# Updated Residual Value policy for BMW's sold with 5K miles or more



## jjrandorin (May 8, 2013)

namelessman said:


> That is an epic post.
> 
> As noted in your post BMW leases are cheap compared to peers(e.g.Audi, MB, Porsche). That reality was driven by the strategy to chase sales crown and expand brand appeal.
> 
> ...


Re leasing the guilia... someone on the forums here looked into it (cant remember who) but reported that they do not have a captive finance arm, so it would be through traditional finance company and something like 44 or 48 percent for a 4 year lease term with a really crappy money factor.

All the saber rattling here is somewhat amusing to me, because if someone is going to go to another brand (and that is TOTALLY FINE), they are going to do so because of something OTHER than the price. Even with the changes, BMW is still competitive on price (RVs still subsidized, etc) vs who they consider to be their competition, which is Merc and Audi.

People are going to get a "similar" bundle of services from audi and merc as they are getting from BMW. BMW was giving away more, but they are not giving away as much now, but its still competitive.

At my job, we have Starbucks machines with beans in them, that grind them when you get a cup of coffee. This is free for us as employees. A few years ago, the company was going to take them away. People threw a FIT... so much so that a decision was made to keep them. Why is this relevant? Because it was free coffee (from a big brand) that most other companies do not provide... but OUR employees are used to it so its "normal" to them and removing it is removing services.

Nevermind that if someone went to another company they would not likely be getting the free starbucks machine coffee. Same principle. Maybe someone would have left over the removal of services, but where they went would likely not have it either.

I see the removal of the Euro Discount like removing the starbucks machine. I see changing the RVs like making the more expensive health plans less subsidized by the company. Even with less subsidized health care, my health care coverage is better than most peoples... its just not as good as it was.

Am I pissed off that they reduced my health care, or am I happy that I have health care that is still better than most peoples, even though its not as good as it was?

Same deal here.. Some will choose to just be upset and take their ball and go elsewhere to another court, but the other court isnt any better... its just leaving on principle.


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## mwm1166 (Jul 16, 2013)

namelessman said:


> That is an epic post.
> 
> As noted in your post BMW leases are cheap compared to peers(e.g.Audi, MB, Porsche). That reality was driven by the strategy to chase sales crown and expand brand appeal.
> 
> ...


The reviews on the G30 all seem to say the driving experience is "good and all" but "doesn't get under your skin, or inspire you."

I'm just saying, if the G20 goes the same way.... I dunno. But i've got my M-Sport LCI manual transmission 340i. If need be, i'll just do a deal with Greg to buy it for a few bucks over cost to the dealer at the time of lease end, and hold on.


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## Robert A (May 18, 2003)

I was the one who researched Alfa leases. When the rains stop, I'm going to test drive one.


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## mwm1166 (Jul 16, 2013)

Robert A said:


> I was the one who researched Alfa leases. When the rains stop, I'm going to test drive one.


I drove one last Saturday...Amazing car...


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## Robert A (May 18, 2003)

...and how does it stack up against your 340i?


mwm1166 said:


> I drove one last Saturday...Amazing car...


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## jjrandorin (May 8, 2013)

Robert A said:


> I was the one who researched Alfa leases. When the rains stop, I'm going to test drive one.


Thanks Robert, I couldnt remember who it was. Can you repeat what the info you found out about it was from a leasing residual perspective?

It might be an amazing car, but I am thinking it will have an amazing price to go along with it. Some may care about the price, and some may not... but I would suspect that anyone upset over the changes that BMW has made that increase the price might also be surprised at how much a car like that would actually cost in monthly payments, especially if they are used to Current BMW leasing numbers.

I am looking forward to all of the forum reviews of it, but that car only makes sense to purchase at this point (to me, from what I read about the financial part of it), and I am perfectly willing to let someone else be the guinea pig for it.

I might look at an AMG the next time around though, and see how those numbers look just to compare.


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## mwm1166 (Jul 16, 2013)

Robert A said:


> ...and how does it stack up against your 340i?


I liked the steering better, the thing handled as well as my 340i at least, it might be better.

The factors involved here though are like this.

in the Giulia you cannot get a MT - so win for my 340i

Unless you get the Quadrigolio you only have 1 choice of engine 4 cylinder with 280 HP.

Now, if I was cross shopping a 330i and the Giulia and I did not care about MT, I would get the Giulia all day long. 1 you have the best steering in a sports sedan that's out right now, sexy Italian styling, a ton of standard features, and more HP than a 330i. The sport seats with the leather felt amazing. I just really didn't have to choose a "very optioned" car to get exactly what I wanted in that car. I drove a Ti with sport package for like 44k maybe. I could have even had less options.

Anyway, I have the inline 6 with a stick for 320HP. I also have a great relationship with Greg who sells me my cars. So I have a dirt cheap lease.

But if I'm Joe Blow off the street, and I'm looking at 330i, A4, C-Class, XE, ATS, wow, I want that Giulia instead.

Also, I don't know where you talked about leasing, but (maybe because it was a presidents day sale) the guy offered me 420 a month 2k down lease for the car. He didn't show me a breakdown of numbers, so I don't have a clue...It could have been before taxes..


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## Robert A (May 18, 2003)

All I know was from a visit to the Santa Monica dealer and an extensive discussion wtih the sales manager. There are two programs -- Ally and Chrysler. One has very high money factors, the other has very low residuals. In effect, they're passing all the depreciation risk to the lessee.

Until Alfa introduces programs of its own that are somewhat in line with its competitors, the actual cost of the car is a complete unknown.



jjrandorin said:


> Thanks Robert, I couldnt remember who it was. Can you repeat what the info you found out about it was from a leasing residual perspective?


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## Robert A (May 18, 2003)

Did the car have any Italian soul to it?


mwm1166 said:


> I liked the steering better, the thing handled as well as my 340i at least, it might be better.
> 
> The factors involved here though are like this.
> 
> ...


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## mwm1166 (Jul 16, 2013)

Robert A said:


> Did the car have any Italian soul to it?


Meaning was it fiery and hot and ready to fall apart? jk

the 4 cylinder leaves it just on this side of feeling like it's going to light your hair on fire I think. I'm sure for italian soul the Quadrifoglio will be the one. The styling is 100% Italian, it's even more gorgeous in person walking around it.


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## RonBurgundy (Feb 18, 2016)

Great discussIon... I've owned 10 BMWs at this point. Here's the unfortunate truth about 'brand ambassadors', self branded enthusiast buyers and the like... they are not BMW's bread and butter customer. For every person foaming at the mouth that BMW won't sell them V8 Turbo wagon with cloth seats there are 1500 that will buy/ lease an X5 and not look back.

Does the new change kill some of the awesome lease demo deals that were out there? To some extent. I got one last year. You still can't match the same value with a comparable MB or Audi, especially on a lease. Price out a S6 no cap cost reduction lease and report back.

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## nealh (Oct 4, 2003)

RonBurgundy said:


> Great discussIon... I've owned 10 BMWs at this point. Here's the unfortunate truth about 'brand ambassadors', self branded enthusiast buyers and the like... they are not BMW's bread and butter customer. For every person foaming at the mouth that BMW won't sell them V8 Turbo wagon with cloth seats there are 1500 that will buy/ lease an X5 and not look back.
> 
> Does the new change kill some of the awesome lease demo deals that were out there? To some extent. I got one last year. You still can't match the same value with a comparable MB or Audi, especially on a lease. Price out a S6 no cap cost reduction lease and report back.
> 
> Sent from my iPhone using Bimmerfest mobile app


Are you saying Audi has better lease deals now?


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## Squeak (Sep 13, 2014)

Had a chance to talk with a reliable CA offline about this, and while it is true, it sounds like there will still be some deals to be had on exec demos -- just not ones with >10k miles. While the residuals will no doubt be lower, the argument is that the auction values that the dealers will buy that at will be lower as well, so the end monthly payment should still be decent.

Only time will tell though, I guess.


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## David1 (Jan 16, 2007)

Squeak said:


> Had a chance to talk with a reliable CA offline about this, and while it is true, it sounds like there will still be some deals to be had on exec demos -- just not ones with >10k miles. While the residuals will no doubt be lower, the argument is that the auction values that the dealers will buy that at will be lower as well, so the end monthly payment should still be decent.
> 
> Only time will tell though, I guess.


Greater with 10k miles is just a plain old used car at that point.


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## Squeak (Sep 13, 2014)

David1 said:


> Greater with 10k miles is just a plain old used car at that point.


Yep. My most recent exec demo had 11k miles on it when I bought it (heck of a deal). works out great for me on this last one. Will have to see how it works for the next one.


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## adrian's bmw (Feb 14, 2003)

nealh said:


> Are you saying Audi has better lease deals now?


No, he's saying they're worse, from what I gather. But what he is saying is that those stupid demo deals are basically a thing of the past.


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## AksNasZasNas (May 30, 2013)

Squeak said:


> Had a chance to talk with a reliable CA offline about this, and while it is true, it sounds like there will still be some deals to be had on exec demos -- just not ones with >10k miles. While the residuals will no doubt be lower, the argument is that the auction values that the dealers will buy that at will be lower as well, so the end monthly payment should still be decent.
> 
> Only time will tell though, I guess.


My sense is that this is a win win for BMWNA. Some dealers used to keep their demos well above 10,000 miles. Some dealers around 7,500 miles. Now those dealers will be splitting the miles between two or three cars that will have at most 4,000 miles when they are pulled out of demo service and put out for sale. This means more cars sold (good for overall sales numbers).

With that said, even though Leasing a demo with over 10,000 miles has now been disfavored, I wouldn't think that the auction value will drop to a point where a 10,000 mile demo leases as cheaply as it used to. A used car with 10,000 miles still has intrinsic value beyond its leasing value. The new demo leasing program probably caused a $3,500 to $5,000 hurt to the leasing numbers on the high mileage demo. But did the car actually lose that much in value? I don't think so.

Totally made up hypo: A $60,000 2016 528 Xi with 10,000 miles may cost $40,000 at the dealer auction. To make up for the lost leasing value, the car would have to be purchased for $35,000 to $37,500. But the reality is that the car still is worth buying at $40,000 to then sell (not lease) at $45,000 as a gently used demo. I believe this is what Lexus does with their demos (which aren't as subsidized as BMW's).

Thoughts?


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## PhantomCypher (Sep 7, 2013)

All I know is my demo that had 17,000 miles when I signed was a hell of a deal. Let me repeat that, SEVENTEEN thousand miles!

$455 a month on 75k car. Let's just say I shed a tear when this new program was released...and then went out and leased a Maserati and Hellcat instead!


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## RonBurgundy (Feb 18, 2016)

adrian's bmw said:


> No, he's saying they're worse, from what I gather. But what he is saying is that those stupid demo deals are basically a thing of the past.


Right - I was saying that even with the changes BMW leases are still a way better proposition than Audi or MB.

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## RonBurgundy (Feb 18, 2016)

PhantomCypher said:


> All I know is my demo that had 17,000 miles when I signed was a hell of a deal. Let me repeat that, SEVENTEEN thousand miles!
> 
> $445 a month on 75k car. Let's just say I shed a tear when this new program was released...and then went out and leased a Maserati and Hellcat instead!


That's awesome! Mine was right at 8500 miles and I did a 0 down 12k 36mo lease at $521/mo on a $76K+ MSRP.

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