dchen2

Lately I have been researching selling my 01 GS 430 and leasing a car since I currently work for my parent's business and can expense much of the lease as a business expense. I heard alot of great things about the new BMW 335i's twin turbo engines and was blown away on the performance and handling of the 335i sedan I test drove recently. However, the interior lacks that luxury ambience and the outside is not that class looking either, resembling all the $30k dime a dozen 325i/328is out on the road.

Obviously, I also looked at the 3rd gen GS350s and GS430s and was shocked at how low the residuals are for our cars compared to BMW.

(http://forums.roadfly.com/forums/fin...8297460-2.html)
2007 Lexus GS350 Sedan
24 mo/15k mi – Residual Value 56% of MSRP
36 mo/15k mi – Residual Value 50% of MSRP

2007 Lexus GS430 Sedan
24 mo/15k mi – Residual Value 55% of MSRP
36 mo/15k mi – Residual Value 49% of MSRP


For the 2007 BMW 335i Sedan:
(http://www.bimmerfest.com/forums/sho...d.php?t=198537)
24 mo/15k mi – Residual Value 71% of MSRP
36 mo/15k mi – Residual Value 61% of MSRP


That is a huge difference of over 11-15%, meaning on a 45k car, $5,000-7000 more money over the life of the lease.

Why is this the case? I thought Lexus is suppose to hold their value very well and especially considering how Lexus is renowned for their long term reliability. In contrast, everyone knows Bimmer's tend to be every expensive to maintain after the free maintainence/warranty expires and are also very troublesome.

I priced out a new 07 BMW 335i and though it costs $44k (cap cost 41.5k) fully loaded, a lease with no money down and 36months 12k/yr will work out to ~$520/month. In contrast, a base 07 GS350 costs 45k (cap cost 42k) with similar lease terms costs $715/month and thats not considering the fact you have to pay the moderately expensive lexus service costs that is included for free in the first 50k miles in the bimmer!

I have a hard time understanding why that would be the case? Originally I felt like I was going to go with a GS350 due to the much more attractive exterior/interior and less snobbish social image and imagined with the similar purchase prices and both brands holding a reputation for high resale, the lease payments would be similar. $200/month payment difference for similarly priced cars is huge!

steverhode

Is this because:

1)BMWs keep their value better in the resale market or

2) BWM is artificially making their leases cheaper or

3) Lexusis artificially making their leases more expensive?

dchen2

Primarily number 2) .

http://www.bimmerfest.com/forums/sho...d.php?t=193029


due to that, I am seriously considering leasing a BMW 335i sedan. Sure, bimmers have lots more problems as they age and are ridiculously expensive to maintain but during the lease period is when its to be most reliable plus its covered under warranty and the service is provided free. So in three years when problems start cropping up and the warranty is close to expiring, I simply return the car to the bank.

Plus, to tell the truth, however unreliable bimmers are, they (the higher powered models equiped with a sports package) are still a blast to drive and arguable more "fun" to drive than Lexi. And according to my insurance quote, a 335i coupe (which would be more expensive than the 335i sedan, I was going for a worst case estimate) only costed about $20 more a month to insure full comp as compared to my current 2001 GS 430.

Also, if you take advantage of BMW's european delivery option (resulting in an additional $3000 discount) your lease payments for a 335i sedan will drop to under $450/month.

If the Lexus GS350 were even somewhat competitve with those prices I would totally go for a GS to stay in the Lexus family and continue enjoying the awesome serivce of my nearby dealership but with it being ~$300 more an month, the financial penalty is just too much.

Modeler

This has been discussed in the past quite a bit. The answer is that Lexus residuals are realistic, while BMW ones are inflated and subsidized by BMW. They also usually offer much lower interest rates than Lexus. One reason this is done is to offset the effect of BMW's greatly inflated car prices compared to the competition.

jjbodean

i have also been told that bmw requires its dealers to purchase at residual value a certain number of lease returns. true or not, i dont know, maybe just speculation.

kaotiq

Thanks DChen2 for pointing me to your thread from mine. All this info has really got me to thinking if I should just lease a 530i, or 335 as well. However, knowing that i have a mod bug in me. I would stray clear of the 335i. The engine itself is a temptress for the wallet.

You are right that it seems more economical to go with the Bimmer. That's an extra $250-300 in your pocket. Just don't go out twice a month if you end up with the GS(just kidding). However, the battle is still waging in my head and I am still leaning towards the GS. I would rather pay for the comfort, style, and reliability. I've always held a slight affinity towards the BMW label. European luxury interior is not all that great. Honda Accord leather interior is better than BMW's. Besides, basic maintainence is only an oil change and tire rotation. You can do that yourself. At 30,000, I'm sure that you can go another 6000 miles without changing the belts before you return the car. If not, it is only a few hundred dollars.

Those are just some thoughts. I'm still deciding myself.

steverhode

Here's an obvious stragegy then: Short BMW stock and use the money to make a Lexus lease be fully competitive with a BMW lease.

LexFather

I'm looking for the quote but Lexus just stated they are slightly worried about low lease rates as it makes luxury too "accesible" and not as hard to get as it should be. BMW in Germany also is concerned with the high discounts on BMWs in America.

I don't think u can buy BMW stock, its a private, family owned company correct?

Nauticalx

I agree with the leather interior comment Any company that offers a "leatherette" interior and calls themselves a luxury brand needs to get their heads examined.

AlBoston

BMW is publicly traded.

LexFather

Thanks.

There was a 8 or 9 page thread in car chat with many people, lol, defending leatherette. I am certain if Lexus or someone else offered it, it would be a riot but since BMW offers it, "oh its fine".

newr

how about a company that offers a "cloth" interior and calls themselves a luxury brand? they need to get their heads examined too don't you think?

It's not about defending leatherette.. it's about personal preference. Lexus does offer cloth as standard just like BMW offers leatherette as standard. There is nothing wrong with that. If people don't like the standard cloth/leatherette, they can op for leather.

I have to agree that BMW has everyone beat on their residual value...

Nauticalx

Cloth is a completely different interior than leather. Some people would't have leather under any circumstances. The whole point of leatherette is to have a leather seeming interior, to fool people into thinking its leather. Its either full fledged leather or not. Its like being half pregnant, no such thing. Leatherette is a joke and if you've ever sat in a bimmer that has it and had the wonderful opportunity to laugh at it, trust me, its bliss.

aptekcom

Ok, so I am in the same boat. The lease on my Infiniti runs out in August, so the GS was tops on my list until I read this thread...HOWEVER,
How can a BMW 335i be compared to a GS? I would think the 335i would compare to the IS more...so I don't think this is a fair comparison. Now, a fair comparison for the GS would be the BMW 530i. Out of curiosity, I priced a loaded RWD (Navigation, etc, no ML), and it came out to about $48,000 sticker. After reading the different posts, the GS could probably be had for about $43000. Now, for a comparable 530i, the sticker came out to about $53000, which I will then assume you can buy for about $50000. So, assuming the GS residual is 53% and the BMW residual is 61%:
The Lexus would be worth $25540 (difference is $22460 from the sticker), and $17460 from the actual purchase price.
The BMW would be worth $32330 (difference is $20670 from the sticker), and $17670 from the actual purchase price.
So, by my calculations (and according to a lease calculator, also assuming the moey factor is the same) the GS would actually be cheaper than the BMW, not more expensive as posted above.
Lexus GS $588
BMW 530i $631
This counts a .00275 money factor, and 6.25% sales tax on a 4 year lease.

So, in my opinion if you compare apples to apples, you are paying more for the BMW up front, and even though the residual is higher, in the end it doesn't make much difference.

Is my logic correct, or am I missing something?

RNM GS3

Lexus lease rates are INSANE LATELY and this is something recent. They had GREAT lease rates a few years ago..........Im interested in leasing a GS350 bec my current lease is almost up. The best they can do is $765/month for 36months with 0 down and taxes rolled into payment. I go to Infiniti they are giving a M35 Sport for 520/month with same lease terms. I gotta try BMW next.

BTW my dad is paying $780 for his 05 LS430 and they want to charge me $765 for GS350, no wonder its not selling well.