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      10-25-2017, 10:30 AM   #262
gmzanatta
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Drives: LBB 6MT M2 # 660/713
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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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