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      01-25-2010, 07:00 PM   #11
Angry3
All your 1 are belong to us!!!
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Drives: '08 135i 'Vert
Join Date: Apr 2008
Location: Charlotte, NC

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I get that a low MF, low residual lease is more desirable than a high residual, high MF lease with the same payment, but I think the benefits of counting on having equity at lease end to offset the payment expense are pretty limited.

With higher residual leases:

1. If the car worth less than the buyout you just turn it in, or you have leverage to negotiate on the buyout amount with the dealer. With the lower residual BMWFS is effectively shifting the risk of a market collapse onto the lessee, which eliminates one of the big positives of leasing to begin with.

2. If the car is wrecked and repaired you can walk away from it at lease end without a second thought. If your M3 is hit any equity you might have seen at lease end is likely up in smoke. With the way people drive these days and the value hit specialty cars take with accident damage this isn't something to be ignored IMHO.

Obviously if you're "leasing to own" because of the tax break and you're buying the car come hell or high water at lease end the low residual is a good thing. Outside of that scenario...

IMHO the bottom line is that, except for the fire sale leases in late '08 and early '09, the lease terms on current M cars have been pretty brutal. It's still the way to go for some people (especially those that can utilize the potential tax breaks), but BMW is definitely not concerned about "moving the metal" with M3 terms as they are.