[Salespunk]

Originally Posted by desertfox73

They really are - and based on what I've found, their maximum residualized MSRP (MRM) for leases is WAY low, so over the course of a lease you wind up actually paying for the full cost of a **lot** of the options you might put on the car. If you buy a stripper, it's better, but you're still bending over.

I looked at a Macan a while back and the MRM was just above base price...and after building the car to a spec I liked, I had added about $15k in options, almost all of which got absorbed in the lease payments.

Clearly Porsche wants a very select clientele to lease their cars, the same people who would buy them.

Completely depends on the model. The Macan's were in VERY short supply for a long time. They had no interest in leasing them. Base 991's however you could get 72% residual for 24 months resulting in a $1K payment with just drive off's if you negotiated well. In addition Porsche regularly has 12 month pull aheads so you can be driving a new car just about every year.

[Salespunk]

Originally Posted by Aloha Joe

bradleyland, Thank you for your first sentence and in depth lease analysis.

Also while it's possible, I've never heard of an insurance policy that reimburses an individual for their prepayment dollars on a lease. Insurance companies require, critical mass, for a specific type of policy to be profitable. I can't imagine that too many people are doing single premium leases, and of those few that do, they then go out and look to purchase an insurance policy to cover their pre payment amount. Gap insurance does not cover this scenario.

While an analysis can be a waste of time, sometimes it's not a waste. Buy our short analysis/discussion here, we have shown that if someone choses to prepay their 3 year lease with say a $30,000 single premium (never cover it with insurance, if it's available), then have their car stolen or totaled in an accident in month 2, they could be basically out the $30k. I personally think that is very a valuable part of an analysis for someone considering a single premium lease.

They would not be out the entire $30K, but instead the difference between book value and their cap cost. They cannot just pay off the lease residual and call it good. I do agree that a single pay lease is a horrible idea because you would lose a large part of that pre pay if the car is totaled and you can get near zero risk returns well above lease MF's

[Aloha Joe]

Originally Posted by bradleyland

You're looking at the insurance requirement a little bit different than how it is sold in the market. They don't insure your out-of-pocket, up-front lease payment. Rather, they insure the total replacement value of the car. For example, Liberty Mutual markets a product under the name Better Car Replacement Coverage (or something like that). This insurance can be purchased on a leased vehicle, and would protect your investment by replacement, rather than cash benefit. The policy buys you a car that is one year newer than your lost vehicle.

The policies are expensive though. We got a quote once and decided to stick with standard gap coverage on our financed vehicle.

Got it, Thanks for explaining.

[marcva]

Originally Posted by BMW335iOn18s

It's not about real world residual value, it's about maximizing profit on a low volume car.

Is the buyout value established at the time of lease origination? or is it priced separately? This could make for a very interesting secondary market.

[bradleyland]

Originally Posted by marcva

Is the buyout value established at the time of lease origination? or is it priced separately? This could make for a very interesting secondary market.

The buyout amount is equal to the residual amount + lease termination fees.

The residual amount is equal to the MSRP times the residual rate.

The buyout amount is established at lease inception, and is memorialized in the lease agreement. That is the price available to the lessee at the end of the lease. There's also a price available to dealers that is slightly discounted from the residual (according to someone at BMW FS, anyway).

IMO, this isn't going to have much effect on the secondary market, because there will not be many leases written for this car.

With a 50% residual, a 36-month lease is equivalent to 72-month financing. When you sit down with the finance department to run the numbers, you'll find that the lease payment for an M2 is as much as a 72-month finance term payment, but the fees are higher. With a 0.00138 money factor (3.312% APR), you'll bee able to finance the car for 72-months at a similar rate.

Unless you really, really don't want to deal with selling the car yourself, there's no incentive to lease this car.

[Flying Ace]

wow! those are horrible residuals. I am betting they hold better value, so you'll come out ahead with a outright purchase or finance. At least that was the 1M experience, but the 1M was a limited run which helped.

Any word on whether M2 will be limited run? If not, then I believe these residuals. If BMW were smart, they should try to get the M2 to outsell the M3...cheapest entry level M on the market, only makes sense to blow this one out and make the M3 more exclusive.

[tennesseebimmer]

Can someone explain how knowing the money factor can help leverage the offer if choosing to purchase

[bradleyland]

Originally Posted by Flying Ace

wow! those are horrible residuals. I am betting they hold better value, so you'll come out ahead with a outright purchase or finance. At least that was the 1M experience, but the 1M was a limited run which helped.

Any word on whether M2 will be limited run? If not, then I believe these residuals. If BMW were smart, they should try to get the M2 to outsell the M3...cheapest entry level M on the market, only makes sense to blow this one out and make the M3 more exclusive.

The M2 is a normal series production model, not limited by anything other than production capacity at the Leipzig facility.

[bradleyland]

Originally Posted by tennesseebimmer

Can someone explain how knowing the money factor can help leverage the offer if choosing to purchase

Huh? The lease money factor has nothing to do with a traditional finance purchase.

Your greatest leverage with the dealer is being willing to walk away (either to not purchase, or to buy from another dealer). M2 supply is going to be very tight for the first few months. 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.

[Flying Ace]

Originally Posted by bradleyland

The M2 is a normal series production model, not limited by anything other than production capacity at the Leipzig facility.

in this case, I believe the lease residual figures. This will be a mass market car unlike the 1M. This car will depreciate at rates similar to other M cars, if not a bit faster than the M3, but not as fast as the rock that is the M5/6.

What's your take, lease or buy to minimize depreciation here? I think in 2018, I'm going to go for either a 1 year old M2 or a 2016 F80.

[Flying Ace]

Originally Posted by tennesseebimmer

Can someone explain how knowing the money factor can help leverage the offer if choosing to purchase

it doesn't, read what money factor is. It's the equivalent of an interest rate. Your best bet is still to negoitate on the original list price as the residuals are already set. (I dont' think residuals are negoiatable, i've never leased before).

Basically do what you would do in a purchase or finance, get the best out the door price you can get.

[bradleyland]

Originally Posted by Flying Ace

in this case, I believe the lease residual figures. This will be a mass market car unlike the 1M. This car will depreciate at rates similar to other M cars, if not a bit faster than the M3, but not as fast as the rock that is the M5/6.

What's your take, lease or buy to minimize depreciation here? I think in 2018, I'm going to go for either a 1 year old M2 or a 2016 F80.

Yeah, with the 50% residual, the M2 is next to impossible to lease, IMO. You can go with a finance program like Penfed payment saver, but that's a balloon payment loan, so you're taking on the depreciation risk. No thanks.

Not much you can do to mitigate depreciation, except negotiate hard on purchase price. Early-run cars are tough to do that though, so I plan on waiting. I'm in no hurry to part with my money.

I don't normally balk at leasing cars like the M2, because I never intend to hold them very long, but at 50% residual, BMW FS isn't offering much of a stop-loss. Sure, residuals might hold up better than they expect, but the entire reason I lease is so I don't have to deal with selling the car. No way I'd pay a 3.2% APR, then have to sell the car myself.

[Flying Ace]

Originally Posted by bradleyland

Yeah, with the 50% residual, the M2 is next to impossible to lease, IMO. You can go with a finance program like Penfed payment saver, but that's a balloon payment loan, so you're taking on the depreciation risk. No thanks.

Not much you can do to mitigate depreciation, except negotiate hard on purchase price. Early-run cars are tough to do that though, so I plan on waiting. I'm in no hurry to part with my money.

I don't normally balk at leasing cars like the M2, because I never intend to hold them very long, but at 50% residual, BMW FS isn't offering much of a stop-loss. Sure, residuals might hold up better than they expect, but the entire reason I lease is so I don't have to deal with selling the car. No way I'd pay a 3.2% APR, then have to sell the car myself.

ha! agreed. To add, my view on lease vs buy is all about minimizing depreciation. Wtiha 50% residual, I'll take the chance and buy in this case. However, I don't NEED a new M2, so I'm more than happy to take a preowned one under warranty and let owner one eat 20% dep first.

[speeddeacon]

As a comparo G12 7 series were just leasing at 61% RV with .000135 MF for 10k/yr.

No way would I lease the M2. CPO will be the way to go since there aren't many options. Most will get Exec then choose tranny and color.

[bimmerking818]

Originally Posted by DS_BMW

Yeah, I'm wondering about people posting how they are getting m3's for like 650-700 a month with nothing down. Maybe my dealers around here suck!

These people who are getting these low monthly payments usually live in new jersey or new York. basically those cities have such a low amount of M sales,[because think about it who wants to lease a car that most likley will AT LEAST be in the garage for 3 months out of the year] that when they do get a costumer in for the f80/f82, They will do anything to close the deal. But for example in California its impossible to get a f82/f80 for less then $850 a month, Especially at 85k msrp. On less your employed by BMW or u have put a ridiculous amount of a down payment= [idiot]

[gulshan]

I guess a lot of potential M2 folks will be test driving a loaded new focus rs that can be had for $40k.

[DS_BMW]

Originally Posted by bimmerking818

These people who are getting these low monthly payments usually live in new jersey or new York. basically those cities have such a low amount of M sales,[because think about it who wants to lease a car that most likley will AT LEAST be in the garage for 3 months out of the year] that when they do get a costumer in for the f80/f82, They will do anything to close the deal. But for example in California its impossible to get a f82/f80 for less then $850 a month, Especially at 85k msrp. On less your employed by BMW or u have put a ridiculous amount of a down payment= [idiot]

I live in PA and can't find a deal like that.

[F87LUV]

Originally Posted by gulshan

I guess a lot of potential M2 folks will be test driving a loaded new focus rs that can be had for $40k.

[M3 Adjuster]

Originally Posted by Robcut1

Penfed money saver loan (balloon) is what I did. Paying in the mid 600's. No money down.

Nice job !!

[firestarter2]

Originally Posted by bimmerking818

These people who are getting these low monthly payments usually live in new jersey or new York. basically those cities have such a low amount of M sales,[because think about it who wants to lease a car that most likley will AT LEAST be in the garage for 3 months out of the year] that when they do get a costumer in for the f80/f82, They will do anything to close the deal. But for example in California its impossible to get a f82/f80 for less then $850 a month, Especially at 85k msrp. On less your employed by BMW or u have put a ridiculous amount of a down payment= [idiot]

I'm in NY lowest I could find was like 1000 a month. Unless someone shows you the paper work I wouldn't believe them.
You'd be shocked people will say they put nothing down but then you find out they had a trade in. Id do 850 in a second

[F87LUV]

Originally Posted by firestarter2

I'm in NY lowest I could find was like 1000 a month. Unless someone shows you the paper work I wouldn't believe them.
You'd be shocked people will say they put nothing down but then you find out they has a trade in. Id do 850 in a second

Yup. Me too. Lowest- I had one dealer with a used non CPO 2015 M3 for $850 with 2k down or new for $970. No thanks.

[JTO24]

My lease is $829/mo from a PA dealer with nothing but sales tax, doc. fee, acquisition fee and first months payment down on a $79k sticker F80. I broke even on my e92 M3 trade-in. I live in NJ.

The deals were out there last year when the residual was .65 and MF was .00129. My deal wasn't even that great at ~$1500 over invoice. I had an F80 on order at the time with another dealer for $850 over invoice but I ended up liking this car better so I canceled the order.