Quote:
Originally Posted by DasMonkey
BMW and many manufacturers set their residuals for all sorts of different reasons that many times that have nothing to do with projected actual resale value. Just a couple as they apply to BMW:
-BMW has been famous for 'subsidizing' their leases by putting out let's just say 'optimistic' residual percentages in order to drive sales volume (i.e. they pump up the percentage in order to make the payments go down to sell more cars).
-By playing with the residual values they can control their incoming used fleet and have a steady supply of profitable 'certified used' vehicles.
As for specifically the M2C: Many times specialty or low volume enthusiast type cars have zero incentives and very crappy lease rates. I remember looking at maybe leasing a 1M when they came around and it was a similar situation residual wise. It makes sense from BMW's standpoint: these are low volume cars that demand will most likely exceed supply and people will line up to pay MSRP. Why bother leasing them which involves some measure of risk and effort on BMW's part. I think what they are saying is: here's this cool car you guys wanted, now buy it. Sure, we WILL lease it to you, but we really would rather not, so we will make the numbers to where if you really want to lease, we get added profit.
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Agree 100%, I also believe it is a way to steer people to a model with higher production. They simple don't have the production output to cope with more attractive lease rates. It certainly has nothing to do with future values, as you can see in the used market. M2's have held their values quite nicely compared to M3/M4.