# How residual work on "Demo" bmw

Can someone please explain, If a car has miles how does that effect Residual.

I looking at a demo BMW 328i, with around 7k miles, Residual comes to 62 % not 65%,

Kind of newbie here ,

thanks

It lowers the residual value, therefore increasing the cost to lease. With BMW, the residual is lowered by \$0.25 for every mile over 500 miles.

Jmac is correct, so in your case ~7000-500=6500 miles x .25 = \$1,625, so you take the normal residual say 66% multiply by the msrp and then subtract \$1,625 to get the residual in dollars.

So is the strategy to get the dealer to take more off the MSRP than the residual reduction or have them meet it? So they should take an additional \$1,625 off the sales price of the car?

You are likely to never get the ~1600 dollars back, the dealers selling the demos are most likely not going to eat that extra money just because its now November instead of October. Each dealer accounts for value loss of demos differently, but the lease programs have no bearing on their cost of for the car, only yours. Whatever they were willing to discount the car in October is probably the same now. Loaners don’t qualify for incentives, so even if there were improvements in the incentives loaners don’t get the additional money anyways. But yes to answer your question the only way to get the 3% loss in residual value is through further discount on sales price. Good luck