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      02-28-2008, 08:49 AM   #144
Second Lieutenant

Drives: E92 M3 or Audi S5 (soon!)
Join Date: Aug 2007
Location: NY

iTrader: (0)

Originally Posted by cardebt View Post
Lets just say you were able to get the price of the car for below MSRP (I know highly unlikely), how dramatically does this effect the lease price? The residual is the same, I assume. Also, if the car is more optioned out would the lease payments be dispropotionatly higher as the these options devaulate more quickly. Additionally, is there a simple way to estimate a payment by multiplying the # of thousands of dollars (cost of the car) by a particular coeficient? If so does anyone have that coeficient for the M3? Thanks and sorry if these are novice questions, but I am curious.

To answer your first questions, the answer is YES, it matters a lot. This is because the residual is based on the MSRP, NOT the negotiated value. Here is an example.... 2007 M6s had a pretty good lease deal going on, I believe it was a 72% residual for a 24 month lease (I could be wrong, but it doesn't change my point). Now, let us say that the MSRP of the car was exactly 100,000k. So, if you got the car at MSRP, you would, over 24 months pay (1-.72)*100,000 + interest, which is 28 grand + interest. Now, lets say that they offer a 10k discount on MSRP. The way the bank calculates the residual is the same thing (.72)*(MSRP), which in this case is 72,000. But now, instead of paying the difference between 100,000 and 72,000, you now pay the difference between 90,000 and 72,000 (+ interest of course), which is only 18 grand (+ interest) over 24 months. Therefore, a 10% difference in MSRP, created a 36% decrease in the lease payments. So, getting a discount off MSRP, even a little, helps decrease your payments by a lot.

To answer your second question, no, a car's lease payments won't be disproportionately higher with options than with no options. So, what BMW does, is they take into account that the average M3 will have $X,XXX amount of options, and then they use that total figure to guess what the residual should be. So basically, if you were to graph the lease numbers, with MSRP of the car on the X axis, and monthly payment on the Y axis, then the line will be positive, and linear (meaning the line is straight, which basically tells use that at no matter what price point the car is, a $1000.00 increase in MSRP, will always increase the monthly payment by a fixed number.)