BMW Lease rates to jump
08-31-08, 07:42 PM
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BMW Lease rates to jump
As we have been reporting for a while now here, at BimmerFile, BMWNA is going to focus more in the coming years on sales and profit per sale rather than volume and leasing. The concept of “pulling” cars from Germany rather than “pushing” them while stocked on lots is one key component of this strategy, the other is by offering leases that have lower residuals and higher money factors.
You can say good-bye to those $399 lease specials, just so BMW can help dealers empty lots of cars in low demand or even to just drive up sales numbers. Unlike years past, expect to see financing for purchasing to be more attractive. You can chalk this all up to the economy, exchange rates and the over-flooded used car market killing residuals. These moves will help sure up the brand and keep it financially strong and decrease the end of lease risks. It will also decrease the volume of BMW cars on the road, providing some more brand cache (something that has declined over the past few years…)
We have obtained a snippet of the soon to be released September lease rates and the jump is significant; say $80-$100 per month on the same car from one month to the next. There has been a a decrease of about 4% in residuals and a bump in the money factor. Since earlier in the year some models have seen a residual value decrease of over 10%, this market is not a pretty one.
We can not report on whether the same low financing options will remain available as current but we will try our best to find out more.
In the mean time, if you are debating whether to lease a car in the next month you better pull the trigger by Monday or you will be a bit sick to your stomach after the fact.
http://www.bimmerfile.com/2008/08/28...jump/#more-525
You can say good-bye to those $399 lease specials, just so BMW can help dealers empty lots of cars in low demand or even to just drive up sales numbers. Unlike years past, expect to see financing for purchasing to be more attractive. You can chalk this all up to the economy, exchange rates and the over-flooded used car market killing residuals. These moves will help sure up the brand and keep it financially strong and decrease the end of lease risks. It will also decrease the volume of BMW cars on the road, providing some more brand cache (something that has declined over the past few years…)
We have obtained a snippet of the soon to be released September lease rates and the jump is significant; say $80-$100 per month on the same car from one month to the next. There has been a a decrease of about 4% in residuals and a bump in the money factor. Since earlier in the year some models have seen a residual value decrease of over 10%, this market is not a pretty one.
We can not report on whether the same low financing options will remain available as current but we will try our best to find out more.
In the mean time, if you are debating whether to lease a car in the next month you better pull the trigger by Monday or you will be a bit sick to your stomach after the fact.
http://www.bimmerfile.com/2008/08/28...jump/#more-525
08-31-08, 09:36 PM
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This is going to hurt BMW sales, and my guess, help Infiniti, Acura, and Lexus, in that order.
08-31-08, 09:40 PM
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BMW did say they expect 20% less sales b/c of this restructuring for profitability instead of sales.I disagree with the order;
Benz, Lexus, Audi, Infiniti, Cadillac, Acura
09-01-08, 06:02 PM
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Well hold on there Mike. New model year cars tend to have LOWER residuals and higher Money Factors. So this is totally expected.
What is true is that the BMW new model year cars will probably suffer a more significant increase in MF and a more significant decrease in residual than normal. But still, to say that the MF will increase and the residual will decrease shortly is sort of a duh comment (and yes, to be clear, it was not your comment).
What is true is that the BMW new model year cars will probably suffer a more significant increase in MF and a more significant decrease in residual than normal. But still, to say that the MF will increase and the residual will decrease shortly is sort of a duh comment (and yes, to be clear, it was not your comment).
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