[NightWriter]

As my car will be delivered this month, and as the August residual values set by BMWNA have not improved at all from July, I'm wondering whether leasing is necessarily the smart choice.

I suspect that when the residual levels were in the 65-66% range, they were inflated artificially to support lower lease payments and hence spur sales. But in the 61-62% range, I'm not sure how much they're really subsidizing them.

Is there any real-world data about what the actual 3-year residual values actually are for these cars? I could take a look at some anecdotal values on autotrader or other retail sites, but I'm wondering if there's a better source.

[sapota]

http://www.cars.com/go/alg/index.jsp

The above shows that a 3 series only has 50% residual after 36 months. !!

Lease is just another way of financing for a car. In general, It also transfers the tax liability.

Even with the lower residuals, a 2016 3 series will come out with lower lease payments compared to a loan.

IMO a lease provides a good option especially if you plan on changing cars every 3 years or so.

[redwing497]

Those 65 or 66 percent residuals are a big "incentive", if you will but even 61 or 62 percent is fantastic for a lease. I was looking at lease rates for an Audi S3 and residuals are pathetic, leading to a absurd lease payment. And they're not any cheaper than some 3 series'

[NightWriter]

Agree, in general, but the devil (as always) is in the details. A lease may be more or less attractive if the manufacturer sets the residual levels artificially high or low, respectively. Traditionally, that's how/why 3-series are so attainable (especially 320i $199 deals that dealers love to advertise, even though it's likely closer to $300 once you add, say, taxes, power windows, and air conditioning).

The cars.com link suggests a residual of 48%, which doesn't sound reasonable. Edmunds.com (http://www.edmunds.com/bmw/3-series/...2/cost-to-own/) computes a 3-year total depreciation of around $22k (given 15k miles year), which is closer to around 58% given an MSRP of $52k. A couple of CPO examples on autotrader suggest residuals in the 64% range, at least at retail prices.

[sapota]

Unlike new cars, used cars will have a much larger range of values.

First of all, there is trade in, private sale, retail, and CPO from dealer.

Then there will be regional variations (eg awd likely has better value in places where it snows )

the kind of options a car has will also determine residual value.

It's likely that cars.com is listing the trade in residual using a 15k miles/year

The reason BMWFS sets higher residuals is because they can sell the car back around as a 1 owner CPO with minimal reconditioning and also because there is a good chance you will end up leasing another BMW; so essentially by leasing, they have pretty much gotten your monthly payments for quite a long time.

If you buy and try to trade in after 36 months, I doubt you will get as high a trade in as BMWFS residuals.

50% of BMW vehicles are leased, I believe one of highest among brands.

[omarkb8]

Anyone know the residual for August? Did it change from July? Someone in the dealer in Southern Cali was telling me it did but i didn't believe him

[ArchJR]

Originally Posted by NightWriter

As my car will be delivered this month, and as the August residual values set by BMWNA have not improved at all from July, I'm wondering whether leasing is necessarily the smart choice.

I suspect that when the residual levels were in the 65-66% range, they were inflated artificially to support lower lease payments and hence spur sales. But in the 61-62% range, I'm not sure how much they're really subsidizing them.

Is there any real-world data about what the actual 3-year residual values actually are for these cars? I could take a look at some anecdotal values on autotrader or other retail sites, but I'm wondering if there's a better source.

Real world residual data is kind of irrelevant for BMW leases. They artificially adjust the residual value and money factor monthly based on the anticipated volume of lease returns into their CPO program in three years. The buy-out figure will always be high because they don't want you to buy the car. They want it back to CPO and make a second generous round of profit on the same car.

[S4Dude]

Originally Posted by NightWriter

As my car will be delivered this month, and as the August residual values set by BMWNA have not improved at all from July, I'm wondering whether leasing is necessarily the smart choice.

I suspect that when the residual levels were in the 65-66% range, they were inflated artificially to support lower lease payments and hence spur sales. But in the 61-62% range, I'm not sure how much they're really subsidizing them.

Is there any real-world data about what the actual 3-year residual values actually are for these cars? I could take a look at some anecdotal values on autotrader or other retail sites, but I'm wondering if there's a better source.

I believe that even at 61/62 they're being manipulated. Look at residuals for most of BMW's competition and you'd see where they would most likely reside if BMW wasn't making such an aggressive lease push.

BMW has always been way over the top aggressive on leasing. It's clearly a sound business practice for them. I just spent a few days driving a buddies new F10. He's leasing that car for about $860/mo and it stickers over 100K. If you enjoy swapping cars, BMW leases are impossible to beat imo.

As Sapota mentioned, BMW seems to do well leasing new and selling CPO for a good premium. Sound business. I only wish Porsche felt similarly.

[S4Dude]

Originally Posted by redwing497

Those 65 or 66 percent residuals are a big "incentive", if you will but even 61 or 62 percent is fantastic for a lease. I was looking at lease rates for an Audi S3 and residuals are pathetic, leading to a absurd lease payment. And they're not any cheaper than some 3 series'

Audi doesn't care about leasing. Not one bit, never have. They have a take it or leave it approach and always have. I leased my first one, bought this one and will most likely go back to leasing next....unsure what brand.

[auf Deutsch]

^I can lease a lightly equipped M3 for $800/mo. Word is, an S4 would cost close to $1000.

[S4Dude]

Originally Posted by auf Deutsch

^I can lease a lightly equipped M3 for $800/mo. Word is, an S4 would cost close to $1000.

Most of the guys who are willing to post their numbers over on Audizine are probably in the high $600's on S4 leases. If you do ED, you can get an M4 for just a bit shy of $800 I think depending on where you live and if you MSD. Great deal for a great car.

I didn't lease my S4. If I stick with Audi I won't lease the next one either because RS leases are insane. If the next car is going to be a lease, it'll be a BMW. Deals are too good to pass up.