/unexpected things during the process?

I hope this clarifies the nature of my question, and alleviates some of the concerns presented in earlier responses, to which while I feel grateful for guidance (from strangers), feel is misplaced. Not in the least bit helped by the fact that I took a final today, am sick, and exhausted. Forgive my rambles/nonsense.

jaime1982

He is leasing, and talking about getting into another lease. There is NO equity being gained. Also OP insurance goes up when you lease vs buy(so I have been told).

Not really thread related, but my worthless 0.02 is to buy an older commuter car and get rid of making payments and stack some $$.

bagwell

you'll be liable for the remainder of the lease payments no matter what you do - you can trade it in right now if you want but the remainder of your lease payments will be rolled into whatever else you get.

or you can try to sell it outright which would entail covering the remainder of the lease payments + the residual purchase price....BMW should be able to provide you with a buyout price.

1111GS

Take your car to Lexus to see what they would give your car. The difference between your current buy it now (from BMW) and Lexus is what you need to cover. These days it's usually a negative asset or they call deep in the hole or up side down. Same car companies do all the time and I read different companies do as well so they can attract buyers from other brands. You may not like the number they offer you but that's one way to do it. Or you could buy, sell then lease the new Lexus.

Individual

iTrader: (7)

What they said^^^

See what the buyout on your lease is, and take to a carmax to get it appraised if the lease lender allows, I know Lexus does. If they will buy your car at your buy out price, or even more, then you can break even, or even make a little profit, then lease the Lexus. When they buy your car, you are no longer responsible for all the lease rules/penalties and stuff.

My lease is up in July, and I got my car appraised at Carmax last month because I wanted to get out early, but the appraisal was short a bit over a grand, so I figured I'd keep it and make the last two payments. I wanted to get rid of it early because I bought a new commuter that's paid off, and didn't want to pay insurance for an extra car.

SC300Es

Why not try to transfer your lease to someone who'd be willing to take over your payments? Then, go get the other car.

Leasetrader.com or swapalease.com?

Ed

tex2670

A few things:

1. Using your numbers, between your assumed RC monthly payment for the lease and insurance, you will save, from now until the end of the lease, $1470. Now, I certainly wouldn't turn down an offer for that cash, but it's not really a huge sum in the grand scheme of things. And without leasing a new BMW, the likelihood that you will be able to end the lease early, without having to pay all remaining monthly payments, is slim--they usually do that when you stay with the brand. Then, you wouldn't be saving anything--you'd be paying for both leases for 15 months.

2. I haven't driven an RC, but it would surprise me if the RC handles bad road conditions better than your F30.

3. I read AboveTheLaw.com, and I know the legal job market out there sucks. It's great that you are in a decent financial position, but just be sure you have a good job lined up after graduation before you go and pull the trigger on your next luxury car.

FleeingFox

Wow, did not even know this was a thing!

Thank you, I shall investigate .

FleeingFox

1) The way I cut the numbers, is that I would save ~$1200 a year leasing a RC v. leasing my current 3 series.

I obviously do not want to be in a situation where my desire to switch cars wound up costing me MORE, hence the point of this post.

Also, would never lease two cars at once, and am not willing to swallow a huge amount of negative equity + a downpayment/RSD in one go.

2) Went to Jim Falk lexus back in April just for Giggles. They didn't have the RC I wanted to see on the lot, so I got to drive a RCF to their storage area. 5-6 miles up Olympic with that awesome beast rumbling.

Drove the RC back to the dealership, and can confirm it is MUCH more comfortable than my car, thought a bit more snug in the cockpit. RC just seemed to glide over the pavement but with sharp steering and control. BMW feels sharper but every crack in the road is felt.

Not expecting a pure luxury ride, if I did I would just get an ES / C class and call it a day.

3) Are you a practicing lawyer or just reading for fun? Yes the legal market is in hardship and while in the 90s that hardship was on employers looking for good lawyers.... its now on lawyers looking for good jobs.

I would have been a fool to go to law school expecting a job right out of the gate...

Hence why I kept my current job and have great job security.
Hence why I am also studying for a real estate brokers license.

Not really planning on working in a law firm anyways, at least not counting on it. Finding my way into a real estate firm and working in one of their higher up departments - putting my skills in contracting, negotiating, analysis, and writing skills I have honed for the last few years to good work.

Gosh, started talking about cars, wound up talking about my plans for the next 20 years..... sorry!

Fizzboy7

Perhaps the word "equity" is off. But my point is there are different degrees of debt being considered in his situation. Getting out of a lease before you've had a chance to pay up on it is digging a deeper financial hole to climb out of. Riding out a lease to the end presents the opportunity of selling the car privately and pocketing the difference, or financing the car all together to gain equity. But as the OP further explained, all of that is irrelevant at this time.

Toyotas/Lexus's make for great beaters by the way. I'm embarking on such a test.

tex2670

Right--and you have 15 months to go on your lease. Of course you wouldn't lease 2 cars at once, but many times, when you approach another dealer about getting out of your lease early, they quote you a new lease payment that rolls your payoff into your new lease, and stretches it out over the next 36 months. So you don't "get out" of your lease--you pay it off, but finance the payoff thru the new dealer.