01-30-2017, 05:06 PM | #221 |
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Id like to know the same thing, curious that they have to offer...
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01-30-2017, 05:14 PM | #222 |
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01-30-2017, 05:22 PM | #223 | |
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2.91%
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01-30-2017, 05:26 PM | #224 |
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03-23-2017, 10:21 AM | #226 |
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that is a realistic value, which i applaud BMW FS for finally doing.
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03-23-2017, 10:23 AM | #227 |
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03-23-2017, 12:52 PM | #228 |
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Errr, no. What PKumar was saying is that (in his opinion) a 47% residual is a realistic value for a 3 year old, 30k mile M2.
I'm not sure I agree with him, but I do agree that BMW lease residuals have historically been over-valued. BMW has treated leasing almost like a form of incentive. The thing to keep in mind is that leasing is like buying a car with a pre-arranged sale date 3 years in to the future. In concept, it could be said that the leasing company is agreeing to buy the car back at a fixed price in 3 years. In order to give you that fixed price, you have to agree to a specific mileage and condition. If you go over on mileage, or if you trash the car, the lease contract spells out how you'll compensate the buyer. In reality, they're not "buying the car back", because you never own it. They just do the math on the difference in price, amortize that amount, and charge you a financing fee. So, once you understand all this, it's easy to evaluate whether a lease is a good deal. The base M2 is around $53k. With a residual of 47%, the leasing company is agreeing to buy the car back at around $25k. If you think that M2 values will be higher than $25k in three years, you have two options: Purchase) Do a purchase finance agreement at lower rate and sell the car privately when you're done. Lease) Do the lease deal anyway, and buy the car at the end-of-lease with the intent to sell it privately. There are a couple of considerations for the lease option: 1) You'll pay quite a bit more in finance fees. Leasing finance fees are always higher than purchase finance fees. The upside is that you're only financing a portion of the car's value (the difference in residual and the negotiated cost of the car), so you're actually paying about the same in some scenarios. You have to do the math on the loan vs the lease finance fees. Keep in mind that you'll need to include lease inception and termination fees in those calculations. 2) You could consider this a hedge. If you think M2 values will be lower than 47% of the residual, you can use the lease as a hedge against declining future values. You'd still have the option to purchase the car and sell it privately, but you're going to pay a couple grand more in finance fees for the lease. These will need to be overcome for this scenario to make sense. My opinion is that 47% is on the low side for the M2. The M2 has some carry over luster from the 1M, and it has received overwhelmingly positive reviews. Supply has not exactly been overflowing, either. It's not a limited run car, but it doesn't appear that BMW are producing the M2 in huge numbers. Add all this up, and I think 3-year, 30k-mile residuals will easily beat 47%. I would take advantage of the lower finance rates on purchase financing and sell the car privately when I grew tired of it. The low residual value and higher fees makes the lease option a bad hedge bet.
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03-23-2017, 01:18 PM | #229 |
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great info!!! i will purchase as planned. 2.9% or less i hope. 72 months too..... 84 if im lucky
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03-23-2017, 01:34 PM | #230 | |
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We're coming up on the first 12 months for original leases, which were 46% residual for 36 months if memory serves me right. After those 12 months, used M2's are going for MSRP or slightly below, so let's call the residual 90% for arguments sake. Assuming the same pattern, I estimate that 3 years in, the residual would be about 70-75% of MSRP. This is all my own estimation, but probably not too far off based on how the market is behaving. |
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03-23-2017, 02:48 PM | #231 |
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I would add the following words of caution:
It is very difficult to gauge a used-car market by listing price, especially for a car like the M2. There are two major factors that drive sellers to ask ridiculous prices: 1) The M2 is a low-volume car, which means there aren't many new models available. On the used car side of things, the car is only ~12 months old, so there is very little supply. This leads to a scenario where dealers are more than happy to put a used M2 on the lot at a crazy asking price, because they know they can drop the price and sell the car at any time. 2) The 1M carry over effects are tremendous. Now 6 years on, 1M prices are still holding up incredibly well. There are easily identifiable reasons for this: very low production numbers, well received/reviewed, great development story, positive ownership stigma (exclusivity, sporting, eclectic). The M2 is experiencing some carry over from this, but used prices haven't been tested in the market. Sellers are absolutely going to experiment to try and capitalize on the 1M carry over. Just recognize that it may or may not play out. None of the above should be interpreted as discouraging the purchase of an M2. I think the car will very easily beat the 50% residual mark. I just don't know if I think they'll make 70-75%. BMW shows every intention of continuing — and even expanding — the M2 line-up. Another unknown is how the presence of a model like the M2 CS will affect base M2 values. That's a major wildcard. The strategy I'm advising against is someone buying an M2 and treating it like a 1M or a 911 GT3, where you can expect to buy the car and turn it around in 2-3 years to recover your full investment (or even turn a profit). There are still a ton of unknowns in the M2 market, which I believe is the primary motivator for the low residual ratings. Finance companies and insurance providers are masters of quantitative evaluation. Somewhere inside BMW finance, there is a massive table of residual rates with confidence intervals and detailed market analysis. Speculative enthusiasts each have their own risk tolerance, but the cut and dry analysis leans heavily toward more traditional residuals (55%-65%).
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03-24-2017, 10:49 PM | #232 | ||
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04-02-2017, 04:45 PM | #235 |
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I was considering swapping from my F10 M5 to either a new M2, an M3 or an M550i as a bridge car until the new M5 comes out and matures for at least 6 to 12 months (to work out any kinks and have the prices drop a bit).
On the BMW site last night found that the M2 and M3 lease out almost exactly the same but MSRP is 20k plus apart! Just working off MSRP for MSRP I noticed the M2 build I did leases out for just about the same as my loaded up M3 build ( https://www.bmwusa.com/byo.html#!/bu...mmary/dbdfz8ck ). The M2 at $58,795 MSRP and the M3 at $79,969 MSRP. Is BMW just heavily subsidizing the M3 leases right now or is there a lease credit promotion? I calculated both leases using the same down payment of $2500, 10k miles, everything same and it came up with M3 at $962 and M2 at $938. That puts the cars less than 30 bucks apart a month when just comparing apples to apples on an MSRP basis. My dealer said the residual from BMW is dreadful around 40% and not their best car to lease. So for another $360/year I can get a loaded up M3 with way more bells and whistles and room vs the M2 right now. |
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04-02-2017, 05:50 PM | #236 | |
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Regardless, lease financing on the M2 currently makes no sense. The reasons why BMW are structuring leases this way are the subject of much speculation. This thread is full of everyone's thoughts.
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04-02-2017, 06:31 PM | #237 |
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DON'T THINK ABOUT IT TOO MUCH. IT IS CLEAR:
Want a M2? = Buy, do NOT lease. Hell, even if you don't want it after 2 or 3 years, you're likely to sell and get almost what you paid for it given the limited quantities and high demand / incredible reviews. |
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04-03-2017, 04:44 PM | #238 |
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The advantages of buying versus leasing the M2 has been discussed many times on this forum. My question is not to stir that debate again but to honestly find out what the current months lease rate factors are?
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04-03-2017, 04:51 PM | #239 |
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Thanks GOLFFRR, I got my answer from you here.
http://f87.bimmerpost.com/forums/sho...232209&page=14 |
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04-03-2017, 05:25 PM | #240 |
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Direct link and quote if anyone is interested:
Same is same.
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04-03-2017, 05:47 PM | #241 | ||
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