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X3 E83 (2004 - 2010)
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  #1  
Old 01-21-2010, 02:31 AM
dashiell dashiell is offline
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Re-Leasing my 2008

My lease is up in one month on my loaded/sport, 2008 Monaco/Tobacco. It has really been a great vehicle. It's been in the shop twice in 2 years, once for oil, once for brakes. I have test driven everything out there(excepting the Cayenne) and nothing compares. The Q5 is nice, but the connection to the road isn't even close, forget about the $850 monthly payment. The RX 350 has the best interior and more tech. stuff than any SUV , but it's a luxury car not a sports car.
BMW is currently running a special on X3 re-leasing, I will continue my current payments for another 18 mos. with an opt out after 12 if I get the new X3. I think there will be a big leap in MSRP/payment, on the next gen., so it will probably be my last BMW for a while. I intend to enjoy the hell out of it while I can.
Has anyone out there taken advantage of this program or even heard of it?
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  #2  
Old 01-21-2010, 06:38 AM
cubed cubed is offline
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Not heard of it --- but it sounds like an excellent choice if you love your car (exactly as I do my 2008). Only thing is I might have tried to lower the payment. I agree with your assessment of the Audi. Removed from the road compared with the X. Also their lease deals are insane. I remember looking at a very stock A5 adn couldnt get out the door under 900/month. Then went looking at an A4 S-line Avant and couldnt get out under 700/month. Just nuts -- and I do have a problem with paying that much for a 4-banger. Enjoy your X -- I plan on keeping mine for as long as it lets me
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  #3  
Old 01-21-2010, 06:56 AM
spencerb spencerb is offline
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Just look closely at the financials.

In theory, with leasing you are paying depreciation. At the end of the lease you have paid an amount equal to the depreciation down to its current value. It involves estimating what the vehicle is worth in the future, and that sometimes is way off. If the lease payments stay the same, they are basically saying that it will depreciate at the same rate over the next 18 months as it had over the last 24, which is probably not the case (cars depreciate faster in the beginning). It's rare, but the current residual value may be lower than market value (in other words, you've paid more than the car has already depreciated).

It may be cheaper to buy the car instead of re-leasing.

First, determine how long you want to keep it. If you want to keep it a long time, I'd buy it if the residual amount is close to what it's worth. If it's too high, try to negotiate it down. It may be cheaper to buy an identical used one. If you are pretty sure you want a new car in the next 18 months, then re-leasing may be the better choice.

Leasing is fine for many people, but it can get you trapped in the end.

This is what I'd do first: Figure the current value of the car, then estimate its value in 18 months (looking at today's value of an 06 model would be a good estimate). Divide the difference by 18 and see how that compares to the lease payments.
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  #4  
Old 01-21-2010, 10:02 AM
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Mystic1 Mystic1 is offline
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Originally Posted by spencerb View Post
Just look closely at the financials.

In theory, with leasing you are paying depreciation. At the end of the lease you have paid an amount equal to the depreciation down to its current value. It involves estimating what the vehicle is worth in the future, and that sometimes is way off. If the lease payments stay the same, they are basically saying that it will depreciate at the same rate over the next 18 months as it had over the last 24, which is probably not the case (cars depreciate faster in the beginning). It's rare, but the current residual value may be lower than market value (in other words, you've paid more than the car has already depreciated).

It may be cheaper to buy the car instead of re-leasing.

First, determine how long you want to keep it. If you want to keep it a long time, I'd buy it if the residual amount is close to what it's worth. If it's too high, try to negotiate it down. It may be cheaper to buy an identical used one. If you are pretty sure you want a new car in the next 18 months, then re-leasing may be the better choice.

Leasing is fine for many people, but it can get you trapped in the end.

This is what I'd do first: Figure the current value of the car, then estimate its value in 18 months (looking at today's value of an 06 model would be a good estimate). Divide the difference by 18 and see how that compares to the lease payments.
Have to agree with this assessment. You may be able to shave some $$ if you purchase rather than re-lease it. We are basically paying the same as our lease payment was, and we purchased it off lease with a CPO. Just something to consider.
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  #5  
Old 01-21-2010, 10:48 AM
UncleJ UncleJ is offline
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Good info! However you should also keep in mind that the value of the '06 A/T being the last year of the "reliable" A/T (see stickey at top of page) commands a slightly better resale than one would normally find in a 3 year old car. It is a big selling point at the least. Have you looked carefully at the XC60 and the EX35 both have a better ride and are excellent performers. I believe the XC60 and FX best the X3 in both skid pad and 0-60 numbers, if you are concerned about performance.

Last edited by UncleJ; 01-21-2010 at 10:50 AM.
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  #6  
Old 01-21-2010, 11:25 AM
spencerb spencerb is offline
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I would say that the pricing guides don't reflect the 07 A/T issue very much, if at all. I did a quick analysis, and actually saw a much larger proportional jump in value from 06 to 07 than for 05 to 06.

My opinion is that most buyers don't research enough to know about the A/T problems before they buy. Unless they notice something during a test drive, most aren't going to dig into the vehicle's history, and most purchases will be from a dealer who probably doesn't know (or cares to share) information about the problem. So the surveyed selling price used for book values doesn't really reflect it.

Book values are just an estimate anyway. We just bought an '04 X3 from an individual for $3,000-4,000 less than private party book value.
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  #7  
Old 01-21-2010, 11:30 AM
PPXYZ PPXYZ is offline
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Originally Posted by dashiell View Post
I think there will be a big leap in MSRP/payment, on the next gen., so it will probably be my last BMW for a while.
That would be nice. It would make the old style cars that we all own - I am going to call them RETRO because they have actual keys - more valuable.

IIRC Lexus dropped, however slightly, the MSRP of the RX when they went to a new model. If BMW does take out the pano roof and doesn't add leather as standard, I could see the MSRP staying the same. I don't know if BMW ever goes down in that dept.
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  #8  
Old 01-21-2010, 04:41 PM
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That would be nice. It would make the old style cars that we all own - I am going to call them RETRO because they have actual keys - more valuable.

IIRC Lexus dropped, however slightly, the MSRP of the RX when they went to a new model. If BMW does take out the pano roof and doesn't add leather as standard, I could see the MSRP staying the same. I don't know if BMW ever goes down in that dept.
Unfortunately in your case, driving your X3 is a bucking bronco ride from your posts, so you probably could not sell it.
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  #9  
Old 01-21-2010, 06:29 PM
ghpup ghpup is offline
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Quote:
Originally Posted by dashiell View Post
My lease is up in one month on my loaded/sport, 2008 Monaco/Tobacco. It has really been a great vehicle. It's been in the shop twice in 2 years, once for oil, once for brakes. I have test driven everything out there(excepting the Cayenne) and nothing compares. The Q5 is nice, but the connection to the road isn't even close, forget about the $850 monthly payment. The RX 350 has the best interior and more tech. stuff than any SUV , but it's a luxury car not a sports car.
BMW is currently running a special on X3 re-leasing, I will continue my current payments for another 18 mos. with an opt out after 12 if I get the new X3. I think there will be a big leap in MSRP/payment, on the next gen., so it will probably be my last BMW for a while. I intend to enjoy the hell out of it while I can.
Has anyone out there taken advantage of this program or even heard of it?
I've actually never understood the benefit to leasing as you pay pretty much the value of the car over the leasing period and are then left without a car. Buy this one or buy a new one and drive it for 10 years.
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  #10  
Old 01-22-2010, 02:13 AM
dashiell dashiell is offline
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Thanks for your replies, I haven't really considered buying as I always end up wanting a new car after 2 or 3 years. BMW's SAV residuals have tanked , so the days of a $50,000 car leasing for $550 to $650 are over I'm afraid. Therefore the idea of keeping my X3 for another 18 mos. seems appealing. The residual on my X3 is close to $31,000 so buying it would be more expensive and it would have to be a 5 year deal to be affordable so I think that's out. Also if I still want to drive it in a year and a half, I can buy it then.
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  #11  
Old 01-22-2010, 02:20 AM
dashiell dashiell is offline
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As for not understanding the benefits of leasing, I could never afford to buy most BMW's, but a lot of them are within my leasing budget. If you are going to keep the vehicle for 7 to 10 yrs. (a smart financial move by the way) then leasing is crazy, but if you want to have a new car every few years then leasing is a great option. By the way, you are not paying the value of the car, you are paying the depreciation of the car, there is a big difference between those numbers.
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  #12  
Old 01-22-2010, 09:12 AM
UncleJ UncleJ is offline
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I have never leased but am considering it for my next car. I find the complexity of the new cars such that unless you have the original warranty you are hanging out there when something major goes wrong with the computer controlled stuff. I usually keep a car for 10 years (longer for trucks) but now I think a lease will be the way I go and then just get a new something at lease end. I have an '06 X3 now and will keep it until it starts giving me any trouble, then sell it. It really depends on your individual circumstances, and for some buying is best, and for others leasing makes sense.
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  #13  
Old 01-22-2010, 02:13 PM
ghpup ghpup is offline
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Quote:
Originally Posted by dashiell View Post
As for not understanding the benefits of leasing, I could never afford to buy most BMW's, but a lot of them are within my leasing budget. If you are going to keep the vehicle for 7 to 10 yrs. (a smart financial move by the way) then leasing is crazy, but if you want to have a new car every few years then leasing is a great option. By the way, you are not paying the value of the car, you are paying the depreciation of the car, there is a big difference between those numbers.
Just doing the math on a payment of $650 over 4 years puts the costs at ~$31k. I know that my X3 new was $45K sticker (I paid $9k less than sticker). That's a difference of $14k, but even Trade In Value is still $20k on a 40k mile '06 X3. Wouldn't I have to expect that my "residual" would be greater than $14K and closer to $20k after 4 years? If I purchased the car I'd have paid $45k new, but after 4 years theoretically I could sell it for at least $20k. The difference is $25K and I'd have saved $6k or nearly 20%. Isn't that $6k really worth avoiding the spending of $7800 per year perputually with no asset (depreciating or otherwise to show for it)? Given this, the economics of leasing still don't make sense to me. I have no value after the lease period, but I've paid a lot of money during it.
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  #14  
Old 01-22-2010, 06:26 PM
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b-y b-y is offline
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Originally Posted by ghpup View Post
Just doing the math on a payment of $650 over 4 years puts the costs at ~$31k. I know that my X3 new was $45K sticker (I paid $9k less than sticker). That's a difference of $14k, but even Trade In Value is still $20k on a 40k mile '06 X3. Wouldn't I have to expect that my "residual" would be greater than $14K and closer to $20k after 4 years? If I purchased the car I'd have paid $45k new, but after 4 years theoretically I could sell it for at least $20k. The difference is $25K and I'd have saved $6k or nearly 20%. Isn't that $6k really worth avoiding the spending of $7800 per year perputually with no asset (depreciating or otherwise to show for it)? Given this, the economics of leasing still don't make sense to me. I have no value after the lease period, but I've paid a lot of money during it.
How's this for an explanation of why leasing works for some of us? Here are a few of the specifics in at least one case (mine):
  • Monthly payment = $500 (not the $650 in your example), which includes sales tax.
  • No cash tied up in a down payment.
  • No risk on the value at lease end.
  • New car every 2 to 4 years, depending on lease terms.
I'm not saying leasing is for everyone or for every situation. I have bought and held cars for as long as 12 years. I bought my M when it was about 8 or 9 years old. But there are times when leases can be a decent approach, especially with the 04 and 08 X3s.
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  #15  
Old 01-22-2010, 07:52 PM
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Originally Posted by ghpup View Post
Just doing the math on a payment of $650 over 4 years puts the costs at ~$31k. I know that my X3 new was $45K sticker (I paid $9k less than sticker). That's a difference of $14k, but even Trade In Value is still $20k on a 40k mile '06 X3. Wouldn't I have to expect that my "residual" would be greater than $14K and closer to $20k after 4 years? If I purchased the car I'd have paid $45k new, but after 4 years theoretically I could sell it for at least $20k. The difference is $25K and I'd have saved $6k or nearly 20%. Isn't that $6k really worth avoiding the spending of $7800 per year perputually with no asset (depreciating or otherwise to show for it)? Given this, the economics of leasing still don't make sense to me. I have no value after the lease period, but I've paid a lot of money during it.
Absolutely agree with ghpup on this topic. Plus if I drive my car more than what is expected I am not penalized later.
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  #16  
Old 01-23-2010, 03:29 AM
dashiell dashiell is offline
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Quote:
Originally Posted by ghpup View Post
Just doing the math on a payment of $650 over 4 years puts the costs at ~$31k. I know that my X3 new was $45K sticker (I paid $9k less than sticker). That's a difference of $14k, but even Trade In Value is still $20k on a 40k mile '06 X3. Wouldn't I have to expect that my "residual" would be greater than $14K and closer to $20k after 4 years? If I purchased the car I'd have paid $45k new, but after 4 years theoretically I could sell it for at least $20k. The difference is $25K and I'd have saved $6k or nearly 20%. Isn't that $6k really worth avoiding the spending of $7800 per year perputually with no asset (depreciating or otherwise to show for it)? Given this, the economics of leasing still don't make sense to me. I have no value after the lease period, but I've paid a lot of money during it.
ghpup, As I said, leasing is not for everybody. In fact, it's often not a smart financial move...but, if you like a new car every 2-4 years, it's a great way to go. It also helps to have some negotiating skills and be good with numbers. Speaking of numbers, I put nothing down and have a two year 30,000 mile deal at $580 a month so I'm into the car for about $14,000. If I extend my lease for another 18 months I'll be into it for $24,000, I'm certain that if I want to keep the vehicle at that point that I can get it for around $23,000, if you add $23k + $24k you get my original MSRP. Or I can just walk away, my choice, that's why I like leasing.
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  #17  
Old 01-23-2010, 08:35 AM
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kyfdx kyfdx is offline
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Originally Posted by dashiell View Post
ghpup, As I said, leasing is not for everybody. In fact, it's often not a smart financial move...but, if you like a new car every 2-4 years, it's a great way to go. It also helps to have some negotiating skills and be good with numbers. Speaking of numbers, I put nothing down and have a two year 30,000 mile deal at $580 a month so I'm into the car for about $14,000. If I extend my lease for another 18 months I'll be into it for $24,000, I'm certain that if I want to keep the vehicle at that point that I can get it for around $23,000, if you add $23k + $24k you get my original MSRP. Or I can just walk away, my choice, that's why I like leasing.
Seems like a decent option, especially since you are still under warranty and the maintenance plan... I wouldn't want to stretch it past 15 more months, as you will then be out of warranty (assuming you drive the full 15K/yr allowance).

I guess the thing that would bug me, is that I didn't go for the cheaper 36 month lease to begin with, but I guess we aren't psychic.. Who knew that cheap lease programs were going away? You certainly can't lease any of the competition (or even a new X3) for anything close to that price.

As noted above, check the paperwork closely.. don't take someone's word that you can opt out after 12 months..

regards,
kyfdx
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  #18  
Old 01-23-2010, 10:44 AM
dashiell dashiell is offline
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kyfdx, For some strange reason, when I leased my X3 the 36 mo. and 24 mo. programs were within $5 of each other(that aint happening anymore either). And you are correct, a 2010 X3 equipped like mine with nothing down would lease for between $750 and $800 a mo. The good news is that now I feel like I'm stealing my car for $580. The only high-end SUV with a really high residual(and therefore an affordable payment) is the RX350 and, it's a great vehicle but I think a bit feminine for me.
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