September Lease Rates to Jump….

vindicator Aug 28th, 2008 Link

Terrible residual values…

vindicator Aug 28th, 2008 Link

Hi Michael,

Thanks for the post. Do you foresee the significant drop in residual values for MY09 rates? Thank you

Michael Aug 28th, 2008 Link

Vindicator: All indications are that BMWNA is going to make the leasing options less attractive whether that be a high MF or low residual it all equates to more of a payment. They will be shifting some US allocation to emerging markets and decreasing sales projections, so profit per car increases and increase open market residuals. The supply has out-weighed the demand for many cars and has led to significant discounting to make a sale…. before 2005 this was not the case and BMW is on course to return to their scheme from that period. They have learned that discounting and flooding the market may increase market share but at the cost of profit and residuals…. not a good combination.

GSKChicago Aug 28th, 2008 Link

I know at least one American car company – Chrysler – has stopped leasing via Chrysler Financial. They (Chrysler) have told dealers if independent finance companies want to provide lease deals/terms, that’s fine – but they won’t take on that risk anymore. For much of the same reason – they’re getting killed on residual values at the end of lease terms and get stuck with a gazillion vehicles to unload.

BMW is still underwriting lease deals, which is good. Ratcheting up makes sense, overall – certainly from a business decision as it relates to losing money versus making money.

Wonder how this will affect salesman numbers at dealerships too – I’d suspect some dealers will get rid of lower producing salesman too? Especially if there will be less “units” to move, they’ll need less bodies to move them.

Business blog » September Lease Rates to Jump…. Aug 28th, 2008 Link

[...] Read the rest of this great post here [...]

Barry Aug 28th, 2008 Link

You gotta do what is necessary. You cant end up like the shrinking 3.

Bob Aug 28th, 2008 Link

There are a lot of vetern salespeople who welcome this change. Over the years many people leased BMW’s that didn’t apprechiate the mark nor could really afford it. The bottom tier, sales and customers, may disappear. Not a bad thing.

X Aug 28th, 2008 Link

Who is the source of this information?
What is confusing is the snippet says MY08, nothing on MY09.

Michael Aug 29th, 2008 Link

X: the info is from BMWNA (and is the genuine article)… MY09 cars do not exist so how can there be rates? SOP for MY 09 is not until September for most models with delivery in October.

Rossii Aug 29th, 2008 Link

Good for BMW……….I was in the biz for 5 years and felt like I was selling Chevy’s. Sales people will welcome this change if BMW sticks to the plan.

my.IS - Lexus IS Forum - BMW Lease rats to jump Aug 30th, 2008 Link

[...] As we have been reporting for a while now here, at BimmerFile, BMWNA is going to focus more in the coming years on sales and profit per sale rather than volume and leasing. The concept of

Chaz Sep 11th, 2008 Link

Hmm, its september now, and the lease rates are cheaper than the spike in may. The basic 328i lease has dropped from $429/month to $409/month (that latter number includes the auto trans and premium package). $399/month is certainly doable, but the $359/month we were seeing at this time last month is now a relic of the past.

Michael Sep 11th, 2008 Link

Chaz,

You are right to an extent. Notice that the low rates are for the 328i and 335i…. That is b/c everywhere but in the NorthEast (mostly XI sales) there are still some 3 sedans on lots and you must be looking at a 3 year, as the 24 month residuals have died.

We started my wifes lease early because it would have cost over $80 more per month (328xi 24 month). We pickup in Munich on 9/25

drew Sep 15th, 2008 Link

btw some of these are incorrect.

335i is .00120

550i is .00140

..for example

Michael Sep 15th, 2008 Link

Drew, Not sure how they are incorrect since they are directly from BMW. There may be a specific market variation but these are the official numbers and are correct from what we gather.

drew Sep 30th, 2008 Link

my local dealers (so cal) who are willing to show me their bulletins have some different numbers, and those numbers agree with some of the other ones posted on the net (e.g. the well known lease comparison site). hmm i wonder if they changed them (i recall you got your info very early!) or else my numbers are indeed market specific and that is where the well known lease comparison site got theirs from….

in any case, in so cal at least i can say for sure that the following are true, because i’m just about to buy one at these rates

2008 BMW 335i Sedan 24 Month – Residual 61% of MSRP – .00120 Base Rate 36 Month – Residual 56% of MSRP – .00120 Base Rate

2008 BMW 550i Sedan 24 Month – Residual 61% of MSRP – .00140 Base Rate 36 Month – Residual 55% of MSRP – .00140 Base Rate

…in case that is of any help for readers…. thanks in any case for being a great source of info…..