Posted by Duke on January 03, 1999 at 20:24:47:
In Reply to: 65% of $30,000 is only $19,500, you could easily posted by MB on January 02, 1999 at 10:46:46:
Market residual for a 3 year/36K 323i is only 60%. BMW subsidizes residual values by a decent amount. The used car market (and resale values) is trending softer. Low inflation, flat new car pricing (1999 323i base MSRP $26,400, 1991 E30 325i base MSRP $26,400) and too many off lease cars in the market. My $33,670 MSRP 1999 323i has a 3 year/45K residual of $21,885. I don't think it will be worth that much in three years and I bet I will not be able to trade it in for that amount in 3 years. I have found that selling used cars on your own in the $20,000 plus price category is not real easy either. If I end up wanting to keep the car, I will exercise the buy out (it should be worth more to me than it would be in the market because I know its history). If I am bored with it(want E46 M3), don't like it anymore, or have found it to be somewhat of a lemon I will turn it in. My point is that leasing makes sense for many people and has advantages including less resale risk. I chose a prepay lease rather than a cash purchase of the car for many reasons. I hope it will be worth more than the 65%, I just don't think it will be.