BMW could help save driving by changing its lease programs

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It’s been almost exactly 18 years since I took delivery of what some people think was the finest non-M-branded BMW sedan ever built. My first wife and I had just accidentally sold her 14-month-old, stick-shift, basic-black Golf GLS 1.8t hatchback to a coworker of mine who had come to the house one Saturday morning for the purpose of buying my Yamaha YZF600R and said, on a whim, “You know what… How much for the bike and the VW?” Knowing our marriage would not survive a single week of carpooling to work, we’d started looking for a replacement ride 20 minutes after shuttling both motorcycle and Golf to the home of their new owner.

As fate would have it, the BMW dealership near that fellow’s home had something that immediately caught our eye: a new 2001 330i sedan, Steel Grey, with the Sport package and a five-speed manual. Black leather. Not too many options. About 41 grand. It just looked plain wicked, and the dealership was more than willing to discount it a bit.

Buying it would have cost $750 a month or thereabouts. BMW offered us a $530/month lease. Three years, 45,000 miles, no money down. Sold. I’d worked briefly for BMW Financial Services during college, so I trusted the company. And with good reason. The deal was exactly as they’d portrayed it, and the lease return three years later was completely free of both drama and unexpected charges. BMW is very, very good at leasing cars.

2004 BMW 325Ci Coupe
2004 BMW 325Ci Coupe

Which is good, because the majority of Bimmers leaving showrooms nowadays are leased, not bought. The company maintains a remarkable degree of transparency about the process; you can spend hours configuring various cars on the website and finding out exactly what it would cost to lease each one of those configurations. Yet if you were to do just that, you would discover that BMW Financial Services, like every other leasing company which provides so-called “closed-end” leases in which the bank, not the driver, guarantees the final value, has some extremely specific ideas about which cars it would like to lease and which ones it would prefer not to lease.

(A brief aside, and one that I will follow-up in a column to come: “Open-end” leasing, where the person leasing the car is responsible for the car’s final value, is now either illegal or strongly discouraged in most states. There’s a reason for that, and plenty of Wild West stories to tell, so watch this space.)

While there are exceptions to the rule, it’s safe to say that BMWFS likes:

  • Smaller engines
  • Modest equipment
  • Volume models (like the 3-Series and X3)
  • Crossover and sedan body styles

2018 BMW M4 Coupe
2018 BMW M4 Coupe

The company has a particular distaste for leasing the M-cars. An M4 doesn’t cost twice as much as a 430i, but it will cost you twice as much to lease, if not more. And that’s better than the situation was just a few short years ago, when you could get a 325i for $309/month but an M3 would run you a grand.

Since so many Bimmers are leased, and since so many of them are leased through BMW Financial, the dealers have gotten in the habit of stocking lease-friendly vehicles to the exclusion of almost everything else. The BMW store next to my father’s place in South Carolina appears to stock nothing but bright-white X5 SUVs, which makes sense because they are easy to lease and therefore everybody in my father’s neighborhood drives a bright-white X5, including my father. Or is it the other way ’round?

When I returned my Stahlgrau 330i Sport to the dealer in May 2004, they didn’t send it back to BMWFS for the auction. They sold it almost immediately to a fellow who had asked for “the first 330i Sport with a stick to come in.” He was one smart dude, because even today those cars are worth serious money. Only the relatively-rare 330i Performance Package sedans are more sought-after, largely because they have a six-speed manual. I just saw a 16-year-old example with more stories than the Decameron go for eight grand.

2018 BMW 4 Series coupe
2018 BMW 4 Series coupe

If you’re the modern equivalent of my 330i’s second owner, waiting for stick-shift Sport-package cars to come in off-lease at your local dealer, chances are you’re going to wait a long time. Yet those Bimmers tend to be worth more in the long run than the automatic-transmission, leatherette-interior, low-power models that seem to dominate the list of “Lease And Finance Offers” on the BMW website. This is because the first owner of an import or exotic car rarely has the same priorities as the second owner of that car.

First owners want automatic transmissions, low lease payments, ephemeral convenience features, big nav screens. Second owners want a stick shift and a Sport package. (Fourth owners want rust-free subframes.) Yet just as with my dad’s Island of Bright-White X5s down in South Carolina, it’s hard to tell whether or not those first-owner preferences drive the lease deals or whether they are, in fact, driven by the lease deals.

With all that in mind, I have an idea for BMW—and for BMW Financial Services. I want them to take the sweetheart lease deals that they offer for base-model X3s and leatherette 3-Series sedans—and apply them to stick-shift 2-Series coupes, M3s, M4s, 8-Series bruisers, and all the other cars that long-time BMW aficionados truly adore. I want every “up” who walks into a BMW dealership this summer to be immediately presented with a $299/month deal on a 230i stick-shift coupe, and I want the dealers to push those cars like they push the X3 right now.

2019 BMW X2
2019 BMW X2

Naturally, those dealers will also have to stock the vehicles in question, at the kind of inventory levels they currently reserve for the X-SUVs. I want a rainbow of affordable coupes out front, each with a clutch pedal and a spoiler on the decklid, just like it’s 1991 all over again and the dealers are shilling hard for the 16-valve 318is two-door sedan. I want the lease auction returns absolutely flooded with the best and most enthusiastic of BMW’s current small-car lineup.

Will it hurt new-car sales? Not that much. The people who really want a silver automatic X3 for the morning commute will still make that choice even if there are other options available. I’m just trying to sway the undecided voters out there, the young couples and single professionals who don’t know exactly what they want. Let’s put them in great Bimmers rather than merely good ones.

The real payoff will be when all of these great enthusiast vehicles are sold to their second owners. Those people will become BMW loyalists rather than mere low-cost purchasers. They’ll join the BMWCCA, they’ll start autocrossing, they’ll spread the word, the same way the owner base of the original 2002 evangelised their cars. As their financial fortunes improve, they will step up to the M4, the X7, the Rolls-Royce Ghost.

2018 BMW 2 Series Coupe
2018 BMW 2 Series Coupe

Meanwhile, those cars will continue to trickle through the market, reaching young buyers and low-income buyers, who will in turn become enthusiasts, and so on, and so forth, all the way down to the inevitable flood of them in affordable endurance racing about 15 years after the first lease return.

I realize this is a ridiculous idea—but why is it ridiculous? When did it become written in stone that everybody had to buy a crossover at the age of 25? Why do we automatically assume that most people will buy the most tepid and somnolent version of a vehicle?

Here at Hagerty, we want to “save driving.” It’s an admirable goal, one to which I have personally set my shoulder. In my few months with the company, I’ve already seen that it’s easy to get young people excited about vintage Mustangs and fabulous supercars and throbbing Hellcat Redeyes—but if we want to make driving enthusiasm a daily habit for the next generation, we need to put them in a position to buy enthusiast-friendly vehicles at prices they can handle. That means used cars, it means ex-lease cars, it means entry-level stuff.

I love the Corvette ZR1 as much as the next 47-year-old man with an FIA International race license, but the ZR1 can’t save driving all by itself. It needs the 230i, the Sonic RS, the Civic Si, and all those other great first-driver cars. I’ve been told it takes a village to raise a child. I’ll tell you this: it takes a lot full of half-price enthusiast-friendly rides to raise enthusiasts. You hear me, BMWFS? Get the little coupes back out there. Let’s save driving. Hell, you might even make a buck doing it!

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