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X5 E70 (2007 - 2013)
E70 BMW X5 produced between 2007 and 2013. Discuss the E70 X5 with other BMW owners here.

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  #1  
Old 02-19-2013, 11:18 AM
jonnyz1245 jonnyz1245 is offline
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Why the 6% spread on residuals

between X5D and X5 35i? 36 month lease on a 13 X5D has resid at 51% vs 57 for 35i. In my neck of the woods, X5 diesel sell at a premium used to the other ones and are hard to find. Doesn't make sense to me?
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  #2  
Old 02-19-2013, 02:34 PM
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Emission Emission is offline
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Quote:
Originally Posted by jonnyz1245 View Post
between X5D and X5 35i? 36 month lease on a 13 X5D has resid at 51% vs 57 for 35i. In my neck of the woods, X5 diesel sell at a premium used to the other ones and are hard to find. Doesn't make sense to me?
Even though the X5D will have much better resale values, the manufacturer (not just BMW) often plays with the residuals to move more or less product and make more profit. The game they play sucks, but it means someone who leases an X5D may never find themselves upside down in the lease.

- Mike
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  #3  
Old 02-19-2013, 04:18 PM
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The X5d has a $3,500 EcoCredit which pretty much makes the offers equivalent.

$60k x 6% = $3,600
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  #4  
Old 02-19-2013, 05:16 PM
jonnyz1245 jonnyz1245 is offline
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Originally Posted by dunderhi View Post
The X5d has a $3,500 EcoCredit which pretty much makes the offers equivalent.

$60k x 6% = $3,600
I must be missing something because I am pretty sure you can sell private party a 60K X5 for more than 30K in 36 months? At least around here you can. Hell, there is a 2011 CPO near me that is selling for 55K on a dealers lot with 43000 miles. Not fully loaded either but pretty nicely equipped. I test drove it before I ordered mine. I know it won't sell for that but at 55K it represents is a 25K delta if you take the 51% residual. On an almost 3 year old car. Its in service date was Aug 2010. There are a bunch of 2010's in the mid-high 40's.
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  #5  
Old 02-19-2013, 06:31 PM
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Why not lease an X5 35d, buy at the end of the lease, and then sell it?
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  #6  
Old 02-19-2013, 06:57 PM
jonnyz1245 jonnyz1245 is offline
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That is not a bad idea. I have never leased before and while I consider myself a good negotiater and have had good luck on my last sevral cars getting a good price, I would have to educate myself pretty quickly about all the leasing language.

Basic question: is the residual based on the negotiated price or the MSRP? (told ya I was a leasing nooB). In my case, with the eco credit and holidya cash, that difference is 10K+

Last edited by jonnyz1245; 02-19-2013 at 07:29 PM.
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  #7  
Old 02-19-2013, 07:07 PM
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dkreidel dkreidel is offline
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^^^ msrp
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  #8  
Old 02-19-2013, 07:27 PM
jonnyz1245 jonnyz1245 is offline
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Originally Posted by dkreidel View Post
^^^ msrp
wow, sweet. so, If the MSRP is 70.5 and I paid 60.5., I will make payments totaling 49% of 60.5 for 36 mos and then buy it out for 51% and potentially could flip it for 5-10K profit?, that is if I don't like it and/or has a ton of issues? doesn't make sense to me but I might just have to take those odds. Oh and I could put down multiple security deposits thereby reducing my % rate?
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Old 02-19-2013, 09:06 PM
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Quote:
Originally Posted by jonnyz1245 View Post
wow, sweet. so, If the MSRP is 70.5 and I paid 60.5., I will make payments totaling 49% of 60.5 for 36 mos and then buy it out for 51% and potentially could flip it for 5-10K profit?, that is if I don't like it and/or has a ton of issues? doesn't make sense to me but I might just have to take those odds. Oh and I could put down multiple security deposits thereby reducing my % rate?
You will have equity at the end of an X5 35d lease, assuming you take care of the SUV. I promise.

- Mike
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  #10  
Old 02-19-2013, 09:17 PM
jonnyz1245 jonnyz1245 is offline
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Originally Posted by Emission View Post
You will have equity at the end of an X5 35d lease, assuming you take care of the SUV. I promise.

- Mike
Mike- was my simplified example correct? My X5 is in Oxnard or on it's way to Oregon on a truck so I will have to do this quickly. I am a quick learner. Having never leased before I would need to make sure all the #'s line up. The dealer will lease it to me but I would need to know all the criteria before I sit down and sign anything. They also have my trade for sale which they would have to pay out on? Or could I use that towards a one pay lease and reduce my cost even more? I need to start reading and see if this makes sense to me. I had planned to own the X5 for 6-7 years or beyond if it was problem free. Sounds like I can still do that at my price either way?

Thanks for any info you or anyone else can provide.
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  #11  
Old 02-19-2013, 09:55 PM
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Quote:
Originally Posted by jonnyz1245 View Post
wow, sweet. so, If the MSRP is 70.5 and I paid 60.5., I will make payments totaling 49% of 60.5 for 36 mos and then buy it out for 51% and potentially could flip it for 5-10K profit?, that is if I don't like it and/or has a ton of issues? doesn't make sense to me but I might just have to take those odds. Oh and I could put down multiple security deposits thereby reducing my % rate?
No, you will make payments on 51 percent of the MSRP, if my math is correct (residual is 49 percent of $70,500). Residual should be about $35,000 after three years.

Cars at that price are difficult to sell privately, but you should be able to trade it back in (or sell it to CARMAX) for a profit. Don't count on $5,000 - $10,000... just count on coming out ahead.

Cars are a really bad investment. Making even $1,000 on a lease return is considered good (most consumers simply turn them back in and pay the disposition fee!).

- Mike
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I am fortunate to have unique press cars delivered weekly, but I own:

'13 Audi Q5 2.0T Quattro 8AT
'86 Porsche 911 Turbo 4MT


Gone, but never forgotten... my E70 X5 35d, E90 335i, E46 330i, E36 328i, E70 X5 3.0si, E53 X5 3.0i.
~~~~~~~~~~~~~~~~~~~~~~~~~
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  #12  
Old 02-20-2013, 08:26 AM
smyles smyles is online now
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Quote:
Originally Posted by dunderhi View Post
Why not lease an X5 35d, buy at the end of the lease, and then sell it?
Financially it's the worst idea; the only benefit is the guaranteed option of returning it upon lease end if you decide to do so.
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  #13  
Old 02-20-2013, 10:28 AM
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Financially it's the worst idea; the only benefit is the guaranteed option of returning it upon lease end if you decide to do so.
Financially it's the best idea.

If the OP is guaranteed to sell it more than his residual price, as assumed above, it's easy money. It's pretty easy to get an independent purchase offer at lease-end to see if you are upside down or not on the residual. At that point one can decide whether or not to turn-in or purchase the leased car.
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  #14  
Old 02-20-2013, 12:23 PM
jonnyz1245 jonnyz1245 is offline
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Originally Posted by smyles View Post
Financially it's the worst idea; the only benefit is the guaranteed option of returning it upon lease end if you decide to do so.
How can it be the worst idea financially? I can either buy it out right for 60K or buy it outright at the end of the lease and have the cost still be 60K. Either way, it cost the same.
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  #15  
Old 02-20-2013, 12:29 PM
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Leasing is best for me.
  • Reduced cash flow on monthly basis
  • Always under warranty
  • If damaged in accident, I don't own the car (no worries)
  • If a lemon, I don't own the car (no worries)
  • Can purchase at any time during the lease
  • First right of refusal on purchase at end of lease

I prefer leasing.

- Mike
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I am fortunate to have unique press cars delivered weekly, but I own:

'13 Audi Q5 2.0T Quattro 8AT
'86 Porsche 911 Turbo 4MT


Gone, but never forgotten... my E70 X5 35d, E90 335i, E46 330i, E36 328i, E70 X5 3.0si, E53 X5 3.0i.
~~~~~~~~~~~~~~~~~~~~~~~~~
Read my work as West Coast Editor for Autoblog!
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  #16  
Old 02-20-2013, 12:34 PM
jonnyz1245 jonnyz1245 is offline
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Quote:
Originally Posted by Emission View Post
No, you will make payments on 51 percent of the MSRP, if my math is correct (residual is 49 percent of $70,500). Residual should be about $35,000 after three years.

Cars at that price are difficult to sell privately, but you should be able to trade it back in (or sell it to CARMAX) for a profit. Don't count on $5,000 - $10,000... just count on coming out ahead.

Cars are a really bad investment. Making even $1,000 on a lease return is considered good (most consumers simply turn them back in and pay the disposition fee!).

- Mike
actually residual is 51% so i would be making payments on the 49%.

if MSRP is 70 and that is what I make payments on? and my negotiated sales cost is 60(just using round #'s) then how does the 60 play into the lease?
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  #17  
Old 02-20-2013, 01:06 PM
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Originally Posted by jonnyz1245 View Post
How can it be the worst idea financially? I can either buy it out right for 60K or buy it outright at the end of the lease and have the cost still be 60K. Either way, it cost the same.
Look at the total $$ spent. With a lease you almost always pay extra in:
- higher interest rate
- various lease-specific fees
- (in some scenarios) double sales tax
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  #18  
Old 02-20-2013, 01:12 PM
jonnyz1245 jonnyz1245 is offline
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Originally Posted by smyles View Post
Look at the total $$ spent. With a lease you almost always pay extra in:
- higher interest rate
- various lease-specific fees
- (in some scenarios) double sales tax
-Looks like the interest rate is same as financing through BMWFS and less if using multiple security deposits. i am financing the minimum amount and paying off in 4 months. I only financed to get the holiday cash. I am putting 50K down.
-undertood. Will have to see what these amount too.
-We have no sales tax in Oregon
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Old 02-20-2013, 01:19 PM
jashearer jashearer is online now
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Quote:
Originally Posted by jonnyz1245 View Post
actually residual is 51% so i would be making payments on the 49%.

if MSRP is 70 and that is what I make payments on? and my negotiated sales cost is 60(just using round #'s) then how does the 60 play into the lease?
You make payments on the difference between 51% of MSRP and your negotiated price. So on the diesel you get an automatic $3,500 reduction in the amount you make the payments on. This was Dunderhi's original post explaining how the lower residual is actually a wash.

Jay
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  #20  
Old 02-20-2013, 07:17 PM
jonnyz1245 jonnyz1245 is offline
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so my local BMW center just said that the MF on all BMW's is .00170 and that they do not offer leases at buy rate. Is this normal operation procedure? that works out to a big bump in the % rate!
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Old 02-20-2013, 08:04 PM
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Originally Posted by jonnyz1245 View Post
so my local BMW center just said that the MF on all BMW's is .00170 and that they do not offer leases at buy rate. Is this normal operation procedure? that works out to a big bump in the % rate!
The dealer can mark up the buy rate .0004. I usually can get the dealer to come down .0002. I just leased another D myself and was able to get .0015 before multiple MSDs lowered the rate to 0.00101. Consider MSDs. Great return on your money.
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Old 02-20-2013, 08:30 PM
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The dealer can mark up the buy rate .0004. I usually can get the dealer to come down .0002. I just leased another D myself and was able to get .0015 before multiple MSDs lowered the rate to 0.00101. Consider MSDs. Great return on your money.
Multiply the number by 2400 to get an equivalent interest rate... so the dealer may mark it up by .48% for additional profit.

- Mike
__________________
I am fortunate to have unique press cars delivered weekly, but I own:

'13 Audi Q5 2.0T Quattro 8AT
'86 Porsche 911 Turbo 4MT


Gone, but never forgotten... my E70 X5 35d, E90 335i, E46 330i, E36 328i, E70 X5 3.0si, E53 X5 3.0i.
~~~~~~~~~~~~~~~~~~~~~~~~~
Read my work as West Coast Editor for Autoblog!
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  #23  
Old 02-20-2013, 09:20 PM
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Originally Posted by dunderhi View Post
Why not lease an X5 35d, buy at the end of the lease, and then sell it?
Because you have to pay sales tax on the residual when you do that, and it's tough to pass that cost on to the person you sell the vehicle to. They don't want to pay double sales tax, as they'll have to pay it again when they register it.
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Old 02-20-2013, 09:23 PM
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Because you have to pay sales tax on the residual when you do that, and it's tough to pass that cost on to the person you sell the vehicle to. They don't want to pay double sales tax, as they'll have to pay it again when they register it.
You can sell a leased vehicle directly to a third party so tax is only charged once.

- Mike
__________________
I am fortunate to have unique press cars delivered weekly, but I own:

'13 Audi Q5 2.0T Quattro 8AT
'86 Porsche 911 Turbo 4MT


Gone, but never forgotten... my E70 X5 35d, E90 335i, E46 330i, E36 328i, E70 X5 3.0si, E53 X5 3.0i.
~~~~~~~~~~~~~~~~~~~~~~~~~
Read my work as West Coast Editor for Autoblog!
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  #25  
Old 02-20-2013, 10:18 PM
jonnyz1245 jonnyz1245 is offline
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I live in Oregon. No sales tax. No worries for me in this scenario.
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