WTF!? Why the lease number so sucky?
02-18-2007, 04:20 PM
#16
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greg is correct in all accounts.
low money factor and hi residual is how bimmers do it.
however, the leasing thing in CA is not as attractive as what greg said. we don't have trade in tax credit. if the lease is up, you should just drop it off at the dealer. usually if mkt val > residual, you would buy out the lease and then sell it at mkt for a possible profit. but in CA, unless you have a dealer's license, as soon as you buy the lease, you have to pay tax with in SF is 8.5%. after you paid the tax, you wont be making much money selling it at market.
low money factor and hi residual is how bimmers do it.
however, the leasing thing in CA is not as attractive as what greg said. we don't have trade in tax credit. if the lease is up, you should just drop it off at the dealer. usually if mkt val > residual, you would buy out the lease and then sell it at mkt for a possible profit. but in CA, unless you have a dealer's license, as soon as you buy the lease, you have to pay tax with in SF is 8.5%. after you paid the tax, you wont be making much money selling it at market.
02-18-2007, 04:23 PM
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Originally Posted by LVDell
Ah, that's how it works. I never understood watching the commercials how a 50K hummer was leasing for 449 a month while a Cayenne selling for the same amount was twice the price. I guess they decide where they want to take the hit then write it off at the end of the life? Interesting though. I never really understood how the leasing worked.
Just as a price point when we bought our Cayenne we looked into 3 SUV's and here is what we were offered for lease rates, all were 12K/yr and nothing down (ie, 1st month payment and fees only), similar MSRP's (within a 1K or two):
RR LR3 $1100
Cayenne $800
X5 $549
We chose the Cayenne. Wife really preferred it over the other two. Personally, from a straight financial aspect I would have preferred the X5. Nice ride, full maintenance included and $250 a month cheaper.
Just as a price point when we bought our Cayenne we looked into 3 SUV's and here is what we were offered for lease rates, all were 12K/yr and nothing down (ie, 1st month payment and fees only), similar MSRP's (within a 1K or two):
RR LR3 $1100
Cayenne $800
X5 $549
We chose the Cayenne. Wife really preferred it over the other two. Personally, from a straight financial aspect I would have preferred the X5. Nice ride, full maintenance included and $250 a month cheaper.
USUALLY you only care about two numbers on a lease, purchase price and residual val. you want to narrow that gap as much as you can with very low purchase price and very high residual.
the hummer example you gave, i suspect is different than bmw. usually amercan car leases will have small prints where you have to put in a large capital reduction (down payment if you will. dont do it. never put money upfront on a lease).
02-18-2007, 04:27 PM
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Originally Posted by mooty
greg is correct in all accounts.
low money factor and hi residual is how bimmers do it.
however, the leasing thing in CA is not as attractive as what greg said. we don't have trade in tax credit. if the lease is up, you should just drop it off at the dealer. usually if mkt val > residual, you would buy out the lease and then sell it at mkt for a possible profit. but in CA, unless you have a dealer's license, as soon as you buy the lease, you have to pay tax with in SF is 8.5%. after you paid the tax, you wont be making much money selling it at market.
low money factor and hi residual is how bimmers do it.
however, the leasing thing in CA is not as attractive as what greg said. we don't have trade in tax credit. if the lease is up, you should just drop it off at the dealer. usually if mkt val > residual, you would buy out the lease and then sell it at mkt for a possible profit. but in CA, unless you have a dealer's license, as soon as you buy the lease, you have to pay tax with in SF is 8.5%. after you paid the tax, you wont be making much money selling it at market.
We have to do the same thing here. Buy it from the lease company (pay sales tax) and the new owner would have to buy it and pay sales tax. I know have friends in the auto biz that I could work the sale through but my last lease was not worth as much as the residual so I turned it in and paid the mileage penalty.
02-18-2007, 04:28 PM
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Originally Posted by mooty
USUALLY you only care about two numbers on a lease, purchase price and residual val. you want to narrow that gap as much as you can with very low purchase price and very high residual.
the hummer example you gave, i suspect is different than bmw. usually amercan car leases will have small prints where you have to put in a large capital reduction (down payment if you will. dont do it. never put money upfront on a lease).
the hummer example you gave, i suspect is different than bmw. usually amercan car leases will have small prints where you have to put in a large capital reduction (down payment if you will. dont do it. never put money upfront on a lease).
Yes, those two numbers are the most important. Sometimes dealers will try to tell you that the sales price doesn't matter.... Walk on them if you hear that crap.
02-18-2007, 04:29 PM
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Originally Posted by Greg Fishman
We have to do the same thing here. Buy it from the lease company (pay sales tax) and the new owner would have to buy it and pay sales tax. I know have friends in the auto biz that I could work the sale through but my last lease was not worth as much as the residual so I turned it in and paid the mileage penalty.
so KY is as bad as CA. note to self, do not move the KY any time soon.
i usually push my car through friends with licenses, but even then it can be lots of hassle. selling used cars over $50k is not very easy. lots of tire kickers no real buyers.
02-18-2007, 04:44 PM
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Originally Posted by mooty
so KY is as bad as CA. note to self, do not move the KY any time soon.
i usually push my car through friends with licenses, but even then it can be lots of hassle. selling used cars over $50k is not very easy. lots of tire kickers no real buyers.
i usually push my car through friends with licenses, but even then it can be lots of hassle. selling used cars over $50k is not very easy. lots of tire kickers no real buyers.
Yes it is. I got burned on that one a long time back.
02-18-2007, 05:35 PM
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Originally Posted by mooty
yes, i know BMW is HEAVILY subsidizing their leases. compared to p cars, they are like driving it for free.
An MCoupe can be lease with 15K 36mo for what? 800 bucks tax included?
WTF!?
02-18-2007, 05:37 PM
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Originally Posted by LVDell
We chose the Cayenne. Wife really preferred it over the other two. Personally, from a straight financial aspect I would have preferred the X5. Nice ride, full maintenance included and $250 a month cheaper.
An X5 $600 a month is like what? 20 bucks a day!? C
Can't even rent a Chevy Cobalt for that from Enterprise.
02-18-2007, 06:01 PM
#24
Prius now has a free (no interest) loan. And dealers are discounting about $1500 (on a $30K car, that's not bad.) Tempting. The '05 Prius we have now is probably the cheapest transport per mile (short of a cheap ticket on Amtrak, but then you're risking your life...) and it has the commute lane stickers. Saves us a lot of time and tedium.
I'm tempted to choose utility type cars by dollars and sense, but not the cars that have some importance to me or my wife. After all, the most expensive car (to own, meaning in terms of total cost including depreciation) has been her preference (and mine) for Range Rovers -- they make Audis and BMWs look like gold bullion. And the underlying Ford lease plans are not (at last inspection) appealing -- cheaper to use existing lines of equity credit. Until Ford figures out how to handle a niche product in the secondary market, Range Rover owners are paying through the nose.
I'm tempted to choose utility type cars by dollars and sense, but not the cars that have some importance to me or my wife. After all, the most expensive car (to own, meaning in terms of total cost including depreciation) has been her preference (and mine) for Range Rovers -- they make Audis and BMWs look like gold bullion. And the underlying Ford lease plans are not (at last inspection) appealing -- cheaper to use existing lines of equity credit. Until Ford figures out how to handle a niche product in the secondary market, Range Rover owners are paying through the nose.
02-18-2007, 09:21 PM
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Originally Posted by mooty
rad, so you are saying NO porsches then (no leasing, no buying either)???
yes, i know BMW is HEAVILY subsidizing their leases. compared to p cars, they are like driving it for free.
yes, i know BMW is HEAVILY subsidizing their leases. compared to p cars, they are like driving it for free.
A friend of mine offered me a 36 months lease on the 2007 BMW MCoupe for $500. Free maintenance including brake rotors, pads, clutch. Sticker on the car is $53k.
BMW can set higher residuals because those cars keep higher resale values than Porsches these days.
02-18-2007, 10:14 PM
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Guys: Let me shed some light-
PFS (PAG/PCNA) have TWO goals: To ensure their cars have the highest residual values over any other make and to be as profitable as possible.
Typically, PFS leases aren't always that adventageous: They have high residual values, but HIGH money factors. They will NOT subsidize their money like other brands ( this means they won't offer cheap interest rates to affect payments). BMW, AUDI, AND MB at one time or another subsidize their rates. Example, right now MB offers 3.9% on Certified Pre Owned cars. That's a heavily subsidized rate wouldn't you say? Considering prime is over 8%. Right? Right.
We typically us USBank- especially if you're plaining on buying out the lease at the end. Really great (low) residuals and the payment is only a few bucks more then PFS.
But this isn't always the case: PFS was the best for a Cayenne S Titanium- Those suv's went for around $1g a month. Why? Low residuals due to the new one coming out and as compared to the 03 and 04 cayennes- the rates were NOT subsidized at all. I've seen people in Cayenne S's in the 6's and 7's and now the truck is way more. But also so is the MSRP.
Leasing is a specatular tool to be used for what it is. It's not an end all be all for EVERYONE. but it does work great. The 911 is the best leasing car out of the Porsche line up. Hands down.
If anyone wants residuals you can PM me and I'll let you know.
Chris
ps.
One thing I observe- and this is MY opinion only here, but one I want to share: I see a lot of talk about discounts and so forth on Porsche- and yes, we do discount them- but you cannot say you want a huge discount on one end, and expect the car to to have HUGE residuals on the other.
At some point you have to expect a happy medium. Because heavily discounting cars is, in effect, saying the car REALLY isn't worth what the company is asking. And by discounting i'm referring to actual cash discounts, subsidized interest rates and incentives.
Porsche want's their cars to maintain the highest residual value out of ANY other car company. Thus why so many secrets- And frankly; I don't blame them.
I'd rather Porsche be making money hand over fist then have to hear about PAG or PCNA laying off people, or shares going down; or not being able to build such exciting cars. And neither should you want to hear that either.
Remember- the latter is MY opinion only. And also remember, yes I sell Porsche- but you guys know by now (hopefully) that I'm first and foremost:
A Gear Head and Car Freak!!
PFS (PAG/PCNA) have TWO goals: To ensure their cars have the highest residual values over any other make and to be as profitable as possible.
Typically, PFS leases aren't always that adventageous: They have high residual values, but HIGH money factors. They will NOT subsidize their money like other brands ( this means they won't offer cheap interest rates to affect payments). BMW, AUDI, AND MB at one time or another subsidize their rates. Example, right now MB offers 3.9% on Certified Pre Owned cars. That's a heavily subsidized rate wouldn't you say? Considering prime is over 8%. Right? Right.
We typically us USBank- especially if you're plaining on buying out the lease at the end. Really great (low) residuals and the payment is only a few bucks more then PFS.
But this isn't always the case: PFS was the best for a Cayenne S Titanium- Those suv's went for around $1g a month. Why? Low residuals due to the new one coming out and as compared to the 03 and 04 cayennes- the rates were NOT subsidized at all. I've seen people in Cayenne S's in the 6's and 7's and now the truck is way more. But also so is the MSRP.
Leasing is a specatular tool to be used for what it is. It's not an end all be all for EVERYONE. but it does work great. The 911 is the best leasing car out of the Porsche line up. Hands down.
If anyone wants residuals you can PM me and I'll let you know.
Chris
ps.
One thing I observe- and this is MY opinion only here, but one I want to share: I see a lot of talk about discounts and so forth on Porsche- and yes, we do discount them- but you cannot say you want a huge discount on one end, and expect the car to to have HUGE residuals on the other.
At some point you have to expect a happy medium. Because heavily discounting cars is, in effect, saying the car REALLY isn't worth what the company is asking. And by discounting i'm referring to actual cash discounts, subsidized interest rates and incentives.
Porsche want's their cars to maintain the highest residual value out of ANY other car company. Thus why so many secrets- And frankly; I don't blame them.
I'd rather Porsche be making money hand over fist then have to hear about PAG or PCNA laying off people, or shares going down; or not being able to build such exciting cars. And neither should you want to hear that either.
Remember- the latter is MY opinion only. And also remember, yes I sell Porsche- but you guys know by now (hopefully) that I'm first and foremost:
A Gear Head and Car Freak!!
02-18-2007, 11:24 PM
#28
2007 911 Carrera Coupe GT3 Rates for Feb fom for Porsche Financial
24 mo/15k mi – Residual Value 66% of MSRP – .00320 Money Factor Buy Rate
36 mo/15k mi – Residual Value 58% of MSRP – .00320 Money Factor Buy Rate
48 mo/15k mi – Residual Value 52% of MSRP – .00330 Money Factor Buy Rate
60 mo/15k mi – Residual Value 45% of MSRP – .00330 Money Factor Buy Rate
add 2% to the residual for 12k leases and 3% for 10k
24 mo/15k mi – Residual Value 66% of MSRP – .00320 Money Factor Buy Rate
36 mo/15k mi – Residual Value 58% of MSRP – .00320 Money Factor Buy Rate
48 mo/15k mi – Residual Value 52% of MSRP – .00330 Money Factor Buy Rate
60 mo/15k mi – Residual Value 45% of MSRP – .00330 Money Factor Buy Rate
add 2% to the residual for 12k leases and 3% for 10k
02-18-2007, 11:35 PM
#29
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Duane,
Those residual numbers sound realistic with the market. My car will be worth $66k in a few months, and a couple of years will bring a GT3 RS with PCCB, Full Leather to $88k.
Interesting that Porsches take a big hit the first two years, and after that they depreciate at a good rate. Buying two year old Porsches sound like a good deal (low cost of ownership).
Those residual numbers sound realistic with the market. My car will be worth $66k in a few months, and a couple of years will bring a GT3 RS with PCCB, Full Leather to $88k.
Interesting that Porsches take a big hit the first two years, and after that they depreciate at a good rate. Buying two year old Porsches sound like a good deal (low cost of ownership).
02-19-2007, 12:07 PM
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Originally Posted by NJ-GT
... My car will be worth $66k in a few months, and a couple of years will bring a GT3 RS with PCCB, Full Leather to $88k)
I wouln't bet, even for $5, that RS would follow, even the 996 GT3 price-trend for their first 5 years. After all, aren't there less than 300 RS's?
I went to see, so far, 3 dealers in So Cal and I highly doubut that 996 GT3 will come below mid-70's for those cars with less than 12k on the dial.
I hope I am wrong though!
P.S. Your car got to worth less than $66K; you track her like mad; don't you?
Last edited by ///Mous3; 02-19-2007 at 12:32 PM.