Shocked by declining values

[dsm2925]

One more thing...
just because you see them listed for sale in the $30k doesnt mean they are worth that much.......... Everyone is losing their job and theres no $ to buy cars-- that drives prices down

[youry]

A couple of days ago I decided to buy a second car (for my wife). To my surprise I found a few VW Passats - 2008 with less than 20k miles for under $18k, cars that sold just a year ago for $32-33k. X5 is no exception.

[schlitzie]

yep -- and they are not discounting new x5's or x6's. In fact, the x6, while nice, is ridiculous on the pricing, especially when coming off of the 4.8is -- to get comparable performance anything less seems like a big step down, (I drove the 3.5 x6 and it was just OK for me - I really like the V8 grunt) so I could only go with the 5.0 x6 - but big big $ with no incentives...

I may be forced to keep my X5 since I am so upside down, and I know I shouldn't be whining since it is no slouch and in killer shape. But damn! I lost allot in my 401K and now this!

[JohnD]

Yeah, I had the same problem a couple of months ago when I went to trade in my wifes 2004 325CI on a new X3 - they offered me 13K. I paid almost 28K for it from the same dealer less than 10 months ago

[nasdakboy]

We just picked up our 06' X5 4.4i christmas eve. Has cold weather package with heated steering wheel, rear load sliding floor, sport package, premium package, navigation, bluetooth, adjustable air ride suspension and panoramic sunroof. Got it CPO'ed for $23,900, financed at .9% and BMW paying first 2 months payments. Car has 36k miles on it. I was surprised they had gotten hit that hard but that's what drew us to pick one up. Overall I'm very happy with the deal we got. However if I was the guy who traded that thing in, I'd be pretty upset. That's a huge hit in 2 years. Build date August 06'. Just keep it bro. I like the X6 but not over a 4.8is!

[Icer006]

This is one reason (or the major reason) why one should buy cars and use them, drive them, use them... and not baby them or make them garage queens.

It just doesn't make sense to have garage queens, good economy or bad.

[TwinsPoppa]

Originally Posted by x54.4blue

If you plan on keeping a car for three years or less you be better of leasing.

That way you know what you will sell the car for (the residual/buyout value on the lease.

I'm not familiar with leasing ins and outs but I thought leasing is mostly for people who like to have newer rides and don't want to worry about ownership.

I thought the purpose was to only pay for the depreciated part of the car during the lease - hence cars that hold their value are the best for leasing. So, if it's a 50K car and it depreciated only 10K during the 3yr lease then that's basically what you pay.

My question is:

The residual/buyout at the end of lease is based on the current market value at the end of the lease or is that agreed upon ahead of time at the time of leasing the vehicle? I always thought it was the first instance.

Can somebody school me on this, please.

EDIT: Hhmm after more thought I guess it would have to be the second scenario. Otherwise you could not figure the lease payment which is based on the depreciation, right? So would the residual value then be based on retail value or wholesale value?

[X5rolls]

Cars and other major purchases - it's a buyers market. Don't sell unless you really have to and cash is king. Sounds like a bunch of clichés. However, they are still true.

[sprocket1200]

Cash is King. Well said.

For leasing, the residual value is determined solely by the manufacturer. There is no negotiation.
Now if you have tax reasons to pay a higher amount you can factor in some extra miles (whether you use them or not), increase your payment which will help decrease the residual (because of the extra miles) and then have a much lower buyout. Buy it, drive it into the ground.

Perfect way to have your taxes lower your vehicle costs...

[ZsX5o3]

23k is downright offensive. . It's not so much the value of the car, it's the fact that the dealer doesn't want the car. You absolutely have to go private sale on this.