Quote:
Originally Posted by psun786
Yes, BMW is losing money on those $800 lease deal with 60% residuals.
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I know its semantics but i think "losing money" is a bit overblown... it is more like BMW was not "making as much money" as they want to or think they can. I guess time will tell.
with this leasing change BMW raises profit per unit... and will sell less units... but will that actually net them more incremental profit? if it doesnt the lease cash or residuals will start to rise again.
In general i see them using the lease cash lever more than residual because at least they tie that margin hit to the sale date vs the residual impacts margins 3 years down the road