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Discussion Starter · #1 ·
Hi All,

Trying to decide whether to lease an 07 or 08 model. Main issue is that, of course, prices and lease rates for the 08 model are unknown. So, I was trying to work out how important the underlying sources of unknowns are, wondering if you guys can comment on my analysis.

For the sake of argument, let's assume that the sale price is $1500 over invoice for either 07 or 08 model, depreciation is 60% (makes the calcs easy). Let I be the invoice price. As a start, let's suppose that both MSRP and invoice go up by 2%. Depreciation on the 07 is therefore

I+1500-0.6*MSRP

Depreciation on the 08 is

(1.02*I+1500)-0.6*1.02*MSRP
=1.02*(I+1470-0.6*MSRP)

Bottom line is, if invoice and MSRP go up 2%, the depreciation goes up by slightly less than 2%. On a three year lease, depreciation would be in the 15-18k range, so this means depreciation goes up by 300-400 dollars, over a 36 month period, this is ~$10/mth. As things go, then, this seems like a small effect. A corollary to this analysis is that even if invoice and MSRP both go up by 5% (from what I see, unlikely), the effect of potential price increases is still (as things go) pretty small.

The main issue is the money factor. Currently, it ranges from 0.00175 to 0.0023. Some research on these boards suggests that it will be higher for the 08s--the 07 328 and 335, when they came out, started out at around 0.00285. If we take cap cost+residual to be around 75k, then the monthly interest payments are

0.00175 : $131
0.00230 : 172.5
0.00285 : 213.75

Thus, the interest goes up by $40-$80 a month. Bottom line is, this simple analysis suggests that the main source of uncertainity is uncertainty over the lease money factors (which we won't know til sept or so), as opposed to uncertainity over prices (which we know around August or so).

This is a simple analysis, some assumptions underlying it are:

1) Can get 08 for same amount over invoice as 07.
2) Invoice and MSRP increase at same %
3) MFs for 08s are likely to be higher than 07s.

Any comments?
 

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The bulletin indicating changes for 08 was recently posted on this forum.
It finally turns out that overall there are very few notable updates/changes for 08, so best to lease an 07 and avoid the risk of price/MF increase for theoretically the exact same car.
 

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Discussion Starter · #3 ·
Timod,

Good point, although paddles are kind of fun. Also, if I want to do ED, I think I'm basically constrained to an 08 model.
 

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1,209 Posts
If you're buying a manual it should have no bearing, if you're buying an autotragic you may want to wait for the 08 although personally I wouldn't.
 

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bewilderbeast
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194 Posts
I'm in the same boat, and having read the bulletin will be looking for an 07
335i..
Anything like this lying around?

Sparkling Graphite Metallic
Terra w/Dakota Leather Upholstery with Burl Walnut Wood Trim Included
Sport Package
STEPTRONIC
Paddle Shifters
Premium Package
Fold Down Rear Seats w/Ski Bag
iPod/USB Adapter
Park Distance Control (rear)
 
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