[StitChES37]

This is the first time I'm considering a lease. Would folks agree the starting residual is going to be quite low, (36 mo, 10k/yr.... 54%?)

Let's say your actual mileage is less than that... typically 7k/yr.. so a 3yo 21k mile car should trade in for... ~60%.

If that's the case, then you can buy the lease out and sell it (to them or others) to recoup that ~6%. In which case, you wouldn't care if the residual was in the low to mid-50's%, right? Assuming actual trade-in value is ~60%, then as long as you buy the lease out at the end you'd recoup the delta.

Is this logic flawed?

[Crazy1323]

Some manufacturers don’t let you buy a lease out at the end, but I don’t think BMW does that.

You’re logic is good, but sometimes the borrowing rate (known as the money factor with a lease) is much higher with a lease than what you could get with traditional financing.

[jnotrom711]

Typically the first few months of a new model/fresh re-design, or sometimes even the mid-year calendar releases the residuals are a touch higher than what would be normally seen. One reason for this is because, as a 2025 model year, you have the remainder of the year (2024) before the calendar turns to 2025. So there is a few months where the age of the car (not the miles) will affect it less. If that makes sense? Say you get your new g90 in October, you have 3 full months of a 2025 model year, but it's 2024 calendar year. So there is usually a slight drop in residuals once January 1 comes around. It's not a massive difference, maybe 1-2% ish. So they'll have higher money factor to make a little more $, then theyll start the sub-vented lease specials and lower money factors after its been on the road for a few months.

Yes, the money factor can be higher than interest, but it also can be much lower as well. The other nice thing about money factors vs interest is it's typically a set amount, and is not front loaded like interest. The money factor stays the same through out the life of the lease where interest amount declines each month, and towards the end of the finance term youre paying pretty much all principal. So there is pros and cons to both.

Out of curiosity what manufactures don't allow you to buy out the lease at the end? Not saying youre wrong, but was just wondering who?

[Crazy1323]

Originally Posted by jnotrom711

Typically the first few months of a new model/fresh re-design, or sometimes even the mid-year calendar releases the residuals are a touch higher than what would be normally seen. One reason for this is because, as a 2025 model year, you have the remainder of the year (2024) before the calendar turns to 2025. So there is a few months where the age of the car (not the miles) will affect it less. If that makes sense? Say you get your new g90 in October, you have 3 full months of a 2025 model year, but it's 2024 calendar year. So there is usually a slight drop in residuals once January 1 comes around. It's not a massive difference, maybe 1-2% ish. So they'll have higher money factor to make a little more $, then theyll start the sub-vented lease specials and lower money factors after its been on the road for a few months.

Yes, the money factor can be higher than interest, but it also can be much lower as well. The other nice thing about money factors vs interest is it's typically a set amount, and is not front loaded like interest. The money factor stays the same through out the life of the lease where interest amount declines each month, and towards the end of the finance term youre paying pretty much all principal. So there is pros and cons to both.

Out of curiosity what manufactures don't allow you to buy out the lease at the end? Not saying youre wrong, but was just wondering who?

Tesla doesn’t and Ford doesn’t on some vehicles (EV’s mainly I think)

[jnotrom711]

Oh, ok, thats why i've not seen this before. Ive never shopped for either of those OEMs. Interesting.

[DHDCF]

My guy says expect this: 53/52/51. Maybe: 54/53/52.

[URBAN LEGEND]

Tesla for sure. Last time I checked was during Covid’s though. I just returned a Plaid and buying was never offered. Nor desired by me.

[trev230]

Originally Posted by DHDCF

My guy says expect this: 53/52/51. Maybe: 54/53/52.

If the residuals are that low then the payments even on a very well negotiated lease will be horrid payment wise.

[Crazy1323]

Originally Posted by trev230

If the residuals are that low then the payments even on a very well negotiated lease will be horrid payment wise.

Many companies will give you a $7,500 lease rebate on a PHEV or BEV. This is actually a tax credit that the leasing company gets. This helps make up for bad residuals since it lowers cap costs.

[DHDCF]

I am hoping for 5300. 4300 rebate + 1000 loyalty. Whether they offer it or not I'm committed to buying. Im also ordering individual paint, which should push the order out far enough to get potentially three fed interest rate cuts; and that would make up for the Ind costs.

[CarlosM4]

Even with low residuals (which is the most likely scenario), I would opt for the lease on this car.

PHEV and long term don't seem to go hand in hand

[Jc360]

What are people being quoted for a deposit? I’ve gotten upwards of 5k, been asked to fill out a credit app, and get this: sign a “no refund” deposit form. Yes, seriously.

[BimmerBahn]

Originally Posted by Jc360

What are people being quoted for a deposit? I’ve gotten upwards of 5k, been asked to fill out a credit app, and get this: sign a “no refund” deposit form. Yes, seriously.

They’re delusional. Those are the same twits who will a $50K ADM on it.

I put a $1500 deposit - rather just had them take the deposit I put on my i5 M60 reservation and move it to the G99 M5 reservation. That was done back in January ‘24

[URBAN LEGEND]

1500.00 deposit. This dealer does tires on all my other cars. Plus all past M cars, in addition to buying many cars there. We know each other well. Bigger dealers might be a different story.

[Hammer110!]

Originally Posted by DHDCF

I am hoping for 5300. 4300 rebate + 1000 loyalty. Whether they offer it or not I'm committed to buying. Im also ordering individual paint, which should push the order out far enough to get potentially three fed interest rate cuts; and that would make up for the Ind costs.

Dealer I did deal through via broker was a 2500.00 fully refundable deposit. No dealers at the time were lower than MSRP. I was told I have first allocation after their HEA vehicle. Dealer has no markup on BMWFS MF and standard terms for BMWFS 3/10 lease.

MF is usually driven by demand not so much current lending rates so don’t expect to see much change with that via 3 tranches of Fed rate reductions. If that’s the case that’s a win. Also I do not believe there are any loyalty discounts available as I would qualify. Hopefully lease terms when released allow these.

If MF and Residual are similar to current 540 that puts payment for 3/10 lease with zero capital reduction at approximately 2321 including tax (7%).

Cap cost: 140,845.00
Residual Value: 57%
MF: .0022
Due at signing: 4665.00
1st MO: 2321.00
Up front fees:
925.00 Acquisition
799.00 Dealer fee
Govt fees: 500.00

Keeping fingers crossed that this estimated payment calculation is somewhat close.

[DHDCF]

Originally Posted by Hammer110!

Dealer I did deal through via broker was a 2500.00 fully refundable deposit. No dealers at the time were lower than MSRP. I was told I have first allocation after their HEA vehicle. Dealer has no markup on BMWFS MF and standard terms for BMWFS 3/10 lease.

MF is usually driven by demand not so much current lending rates so don’t expect to see much change with that via 3 tranches of Fed rate reductions. If that’s the case that’s a win. Also I do not believe there are any loyalty discounts available as I would qualify. Hopefully lease terms when released allow these.

If MF and Residual are similar to current 540 that puts payment for 3/10 lease with zero capital reduction at approximately 2321 including tax (7%).

Cap cost: 140,845.00
Residual Value: 57%
MF: .0022
Due at signing: 4665.00
1st MO: 2321.00
Up front fees:
925.00 Acquisition
799.00 Dealer fee
Govt fees: 500.00

Keeping fingers crossed that this estimated payment calculation is somewhat close.

Everything I read, as well, as what my guy says, points to interest rates affecting lease rates, but I'm committed either way.

I think you should plan on max of 54% residual in best scenario. I'll add that I am new to the lease world though...my i5 m60 was the first of 15 BMWs that I leased and that was only to take advantage of the 7500.

[CarlosM4]

I don't think residuals are going to be much higher than 50%, because this is very likely where the value of the new M5 will be.