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BMW 3-Series (E90 E92) Forum > BMW E90/E92/E93 3-series General Forums > Regional Forums > Canada > Anyone notice the really low residuals?



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      07-11-2008, 12:53 PM   #1
Skeptikal12
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Anyone notice the really low residuals?

Was just looking at the Canadian website when I noticed the residuals for the 08 coupe and sedan were really low. 52% and 51% for a 3 year lease w/ 20,000KMs. I guess they anticipate the car's value being significantly less at the end of the lease due to the 09s coming shortly... Or perhaps this is their classic trick of promoting 'low' interest rates while making you think you are getting a deal.

Anyone have any information on the possible increase or promotion of these lease factors? It seems like this isn't a good time to lease a BMW -where one would think otherwise as BMW has to clear inventory before the 09s arrive. I know last year around September they had some good 'deals, wonder if this year will be the same?

Anyways, just thinking out loud. Feel free to comment.
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      07-11-2008, 01:38 PM   #2
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I think the lower residuals are a result of BMWCA getting burned on disposition of the lease returns coming in.

We turned in our X3 two weeks ago. Buy out at lease end would have been $31k. Wholesale market for that car today is $20k to $22k.

The residual on my June lease is 54% vs 48% if I were to have done the lease this month. Over 36 months, that's $100 a month more on a $60k car.
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      07-11-2008, 06:05 PM   #3
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My residual is 62% on my 335xi coupe. I put it at a 16000km lease. I'm planning to buy out after but if you raise the residual with low km... you don't pay interest on the amount that's residual... so it's sorta like an interest free loan if you're looking to buy it out in 3 years.
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      08-14-2008, 09:48 PM   #4
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i talked to a SA today inquiring about a used car. but it was so. So i told him the website residual for the 3 series coupes on a 36 months lease was 52% but he says he can do 60% if i buy a new 08 that is in stock. is that possible?
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      08-15-2008, 08:17 AM   #5
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A little off topic but GM just announced that it will be getting rid of leases, the dealers and GM are just losing too much money on the returns. They said they will instead start offering 7yr 0% financing... and everyone else should follow.
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      08-15-2008, 08:58 AM   #6
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I leased my 328i in June, took delivery in late July. The August residual is already over 2k less than what I got in June. With the economy not all that great and US used cars coming over fairly easily, the used car prices are tanking here.
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      08-15-2008, 09:02 AM   #7
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Quote:
Originally Posted by nospleeny View Post
My residual is 62% on my 335xi coupe. I put it at a 16000km lease. I'm planning to buy out after but if you raise the residual with low km... you don't pay interest on the amount that's residual... so it's sorta like an interest free loan if you're looking to buy it out in 3 years.
I don't think that is correct. For a lease, you are charged interest for the entire vehicle purchase price (not including taxes). The cost decreases every month as you make you payment. The residual is fixed throughout the lease and therefore the interest charge on the residual is. However, the sales tax you are charged on the residual @ the time of buyout is not charged interest during the course of the lease.
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      08-15-2008, 02:57 PM   #8
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Quote:
Originally Posted by BDMBimmer View Post
A little off topic but GM just announced that it will be getting rid of leases, the dealers and GM are just losing too much money on the returns. They said they will instead start offering 7yr 0% financing... and everyone else should follow.
I hope they are going to be increasing warranty with this offer! Paying for a car for 7 years that has a 4 year warranty bites the big one from my point of view.
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      08-20-2008, 12:44 PM   #9
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Quote:
Originally Posted by Lazzer View Post
I hope they are going to be increasing warranty with this offer! Paying for a car for 7 years that has a 4 year warranty bites the big one from my point of view.
Ever think that if you need 7 years to pay for it you can't afford it?
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      08-20-2008, 03:13 PM   #10
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Quote:
Originally Posted by davig View Post
Ever think that if you need 7 years to pay for it you can't afford it?
Maybe he has the cash and wanted to invest it (making some money on interest), while slowly paying off his car?

Its not always about being able to afford it.
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      08-20-2008, 05:28 PM   #11
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Residuals typically drop throughout the year and are historically the lowest at this time due to introduction of the new model year, but also the perception that a 2008 car is older and therefore worth less at this time of year.

The best time of year for residuals is to buy a 2009 when it comes out. Although the residual will likely be just as high in November. It may drop 1-2% in January/Feb.
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      08-21-2008, 10:00 AM   #12
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Quote:
Originally Posted by Skeptikal12 View Post
Maybe he has the cash and wanted to invest it (making some money on interest), while slowly paying off his car?

Its not always about being able to afford it.
Not specifically to you or anyone else here, but that is typically what the guy that can't afford it says to justify his actions. lol


And about GM, they are not completely out of leasing, they are just no longer subsidizing them. So now you will be paying say 8% on a lease or 0-1% on financing plus they are also giving cash back on financing so they are pretty much forcing their customers to finance. Taking the risk of shitty resale away from them and putting it on the customers.
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      08-21-2008, 10:32 AM   #13
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10 year financing for a corolla is normal in asia.....

and i think the monthly payment will come out to around $900/month
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      08-21-2008, 11:23 AM   #14
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Quote:
Originally Posted by EDMBMW View Post
Not specifically to you or anyone else here, but that is typically what the guy that can't afford it says to justify his actions. lol


And about GM, they are not completely out of leasing, they are just no longer subsidizing them. So now you will be paying say 8% on a lease or 0-1% on financing plus they are also giving cash back on financing so they are pretty much forcing their customers to finance. Taking the risk of shitty resale away from them and putting it on the customers.
Hahah, yes I agree. Sometimes people need to justify their actions and have that excuse, other times every penny is accounted for and the wiser decision is made.
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      08-23-2008, 11:57 AM   #15
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Quote:
Originally Posted by EDMBMW View Post
Not specifically to you or anyone else here, but that is typically what the guy that can't afford it says to justify his actions. lol
Certainly not always. I had a buddy who was swimming in cash and the dealer had a low .9% offer on financing, and he took that rather than write the check. Of course, back then, a savings account was earning 4%.

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      08-23-2008, 02:12 PM   #16
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Quote:
Originally Posted by Skeptikal12 View Post
Maybe he has the cash and wanted to invest it (making some money on interest), while slowly paying off his car?

Its not always about being able to afford it.
+1...people always think that if you lease you can't afford it
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      08-23-2008, 02:15 PM   #17
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"Not specifically to you or anyone else here, but that is typically what the guy that can't afford it says to justify his action"


this is just not true

there offering you 7 years to pay for something and not charging you 1 penny to do so

why pay $400 a month when you can pay $300 a month and take a little extra time. the $300 is not costing you in reality more then the $400

plus you can use that money to do other things.

were talking 0% intrest charge. its free money.

people usually pay it off quicker because it makes them feel better, to say i dont have payments. but in this case it doesnt make sense as its not costing you any more to take your time.

i need a new van for work, and i will take the 7 year term. trust me its not because i cant afford it.............
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      08-23-2008, 03:13 PM   #18
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i had a negative balance in my bank account when the bank gave me a $50K loan to buy the car; 8 years of payments.

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      08-23-2008, 04:13 PM   #19
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Quote:
Originally Posted by slapmyfro View Post
"Not specifically to you or anyone else here, but that is typically what the guy that can't afford it says to justify his action"


this is just not true

there offering you 7 years to pay for something and not charging you 1 penny to do so

why pay $400 a month when you can pay $300 a month and take a little extra time. the $300 is not costing you in reality more then the $400

plus you can use that money to do other things.

were talking 0% intrest charge. its free money.

people usually pay it off quicker because it makes them feel better, to say i dont have payments. but in this case it doesnt make sense as its not costing you any more to take your time.

i need a new van for work, and i will take the 7 year term. trust me its not because i cant afford it.............
I suspect though you will either get or can negotiate a much better deal if you pay up front and not take the 0% financing. I remember getting car insurance in the UK, all companies I spoke to charged an extra fee if you paid in monthly instalments rather than pay for the whole year except one company. They really pushed it that they charged no extra to pay monthly, but on asking they give you a 10% discount to pay up front.
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      09-13-2008, 11:21 AM   #20
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So you think the 3 series lease end residual is bad? I just trial configured a 535Xi on bmw.ca and the residual after 36 months is ---------DRUM ROLL ----------40%!!!!!

That make the car very expensive to lease even with a 2% (1.5% for repeat customers) lease rate.
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      09-15-2008, 12:12 PM   #21
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^ I am hoping to buy a used 535 next year so that is good news for me.
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      09-15-2008, 02:05 PM   #22
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Residuals have nothing to do with retail used prices. A residual is simply a guaranteed buy back price when you return the car to the dealer.
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