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      05-04-2016, 08:47 PM   #67
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Quote:
Originally Posted by M3 Adjuster View Post
I don't understand the mentality of all those that are into leasing. It's like so many people in this thread have no idea that you can actually PURCHASE a car rather than lease it.
It's not a "mentality", it's simple math and convenience. Some cars I lease; some I buy. I bought our X3 because we plan to keep it for several years. A better way too put it is that I don't have a finite timescale on which I intend to turn the X3 around in to a new car, so I bought it. When I picked up my M3, I knew it wasn't a car that I was going to own long term. It's a car I wanted to enjoy for a time, then be rid of.

The thing is, I really don't want to deal with selling a car privately. Especially an M3. It's just something that I don't have time for. Leasing is a lot like buying with a pre-arranged agreement to sell the car. Fiscally speaking, you pay a penalty in the form of a higher finance fee, but (in many states), you only pay sales tax on the payments, so there's an offset there. It still ends up costing a little more, but for me, it's worth it if it fits with my plan for the car.
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      05-04-2016, 08:49 PM   #68
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Originally Posted by ZMM_OMG View Post
Sales are down across the board, BMW "i" was a huge cash sink that hasn't had good sales and has just lost executive leadership, they're slashing the maintenance program, reducing the Euro delivery discount, and now this.

I smell blood in the waters at BMW.
What's the connection between that and M2 lease rates?
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      05-04-2016, 08:51 PM   #69
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All the speculation in here about why the lease residuals are high is pretty funny. Financing companies aren't the primary source of residual values; they rely on ratings agencies for this information. It's like a risk rating on a security. You don't trust the brokers to rate the securities. That'd be a recipe for disaster.

Residuals on first-run models are always worse than later revisions, because the model has no track record from which the lease rating agency can establish a baseline. Their models discount the residual to account for this risk. Lease residual models are a bit like insurance premium models. They're built to model risk. A new model brings additional risk.
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      05-04-2016, 08:53 PM   #70
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He is telling himself sssome stories !





Quote:
Originally Posted by bjcarls View Post
I want to know your dealer. I hear stories like this and then the truth comes out that a person had tier 2 pricing with the dealer, car has no options, it was sitting on the lot for 2 years, and they gave a blow job to everyone at the dealership. I couldn't come close to that on an 2016 M5 which is why I'm in a x5 at $900 a month that retailed for $83 and sold for $74. No idea how someone could get a $100k+ car for only be $100 more a month.
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      05-04-2016, 09:08 PM   #71
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Quote:
Originally Posted by Jason View Post
Current lease residuals and money factor for 36 month lease on an M2:

47% - 15k miles
49% - 12k miles
50% - 10k miles
Money factor is .00138

Residuals values are down and money factor has crept up since the last published figures.
Looks like BMW is running "Audi Sales Event"
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      05-04-2016, 09:15 PM   #72
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Nothing surprising here, pretty much expected numbers close to that for lease. MB does this with many AMG models as well.

The bad thing is, I just don't think after the e9x series there are going to be any long term "own-able" BMWs. All the tech and shit loaded into the most average models gets outdated quickly and has issues with only high dollar fixes i.e. Idrive issues, etc.... Any bimmer guy knows you can't own one off warranty. Sucks but that's where it's going.
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      05-04-2016, 09:23 PM   #73
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Quote:
Originally Posted by Msmall143 View Post
not necessarily. it could actually be cheaper to lease then buy, than just buy.
1) calculate what the money factor gives you in terms of interest rate..it may be lower than the buying finance rate
2) you may be making higher payment over the first 3 years which means you are reducing principal quicker and in turn means you are paying less interest over the life of the loan.

over the course of 5 years it can absolutely be cheaper to lease for 3 and finance for 2, rather than finance for 5 from the start.

havent run the numbers on this but its absolutely a possibility.
Bingo. Despite the occasional short-sighted person thinking that leases are stupid, there's really not much difference between financing the car or leasing it in practice. Sure, the details are handled differently, but a lease is basically a 7 or 8 year two part finance job with the option to give back the car half way through with no strings. It's a boon for liability purposes (say you nearly total the car and insurance repairs it, you can unload it), but the lower the residual the worse the deal is, should you choose to exercise your option. The converse is also true though, a high resitual and money factor and you'd be stupid not to lease. My wife's money factor is basically 0%... Buy a car interest free for the first three years with the option to give it back half way through for any reason, why not?

It's surprising how many people don't like leases without even knowing much about them. I was talking to a guy the other day who was shocked that you can trade in a lease or call up and get a payoff amount like any other finance.
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      05-04-2016, 09:24 PM   #74
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Quote:
Originally Posted by COBodom
Quote:
Originally Posted by Jason View Post
Current lease residuals and money factor for 36 month lease on an M2:

47% - 15k miles
49% - 12k miles
50% - 10k miles
Money factor is .00138

Residuals values are down and money factor has crept up since the last published figures.
Looks like BMW is running "Audi Sales Event"
You nailed it.
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      05-04-2016, 09:35 PM   #75
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Quote:
Originally Posted by bradleyland
Quote:
Originally Posted by M3 Adjuster View Post
I don't understand the mentality of all those that are into leasing. It's like so many people in this thread have no idea that you can actually PURCHASE a car rather than lease it.
It's not a "mentality", it's simple math and convenience. Some cars I lease; some I buy. I bought our X3 because we plan to keep it for several years. A better way too put it is that I don't have a finite timescale on which I intend to turn the X3 around in to a new car, so I bought it. When I picked up my M3, I knew it wasn't a car that I was going to own long term. It's a car I wanted to enjoy for a time, then be rid of.

The thing is, I really don't want to deal with selling a car privately. Especially an M3. It's just something that I don't have time for. Leasing is a lot like buying with a pre-arranged agreement to sell the car. Fiscally speaking, you pay a penalty in the form of a higher finance fee, but (in many states), you only pay sales tax on the payments, so there's an offset there. It still ends up costing a little more, but for me, it's worth it if it fits with my plan for the car.
Actually. It's this exact mentality that separates the M2 buyer from the M3 and M4 and M235.

AAn unfavorable lease rate makes it unreasonable for someone to come pick up an M2 and sell it cheaply, dispose of it easily. That's what you do with " car as appliance ", not with specialty, halo or niche cars.

M4 GTS Lease ? Hell no.

M2 lease ? sure if you really want to

M235/M4/M3 all day
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      05-04-2016, 09:37 PM   #76
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Still waiting for the value of the 1M to drop "once the M2 comes out".

I laugh every time I read that.
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      05-04-2016, 09:45 PM   #77
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Quote:
Originally Posted by Wilsel View Post
If you plan to buyout, it doesn't matter that much. Your first 36 months costs more, but the buyout is low. If you plan to turn the car in, it's a total ripoff. The market value should be much higher at 36 months. When a car has this much demand the lease terms are always a ripoff. Just look at the Cayman GT4.
With a 50% residual, you wouldn't walk away at the end of the lease. You would sell the car and pocket the difference.
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      05-04-2016, 10:14 PM   #78
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      05-04-2016, 10:22 PM   #79
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Quote:
Originally Posted by Msmall143 View Post
not necessarily. it could actually be cheaper to lease then buy, than just buy.
1) calculate what the money factor gives you in terms of interest rate..it may be lower than the buying finance rate
2) you may be making higher payment over the first 3 years which means you are reducing principal quicker and in turn means you are paying less interest over the life of the loan.

over the course of 5 years it can absolutely be cheaper to lease for 3 and finance for 2, rather than finance for 5 from the start.

havent run the numbers on this but its absolutely a possibility.
I've run the numbers. I run them every time I buy/lease a car.

1) It is extremely rare to see a lease interest rate that is lower than a financing rate, unless you're financing for a longer term.

2) The amount you pay over the term of the lease is the depreciation. The depreciation is cap cost (final purchase price) minus the residual. The key is that the residual is calculated from the MSRP. Whether or not you're paying down the principle faster than traditional financing depends on the residual and the term used for traditional financing. It's very uncommon for the effective pay down rate to exceed traditional financing. That's the entire reason lease payments are typically lower.

In a lease transaction, the finance company is guaranteeing the residual, which represents risk. This is why interest rates on leases are higher. In a traditional financing scenario, the only risk being taken by the finance company is whether or not you'll make the payments. More risk = higher rates.
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Last edited by bradleyland; 05-04-2016 at 10:27 PM..
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      05-04-2016, 10:42 PM   #80
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Quote:
Originally Posted by bradleyland View Post
I've run the numbers. I run them every time I buy/lease a car.

1) It is extremely rare to see a lease interest rate that is lower than a financing rate, unless you're financing for a longer term.
Sort of. Single-pay lease rates are extremely low, close to a zero percent interest. I ran a calculation for my M3 comparing the lowest finance rate I could get from BMW (1.9%) against a lease-purchase scenario using a single-payment lease. The money factor for single-pay lease was so low it actually does wind up cheaper to lease for three years then buy the car, rather than to buy the car outright. And if I decide to return the car in 3 years, I'll have spent less over the three year lease than I would have over three years of a 5-year financing term.

Quote:
Originally Posted by bradleyland View Post
In a lease transaction, the finance company is guaranteeing the residual, which represents risk. This is why interest rates on leases are higher. In a traditional financing scenario, the only risk being taken by the finance company is whether or not you'll make the payments. More risk = higher rates.
In a lease transaction the company is guaranteeing the residual, true, but they are also still financing the risk that the lessee won't make payments. That doesn't go away with a lease, it just gets layered on top of the residual risk. Maybe that's what you meant, just clarifying.
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      05-04-2016, 10:52 PM   #81
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At 52k, I will be more then happy to get one for 26k since that is all the car will be worth in 3 years... It's bmw knowing they have you cornered... An almost 2 year old m3/m4 is still selling 55k or over.. I have searching for something used and they just aren't dropping... Bmw will let you lease and payoff to 50% of value and the. Sell the car for a big profit when real residuals is still high 60s
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      05-04-2016, 10:56 PM   #82
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Quote:
Originally Posted by COBodom
Quote:
Originally Posted by Jason View Post
Current lease residuals and money factor for 36 month lease on an M2:

47% - 15k miles
49% - 12k miles
50% - 10k miles
Money factor is .00138

Residuals values are down and money factor has crept up since the last published figures.
Looks like BMW is running "Audi Sales Event"
Worse. Last time I was looking at the S3, it was 57% residual.
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      05-04-2016, 11:01 PM   #83
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Quote:
Originally Posted by smq42 View Post
Does BMW have any restrictions for track use (HPDE) or autocross for leased M cars?
None whatsoever.

I'm going to the track in 10 days.
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      05-04-2016, 11:09 PM   #84
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Originally Posted by pruettfan View Post
If you have a business where you can write off the lease it might still make sense but for anyone else leasing the M2 won't make sense. I read a lot about the auto industry and the manufactures are getting nervous about the level of leasing and having a bunch of used cars flood the market so they are becoming more conservative regarding residuals so we will likely see the cost of leasing go up a bit for a while. I suspect that will run in cycles.
Correct. A business owner or self employed who can deduct 70% or greater of the lease payments will benefit.

If they purchase the car at the end of the 3 year lease, they still get to take the usual depreciation amounts allowed for a business car purchase. Also if it's realistic, they can sell it for more than the residual amount and make a small profit on the sale, which will offset their already deducted lease payments.

The current MF and residual is the Perfect Storm from a business owners point of view.
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      05-04-2016, 11:15 PM   #85
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Quote:
Originally Posted by desertfox73 View Post
Sort of. Single-pay lease rates are extremely low, close to a zero percent interest. I ran a calculation for my M3 comparing the lowest finance rate I could get from BMW (1.9%) against a lease-purchase scenario using a single-payment lease. The money factor for single-pay lease was so low it actually does wind up cheaper to lease for three years then buy the car, rather than to buy the car outright. And if I decide to return the car in 3 years, I'll have spent less over the three year lease than I would have over three years of a 5-year financing term.

In a lease transaction the company is guaranteeing the residual, true, but they are also still financing the risk that the lessee won't make payments. That doesn't go away with a lease, it just gets layered on top of the residual risk. Maybe that's what you meant, just clarifying.
On your single lease calculation, don't forget to calculate the opportunity cost of the lump sum money. It's definitely better to pay 1.9% interest on borrowed money and earn 5% interest on your invested money.
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      05-04-2016, 11:42 PM   #86
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Quote:
Originally Posted by Aloha Joe
Quote:
Originally Posted by desertfox73 View Post
Sort of. Single-pay lease rates are extremely low, close to a zero percent interest. I ran a calculation for my M3 comparing the lowest finance rate I could get from BMW (1.9%) against a lease-purchase scenario using a single-payment lease. The money factor for single-pay lease was so low it actually does wind up cheaper to lease for three years then buy the car, rather than to buy the car outright. And if I decide to return the car in 3 years, I'll have spent less over the three year lease than I would have over three years of a 5-year financing term.

In a lease transaction the company is guaranteeing the residual, true, but they are also still financing the risk that the lessee won't make payments. That doesn't go away with a lease, it just gets layered on top of the residual risk. Maybe that's what you meant, just clarifying.
On your single lease calculation, don't forget to calculate the opportunity cost of the lump sum money. It's definitely better to pay 1.9% interest on borrowed money and earn 5% interest on your invested money.
If you took what would have been the lump sum payment and invested it, then used a separate bucket of funds to make payments on the car, it could work depending on the lump sum amount. But assuming you only have one chunk of change to invest AND/OR pay for a car, it's a different story.

In that case, you would be drawing down principle each month to cover the finance payment, in which case the investment wouldn't pay too much, even at 5%.
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      05-05-2016, 12:06 AM   #87
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Originally Posted by bjcarls View Post
I want to know your dealer. I hear stories like this and then the truth comes out that a person had tier 2 pricing with the dealer, car has no options, it was sitting on the lot for 2 years, and they gave a blow job to everyone at the dealership. I couldn't come close to that on an 2016 M5 which is why I'm in a x5 at $900 a month that retailed for $83 and sold for $74. No idea how someone could get a $100k+ car for only be $100 more a month.
Those dealer M5s are usually ordered with CP/Exec/B&O/Full Leather which ends up at a MSRP of $115k give or take. I picked up my 2015 M5 in July at the end of the month for $1290 (with taxes rolled in) with only $3400~ out the door. I've always gotten great deals by waiting to buy at the end of the month and while that tactic may not work at every dealer I've done far better than most.
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      05-05-2016, 12:42 AM   #88
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Love how every lease topic turns into a lease vs finance topic lol.

One of the bigger advantages of leasing is the peace of mind that if you get in an accident, which will effect the value of a car like this, you can turn the keys into the dealer no problem at all.

BMW isn't setting these rates super low because they think the car will depreciate 50% in 3 years. They just want more of your money within that 3 year span lol. Sure you can buy the car out then flip it to recoop some of the excess depreciation paid to BMW but money now> money later

Geez those rates suck. By any chance does anyone remember the x5 rates when that first came out? I think it was close to this


Conclusion: just buy the damn car ! ...or lease an M235i or M3
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