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High End Luxury Cars

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Comments

  • deweydewey Posts: 5,243
    Lexus residuals are realistic, whereas the redisuals on some of the German models are completely unrealistic; that makes the nominal "sale" price (not MSRP) on these same cars in a lease contract highly suspect.

    What kind of proof is that? MSRP is irrelevant independent of whether it is a lease or purchase cash deal?

    Brightness if you want to continue this discussion please back it up with $$$ and facts versus mere armchair conjectures that cannot be proved or disproved.
  • brightness04brightness04 Posts: 3,151
    Please read my previous post again. The discussion is not on MSRP, but on the nominal "sale" price in a lease contract, and how truthful it is. There is a "sale" price in a lease contract; that's the amount BMW or MB takes out of one pocket and puts in another, and call it current revenue in their books, and then counted towards average vehicle sale price (the write-down that comes 24 to 36 months later is not taken into account for average vehicle sale price)

    Go check out auction prices on lease returns. The prices onlease returned BMW and MB are fetching are way below the residual. Checkout what third-party banks are willing to give you as lease residual . . . they are inline with what Lexus would give you on their cars, but way lower than what BMW and MB are offering. Even many Europhiles are realizing this phenomenom; that's why they insist on leasing only, to take advantage of the offer.
  • deweydewey Posts: 5,243
    Really?

    Where are these disgustingly low auctioned prices on MBs and BMWs and those golden high auctioned prices on Lexuses?
    Appreciate it if you can link me to that site or group of sites. I myself would love to buy such a deal. Such low prices would make it worth importing a used BMW from USA to Canada even with the customs issues involved.
  • brightness04brightness04 Posts: 3,151
    There is no golden high auction prices for Lexuses. They are just inline with what Lexus predicts in their lease offers (and the offers from third-party banks). The problem with MB and BMW is that their residuals are way above auction value. You can find out the numbers first-hand by going to dealer auctions.

    If you do not have that opportunity, a proximation can be found by simply looking at the trade-in values on the cars on edmund's website, take for example:

    a 2003 745i's trade-in value is 36k, vs. new 750i MSRP of $72k, or 50% of MSRP in 3yrs. There was very little price change between 745i and 750i.

    a 2003 LS430's trade-in value is 33k, vs. new LS430 MSRP of $52k, or 63% of MSRP in 3rs.

    The current lease residual on 750i offered by BMW is 60% of MSRP, clearly not born out by the numbers from Edmunds; whereas what Lexus is offering on LS lease is 57%. Remember, the per centage of MSRP in a lease applies to the entire vehicle purchase including all options' MSRP . . . whereas in reality as we know the options don't add up to much in used sale value.
  • deweydewey Posts: 5,243
    Interesting how you used a 2003 7 series as a comparison to the 03 LS ;)

    We all know the notirety involved with a 03 7 series model with its new revolutionary idrive system and reliability issues.

    The two biggest US organizations that are in the business of determing retained and future resale values voted BMW overall as number one. Ofcourse if you compare one single model from one single year that happens to be the notorious 03 7 series then you will definitely succeed in proving otherwise.

    Also I dont know if you are aware of this but higher priced vehicles usually involve higher rates of depreciation . As you know the prices of a 03 LS resembles more closely the prices of a 03 BMW 545 series than a 7 series.

    If you honestly believe that this one example you provided proves that BMW/MBs sell for dirt cheap auction prices(which you apparently have no proof of) while Lexuses dont sell at dirt cheap auctioned prices (again no proof) then I will allow you to have that belief.
  • brightness04brightness04 Posts: 3,151
    The meat in your bun is turning out to be soy :-)

    03 7 series was used because it's three years ago and 7 series is the car that fits this HELM forum. First model year actually tends to have better value retention because there is usually less discount at the beginning of a model run. If you insist, we can look at the 04 7 series. Edmund's trade in is $43k . . . that's 60% after 2 yrs, compared to 50% after 3yrs for 03 745 . . . hmm, I'd stick with the 03 if I were trying to make your argument.

    03 540i has a trade-in value of $29k (rounded up), compared to new 550 MSRP of $57k (rounded down), or 51% of MSRP after 3yrs (even after the roundings adding nearly $1k, or 2-3%, to value retention). It's not even close to the 63% of 03 LS430.

    Like I said, your "meats" are fake, mere counter-factual prejudices.

    745i is one example. Now you have added 540i yourself voluntarily. You can run the numbers yourself on all the main line models from MB and BMW, and more or less getting the same result. Only 3 series before E90 had high value rentention . . . that and some the relatively exotic models like the M and AMG cars. In any case, once you run though the numbers, you'd realize just how inflated the residuals are on MB and BMW cars . . . and that many of your fellow Europhiles are no fools for leasing.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    If you honestly believe that this one example you provided proves that BMW/MBs sell for dirt cheap auctions prices(which you apparently have no proof of) while Lexuses dont sell at dirt low auctioned prices (again no proof) then I will allow you to have that belief.

    You are doing good here with this argument, dewey. Stay with it.

    Brightness04 keeps inferring that Lexus is worth its retail price, and that Mercedes and BMW MSRPs are inflated. Heck, a fully-equipped LS460L is not a price bargain by any means, especially considering the car. Lexus has abandoned low price structures, with exception for the basic LS460.

    And then there's all this lease residual vs. auction price baloney.

    TagMan
  • brightness04brightness04 Posts: 3,151
    Not just MSRP, but nominal "sale" price in leases . . . as the majority of BMW and MB are leased nowadays.

    Lease residual vs. auction price is certainly no baloney. The difference is the money that nobody ever paid to the manufacturer in the lease transaction. It's even more dishonest than mail-in rebates or giving a free luxury car for buying a condo, to keep the nominal sales up; at least in these latter cases, actual transfer of money from the buyer (or its banking agent) to the seller do take place.

    I do agree that LS460L may not be much of a price bargain. Incidentally, if you follow my logic, you'd notice that, even LS430 is not much of a bargain if one is willing to go the lease route on the MB and BMW's. i.e. MB and BMW actually cost a lot less than their MSRP (or avearage "sale" price for that matter) when subsidized leases are taken into account.
  • hpowdershpowders Posts: 4,269
    BMW's are always given the CR coveted red circle for depreciation, meaning "excellent."
    Every single BMW rated in the April 2006 CR was given the red circle except for new models which weren't rated.
    Very few cars hold their value as well as BMW's and this has been true all the way back to the lamented Bavaria and 2002 models of the 1970's.
    Admittedly, the residuals are a little inflated on the BMWFS leases, but not by much!
  • deweydewey Posts: 5,243
    Ingenious Brightness, ingenious!

    The data you point out from Edmunds is valid for the number of cars involved . The sampled examples in Edmunds is substantially smaller than the samples used by the two biggest organizations that are in the business of future resale values/retained values and CR itself. In otherwords Edmunds datais more prone to sampling errors. If I am going to rely on stats I am going to rely on the ones with a bigger samples.

    And which brings me back to my original point:

    Your view that BMW/MB values are selling at dirt low prices at auctions is bunk. You yourself cant prove it. Can you?.

    Your view that MB/BMW subsidized lease averages and manipulation and blah blah blah is bunk. And now excuse me I am going to have some serious steak Tartar with raw egg yolk( raw fish is far too over-rated in my opionion)
  • brightness04brightness04 Posts: 3,151
    1. BMW sells far more 3 series than 5 and 7 combined. 3 series before E90 had very good value rentention. The heavy discounting on E90 had not yet begun or had its effect by April 2006.

    2. CR also gives red circle to Lexus. In a sea of domestics, both brands are fine, especially if BMW numbers are dominated by pre-E90 3 series.

    I'd call 60% residual vs. 50% actual auction pretty big discrepancy. The monthly payment would have been nearly a 33% higher if the true 50% residual were used (assuming 10% reduction in nominal sale price from MSRP). On cars like E46 convertibles right now, with nearly 20% off MSRP negotiated capitalization cost possible, a 10% MSRP decrease in residual (from 60% to 50%) would increase payment by 50%. I'd say, that's a huge difference.
  • deweydewey Posts: 5,243
    And then there's all this lease residual vs. auction price baloney.

    Baloney. Meat? There you go again. ;)
  • brightness04brightness04 Posts: 3,151
    CR has data on the BMW brands not 7 series specificly. The last time CR did its survey, the BMW brand value retention was predominated by E46 3 series. That's a whole different ball game from the 7 series under discussion in this HELM board. . . it's even different from today's E90, which is witnessing price discounts that had been unheard of this early in a BMW 3 series model cycle.

    I have been to auctions, so I know what it's like first-hand. For obvious industry profit reasons, those numbers are not widely published. If you think your own preconceived notions are more valid than Edmunds' numbers, that's your problem. It's rather hard to believe that they would consistently get it wrong on all main line MB and BMW models. The reality is that, from what I have seen, they are rather generous in their numbers.

    Your view that MB/BMW subsidized lease averages and manipulation and blah blah blah is bunk.

    You can stuff your fingers in your ear and say blah blah all you want. The reality is that the market place is well aware this phenomenom, and explains why most of your fellow Europhiles are leasing nowadays.
  • brightness04brightness04 Posts: 3,151
    I randomly picked 03 745i because it's a 3yr old model and a model that fits the HELM forum. You augmented my argument by bringing up 04 745i and 03 540i, without running through the numbers yourself first. You will get the same result if you run the numbers on other models. Now, instead of discussing the substance, you prefer personal attacks.
  • deweydewey Posts: 5,243
    I have been to auctions, so I know what it's like first-hand. For obvious industry profit reasons, those numbers are not widely published.

    Huh huh so now you know the inside story on what numbers are published and what numbers are not published in the industry.

    Wow!

    Dont worry Brightness I am not going to ask you how you know that? You are not under prosecution at least not here in these forums. But I would just love to be the prosecutor in this one single case of yours :P

    You can stuff your fingers in your ear and say blah blah all you want. The reality is that the market place is well aware this phenomenom

    And ofcourse you yourself know that phenemona which is unpublished ;)
  • brightness04brightness04 Posts: 3,151
    This is getting ridiculous. If you don't believe Edmunds, check out KBB yourself. It's more or less the same. If you don't believe that either, bribe a used car dealer to bring you to auctions that require dealer license. Obviously, those auctions require dealer license because the insiders do not want average consumer to have access to them . . . the same reason why the results are not published (not to mention little profit could be generated from selling the data to dealers).

    All the personal attacks really do not add to your argument. If your argument is that Edmunds numbers are way off base, the onus is on you to prove it. I just used their numbers in here for the sake of simplicity, and they are close enough, from what I have seen.

    BTW, how did I get access to dealer auctions? I had a roommate when I was out of college and relatively poor, and her boyfriend runs a used car lot and a mechanics shop. They eventually moved in together and got married, but he still takes care of my out-of-warranty repairs and wear items like brakes etc.. Much of his profit is from buying and selling lease returns. He brought me and some of my family relatives to those auctions when we wanted cars.
  • hpowdershpowders Posts: 4,269
    "CR also gives red circle to Lexus."

    Not entirely true:

    If you look at CR April 2006, you will find a perfect 4 out of 4 BMW vehicles rated excellent for depreciation. Three weren't rated because they were either new models or not enough data were collected.

    For Lexus vehicles, 4 vehicles were rated excellent, 3 were rated very good (includes the LS) and one wasn't rated because it was a new model (IS).
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    I do agree that LS460L may not be much of a price bargain.

    That's good. We're closing the gap here.

    And the difference between that larger-than-expected fully-equipped LS460L price and an S-Class is the point here.

    You were saying that the S-Class price is inflated. I'll close the gap a bit with you myself by saying that I think Mercedes could benefit by lowering the price slightly, because I have posted that opinion in the past.

    But, for the most part, I believe that the S-Class delivers more than enough of a return for its price.

    TagMan
  • brightness04brightness04 Posts: 3,151
    What's the rating on the 7 series? and what are the criteria for "excellent" vs. "very good"?
  • brightness04brightness04 Posts: 3,151
    Value is inherently subjective (that's why we have a market of so many different cars :-) It would be rather boring if everyone has the exact same taste. That being said, I was pointing out how much the average buyers of S and LS are really paying for their cars. Presumably, the fact that they are shelling out the money means the car is worth that much to them. In that analysis, it's helpful to keep out all the fluff numbers that people were not actually paying.
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