[Penguino]

Originally Posted by IS350

Thought about that, just wonder if selling at year 3 may see values in the $30k range vs. lease residual of about $45k on an $82k MSRP vehicle.

It's 2020 with MY2021 models already available. Meaning 2019 X5s are either 2 years or some 3 years old already. It's very hard to find a $80K X5 in the low $50s. Most are high $50s low $60s.

[jc.bmw]

Originally Posted by IS350

Thought about that, just wonder if selling at year 3 may see values in the $30k range vs. lease residual of about $45k on an $82k MSRP vehicle.

I thought I had seen offers on this forum of 53% residual for the 45e, but might have been on a more base model. For a 84k MSRP the residual would be less percentage wise.

[jc.bmw]

Originally Posted by Penguino

PenFed has a similar program as well. It's normally what I use.

In my contract/invoice it just said $3500 rebate. I was coming from Audi so not sure how they got to $3500. I closed the deal in late August but it was a custom order so actual sale date was November 6th. The incentives I got were the ones available in August.

My suggestion would be to assess your strategy based on cost of ownership rather than what you pay on a monthly basis. The comparison would be lease monthly payment times 36 plus initial payment and lease costs, compared with purchase price minus estimated resale value plus financing costs.

Remember you also need to account for prorated sales tax in both cases. When you trade in your 45e in 3 years you'll get a tax credit for its trade in amount.

The $7500 tax credit will help swing the scale in favor of a purchase, so will the 0.9% APR.

Something else to consider is keeping the vehicle for longer, like 5 years, given that the cost of ownership will be much less on the 4th and 5th years, greatly reducing your "actual monthly payment/cost" on a 5-year basis.

In 3 years time, you could reassess based on government incentives at the time.

[TurtleBoy]

Originally Posted by jc.bmw

I thought I had seen offers on this forum of 53% residual for the 45e, but might have been on a more base model. For a 84k MSRP the residual would be less percentage wise.

Residuals do not change based on options, it is based on the mileage of the lease for a model/trim. 52% is the current RV for a 15k/yr lease and 54% for the 12k for the 45e.

[CaboM4]

Ordered my 45e in mid-October ... 10% off MSRP plus $4500 incentives from BMW ($2500 APR credit on 45e, $1000 loyalty, $1000 college grad(MBA)) plus $7500 tax credit to claim with 2020 taxes, plus $1000 BMW CCA rebate plus 0.9% for 60 months ... this thing is a no-brainer ... scheduled to complete production on 12/2/20 ... should have it in a couple of weeks, just in time to make the cutoff for 2020 tax year

oh ... forgot the 30% cost of charger tax credit for 2020 taxes, so will get another couple of hundred bucks back for the level 2 charge i just installed

Who would lease with these shitty residuals and money factor right now?

[SwamiV]

I have to agree on the purchase vs lease part.

9% off MSRP + 3000 incentives + 1500 CA Clean Fuel Rebate + 7500 Federal Tax credit + 0.9% APR is just too good a deal to pass up.

Plus carpool stickers for what is ~18 dollars a day commute charges for using the HOV lane is a pretty significant saving.

[IS350]

Originally Posted by CaboM4

Ordered my 45e in mid-October ... 10% off MSRP plus $4500 incentives from BMW ($2500 APR credit on 45e, $1000 loyalty, $1000 college grad(MBA)) plus $7500 tax credit to claim with 2020 taxes, plus $1000 BMW CCA rebate plus 0.9% for 60 months ... this thing is a no-brainer ... scheduled to complete production on 12/2/20 ... should have it in a couple of weeks, just in time to make the cutoff for 2020 tax year

oh ... forgot the 30% cost of charger tax credit for 2020 taxes, so will get another couple of hundred bucks back for the level 2 charge i just installed

Who would lease with these shitty residuals and money factor right now?

Wow, impressive rebates! That's almost as much as my employee discount, because apparently I'm ineligible for the BMW CCofA discount.

The only reason I'm considering a lease is because I can get the base rate MF and I'm still cautious about values tanking more than that $7,500 tax credit and $1,000 finance credit, (1,000 difference, since I'd get $500 lease credit and acquisition fee waiver.) And, we don't intend to keep the car outside of 3 or 4 years, when maintenance and warranty are up. So, in that time, when trading in, I'm leaning more toward mitigating the loss risk. But man, the .90 is tempting, to just finance and hope these tank much less than the 40e did, with the smaller battery.

Overall, despite the slower charge rate, they look impressive.

[IS350]

Originally Posted by jc.bmw

In my contract/invoice it just said $3500 rebate. I was coming from Audi so not sure how they got to $3500. I closed the deal in late August but it was a custom order so actual sale date was November 6th. The incentives I got were the ones available in August.

My suggestion would be to assess your strategy based on cost of ownership rather than what you pay on a monthly basis. The comparison would be lease monthly payment times 36 plus initial payment and lease costs, compared with purchase price minus estimated resale value plus financing costs.

Remember you also need to account for prorated sales tax in both cases. When you trade in your 45e in 3 years you'll get a tax credit for its trade in amount.

The $7500 tax credit will help swing the scale in favor of a purchase, so will the 0.9% APR.

Something else to consider is keeping the vehicle for longer, like 5 years, given that the cost of ownership will be much less on the 4th and 5th years, greatly reducing your "actual monthly payment/cost" on a 5-year basis.

In 3 years time, you could reassess based on government incentives at the time.

Thanks, estimated resale value is the tricky one. 55% residual on the 10k mile/year lease, but we know BMW inflates residuals to get a lower lease payment, in reality, vehicle may be worth 30% of MSRP in 3 years. If I know I'm wanting to get out in 3 years, and it's worth around $24k, the lease probably makes for less loss, since no worry about values. IF I could use the full $7,500 tax credit this year, that would help offset the loss, of course. Still not sure I can use it all, awaiting TurboTax software fir 2020.

Congrats on your ride!

[Penguino]

Originally Posted by IS350

Thanks, estimated resale value is the tricky one. 55% residual on the 10k mile/year lease, but we know BMW inflates residuals to get a lower lease payment, in reality, vehicle may be worth 30% of MSRP in 3 years. If I know I'm wanting to get out in 3 years, and it's worth around $24k, the lease probably makes for less loss, since no worry about values. IF I could use the full $7,500 tax credit this year, that would help offset the loss, of course. Still not sure I can use it all, awaiting TurboTax software fir 2020.

Congrats on your ride!

How would you loose money 3 years down the road when you bought a car for about 15-20% off MSRP? You probably break even at year 2. Year 3 the loss (depreciation) will be minimal.

[TXSchnee]

Originally Posted by IS350

Thought about that, just wonder if selling at year 3 may see values in the $30k range vs. lease residual of about $45k on an $82k MSRP vehicle.

My '18 X3 M40i (almost 3 year old) is worth $41,000 right now. I would find it odd that an X5 wouldn't hold it's value as well or better. I think PHEVs will hold value better than BEVs, since range improves more drastically in a BEV. I wouldn't compare the 45e to the 40e, since the 40e only had a 4 cyl and wasn't a great vehicle.

[IS350]

Originally Posted by Penguino

How would you loose money 3 years down the road when you bought a car for about 15-20% off MSRP? You probably break even at year 2. Year 3 the loss (depreciation) will be minimal.

Guess it's anyone's guess how much they'll lose, here in SC, there's oddly little demand for PHEVs, and with others already getting around 12% off, they're not off to a great start for holding value.

[IS350]

Originally Posted by TXSchnee

My '18 X3 M40i (almost 3 year old) is worth $41,000 right now. I would find it odd that an X5 wouldn't hold it's value as well or better. I think PHEVs will hold value better than BEVs, since range improves more drastically in a BEV. I wouldn't compare the 45e to the 40e, since the 40e only had a 4 cyl and wasn't a great vehicle.

True, what was your MSRP? Did you get an appraisal at $41k?

[TXSchnee]

Originally Posted by IS350

True, what was your MSRP? Did you get an appraisal at $41k?

MSRP was $67k, but I paid $60k. Appraisal was prior to my 45e coming in, and it was just extended to me again from the GM of the dealership if I would come look at something on the lot. Of course, used vehicles are still going for a premium right now due to shortages, but my F15 was traded after 2 years for $42k (MSRP of $66k).

[jc.bmw]

Originally Posted by IS350

Thanks, estimated resale value is the tricky one. 55% residual on the 10k mile/year lease, but we know BMW inflates residuals to get a lower lease payment, in reality, vehicle may be worth 30% of MSRP in 3 years. If I know I'm wanting to get out in 3 years, and it's worth around $24k, the lease probably makes for less loss, since no worry about values. IF I could use the full $7,500 tax credit this year, that would help offset the loss, of course. Still not sure I can use it all, awaiting TurboTax software fir 2020.

Congrats on your ride!

I think residuals are a complex matter, but in general they should be a good indication of the vehicle's market value at the return of a lease. At that point, whoever gets your vehicle back will try to sell it for at least that price.

The manufacturer and financial institutions will play some games here (taking from one place to put on the other) for whatever they're trying to push onto the market but there's no running from the fact that somebody has to pay MSRP minus discount for that vehicle at the end.

So what I'm trying to say is that residuals should be a reasonably good representative of the market value for the vehicle in 3 years.

With expression below being generally the case:
trade-in < residual < dealership used price

I can't imagine though residual being 54% and trade-in being 30% because the difference between trade-in trade-in and dealership used price is no more than 15% of MSRP, right? (In 3 years)

Ps> everyone feel free to validate my thinking here.

Ps2> assumption here is that BMW + FS know what they're doing when setting residuals, and they've been doing this at scale for a long time.

Ps3> the 45e is a great model vehicle. I was super hesitant going for the hybrid but I feel that I definitely made the right choice given that I can charge it everyday. Smooth silent ride and lots of torque. I say this even discounting my 'confirmation bias'.

[IS350]

Originally Posted by TXSchnee

MSRP was $67k, but I paid $60k. Appraisal was prior to my 45e coming in, and it was just extended to me again from the GM of the dealership if I would come look at something on the lot. Of course, used vehicles are still going for a premium right now due to shortages, but my F15 was traded after 2 years for $42k (MSRP of $66k).

Appreciate that, so you'd definitely consider the finance over the lease, given what we know now, and assuming I'll be trading it in, 2 or 3 years down the road?

The lease prevents me from losing anymore than the 36 monthly payments. Would be a bummer if I lost more, by financing.

[IS350]

Originally Posted by jc.bmw

I think residuals are a complex matter, but in general they should be a good indication of the vehicle's market value at the return of a lease. At that point, whoever gets your vehicle back will try to sell it for at least that price.

The manufacturer and financial institutions will play some games here (taking from one place to put on the other) for whatever they're trying to push onto the market but there's no running from the fact that somebody has to pay MSRP minus discount for that vehicle at the end.

So what I'm trying to say is that residuals should be a reasonably good representative of the market value for the vehicle in 3 years.

With expression below being generally the case:
trade-in < residual < dealership used price

I can't imagine though residual being 54% and trade-in being 30% because the difference between trade-in trade-in and dealership used price is no more than 15% of MSRP, right? (In 3 years)

Ps> everyone feel free to validate my thinking here.

Ps2> assumption here is that BMW + FS know what they're doing when setting residuals, and they've been doing this at scale for a long time.

Ps3> the 45e is a great model vehicle. I was super hesitant going for the hybrid but I feel that I definitely made the right choice given that I can charge it everyday. Smooth silent ride and lots of torque. I say this even discounting my 'confirmation bias'.

Thanks! Same question to you, so you'd definitely consider the finance over the lease, given what we know now, and assuming I'll be trading it in, 2 or 3 years down the road?

The lease prevents me from losing anymore than the 36 monthly payments. Would be a bummer if I lost more, by financing.

[CaboM4]

Originally Posted by Penguino

How would you loose money 3 years down the road when you bought a car for about 15-20% off MSRP? You probably break even at year 2. Year 3 the loss (depreciation) will be minimal.

My calculation is I'm @ 26% off MSRP with the purchase discounts and federal tax credit combined. netting $21k off an $80.5k vehicle MSRP

I agree ... not sure there's much risk of excess depreciation to be had compared to the fixed residual of a lease for 36 months.

[Penguino]

Originally Posted by CaboM4

My calculation is I'm @ 26% off MSRP with the purchase discounts and federal tax credit combined. netting $21k off an $80.5k vehicle MSRP

I agree ... not sure there's much risk of excess depreciation to be had compared to the fixed residual of a lease for 36 months.

So you bought a $80K car for $60K. A standard depreciation curve will put the $80K car at about $45K value in 36 months. Meaning your cost of ownership would be $15K in 36 months. That's a win.

And btw, I've never seen a 3 year old X5 for $45K. Most are in the $50ks.

[TXSchnee]

Originally Posted by IS350

Appreciate that, so you'd definitely consider the finance over the lease, given what we know now, and assuming I'll be trading it in, 2 or 3 years down the road?

The lease prevents me from losing anymore than the 36 monthly payments. Would be a bummer if I lost more, by financing.

I dislike leasing personally, and on the 45e a lease means you cannot use the $7500 tax credit. I think with a good deal (8-10% off) and the $7500 tax credit, buying the 45e makes more sense. Resale isn't guaranteed to be great, but it matters less if you keep the vehicle for 5 years and get a decent deal. If you are using it for a company vehicle, then I would lease.

[codex57]

Originally Posted by TXSchnee

MSRP was $67k, but I paid $60k. Appraisal was prior to my 45e coming in, and it was just extended to me again from the GM of the dealership if I would come look at something on the lot. Of course, used vehicles are still going for a premium right now due to shortages, but my F15 was traded after 2 years for $42k (MSRP of $66k).

That's a really nice offer. Out here in CA, with all the off leases you're competing against, your m40i would be worth about $36k. I just sold my 30i for $30k. Luckily, I only paid $45k with an MSRP of $56k. It's only because I bought for so low did I consider selling it to get the X5. $15k for 2 years isn't too bad.

COVID is really tanking values here on used luxury cars right now. Too many people are selling due to loss of job/transfer right now. Much more than normal.

[TXSchnee]

Originally Posted by codex57

That's a really nice offer. Out here in CA, with all the off leases you're competing against, your m40i would be worth about $36k. I just sold my 30i for $30k. Luckily, I only paid $45k with an MSRP of $56k. It's only because I bought for so low did I consider selling it to get the X5. $15k for 2 years isn't too bad.

COVID is really tanking values here on used luxury cars right now. Too many people are selling due to loss of job/transfer right now. Much more than normal.

Used luxury values are holding pretty well here in TX. We got $3000 more for my husband's Infiniti then we expected when trading it on my Cayenne. I do tend to keep my vehicles low mileage, so my '18 M40i only has 12,000 miles on it, after almost 3 years.

[codex57]

Originally Posted by TXSchnee

Used luxury values are holding pretty well here in TX. We got $3000 more for my husband's Infiniti then we expected when trading it on my Cayenne. I do tend to keep my vehicles low mileage, so my '18 M40i only has 12,000 miles on it, after almost 3 years.

Oh wow! Yours is basically new!

Yeah, I think it's cuz there are a lot of tech companies in CA (although Texas has quite a few too). Apparently, the tech companies are really hit hard. Not the Googles and Apples, but the start ups. I have a ton of tech neighbors but they all work for the big boys so they're all still spending like normal. The sales guy who bought my car was explaining things to me. He's never seen it this bad, even during the tech crash around 08. People are up and leaving the country so they take whatever offer they can get because they. I guess there are the visa changes are affecting small companies' desires to deal with the H-1 visa headaches. You've also got the medical field hit hard too. When the hospitals geared up for COVID, they pushed off a lot of elective surgeries and that hit the hospital budgets the most so even doctors are getting forced pay cuts.