Quote:
Originally Posted by mjovic
How can a 135i be $600+/mo. to lease when you can get an Inifiniti G35 for $349/mo. with $3K down? Am I missing something? :iono:
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YES....you are missing the point that Infinity (Nissan) is writing down the cost of the car OUT OF THEIR POCKET.
The cost of money is the cost of money. BMW is setting the residual value.
BMW is not charging a Money Factor greater than the interest rate and BMW is setting a reasonable residual value. This ='s the lease rate.
To get the 135i to a lower lease rate BMW can only do 3 things.
1. Decrease the money factor (which loses them money)
2. Increase the residual (which loses them money)
3. Decrease the cost of the car (which loses them money)
The 135i is a low margin car for BMW (this is well stated all over the media and by BMW itself), so if they do any of the above 3 to reduce the lease payment then they will LOSE MONEY on the sale of the cars.
The reason the 135i is a low margin car is one of three factors:
1. Production cost. Somewhere "we 1 Series fans" think it's cheaper to make than the 3 series even though most of the car is a 3 series
2. Lower price point to attract new market segment
3. Weak US Dollar
Seriously this car is roughly 6K cheaper than a 3 Series (option for option). It's mostly a 3 Series car and made at the same plant. Does it not stand to reason that 6K is PROFIT on a 3 Series and thus the 6K lower cost on car is gives BMW WAY LESS room to play with profit numbers on the 1 Series.
QUESTION: Do some Car Manufactures lose money on car sales?
YES...when they have to keep production up or have too many of a model on the lot. They will sell at cost or slight loss to move cars.
Now,there are only 8000-10000 1's coming to the US and very few of them will be 135's. Followed by ALL of the 1's coming in seem to be pre-ordered filled. (hell they are getting sticker plus in certain markets)
What makes anyone think that BMW will offer incentivized deals (at the cost of profit to BMW) NOW or in the next year or next or next.
Unless the production increases dramatically, the demand goes down and the US dollar get closer to the EURO there isn't going to be "cheap " 1 Series leases.
Even if the demand goes down they will lower US production numbers, not GIVE CARS AWAY so the pissed off "cheap lease guys" get a better deal.
SORRY
Now, the Fed continuing to lower rates will have an effect on the money factor over time. If the cars hold there resale values this will also increase the residual values over time. Both of these will effect the lease rates. The residuals could go lower and then you would have a negative effect and actually increase lease rates.
Either way, if you are price shopping a payment the 335i is a better deal (BMW has more to play with in this car and is incentivizing it threw more attractive lease rates) or some other car companies offering.