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Originally Posted by Artdnj
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Originally Posted by riM3
It's simple- is the offered residual higher than what you think the depreciated selling price of the car (minus the acquisition fee) will be in 3 years?
Of course, that depends on the model, current incentives, etc. But from time to time, BMW inflates residuals to move cars, making the 'put' option your long in the lease worth more than the $725-925 you'll pay to lease.
If at the end of the lease the car is worth less than the residual (and you want to keep it), you may be able to negotiate a purchase price below the residual, leaving BMW to deal with a bit of depreciation that would have otherwise been yours (had you purchased at the outset). If it's worth more (and you want to keep it), you can purchase at the residual.
Further, given the relatively high % of leased BMWs, BMW will often incentivize lease conversion by offering deals on extended maintenance/CPO.
Your real question is "why do people acquire cars more frequently than every 10 years?". Who knows.
For me, I buy, rather than lease, because I tend to turn over cars every 12-18 months. It's a vice- for sure, but I'm an enthusiast.
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Interesting point. If I may ask, do you find any equity in the vehicle after that short time frame or do you take a loss each time. I assume it's the former but I always seemed to get screwed when I try to do the same. |
I almost always lose a little money (though I made money on my E92 M3).
That said, my dealership values my business, so generally I pay invoice less current incentives (I try and wait for USAA incentives, holiday incentives, etc). Given how low my mileage is, I usually work out a fair trade as well. If not, I'll sell private.
Like I said, it's a vice.