Residual Value Question - BMW Loaner

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1

Hi All,

My wife and I stopped in a BMW dealership this past weekend to test drive a '17 X3. On the way out, the lady that was helping us out wrote up some numbers on a loaner they had. The numbers weren’t great - not so surprising - but there was one thing that I wasn’t sure of. 2018 model aside, I had a general leasing question.

They didn’t have residual value posted on the sheet, instead, they had Lease-end Value and L.E.V. % listed. Is the L.E.V. % the same as the RV? Also, I know they hit the residual for vehicles with over 5000 miles, but outside of that, can they adjust residual? The deal they wrote up was a vehicle with 3000 miles but had the L.E.V. % listed as 59.81% when I believe that the RV was supposed to be 62% for the term we were looking at (36/15K).

Thanks in advance!

2

They can’t modify the actual RV. They can only penalzie the car for the X miles over.

3

So, based on that, I should assume L.E.V. % is not the same as RV. Can anyone explain the difference?

4

LEV is the same as adjusted RV (ie for demo units with miles on them).

5

They deduct $0.25 per mile less 500 miles on the set RV.

Hope this helps

6

This is true but if a Bmw loaner has over 5k miles the residual is dinged 4% on top of the mile deduction.
So a $50,000 demo with 5500 miles and a residual of 60% is calculated like this:
50,000 x .6 = $30,000
-4% x $50,000 = $2,000
-5000 (5500 - 500) miles x .25 per = $1250
Residual = $26,750 = 53.5% residual

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7

Thanks for the explanation, very clearly written. Calculated it as you explained and got the exact same numbers as the dealer now.