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      06-08-2015, 11:40 AM   #1
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Lease Residuals on New M Model vs. Older

I'm a newbe at fully understanding the leasing business & would appreciate an understanding comment from ones more familiar.

Is there a more conservative residual value assigned to a new M model lease contract by BMW Financial than an older, more established M model? In other words, at the time of first M2 available delivery, could it be possible that residuals could be such that the monthlies of a $70,000 M2 be close to the monthlies of an $80,000 M4?
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      06-08-2015, 01:06 PM   #2
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Maybe this will help.

http://f80.bimmerpost.com/forums/sho....php?t=1084623
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      06-08-2015, 02:17 PM   #3
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Quote:
Originally Posted by rhonig View Post
I'm a newbe at fully understanding the leasing business & would appreciate an understanding comment from ones more familiar.

Is there a more conservative residual value assigned to a new M model lease contract by BMW Financial than an older, more established M model? In other words, at the time of first M2 available delivery, could it be possible that residuals could be such that the monthlies of a $70,000 M2 be close to the monthlies of an $80,000 M4?
BMWFS plays with their residuals so much that it's hard to tell what they're going to do. In an ideal world, residual values would be highest for those cars who will hold their value better and this would never change. So, the more popular vehicles like the 328i will have highest residuals.

But there are certainly months when you will have some insane residual values for vehicles which aren't selling as well or because BMWFS wants to sell a lot in a certain month - maybe because leases at that time of the year line up the vehicles to be returned at an opportune time for CPO resale. Back in 2011 when I bought my 335is, I leased it at a higher monthly than what some folks got for an e93 M3 through euro delivery. The euro delivery with high residual helped push a $70,000 car well below the price of a $60,000 car by about $100 a month. The reason was because it was summer and they wanted to really push convertibles and these convertibles would be maturing in the summer three years later, where they could offer a pull ahead program to get a surge of new convertible stock for CPO.
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      06-08-2015, 03:45 PM   #4
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Thank you. Interesting. At the time of M2 ordering, since I'll want to lease, although I think I really want the M2, I think I'll request a lease work-up on the M2 as well as an M4 (probably $70k vs. $80k MSRPs) to see what the comparable monthlies would be.

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      06-08-2015, 03:54 PM   #5
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Quote:
Originally Posted by rhonig View Post
Thank you. Interesting. At the time of M2 ordering, since I'll want to lease, although I think I really want the M2, I think I'll request a lease work-up on the M2 as well as an M4 (probably $70k vs. $80k MSRPs) to see what the comparable monthlies would be.

Loaded M2 should be in the 60-65k ballpark, I assume. Also note that some months are more likely to have overall higher rates and good chance of discounts across the board. For instance, you can almost always guarantee 500+ off a car in November/December for holiday credits.
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      06-08-2015, 06:03 PM   #6
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Quote:
Originally Posted by hyperzulu View Post
Loaded M2 should be in the 60-65k ballpark, I assume. Also note that some months are more likely to have overall higher rates and good chance of discounts across the board. For instance, you can almost always guarantee 500+ off a car in November/December for holiday credits.
If they offer CCBs on the M2 which I doubt it will be over $70k fully loaded. But I doubt they will offer it.
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      06-08-2015, 06:07 PM   #7
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Originally Posted by PhoenixWolf View Post
If they offer CCBs on the M2 which I doubt it will be over $70k fully loaded. But I doubt they will offer it.
haha well true enough, but I also suspect we won't see that option. Strictly speaking though, you can have a fully loaded car without every option checked. I wouldn't consider a car with a manual transmission "not fully loaded" just because there is DCT as a $2k option. CCBs and larger wheels by the same token are not always preferable for reasons of their own.
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      06-08-2015, 06:09 PM   #8
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Quote:
Originally Posted by hyperzulu
Quote:
Originally Posted by PhoenixWolf View Post
If they offer CCBs on the M2 which I doubt it will be over $70k fully loaded. But I doubt they will offer it.
haha well true enough, but I also suspect we won't see that option. Strictly speaking though, you can have a fully loaded car without every option checked. I wouldn't consider a car with a manual transmission "not fully loaded" just because there is DCT as a $2k option. CCBs and larger wheels by the same token are not always preferable for reasons of their own.
Very interesting. You're right because in the car world fully loaded doesn't mean every single option added. Lol. True dat
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      06-09-2015, 04:32 AM   #9
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It will be interesting seeing how BMW going to set the M2 residual at... Me and a lot of Fellow F80/F82 buyers got attracted by the Residual they set on them.. For instance, my M3 residual when I ordered it was at 65%! And lots of dealers are willing to work on the price even with my Individual order.. My lease payment for a decently loaded 80K Individual M3 is not far from loaded 60k 435...
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      06-09-2015, 03:28 PM   #10
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Quote:
Originally Posted by pups06112003 View Post
It will be interesting seeing how BMW going to set the M2 residual at... Me and a lot of Fellow F80/F82 buyers got attracted by the Residual they set on them.. For instance, my M3 residual when I ordered it was at 65%! And lots of dealers are willing to work on the price even with my Individual order.. My lease payment for a decently loaded 80K Individual M3 is not far from loaded 60k 435...
They're smart. They are well aware that a high priced vehicle like the M3/4 is going to be a very hot item in the used car market. So, they are willing to push these out on lease in hopes to get them back in 24/36 months to have a good lot of CPO's available.

Make a little money now, but guarantee yourself even more revenue later. While there is no guarantee that a used car buyer is going to use BMWFS to finance the car, it's a pretty good chance they will if they're sitting on a BMW lot as a CPO vehicle.
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      06-09-2015, 03:49 PM   #11
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If residuals are like the 1M, more than a few people might just get an M3 or 4.
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      06-10-2015, 04:33 PM   #12
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Quote:
Originally Posted by hyperzulu View Post
Strictly speaking though, you can have a fully loaded car without every option checked. I wouldn't consider a car with a manual transmission "not fully loaded" just because there is DCT as a $2k option. CCBs and larger wheels by the same token are not always preferable for reasons of their own.
Fully loaded = equipped with all available options

Obviously not everyone wants all of the options, but that doesn't change the definition of the term.
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      06-10-2015, 04:43 PM   #13
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Quote:
Originally Posted by Reid
Quote:
Originally Posted by hyperzulu View Post
Strictly speaking though, you can have a fully loaded car without every option checked. I wouldn't consider a car with a manual transmission "not fully loaded" just because there is DCT as a $2k option. CCBs and larger wheels by the same token are not always preferable for reasons of their own.
Fully loaded = equipped with all available options

Obviously not everyone wants all of the options, but that doesn't change the definition of the term.
Hmm, the M235i comes with a moonroof delete option. Kind of fail to see how ticking that option makes the car fully loaded compared to a base model with a sunroof.

I think I win this argument but feel free to try again.
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      06-10-2015, 04:53 PM   #14
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Quote:
Originally Posted by hyperzulu View Post
Hmm, the M235i comes with a moonroof delete option. Kind of fail to see how ticking that option makes the car fully loaded compared to a base model with a sunroof.

I think I win this argument but feel free to try again.
It's not an argument.

Fully loaded by definition means that the car is equipped with all available options.

No cost options are not factored into the meaning of "fully loaded".

EDIT:

I myself don't care to ever own a "fully loaded" car. I just pick the options that I like. It seems that people like using the term to describe their vehicles because it somehow makes them feel better. I see "fully loaded except ______" in people's signatures, which makes no sense.
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      06-10-2015, 04:57 PM   #15
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Quote:
Originally Posted by rhonig View Post
In other words, at the time of first M2 available delivery, could it be possible that residuals could be such that the monthlies of a $70,000 M2 be close to the monthlies of an $80,000 M4?
Yes.
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      06-10-2015, 07:11 PM   #16
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Quote:
Originally Posted by Reid View Post
Fully loaded = equipped with all available options

Obviously not everyone wants all of the options, but that doesn't change the definition of the term.
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      06-10-2015, 07:13 PM   #17
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Quote:
Originally Posted by Reid
Quote:
Originally Posted by hyperzulu View Post
Hmm, the M235i comes with a moonroof delete option. Kind of fail to see how ticking that option makes the car fully loaded compared to a base model with a sunroof.

I think I win this argument but feel free to try again.
It's not an argument.

Fully loaded by definition means that the car is equipped with all available options.

No cost options are not factored into the meaning of "fully loaded".

EDIT:

I myself don't care to ever own a "fully loaded" car. I just pick the options that I like. It seems that people like using the term to describe their vehicles because it somehow makes them feel better. I see "fully loaded except ______" in people's signatures, which makes no sense.
Yeah but then what do you call an alpine white BMW with every for-cost option? Not fully loaded? I guess an M4 without CCBs is not fully loaded technically, but technically it's absurd. What's a fully loaded Porsche Cayman? $100,000 with a base of 50k.
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      06-14-2015, 08:39 PM   #18
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Quote:
Originally Posted by hyperzulu View Post
If residuals are like the 1M, more than a few people might just get an M3 or 4.
Which is exactly what they want...they will make the M2 hard to get...make it NOT attractive from a leasing perspective...and wait for the M3/4 converts.

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      06-16-2015, 06:47 PM   #19
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Quote:
Originally Posted by rhonig
I'm a newbe at fully understanding the leasing business & would appreciate an understanding comment from ones more familiar.

Is there a more conservative residual value assigned to a new M model lease contract by BMW Financial than an older, more established M model? In other words, at the time of first M2 available delivery, could it be possible that residuals could be such that the monthlies of a $70,000 M2 be close to the monthlies of an $80,000 M4?
More likely the other way around. F8x residuals have improved dramatically since launch. Given the expected demand, I wouldn't expect to see BMW subsidize the M2.
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      06-17-2015, 12:57 PM   #20
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Quote:
Originally Posted by hyperzulu View Post
Yeah but then what do you call an alpine white BMW with every for-cost option? Not fully loaded? I guess an M4 without CCBs is not fully loaded technically, but technically it's absurd. What's a fully loaded Porsche Cayman? $100,000 with a base of 50k.
Strictly speaking that would be a loaded car, not a fully loaded one. But why does it matter? An M4 without CCBs isn't technically not fully loaded, its actually not fully loaded. But i suppose its colloquially acceptable for people to use the term fully loaded erroneously so why not: yes, its fully loaded.
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      06-17-2015, 01:29 PM   #21
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M2 lease residuals and misc. rant

Most likely, the first two months of M2 will be similar to the 1M vs. M3 lease situation back in 2011.

At the time, I qualified for employee lease and nobody had the foresight that the 1M was going to be worth MSRP 3 years later with miles...

At the time, the residual percentages were similar however the 1M was given BMW's "new model demand money factor" referred to as "standard rate".

At the time, I was comparing these two deals...you tell me what you would have done considering that you didn't know 1M was going to be worth insane future values.

2011 M3 DCT 75,900 MSRP
Zero money down, rolled drive offs $689 a month including tax.

2011 1M
Zero money down, rolled drive offs $838 a month including tax.

Since we knew both vehicles performed equally, it was a no brainer to decide at the time...in retrospect, I would have gotten all of my lease payments back having gotten a 1M. Ridiculous.

For me, I am not that excited for the M2 since there won't be significant weight savings enough to justify the lesser engine. They really need to just put the M3/4 engine in there since the weight is so similar. I guarantee there are only a small percentage of us who could actually gain track performance advantage from the smaller vehicle at the same weight.

Also, pending the actual M2 production pictures, I can only assume it will be a tad more masculine than an IMO very feminine M235i. The M3/4 is going to win the looks contest all day in most driver's eyes.

I believe the M2 production will be just a tad less than the current M235i. Given that fact, the M235i is still somewhat hard to acquire so the new market still contains higher demand than supply. The fact that they're offering the M2 in only four colors might lead us to believe it will be greatly reduced production but that could just be another one of BMW's stupid tricks.

Currently, you can lease basic M3 for around 700 a month...that being said, the M2 would have to be significantly less per month for me to consider it...circa 550 a month. That is definitely not going to be the case so it seems the 2016 M3 lci competition package might just be the right answer at $750 a month.
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      06-17-2015, 03:10 PM   #22
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The fawkk.... america. it costs 1300+tax to lease a lightly optioned M3/M4 in canada. No including the fact that our tax rate is 13%. I pay 775 all in for a loaded 335i.... and thats considered a pretty good deal here. To hear you guys getting M3's for what I pay for a 335i just makes me so Jelly
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