What keeps it residual value better, GS350 or E350?
01-03-11, 01:20 PM
#16
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ummm, i think actually you can widen this to most models between lexus and mb and it will be the same. gs being close to end of cycle vs the e class early in the cycle, that's only a very minor reason, actually.
if you do some study between lexus vs bmw vs mb lease, you will see this is nothing surprising at all.
historically, bmw and mb always have much higher msrp compared to lexus. in order to sell their cars, they always set the residual to higher in order to make lease attractive. on the other hand, lexus keep the residual values at a very reasonable (and accurate) level. so in comparison, lexus is much more expensive to lease.
i will use a few examples to illustrates my point. back in 2007 when i leased my ls460l. msrp on that car was 85k, residual was set at 48% i believe. the lease came out to around 1200 a month. on a comparable (option wise) s550, msrp was over 100k. i forgot the residual, but lease payment was also around 1200. and it was not because of the money factor. so that tells you how high they set the residual at
2008, when we leased our m3. msrp 78k, money factor almost 0, and payment is around 1000 a month. compared to isf (2008), msrp 62k, my cap cost price was below 50k, however payment was still around 850 a month. that was because the residual was set quite low again at around 50%. if you go lease a 2011 m3 now (coupe), msrp around 70k i think. they set the residual at a whopping high 62 or 65%, and your monthly will be around 850 as well.
if you look at most lexus vehicles, their residual values after 3 yrs are usually around 50%. however if you look at euro cars, their residuals are much higher around 55% to 65%. THAT, is the reason why their lease payments are a lot more attractive than lexus.
however, if you look at reality, lexus is being realistic. there is no way those bmw and mb are retaining close to as much residual after 3 yrs. it's not hard to figure, just go to forums and look at how much those used cars are being sold for and you get a good idea.
m5, msrp mostly 100k. but look at 3-4 yrs used car, they are all around 40-50k (50%). e63, 100k, look at a 2007, it will be in low to mid 40s (45%). s550, mostly over 100k. look for a reasonable 2007 now, it will be in low to mid 40s (40%). it gets worse and worse if you go higher models.
so what does this mean?
1) if you lease, mb and bmw are almost always a better option. much cheaper for what you get compared to lexus.
2) if you want to own, lexus is much better because their price structures are set based on a realistic market model. if you buy mb and bmw, you will be the one paying for the holes (keep in mind, euro cars, their invoice prices are relatively closer to msrp)
3) bmw and mb keep on digging holes for themselves, the dealerships are the ones suffering. they lease cars at low price, when cars come back, they aren't worth close to residual values at all. so someone will have to take the loss
this has been discussed extensively before. again, it has little to do with 3gs vs w212. it's the price structure between lexus and bmw/mb
and keep in mind, the examples i use, they have nothing to do with new/old models. ls460l and s class, both out 2007. m3 and isf, both out 2008
if you do some study between lexus vs bmw vs mb lease, you will see this is nothing surprising at all.
historically, bmw and mb always have much higher msrp compared to lexus. in order to sell their cars, they always set the residual to higher in order to make lease attractive. on the other hand, lexus keep the residual values at a very reasonable (and accurate) level. so in comparison, lexus is much more expensive to lease.
i will use a few examples to illustrates my point. back in 2007 when i leased my ls460l. msrp on that car was 85k, residual was set at 48% i believe. the lease came out to around 1200 a month. on a comparable (option wise) s550, msrp was over 100k. i forgot the residual, but lease payment was also around 1200. and it was not because of the money factor. so that tells you how high they set the residual at
2008, when we leased our m3. msrp 78k, money factor almost 0, and payment is around 1000 a month. compared to isf (2008), msrp 62k, my cap cost price was below 50k, however payment was still around 850 a month. that was because the residual was set quite low again at around 50%. if you go lease a 2011 m3 now (coupe), msrp around 70k i think. they set the residual at a whopping high 62 or 65%, and your monthly will be around 850 as well.
if you look at most lexus vehicles, their residual values after 3 yrs are usually around 50%. however if you look at euro cars, their residuals are much higher around 55% to 65%. THAT, is the reason why their lease payments are a lot more attractive than lexus.
however, if you look at reality, lexus is being realistic. there is no way those bmw and mb are retaining close to as much residual after 3 yrs. it's not hard to figure, just go to forums and look at how much those used cars are being sold for and you get a good idea.
m5, msrp mostly 100k. but look at 3-4 yrs used car, they are all around 40-50k (50%). e63, 100k, look at a 2007, it will be in low to mid 40s (45%). s550, mostly over 100k. look for a reasonable 2007 now, it will be in low to mid 40s (40%). it gets worse and worse if you go higher models.
so what does this mean?
1) if you lease, mb and bmw are almost always a better option. much cheaper for what you get compared to lexus.
2) if you want to own, lexus is much better because their price structures are set based on a realistic market model. if you buy mb and bmw, you will be the one paying for the holes (keep in mind, euro cars, their invoice prices are relatively closer to msrp)
3) bmw and mb keep on digging holes for themselves, the dealerships are the ones suffering. they lease cars at low price, when cars come back, they aren't worth close to residual values at all. so someone will have to take the loss
this has been discussed extensively before. again, it has little to do with 3gs vs w212. it's the price structure between lexus and bmw/mb
and keep in mind, the examples i use, they have nothing to do with new/old models. ls460l and s class, both out 2007. m3 and isf, both out 2008
If I remember what was recently revealed is over 62% of BMWs are leased, Benz's in the 50s and Lexus in the 44% range.
BMW Germany was extremely upset with USA sales practices as it hurt income and created a huge used car supply of cars off lease. They said they would tone it down but that hasn't happened.
Lexus has increased incentives to sell cars the past few months which has pissed off dealers. The smart dealers want to sell the cars based on the product, not based on bargain basement and cutthroat prices. It hurts EVERYONE eventually in the end.
I will say Lexus usually does have a lease rate for the ES/RX/IS 250 nationally advertised.
01-03-11, 02:59 PM
#17
This is what I think... That person that went w/ the Benz got swayed into getting it because he thought it was "better value". Personally, if I am dead set on getting a car, I'm gonna get that car.
But I think it's a stupid reason to go a diff route just cuz of "better value". I'd rather take in account of the whole package like reliability or personal appeal.
But I think it's a stupid reason to go a diff route just cuz of "better value". I'd rather take in account of the whole package like reliability or personal appeal.
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