# BMW 3 Series Leasing and Residual Values



## BMWwannabe (Oct 10, 2003)

I went to a dealer recently and got what I believe to be some startling residuals for an ED of a 2004 330i w/PP, SP, CWP. 

I received quotes with the following quotes:
$650 for a 36 month / 12k per year lease with residual set @ less than 54%
$580 for a 48 month / 12k per year lease with residual set @ less than 45%

Although each of these leases had an implied interest rate of ~3%, which seems reasonable, the residual values look LOW and the monthly payments HIGH.

Based on searches in this forum, the 36 m/12k lease residual for a 2003 330i are typically well north of 55% and close to 50% for a 48 m/12k lease.

For those of you who just leased a 2004 330i, if you wouldn't mind sharing with me the residual and money factors of your transaction. This way I can be comfortable in evaluating the quotes I'm getting from area dealer.

Thanks.


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## SONET (Mar 1, 2002)

I don't know how accurate this is, but so far I've had good luck with it:
http://www.cars.com/carsapp/nationa...mknm=BMW&mdnm=330+SERIES&yr=2004&mr=&x=13&y=9

Good luck!

--SONET


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## BMWwannabe (Oct 10, 2003)

DougDogs said:


> One silly question. You know that if you lease an ED, you will be making 1-3 payments for a car that you will not be driving??? Lately it seems to take 2-3 weeks just to get through VPC, let alone the time it takes for train/loading onto ship/ sailing of ship.


Yes I am aware of that particular pitfall associated with leasing an ED. But my intentions are to keep the vehicle at lease end, so to make an apples to apples comparison, I need to be comfy with the lease terms. Thanks though :thumbup:


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## WILLIA///M (Apr 15, 2002)

I've noticed that the lease prices seem higher to me on the '04's when I play around with the build your own BMW feature on the website now. I don't know what the current residuals are and if they are in fact lower than before. Maybe a post in the ask a dealer forum will help? :dunno:


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## Jon Shafer (Dec 15, 2001)

One of the coolest aspects of the ED Lease through
BMWFS is that the residual value is based on the US
MSRP, and not the ED MSRP. Therefore you will have a higher figure which translates into less
depreciation and lower payment. The cap
cost is based on the lower ED selling price.
:thumbup:


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## Tanin (Dec 21, 2001)

For a 330i ZHP - I was quoted .62% residual for a 2003 and it dropped to .60% for 2004.

You #'s are :yikes: IMO.


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## Chris90 (Apr 7, 2003)

Good god, why would you pay $24,000 to borrow a $40,000 car for 3 years? No wonder BMW pushes leases.
Leasing is just a way for people to buy more car than they can afford.


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## BarryH (Oct 13, 2003)

Tanin said:


> For a 330i ZHP - I was quoted .62% residual for a 2003 and it dropped to .60% for 2004.
> 
> You #'s are :yikes: IMO.


I just purchased a yet to be delivered 325cic with a 62% residual. Sticker was $46K, 10K miles per year, three year term, $775 drive away, $625 a month (w/o tax). Something doesn't seem right with your deal as the payment is higher and the selling price is lower.


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## bbkat (Oct 27, 2002)

DougDogs said:


> One silly question. You know that if you lease an ED, you will be making 1-3 payments for a car that you will not be driving???


I heard that concern a lot but I'd argue that I'm effectively 'renting' the car for a number of miles, rather than months. Not driving for a couple months means more miles per month. :drive: Am I rationalizing? :dunno:

*wannabe:* I locked in the Aug rates (for all 3-series at the time), 59% residual. Edmunds.com  has a great resource under 'Car Discussions/Finance, Warranty.../Leasing' Post your question in 'Lease questions - ask here. Car-man is DA MAN!


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## bbkat (Oct 27, 2002)

Dawg90 said:


> Leasing is just a way for people to buy more car than they can afford.


Or to drive a new car every few years, if they can afford it :lmao:


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## SONET (Mar 1, 2002)

Dawg90 said:


> Good god, why would you pay $24,000 to borrow a $40,000 car for 3 years? No wonder BMW pushes leases.
> Leasing is just a way for people to buy more car than they can afford.


I agree that leasing is the way many people buy more expensive cars than they can actually afford. However, I don't think it's right to overgeneralize here. If you actually crunch the numbers, leasing makes more sense under certain circumstances - especially if you own a business where you can write it off.

As for your numbers, what you're paying for is called depreciation. Purchased vehicles aren't impervious to it, and you're essentially paying the same thing if you keep the car over the same period (assuming BMW's residual estimates are correct). And you're also stuck with paying tax on the whole car instead of just paying tax on the payment, not to mention having to try to find a buyer for it when it comes time to sell. There are certainly disadvantages to leasing, but I don't know that the one you pointed out is necessarily one of them.

--SONET


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## BarryH (Oct 13, 2003)

SONET said:


> I agree that leasing is the way many people buy more expensive cars than they can actually afford.


Not really. You have to have pretty decent credit to qualify for a lease and being over extended is one of the things that can get you turned down. Also, defaulting on a lease is almost as bad as a bankruptcy on your credit report - do it once and it'll take you seven years before you can do it again. Leasing is definitely a no-no if there's any chance that financial hardship will prevent you from completing the term. If you default, you're responsible for -all- the remaining payments even though you won't have the car any more.


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## Taco (Aug 26, 2003)

Another thing to think about, if you buy your car and some jacka$$ smashes into it you're stuck with a $40,000 tin can with a bmw emblem pasted on it, which won't be worth squat after its rebuilt. If you lease, you don't have to worry about it - just turn it in after 3 years. But, if you want to keep the car for over 5 years and don't care about reselling it, then yeah, buying is definitely the way to go.


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## SONET (Mar 1, 2002)

Yet another thing to consider is if you took that same $40k and put it in an interest bearing account/liquid investment, and only withdrew money to pay your lease payment. At the end of three years you would certainly come out ahead of the guy who bought his car outright and sold it at the end of three years. Same thing goes with the guy who doesn't have $40k laying around sending in his lease payment each month, and putting whatever the difference would be from a car payment into a simple investment. Three years later, chances are he will be ahead.

Cars are almost never a good place to tie up your money. 

--SONET


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## WILLIA///M (Apr 15, 2002)

SONET said:


> Cars are almost never a good place to tie up your money.
> 
> --SONET


That's the ticket. :thumbup:


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## Frank Rizzo (Aug 2, 2003)

If you are buying a car as an "investment" you need to seek help.
As an ex car salesman, I'll tell you that leasing is so popular, because cars have become so expensive. 
As a general rule of thumb:
If it Appreciates in value, own it.
If it Depreciates in value, lease or rent it.

BTW, the BEST leasing caclulator in the world in on www.carbuyingtips.com. It's an Excel spreadsheet you can download. go to the "leasing" section.I use it when I go with friends to lease cars (I bring my laptop). You'll understand how complicated leasing really is.

Some cars make good leasers, BMW, Benz, etc. because they have a high residual value. American cars are not good leasers due to low residual values.

BTW - you NEVER want to come in under milage at the end of a lease, that means you paid for miles you did not use. Better to come close and go over - and pay the difference at the end.


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