Lexus Leases Are A Huge Rip-Off
09-14-07, 01:41 PM
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Lexus Leases Are A Huge Rip-Off
Sorry to say that, but it's true. The lease price of a car should be closely tied to it's residual value when you turn it back. Everyone knows that Lexus' hold their value far better than pretty much any car out there. Certainly better than the German cars.
So just for yucks, I priced a couple of German cars vs. a Lexus. I kept the list prices around $58-60k.
The BMW and M-B offerings were around $850/month on a 36 month/12,000 mile lease with $500 down. Plugged in the same data on a Lexus (the GS450h) that retailed for about $1500 more than the two Germans (around $60k vs $58k and change) and the price was $1150.
This is consistent with my experience with my car. I lease a 2007 ES350 with no money down on a 36 month, 12,000 mile lease and pay $664. The list price of the car is $44k and change. For about $750/month I could be leasing a $58k M-B E350.
Clearly either the Germans are subsidizing their leases something wicked, or Lexus is ripping off the leasing public as it may just be interested in selling cars, not leasing them.
Anyone have any thought about the crappy value per dollar you get on a Lexus lease?
(Don't get me wrong, I love my car and I think Lexus' are a terrific value as a purchase...I'm just put off about how poorly you do on a Lexus lease)
So just for yucks, I priced a couple of German cars vs. a Lexus. I kept the list prices around $58-60k.
The BMW and M-B offerings were around $850/month on a 36 month/12,000 mile lease with $500 down. Plugged in the same data on a Lexus (the GS450h) that retailed for about $1500 more than the two Germans (around $60k vs $58k and change) and the price was $1150.
This is consistent with my experience with my car. I lease a 2007 ES350 with no money down on a 36 month, 12,000 mile lease and pay $664. The list price of the car is $44k and change. For about $750/month I could be leasing a $58k M-B E350.
Clearly either the Germans are subsidizing their leases something wicked, or Lexus is ripping off the leasing public as it may just be interested in selling cars, not leasing them.
Anyone have any thought about the crappy value per dollar you get on a Lexus lease?
(Don't get me wrong, I love my car and I think Lexus' are a terrific value as a purchase...I'm just put off about how poorly you do on a Lexus lease)
Last edited by PsychDoc; 09-14-07 at 01:58 PM.
09-14-07, 01:51 PM
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What's your sense of the relative value of Lexus leases?
Mine is that they stink compared to the competition. Don't forget, the 5 series BMW and M-B E-class are mid $50k cars and can be gotten for a few bucks more than the ES which is a low $40k car even with all the bells and whistles.
Last edited by PsychDoc; 09-14-07 at 02:12 PM.
09-14-07, 02:00 PM
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Such lease deal numbers (i.e., "$399") is useless without other information, most importantly the amount of the down payment.
09-14-07, 02:03 PM
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"$3500 down at time of signing" is another $100/month.
So all of a sudden, that "attractive" $399 lease has jumped to $500/month.
09-14-07, 02:05 PM
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Yeah my Audi A4 was ZERO down 389 including 7% tax, 15k miles a year and for only 24 months.
I basically asked Lexus and Acura if they could come close to that payment. Acura wanted a 4000 dollar down payment to be able to match it on a TL with 6-speed manual and no navi. Lexus wanted 8000 down for that payment on an IS350 with very few options
I'm getting ready to lease again, now, 2 years later. Looks like I'll be able to get a 335i with a 45-46k dollar sticker price for ~550/month, zero down, all taxes included.
I basically asked Lexus and Acura if they could come close to that payment. Acura wanted a 4000 dollar down payment to be able to match it on a TL with 6-speed manual and no navi. Lexus wanted 8000 down for that payment on an IS350 with very few options
I'm getting ready to lease again, now, 2 years later. Looks like I'll be able to get a 335i with a 45-46k dollar sticker price for ~550/month, zero down, all taxes included.
09-14-07, 02:12 PM
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Yeah my Audi A4 was ZERO down 389 including 7% tax, 15k miles a year and for only 24 months.
I basically asked Lexus and Acura if they could come close to that payment. Acura wanted a 4000 dollar down payment to be able to match it on a TL with 6-speed manual and no navi. Lexus wanted 8000 down for that payment on an IS350 with very few options
I'm getting ready to lease again, now, 2 years later. Looks like I'll be able to get a 335i with a 45-46k dollar sticker price for ~550/month, zero down, all taxes included.
I basically asked Lexus and Acura if they could come close to that payment. Acura wanted a 4000 dollar down payment to be able to match it on a TL with 6-speed manual and no navi. Lexus wanted 8000 down for that payment on an IS350 with very few options
I'm getting ready to lease again, now, 2 years later. Looks like I'll be able to get a 335i with a 45-46k dollar sticker price for ~550/month, zero down, all taxes included.
Not sure of down etc, clearly Tier 1 credit (I want to say around $2k or 3k at signing).I've seen IS 250 leases for $379, same sort of down etc. Acura is offering 1.9% financing on the TL right now. Infiniti has $379 G35, $399 M35/FX 35 deals as well with I believe about 3k down.
Nobody can touch BMW leases and rebates. They lead luxury brands with over $4,000 in rebates and their leases are just amazing.
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09-14-07, 02:24 PM
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In fact my BMW dealer did when I made my initial offer on a 335i. "This is BMW so we don't deal in invoice pricing". I told them "well this BMW isn't going in MY garage unless you do deal in invoice pricing, and since I see 2007s still sitting on your lots with the 2008s about to be here, I think you wouldn't mind getting rid of the 2007s".
Lexus of Memphis is the same way, but they won't budge at all.
Basically they'll look you straight in the face and say "sorry, sir, but if you want to drive a Lexus, you're going to have to agreed to be financially bled dry along with the rest of our customers. Not only upon purchase or lease, but also in our service department once every 15k miles"
09-14-07, 02:27 PM
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Adding to what SICK mentioned, it's not that Lexus leases are a "rip off". It's just that the German brands offer heavily subsized leases and leases that carry lots of discounts/incentives.
BMW shareholders for example are concerned that BMW is offering such kind of leases, saying it's not representative of a luxury maker.
That's not what luxury automakers should be about. That shows BMW, Benz, and Audi are all trying to increase sales no matter what. Lexus is holding the line on incentives and crazy lease rates because it's a luxury brand. Lexus is firm on pricing specifically so that NOT every average joe out there can afford it and so that the brand retains some exclusivity.
What's the point of a luxury brand if every single average joe out there can afford one? That is essentially what BMW, Benz and Audi are doing. This includes not only incentives and awesome lease rates, but also includes offering downmarket models just so they can boost sales. Models like the 1 Series, B Class, or A3 which IMHO have absolutely no business being called "luxury" cars.
You can call it part of the "snob" appeal or prestige of a brand, but the brand's reputation and image will go down long term with incentives, crazy leases, and downmarket models. Don't think that the German luxury brands are immune from the ill effects of the things that they are doing.
BMW shareholders for example are concerned that BMW is offering such kind of leases, saying it's not representative of a luxury maker.
They're there to sell MORE cars than would be selling otherwise. There's nothing wrong with pricing competitively to increase volume of sales and take sales away from your competitors. The 3-series outsells the IS by leaps and bounds - so I'd say it's working. You make it kinda sound like it's 'beneath' Lexus to 'stoop to such a level' as to actually price their products competitively. Like if you buy a Lexus, even as inexpensive 30k dollar IS, you should have so much extra cash or be so fiscally free-minded that you don't care if you're getting a bad deal or not because "it's a Lexus". That just doesn't appeal at all to me when companies try to play that game.
What's the point of a luxury brand if every single average joe out there can afford one? That is essentially what BMW, Benz and Audi are doing. This includes not only incentives and awesome lease rates, but also includes offering downmarket models just so they can boost sales. Models like the 1 Series, B Class, or A3 which IMHO have absolutely no business being called "luxury" cars.
You can call it part of the "snob" appeal or prestige of a brand, but the brand's reputation and image will go down long term with incentives, crazy leases, and downmarket models. Don't think that the German luxury brands are immune from the ill effects of the things that they are doing.
Last edited by TRDFantasy; 09-14-07 at 02:34 PM.
09-14-07, 02:33 PM
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09-14-07, 02:35 PM
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Basically they'll look you straight in the face and say "sorry, sir, but if you want to drive a Lexus, you're going to have to agreed to be financially bled dry along with the rest of our customers. Not only upon purchase or lease, but also in our service department once every 15k miles"
Hi,
While I generally agree, from what I can tell this is the situation.
Lexus' are a great value for purchases, but lousy lease deals. Dollar for dollar you get much more car for your dollar on a Lexus purchase than on a BMW/M-B purchase.
BMW's and M-B are horribly overpriced on purchases but offer great lease deals.
So if you're going to buy, think Lexus.
If you're going to lease, think M-B/BMW.
09-14-07, 02:39 PM
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Adding to what SICK mentioned, it's not that Lexus leases are a "rip off". It's just that the German brands offer heavily subsized leases and leases that carry lots of discounts/incentives.
BMW shareholders for example are concerned that BMW is offering such kind of leases, saying it's not representative of a luxury maker.
That's not what luxury automakers should be about. That shows BMW, Benz, and Audi are all trying to increase sales no matter what. Lexus is holding the line on incentives and crazy lease rates because it's a luxury brand. Lexus is firm on pricing specifically so that NOT every average joe out there can afford it and so that the brand retains some exclusivity.
What's the point of a luxury brand if every single average joe out there can afford one? That is essentially what BMW, Benz and Audi are doing. This includes not only incentives and awesome lease rates, but also includes offering downmarket models just so they can boost sales. Models like the 1 Series, B Class, or A3 which IMHO have absolutely no business being called "luxury" cars.
You can call it part of the "snob" appeal or prestige of a brand, but the brand's reputation and image will go down long term with incentives, crazy leases, and downmarket models. Don't think that the German luxury brands are immune from the ill effects of the things that they are doing.
BMW shareholders for example are concerned that BMW is offering such kind of leases, saying it's not representative of a luxury maker.
That's not what luxury automakers should be about. That shows BMW, Benz, and Audi are all trying to increase sales no matter what. Lexus is holding the line on incentives and crazy lease rates because it's a luxury brand. Lexus is firm on pricing specifically so that NOT every average joe out there can afford it and so that the brand retains some exclusivity.
What's the point of a luxury brand if every single average joe out there can afford one? That is essentially what BMW, Benz and Audi are doing. This includes not only incentives and awesome lease rates, but also includes offering downmarket models just so they can boost sales. Models like the 1 Series, B Class, or A3 which IMHO have absolutely no business being called "luxury" cars.
You can call it part of the "snob" appeal or prestige of a brand, but the brand's reputation and image will go down long term with incentives, crazy leases, and downmarket models. Don't think that the German luxury brands are immune from the ill effects of the things that they are doing.
You think Lexus can hold a candle to BMW or M-B for cache or prestige?
Not a prayer.
Both still blow away Lexus in those departments, rightly or wrongly so let's not moralize over "what it means to be a luxury car maker."
Lexus is simply ripping off the public on its leases.
Pure and simple.
And for those of us who have leased our Lexus', I can tell you, it pisses us off.
09-14-07, 02:41 PM
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They're there to sell MORE cars than would be selling otherwise. There's nothing wrong with pricing competitively to increase volume of sales and take sales away from your competitors. The 3-series outsells the IS by leaps and bounds - so I'd say it's working. You make it kinda sound like it's 'beneath' Lexus to 'stoop to such a level' as to actually price their products competitively. Like if you buy a Lexus, even as inexpensive 30k dollar IS, you should have so much extra cash or be so fiscally free-minded that you don't care if you're getting a bad deal or not because "it's a Lexus". That just doesn't appeal at all to me when companies try to play that game.
These are luxury brands, they should use luxury tactics. Lexus themselves posted the alarm of "over-selling where basically it seems everyone has one and some of the cache is lost b/c it simply isn't rare. Somehow that has not happened (yet?) in America. BMW execs at home have complained about BMW selling tactics here, we posted it here. Audi's only sell around 80k cars a year but with almost no lease deals, well people REALLY wanted an Audi.
In fact my BMW dealer did when I made my initial offer on a 335i. "This is BMW so we don't deal in invoice pricing". I told them "well this BMW isn't going in MY garage unless you do deal in invoice pricing, and since I see 2007s still sitting on your lots with the 2008s about to be here, I think you wouldn't mind getting rid of the 2007s".
That is the particular dealer.
Lexus of Memphis is the same way, but they won't budge at all.
Again, that is the particular dealer
Basically they'll look you straight in the face and say "sorry, sir, but if you want to drive a Lexus, you're going to have to agreed to be financially bled dry along with the rest of our customers. Not only upon purchase or lease, but also in our service department once every 15k miles"
Its not financially bled. Its paying for what you can truly afford. BMW leasing is similar to the crap the housing market is going through. Sub-prime loans left and right, so people who should be in a $150k home are in a $280k one and then the chickens come home to roost. Now, clearly this way of buying a car is fine with thousands of people and I am not knocking or judging their decision. However, I agree with Lexus on pricing and leasing the cars the CORRECT way. AMAZINGLY, it has not hurt sales one bit.
These are luxury brands, they should use luxury tactics. Lexus themselves posted the alarm of "over-selling where basically it seems everyone has one and some of the cache is lost b/c it simply isn't rare. Somehow that has not happened (yet?) in America. BMW execs at home have complained about BMW selling tactics here, we posted it here. Audi's only sell around 80k cars a year but with almost no lease deals, well people REALLY wanted an Audi.
In fact my BMW dealer did when I made my initial offer on a 335i. "This is BMW so we don't deal in invoice pricing". I told them "well this BMW isn't going in MY garage unless you do deal in invoice pricing, and since I see 2007s still sitting on your lots with the 2008s about to be here, I think you wouldn't mind getting rid of the 2007s".
That is the particular dealer.
Lexus of Memphis is the same way, but they won't budge at all.
Again, that is the particular dealer
Basically they'll look you straight in the face and say "sorry, sir, but if you want to drive a Lexus, you're going to have to agreed to be financially bled dry along with the rest of our customers. Not only upon purchase or lease, but also in our service department once every 15k miles"
Its not financially bled. Its paying for what you can truly afford. BMW leasing is similar to the crap the housing market is going through. Sub-prime loans left and right, so people who should be in a $150k home are in a $280k one and then the chickens come home to roost. Now, clearly this way of buying a car is fine with thousands of people and I am not knocking or judging their decision. However, I agree with Lexus on pricing and leasing the cars the CORRECT way. AMAZINGLY, it has not hurt sales one bit.
09-14-07, 02:44 PM
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Hi,
While I generally agree, from what I can tell this is the situation.
Lexus' are a great value for purchases, but lousy lease deals. Dollar for dollar you get much more car for your dollar on a Lexus purchase than on a BMW/M-B purchase.
BMW's and M-B are horribly overpriced on purchases but offer great lease deals.
So if you're going to buy, think Lexus.
If you're going to lease, think M-B/BMW.
While I generally agree, from what I can tell this is the situation.
Lexus' are a great value for purchases, but lousy lease deals. Dollar for dollar you get much more car for your dollar on a Lexus purchase than on a BMW/M-B purchase.
BMW's and M-B are horribly overpriced on purchases but offer great lease deals.
So if you're going to buy, think Lexus.
If you're going to lease, think M-B/BMW.
For instance, instead of me buying an IS 350, I can LEASE a 535 for the same price, then on top of that not pay a dime in maintenance of the life of the lease.
That is just incredibly attractive and clearly a BMW trait that works.