I just happened to notice that BMWFS has seriously dropped the residual % for the 3 series, particularly on the 36 month leases. When I leased mine in 2/07 the 36 month residual for 15k was 61% and now in 5/08 it is 56% for the same car (335i sedan).

So is this just an effect of the economy i.e. they're betting on lower resale value due to weak consumer spending 3 years from now or is there some reason that the relative value of the 3 series is declining in general?

Theories? Thoughts?

Probably trying to reduce their risk. They can offset the decreased Residual by offering attractive MF to keep the monthlies pretty close.
Another way to look at it is that if they are leasing a larger # of cars than anticipated b4, then they expect more cars to be turned in and br put up for auction which could mean less $$ fetched per car.

Probably trying to reduce their risk. They can offset the decreased Residual by offering attractive MF to keep the monthlies pretty close.
Another way to look at it is that if they are leasing a larger # of cars than anticipated b4, then they expect more cars to be turned in and br put up for auction which could mean less $$ fetched per car.

PRoblem is the MF's are also higher. You make a good point that maybe the low MF and high residuals of 2007 are going to cause so many off-lease cars to be available ~2009/2010 that it might dilute the overall perceived value of the 3 series.

I just thought it was interesting and might generate interesting discussion. All I know is that my exact same car would have cost me $100+ more per month just one year later.

My friendly BMW salesman said they jacked up the lease money factor and reduced residuals because they were leasing more cars than they wanted to and didn't want a glut of off-lease cars in 2-3 years.

They did reduce the finance rates for purchases to 3.9% for whatever that's worth.

PRoblem is the MF's are also higher. You make a good point that maybe the low MF and high residuals of 2007 are going to cause so many off-lease cars to be available ~2009/2010 that it might dilute the overall perceived value of the 3 series.

I just thought it was interesting and might generate interesting discussion. All I know is that my exact same car would have cost me $100+ more per month just one year later.
It is the opposite here, my same car would have cost me 50+ less per month if I bought it now (i.e. 1 year later) and now it comes with a few standard extra options that I had to pay for or couldn't get (fog lights, heated mirrors). I believe due to the fact that prices here are much more than in the US, they wanted to give incentives to people without changing the MSRP, so they added a few standard options and lowered the MF (down to 2% APR from 4.9). I don't think they changed the residual.

No offense, but ugh. I definitely did not want this to be a lease vs buy thread.

I think this is turning into a lease vs buy thread. :eek:

I will try to resist the urge to post my two cents worth.

I think this is turning into a lease vs buy thread. :eek:

I will try to resist the urge to post my two cents worth.
Problem solved, that debate can continue there:
http://forums.bimmerforums.com/forum/showthread.php?t=987540

I just happened to notice that BMWFS has seriously dropped the residual % for the 3 series, particularly on the 36 month leases. When I leased mine in 2/07 the 36 month residual for 15k was 61% and now in 5/08 it is 56% for the same car (335i sedan).

So is this just an effect of the economy i.e. they're betting on lower resale value due to weak consumer spending 3 years from now or is there some reason that the relative value of the 3 series is declining in general?

Theories? Thoughts?

Could be lots of reasons. They can tweak the number of cars they move and the margin they earn by change lease and finance terms. Could be the summer selling season, inventory issues, foreign currency issues, supplier issues...

It's near the end of the 2008 model year, that is common practice.