Thoughts on Residual and Money Factor

[turbomzi]

Based on what is offered for other M models and their regular counter parts, the numbers should sit like below:

36 month / 15K / 58% / .0019

You think this is realistic? Any word from any dealers in the US what these numbers are going to be? Any help is appreciated.

[avsbmw]

+1

[ES BMW]

Too soon to tell. I wouldn't be surprised if they offer the non-subsidized MF of .00230

[SamS]

Being that the 1M will be a popular model, who even decides if it will be offered via lease? BMW FS?

[YVES1M]

This is a car we should buy no lease!!

[Kurt_OH]

Originally Posted by SamS

Being that the 1M will be a popular model, who even decides if it will be offered via lease? BMW FS?

To BMWNA, a lease IS A SALE. There is no "deciding" on their part. The car is SOLD no matter if YOU or some financial institution takes title and transfers THE ENTIRE PRICE to BMWNA. That includes BMWFS.

[Kurt_OH]

I don't think you have a chance of getting 36 months with 58% residual on a BMW M vehicle. The most I've seen for ANY non-vert M is 57% and it's MUCH more often close to 50% at 36 months.

Bump your lease payment guess up by $100 month from whatever your calculation had provided . . .

[SamS]

Originally Posted by Kurt_OH

To BMWNA, a lease IS A SALE. There is no "deciding" on their part. The car is SOLD no matter if YOU or some financial institution takes title and transfers THE ENTIRE PRICE to BMWNA. That includes BMWFS.

I have never used BMWFS, but I have leased, and purchased outright, many new cars.

Other automotive financial companies do not consider a lease the same thing as a sale. Yes, they are selling the car to you, but their books must reflect a residual. And that residual carries a cost, so many car companies shied away from leases over the past few years to help their bottom line.

And with the 1M, it would appear BMW will be able to sell what they make, hence no motivation to offer a lease when traditional buyers would appear plentiful, at least initially.

[M2audioman]

People fail to realize that this car will be tough for BMW to move. I know us board members here love this car and think it will sell like hotcakes...but the reality is that a $50K sports car only available in 3 colors and with a manual transmission will not have a big market in this country. At $50K, some people will pick up a pre-owned M3 instead.

Personally, I'm only interested in leasing this car. I really don't expect to own it for more than 3 years since I drive almost 20K miles a year. Plus, I don't want to own this car past its warranty period. Being the current owner of a Z4M Coupe out of warranty, I can tell you costs add up quick on these. The 1M is the perfect car to lease....assuming the residual and money factors aren't too absurd. Also, waiting a few months should allow you to get this car for maybe $1K over invoice instead of paying full MSRP.

[Kurt_OH]

Originally Posted by SamS

I have never used BMWFS, but I have leased, and purchased outright, many new cars.

Other automotive financial companies do not consider a lease the same thing as a sale. Yes, they are selling the car to you, but their books must reflect a residual. And that residual carries a cost, so many car companies shied away from leases over the past few years to help their bottom line.

And with the 1M, it would appear BMW will be able to sell what they make, hence no motivation to offer a lease when traditional buyers would appear plentiful, at least initially.

You're mixing up two completely separate entities: a car company - who builds cars to sell them, and a auto finance company who lends money to folks who buy cars.

BMWNA is a company who sells cars; if they have ANY interest in who finances it, they would FAVOR BMWFS. As for BMWFS, they'll either offer a market rate lease, or better than market rate lease. Otherwise, you can just go ANYWHERE and get a market rate lease and it's not at all up to BMWNA or BMWFS whether you lease or buy. In fact, if you're NOT financing through BMWFS, there IS NO DIFFERENCE AT ALL TO BMWNA OR BMWFS whether you buy or lease. From the perspective of BMW, the car was SOLD. It just so happens that it was sold to a finance company if you lease.

[SamS]

I understand the the differences between BMWNA and BMWFS, but the two are indeed linked. If you are unaware that there are incentives for BMWNA to use BMWFS then maybe you should ask around a bit more.

[turbomzi]

The M3 coupe is going for 58% with 15K miles and 60% with 12K. the vert is even better 61% 15K and 63% with 12K so M cars do go with these numbers! not the X5 M or X6, but the more sensible ones.

I think we will have the numbers by mid-february.

I do agree that this car is a good lease since out of warranty would be a handful! been there done that and it's not fun...

[Kurt_OH]

Originally Posted by SamS

I understand the the differences between BMWNA and BMWFS, but the two are indeed linked. If you are unaware that there are incentives for BMWNA to use BMWFS then maybe you should ask around a bit more.

The question was "will the 1M be 'offered via lease'". To which THE ONLY ANSWER is YES. How can this be known? Because the cars are FOR SALE. BMWNA does not lease or finance cars - it SELLS them. BMWFS or whomever else you would propose to lease through, BUYS THE CAR.

Thus, incentives or the wishes of BMWFS are irrelevant to the question of whether you can lease a 1M. OF COURSE YOU CAN.

[WULFFZA]

I have never leased a car and will likely be leasing this one. My reasons:

- Dont know how much I will like the car in the long run (I hope alot). I'm signing up for a car I have never seen in the flesh or drive before I take delivery. I've never even taken a 135i home for the night.

- Dont know how the market will react to this car. Resale value may be worse than expected, the hype may die quickly. Its irrelevant if you plan to own it a very long time, but given my history with changing cars every 2-3yrs I cannot say that I will definitely keep it.

- The lease gives me 3yrs to decide how much I like the car, see how the market reacts and what used prices do and whether any reliability and maintenance issues make it worth springing for an extended warranty if I buy it, or turn it in.

- I know what I am in for $ wise on day 1, with a guaranteed give it back no questions, and almost no money out on maintenance over that period.

- If the market value exceeds the residual in 3yrs, then I can buy it and resell it at a small margin to make up for the additional lease pmt I paid. If the market value is lower then I scored by getting a lower lease pmt than I should have. Either way I can buy it out if it makes sense, paying more in interest over the entire term, but that is worth it to alot of people who are uncertain for the same reasons above.

- Mileage is not an issue since it is the pleasure car not the daily driver.

- I have no interest in making any modifications and am fanatical about mechanical and cosmetic maintenance so it will likely be good as new when it is turned in.

A few other reasons, but I havnt had my second cup of coffee this morning so cant think of them right now..

Yes, if I decide to keep it and buy it out I'll be paying more in the long run, but the extra cost to me is worth the confidence of knowing what I am in for over the first 36months to make up my mind. If I'm bored with it and there's something else that peaks my interest, I turn it in and sign for something else. No hassles with advertising - test driving - trade in price shock, horror, disappointment etc with trying to sell a used car.

As for BMWNA, BMWFS etc, they get an inflow of nicely equipped cars that they can sell CPO and profit off again in 3 yrs, which likely means you just bought or leased another BMW, win win.

[turbomzi]

And on top of that ^^, if you decide you don't want the car after 3 years when you buy, you would be behind $1500-2500 (assuming you sell the car when you would turn in the lease like after 3 years, comparing the calculation of the down payment and payments for both lease and finance (60-month finance) on a known car like E92 M3) whereas lease should be less than $500 to turn it in if even that.

Purchase makes sense only if you are 100% sure you are keeping the car for more than 3 years if you are doing 60+ month finance. I personally know I won't be able to stay in this for more than 3 years so lease makes the most sense for me.

[Kurt_OH]

Originally Posted by turbomzi

The M3 coupe is going for 58% with 15K miles and 60% with 12K. the vert is even better 61% 15K and 63% with 12K so M cars do go with these numbers! not the X5 M or X6, but the more sensible ones.

I think we will have the numbers by mid-february.

I do agree that this car is a good lease since out of warranty would be a handful! been there done that and it's not fun...

I'd like to see some documentation of published residuals of 58% on an M3 coupe. I can't find any. I searched and the typical was ~51% with a single outlier of 57%, and that's for 12k miles.

Can you show me where you're getting those numbers?


Thanks!

Kurt

[turbomzi]

Originally Posted by Kurt_OH

I'd like to see some documentation of published residuals of 58% on an M3 coupe. I can't find any. I searched and the typical was ~51% with a single outlier of 57%, and that's for 12k miles.

Can you show me where you're getting those numbers?


Thanks!

Kurt

Here is a website that posts the same information available to dealers. My brother has also just ordered an M3 coupe with 12K lease 36 month with a 60% residual.

http://www.ridewithg.com/index.php/2...-january-2011/

[ES BMW]

Originally Posted by Kurt_OH

Can you show me where you're getting those numbers?

They're usually posted monthly - http://bimmerfest.com/forums/showthread.php?t=510810
Residuals posted are for 15K miles/year. Add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms.

[Kurt_OH]

Damn, I hate when it's THAT easy to prove me wrong.

Thanks! (I think).

[Raine]

Seeing as manual will be the only transmission available, that eliminates quite a few buyers.

[teddyb]

Originally Posted by 335audioman

People fail to realize that this car will be tough for BMW to move. I know us board members here love this car and think it will sell like hotcakes...but the reality is that a $50K sports car only available in 3 colors and with a manual transmission will not have a big market in this country. At $50K, some people will pick up a pre-owned M3 instead.

Couldn't agree more.

It's easy to forget as 1 series enthusiasts we are like a tiny subset of a subset of enthusiasts. BMW must love the hype that we create over these cars.

I can see a cult following for this car in Europe though - and I have a feeling they are going to get HOSED. Having lived there and in South Africa, I think US owners often forget how fortunate they are both in terms of pricing and standard content in a car (the 2010 de-contenting notwithstanding).

My thinking is that when the lease is up on my 135 in 2013, BMW is going to have some tasty options out there. Like a DCT 1M perhaps? Here's hoping.

As far as leasing goes - all told, BMW really does have one of the better programs out there, at least in my experience.