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X6 E71 / E72 (2008 - current)
The newest sport activity vehicle from BMW is a crossover-coupe style and is expected to appear sometime in 2008!

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  #1  
Old 01-19-2009, 11:02 AM
550isport 550isport is offline
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predictions re: X6 leasing in 2009-2010

Here's were I am coming from: My lease is up in 9 months and I am thinking what would I choose if I had to get a new BMW tomorrow? The X6 has really grown on me, but it would not be an option right now, because it's too expensive. Not the price, but rather the leasing. I will not be purchasing my next car for a number of reasons. And as you all know the lease #s on the X6 are less attractive than any other model, M cars, Individuals and Alpinas included. If the money factor dropped to below .00220 and more importantly the residuals increased to at least 52% or more (36 months/15k mi. per year), then I would shoot for an X6 5.0 (drove it and was really impressed). But to lease a 6 cylinder right now for the same payment as a 2009 M5 is ludicrous.

So here's my guess: I think that the leasing parameters will become a bit more conventional by fall of this year if for no other reason than the MX6 might be out at that point, and then the regular X6s loose some of their halo status. If BMW positioned the X6 as an X5 alternative (which it really is) with the same leasing parameters, the X6's superior power and handling could have hurt X5 sales. So, they gave it a year for buyers who like the X6 to purchase it and at the same time they made it "unleasable", which by default positions it as a superior vehicle to the X5. Right? But what happens when the X5 gets the TTV8 and the ever important torque vectoring differential that gives the X6 its handling edge? BMW isn't going to zap leasing incentives on the X5 at that point. Its a bread and butter vehicle for them. I think at that point the X6 would get demoted, in a way, to basically an X5 coupe. Pricing may remain a bit higher, but hopefully the leasing numbers make the non M versions more attainable at that point.

It's all conjecture...? It still surprises me that BMW chose to make a car that was a hard sell in the first place, totally unattractive to lease? Imagine if Mercedes tried to position the R wagon in such a way (different car for a different market though)?

DRP

Last edited by 550isport; 01-19-2009 at 03:09 PM.
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  #2  
Old 01-29-2009, 07:25 PM
LI E90 LI E90 is offline
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not going to happen, the X6 is not a volume producer for BMW, standard rates will always apply
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  #3  
Old 01-30-2009, 07:55 AM
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David1 David1 is offline
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Leasing as we know it is over and will not recover to the way it was.
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Old 01-30-2009, 08:12 AM
sdbrandon sdbrandon is offline
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The X6 volume is 40k per year. BMW has already stated that for any cars that do not sell well, they will send overseas wher ethe market is better rather than have a glut in the U.S. and have to discount.

As far as I can tell, X6's are hard to come by because the majority are sold overseas.

BMW is not GM. And will scale back accordingly.

Lease incentives/rebates are an indication of over production and poor management. With this economy, I expect BMW to become smarter with production.

I also expect the consumer to keep cars longer, buy more used rather than new, and many middle class will get out of lease loops and go back to more conservative financial patterns.
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Old 02-02-2009, 11:40 AM
550isport 550isport is offline
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I agree with all three responses (although I don't think the X6 is at a standard rate. Its far above that. The money factor of .00285 is the top tier and the residuals are atrocious).

Maybe all the leasing incentives will dry up in this economy? As a former E38 owner, I'm convinced that the record sales of the E65s were primarily due to heavily subsidized leasing that made an $85,00.00 7 series far cheaper to lease than its S class counterpart. If that is what happens then so be it. BUT I suspect more is at play with the X6. The residual is in the toilet! As it is with the diesel X5 (which should have a higher residual than a gas X5). Why? Simple, BMW NA...not AG is trying to capitalize on the segment of its customers that 1) have the ability to purchase the vehicles outright (I read that almost 70% of X6s have been purchased/financed - compare that to 91% of 7 series leased) and 2) must have them regardless of the financials. Once this initial wave a wealthy salivators have subsided the rates would normally (using the last 3-4 years as a basis) correct downward to a more conventional level based on the specifics of the vehicle itself (i.e. M cars usually remain at high lease numbers because of strong demand, whereas a 760li or 650i won't). I bought my 740i sport. Kept it for 5 years and got hammered on a private sale (would have gotten sodomized on a trade-in). I am an ideal candidate for leasing and I love it. I hope my lease loop of 4 BMWs since the 01' 740 doesn't get broken

Time will tell. Thanks for the responses.

DRP

Last edited by 550isport; 02-02-2009 at 11:46 AM.
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  #6  
Old 02-05-2009, 03:09 AM
jaldeborgh jaldeborgh is offline
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I have always been confused with this whole lease thing. Help me understand the logic.

I have always approached buying a car as follows.

I'm admittedly a bit of a an old world yankee so typically buy a used car - 18 months to 2 years old - and I always pay cash.

In recent years I have bought 2 BMW X3's and an Audi A4 Avant and on all three car the milage was between 20K and 25K and in all cases I paid roughly 50% of the sticker +/- 5% - all were bought from dealers. Again, in all cases you would have a difficult time telling the car from new once detailed.

Funny story - I also bought a 1 month old Porsche Cayenne with 1500 miles from a guy who bought the car for his wife as a gift only to have her complain that she wanted a MB G Wagon. After a couple of weeks of her moaning he acquiesced and got her what she wanted - so I got the car for 30% less than he had just paid.

I/we also drive cars for a long time - not necessarily a huge numbers of miles in a year. Also, once I become familiar with a car and it becomes comfortable I find I look forward to my daily drive regardless of the cars age - I guess this is the real benefit of buying a great car to begin with.

We still have all of these cars - one X3 and the A4 were bought for two of our daughters.

I'm curious about what the rational, logic or formula is for leasing. Any thoughts.
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  #7  
Old 02-05-2009, 08:04 AM
sdbrandon sdbrandon is offline
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Quote:
Originally Posted by jaldeborgh View Post
I'm curious about what the rational, logic or formula is for leasing. Any thoughts.
For some who are financially enlightened, leasing is a strategy to preserve capital while still driving newer cars.

For the masses, leasing is a tactical option to improve monthly cash flow and allows the consumer to drive a car that they could not otherwise afford.
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  #8  
Old 02-05-2009, 08:56 AM
apollner apollner is offline
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You make good points for ownership and you certainly have found excellent values in buying pre-owned after the severe depreciation that occurs on a 1-2 year old car.

Now let me give you some advantages for leasing. First, in leasing you are essentially renting the car for the term you've agreed. Therefore, the price to 'rent' the car is based on the value of the car during the term that you lease it. For a car with a high residual (the car's value at the end of the lease) that means low payments (relative to financing for same term). So to lets use an extreme example: Say you want to own a $100k car. Maybe its something a little beyond your grasp. If you finance it, your payments will be high because you are responsible for the entire $100k amount. Lets say you decide to lease and the calculated residual after 3 years for that car will be $70k. Now, the terms of your lease will be based on the 'value' i.e. $30k for the term of your lease. Payments arrived at from $30k will be MUCH less than those arrived at from $100k! The interest on the lease, what they call money factor, may be higher, but not nearly to account for this difference.

So through the lease we have the ability to drive something more expensive than we could otherwise own. There is always the option to buy the car and finance for 7+ years to get a similar monthly payment, but cars depreciate quickly and it doesn't make sense to finance a car for so long.

Now, the issue is what happens when your lease is up? Well you have some choices:
1) Turn the car back in and start anew
2) Buy the car from the leasing company for its residual value (which is pre-determined at least start) if you really love the car and want to keep it longer.
3) Find a buyer for your car if the market value is significantly higher than your predetermined residual. Negotiate with the dealer for the sale/transfer and you could make some $$ out of it!

By way of example, I owned a 1997 540i Sport which, given my low mileage, was worth more at the end of the lease than what they had valued it at. I did have an arrangement with the dealer who would help me with the transaction, but I could not find a party to commit to buying before my next car came in, a 2000 M5.

As the lease for the M5 ended, I loved the car and decided to buy it at its residual value. I owned it for another 3 fun-filled years! However, the warranty was over after year 4, so I was on my own. European cars are expensive to maintain, for even the smallest issue.

I leased a 650i for the next 3 years and just took delivery of an X6. Each car was built to the exact specification of color and options I desired. The second-hand market does not give you this choice. You take what you find. Personally, I've enjoyed keeping up-to-date on the models and the technology/engineering they bring. The excitement about the last car is quickly overshadowed by the new car.

So there's really no right or wrong approach, just different benefits to each.

I hope this was helpful without stating the obvious!

Regards,
ANDREW
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  #9  
Old 02-05-2009, 09:46 AM
550isport 550isport is offline
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+1 Great response

When they list "ownership" as a benefit of financing vs. leasing I;m at a bit of a loss on that... To me that simply means higher property tax on my car.... This isn't 16th century England where someone is going to steal your horse unless you can prove ownership. I'm very comfortable with BMW Vehicle Trust "owning" the car which I have the only keys to

DRP
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  #10  
Old 02-05-2009, 01:47 PM
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mason mason is offline
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It is safe to say the car sales not improving for rest of the year. But is the Op implicitly saying BMW would undergo GM like deal? I don't think so. You, for sure, will see incentives.
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  #11  
Old 02-06-2009, 01:40 AM
jaldeborgh jaldeborgh is offline
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Quote:
Originally Posted by apollner View Post
You make good points for ownership and you certainly have found excellent values in buying pre-owned after the severe depreciation that occurs on a 1-2 year old car.

Now let me give you some advantages for leasing. First, in leasing you are essentially renting the car for the term you've agreed. Therefore, the price to 'rent' the car is based on the value of the car during the term that you lease it. For a car with a high residual (the car's value at the end of the lease) that means low payments (relative to financing for same term). So to lets use an extreme example: Say you want to own a $100k car. Maybe its something a little beyond your grasp. If you finance it, your payments will be high because you are responsible for the entire $100k amount. Lets say you decide to lease and the calculated residual after 3 years for that car will be $70k. Now, the terms of your lease will be based on the 'value' i.e. $30k for the term of your lease. Payments arrived at from $30k will be MUCH less than those arrived at from $100k! The interest on the lease, what they call money factor, may be higher, but not nearly to account for this difference.

So through the lease we have the ability to drive something more expensive than we could otherwise own. There is always the option to buy the car and finance for 7+ years to get a similar monthly payment, but cars depreciate quickly and it doesn't make sense to finance a car for so long.

Now, the issue is what happens when your lease is up? Well you have some choices:
1) Turn the car back in and start anew
2) Buy the car from the leasing company for its residual value (which is pre-determined at least start) if you really love the car and want to keep it longer.
3) Find a buyer for your car if the market value is significantly higher than your predetermined residual. Negotiate with the dealer for the sale/transfer and you could make some $$ out of it!

By way of example, I owned a 1997 540i Sport which, given my low mileage, was worth more at the end of the lease than what they had valued it at. I did have an arrangement with the dealer who would help me with the transaction, but I could not find a party to commit to buying before my next car came in, a 2000 M5.

As the lease for the M5 ended, I loved the car and decided to buy it at its residual value. I owned it for another 3 fun-filled years! However, the warranty was over after year 4, so I was on my own. European cars are expensive to maintain, for even the smallest issue.

I leased a 650i for the next 3 years and just took delivery of an X6. Each car was built to the exact specification of color and options I desired. The second-hand market does not give you this choice. You take what you find. Personally, I've enjoyed keeping up-to-date on the models and the technology/engineering they bring. The excitement about the last car is quickly overshadowed by the new car.

So there's really no right or wrong approach, just different benefits to each.

I hope this was helpful without stating the obvious!

Regards,
ANDREW

Thanks for your comments - and I don't think you are stating the obvious. I've always understood the math and I guess it ultimately boils down to enabling people to drive a car with an exact and desired configuration in a given timeframe while minimizing cash outflow - which is very understandable. I think in some way I enjoy the hunt for the perfect combination of car and deal. It always takes me a long time to find a car but I enjoy the process and never feel rushed.

The end point is essentially the same - we are all pleased with the outcome and we enjoy the everyday experience of driving cars we love.
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2007 X3 3.0si - Wife's Car
2004 X3 2.5i - Daughter's Car
2003 K1200RS - Dad's Toy
2001 750 iL - Retired by me in 2005 - Great Car but wanted AWD
1995 750 iL - Retired by me in 2002 - Great Car
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  #12  
Old 02-10-2009, 09:07 AM
550isport 550isport is offline
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"CAR"NACK the Great?

I know its not cool to gloat over being right, but I'm excited that my predictions came true 100%:

Base rate down - residual up by 11%!!!!!!

February 2009 X6 5.0 rates:
36 Month Residual 58% of MSRP .00260 Base Rate

Now if I could get them to pull me out ahead of my lease. Fat chance in this market. Lets hope these numbers stay put for a few months and aren't just a means of trimming down excess inventory before reduced production takes hold.

DRP
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  #13  
Old 04-14-2009, 08:42 AM
550isport 550isport is offline
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Correction...

Make that 58% residual and .00175 money factor on a 5.0 as of April 09'! That's a $400.00 difference monthly on the same X6 5.0 leased in November 08' vs. April 09'. WOW!
That's almost $15,000.00 more to lease the car when it first hits the lot!

I suspect the exact same thing applies to the 09' 7er right now. If BMW want it to compete with the soon to be released A8 and S class updated for 2010, there's no better way to guarantee market share then to increase value - which the last 7 series undeniably established.

DRP
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  #14  
Old 04-18-2009, 09:54 AM
buddhak0n buddhak0n is offline
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Because BMW wants you to BUY your car. Could that be it? Sure could . If you haven't noticed, there's a recession going on and nobody's offering to give you THEIR money to use for cheap nowadays. When people lease a car it never occurs to them that actual checks are changing hands and what you are actually doing is "Renting" a car from somebody who has agreed to pay the dealer on your behalf.

Part of the big supposed crash according to some experts was the sale of CDO's or Certified Debt Obligations which basically was a nice way for the bank to say it was bundling up the thousands in expected Payments from nice score people with no equity and shipping them off to investors without any true certification as to whether the instrument in and of itself had any underlying value.

Don't worry about it. Just keep electronically transferring your money to us every month LOL and keep thinking you didn't really spend that much money ROFL

But seriously I want to buy one as well and all this attention is causing them to RAISE prices. Go back to freaking out over Benzos and souping up acuras hehehe
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