GS350 or BMW 528 (real buying intended)
10-04-07, 01:46 PM
#31
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It's great to hear all these comments. So if you were to receive a $50K check, what would you do?
I might take some one's advice - it's a gift, go with the one that put a bigger smile on your face, and don't worry about reliability. I think for us, it might be the 528 rather than the GS.
GS is a very nice vehicle. One thing I couldn't figure out is, it's in the 3rd generation so it should be a great sedan design/engineering wise, but some of the things in the car are a bit puzzling. GS also has the lowest selling volume of all Lexus sedans. Is it because strong competition (E class, 5 series, Infiniti's M35) in the segment, or Lexus hasn't figured out the winning formula for a midsize RWD sedan?
Another question, I know leasing BMW is pretty favorable considering all the factors, but it's a lot of math for me to figure out. With the gift money, is it better to buy, or lease and change vehicle in 3 years?
I might take some one's advice - it's a gift, go with the one that put a bigger smile on your face, and don't worry about reliability. I think for us, it might be the 528 rather than the GS.
GS is a very nice vehicle. One thing I couldn't figure out is, it's in the 3rd generation so it should be a great sedan design/engineering wise, but some of the things in the car are a bit puzzling. GS also has the lowest selling volume of all Lexus sedans. Is it because strong competition (E class, 5 series, Infiniti's M35) in the segment, or Lexus hasn't figured out the winning formula for a midsize RWD sedan?
Another question, I know leasing BMW is pretty favorable considering all the factors, but it's a lot of math for me to figure out. With the gift money, is it better to buy, or lease and change vehicle in 3 years?
10-04-07, 02:17 PM
#32
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I'm afraid you don't fully understand the concept of a subsidized lease. A subsidized interest rate is part of it for sure, but only a very small part. As you pointed out, Lexus does offer subsidized interest rates from time to time, but one has to recognize that these rate reductions are quite insignificant compared to what BMW frequently does. For example, my GS450h money factor was subsidized, but amounted to about 5% interest rate in 7.5% rate environment. At the same time BMW was offering 1.9% rate on the 550i.
But the real BMW subsidies come in the form of inflated residuals. Now these babies do make a HUGE difference in monthly payments. BMW has inflated residuals on most of their models (though the levels obviously vary by model popularity). These high residuals have very little to do with what BMW expects to net when selling an off-lease car; they represent manufacturer incentives for lessees. And it is a very little known fact among BMW buyers that the company does that. To give you an example, my GS450h lease has a 53% residual, while a 550i had a 62% subsidized residual at the time I was shopping.
When I was shopping for a car, a 550i with MSRP $15,000 more than the GS450h was going to run me about as much in monthly lease payments due to the residual and money factor subsidies.
But the real BMW subsidies come in the form of inflated residuals. Now these babies do make a HUGE difference in monthly payments. BMW has inflated residuals on most of their models (though the levels obviously vary by model popularity). These high residuals have very little to do with what BMW expects to net when selling an off-lease car; they represent manufacturer incentives for lessees. And it is a very little known fact among BMW buyers that the company does that. To give you an example, my GS450h lease has a 53% residual, while a 550i had a 62% subsidized residual at the time I was shopping.
When I was shopping for a car, a 550i with MSRP $15,000 more than the GS450h was going to run me about as much in monthly lease payments due to the residual and money factor subsidies.
BMW's do hold their value. I purchased the Dinan 3 in april of 2004 at the Manheim auction for $22,500, and the insurance company gave me $20,211 last month for it being flooded. The car cost me $54.50 per month to drive over the time i had it. That beats any lease i've seen.
10-04-07, 03:36 PM
#33
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I'm afraid you don't fully understand the concept of a subsidized lease. A subsidized interest rate is part of it for sure, but only a very small part. As you pointed out, Lexus does offer subsidized interest rates from time to time, but one has to recognize that these rate reductions are quite insignificant compared to what BMW frequently does. For example, my GS450h money factor was subsidized, but amounted to about 5% interest rate in 7.5% rate environment. At the same time BMW was offering 1.9% rate on the 550i.
But the real BMW subsidies come in the form of inflated residuals. Now these babies do make a HUGE difference in monthly payments. BMW has inflated residuals on most of their models (though the levels obviously vary by model popularity). These high residuals have very little to do with what BMW expects to net when selling an off-lease car; they represent manufacturer incentives for lessees. And it is a very little known fact among BMW buyers that the company does that. To give you an example, my GS450h lease has a 53% residual, while a 550i had a 62% subsidized residual at the time I was shopping.
When I was shopping for a car, a 550i with MSRP $15,000 more than the GS450h was going to run me about as much in monthly lease payments due to the residual and money factor subsidies.
But the real BMW subsidies come in the form of inflated residuals. Now these babies do make a HUGE difference in monthly payments. BMW has inflated residuals on most of their models (though the levels obviously vary by model popularity). These high residuals have very little to do with what BMW expects to net when selling an off-lease car; they represent manufacturer incentives for lessees. And it is a very little known fact among BMW buyers that the company does that. To give you an example, my GS450h lease has a 53% residual, while a 550i had a 62% subsidized residual at the time I was shopping.
When I was shopping for a car, a 550i with MSRP $15,000 more than the GS450h was going to run me about as much in monthly lease payments due to the residual and money factor subsidies.
Also, the 1.9 was probably on the 530 not the 550.... haven't seen the 1.9 on the 550 for a long time. What month/year was that?
10-04-07, 03:49 PM
#34
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Fortunately I do understand the concept of subsidized leases and fortunately BMW does not inflate their residuals. KINGLEX gave you a nice example and alas, 3rd party leasing companies also have the same residual (or very close) to what BMW has - so unless THEY are also subsidizing...
Also, the 1.9 was probably on the 530 not the 550.... haven't seen the 1.9 on the 550 for a long time. What month/year was that?
Also, the 1.9 was probably on the 530 not the 550.... haven't seen the 1.9 on the 550 for a long time. What month/year was that?
The 1.9% rate was on the 550i in January of this year.
10-04-07, 03:53 PM
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^ Ok, I believe you. So what is the ultimate advice to give to TMQ ? Should he lease a 535i for 4 yrs or should he purchase a GS350 ? (Assuming a forthcoming 50k gift from inlaws)
10-04-07, 05:43 PM
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Let me be blunt: I'm an Economist who, among other things, reviews statistical models used by auto finance companies to calculate and account for residuals; so I know what I'm talking about. One incomplete example provided by Kinglex that doesn't take into account a number of costs involved in disposing of an off-lease vehicle is completely irrelevant to me. Those residuals really are inflated, and it is a well publicized fact in the auto-finance industry circles (not in consumer publications). You may choose not to believe me, but that's not my problem.
The 1.9% rate was on the 550i in January of this year.
The 1.9% rate was on the 550i in January of this year.
edit:
The money factor on the 550 for January 2007 was .0015
The money factor on the 530 for January 2007 was .0009
The money factor on the 525 for January 2007 was .00065
Last edited by doug_999; 10-04-07 at 05:47 PM.
10-04-07, 07:36 PM
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since i have a ba in economics from nyu, i guess i can be called an economist as well. Buying a car brand new is always a losing proposition, no matter what manufacturer. given the resale value of bmw i just don't see why it would be better to buy a lexus brand new. here is a little test that anyone can do. go to any lexus dealership and see how close to invoice you can get on a gs 350, now go to a bmw dealer and see how close you can get to invoice. lexus discount their cars like crazy while bmw stays pretty close to msrp. another game that dealers like lexus play is the money factor on a lease will change according to your credit score. With BMW Financial either you qualify or you don't. This also applies for loans, everyone who qualifies gets the same interest rate. The whole reason i purchased my 545 as a CPO was because my credit union gave me 7.99% and BMW Financial gave me 3.9%. that over the life of the loan made the total cost of the vehicle the same whether i overpaid by buying from bmw as opposed to buying from a used car dealer and paying a lot less
10-04-07, 08:06 PM
#38
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forget what everyone told you... answer one question...
do you want LUXURY/COMFORT or do you want SPORTY/PERFORMANCE (forget the Horsepower)
Make your decision...
Do you want a very conservative style car, or something alot more edgy... you make the call...
New E-Class will be off the hook once it comes out... best combo of luxury and sport... IMO and my experience...
do you want LUXURY/COMFORT or do you want SPORTY/PERFORMANCE (forget the Horsepower)
Make your decision...
Do you want a very conservative style car, or something alot more edgy... you make the call...
New E-Class will be off the hook once it comes out... best combo of luxury and sport... IMO and my experience...
10-04-07, 08:32 PM
#39
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my humble perspective of the top3 luxury brand cars
I believe when you look for a car in this price range, you want the following 4...
Prestige
Performance
Style
Quality
but in what order??? is the big question...
You have to decide what your taste is... just my observation, aftering owning all three brands.
LEXUS= Quality 100 * Prestige 91 * Performance 86 * Style 85
BMW = Performance 100 * Style 92 * Prestige 91 * Quality 82
MB = Prestige 100 * Performance 97 * Style 93 * Quality 89
Prestige
Performance
Style
Quality
but in what order??? is the big question...
You have to decide what your taste is... just my observation, aftering owning all three brands.
LEXUS= Quality 100 * Prestige 91 * Performance 86 * Style 85
BMW = Performance 100 * Style 92 * Prestige 91 * Quality 82
MB = Prestige 100 * Performance 97 * Style 93 * Quality 89
10-05-07, 05:12 AM
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keep in mind that the jd powers reliability survey looks at cars from 3 years ago. The new gs and es were not around. in the coming years you will see how the current models stack up against other current cars. remember that lexus had huge quality issues with both the gs and es. also remember that bmw had huge quality issues with the x5 and 7 series, so the results can be skewed by cars you are not even interested in buying.
10-05-07, 05:47 AM
#41
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You forgot to add the all-important qualifier "in my experience". I don't know if that's the area you live in, or if you're just a bad negotiator, but I can get any BMW for 2% over invoice in the Washington DC area. I've shopped for 330i, 335i and for 550i over the last three years, and that has always been the case for me. Certainly when you just walk into any random BMW dealership, you will be offered your cars at MSRP; that's the same thing with Lexus dealerships here as well. But regardless of the brand, I've always been able to find a dealer willing to discount cars very deeply.
10-05-07, 09:03 AM
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I believe when you look for a car in this price range, you want the following 4...
Prestige
Performance
Style
Quality
but in what order??? is the big question...
You have to decide what your taste is... just my observation, aftering owning all three brands.
LEXUS= Quality 100 * Prestige 91 * Performance 86 * Style 85
BMW = Performance 100 * Style 92 * Prestige 91 * Quality 82
MB = Prestige 100 * Performance 97 * Style 93 * Quality 89
Prestige
Performance
Style
Quality
but in what order??? is the big question...
You have to decide what your taste is... just my observation, aftering owning all three brands.
LEXUS= Quality 100 * Prestige 91 * Performance 86 * Style 85
BMW = Performance 100 * Style 92 * Prestige 91 * Quality 82
MB = Prestige 100 * Performance 97 * Style 93 * Quality 89
Again its still opinion. I would have to agree with you on some things but, not flaming or trying to hate a history rich Germany luxury auto maker (BMW) has more prestige than Lexus, sorry but its true. Also MB Prestige of 100? I can't agree with that either. MB's C, E, M, and SLK classes aren't as prestigious as many of their rival's counterparts, and certainly don't merit at "100" prestige rating. However, I think MB's high dollar cars are are more prestigous like the S, CL, SL, and of course SLR
, and thats coming from a 7 series driver! Sorry for getting off topic, but I would say go with the 5 series if you are buying a brand!
10-05-07, 02:58 PM
#43
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You forgot to add the all-important qualifier "in my experience". I don't know if that's the area you live in, or if you're just a bad negotiator, but I can get any BMW for 2% over invoice in the Washington DC area. I've shopped for 330i, 335i and for 550i over the last three years, and that has always been the case for me. Certainly when you just walk into any random BMW dealership, you will be offered your cars at MSRP; that's the same thing with Lexus dealerships here as well. But regardless of the brand, I've always been able to find a dealer willing to discount cars very deeply.
I'll let you be the judge of the type of negotiator I am. I purchased my 545I 34k miles fully loaded CPO for $38,500. They wanted $42k. Check the BMW CPO site to see what they are going for. Lexus probably never ever sold a car for full MSRP.
10-05-07, 03:27 PM
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Dude....I hope you get the $$$...otherwise this thread is just a bunch of....keep it simple....test drive the cars you're shopping for....and pull the damn trigger...go with your own intuition...Good luck with whatever ride you end up with.
10-05-07, 03:50 PM
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Lexus has a LOT more profit in their cars than BMW - Thus one of the reasons you will often see them at lower residuals which are based on MSRP (even though they (Lexus) just ranked highest in a recent survey). Also the low dealer profit also helps the BMW residual stay nice and high as well.
But the fact remains, there is a lot more "wiggle" room in a Lexus price than a BMW price and that BKE420's advice is probably the best you will get.
But the fact remains, there is a lot more "wiggle" room in a Lexus price than a BMW price and that BKE420's advice is probably the best you will get.