Residual value and money factor

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12-09-06 | 09:58 AM

#16

jjbodean

Lexus Test Driver

Joined: Jan 2005

Posts: 936

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From: WV

toyota and lexus tend to use realistic residual values when putting their lease programs together. they are in this for the long haul unlike some leasing companies i have seen come and go who pump up their residuals to gain market share and then pull out of the leasing business when the cars start coming back off lease and they lose their rear ends at the auction.

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12-09-06 | 10:03 AM

#17

sdbrandon

Lead Lap

Joined: Dec 2006

Posts: 488

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From: CA

Quote:

Originally Posted by jjbodean

This is one thing that bothers me about BMW. They discount cars via backend lease deals with BMWFS. The claim high residuals. However go trade one in, they will not even give you close to what bluebook is. Furthermore, these incredible lease deals are getting young kids in over their heads. They do not understand leasing and are only looking at monthly payments. They can afford $400 per month, but not $1200 for performance tires.

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12-09-06 | 10:07 AM

#18

Gojirra99

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Joined: Oct 2002

Posts: 30,120

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From: Canada

Yes, some car manufacturers use subsidized leasing to promote the sales of their cars, make the monthly payments much lower for cars with the same or even higher MSRP's to make them look attractive. The residuals does not necessarily reflect the future resale values of the cars. Subsidized leasing is equivalent to using incentives to increase sales, some car manufacturers do that much more than others.

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12-09-06 | 10:09 AM

#19

jjbodean

Lexus Test Driver

Joined: Jan 2005

Posts: 936

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From: WV

i have been told by my lexus financial services rep that bmw forces their dealers to buy a certain percentage of off lease vehicles from bmw financial services, therefore limiting their exposure somewhat as well.

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12-09-06 | 11:22 AM

#20

socalJD

Lexus Champion

Joined: Mar 2004

Posts: 1,810

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From: So Cal

It's not just Bmw, Audi & MB use the same lease tactics. I couldn't believe my sister got into a '06 A6 Avant lease for a similar mo pmt as my IS350 which I purchased - the MF & residuals were so favorable . . .

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12-10-06 | 11:22 AM

#21

jman-is350

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Joined: Sep 2006

Posts: 730

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From: CA

Quote:

Originally Posted by DallasLex

Here's an example of a $50K 335i:

Base Price: $38,700
Destination Charge: $695

Exterior Features:
Titanium Silver Metallic $475
Interior Features:
Black with Dakota Leather Upholstery and Aluminum Trim
Packages:
Premium Package $2,450
- BMW Assist with Bluetooth Wireless Technology
- Universal Garage Door Opener
- Auto-Dim Mirror
- Lumbar Support
- Digital Compass
Options:
Sport Package $1,600
STEPTRONIC Automatic Transmission $1,275
Paddle Shifters $100
Active Steering $1,250
Park Distance Control (rear) $350
Comfort Access $500
Active Cruise Control $2,200
Satellite Radio $595
Accessories:
Auto-Dimming Exterior Rearview Mirrors $0

Price As Built: $50,190

Zero down, $600 Sec. Dep.(refundable) 36m 10K/Yr: $599 per month so yes the $769 per month on a GS350 is a bit too much.

It's impossible to get this deal... How did you come up with the deal on the 335i at ~$50K MSRP like this? Please tell.

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12-10-06 | 02:21 PM

#22

twister

Lexus Test Driver

Joined: Jun 2006

Posts: 1,541

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From: nj

We need a "sarcasm" emoticon for posts like this

BTW, I originally didn't notice that lease was for 10k/yr. How realistic is that? And they never tell you if the monthly payment includes taxes or not, which in a lot of cases with these super deals you will have to add on top.

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