M3/M4 Residuals = 55/57/58

[RealStig]

This is completely not official but I heard from my salesman who is very well connected that the residuals are "expected" to be 55(15k)/57(12k)/58(10k) for the M3/M4s for MY2015. We have done the math and a base M3 with no features comes to about $900/month whereas anything with 1 or more packages easily crosses into the $1000-1100/month territory. I hope I'm wrong or I'm going to have to re-think my options, will most likely have to give up the LED and driver assist package. It would be great if I can order HUD alone because that and the Harman Kordon along with bluetooth are the only features I care about. Oh and there is the DCT and 19" wheels. Oh well

This is with taxes rolled into the payment with full MSDs paid.

[Jockey]

I'm pretty sure everyone has been saying don't expect a sub-1000 lease for the first year because of the residuals.

Looks like they were all correct.

[RealStig]

Originally Posted by Jockey

I'm pretty sure everyone has been saying don't expect a sub-1000 lease for the first year because of the residuals.

Looks like they were all correct.

You are right but I guess you don't believe it until you see it. The problem is if you paid about $100 more a month you can actually lease an M5 which is ridiculous. I know they are totally different cars and so on, but for the M3 buyers (does not apply for M4), it's a serious consideration. The comfort and the luxury in M5 is just something else. You are almost wondering what the heck am I doing paying $1000/month for a 3 series whereas just a bit more can get you the big mothership.

And just as I am saying that to myself, I see Jason's post where I'm reminded that the new M3 does 0 to 60 in 3.9 seconds, it weighs as much as the E46 did, and gets around 23-24 mpg combined, and all those thoughts goes out of the window

[F9T]

I would actually be fine with those numbers since I will only be doing 10k miles per year. Does anyone know what the money factor might be?

Edit: I just re-read the original post. Are you saying that those are the expected residuals for the 2015 models or what the expected residuals will be in the middle of 2015?

[RealStig]

Originally Posted by infantrytroop22

I would actually be fine with those numbers since I will only be doing 10k miles per year. Does anyone know what the money factor might be?

Edit: I just re-read the original post. Are you saying that those are the expected residuals for the 2015 models or what the expected residuals will be in the middle of 2015?

This is the residuals from the day production starts till the end of MY2015 (so until April 2015). Money factor is same as M5, 0.00111.

[caneaddict]

those residuals seem very low to me for such a new car. I don't see how BMW earns much by artificially lowering residuals. If the car is worth more at the end of your lease than the buy-out (residual), owners can simply sell the car - pay off the lease and pocket the difference. If BMW believes they can get a higher monthly payment due to demand, shouldn't they achieve that by keeping realistic residuals and upping the money factor? That way they are assured of capturing the full excess price.

[Sedan_Clan]

It'll be interesting to see what the early adopters end up paying. I have never had an M3 lease payment over $900, so that is still my target. Actually, I take that back. My 2003 M3 was $998 a month or something like that.

[F9T]

Originally Posted by RealStig

This is the residuals from the day production starts till the end of MY2015 (so until April 2015). Money factor is same as M5, 0.00111.

Got it. Isn't that a really good rate for the money factor? Do dealerships or BMWFS add on to that to make it higher? My mother-in-law just leased a 428 and I think her money factor was like .002 something.

[LSM]

Originally Posted by infantrytroop22

Got it. Isn't that a really good rate for the money factor? Do dealerships or BMWFS add on to that to make it higher? My mother-in-law just leased a 428 and I think her money factor was like .002 something.

Yes if they can they will add at the dealer level..they make more money by adding onto the buy rate

[F9T]

How do you know if the dealer is adding onto the buy rate?

[Kief]

I would give my left...for those residuals, but I doubt very much they will be this high right out the gate.

These residuals are actually the current rates for an M5, which you can get at or very near invoice. The current MF across the line is .0013

[RealStig]

Originally Posted by Kief

I would give my left...for those residuals, but I doubt very much they will be this high right out the gate.

These residuals are actually the current rates for an M5, which you can get at or very near invoice. The current MF across the line is .0013

These residuals are terrible. The residual on my current car (M3) was 64% for 10,000 miles. This is a difference of 6% of the purchase price, which for $80,000 is around 5k. Pretty significant.

[Kief]

Originally Posted by RealStig

These residuals are terrible. The residual on my current car (M3) was 64% for 10,000 miles

Really...these rates are not terrible for a newly introduced M-series. Check out the rates when the F10 M5 was introduced...<50% http://f10.m5post.com/forums/showthread.php?t=711879

Eventually the rates improve, hence your 64%, but the rates you quoted seem optimistically high (I hope I'm wrong).

[RealStig]

Originally Posted by Kief

Really...these rates are not terrible for a newly introduced M-series. Check out the rates when the F10 M5 was introduced...<50% http://f10.m5post.com/forums/showthread.php?t=711879

Eventually the rates improve, hence your 64%, but the rates you quoted seem optimistically high (I hope I'm wrong).

That's because that's an M5. There is so few of them, I spoke to 4 dealerships over the course of almost all of past year (I was in the market for one at some point) and all 4 of them combined had sold 3 M5s past year in tri-state area. 3 M5s! Can you believe that? M5s don't sell really well and they don't hold their value at all. An E46 M3 holds 50% of its value today (2 generations older than the current M3), the E60 M5 however barely holds 25% of its value today. They are expensive cars, hard to maintain, expensive to repair. Even a cheap winter tire setup costs $3,000-4,000 for these cars. M3s are not like that. They are a lot more affordable, sell a lot more than M5s, and many people do their own maintenance after warranty.

Regardless of all of that, I guess my frustration is, it's not enough we get butt screwed with MSRP pricing and now we have to get screwed with residuals? It's like dual screw-up. Really disappointing

[dmk08]

So I am going to be a first time leaser on my M3 as I have always just purchased my cars. Since we will all be paying at or close to MSRP and apparently the rates will not be favorable at launch are we pretty much stuck in the car for the term of your lease?

What I mean is in a year and a half if I wanted to get out of my lease would it be near impossible to swap-a-lease it or sell it without eating some more cash? I'm assuming if lease values had gone down anyone agreeing to take over would be looking for some type of incentive.

All this has me wondering if I should just purchase the car.. I mean the way you guys are talking the lease payments may be as much as a 5 year loan w/ a decent down payment.

[Swancoat]

Originally Posted by caneaddict

those residuals seem very low to me for such a new car. I don't see how BMW earns much by artificially lowering residuals. If the car is worth more at the end of your lease than the buy-out (residual), owners can simply sell the car - pay off the lease and pocket the difference. If BMW believes they can get a higher monthly payment due to demand, shouldn't they achieve that by keeping realistic residuals and upping the money factor? That way they are assured of capturing the full excess price.

A lease is basically balloon financing with a put option that the the buyer holds. That's why the residual is low. The buyer holds all of the optionality, and the higher residuals increase the value of the option.

Basically, BMW's risk is that the cars aren't worth as much and they're left with a bunch of turned in cars that they've effectively overpaid for.

I'd say the residuals reflect BMW's concern that there will be significant depreciation.

[/// M sa]

Without pricing being released somehow a dealer has come up with lease/money factors? I dont buy it one bit until I see the numbers for my self released by BMW and if/when the numbers come out to be much different from your dealer whom is well connected I suggest you move on to another dealer for giving you false information My brother placed an order for the M4 yesterday with the same Sales guy I have known for over 8 years and when I asked him if he knew terms (one of the top sales guy in the entire Delmarva area) he said its futile until pricing has been released.

[Black Gold]

Originally Posted by RealStig

That's because that's an M5. There is so few of them, I spoke to 4 dealerships over the course of almost all of past year (I was in the market for one at some point) and all 4 of them combined had sold 3 M5s past year in tri-state area. 3 M5s! Can you believe that? M5s don't sell really well and they don't hold their value at all. An E46 M3 holds 50% of its value today (2 generations older than the current M3), the E60 M5 however barely holds 25% of its value today. They are expensive cars, hard to maintain, expensive to repair. Even a cheap winter tire setup costs $3,000-4,000 for these cars. M3s are not like that. They are a lot more affordable, sell a lot more than M5s, and many people do their own maintenance after warranty.

Regardless of all of that, I guess my frustration is, it's not enough we get butt screwed with MSRP pricing and now we have to get screwed with residuals? It's like dual screw-up. Really disappointing

neither one of those things makes any sense, and isn't true.

the m3 and m5 have almost the exact same size tires.

as for leases, unfortunately in texas you have to pay sales tax on the full value of the car, making it much less lucrative.

[RealStig]

Originally Posted by KennyPowers

neither one of those things makes any sense, and isn't true.

the m3 and m5 have almost the exact same size tires.

as for leases, unfortunately in texas you have to pay sales tax on the full value of the car, making it much less lucrative.

Not true. M5 uses 295 rears 275 fronts on a massive 20" wheel. M3 uses 265/245 on 19". For M5 you need 19" wheels with 265 tires for winter minimum whereas M3 can do it with 235s on 18" wheels. M3's winter setup costs around 1500, M5 is 2.5 times of that. M3 is still manageable by someone who is in upper middle class with "good" income. For M5, unless you are outright irresponsible, you need to be above middle class with money to burn. Everything in that car is extremely expensive from repairs to maintenance. The brake job alone is twice as much as expensive.

[nicknaz]

that's good info thanks. I know it is how the math works out but I am always amazed to see how much residuals influence the lease payment.

The MSRP on my Z435 is $63k but my lease payment is $589/mo incl taxes because of the 67% residual (and huge discount and max msds...)

Looks like there is no shot at replicating that type of deal on the F80 and I'll have to switch over from renting to buying for this one.

[dmk08]

Originally Posted by RealStig

Not true. M5 uses 295 rears 275 fronts on a massive 20" wheel. M3 uses 265/245 on 19". For M5 you need 19" wheels with 265 tires for winter minimum whereas M3 can do it with 235s on 18" wheels. M3's winter setup costs around 1500, M5 is 2.5 times of that. M3 is still manageable by someone who is in upper middle class with "good" income. For M5, unless you are outright irresponsible, you need to be above middle class with money to burn. Everything in that car is extremely expensive from repairs to maintenance. The brake job alone is twice as much as expensive.

Free during the lease term tho right?

[RealStig]

Originally Posted by dmk08

Free during the lease term tho right?

Not necessarily if you track it. Also any type of overall damage repair is still owner's responsibility. To give you an example, a large rip in the standard leather will most likely cost half of that of the Merino in the M5's. A crack in the lcd will be the same. Anything in the M5 that has a cost will be a lot more than the M3. Check the insurance rates? For me its 1k vs 1.8k for 6 months. Its things like this and everyone knows it including BMW. M5s and M6s are exclusive cars and they depreciate big time. The 110k car will sell for 50k if you are lucky in 3-4 years. M3s have historically held their values more.

JMHO.