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      01-29-2013, 07:37 PM   #23
mogrefy
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Drives: '14 Jeep GC | '13 3/4-Suburban
Join Date: Dec 2005
Location: Livermore, CA

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Quote:
Originally Posted by cmhsam View Post
I dont see BMWFS doing this in the near term. They are basically taking the risk and shifting it onto the customer with the lower residual. They are hedging their bets on the fact that the value of the m5 will not hold after 36 months. They know worst case they will get their 49% and then a few extra points when they turn around and the dealer sells the vehicle.
Fully agree with your assessment about them shifting risk to the customer with the 48-49% residual approach thus far.

However, if the pipeline is filling up then one way to move the vehicles without significantly discouting purchase price is to bump up the residuals. It's pretty well known the BMWFS provides "support" for some models above what they will actually be worth after x years, often leading to BMW being considered a more advantageous lease when compared to others (say Audi for example). BMWFS can write off the "loss" on the residual and they've moved inventory without dealers offering large discounts on the vehicles.

Of course that's just one of many options... I'll be leasing, so I can hope right?!
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