Why Are Used BMWs So Affordable? - BMWCoop

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Are you looking for a new car in the market? If so, you can save a little money by purchasing a car at an affordable rate. Getting a new car is a crucial financial decision, so when you’re planning for a luxurious car, BMW may come first on the list.

However, BMWs are quite expensive and may be out of your budget. Whereas, used BMWs come at a cheaper price and are widely available. But many people might wonder why are used BMWs so affordable?

Here are the reasons behind used BMWs being so cheap and what you need to consider while buying one. Let’s get into details.

Contents hide Maintenance and Repairing Cost Lease Returns of used BMWs Huge incentives on new cars Residual value Model availability Expensive to own SHARE THE ARTICLE About Post Author Marcus M.

Maintenance and Repairing Cost

BMW is known for its high maintenance and repair. Its maintenance includes tire rotations, engine oil, oil filter, break pads, replacing the damaged parts, etc. Whereas, if any part fails to work properly or breaks unexpectedly, it needs repair.

Now, new BMWs have various latest features, advanced sensors and comforts that provide a smoother driving experience. So, while you are purchasing a used one, it might be mildly expensive to maintain. In fact, sometimes the repair cost can be more than the car’s original value. When that’s the case, you can opt for selling the car and getting cash for your BMW in whichever condition it’s in. There’re many buyers who will buy the used BMW at a cheaper rate.

Lease Returns of used BMWs

One of the main reasons BMWs are so affordable is the easy lease returns. The price of cars typically drop when the supply is huge but no demand in the market. If you book a new BMW, you can check that they offer a good lease deal on all models. But do you know what happens after these cars are leased and returned at the end of the term?

BMW lease returns are generally sent for auctions or sold as certified pre-owned (CPO) cars to the car dealerships. Once their dealer lots are full of CPO cars, the prices of the cars fall quickly at the dealership level as well as for private sellers too. When you’re selling the car as a car dealer, you need to price it according to the present market rate to earn a profit.

Huge incentives on new cars

Another reason used BMWs are so cheap is due to some hard competitions from the new car sales. It’s because BMW sellers receive huge incentives from the manufacturer. Therefore, BMW lease deals are that good so buyers can choose a new car instead of a used car. In short, rather than spending $600 each month on a four-year-old BMW, it is easier to invest $399 each month for a brand new BMW on lease.

So, while the incentives make new car purchasing more tempting, it results in a decrease in the rate for used cars to attract buyers.

Residual value

Knowing the residual value of an old used car can be helpful while planning to buy a car. The residual value is simply the percentage of the manufacturer’s real value that a car holds after ownership.

If the residual value of a specific model of used BMW is lower than another used BMW, it hints that there are problems that have affected the specific model. Additionally, the residual value also depends on the demand for a specific car, providing insights into how quickly you can sell it later.

On average, BMW’s residual value is 24% after 10 years which is far lower than the 28% to 35% residual value of other branded cars. Used BMWs are cheap because their life spans are short and have more issues than other cars leading to higher maintenance costs. So, since the depreciation is such low for used BMWs, it becomes affordable for car enthusiasts who can’t afford brand new models.

Model availability

When you wish to buy a used BMW, it gives you the benefit of the model year availability. When the older models are classified as outdated, their model years become widely available and the new model years are declared.

However, older BMW models are still luxurious and include the required features. For example, if you buy an old 2015 BMW 328, you’ll still get an LCD touchscreen, surround sound system, satellite radio, voice-activated radio and many more. So, being able to choose an older model year not only saves you money but also gives you access to the latest features.

Expensive to own

The final reason that a used BMW offers a low cost is that they are quite expensive to own. When it comes to maintaining a BMW, the cost can be around a hundred or even thousands of dollars sometimes. Consequently, it drives away the car shoppers from getting a new vehicle, so the selling price gets lower.

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Marcus M.

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