[bradleyland]

Originally Posted by cwg

There is no leverage on this car now.

Agreed. That's why I said: "If you're interested in a deal, your choices are to wait, or to shop very, very hard and be willing to travel to pick up the car."

[Jason]

Update 6/8/16:

Lease residuals and money factor remain the same in June (versus May).

[DS_BMW]

I wonder if we will ever see good residuals for the M2.

[clemsonkev]

with rates so low, just buy it... forget leasing this one.

Your local credit union will likely beat BMW Financial btw....

[blackholescion]

Originally Posted by clemsonkev

with rates so low, just buy it... forget leasing this one.

Your local credit union will likely beat BMW Financial btw....

Another thing to try to do as well if you don't have a credit union is to get the dealer to shop the loan for you. They have access to tons of banks and could get close to a CU interest rate or at least better than one you would have gotten. This is in their interest since they get a kickback for the "sale" of the loan

I can get 2.05% from my bank but I'm still going to get the dealer to shop it.

[doug_999]

Originally Posted by blackholescion

Another thing to try to do as well if you don't have a credit union is to get the dealer to shop the loan for you. They have access to tons of banks and could get close to a CU interest rate or at least better than one you would have gotten. This is in their interest since they get a kickback for the "sale" of the loan

I can get 2.05% from my bank but I'm still going to get the dealer to shop it.

I don't think dealer gest too much of a kickback on a 2% loan - however, what they do get (or so I was told when we got like .8% on our MDX two years ago) is an on-going relationship with one of their many money providers - which helps them when they have one of "those" customers that really could use a loan, but is just a little shy of qualifying. And yes, on those loans they get a nice kickback

So yes, the dealer will normally want to originate the loan.

[blackholescion]

Originally Posted by doug_999

I don't think dealer gest too much of a kickback on a 2% loan - however, what they do get (or so I was told when we got like .8% on our MDX two years ago) is an on-going relationship with one of their many money providers - which helps them when they have one of "those" customers that really could use a loan, but is just a little shy of qualifying. And yes, on those loans they get a nice kickback

So yes, the dealer will normally want to originate the loan.

I thought they got whatever flat fee from the bank. Could be $100. Could be $500. All depends on the buyer and circumstances, like you said.

[bradleyland]

Originally Posted by blackholescion

I thought they got whatever flat fee from the bank. Could be $100. Could be $500. All depends on the buyer and circumstances, like you said.

The problem with dealer originated loans is that they have the opportunity to mark them up (flat rate or percentage). Dealers are getting squeezed from every direction, so they have to make money wherever they can. There's nothing wrong with asking the dealer to shop the loan, but ask them flat out what their buy rate is. Tell them you want to see the paperwork from the bank, and if they won't answer those questions or show you the paperwork, know that you're paying a markup on the loan.

Again, there's nothing wrong with a dealer making a profit, but it's a caveat emptor situation. Sometimes dealers have wholesale relationships with banks, so their markup doesn't affect your purchase price, but if you have a credit score over 740, there's not a lot of room, even at a wholesale level. The competition for the top tier is to tough.

The most important thing is to know what you're paying for, and to be comfortable with that. I don't squeeze every penny out of my dealer, because I want them to stay in business. I already drive 30 minutes to get service, and I'd hate to have to drive 75 to the next closest dealer, so I'm reasonable. In exchange, my CA shares every detail with me.

[M3 Adjuster]

Originally Posted by DS_BMW

I wonder if we will ever see good residuals for the M2.

You will not. I Gar-On-Tee it. Not a lot of profit in it. Which means no reason to incentivize buyers. You can absolutely Expect better and better deals on the M3 and M4 however, as they end their life cycle.

[kylejdavidson]

Anyone with access to this sort of thing have updates on August rates? Fat chance there's been any change to lease or incentives but curious! Thanks in advance.

[desertfox73]

Originally Posted by M3 Adjuster

You will not. I Gar-On-Tee it. Not a lot of profit in it. Which means no reason to incentivize buyers. You can absolutely Expect better and better deals on the M3 and M4 however, as they end their life cycle.

And they've already started moving M5's for steep discounts...

[x97Melbourne]

Originally Posted by iamdabest1

I really like the m2 and even wanted one for a while , last month I got a 79k m4 for 810 a month / 36 months -12k a year with 2300 total out of pocket including the 1st month .
Seriously , the m2 as a 60k car isn't worth a dime over $650 per month .

Agree 100% M3 and M4 is "more" car anyway.
Leasing an M2 doesn't make sense at current levels; it's a great looking car, but I'd rather have an M3 for less money anyday. Love the look of the 4-door sleeper.

[x97Melbourne]

Originally Posted by bigsid05

These are horrendous lease terms. That lease payment is crazy for this car. If you are anywhere near $1k on a lease you should be in a more expensive car.

Agree 100% You can lease a $93,000 SL400 for close to $900-1000 month with zero down.

BMW is crazy (as are anyone paying these lease rates) for a fairly basic car like the M2. I love the car....but wouldn't pull the trigger

[ChrisK]

How are you guys figuring this math?

An M2 @ $57,295 @2.95 APR for 60 months is approx $1028

[M3 Adjuster]

Originally Posted by x97Melbourne

Agree 100% You can lease a $93,000 SL400 for close to $900-1000 month with zero down.

BMW is crazy (as are anyone paying these lease rates) for a fairly basic car like the M2. I love the car....but wouldn't pull the trigger

It's motivation for people to BUY the car. Many People abuse things they lease because they know they don't have to worry about the vehicle in the future.

[bmrwrld]

Yup, Just another mind trick.

[bradleyland]

Originally Posted by M3 Adjuster

It's motivation for people to BUY the car. Many People abuse things they lease because they know they don't have to worry about the vehicle in the future.

This residual has nothing to do with abuse. Lease contracts put limits on wear and tear, so it's a moot point for the financing company. That's why you need a higher credit score to lease. They want to be sure they can extract their fees in the event you damage the car.

Lease rates are built like life insurance rates: built off actuary tables, which are built from mortality data for a given demographic. Ratings agencies publish ratings, which are based on historical data, market segment, and god knows what other data lurking around the myriad of databases ratings agencies keep. New models always have worse lease rates, because there is no history for the ratings agencies to factor in to their models.

Finance companies make bets on whether they think the ratings are optimistic/pessimistic by setting the residual and money factor above or below ratings agency guidance.

BMW doesn't care whether anyone buys or leases the car, because their financial chain doesn't change much:

- Manufacturers sell the cars to distributors
- Dealers buy the cars from distributors
- Drivers buy the cars from dealers

Financing happens all along the way.

- The manufacturer uses financing to capitalize production.
- The dealer uses financing to capitalize inventory.
- Drivers use financing to capitalize their purchase.

When someone uses financing, the financier writes a check to the seller. It's like when you mortgage a house. The mortgage issuer cuts a check to the seller. In the case of a car, that might be BMW Finance (a division of BMW Group), or it might be a 3rd party bank. BMW AG doesn't care, because BMW Finance operates as a separate entity. They have their own balance sheet, and they're responsible for the performance of their financing activities.

You could say that BMW Finance doesn't want you leasing the car, but that's a misnomer as well. They're selling financing, not cars, and financing is priced on risk. It's not that they don't want you leasing the car, it's that the cars lease residual rating factors in the risk of it being an entirely new model at the top of its price range. That risk is reflected in the residual.

[bradleyland]

Originally Posted by bmrwrld

Yup, Just another mind trick.

It's not a mind trick. It's risk mitigation.

[mrcheezle19]

Current Residuals?

[clemsonkev]

right.... mine is almost ready and I need to decide: lease or buy.

current residuals?

[doug_999]

48% for 15,000 miles and 36 months…add 2% for 12k and 3% for 15k.

[clemsonkev]

thanks, but I don't keep up on such things. Is this GOOD or BAD?

I assume bad, and will likely shoot for the straight 2.9% for 72 months from BMW FS.