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Discussion Starter #1
I'm shopping for a new car and was about to go to a dealer to buy a mini & I noticed that the new 05 pricing has jumped massively on the website..

The MSRP hasn't changed much but look at leasing terms..
It appears that the MINI's don't hold depreciation as well as was thought because residual values for leases set by the company seem to have plummeted.

04 Mini Cooper S with:
Sport Package 1700
Chrome exterior 220
Harmon Hifi 795
CD Changer 695
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Total 33480 MSRP + PDI
Lease Terms 36 month - QC
Rate 7.45%
Residual $22,776

Monthly payment est. $472 / month + tax.


05 Mini Cooper S with:
Sport Package 1800
Chrome exterior 220
Harmon Hifi 795
CD Changer 695
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Total 34010 MSRP + PDI
Lease Terms 36 month - QC
Rate 7.45%
Residual $18,066

Monthly payment est. $604 / month + tax.



That's a price difference of over $130 per month!!!!
Residual fell by Over $4700 Dollars!?

While the lease rate stayed plastered at 7.5, one of the worst available..

I checked this pricing info less than 3 weeks ago, now I think they'll have to pay ME to lease a MINI, they must be crazy..

Similarly equipped Convertible S?
$821 Dollars A MONTH!! with residual only up 2800 dollars to $20,870
cost of this mini after 3 years with buyback? get ready...
$50,246 DOLLARS

I'll get a hell of a lot more car somewhere else for those kind of greenbacks, that doesn't include 1300 dollars in PDI - if they dropped residuals to those levels the lease rates should have tumbled down to 1.9%. Pound for pound (I'm shopping for cars) the '05 Mini is BY FAR the wost lease value I've seen & represents a 28% price Increase to lease over an '04 in under one week! :confused:

Please check my Math or my head because if this is right they can expect sales to fall out from under them, including mine.
 

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You aren't comparing total costs. The biggest change in the monthly rate you quoted is the residual. 4700 / 36 = $130.50 You need to compare total costs.

Your first lease costs 39,768 Your second lease cost 39,810 $42 bucks Oooh Aaah Thank God they don't make firecrackers that explode like that.

This hardly represents a price explosion, and if you shop for cars by the residuals quoted on offered leases your asking for a real bad experience in 36 months.

I can't believe you would shop for a car based on quoted residuals. Man you are asking to be duped.

Go get a sunfire
 

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Discussion Starter #3
I must be real dumb then because I'm not quite sure I follow?

In a lease you opt for paying payments on the portion of the vehicle you are using during the lease, as opposed to paying payments on the full value of the car..
If the residual drops by 4700 dollars that means that you are now paying that 4700 dollar cost in the 36 months of the lease, where as previously that 4700 was being absorbed by the leasing company who owns the vehicle after the lease term (MINI).

The MSRP stays about the same, the lease rate stays the same, the lease term stays the same but the payment goes from 472 before tax to 604. I would have thought that paying 130 dollars a month more qualifies as being duped.

Cost over the term of the lease?
36x 472 = 16992
36x 604 = 21744
total cost to lease an 05 Mini went up by 4752 in payments before taxes, or with $5464.(/36 = 151 dollars per month over the term of the lease)

Thanks for advice on car choices btw, I drive an SLK. By your logic the lease rate is irrelevant, as is the residual.

Monthly depreciation on an 05 is 442 dollars per month
Monthly depreciation on an 04 is 297 dollars per month
Monthly finance charges on an 04 is 174
Monthly finance charges on an 05 is 161

add the depreciation & finance cost for the payment
04 = 471
05 = 603
Seems fairly straighforward to me

"I can't believe you would shop for a car based on quoted residuals. Man you are asking to be duped."

I can't believe you wouldn't be - in conjunction with the rate, the depreciation values make up the payment - in a closed lease which they all are in Canada it makes no difference whatsoever 36 months later, only that I was duped into paying hundreds of dollars more by signing a crap lease such as the one offered this week on 05 Minis. I can walk across the street and with a better depreciation value & better rate for example drive home in a crossfire for the same monthly payment while that car MSRP's at 49,000. Such is the entire purpose of leasing. Any you slice it, the leasing cost went up by 29% at the current MINI offering.
 

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Caveat Emptor

"I can't believe you would shop for a car based on quoted residuals."

It sounds to me like he is shopping for a car with the best monthly payment and he is shocked at the difference between '04 and '05 and can't understand why...

I am shocked too - if you bought both cars today, why wouldn't the residual on an '05 be HIGHER than an '04? Think about it- in Aug 2007 an '05 model will be worth more than an '04..

Clearly the answer to "why?" is "Because they can."

MINIs are great cars and I love mine, but when it comes to discussing price around here it seems like a touchy subject for a lot of folks (as displayed by that snide "Go get a Sunfire" remark).
 

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Indeed I was snide, and perhaps without justification.

If it is a true closed end lease and there is no residual / market value risk the drop in residual basically is transfer of risk, although the prices are virtually unchanged.

I checked the Mini.ca websight but they don't have their lease contract on it. I would call Mini Financial and ask what the difference if any there is in the conrtracts and end of lease risk. ( There were closed when I checked this.) If the 2004 and 2005 contracts are the same, it is a transfer of risk that has taken place rather than a price change. On the 2004 contract MINI is carrying more risk if you can truly walk away with a market value below the residual. But be warned lots af closed end leases are anything but. Without seeing the Minin contract I can't comment on theirs.
 

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Discussion Starter #6
Valdiri you are correct, I was indeed shocked, and am indeed shopping by monthly payment. I was going to get an 04 but had staved that due to the minor but plentiful changes in the 05 models. You can certainly imagine my shagrin to find out that privilege will cost me an additional 150 dollars per month for a small gain :( .

Rhogg there's no problem, I posted this info because as consumers we should share information and I was pretty surprised by this change, that's the real strength of an active user group like this one you guys use. I think you can imagine I'm rather upset.. Instead of enjoying a short wait for a MINI cooper S, I'm now going to have keep shopping after I had made my decision.

I'm frustrated as heck. My lease budget is firm, my research detailed and I want to get the best value / performance & car for my fixed lease payment per month. This info substantially screwed up my spreadsheet, I was ready to plunk down on the Cooper S, now the Mazda MX5 Speed is topping my list. The MSRP is the same, the Residual is higher, and the APR is 1.9 - 200 dollars lower per month, trying to look at the bright side there may be a bonus sunfire in there after all!

Maybe this is just a transition and the terms will improve for leasing, I certainly hope so. I'm definitely going to check the US side of the figures as well to see if they mirror the Canadian changes somewhat.
 

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"If the 2004 and 2005 contracts are the same, it is a transfer of risk that has taken place rather than a price change."

I suspect they are exactly the same (http://www.mini.ca/en/More_MINI/MINI_Financial_Services/Leasing_MINI/Standard_Leasing/default.aspx) - from what I can see, BMW Financial is very straightforward and professional with their leases - no sneaky charges, no traps or nasty end of lease suprises. They respect their customers.

So the 'transfer of risk' means that they don't think the cars will hold their value come 2007 (when I believe a new version of the car will be made available http://www.motoringfile.com/2004/08/17/more_details_emerge_on_the_next_mini ).

Now that I think about it a bit more, we might also consider that since it is August now and the 2005s are arriving at dealers, there may be factory discounts available for the 2004s that are remaining (remember you can't order a 2004, you have to take what is left over and there might not be any S with Sport Pkg and H/K - although you could buy the dealer installed "Sound Modul" for $1000+). One way to lower the monthly price on the 2004s is to increase the residual offered.. (oops, I mean alter the "transfer of risk" ;-) )

Ask your dealer about discounts on 2004s - and if they say there are none, call a Montreal Dealer like Laval or Mont Royal to confirm (Montreal is a *competitive* market for MINIs - there is less BS there , IMO)
 

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Discussion Starter #8
I have looked into a possible 04 Mini, availability is naturally tight but there are vehicles about. As far as discounts there's not much leeway from the discussions I've had though I've only looked at one dealarship so far in the montreal area. I tend to agree with your view, as when I dealt with mercedes on my previous vehicle they also maintained there were absolutely no reductions on the model from MSRP - I wasn't convinced then and I'm certainly not now. That dealer reduced and put in a 6 cd changer to boot as well as waived security deposist in the end.

What's more important is whether the lease terms changed for 05 retroactive to available 04 models - if they do then residual values on 04 MINIs wll also be drastically reduced. I've yet to get a definitive answer on that subject.
 

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Well all I can say is you got my attention with this thread. Seeing as I'm looking into leasing an 05 in the future when I can afford to get rid of my current car. Well I did some checking on the mini.ca site and low and behold the residual value doesn't change when options were added. At least not with anything substantial. My sugestion to you is to go to a dealership and get hard figures from someone, then go to another dealership and get hard figures from them. The mini.ca site is probably just a close suggestion to what the base model will be worth in the future, not with options. This is a problem with these so called litte black books, most of the time they don't list all avalible options that could be added to a cars value, so they are discared as being worthless (I work at a chev dealership). Now I'm sure at MINI they have a computer program that allows them to calculate every option on one of their cars for residual, and would probably give you a better idea as to what the value would truly be. Don't get so dicuraged so easly with things on the internet, use them as a guide not as hard fact till you actualy speak with someone.

On a humorus note, if you indeed want a Sunfire I'm sure I could hook you up! LOL :D

Ken
 
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