RajaReMax

I'm curious to know how many of you new LS owners leased their cars or purchased them...If leased, how many miles did you have "built-in"?

Seems like a wash if you get a car like the new LS, where the residuals stay pretty stable...In 3 years with 60,000 miles with a lease you can just drop off the car & pick-up a new one.

If purchased, did many of you pay cash or finance?

stanatl

I leased for three (3) years with 17,000 miles per year as part of the lease. I figured that when this car comes off lease, the new version of the LS will have been out for one year. The second year of a new design is a good time to get a car, particularly a Lexus where they will certainly fix any bugs in that timeframe.

pvo

iTrader: (2)

I purchased and financed mine. I hope to keep it for a while though. Put less than 8000 miles on the car yearly.

Mandingo

I always used to lease but I decided to purchase the LS.

Leasing is OK but the routine every three years of turning it in was getting old. My cars do less than 10,000 miles a year and I was returning almost-new cars each time. The hassle of the inspections at the end when BMW nickle and dime you was also an issue.

If you intend to keep the car for any reasonable length of time it is still the most cost effective solution to buy it. The majority of the depreciation on this car is all happening over the first couple of years - after that you have a luxury car that you know the history of that isn't losing much value.

A three year old LS in excellent condition with 30,000 miles is going for $45,000
A four year old LS in excellent condition with 40,000 miles is going for $40,000.

$400 a month to drive an LS430 is the best deal

daryll40

Not exactly. You forgot to figure the imputed interest on the residual. So if your car is worth $40,000 after four years, you have to add a market rate of interest...say the 4% you would get today on a 4 year CD...to the depreciation. In other words, you have to tie up $40,000 (or borrow it from a lender and pay interest on it) and give up about 4% annual interest on it (in today's interest rate market). So the equation is as follows:

$20,000 depreciation ($60,000 purchase price minus $40,000 resale value) divided by 48 months or $417 per month PLUS 4% per annum interest or $133/month for a monthly true cost of $550.

Your larger point, however, IS taken that you can't even lease a decent Explorer for under $600/month these days and most people don't realize that the true cost of owning a vehicle is not determined by the purchase price but by the resale value. In the case of our beloved "best car" LS430, the real cost to own is frequently less than many cars costing 1/3 less.

Daryll40

daryll40

One more thought: Although I just proved that the LS430 often costs less to own than many "lesser" vehicles, there is always the risk factor. While you can estimate the resale value, it's not guaranteed. Take the case of the Audi 5000 which was, originally, a high resale car that, well...you know the rest of the story.

You can transfer that risk by leasing, but, again there is an increased cost to do that that the leasing company charges versus buying and selling on your own after 3-4 years. And for all of us, there is risk that the new model LS coming out in around 2006 might kill resale values of "the old model". There is, for instance, a huge difference in the resale values of the 2000 LS400 vs the 2001 LS430. More than the usual difference for one model year older. Those who bot brand new '98, '99 and '00 LS400's probably got less on resale than could have been estimated at the time of purchase.

On the other hand, if Lexus goes upmarket, there could be good demand continuing for the lower priced "almost as good" older LS.

Methodical

iTrader: (-1)

I purchased mine for a ridiculously low price from an 80 year old man who had no concept
of what it was really worth.

daryll40

Every once in a while you do come across deal like that. My great uncle recently gave up driving. I sold his 2001 Buick LeSabre with, literally, 2100 miles on it. I realized afterwards that I got too little and left money on the table. Edmunds, KBB and NAPA numbers were too low as cars like that don't get sold enough to accurately compute. I sold the car to the first buyer for the asking price and realized as my phone rang for days and days that I sold the car for way to little.

In the end it didn't matter because the money will go to his assisted living/nursing home anyway. I guess I'd rather make that couple who bot it happy and give them the break as opposed to giving it to the nursing home!

AggieLS

Anyone know if Lexus Financal offers the one payment lease option? I'm getting much closer on my negotating and am interested in that as a potential cost savings. Opinions welcome too on doing this vs a normal lease payment plan.

I'm also considering using my 4.9% home equity loan to make the deal for either a purchase or the single lease payment and am wondering if anyone has done that?

RNM GS3

The rate on ur home equity loan is too high (if its variable), try getting one at 4.0%(prime) or lower.

Leasing is good if u dont want to have money tied up, deal with selling the car, and if u drive lots of miles. It can also be beneficial for tax purposes, depending on ur job.

IMO u should only finance if u are keeping the car for 5+ years, otherwise lease it.

AggieLS

My equity loan is at 4.75 fixed and has a $75k limit. I did find the Lexus Custom lease on their financial web site so I am going to do some more analysis -- thanks.

Sal Collaziano

I'd like to hear more about the Lexus One Payment Lease Option. Do they have that? And if they do, that's where you put on big high payment down and drive it until that purchased time runs out.. How much does one normally put down?

AggieLS

Lexus web site calls it "1Pay Lease" and the only info is below.

"This program saves you money and allows you to avoid the hassle of monthly payments. It permits you to prepay all monthly payments in a single total lease payment at lease signing. This single total lease payment is less than the amount you would pay over the life of a conventional lease."

I've got an email into my friend there to ask for details.

daryll40

Don't forget to compute the REAL cost...by comparing not only the upfront payment with monthly payments, but by adding in the interest you'd earn on that lump sum if you kept it invested then paid it out each month.

AggieLS

That's a great point about the real cost of not collecting interest. With rates and the market struggling I am not sure that using it to lower the cost of the lease isn't a better choice given the lack of depreciation here.

Better question for you though - what color interior did you go with? I'm debating moving up the the Custom as I don't think I really like the cashmere or the ash(gray) interiors.