BMW is in trouble.
 
They took out an ad in the Wall Street Journal to announce it.
 
They didn’t exactly put it in those words, but the net effect is the same.
 
BMW will pay you to buy one of their used cars.
 
They will give you half-price financing and two months free, if you will please, please take a used BMW off their hands.
 
Not a good sign. 
 
The Ponzi scheme is coming home to roost.
 
Ponzi, for those that are unfamiliar with the concept, sold investments that promised a high return, and paid that return from those who invested. Such schemes are, of course, doomed by their own success.
 
So, too, with BMW.
 
Using the high resale value of the brand, they’ve flooded the market with new cars leased at low prices based on the expectation that the resale value will be historically high.
 
So, now, they have to support that resale value to keep the scam going.
 
Don’t bet on it. BMWs are fiendishly complicated vehicles with exceptionally high maintenance costs.
 
That BMW is offering a sale on their used cars tells you all you need to know.
 
People won’t pay the price BMW needs on a used BMW. The company can’t support the price forever, because what it’s been doing is, in effect, a Ponzi scheme.
 
But, if you’re interested in a Bimmer, for whatever reason.
 
Lease.
 
Don’t buy.

What do you think?
Show Comments

3 comments:

SpikeX5  (60) posted on 12.1.2007

I agree, times like these don’t came every year

pdaix  (431) posted on 11.29.2007

Folks, better hurry to the dealership while the lease price are low. Especially as the Euro currency keeps on going up. 2008 BMW lease might be a lot more expensive. And yes you have to wait until then to get a new M3 smiley

tango  (372) posted on 11.29.2007

...but not for longer than 2 years folks. Beyond that a lease will make less sense than buying.

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