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Insane price on a 7-series lease..

3K views 12 replies 10 participants last post by  StupidGrin8UP 
#1 ·
QUOTE FROM AUTO SPIES:

If you’re buying the line that 7’s are hard to come by an orders are outstripping the supply, don’t believe it.

The spies went out on a mission with our handy “Auto Spies BS decoder” and uncovered the fact that not only are sales of the new seven slow, but massive inventories are building up at BMW dealers (see pictures above).

And the 2003 7’s are just around the corner…

So BMW just announced to their dealers, an aggressive lease program on 2002 7’s.

Here’s how the deal shakes out…

2002 740i [[typo?? I think they meant the 745i]] (MSRP of around $70K)
$799 for 36 months with around $4K of drive offs…
This number is based on a selling price of the car at $2500 over invoice (trust us, you can get this car for between invoice and $500 over if you make some calls and do your homework). That would mean you could get the $799 car for even less…

Our advice is to find a dealer who has a lot of them in stock and grind them..(We found over 30 7’s on the ground at Irvine BMW)

To put this in perspective, we chatted with owners who leased the SAME car before this program started, who are paying $1250 per month for the same lease!

How do you think these owners are going to feel when they find out that if they had just listened to the Spies, they could have been saving over $450 per month!

That’s $16K over the full term of the lease!

OUCH!
 
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#2 ·
More bad news for the 7..

2002 BMW 7's getting 'low balled' on wholesale market ..
Resale value of new body style in the tank ..

A quick survey of BMW dealers by the Spies uncovered extremely weak resale values of the new 7-series.

Based on random calls to our 'in the know' wholesalers and BMW dealer GM's, a 2002 seven series with an original MSRP of $75K, is only bringing around $62K wholesale.

What this means to you the consumer is, if you had or have bought one and want to dump it or trade it in on another car, you can only expect to get a number in the low sixties.

Which means you are probably $12-15K underwater on your 745...

Brutal!
 
#4 ·
Bangle = someone should fire his ***. grrrrrrr
 
#7 ·
Using a residual value of 63% (way too high) and a 0 % interest rate I calculated a lease payment around $800. BMW is giving these leases away. I would imagine that this will push short-term revenue up but BMW is going to take a whack when these cars start coming off lease.
 
#8 ·
I'm glad. This will teach the executive board not to mess with success as well as piss off their loyal customers and fans. Maybe in the future, they will have more respect for BMW's traditional, no-nonsense styling that made the past models such a hit.
 
#9 ·
Older 7 Series??

How is the older 7 series resale doing? My thinking here is if the new M5 design sucks. The E39 could actaully increase in value. It's a long shot, but possible.

//MWEELS
 
#11 ·
I don't know if I would call the lease deals "insane", but they remind me more of what is offered at the end of a model run.

This is a very "ballpark" estimate but I did some quick calculations.

1. with 0% interest.
36 payments at $799 is $28,764
60% residual on $70K car is $42K
Those two add up to $70,764.
What is in the $4K drive off? Seems kind of light for taxes & all.
Add some of that to the above figure???

2. with a 4% interest rate. (numbers discounted to
Present value - "PV" on a HP calculator)
PV of 36 payments at $799 is $27,153
PV of 60% residual on $70K car is $37,258
Total of $64,411 - still above dealer cost I think?
Still some of the $4K to add on???

Sounds like a good deal. Here is what I would do if I wanted one. Lease the car giving them the valuation risk, invest your money in a basket of blue chip stocks yielding more 4% that have the best chance of going up over the next three years. You may drive the car for nearly nothing.

Ok, on second thought maybe boarderline insane for a new model BMW 7 series. I would need to know the specific residual and upfront charges to be more exact. But then one always has to pick out of the air a reasonable interest rate discount factor.

TD 2000 M5
 
#12 ·
I called the local dealership here to inquire about this "deal" and the literally laughed at me. Their reply was yeah with about 10% cap reduction plus taxes and first months payment due at signing. I was kinda bummed because at $800. a month I think it's a lot of car for the money. My 2001 X5 has had a lot of service issues and even though it is a great car I would welcome the change and lower payment. If anyone has seen this offer in writing and truly is true I would even go out of state to get it.
Bill
 
#13 ·
I have another theory. I think leases get more attractive when people have less money to throw around. If they don't sweeten the pot, nobody's going to buy. Also, they're trained to laugh in your face so you don't see them sweat. In reality if a dealership has a bunch of cars on the lot they'd be pretty incented to get rid of them, especially with the '03s coming out.
 
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