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Old 02-19-2013, 06:01 PM
mryakanisachoad's Avatar
mryakanisachoad mryakanisachoad is offline
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Location: brooklyn,ny
 
Join Date: Aug 2008
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Mein Auto: 550xi / 135i / M5
Quote:
Originally Posted by jason60050 View Post
I have been researching this a bit and from what I have seen it isn't good...the resale value on these vehicles at this point is ridiculously low.
Low compared to what? Can you give some examples?

I've been trying to figure out for years how companies like BMW and Mercedes keep this current business model going.

When you look at residual values vs. the true selling price of these cars at auctions like Manheim it's a total disconnect.

For instance - the residual on my 550 is like 47k. I know for certain that when they dump my lease return for auction at Manheim that it won't fetch more than 35k.

That's a huge hit for them to take. We all have a general idea of the margins for the auto industry so there's no way they can take 25% hits on lease returns forever.

I know the CPO program helps support some of the market but it looks like a lot of these cars still wind up at auctions.

I know so many people who swore that they would never lease a car for any reason who all of a sudden find themselves leasing because buying these things new just doesn't make sense.

Last edited by mryakanisachoad; 02-19-2013 at 06:04 PM.
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