[Throttlesteer14]

I recently bought a used M240i for a DD. I originally looked at M2s since I thought it would only be fair to compare the straight M car vs. the performance trim and see what fit the bill. The M2 was a blast to drive, but I decided to go with the M240i for the following reasons: I wanted better gas mileage than my current daily driver, I wanted something less stiff and rigid for driving around town or taking on a long trip, and I wanted something a little less conspicuous. Along the way, one of the selling points folks tried to push was that M2s hold their value so much better than the M235i/M240i.

Just for fun, I took the model years 2017 and 2018 of both cars and looked at their original MSRP and current average selling price with like miles. I took into account the M2 being well-equipped out-of-the-gate and added the popular packages to the M240i to track things fairly. After researching several popular used car sites, I compiled the data from 30+ of each model (keeping the options/build as close as possible) to see if the original assumption was true. Considering the original MSRP and current selling price of each (with similar mileage on the odometer), there is roughly no difference in their average percentage of depreciation. Sure, the M2 is still more expensive. But, there is less than a 5% difference in total depreciation as a function of their original MSRP.

My goal isn't to make a case for one car or another I just thought it was interesting that this myth persists and there isn't much to back it up. On a side note, if I didn't already have a weekend/fun car, I would buy an M2 in a heartbeat. Holy crap that car is a monster! But, I'm really glad I bought the M240i for it's intended purpose. It's also a hell of a car.

[MasterFloody]

The depreciation is wild on these. My 2016 WRX kept an insane value and is half the car my M240i is. My ultimate guess is people are afraid of BMW repair costs? I got my 2018 M240i for $39k with 4.5k miles and it has pretty much every option.. XDrive, M exhaust, front splitter, HK system, parking assist, LED headlights, etc (just doesn't have the carplay crap lol).
I got a build sheet from BMW and the original sticker was $59.6k. I got a $60k vehicle for under $40k. THAT IS INSANE. At this point, I don't car how much it depreciates!!! This much car for that price is amazing. And to think, I was about to pre-order a new STi and pay more... to get less. I do miss the 4-door, but waaaah. M240i is an under valued beast.

I will say though, if I knew then what I know now, I would have skipped the M240i and got an M4. Not the case and I don't regret my decision, but damn!

[aozer]

m235i are insanely cheap now, the 2 series just doesnt hold its value. i just traded in my 2014 and got less than 20k. i think the kbb value for a 2014 is around 18.5k.

[BimBimM2]

Originally Posted by MasterFloody

The depreciation is wild on these. My 2016 WRX kept an insane value and is half the car my M240i is. My ultimate guess is people are afraid of BMW repair costs? I got my 2018 M240i for $39k with 4.5k miles and it has pretty much every option.. XDrive, M exhaust, front splitter, HK system, parking assist, LED headlights, etc (just doesn't have the carplay crap lol).
I got a build sheet from BMW and the original sticker was $59.6k. I got a $60k vehicle for under $40k. THAT IS INSANE. At this point, I don't car how much it depreciates!!! This much car for that price is amazing. And to think, I was about to pre-order a new STi and pay more... to get less. I do miss the 4-door, but waaaah. M240i is an under valued beast.

I will say though, if I knew then what I know now, I would have skipped the M240i and got an M4. Not the case and I don't regret my decision, but damn!

Seems like you and I got similar deals for 2018 M240i. Mine was a brand new convertible and had every option AWD and all that fully loaded jazz. Red coral Dakota. All for $42k.

However in the beginning I thought the exact same as you did about "damn! I could have gotten a brand new M4 convertible (if I had waited till the end of the model year)" Sure, more money, but these things were going off on massive discounts toward the end of the year... and it would be an M4!!

However the AWD is a deal maker for me since I live in MN... and now looking back, I would make the same decision again. The price/performance ratio is phenomenal as well as the reliability and modding potential of the B58 platform.

I just don't know why they depreciate as badly as they do. It is the best BMW currently offers purely because of its simplicity, performance and accessibility.

[chattanooga240]

Who tried to convince you that any performance BMW doesn't drop in value like an asteroid?

The M2 is not some mythical unicorn that is somehow immune to depreciation.

[USA-RET]

I love the M cars. When I take my M240i in for routine service I often joke with the service manager that I should trade for an M Car. He say's (quite seriously too), that I should stick with what I have, stating that he see's way more "M" cars coming in with issues and virtually no M240i's. He went on saying "with the Dinan Tune and Intake you have virtually the same performance as an M car without the expense".

Not saying I wouldn't like a M2 or an M3/M4 just for the appearance and prestige, but getting that kind of advice from someone that makes his money by servicing cars, you'd think he'd be pushing owners the other way.

Quite happy with mine, but I still play with the BMW configuator building M3's and M4's for fun.

All BMW's in general take a huge depreciation hit early (compared to others), but eventually level out a few more years down the road. Those wanting a BMW with a factory warranty can find some great deals on 1-3 year old cars.

[Throttlesteer14]

Great post, USA-RET. I have to say, the M2 behaves a lot differently than the M240i with the Dinan goodies. The sound, handling, and application of power are quite distinct. But, you're completely correct about straight-line performance. They're designed for different things and, for my daily driving, I'm quite happy with the M240i.

No BMW is a magical unicorn pooping rainbow cupcakes. They all depreciate and it appears it's quite linear, regardless of M car or M performance. Buy what you like and what works best for your application.

[dradernh]

Originally Posted by Throttlesteer14

Just for fun, I took the model years 2017 and 2018 of both cars and looked at their original MSRP and current average selling price with like miles. I took into account the M2 being well-equipped out-of-the-gate and added the popular packages to the M240i to track things fairly.

Did you add an installed limited slip differential to the cost of the M240i; if so, what cost did you estimate for that?

[Throttlesteer14]

Originally Posted by dradernh

Did you add an installed limited slip differential to the cost of the M240i; if so, what cost did you estimate for that?

No, I realize it's a popular option among board members. However, it's a tough one to track down on the car buying sites. I could only find one that listed it as an option. I'm not sure how much a $2500 option would change the the depreciation of the M240i or it's relationship to the M2 (with LSD). Option packages definitely depreciate as well and don't tend to translate much in resale, other than changing the purchase decision of one offering over another.

[dradernh]

Originally Posted by Throttlesteer14

No, I realize it's a popular option among board members. However, it's a tough one to track down on the car buying sites. I could only find one that listed it as an option. I'm not sure how much a $2500 option would change the the depreciation of the M240i or it's relationship to the M2 (with LSD). Option packages definitely depreciate as well and don't tend to translate much in resale, other than changing the purchase decision of one offering over another.

I was thinking of it as something that would increase the purchase price of the car by ~5% and thereby increase the M240i's rate of depreciation as the vast majority of subsequent purchasers would be unlikely to care one way or the other that an LSD was installed. I could be all wet, however; the wife often claims this is the case.

[USA-RET]

Originally Posted by Throttlesteer14

Great post, USA-RET. I have to say, the M2 behaves a lot differently than the M240i with the Dinan goodies. The sound, handling, and application of power are quite distinct. But, you're completely correct about straight-line performance. They're designed for different things and, for my daily driving, I'm quite happy with the M240i.

No BMW is a magical unicorn pooping rainbow cupcakes. They all depreciate and it appears it's quite linear, regardless of M car or M performance. Buy what you like and what works best for your application.

Thanks for the kind words. to your point, for most buyers street driving and straight line acceleration is the only meaning measurement we have. Track use, definitely two different animals and full "M" versions have the upper hand. However I was surprised at reviews of the M240i on the track did very well even compared to the M2. Twitchy at the extremes, but for my abilities, the M240i is a much better performer than I can ever hope to be.

[Maynard]

Thanks for doing some empirical research, interesting to see. Depreciation takes a big bite, but with this type of car I worry more about unnatural wear or accident damage, and buying new gives the confidence that it hasn't been abused. I'm also quite leery of used MT cars, as it only takes a few ham-fisted shifts to start to wear out parts..

[morphomeman]

No matter what the car, add-ons of any sort, including original equipment, always depreciate much faster than the vehicle itself. This means that a loaded 235 or 240 should depreciate faster than an M2, because the M2 has most of the goodies 'built-in'. The LSD will take a very large hit, because it is an expensive add-on that few people want.
This is bad for the original owner and good for the used car buyer.
On the other side of the coin, there is a very small market for performance vehicles like the M2, which might speed up their depreciation.
BTW, the same goes for lease cost, which is based on faster depreciation of extras beyond the base model, because when the lease is up, the leasing company will get less for those add-ons when turning the car over. So you pay more to lease the extras.

[sethwas]

Originally Posted by morphomeman

No matter what the car, add-ons of any sort, including original equipment, always depreciate much faster than the vehicle itself. This means that a loaded 235 or 240 should depreciate faster than an M2, because the M2 has most of the goodies 'built-in'.

This is why it's better to lease a loaded version of a lower trim than a higher version with the same equipment. The depreciation curve is shallower (higher residual) so the payment will be less as the car will be worth more to re-sell at the end of its term. This is because the residuals are based not on the options but on the trim.

When buying, it depends on how long you plan on holding the car for. If for a really long time then it doesn't matter as much. But as you say this is a benefit for the secondhand purchaser (like me) who likes to find good cars that have poor residuals.
The demand now is in suv's/pickups now so any 'car' will be worth less, relatively, and a coupe even less than that. Which is a boon for people who are price sensitive as there is a lot of really good stuff out there.

Seth

[keylime503]

Originally Posted by sethwas

This is why it's better to lease a loaded version of a lower trim than a higher version with the same equipment. The depreciation curve is shallower (higher residual) so the payment will be less as the car will be worth more to re-sell at the end of its term. This is because the residuals are based not on the options but on the trim.

Seth

Residuals are based on MSRP. They are literally a set percentage of the MSRP.

[MarkDemma]

Something I'd throw in here for consideration: The BEST price I've ever EVER seen on a M2 is MSRP. (Things may be different right now.) i got my M240i for $10K under MSRP by taking advantage of a lot of incentives and a good dealer markdown. So I doubt anyone ever pays close to MSRP for a non M 2 series. That was really the big deciding factor for me.

I totally get that folks are afraid to buy a BMW, especially one with even MORE expensive M parts to replace, when it's out of warranty. I got a 330Ci ZHP the was already 5 years old and as much as I loved the thing, I was practically paying a car payment just replacing parts in it.

From what I've read about how Toyota did insane testing of the B58, I'm really hoping a lot of that bled over into the engine in the M240i and it will be a lot more reliable than the M54 in my ZHP.