Advice Needed: 04 530i or 06 530i

Great Forum. I have been reading the boards for awhile now. I have determined that I am going to buy an E60 BMW. I think it is the best blend of sport and luxury in the auto world. Okay, here is the first deal: I can pick up a used CPO 2004 530i from a BMW Dealer, 24,000 miles, automatic, sport package, premium package, navigation for $44,000, including California tax of 7.97%. So, selling price is $40,500 with $44,000 being the out the door price. I REALIZE that a car is a depreciating asset and that the enjoyment is what you are paying for, but I also think it is prudent to always consider the financial side of ANY purchase.

Now, for the second deal: I can buy a new 2006 530i, automatic, sport package, premium package, navigation for $56,000 out the door, this includes the California tax of 7.97%, license, and doc fees. So, the selling price is $51,500 with $56,000 being the out the door price.

As you can see, their is a $12,000 difference between the two vehicles. I know the smartest financial decision is to get the used car, since the depreciation has taken its greatest hit, right?? But, driving a New car is also quite an experience and the 2006 has the bigger engine.

Now, I plan on keeping this BMW for three to four years. I understand the next generation BMW should be out in model year 2008 or 2009. So, I would be selling either car in three or four years. ( I know some good folks might suggest leasing, but leasing is NOT an option for me. I do not feel comfortable with a lease.) At that time, I would either buy another two year old E60 with the N52 engine, or the New successor to the current N52 engine E60.

So, given that I am buying either the 2004 530i or the 2006 530i, I guess the question I am asking is this: In three to four years when it comes time to sell either E60 to purchase the successor to the current E60, or another two year old BMW with the current new engine, what do you think will be the real dollar difference between the 2004 and 2006? In other words, will that $12,000 gap grow bigger or close, or heck, I am starting to ramble... I hope this makes sense to some of you nice folks. I am just trying to make the best decision possible. Any advice or opinions are greatly appreciated. Thank you.

Reply » Advice Needed: 04 530i or 06 530i

One other option I would consider if I were you is buying a new 530 through the european delivery program. Yes, it'll take longer to get the car, but you'll be able to get the selling price down even further and will save money even taking into account the trip to europe. Do a search on this forum if you want more details.

Convetional wisdom is that its always better to buy used from a depreciation perspective. But, i'm not so sure that applies when buying a BMW CPO car from a dealer; the price you pay can end up pretty high compared to what a "regular" used BMW is going for. And, as soon as you drive off the lot, your car will essentially be worth what any regular used BMW is going for; so right there you've potentially lost some money. Yes, there is the CPO warranty to consider; I think that's worth about $1k. I've run some calculations before, and it seems that, in general, you may actually be better off depreciation wise buying a new BMW through european delivery than buying a 1 or 2 year old CPO BMW. Why? Because if you negotiate a good deal (say 1k over european deliveyr invoice), you're actually buying the car for under US invoice. When people say "your car depreciates the moment it drives off the lot", its the dealer markup that you're really losing. So, with an ED car that gets minimized. After that inital hit, I've found that BMWs depreciate at a pretty linear rate over the first 5 years; so you'll probably lose the same amount each year after factoring out the loss of the initial dealer profit.

If you have to do regular US delivery you'll probably be better off with the used one; but again, with CPO you have to be careful. Try to find out what the "wholesale" cost is of similar used models; that'll tell you what your "drive off" hit is. Comapre that to the dealer profit on the new one and that'll tell you which one you'll likely lose less money on over 3-5 years.

Sorry if I'm rambling; hope this all makes sense.

Reply » Advice Needed: 04 530i or 06 530i

From the standpoint of reliability, get the 2006.

Reply » Advice Needed: 04 530i or 06 530i

Everyone forgot about the higher hp more fuel effeceint engines in the 2006.
The 2006 525 is just 10 hp less than the 2004-2005 530! And the 2006 530 packs a LOT of horses.

And honestly, I would never by a 2 year car with just 20-25% depreciation (the $12K you are reporting). You will most likely be better off financially with the 2006 after you account for the longer warranty period and the included free maintenance for 4yrs/50K vs the 2004. The only way buying a late model used makes sense is if you can get at least 15% off per year (2 years = 70%, 3 years = 55%) off the MSRP. Otherwise the additional maintenance and repair costs will easily compensate for the slightly less depreciation.

If you want to save cash, do ED. And 24 mont ED leases are great with the current program.

Reply » Advice Needed: 04 530i or 06 530i

Your statement about only keeping the car 3-4 years would make me take a hard look at leasing. the programs are very attractive right now. You may want to consider that option if you want a new car in a few years

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