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      04-10-2017, 08:30 PM   #243
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M2 CS production info leaked. Looks like an S55 powered successor is on its way with 410 HP. That would explain the 47% residual from BMW FS. Looks like they knew something we didn't. 2018 model proposed, which lands it before most 3-year leases of the base M2 would be up.

Time to adjust your expectations if you're in the 75% residual camp.

http://f87.bimmerpost.com/forums/sho....php?t=1372982
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      07-24-2017, 04:30 AM   #244
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Originally Posted by bradleyland View Post
M2 CS production info leaked. Looks like an S55 powered successor is on its way with 410 HP. That would explain the 47% residual from BMW FS. Looks like they knew something we didn't. 2018 model proposed, which lands it before most 3-year leases of the base M2 would be up.

Time to adjust your expectations if you're in the 75% residual camp.

http://f87.bimmerpost.com/forums/sho....php?t=1372982
can you dumb down what this means in laymen terms for me? (im not too lease term savvy with residual and what not)

ive been hoping they would eventually adjust the lease rates so it would actually be financially feasible to lease a M2 unlike how it is now..

thank you!
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      07-24-2017, 06:48 AM   #245
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Originally Posted by bradleyland View Post
M2 CS production info leaked. Looks like an S55 powered successor is on its way with 410 HP. That would explain the 47% residual from BMW FS. Looks like they knew something we didn't. 2018 model proposed, which lands it before most 3-year leases of the base M2 would be up.

Time to adjust your expectations if you're in the 75% residual camp.

http://f87.bimmerpost.com/forums/sho....php?t=1372982
can you dumb down what this means in laymen terms for me? (im not too lease term savvy with residual and what not)

ive been hoping they would eventually adjust the lease rates so it would actually be financially feasible to lease a M2 unlike how it is now..

thank you!
It means he "thinks" that when the M2 CS comes out, nobody will want a regular M2 and the values will drop and thus a 3 year old M2 will suddenly only be worth only $26K.

and just typing this is making me laugh.

Because, this is the same kind of nonsense people were saying about 1M values with the M2 on the horizon.
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      07-24-2017, 09:31 AM   #246
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Exactly. That hyper CS will be limited production and likely cost in the 70s or more. M2 MY 2016-2018 values will be just fine.

Haters gonna hate.
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      07-24-2017, 09:33 AM   #247
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And for what is worth.. BUY your desired M2. My credit union gave me 2.39% for 72 months! And no payments for 90 days.
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      07-24-2017, 09:59 AM   #248
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And for what is worth.. BUY your desired M2. My credit union gave me 2.39% for 72 months! And no payments for 90 days.
Ugh, I'd rather shoot myself than take a car note out over 72 looooooonnng months.
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      07-24-2017, 10:28 AM   #249
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Nothing stopping you from paying it off early. 2.39% is like free money though if you know a thing or two about investing. And my car payment is less than a lease payment.
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      07-24-2017, 12:11 PM   #250
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Nothing stopping you from paying it off early. 2.39% is like free money though if you know a thing or two about investing. And my car payment is less than a lease payment.
Over 72 months, I would certainly hope that your car payment is lower than a lease payment.

And while paying off the loan early is always an option, I just wouldn't sign myself up for a 72 month loan. Hence my comment.

You want free money take a 36 month @Pen Fed @ 1.49%.
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      07-24-2017, 12:36 PM   #251
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Amen. If I could afford the 36 month payment then I would be all over that sweet rate.... But this joker has 3 kids and college for each just around the corner.
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      07-25-2017, 05:02 PM   #252
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Ah I see! I just don't understand why the lease rates are so bad!!! Might as well just get an M3.. I got a couple years till I'll be upgrading to an M car.. hopefully the M2 rates reflect the respective msrps relative to the other M cars by then..
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      07-25-2017, 07:53 PM   #253
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Ah I see! I just don't understand why the lease rates are so bad!!! Might as well just get an M3.. I got a couple years till I'll be upgrading to an M car.. hopefully the M2 rates reflect the respective msrps relative to the other M cars by then..
Except when you're done with the M3 lease your payoff will be the equivalent of a brand new M2. The lease on the M2 will pay off half the car.

Moot point if you have 0 desire to option the buyout of course.
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      08-03-2017, 12:17 AM   #254
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It's 2017 and 2018 models are coming out. I'm still surprised that the lease on the M2 is still so high.

But the resale value is very good. Many used M2 is going for the price of brand new.
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      08-03-2017, 11:17 AM   #255
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The cost of a car is equal to:

Net Cost + Finance Fees

Net Cost: Total Price Paid - Total Recovered at Time of Sale
Finance Fees: Total of Interest Paid

When you lease a car, the net cost is the negotiated cost of the car minus the residual value. Leases are basically pre-negotiated buy-backs.

This makes the current lease terms a garbage deal. After a typical lease term, you'll be "selling" the car back to BMW at below market value. No thanks.

You're basically stuck buying the car at the end of the lease and selling it privately. In which case you might have well just financed it traditionally to begin with, because you'll pay less finance fees.

There is basically no way that an M2 lease makes financial sense right now. That is true of any car where lease residuals are below the expected value of the car at the end of the lease term.

My strategy would be to estimate my own residual value (be realistic here) at an intended sale date, then target my loan terms to balance the value at the intended sale date to be close to this estimated residual. The balance is between the finance rate and the loan amortization at the intended time of sale. I won't pay over 2% for auto financing on principal. Everyone likes to trot out the "free money" argument, but expenses are expenses. It's like people who buy shit they can't afford just because "it's a tax write-off". You're still spending money you probably shouldn't be.
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      08-03-2017, 11:34 AM   #256
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It's 2017 and 2018 models are coming out. I'm still surprised that the lease on the M2 is still so high.

But the resale value is very good. Many used M2 is going for the price of brand new.
It?s country sensitive as well. Here in Canada we?ve seen used M2?s sell for above MSRP.
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      08-03-2017, 12:36 PM   #257
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Originally Posted by gmzanatta View Post
It?s country sensitive as well. Here in Canada we?ve seen used M2?s sell for above MSRP.
It's market sensitive. The US and Canada are big places, so market boundaries aren't always defined by political geography. Since markets are driven by supply and demand, the price of an M2 will be dictated by the same rules. The car continues to be supply constrained, so markets with higher demand will see higher prices. This means large population centers will see higher prices.

For example, my brother-in-law bought an M3 at a discount only a couple months after they came out. People in Miami and LA were paying mark-ups, and his rural Virginia dealer was excited just to sell an M3.
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      08-03-2017, 12:54 PM   #258
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This makes the current lease terms a garbage deal. After a typical lease term, you'll be "selling" the car back to BMW at below market value. No thanks.
and don't forget additional taxes in many markets if you lease and then buy out at end of the lease (Like IL and TX).

PS - well worded post - I just didn't copy the whole thing.
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      08-03-2017, 05:36 PM   #259
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Yeah, I always forget about the double tax issue, because we only pay taxes on the payments here in Florida. Thank you State of Florida!
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      08-20-2017, 03:33 PM   #260
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Anyone know 2018 MY lease rates 36/10K?
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      10-25-2017, 11:23 AM   #261
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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%).


That 1M carry over is a huge factor for the used M2 market right now, and is one of many excellent points made by you! Good analysis!


All that taken in to account, I feel as time goes on, the values will start to fade a bit on the M2. It will still be well above average for a used car, but I would not expect one that has been DD for 3 years with ~36k miles (standard 3 year lease return) to be anywhere near what they are going for right now. Supply and demand is the ultimate factor, and even though the production is still lowish, after 3-4 years, the market should be satisfied. As a matter of fact, there are already a lot of used ones out there now, but as you suggested, sellers are trying to get top dollar. Asking price does not equal selling price!
Also, in a few years the next model will most likely be on the horizon and by then the honeymoon will be over on this M2. It will not be like the 1M used car market anymore. 800 units versus thousands.

Again, not suggesting the bottom will fall out, but I would not expect that there will be M2's to be had for high 30's in a couple of years.
Keep this in mind. There comes a point when you have to ask yourself, why pay $50k for a used M2, when you can buy an M4 for the same money or less?
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      10-25-2017, 11:30 AM   #262
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Quote:
Originally Posted by norMcal View Post
Quote:
Originally Posted by bradleyland View Post
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%).


That 1M carry over is a huge factor for the used M2 market right now, and is one of many excellent points made by you! Good analysis!


All that taken in to account, I feel as time goes on, the values will start to fade a bit on the M2. It will still be well above average for a used car, but I would not expect one that has been DD for 3 years with ~36k miles (standard 3 year lease return) to be anywhere near what they are going for right now. Supply and demand is the ultimate factor, and even though the production is still lowish, after 3-4 years, the market should be satisfied. As a matter of fact, there are already a lot of used ones out there now, but as you suggested, sellers are trying to get top dollar. Asking price does not equal selling price!
Also, in a few years the next model will most likely be on the horizon and by then the honeymoon will be over on this M2. It will not be like the 1M used car market anymore. 800 units versus thousands.

Again, not suggesting the bottom will fall out, but I would not expect that there will be M2's to be had for high 30's in a couple of years.
Keep this in mind. There comes a point when you have to ask yourself, why pay $50k for a used M2, when you can buy an M4 for the same money or less?
To answer your last question: because the M2 and M4 are very different cars, especially around a twisty track. It depends on what you as a driver wants. I could have bought an M4 but chose not to drive a bathtub around

One other thing to keep in mind is that there is zero guarantee the M2 production will continue past MY20, since the car was always planned for a 5 year run. BMW will at that point have moved the 2-series to the fwd platform and who knows what will happen.

There was a thread in here recently from the head of M talking about how the M2 was the last pure sports car they would make before the shift to awd/hybrid/electric starts.
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      10-25-2017, 12:32 PM   #263
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To answer your last question: because the M2 and M4 are very different cars, especially around a twisty track. It depends on what you as a driver wants. I could have bought an M4 but chose not to drive a bathtub around

One other thing to keep in mind is that there is zero guarantee the M2 production will continue past MY20, since the car was always planned for a 5 year run. BMW will at that point have moved the 2-series to the fwd platform and who knows what will happen.

There was a thread in here recently from the head of M talking about how the M2 was the last pure sports car they would make before the shift to awd/hybrid/electric starts.
I'm in the same boat, no pun intended. The M4 is not really what I want due to size. But in reality, it weighs nearly the same, and one might be able to tune some of that larger feel out of it with some suspension mods. On the track they seem to be very evenly matched and it it comes down to just feel, well sure, the M2 might feel lighter and nimbler, but in reality it isn't lighter nor faster.
FWIW, that I why I have an e46 M3, and you don't have to sell me on the idea of the M2 ;-). I generally agree with you and would also rather have it over the M4, BUT within reason (price wise).

I did not know that about the next generation 2 series. Although I kind of doubt they will go FWD. They've been saying that for decades. The M2 in it's current form would make a worthy successor to the M3, since it is moving up to GT car. If you are right, then the current M2 might very well hold it's value much better than I suggested.
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      10-27-2017, 11:38 AM   #264
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Quote:
Originally Posted by gmzanatta View Post
To answer your last question: because the M2 and M4 are very different cars, especially around a twisty track. It depends on what you as a driver wants. I could have bought an M4 but chose not to drive a bathtub around

One other thing to keep in mind is that there is zero guarantee the M2 production will continue past MY20, since the car was always planned for a 5 year run. BMW will at that point have moved the 2-series to the fwd platform and who knows what will happen.

There was a thread in here recently from the head of M talking about how the M2 was the last pure sports car they would make before the shift to awd/hybrid/electric starts.
Agreed.

I very much like "last of a kind" cars for long term value. Not every last of a kind car sees massive appreciation, but they do tend to hold up well. This, of course, is predicated on the fact that it was a good car to begin with.

I think this effect is going to come to bear on the E92 M3, for example. It's the last naturally aspirated M3. Even though the F8x out performs the E9x, I think that there are factors that will prop up E9x values to a greater degree that we will see with the F8x cars:

1) Naturally aspirated heritage linking the car back to the original E30 M3. Collectors of the appropriate age for the E92 will have grown up on naturally aspirated race cars, and many bemoan the shift to turbocharging as a fuel economy driven compromise.

2) The proliferation of the S65 engine in motorsport. To understand this factor, we can look at other "legendary" BMW engines, like the S14. The S14 served as the basis for the incredibly successful E30 M3 Group A car, but also shares lineage (through the M10) with the BMW Megatron F1 engine. The S65 serves as the basis for a staggering number of racing engines, ranging from BMW's own P65, to a variety of engines from Judd, KMS, and other sources. Major components from the S65 found their way into racing cars ranging from LM prototypes, to relatively stock GT4 configurations, and everything in between.

But that's an entirely separate digression

If the M2 does turn out to be the last non-hybrid M-car developed, I think it will play a major factor in long term value.

Another aspect that will bolster the M2's long term value is the "sweetheart" and "underdog" factors. The F8x series of M3/M4 are perceived as the penultimate refinement of the performance aspects of the M brand, but regardless of one's individual feelings about the cars, the broader sentiment is that they are somewhat clinical in their execution. The language used to describe the M2 makes much greater usage of terms like "fun" and "engaging". The market perception of the M2 will be that of a car built for drivers. It makes no difference whether the M3/M4 are also drivers cars; value is affected by market perception.
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