Quote:
Originally Posted by Cyberdemon
Regardless of Canada, if you try to price out a lease on BMW.com and base your understanding of lease rates you have little understanding of how the lease works.
The lease rate you get from BMW assumes you pay MSRP, and put all of your fees and everything else up front.
The point of knowing how a lease work is:
-Depreciation (residual value) is a FIXED number - but this number is set by the manufacturer month to month. Buying a car in March is almost guaranteed to give you a worse deal than November or December on the exact same vehicile.
-Your price paid is variable. There are manufacturer incentives (programs) like holiday bonus cash, loyalty, first responder, corporate, etc. These discounts all stack which means if you understand the timing you can get a tremendous discount.
-The overall discount is negotiated on top of those programs. This is the dealers bottom line as incentives come from the manufacturers, the dealer doesn't care about the cash that comes from BMW.
-Your monthly cost is the delta between the two. Unlike buying a car where your residual value is going to be based on the actual resale value of the car (Great for a Toyota or Lexus, not so great for your Kia).
Understanding all this is how some people get a M4 CS for the same monthly price as some people will pay for a base X3.
Concrete example of this:
If you price out my X5 on BMW.com with a $65K MSRP, and 12k/yr and add tax on top - it would be $1050/mo, I pay ~$650 with nothing down up front except the state fees/DMV and MSD's. That literally means through the negotiation and leverage of programs alone the cost delta could be $400/month based on bad negotiations and misunderstanding of the programs.
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Agreed, I think too many people look at the lease deals on the manufacturer website and get scared away. This is merely price anchoring, those of us who put the time and effort into understanding leases and fairly comparing leasing vs financing vs buying know what we are getting for a small premium. We know it's a short term, we know we are paying a little more for a new car every 3 years.