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High End Luxury Cars

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  • deweydewey Posts: 5,243
    All your posts did nothing to prove your "BMW leases are subsidized more than Lexus leases" ideas"

    But I will do likewise and no longer play this game that you yourself had participated in!
  • bdr127bdr127 Posts: 950
    Projections and Reality are not always the same !!! How 'bout real-life situations instead of a pie-in-the-sky, wet your pinkie and stick it in the wind consideration ?? Now, why should Lexicans head to an emergency meeting on this superflous award ?

    So what should I reply when all the Lexicans spout all the info about CR and their newest reliability ratings reports? Should I, too, say that those are only speculation and "pie-in-the-sky" pipedreams?

    I believe, in fact, that many Lexicans have fired back saying "CR bases those future reliability projections on past data." But talk about KBB and ALG, and you'll get the argument that "guessing those future projections is ridiculous." So does KBB and ALG (two unbiased and respected third-party sources) just like to make stuff up and make predictions based on their magic 8-ball? Do you think they base their decisions on anything factual from the past, or is it just their eager enthusiasm for a particular brand?

    You can't have your cake and eat it, too. What a double standard....
  • oacoac Posts: 1,594
    In response to yours, I'd just like to quote hpowders post made yesterday:

    "Judging from the BMW and Lexus leasing figures, BMW with its high residuals and competitive money factors and relatively poor long-term reliability encourages one to lease and Lexus with its ridiculously low residuals (totally out of touch with reality), rather high money factors (except in December, yes I remember!) and incomparable long term reliability encourages one to buy."

    Does that answer your question ?
  • hpowdershpowders Posts: 4,269
    Best way to find out is to ask a Lexus dealer. It would not surprise me if more Lexus people buy than lease.
    Lexus makes the perfect car to buy:
    Worry-free long-term reliability which is critical, and its vehicles hold their value among the best in the industry. You can trade your Lexus in 2-4 years and not have to worry about where the bulk of your cash will be coming from to purchase your next Lexus.

    BMW makes the perfect car to lease because for whatever reason, they absolutely encourage it:
    The highest leasing residuals in the industry. Free maintenance for the entire lease term. Poor long-term reliability. Those parts and labor costs become quite significant after that warranty runs out. No thanks.
    Even though I love BMW vehicles, if the only way I could have one is to buy one, there is no way I would do it. And I'm sure a lot of BMW drivers feel the same way.
    I have no direct evidence, but I feel pretty sure that the success of BMW has a great deal to do with BMW Financial Services' incredible leases.

    If the 2007 Lexus LS becomes the car we all hope it will be, then it may finally be time for me to "settle down" with a fine vehicle that I can actually say with pride, I own.
  • patpat Posts: 10,421
    Can we get past this and get back to the actual marques?

    Seems like everyone who has a view on the ins and outs of leasing a BMW vs a Lexus has had a say, and it's clear no one is going to change, um, gears on a perspective.

    Let's agree to disagree and find something else more topical to debate.
  • designmandesignman Posts: 2,129
    Final Score:
    Alamo 10
    Lexicans 7
  • deweydewey Posts: 5,243
    Even though I love BMW vehicles, if the only way I could have one is to buy one, there is no way I would do it. And I'm sure a lot of BMW drivers feel the same way.

    After owning a BMW for 7 years, after knowing relatives who owned and not leased BMWs for the last two decades, I can assure you I am quite ignorant about this BMW after-warranty scare of yours!
  • designmandesignman Posts: 2,129
    I think a lot of people who have to have a BMW don’t worry about that stuff. I own. Cars are expensive and require a lot of attention no matter how reliable they are. Once I decide on a car I put any concern behind me, then play the cards as they are dealt.

    BMW’s free maintenance gives oil changes at 15K miles but I have it done at 7500. So far they haven’t charged me for the two additional oil changes. They also changed my brake fluid recently free of charge when they didn’t have to. I hear stories about unscrupulous BMW service departments but this hasn’t been my experience so far. Will I keep it beyond the warranty? Not sure. But if I don’t it will be because of lust for another car. Right now there is no other sedan outside an E39 M5 I would rather have. If there were I'd get it plain and simple. Can't get the M5 because my wife doesn't drive manual. I've often thought of replacing the Boxster with it but the latter is just too much fun. Porsche. Lordy, they know how to put their hand in your pocket.
  • hpowdershpowders Posts: 4,269
    Good to hear. Now I know at least one person who isn't leasing a BMW.
    Right now the only car I would buy without hesitation is the LS430 due to its incredible long term reliability.
    I myself wouldn't bet on a BMW's long term reliability, but It's good that it works for you.
  • hpowdershpowders Posts: 4,269
    I also did 2 synthetic oil changes per year for my last BMW.
    No charge for the extra oil changes, but they sure don't advertise it!
  • It is more profitable for BMW to offer competitive leases than Lexus! Why? The primary reason is BMW's competitive advantage : The highest anticipated resale values in the industry.

    That's not true at all. The lease residue for BMW-financial leases are set by the car maker itself. The residue does not have to reflect actual resale value at all. Think of this finacial engineering trick this way: the car company can lease out a 330i convertible at $50k MSRP with a residue of $30k, or lease the same car out at $40k MSRP with a residue of $20k, or lease the same car out at $100k MSRP with a residue of $80k . . . so long as the money factor is subsidized to near-zero, the payments will be exactly the same for all three trasactions. Obviously the car is not fetching both $80k and $20k at the same time three years later. There is a lot of room for financial engineering there, and indeed it is an important activity for car companies to engage in order to maintain marque value. In fact, if you thnk about it, it is almost the only reason why car companies need a financial arm at all: to engage in vendor financing, thereby lowering the true cost of acquisition without having to lower nominal selling price (which may upset buyers of previous model years). By doing so, the car company can also delay the adverse market condition by three years (or whatever the lease term is) before it is reflected in the accounting books. Usually the high rate of lease vs. purchase is reflective of the degree of lease subsidy book-cooking; after a while, the phenomenom show up in lower consolidated margins, as the case for a while now at MB, and starts to happen at BMW, too. The nominal price in a lease written by the car company itself is no reflection of true sale price.
  • deweydewey Posts: 5,243
    I think a lot of people who have to have a BMW don’t worry about that stuff. I own. Cars are expensive and require a lot of attention no matter how reliable they are.

    I agree! Although it may appear at least in this forum that I am the only BMW driver on this planet earth who has justified his purchase with reliability statistics, I can assure you that is not the case at all. I bought and I will buy any car based on how it drives, reliability stats be damned.

    The fact that I keep on using reliability/resale stats to justify my arguments is because that is the only ammunition that can be used against those Lexicans!

    The car I am lusting after is a sport wagon. Unfortunately BMW does not believe wagons and power are compatible. I find both the 325xi and 530xi tourings underpowered. I would buy a 330xi or 550xi touring right now if they were avaiable at my local dealer. An A4 Avant does not excite me and the Audi S4 is priced like a BMW 550i in Canada( I would rather forgo the wagon idea and stick with the 550i)
  • deweydewey Posts: 5,243
    That's not true at all. The lease residue for BMW-financial leases are set by the car maker itself. The residue does not have to reflect actual resale value at all.

    What you are saying applies equally to Lexus and BMW. It is the subsidy component that was the source of our debate!

    You can refer to our prior discussions from today and yesterday for further riveting details since it would make no sense for me to repeat my point over and over again.
  • Is the difference in lease costs between a Bimmer and a comparable Lexus sufficient get the prospect to change brands?

    Or just change how he is going to acquire the brand of his choice from leasing to buying (or vice versa).

    On a side note, I'm surprised that a board full of such smart, savvy business guys is a board full of guys who lease or turn cars over rapidly. I would think that a savvy guy would ladder his cars (like his bonds) and have a family fleet full of cars of varying years, beginning say with a 11 year, 125K miles, s***box and ranging up to himself's daily driver. Sure, a 5 year old Bimmer might have some maintenance issues but they will be a lot less costly to fix than to reset the depreciation clock and pay another hit of sales tax. The people who I see doing well in this world do not have a driveway full of newish leased cars. Moreover, the affluent driveway usually contains a pickup or two.

    Speaking of retail "equity investment advisors" (see post a day or so ago), those with a 250K ride are telling anyone with a brain that they don't really have any good ideas. In other words, they bought the car because they had zero opportunities to invest. People like Warren Buffet would laugh all the way to the bank at the sight of an "investment advisor" in a Lambo. Interestingly enough, high net worth financial types (i.e., hedge fund partners etc., not retail advisors) in the Northeast, much prefer a chaufer driven Tahoe or Denali.
  • deweydewey Posts: 5,243

    I would think that a savvy guy would ladder his cars (like his bonds)


    ;)
  • What you are saying applies equally to Lexus and BMW. It is the subsidy component that was the source of our debate!

    In case you missed it, BMW Financial leases have lower money factors, and at the tail end of a lease, there is greater difference between auction returns and the projected residues by BMW Financial. These are signs that BMW has been subsidizing leases; also at the root of why BMW financial statements starting to deteriorate.
  • Is the difference in lease costs between a Bimmer and a comparable Lexus sufficient get the prospect to change brands?

    I for one would. Everything has a price. If BMW wants to give me a car for free, or nearly so, I will take it, assuming I'm not using the car for business purpose. Lease subsidy does come in here in a significant way. For example, an unsubsidized lease of IS350 (or even IS250) sedan can push over $500 per month. On the other hand, with lease subsidy, BMW 330i convertible can be had for a little over $500 a month. In effect, BMW is giving away 330 convertible at about $38k, not anywhere near the $50k MSRP. If you are in the market for a convertible and your use of the car can put up with some unscheduled service visits, the 330i convertible may just be the ticket.

    As to how one maintains a family fleet, there are a couple issues besides just money:
    (1) time. I probably don't have the time to put up with an 11yr old car with 125k miles, with all the attendent maintenance issues, especially unexpected ones, unless it is a collector's car;
    (2) safety. New safety technologies come up every few years. We all put a price on our own lives.

    For what it's worth, I think Warren lives out of a plane.
  • tiny1tiny1 Posts: 26
    Wondered if you guys could answer a question or direct me to a maintenance or troubleshooting forum...I have a noticeable "shudder" between 40-50MPH with my 2002 CLK55 AMG. Dealer has balanced tires twice with no significant improvement. I still have factory warranty for another month, but they keep wanting to go the balancing route. Any thoughts or experience with this? This is starting to bug me as it's causing a couple of squeaks to emerge in the dash. Can really feel it on the wheel and pedels. Seems fine under 40 and at higher speeds. Would appreciate any thoughts..

    thanks!
  • deweydewey Posts: 5,243
    In case you missed it, BMW Financial leases have lower money factors, and at the tail end of a lease, there is greater difference between auction returns and the projected residues by BMW Financial. These are signs that BMW has been subsidizing leases

    No Kidding!!

    Have I said that BMW does not subsidize leases? So what is your point?

    If you think you can win a debate by having the last word with pointless information then so be it! I will let you have the last word!

    BMW Financial Statements are deteriorationg? You seem greatly misinformed! Here is a link to BMW Group's Interim June 2005 and Annaul 2004 Financial Statements!

    BMW F/S
  • ljflxljflx Posts: 4,661
    Dewey - there were a number of financial reports recently that said BMW's results were disappointing and profits dropped. Maybe you missed it. And - I have no intention of proving those reports to you.
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