kaotiq

My friend's mom JUST leased a 530i last month. 3 year term, 0 down, $500.00 per month. Taxes, registration, title fees all included. Now that is a crazy deal. However, as i stated before, it's the interior that gets to me on a bimmer.

EDIT: I forgot to add that I'm going to give the 5 series a shot with a test drive and interior inspection. Who knows? It could be surprising. I have pretty much already decided that I'm going to get the GS regardless of the price difference, but I have to be absolutely certain before I make any haste decisions. That cheap european leatherette/vinyl feel will probably seal the deal for me.

steverhode

I just went to EBay Motors since they have a wide selection and looked at residuals of GSs vs. BMW 3 series for 2004. Based on what I saw, the BMW's DO command a higher % of the original selling price in the resale market.

This is not what I expected to find.

Based on this, I'm not at all sure that BMW is paying games with the residual values of leases afterall. I think they are pricing them close to reality.

aptekcom

But, isn't the bottom line that you are paying more initially for a comparable 530i ($6000-$7000 more)?
So, that would offset the cost of the lease per month, right?

aptekcom

Does anyone have a good site where residual values and money factors are listed by car make / model?

What is the current residual / money factor on a 2007 GS350 (4 years / 60K miles)?

Threxx

"Real" leather these days is primarily vinyl top coat with leather backing anyway - no part of your skin will touch real leather unless you have the optional aniline or semi-aniline leather in an LS430 or LS460.

Leatherette is nice because it offers most of the looks and comfort of real leather without the maintenance and durability worries. Go look at a leatherette interior after 10 years of use and a leather interior after 10 years of use. The leather interior will be cracked, hard, and torn up unless the leather was obsessed over by its owner and many hard hours were spent each year keeping it in shape or else just not driving it or parking it outside at all.

Generally the more vinyl content in 'real' leather, the more durable it is and easier it is to maintain - so do you really blame the germans for saying "why even bother to throw a thin real leather backing on? Why not just go all vinyl, and save the headaches and cost?"

Yes leather is still the superior luxury item and if well taken care of will be nicer and more comfortable - but let's face it... lexus is more focused on superior luxury while the germans are more focused on superior sport... and the average luxury car owner pretty much never maintains their seats, either.



Oh, and yes BMW inflates their residual values with the equivalent of 'rebates' built in to the residual.

Lexus also has unrealistically low residuals because it makes them more money to do things that way and I guess they don't have much desire to sell more cars than they're already on track to sell. Much like my local Lexus dealer, they seem very full of themselves and unwilling to 'stoop' to competitive pricing, despite the fact that once upon a time they made their name on such a thing.

onchrome

hey where did u get that quote on the m35 cause i'm about 15 mins from new york and gonna def check out that car before i lease in 2 months when my car goes back...if i can can get a m35 for 520 a month with nothing down i think i'll b on the infiniti forum soon...lol

Acuraelin

This is exactly right. The strategy behind this is to keep the BMW customers within the BMW family.
When I was at Lexus, it's hard to compare with the BMW leases. Lexus is 4 years and for the same payment BMW is 3 years and typically high price tag and with mantainance

dchen2

Well, currently for 2007 BMW 530s, BMW is offering a .00095 money factor if you do it through bmw financial and contrary to popular opinion, you can also get a bimmer (except for the new red hot 335i coupes) for close to invoice as well if you shop around.

Also, it seems you are using the residuals for 3 year periods while stretching out the payments for 4 years. The 4 year residuals for both makes are ~40%.

Anyways, let make a scenerio of leasing each car based on a 3 year lease (which is the most popular since you will be covered under the warranty during the entire period of the lease which you definitely want to do with a bmw):

Lexus GS350 at a 3 year 12k miles a year lease
MSRP 48,000 Cap cost 43,000 ($5000 discount)
Residual 52% Money factor .00275
6.25% sales tax

$731/month payment (688 before tax)

BMW 530i at a 3 year 12k miles a year lease
MSRP 53,000 cap cost 49,000 ($4000 discount)
Residual 62% Money factor .00095
6.25% sales tax

558.98/month payment (526 before tax)

For the lease payments of a GS350, you could easily lease a well optioned BMW 550i that costs $70,000! (a 550 would lease for $700-750 a month)

Thus you see how the GS350 is still $173 more expensive each month compared to a 530 despite the 530 being $6,000 more expensive in the selling price. That is due to the combination of really high resale value and extrodinaryly low money factor which is subsidized by BMWF (the .00095 equals out to ~2.28%, and with the MSD program the interest rate equivilent goes down even lower to a 1.1%)

And if you take advantage of the BMWF's multiple security deposit program (where you put down a bigger security deposit at the beginning of the lease which will be refunded to you at the end of the lease or if the car is totaled)

the money factor is reduced .00049, which makes the payment $516

And if you really wanted to save money, you could do the european delivery option, which subtracts another $3000+ off your sales price, which when combined with participation in the MSD program makes the montly payment $426/month with tax included!!!

In my earlier posts I used the 335i sedan as a comparison because while I prefer a smaller sedan, I (being 6'4") can't fit comfortably in the IS while the BMW 3 series in comparison is much more spacious inside and also is much more fun to drive. It being cheaper and more powerful doesn't hurt either .

Don't get me wrong, I love my 2001 GS 430 to death and I liked the 07 GS 430 I took out on a 2 hour test drive even more. Its just that the price premium for leasing a lexus over a bimmer is so much despite the lexus possessing a much lower sales price. I presonally favor the GS 430 over the 350 due to the torque of the engine. The 350 may be just as fast but the 430 feels faster. Unfortunately, leasing a Lexus GS430 even with a invoice cap cost would still cost ~$1,000/month. Thanks but no thanks!

LexFather

I agree. Not sure what happened to their lease rates. I am assuming since the cars are selling like crazy, they don't NEED to offer them. We are talking 320,000 luxury cars a year, unheard of 20 years ago.

On the other end, ASK the finance manager. THey get EVERY MONTH a book of lease rates, most not advertised, to push slow moving models.

The Audi A6, A8 also suffers with awful lease rates.

Infiniti has had $399 lease (not sure the down) on the M35 for years now. It is now joined by $549 on the M45 sport. Great lease deals.

onchrome

yea i just seen that on there website....4 grand down...399 a month thats a good deal for a $44,000 car......i hate to say it cause i like the gs better and have not had the best luck with nissan/infiniti in the pass but it may have to be my only option for that kind of payment!!

linh811

exactly!!!

basically BMW is buying the car from themselves ....

Modeler

To clarify: it's not due to "really high resale value" of BMW, but an artificially inflated lease residual value. The market resale value for the BMWs is not significantly different from Lexus cars'.

sdbrandon

I completely agree. I own both BMW's and Lexus. The BMW lease incentives are a house of cards. Approx. $5000 on every car is held back and back-channeled to BMWFS.

Lexus is a few thousand less. So the lease rates are more realistic.

BMW wants cars back to fuel the CPO market where they will get the discount money back.

Instead of discount ads on TV like GM and Ford do, BMW does not want to cheapen the brand. So they do backend incentives. I don't like it because only folks who lease benefit. If you are financing the deals are not as good.

The problem is, no car company can survive with exessive leasing. It floods the used car market. Also, if everyone leased, there would be no used car market.

I think BMW's plan is the 8 year finance plan.

Customer A leases the car for 3 years
Customer B financees the CPO car after the lease for 5 years.

This is the only way they can get expand sales of expensive cars into the hands of those who cannot traditionally afford them.

Leasing used to be for business and the wealthy. Now folks are in getting over their heads just like ARM mortgages.

So to me the BMW lease deals are not good. The MSRP of the car is inflated to give that illusion. However, this is good for those who lease.

Also, BMW only has a certain amount of manufacturing capacity. They would would rather over charge and liimit sales, than lower prices and flood the market.