Auto leasing surges to record high
#31
Lexus Fanatic
iTrader: (20)
cliff notes:
reason to lease ^^^
reason to buy ^^^
i'm somewhere in between... buy but keep 6-7 years.
i'm somewhere in between... buy but keep 6-7 years.
#32
Lexus Fanatic
In this example, the residual value of the vehicle is $23,701. The person leasing paid $14,565. The dealership (or leasing company?) gets the car back at the end of the lease. If they sell it for $23,701 as a certified pre-owned car, aren't they getting $23,701 + $14,565 = $38,266 > $33,595?
Where does the subsidy come in, or is this not an example of a "subvented" lease?
Where does the subsidy come in, or is this not an example of a "subvented" lease?
Honda financial services the lease, they charge interest and fees for doing that, and at the end of the lease, they get the car back. Or...you can buy it or sell it or trade it as long as you get at least the residual value of $23,701. You can buy the car, trade the car, or sell the car at any time during the lease as long as Honda financial gets $23,701 + the remaining lease payments.
When we discuss a subsidized lease, the manufacturer is offering incentives to lease the vehicle in the form of rebates (for instance Lexus has a $2,500 rebate on the GS now but only if you lease, when I leased my Jeep they had a $3,500 rebate but only on a lease), high residuals (which reduces payments but raises the buyout price, and the risk for the lender), and low money factors (which is interest). For instance assuming $33,595 is an MSRP price, that residual of 23,701 is a 70% residual which is VERY high. That would be an example of how the manufacturer might subsidize a lease. It could be that $33,595 is a negotiated price, thats why you want to negotiate the price as low as you can on a lease, because the residual is calculated off of the MSRP.
Also with a lease, isn't the dealership or leasing company guaranteed to get the car back by the end of the lease? Once they do get the car back, they can sell it again.
My Lexus dealer prefers to take cars in on trade instead of doing lease returns for that very reason, they want the car...and as long as they can give the customer the lease buyout on trade its a win win for everyone, customer saves the sales tax or maybe even makes some money on the car depending on the value(I traded my 2010 ES instead of turning it in and made $1,000 on the deal, plus I saved $1300 on sales tax on the GS, so overall trading over turning in made me $2,300), and they are assured to get the car for their CPO fleet.
Last edited by SW17LS; 09-07-13 at 09:22 AM.
#33
Lexus Test Driver
it just goes to show everything in life is negotiable.
i have to look into this...
i have to look into this...
If you're brand-loyal, sometimes it can still make sense. I used to work with a guy who leased a new camry for his one-man business every 2 years. He'd turn them in with 40-55k miles, lease another one and pay no penalty for the excess mileage.
You'd probably want to verify that in advance, of course.
You'd probably want to verify that in advance, of course.
#35
Driver School Candidate
Join Date: Jun 2008
Location: Missouri
Posts: 48
Likes: 0
Received 0 Likes
on
0 Posts
Actually, my wife and I went into our local Lexus dealership looking at the RX and asked if we wanted to lease it for 12k miles instead of the advertised 10k miles, our payment would only go up $17 a month. Not too bad.
#37
Lexus Fanatic
Also, you can trade out of the lease so if you are over your mileage as long as the dealer gives you the buyout on trade you owe no mileage penalty.
#38
Lexus Test Driver
iTrader: (6)
I have a small business lease was by far a better option. in 1 year we leased 4 new cars for our office all with very little money out of pocket. 2013 750li $110k, 2013 evo x gsr $36k, 2013 volt $40k, 2013 gs350 fsport $58k. Retail valve for all 4 cars was about $240k. We put 5k down for 750, 2k down for the evo, 2.5k down for gs, 0 down for the volt after ca rebate. Total out of pocket $9500 and less than $2300 a month including tax we have 4 new cars. Instead of dumping 240k into car that depericate we put it in the business, if our 240k give us return if 1% a month it pretty much cover our monthly payment. We still have a gx470, ls460, ls430, is350 that was purchase and paid in full we dont even drive. Those car depericate so much that it would of save us money if we would of lease them instead of purchase. For me unless it is a car i plan to collect like a ferrari all my future cars is going to be lease.
#39
Lexus Champion
iTrader: (3)
as said before though, many factors play into leasing and it being cheaper for your personal preference
#40
Lexus Fanatic
For me , the next three years will be an exercise in restraint. I already have that itch for another car and I am only 3 years in on my LS. I keep promising myself that I will keep the car until its payed off. We will see
#41
Lexus Test Driver
having never leased, it's a little weird being forced to purchase or start a new lease in just 2-3 years and always having a car payment. even if the payments are low, $500/month is nothing to sneeze at.
both cars fully paid off = very nice feeling
both cars fully paid off = very nice feeling
#42
Lexus Test Driver
iTrader: (1)
you do save on interest charges during the lease term if you plan to lease up front then buy out right in the end...my dad did this on one of ES sedans they've had and factored out to come out cheaper than financing outright. we probly would have still had that 3ES had it not been hit and written off, car ran impeccably as the same day we bought it.
as said before though, many factors play into leasing and it being cheaper for your personal preference
as said before though, many factors play into leasing and it being cheaper for your personal preference
#43
Lexus Fanatic
If you're getting a $2,500 rebate from Lexus for leasing and a very low money factor you might save money leasing then buying it out.
#45
Lexus Champion