How Much Should I Pay: 2008 BMW 5 Series
Question From Mike: How much should I pay for a 2008 BMW 5 series sedan?
CarFinanceGuru: Hi Mike. With the economy being the way it is right now there are deals to be had in the luxury car space. However, allow me to add some advice here. Less than a month ago “Bayerische Motoren Werke AG aka BMW, the world’s largest maker of luxury cars, booked a 236 million- euro ($370 million) charge after the weaker U.S. economy hurt the resale value of new autos it sells under lease agreements. “
http://www.bloomberg.com/apps/news?pid=20601100&sid=ahNEACGtfTLE&refer=germany
What this means is that the cars coming off of lease were valued too highly at the beginning of the lease. Due to the stinky economy the residual value on these off lease vehicles have been plummeting. Here is what we are talking about: Last week in the wholesale market we saw first hand the price decreases… 2005 545I with 20k miles sold for $26,500. 2006 BMW 5 Series with 13k miles sold for $27,500.
Right now the average price for a above average condition 2006 BMW 5 Series is $28k with 16k miles. You would be saving roughly $15k-$18k dollars by going to a 2 year old BMW with very low mileage. We’re talking about a formerly new $48k-$55k sticker luxury car selling for 35%-40% off. This is where the value is at if you are looking at a luxury vehicle right now.
Mike, if you want to stick to a new BMW 5 Series we won’t stop you but seriously think about it. When the next version of the 5 series comes out which will be for 2010, your 2008 5 series will drop in value like a rock. The slightly older 2005 or 2006 5 Series will drop MUCH less from a percentage standpoint. If you then decide to upgrade to the 2010 5 Series your financial hit will be far less… I won’t bug you about buying a pre-owned 5 Series because the 2010 will be the newest body style.
Here’s the 2008 BMW 5 Series Crash Test & Rollover Ratings. In case you’d like a new BMW anyways, which style are you interested in? 528i, 535i or 550i?
