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      04-12-2016, 10:09 PM   #1
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Buy the M2 don't lease it

I just leased the 2016 M3 $76,500 msrp for $0 drive off $900/month. They wanted almost the same for an M2 $60k msrp

I'm a lease guy because of write off reasons for business. If you're going to buy this car then disregard this post.

I went into my dealership looking to get an M2 allocation, and started crunching numbers with them. I found that once you get the options you want on the M2 the lease price isn't much different than an M3! This is why:

1. Unknown residual value.
- lease equations are a big calculation and the residual value of the car is a big impact on the price per month you'll be spending.
2. It's the first year of its production
- The first year of a new production car is basically a test to see how it will do, and the manufacture wants to make sure and not lose its ass if the car isn't a big hit, so they buffer the residual value of the car in their favor. This makes the lease price go up exceptionally.

I did my cross analysis as to what the M3 had I liked/disliked and what the M2 had I liked/disliked. I decided for almost the same lease price I'm going with the M3.

I wanted the m2 because of price point. I felt it would put me in a $700-$750/month range. I would have gone straight to the M3 without hesitation if I knew they would have given me a deal like I got! But I figured it was way out of my price range. Come to find they're a lot more reasonable than I thought!

I love my M3 and can't get enough of it! Again this is a post for anyone looking to lease an M2, if you're going to buy one then my argument doesn't work. It's still $15k msrp less than an M3. Just giving my two cents about leasing. This is my 5th BMW lease. I love their cars and will continue to get them!

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      04-12-2016, 10:31 PM   #2
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I'm surprised they need a whole year to determine if the car will be a big hit.
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      04-13-2016, 01:06 AM   #3
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I totally agree with the OP. The issue of low residual values is not exclusive to BMW's new models but is consistent with pretty much all new models regardless of manufacture. No manufacture wants to be caught off guard and be left holding the bag in 3 years. Also leasing is a good tool for them to move inventory, if the inventory is already moving why would they want to take the risk ? I follow the industry closely and there have been several articles written about manufactures becoming nervous that they are leasing too many cars and they worry that when those cars are returned they will flood the market and lower the actual values leaving the manufacture with a bunch of off lease cars sitting on their lots that they will be forced to discount or have to provide incentives to move them. Most articles predict manufactures beginning to lower residual values to protect themselves so I won't be surprised to see leasing become a little less attractive for even well established cars.

I have decided to go with the BMW Select, I am cool with taking the depreciation risk and like the option of a lower payment for a couple of years. My car will get driven 8k per year so I think I will be pretty safe.
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      04-13-2016, 09:13 AM   #4
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Porsche is the same way when it comes to residuals on new models.

Very low to protect themselves.
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      04-13-2016, 09:27 AM   #5
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Makes sense and not very surprising. Probably further aggravated by the fact that there is only a (relative) handful of cars being made available.
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      04-13-2016, 04:50 PM   #6
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I have seen other posts regarding to this and usually turns into a fight between the two camps.

I am not here to pick a fight since I actually need to make the decision in the coming months, I am just here to try to check my numbers.

So based on my calculation using the lease rate and residual posted for March, I don't see much saving between "buying the car then sell it after 3 years" or a 3 year lease provided the following:
  • best auto loan rate I could find now is 1.99% for 66 month
  • No money down for both cases
  • M2 is the only car I am looking to drive next

I understand the residual value sucks but I could always sell the car at lease end and pocket the difference between what's worth at that time and the buy off price. (Just did it on my 981S)

So am I missing something on my calculation?
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      04-13-2016, 05:37 PM   #7
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Quote:
Originally Posted by konoyei
I have seen other posts regarding to this and usually turns into a fight between the two camps.

I am not here to pick a fight since I actually need to make the decision in the coming months, I am just here to try to check my numbers.

So based on my calculation using the lease rate and residual posted for March, I don't see much saving between "buying the car then sell it after 3 years" or a 3 year lease provided the following:
  • best auto loan rate I could find now is 1.99% for 66 month
  • No money down for both cases
  • M2 is the only car I am looking to drive next

I understand the residual value sucks but I could always sell the car at lease end and pocket the difference between what's worth at that time and the buy off price. (Just did it on my 981S)

So am I missing something on my calculation?
Or you could do a balloon loan, drop the payment $200-300/month and hope the value of the car equals the balloon payment. In this case, I think if production really is low/limited quantities then the car will hold its value. We won't know until allocations start coming through and/or the plant actually starts moving these cars quicker.

Penfeds 36 month balloon loan is at 1.74% which brings the payment down to $550-600 depending on the way the car is optioned. I think the car will be worth the $38-40k residual (balloon) in three years. Every other M seems to have kept a good portion of its value. Why wouldnt this?
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      04-13-2016, 06:15 PM   #8
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Quote:
Originally Posted by konoyei View Post
I understand the residual value sucks but I could always sell the car at lease end and pocket the difference between what's worth at that time and the buy off price. (Just did it on my 981S)

So am I missing something on my calculation?
there are likely additional fees with leasing.

You can not sell your lease unless you buy it. In my state, if you buy your lease, you are double taxed. So not necessarily a smart idea.
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      04-13-2016, 06:33 PM   #9
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Quote:
Originally Posted by zenmaster View Post
there are likely additional fees with leasing.

You can not sell your lease unless you buy it. In my state, if you buy your lease, you are double taxed. So not necessarily a smart idea.
You are right, there could be fees that I am not aware of then...

For selling the car, it is indeed state specified. In some state, I was told you don't need to pay tax if you buy and sell the same car within 10 days. In CA, I sold mine directly back to the original dealership and since they have a wholesale license, I don't get taxed since I don't need to register the car under my name at all.

I am guessing it also depends on BMW finance then, since I was told Audi Finance have a different (higher) buy off price when you sell it to the dealership but luckily Porsche Finance does not.
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      04-15-2016, 07:42 AM   #10
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I checked with penfed and they will not balloon the M2

Quote:
Originally Posted by F87LUV View Post
Or you could do a balloon loan, drop
the payment $200-300/month and hope the value of the car equals the balloon payment. In this case, I think if production really is low/limited quantities then the car will hold its value. We won't know until allocations start coming through and/or the plant actually starts moving these cars quicker.

Penfeds 36 month balloon loan is at 1.74% which brings the payment down to $550-600 depending on the way the car is optioned. I think the car will be worth the $38-40k residual (balloon) in three years. Every other M seems to have kept a good portion of its value. Why wouldnt this?
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      04-15-2016, 07:43 AM   #11
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Quote:
Originally Posted by Robcut1
I checked with penfed and they will not balloon the M2

Quote:
Originally Posted by F87LUV View Post
Or you could do a balloon loan, drop
the payment $200-300/month and hope the value of the car equals the balloon payment. In this case, I think if production really is low/limited quantities then the car will hold its value. We won't know until allocations start coming through and/or the plant actually starts moving these cars quicker.

Penfeds 36 month balloon loan is at 1.74% which brings the payment down to $550-600 depending on the way the car is optioned. I think the car will be worth the $38-40k residual (balloon) in three years. Every other M seems to have kept a good portion of its value. Why wouldnt this?
Complete lie. I did it.
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      04-15-2016, 08:08 AM   #12
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Quote:
Originally Posted by F87LUV View Post
Complete lie. I did it.
Can you please provide your contact information at penfed asap!!
Thanks
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      04-16-2016, 10:56 PM   #13
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Quote:
Originally Posted by konoyei
I have seen other posts regarding to this and usually turns into a fight between the two camps.

I am not here to pick a fight since I actually need to make the decision in the coming months, I am just here to try to check my numbers.

So based on my calculation using the lease rate and residual posted for March, I don't see much saving between "buying the car then sell it after 3 years" or a 3 year lease provided the following:
  • best auto loan rate I could find now is 1.99% for 66 month
  • No money down for both cases
  • M2 is the only car I am looking to drive next

I understand the residual value sucks but I could always sell the car at lease end and pocket the difference between what's worth at that time and the buy off price. (Just did it on my 981S)

So am I missing something on my calculation?
There is big upside potentially for ownership if the car continued to be produced in small quantities

As It is now the M2 is returning to BMW the accolades of what the M3 originally was in E30 , E36 and E46 guise. The 1M of course holds its value Better than the E90 and I think one should fully anticipate that the M2 will hold its value better than the M4 will because it will be available in much smaller numbers.

I would go with BMW select if you can manage a good payment or 66 months with the low apr.

If you lease this car on a closed end lease and you could actually end up hating yourself unless it's a business write off.


It's also painfully obvious from the residuals on the 1M and the M2 that BMW NA wants people to buy this car, not lease
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      04-17-2016, 07:40 PM   #14
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Quote:
Originally Posted by konoyei View Post
I have seen other posts regarding to this and usually turns into a fight between the two camps.

I am not here to pick a fight since I actually need to make the decision in the coming months, I am just here to try to check my numbers.

So based on my calculation using the lease rate and residual posted for March, I don't see much saving between "buying the car then sell it after 3 years" or a 3 year lease provided the following:
  • best auto loan rate I could find now is 1.99% for 66 month
  • No money down for both cases
  • M2 is the only car I am looking to drive next

I understand the residual value sucks but I could always sell the car at lease end and pocket the difference between what's worth at that time and the buy off price. (Just did it on my 981S)

So am I missing something on my calculation?
What you say is true but most people want to save their money right away during the lease, for example if you get in any accident it'll affect your resale value.

I'm in a similar position to the one you are describing, once the lease draws to a close on my M4 I plan on selling it since I was an early adopter and inherited a low residual value
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      08-05-2016, 05:10 PM   #15
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Quote:
Originally Posted by WWFit View Post
I just leased the 2016 M3 $76,500 msrp for $0 drive off $900/month. They wanted almost the same for an M2 $60k msrp

I'm a lease guy because of write off reasons for business. If you're going to buy this car then disregard this post.

I went into my dealership looking to get an M2 allocation, and started crunching numbers with them. I found that once you get the options you want on the M2 the lease price isn't much different than an M3! This is why:

1. Unknown residual value.
- lease equations are a big calculation and the residual value of the car is a big impact on the price per month you'll be spending.
2. It's the first year of its production
- The first year of a new production car is basically a test to see how it will do, and the manufacture wants to make sure and not lose its ass if the car isn't a big hit, so they buffer the residual value of the car in their favor. This makes the lease price go up exceptionally.

I did my cross analysis as to what the M3 had I liked/disliked and what the M2 had I liked/disliked. I decided for almost the same lease price I'm going with the M3.

I wanted the m2 because of price point. I felt it would put me in a $700-$750/month range. I would have gone straight to the M3 without hesitation if I knew they would have given me a deal like I got! But I figured it was way out of my price range. Come to find they're a lot more reasonable than I thought!

I love my M3 and can't get enough of it! Again this is a post for anyone looking to lease an M2, if you're going to buy one then my argument doesn't work. It's still $15k msrp less than an M3. Just giving my two cents about leasing. This is my 5th BMW lease. I love their cars and will continue to get them!

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good thing u went and got the M3, lease rates for the M2 is out and they are not pretty, the monthly will be probably above what you are currently paying for the M3

2016 models
mf .00137
36mo
15k 46%
12k 48%
10k 49%

no incentives
finance 24-72mo 2.97%

2017 models
mf .00137
36mo
15k 44%
12k 46%
10k 47%
no incentives
finance 24-72mo 2.97%
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      08-06-2016, 02:48 PM   #16
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47% residual for 10k mi/yr? Is that for real? Are they insane? Should be 57%.
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      08-10-2016, 11:16 AM   #17
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So let's do the math: according to this, after 3 years, the car with a 10k miles/year will be worth 47% of its original value
52k*47%= $24.44K

basically, that's what they are saying the M2 with 30k miles will be worth.

In other words, they're saying: don't lease, buy it.
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      08-10-2016, 11:46 AM   #18
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Quote:
Originally Posted by rainfall View Post
So let's do the math: according to this, after 3 years, the car with a 10k miles/year will be worth 47% of its original value
52k*47%= $24.44K

basically, that's what they are saying the M2 with 30k miles will be worth.

In other words, they're saying: don't lease, buy it.
looool what is this a mustang ecoboost?
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      08-10-2016, 01:27 PM   #19
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looool what is this a mustang ecoboost?
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      08-13-2016, 02:14 PM   #20
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Did ED with the F80, AW, leather, 19's, HK, in 6MT was 58k.
I see all the time how people have 80k M-cars, I just don't see how w/o competition pack and ceramics?

A low option M3 with 4 doors and a stick can be a great buy/lease.
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