[iroc86]

First-time poster here! This may very well be a subjective discussion, but I'm curious to hear what other enthusiasts might do in my situation. I'm contemplating a lease buyout for my 2020 230i 6MT. This is not normally something that I'd consider, but with the pandemic, my car has seen little use and it's essentially new--two years into the contract and only 5400 miles driven. Second scheduled oil change is tomorrow, ha. I ordered it on New Year's Eve 2019 and it was one of the last cars to make it out of Leipzig before the factory shut down in early 2020.

I was originally planning to use my car's equity on a lease trade-in, but now I'm not so sure. The dealer is willing to give me $30k on trade towards a new BMW. Current payoff is $25k and the residual will be $20k at lease termination in another year. If car values continue to remain high--no telling one way or another--I have the possibility of earning a $10k rebate on a new car ($30k trade minus $20k residual). I'll probably be lucky if I put another 2000 miles on the car before that time, so I think the ridiculous equity is a real possibility if the used car market stays the same.

The rub here is that I'm not particularly drawn towards the new G42 coupes. There isn't really a "wow" factor anymore for me--they discontinued the convertibles, the manual transmission is dead, they aren't made in Germany anymore, etc. Probably the only model interesting enough is the M240i, but at those lease payments, I'd be better off buying one and selling it in a couple years... get one with the 50th anniversary M badging or something. Even with a $10k rebate from a hypothetical trade, an M240i is more than I want to spend. My F22 230i is appealing to me because it's small, simple, and unassuming, as well as affordable.

However, if I keep my 230i, which I know and enjoy, I'm concerned that it may not be "desirable" enough as a base-ish model if I were to sell it, say, in 2025. Selling (or trading) cars is not fun for me, and it's one of the reasons that I lease in the first place. Owning a car often feels like a liability because I'll never get back the blood, sweat, and tears that I put into its maintenance or care. With a lease, I can be less discriminate because it's going back after three years, no questions asked, more or less. (These days, I only have the bandwidth for that level of attention with a few special classic cars, which I'll probably never sell.)

This all being said, a couple questions arise: Is buying out an F22 230i on lease worthwhile? Will I have trouble offloading it in a couple years? Is it foolish to not seize the equity in my car on a new BMW, even though I'm not particularly excited about the offerings?

I know there's no right or wrong answer, since it depends on the situation and motivations, but what would you do?

[Sportstick]

Between automatic transmissions and electrification, your car is among a few that represent the end of an era. Not only would I buy it out, but I’d figure out a way to keep it forever. I’m doing that with mine and have a different “family/daily driver” car.

[Ajowhan]

With the amount of miles that you drive, let's say you buy out the lease of the car next year and were to sell it in 2025. Im guessing that you should either be able to sell it for more than the lease buyout still or at the least very close to it.

Other thing to consider is that the price that you were quoted right now, $30k is a dealer trade in price which is considered bottom cash value. Likely that car would be worth more to private buyer. If the car is worth that much to a dealer, you already have an easy avenue of a backup plan for offloading in say, 2025.

You think you are seizing an opportunity in equity in a new BMW that you are not particularly excited about. I think you are just going to end up losing equity in a new BMW and end up with more monthly payment that is unnecessary. Keep the car, sell it in 2-3 years or so for what likely will be similar price to your current lease buyout. Enjoy 2-3 years of no monthly payment and the feels of "driving a car for free".

Thats just my opinion.

[freakystyly]

I'm not too optimistic on the resale value of a 230i a few years down the road. Low mileage and good condition definitely would be the deciding factor over what kind of car it actually is.

Not saying it will drop off a cliff or anything.. just don't expect it to hold a high number.

[230iZTR]

Base models in a rare configuration don't hold value as well as a limited edition model (i.e. Performance Edition or CS) but there's pretty compelling evidence that in the very long term you'll see them tick up in price above your typical depreciation of a less enthusiast-friendly spec'd model. Look at clean E30's and E46's today. Most of them are depreciated junkers to the extent that they're being turned into cheap track cars... But every once in a while you see a clean M-tech E30 or ZHP E46 go for way more money than you'd expect on Bring a Trailer or whatever. Doesn't seem like you'd want to hold it for that long, but if the 2-er excites you more than anything you could trade it into, then keep it.

[Shovelman]

You and I have sorta rare birds, 230 6MT. That will give them a little bump in value in a few years. Maybe more than a few years if you are thinking 2025 which is next week. I've been down this road and the challenge is finding the rare buyer who will want it. Depreciation is going to continue it's gristly carnage. My plan is to reduce the cost per mile by enjoying mine for many miles.

[morphomeman]

Keep it!! In any case, don't sell it to the dealer. It is worth more than they are offering. Check the Blue Book value. If you want to sell it, sell it privately. But then you will be faced with buying a new car in a terrible market in which there are no cars of this ilk available.
Of course, it will depreciate. All cars do, but depreciation slows down as the car gets older and that will be especially true of 'special' cars like the 2-series, no matter how configured.

[iroc86]

Thanks for the input. This is just the kind of discussion I was hoping to have, from people who have either been here before or are in similar situations with their cars.

I agree that we're in an unusual period where much of the automotive landscape is changing. That fact alone lends itself to keeping the car, perhaps not for the long term in my case, but at least to enjoy for a few more years. Admittedly, I don't have any other manual transmission in my small car collection of "keepers"; stick shifts have always been daily drivers for me.

In the resale market, the special edition models and packages are always the hot topic, but that's a good point about the more basic E30s and E46s. I think a clean, low-mileage car in any configuration is going to appeal to the right person one way or another. Even so, I feel the 6MT sets my car apart more than anything, as well as the Oyster interior. A light interior is a dealbreaker for me and almost always puts the sportier trims out of the question, although I wish I would have sprung for the M Performance package. When I ordered my 230i, it came down to the manual transmission or the convertible--couldn't get them both in the same model.

Whatever decision I make isn't all about financials, but I did run the numbers just to see how it stacks up. Sparing you all the intricate details, I figure I'd net about $4k if my 230i can be sold for $25k in 2025 (I'm just saying 2025 because a five-year-old BMW doesn't sound too old for resale). This may be plausible, but who really knows: the NADA private party value for a 2017 230i is nearly $29k, and it's hard to forecast with the market being what it is.

So, yeah, a $30k dealer trade for my car is probably unrealistically low.

This potential net gain of $4k may be offset by maintenance and repair costs, but I sure hope I wouldn't spend that much for driving it for just one year out of warranty, assuming 2025 is the magic year to sell. The gain is almost lost in the noise anyway and I certainly wouldn't pin my decision on earning a couple grand in a few years. I think this is one of the reasons I'm having difficulty weighing the options, since it's really not just about the numbers. It's kind of a mix between enjoying what I have and planning for the future, while not ignoring the fact that cars have a bunch of unrealized equity at this very unique moment in time.

If I leased another BMW, one of the things that worries me is indeed the potential lost equity in a new model, as Ajowhan mentioned. I priced out a basic 230i (G42) and could reduce my lease payment by about 25% compared to my 230i (F22) if I got a $30k trade valuation when my lease term expires next year. (The fact that the 2 Series has awful residual notwithstanding.) That sounds good on paper--lower monthly payment, yay--but this could set things up for sticker shock for, say, the lease after the G42 when there's no equity to be had. Of course, this is always the situation when moving from lease to lease, but I see the process just getting more expensive in general. As an example, my wife just leased a new Jetta and is paying about $100 more per month than I was in 2014 on a then-new Jetta. Nearly the same MSRP and she even gave them 10% down (I did 0% down in 2014). The rebates and availability just aren't there anymore.

It sure seems like the consensus so far is to buy out the lease!

[bensanford]

I agree with the opinions mentioned by most everyone - buy out the lease and keep your 230. I have a similar but slightly older 230, and am just now approaching 15,000 miles.

One question that I have. If I were thinking of selling mine, when I look at KBB or other sites, I can't really determine if the manual transmission adds to the potential value or is that a negative factor since it limits the potential pool of buyers - even though the MT is no longer available unless you spring the $'s for a M model.

[iroc86]

Thanks for bringing this thread back to the top, bensanford. I've been continuing to evaluate my stance on buying out the lease, and I think I'm still in agreement with those that replied here--keeping the car seems to make the most sense at this moment in time, and probably for the foreseeable future if the market continues the way that it is.

Regarding your question about the resale potential of a MT car, in my experience, the valuation tools like KBB or NADA usually knock off money for having a manual transmission (BMW or otherwise). I figure this is because automatics are/were an option that usually raised the MSRP. However, for a potential buyer that's seeking a MT, there's no substitute. I'd argue that a manual transmission in the used market decreases value on paper, but the lower valuation isn't an accurate reflection of reality considering how difficult it can be to find a car with such a transmission. I'd say it comes down to the right buyer for the right car, and how much it's worth to them.

[bensanford]

Actually, the MT was a (no cost) option on the 2018 models, and I think that was likely the case later until the MT was deleted as an available option. So the MT and the automatic were the same cost to the buyer, but it does appear that KBB does lower the projected value for cars with the MT.

[iroc86]

Originally Posted by bensanford

Actually, the MT was a (no cost) option on the 2018 models, and I think that was likely the case later until the MT was deleted as an available option. So the MT and the automatic were the same cost to the buyer, but it does appear that KBB does lower the projected value for cars with the MT.

Yep, that's right--same for my 2020.

My wife and I purchased two identical VW Alltracks a few years ago and she was bummed that her automatic cost another ~$1200 compared to my 6MT.