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      11-30-2017, 03:03 PM   #1
voyagergab
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Crystal ball - future value of x3 m40i

I'm going back and force between option to finance or lease. Kind of know all the pros and cons of each option. The residual on the x3 is quite strong compared to more expensive bmw.
What's the general consensus? Does that translate to a future value that is on par with the lease residual value? Higher? Lower?

I'm usually not too eager to change cars if I like them.
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      11-30-2017, 03:54 PM   #2
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Well, you're in Canada so things are probably different, but to me it seems the residual doesn't reflect reality, more about how BMW wants to market and what cut they want to take.

It makes no sense that the 2017s have a 64% residual, but the newer models have a 59%. Clearly the newer design will be worth more in 3 years than an old design, barring some catastrophic design issue they already happen to know about.

I just got mine, and the lease option was pretty horrible. With my negotiated price and down payment I had the choice of paying ~$930/mo lease (including sales tax in payment) and having a residual/buyout cost of $39,500 in three years, or paying a $950/mo payment on a 6 year BMWFS loan at 1.9% and having the balance be ~$33,000 in three years. If the 59% residual is accurate, I'll have $6500 in equity after three years with almost the same payment, and I can still turn it in if I want.
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      12-02-2017, 10:56 PM   #3
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Quote:
Originally Posted by sor View Post
Well, you're in Canada so things are probably different, but to me it seems the residual doesn't reflect reality, more about how BMW wants to market and what cut they want to take.

It makes no sense that the 2017s have a 64% residual, but the newer models have a 59%. Clearly the newer design will be worth more in 3 years than an old design, barring some catastrophic design issue they already happen to know about.

I just got mine, and the lease option was pretty horrible. With my negotiated price and down payment I had the choice of paying ~$930/mo lease (including sales tax in payment) and having a residual/buyout cost of $39,500 in three years, or paying a $950/mo payment on a 6 year BMWFS loan at 1.9% and having the balance be ~$33,000 in three years. If the 59% residual is accurate, I'll have $6500 in equity after three years with almost the same payment, and I can still turn it in if I want.
In my experience BMWFS generally assign rather optimistic residual values to most of their "volume" models. It's all a game to manipulate the monthly payments. The reason the last model year have higher residuals is to help dealers sell any remaining stock. Very few vehicles are worth 60% after 3 years, most loose more than half.
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      12-02-2017, 11:39 PM   #4
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Originally Posted by dkerr View Post
In my experience BMWFS generally assign rather optimistic residual values to most of their "volume" models. It's all a game to manipulate the monthly payments. The reason the last model year have higher residuals is to help dealers sell any remaining stock. Very few vehicles are worth 60% after 3 years, most loose more than half.
I don’t necessarily agree with that. Almost every lease I’ve gotten I’ve been able to trade in and get roughly my payoff amount. For example I had a 2012 S4 on a 39 month lease that I traded in 6 months early, sold to Carmax so I wouldn’t be negotiating a trade-in while trying to lease a car (didn’t want to give the dealer an opportunity to confuse me by adding another variable). Came out about $500 ahead of my lease buy out.

I also leased a 2010 RAV 4 for my wife. At the end of three years its residual was less than the market value, so we bought it out and gave it to my mother.

I do agree that 64% on the 2017 X3 is a marketing ploy and BMW is calculating in a loss on that residual when they go to sell those three year old returns. However, high fifties is probably in the ballpark after three years, not below fifty. It’s going to vary by make and model, of course. Maybe you’re right that most lose more than half and I just don’t have experience with those brands.
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      12-04-2017, 04:44 PM   #5
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Quote:
Originally Posted by voyagergab View Post
I'm going back and force between option to finance or lease. Kind of know all the pros and cons of each option. The residual on the x3 is quite strong compared to more expensive bmw.
What's the general consensus? Does that translate to a future value that is on par with the lease residual value? Higher? Lower?

I'm usually not too eager to change cars if I like them.
I was undecided in terms of either purchasing or leasing the vehicle. Do you qualify for a loyalty discount to bring the lease rate to 3.15%?

I went with a 45 month lease, and it is mostly from my experience of owning a '11 X3 35i. 2 years extra warranty is now about $4500. Expect to replace the battery around the 5 year mark, and most definitely the brakes, will need to be changed twice if you have the car 6 years. So, with all the electronics in the car, and the fact it's a brand new release and no matter what you think you will get for your car after 5-6 years, you will get 3-4k less, it might be worth it to just lease. Rates will go up as interest rates go up, so when they are back to 5-6% again to lease, then it might be better to buy.

Also, who knows where hybrids will be in 4-5 years, so I usually like to hold onto cars too, but I don't know how well the electronics in this will hold up. You have HUD now, and digital odometers, etc..Not something I wanted to test owning outright after the warranty is done. So, that was my train of thought.
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      12-04-2017, 07:20 PM   #6
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Quote:
Originally Posted by mtlcruisin View Post
I was undecided in terms of either purchasing or leasing the vehicle. Do you qualify for a loyalty discount to bring the lease rate to 3.15%?

I went with a 45 month lease, and it is mostly from my experience of owning a '11 X3 35i. 2 years extra warranty is now about $4500. Expect to replace the battery around the 5 year mark, and most definitely the brakes, will need to be changed twice if you have the car 6 years. So, with all the electronics in the car, and the fact it's a brand new release and no matter what you think you will get for your car after 5-6 years, you will get 3-4k less, it might be worth it to just lease. Rates will go up as interest rates go up, so when they are back to 5-6% again to lease, then it might be better to buy.

Also, who knows where hybrids will be in 4-5 years, so I usually like to hold onto cars too, but I don't know how well the electronics in this will hold up. You have HUD now, and digital odometers, etc..Not something I wanted to test owning outright after the warranty is done. So, that was my train of thought.
I agree with your logic, especially regarding hybrids. This will probably be my last gas only vehicle. A lot of the parts are new or updated. I have a colour HUD in my GT - no issues after 4 years, in fact other than a recirculating valve, a lot of programming issues and an actuator that went bad under warranty it has been ok. The brakes only lasted 65,000km - way less than on the E92 but it is an automatic.
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      12-04-2017, 09:03 PM   #7
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I went in Sept end to book the new X3, my SA with whom I bought previous 3 cars, advised me to come back next Decemberfor better numbers. I leased a 52k 2017 model with Just fees down & monthly is $450 with taxes in NJ.

Like someone posted, the residuals are not really attractive. Financing may be the way to go..
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