RL Leasing - Achille's Heel
#1
My only car is a Bus
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RL Leasing - Achille's Heel
Check this one out:
![](http://www.latimes.com/media/thumbnails/graphic/2007-07/31015921.gif)
This is why the RL isn't moving... check out the high lease numbers for the 5-Series! I was very surprised by this.
The whole article:
http://www.latimes.com/business/la-f...,4624295.story
Some interesting info here for possible reasons why the RL doesn't move!
![](http://www.latimes.com/media/thumbnails/graphic/2007-07/31015921.gif)
This is why the RL isn't moving... check out the high lease numbers for the 5-Series! I was very surprised by this.
The whole article:
http://www.latimes.com/business/la-f...,4624295.story
Some interesting info here for possible reasons why the RL doesn't move!
#2
Trolling Canuckistan
Thats basically all BMW does is lease. Who would buy a car with a horrible reliability rating and want to own it outside of the free maintenence period? Most BMW leases are 24 or 36 months that allows you to be out of the car before you are out of warranty or the maintenence period.
I have a BMW store next to me, they typically do 65-75% of their total business each month in leasing.
I have a BMW store next to me, they typically do 65-75% of their total business each month in leasing.
#3
Go Big Blue!
I think you hit the nail on the head. Certainly there are some other factors, however, if Acura was more agressive with it's lease programs AND sold cars in a more "lease friendly" way, then they'd sell a lot more. Not just the RL, all their cars.
For example, I'm considering an MDX, but, the lease deal is average PLUS you need to spend another $2k to "finish" the vehicle. What's up with that? Gotta add running boards, roof racks, side molding, cargo trays, nets, upgraded steering wheel, etc. That's fine if you're buying it, but Acura won't residualize any of that on a lease (except the running boards). As a result, I'm considering going with a Lexus GX. Not my first choice but it comes "finished" from the factory and has better money factors. As a purchase the MDX is a no brainer. As a lease it looses its advantage. The RL isn't as bad in that regard, however, I wanted to purchase it anyway, so, the lease "factors" didn't matter.
Honda really knows how to make a great car. I don't think Toyota has anything over on them in that category. However, Toyota surely has learned a few things from the Germans on how to SELL luxury cars.
For example, I'm considering an MDX, but, the lease deal is average PLUS you need to spend another $2k to "finish" the vehicle. What's up with that? Gotta add running boards, roof racks, side molding, cargo trays, nets, upgraded steering wheel, etc. That's fine if you're buying it, but Acura won't residualize any of that on a lease (except the running boards). As a result, I'm considering going with a Lexus GX. Not my first choice but it comes "finished" from the factory and has better money factors. As a purchase the MDX is a no brainer. As a lease it looses its advantage. The RL isn't as bad in that regard, however, I wanted to purchase it anyway, so, the lease "factors" didn't matter.
Honda really knows how to make a great car. I don't think Toyota has anything over on them in that category. However, Toyota surely has learned a few things from the Germans on how to SELL luxury cars.
#4
Torch & Pitchfork Posse
![Cool](https://acurazine.com/forums/images/icons/icon6.gif)
That is very enlightening. I expected luxury leases were significant. That, however is eye opening!
I know Honda does not supply rental firms and these lease stats are curious. I wonder what strategy sopports these actions?. I have read that Honda owners are likely to own vehicles longer than most other brands. I would extend that to Acura owners as well.
![what](https://acurazine.com/forums/images/smilies/what.gif)
I know Honda does not supply rental firms and these lease stats are curious. I wonder what strategy sopports these actions?. I have read that Honda owners are likely to own vehicles longer than most other brands. I would extend that to Acura owners as well.
#5
My only car is a Bus
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72.7% of all 5-Series being leased is really an amazing number. Just think of how many CPO are on the market! The A4 is a piece of garbage but I thought their numbers would be higher.
#6
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BMW has always had attractive lease rates (MF/residuals), so I'm not surprised that most on the road are being leased. Payments are cheaper than outright financing so people can feel the snootiness of being in a BMW for less money than buying an Acura.
Anyhow, I would never own a German make out of warranty.
Anyhow, I would never own a German make out of warranty.
#7
Senior Moderator
Those numbers are not only eye-opening, but eye-popping. I had no idea so many people leased these luxury cars. It's too bad I drive too much to lease.....
Maybe all Acura has to do is to make the RL more lease-friendly. I'm amazed they are offering smoking hot deals on finance/purchase when the money is OBVIOUSLY in leasing, if this article is right.
Maybe all Acura has to do is to make the RL more lease-friendly. I'm amazed they are offering smoking hot deals on finance/purchase when the money is OBVIOUSLY in leasing, if this article is right.
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#8
Go Big Blue!
Originally Posted by CL6
72.7% of all 5-Series being leased is really an amazing number. Just think of how many CPO are on the market! The A4 is a piece of garbage but I thought their numbers would be higher.
![Tongue](https://acurazine.com/forums/images/smilies/tongue.gif)
#9
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Sorry... Certified Pre-Owned.
Makes you think that maybe the RL isn't selling all that slowly... it's leasing slowly. I wonder how many BMW 525s are sold per month?
Makes you think that maybe the RL isn't selling all that slowly... it's leasing slowly. I wonder how many BMW 525s are sold per month?
Originally Posted by SpicyMikey
CPO? Explain please. All I can think of is Chief Petty Officer ![Tongue](https://acurazine.com/forums/images/smilies/tongue.gif)
![Tongue](https://acurazine.com/forums/images/smilies/tongue.gif)
#10
Go Big Blue!
Originally Posted by CL6
Sorry... Certified Pre-Owned.
Makes you think that maybe the RL isn't selling all that slowly... it's leasing slowly. I wonder how many BMW 525s are sold per month?
Makes you think that maybe the RL isn't selling all that slowly... it's leasing slowly. I wonder how many BMW 525s are sold per month?
![Annoyed](https://acurazine.com/forums/images/smilies/annoyed.gif)
#11
AcurAdmirer
Well - I've alluded to this before ... the residuals and money factors on Acuras appear to be set high so as to offset the heavy discounting they do. As I've mentioned before, I leased an '06 Infiniti M45 ($50,000 cap cost) for LESS per month than my '06 RL ($40,000 cap cost). Reason is the M had a residual of 61% and a MF of .00175, whereas the RL's residual was about 51% and MF was something like .00285. (I don't remember the exact numbers, but I DO remember the RL was a lot cheaper and yet cost me a few bucks more per month for the same 36/15,000 lease.)
Another interesting note is that the Technology Pkg. MDX (like I have) has a higher residual than both the Sport Pkg. and the Entertainment Pkg. models, even though both are higher-priced, more-optioned vehicles than mine. The GM at my dealer mentioned that, and said the only reason he could think of is that Acura figures people with enough money to buy loaded used vehicles will probably just buy new ones ... so the loaded ones will be worthless as trades. Figure THAT one out.![what](https://acurazine.com/forums/images/smilies/what.gif)
As for the high % of leases on high-end cars, it's a matter of sound economics. People with money use other people's money ... they don't tie up their own money buying liabilities like cars. They "rent" them.
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Another interesting note is that the Technology Pkg. MDX (like I have) has a higher residual than both the Sport Pkg. and the Entertainment Pkg. models, even though both are higher-priced, more-optioned vehicles than mine. The GM at my dealer mentioned that, and said the only reason he could think of is that Acura figures people with enough money to buy loaded used vehicles will probably just buy new ones ... so the loaded ones will be worthless as trades. Figure THAT one out.
![what](https://acurazine.com/forums/images/smilies/what.gif)
As for the high % of leases on high-end cars, it's a matter of sound economics. People with money use other people's money ... they don't tie up their own money buying liabilities like cars. They "rent" them.
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#12
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I really do think lack of lease deals are the #1 reason the RL is selling so poorly.
I was like many of you - I thought the RL was a steal at 40k. Then one of my co-workers leased a fully loaded 530 BMW(MSRP 56K) 36 months/12K miles per year for 550/month. Amazing. Granted, this was because the new 535s were coming out, but it's comparable to the RL with marketing support.
Now, if you get a new car every 3-4 years, this deals blows away the RL even at 40k. Heck, this is almost as cheap as my cost of owning my TL for the last 2.5 years. 38K after taxes. I'll be lucky to sell it for low 20s.
This really opened my eyes. I'm a value shopper, which is why I was always attracted to Honda/Acura. I still believe hondas are great value cars if you are going to drive it to the ground, but since I now like to switch cars every 3 years, I chose to lease a BMW instead of buying an RL.
I was like many of you - I thought the RL was a steal at 40k. Then one of my co-workers leased a fully loaded 530 BMW(MSRP 56K) 36 months/12K miles per year for 550/month. Amazing. Granted, this was because the new 535s were coming out, but it's comparable to the RL with marketing support.
Now, if you get a new car every 3-4 years, this deals blows away the RL even at 40k. Heck, this is almost as cheap as my cost of owning my TL for the last 2.5 years. 38K after taxes. I'll be lucky to sell it for low 20s.
This really opened my eyes. I'm a value shopper, which is why I was always attracted to Honda/Acura. I still believe hondas are great value cars if you are going to drive it to the ground, but since I now like to switch cars every 3 years, I chose to lease a BMW instead of buying an RL.
#13
AcurAdmirer
Originally Posted by poncekim
I really do think lack of lease deals are the #1 reason the RL is selling so poorly.
I was like many of you - I thought the RL was a steal at 40k. Then one of my co-workers leased a fully loaded 530 BMW(MSRP 56K) 36 months/12K miles per year for 550/month. Amazing. Granted, this was because the new 535s were coming out, but it's comparable to the RL with marketing support.
Now, if you get a new car every 3-4 years, this deals blows away the RL even at 40k. Heck, this is almost as cheap as my cost of owning my TL for the last 2.5 years. 38K after taxes. I'll be lucky to sell it for low 20s.
This really opened my eyes. I'm a value shopper, which is why I was always attracted to Honda/Acura. I still believe hondas are great value cars if you are going to drive it to the ground, but since I now like to switch cars every 3 years, I chose to lease a BMW instead of buying an RL.
I was like many of you - I thought the RL was a steal at 40k. Then one of my co-workers leased a fully loaded 530 BMW(MSRP 56K) 36 months/12K miles per year for 550/month. Amazing. Granted, this was because the new 535s were coming out, but it's comparable to the RL with marketing support.
Now, if you get a new car every 3-4 years, this deals blows away the RL even at 40k. Heck, this is almost as cheap as my cost of owning my TL for the last 2.5 years. 38K after taxes. I'll be lucky to sell it for low 20s.
This really opened my eyes. I'm a value shopper, which is why I was always attracted to Honda/Acura. I still believe hondas are great value cars if you are going to drive it to the ground, but since I now like to switch cars every 3 years, I chose to lease a BMW instead of buying an RL.
Some of us are stoopid enough to pay it, though, since we want the superior electronics of the Acura. As I've stated elsewhere, I've concluded the Honda/Acura Nav system is orders of magnitude better than any of the competition (which means about 20 times better than BMW's
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
So, do you pay extra for a car just for its Nav system and other electronics? In my case ... yes. Now, if BMW had as good a Nav system as Acura, I'd probably be driving another Bimmer right now. I've had 4 of them in the past and I love them ... but I just value the electronics too much right now.
But there limits ...
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
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#15
CLS 6MT Navi
Makes sense, I looked at a new 335 coupe and it sticker said about $50k, crazy to me. Hate the interior and the car overall is not that luxurious. For that price, I want much more.
I know the 1 series is coming, obviously BMW has priced the 3 out of it's original entry level place in then lineup.
I know the 1 series is coming, obviously BMW has priced the 3 out of it's original entry level place in then lineup.
#16
Go Big Blue!
Originally Posted by Mike_TX
You ain't just woofin'. That $40,000 RL will cost you over $700 for the same lease.
Some of us are stoopid enough to pay it, though, since we want the superior electronics of the Acura. As I've stated elsewhere, I've concluded the Honda/Acura Nav system is orders of magnitude better than any of the competition (which means about 20 times better than BMW's
), and the BT and VR are also far better.
So, do you pay extra for a car just for its Nav system and other electronics? In my case ... yes. Now, if BMW had as good a Nav system as Acura, I'd probably be driving another Bimmer right now. I've had 4 of them in the past and I love them ... but I just value the electronics too much right now.
But there limits ...![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
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Some of us are stoopid enough to pay it, though, since we want the superior electronics of the Acura. As I've stated elsewhere, I've concluded the Honda/Acura Nav system is orders of magnitude better than any of the competition (which means about 20 times better than BMW's
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
So, do you pay extra for a car just for its Nav system and other electronics? In my case ... yes. Now, if BMW had as good a Nav system as Acura, I'd probably be driving another Bimmer right now. I've had 4 of them in the past and I love them ... but I just value the electronics too much right now.
But there limits ...
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
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As a result, I've been eying a Lexus GX as well and the deal seems much better. I agree with you, I love the tech that an Acura offers but there are limits.
#17
AcurAdmirer
Originally Posted by SpicyMikey
I have to admit ignorance on this one. I never realized how greatly the mf could vary from manufacturer to manufacturer (and model to model). I'm thinking of getting a new SUV soon and have been eying the MDX like you Mike. But, I'm disappointed to see the MF and residual being quoted as well as the fact that I need to spend another 2 grand of non-residualized accessories to finish the car. Hell, it doesn't even come with the roof rack from the factory!!
As a result, I've been eying a Lexus GX as well and the deal seems much better. I agree with you, I love the tech that an Acura offers but there are limits.
As a result, I've been eying a Lexus GX as well and the deal seems much better. I agree with you, I love the tech that an Acura offers but there are limits.
Residual: 56%
MF : .00275 (Tier 1+)
I don't know what the other brands and models are getting for MF right now, but that equates to 6.6% APR, which is not too bad in todays' market. And I was mildly surprised to see a decent Residual on the MDX. I guess it's a function of its early popularity.
I'd say the MDX probably has the best terms right now of any Acura product.
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#18
Go Big Blue!
Originally Posted by Mike_TX
FWIW, Mikey, the numbers I got on my MDX last month were:
Residual: 56%
MF : .00275 (Tier 1+)
I don't know what the other brands and models are getting for MF right now, but that equates to 6.6% APR, which is not too bad in todays' market. And I was mildly surprised to see a decent Residual on the MDX. I guess it's a function of its early popularity.
I'd say the MDX probably has the best terms right now of any Acura product.
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Residual: 56%
MF : .00275 (Tier 1+)
I don't know what the other brands and models are getting for MF right now, but that equates to 6.6% APR, which is not too bad in todays' market. And I was mildly surprised to see a decent Residual on the MDX. I guess it's a function of its early popularity.
I'd say the MDX probably has the best terms right now of any Acura product.
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Yes, those are the numbers I was quoted when I stopped in this weekend. However, it also seems Acura is offering 4.9% financing on 60 months for the MDX this month. Some quick calculations showed the purchase with a 5 year loan was actually cheaper using their financing then the lease deal. That's even using a conservative 50% trade in value after 36 months. Plus, they can only residualize running boards so roof racks, side molding, etc. is 100% lost. I just felt it was weak which supports what others have been saying.
These were the rough figures I rougly worked out comparing a 3 year lease to a 5 year loan with a trade in after 3 years.
MSRP 49.5K
Price: 44k
4.9% interest
$3000 down
Lease 15k miles/year = $690 x 36 = $24,840 total cost
Purchase 5 year loan = $828 x 36 = $29808 payments - $24750 tradein + $18900 loan bal = $23958 total cost
Check my numbers, I could be wrong
#19
Originally Posted by SpicyMikey
CPO? Explain please. All I can think of is Chief Petty Officer ![Tongue](https://acurazine.com/forums/images/smilies/tongue.gif)
![Tongue](https://acurazine.com/forums/images/smilies/tongue.gif)
#20
Go Big Blue!
Originally Posted by NavyDoc333
Hahah.. that was my first thought when I saw CPO too. But it's Certified Pre-Owned. Somehow the auto industry got us to stop saying 'USED' car....and got us to say 'Pre-Owned'. I'm still not sure how it happened so effortlessly.
![Why Me](https://acurazine.com/forums/images/smilies/whyme.gif)
#21
AcurAdmirer
Originally Posted by SpicyMikey
Yes, those are the numbers I was quoted when I stopped in this weekend. However, it also seems Acura is offering 4.9% financing on 60 months for the MDX this month. Some quick calculations showed the purchase with a 5 year loan was actually cheaper using their financing then the lease deal. That's even using a conservative 50% trade in value after 36 months. Plus, they can only residualize running boards so roof racks, side molding, etc. is 100% lost. I just felt it was weak which supports what others have been saying.
These were the rough figures I rougly worked out comparing a 3 year lease to a 5 year loan with a trade in after 3 years.
MSRP 49.5K
Price: 44k
4.9% interest
$3000 down
Lease 15k miles/year = $690 x 36 = $24,840 total cost
Purchase 5 year loan = $828 x 36 = $29808 payments - $24750 tradein + $18900 loan bal = $23958 total cost
Check my numbers, I could be wrong
These were the rough figures I rougly worked out comparing a 3 year lease to a 5 year loan with a trade in after 3 years.
MSRP 49.5K
Price: 44k
4.9% interest
$3000 down
Lease 15k miles/year = $690 x 36 = $24,840 total cost
Purchase 5 year loan = $828 x 36 = $29808 payments - $24750 tradein + $18900 loan bal = $23958 total cost
Check my numbers, I could be wrong
But it looks like you are okay either way ...
Side question: If they include the price of accessories in the lease (adjusted cap cost), how do they not residualize them? Do they just figure the lease, then add the cost of accessories, divide by the term, and add to the payment amount?
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#22
Go Big Blue!
Originally Posted by Mike_TX
Your numbers look okay to me, Mikey, although I've found "money down" affects lease payments more than it does finance payments, just due to the funky method used to calculate lease payments.
But it looks like you are okay either way ...
Side question: If they include the price of accessories in the lease (adjusted cap cost), how do they not residualize them? Do they just figure the lease, then add the cost of accessories, divide by the term, and add to the payment amount?
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But it looks like you are okay either way ...
Side question: If they include the price of accessories in the lease (adjusted cap cost), how do they not residualize them? Do they just figure the lease, then add the cost of accessories, divide by the term, and add to the payment amount?
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![what](https://acurazine.com/forums/images/smilies/what.gif)
#23
My only car is a Bus
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It's how it sounds. Instead of a 'problem' you have a 'challenge' and instead of a 'discount' you have 'savings.'
I tell people 'used' is a pair of old shoes and you wouldn't want to buy a pair of old shoes, would you?
I tell people 'used' is a pair of old shoes and you wouldn't want to buy a pair of old shoes, would you?
Originally Posted by SpicyMikey
I still say "used". Can't seem to get used to that "pre owned" term. Must be an "over 40" thing. Can't teach an old dog new tricks ![Why Me](https://acurazine.com/forums/images/smilies/whyme.gif)
![Why Me](https://acurazine.com/forums/images/smilies/whyme.gif)
#24
Proboscis-free zone
Those BMW lease numbers confirm what we all knew...a large proportion of our fellow Americans are using "creative financing" to live beyond their means. The correction, when it comes, will be ugly.
The dirty little secret of BMW leases is in the huge cap cost reductions ("down payments") they use to get the payments low. Typically $5K of customer cash flushed straight down the toilet at signing.
I'll take my RL, thank you. Yet I agree with those who wish Honda/Acura would get in the game with some competitive MFs. For those who like to switch cars often, leasing can make good sense.
The dirty little secret of BMW leases is in the huge cap cost reductions ("down payments") they use to get the payments low. Typically $5K of customer cash flushed straight down the toilet at signing.
I'll take my RL, thank you. Yet I agree with those who wish Honda/Acura would get in the game with some competitive MFs. For those who like to switch cars often, leasing can make good sense.
#25
Go Big Blue!
Originally Posted by VOdoc
I'll take my RL, thank you. Yet I agree with those who wish Honda/Acura would get in the game with some competitive MFs. For those who like to switch cars often, leasing can make good sense.
Acura just doesn't make it easy. They are offering no lease incentives on an MDX, they leave the suv without basic "trim" features (step ups, roof racks, cargo lining, etc.) which must be added as non residualized accesories, and then dangle discounted purchase financing deals. You almost have to look at purchase.
Acura is just not as aggressive as their competition when it comes to getting their vehicles leased. Unfortunately, as you move into higher price brackets the finance dynamics change and more buyers are leasers then purchasers. Could Acura not have figured that out yet and still be trying to sell $40k+ MDX's and RL's like a $15k Civic?
#26
Racer
Does anyone have any idea if the NSX was heavily leased? This is Acura's only real foray into the high priced area. It would be interesting to see how Acura performed with that car with respect to leasing. It might shed some light on their current thinking.
#27
AcurAdmirer
I guess I will continue to be puzzled by the negativity toward leases. It's almost like some people feel like they need to use mouthwash after they say the word.
Leasing is nothing in the world but another way to finance a car. It's not black magic, it's not immoral and it's not some kind of clever trap car dealers lure you into. It may not fit your own personal needs, but then a 48-month loan might not, either.
A car is a LIABILITY. It is not an asset. It is a device that you use to get places, and it immediately starts going down in value as soon as you sign the papers. ANY money you put into a car is - in a sense - flushed down that toilet VoDoc referred to. Therefore, you need to find the way to "finance" that liability that best suits your style. It may be to buy it outright, finance it or lease it.
Buy it outright and you have no payments and no interest, but most financial experts would tell you that's the stupidest way to spend your hard-earned money. You can actually watch your money swirling around the bowl of that toilet with each passing day. You can finance it and therefore use someone else's money, but you pay fat payments, lots of interest, and you're left with a used car that's worth a fraction of its original value. In the meantime, you've tied up a lot of money that could be used to invest, buy groceries or pay for a big-screen TV.
Lease that car and you essentially pay only for the part you're using. In essence, you're "buying" only the part of the car that depreciates as you use it. The other part - the resale value part - remains the responsibility of the car company. And the monthly payments are much less, since you're not paying for the whole car. The golden part of that is that you know from day one what it'll be worth as a trade, and more importantly that the car company is going to buy it back for that exact price, so there's no hassle over how much they'll "give you" for it.
And VoDoc, with all due respect, cap cost reduction isn't money flushed down the toilet ... it's merely advance partial payment of your monthly lease bill, since it reduces those payments. It may not be the best thing to do for other reasons, but it's not money that just goes *poof* and it's gone.
I'm totally convinced many people dislike leasing because they haven't taken the time to understand it. I'm not the smartest guy around, but I know I've 'profited' from leasing for years, and I like it. But I'm surprised how many people say leasing like it's a dirty word.
(Could someone help me down off this soapbox?)
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![ugh](https://acurazine.com/forums/images/smilies/ugh.gif)
Leasing is nothing in the world but another way to finance a car. It's not black magic, it's not immoral and it's not some kind of clever trap car dealers lure you into. It may not fit your own personal needs, but then a 48-month loan might not, either.
A car is a LIABILITY. It is not an asset. It is a device that you use to get places, and it immediately starts going down in value as soon as you sign the papers. ANY money you put into a car is - in a sense - flushed down that toilet VoDoc referred to. Therefore, you need to find the way to "finance" that liability that best suits your style. It may be to buy it outright, finance it or lease it.
Buy it outright and you have no payments and no interest, but most financial experts would tell you that's the stupidest way to spend your hard-earned money. You can actually watch your money swirling around the bowl of that toilet with each passing day. You can finance it and therefore use someone else's money, but you pay fat payments, lots of interest, and you're left with a used car that's worth a fraction of its original value. In the meantime, you've tied up a lot of money that could be used to invest, buy groceries or pay for a big-screen TV.
Lease that car and you essentially pay only for the part you're using. In essence, you're "buying" only the part of the car that depreciates as you use it. The other part - the resale value part - remains the responsibility of the car company. And the monthly payments are much less, since you're not paying for the whole car. The golden part of that is that you know from day one what it'll be worth as a trade, and more importantly that the car company is going to buy it back for that exact price, so there's no hassle over how much they'll "give you" for it.
And VoDoc, with all due respect, cap cost reduction isn't money flushed down the toilet ... it's merely advance partial payment of your monthly lease bill, since it reduces those payments. It may not be the best thing to do for other reasons, but it's not money that just goes *poof* and it's gone.
I'm totally convinced many people dislike leasing because they haven't taken the time to understand it. I'm not the smartest guy around, but I know I've 'profited' from leasing for years, and I like it. But I'm surprised how many people say leasing like it's a dirty word.
(Could someone help me down off this soapbox?)
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#28
Go Big Blue!
Your absolutely right Mike. Leasing is a smart option under the right circumstances. I think it's gotten a bad rap because it's often misused. A lot of people are "lured" into leasing because the monthly payment is lower without doing the math to see the end result is actually more expensive.
Bottom line; the circumstances must be right for it to make sense from a TCO perspective. I am neither pro or con lease. I do both.
However, you're being guilty of the same thing you're accusing VODoc of saying. You just said buying a car for cash is stupid. The fact is, it depends on your circumstances. Someone who is 65 years old, retired, has a lot of cash invested in conservative investments, and wants a new car should definitely pay cash for it (unless there's some rediculous interest deal available like with the Cady's right now). Paying 7% interest to save 3% is foolish.
Bottom line; the circumstances must be right for it to make sense from a TCO perspective. I am neither pro or con lease. I do both.
However, you're being guilty of the same thing you're accusing VODoc of saying. You just said buying a car for cash is stupid. The fact is, it depends on your circumstances. Someone who is 65 years old, retired, has a lot of cash invested in conservative investments, and wants a new car should definitely pay cash for it (unless there's some rediculous interest deal available like with the Cady's right now). Paying 7% interest to save 3% is foolish.
#29
Torch & Pitchfork Posse
![Red face](https://acurazine.com/forums/images/icons/icon11.gif)
It's common Mike. If something does not appeal to the masses, the critic personally, it is declared taboo.
Leasing is simply a choice. And what appeals to a few may not appeal to the group. It is all about choices, priorities and comfort. Anyone who does properly research and consider the options should make the decision on their own choices and needs. There is nothing wrong with leasing if it works for you. The whole 'ownership' issue is merely a charade as most have a lien on the vehicle anyway and very few actually pay attention to the value / loan balance until they are looking to trade.
Heck, we are all RL owners for a vehicle that is not appealing to the masses. I do not feel in any way, shape or form, I made the wrong decision. I am somewhat amused I am privy to a secret.
I likely would be a good lease driver. I maintain my vehicles meticulously. I drive 10-12k miles / year. And I have perpetuat new car fever. Although I typcally pay off my vehicles in short term, as soon as I do, I start looking! (My hopes is the RL will change that behavior as I can truly see the RL living a long life in my garage).
I have leased before, it it was a very successful venture for me. I have never turned in a vehicle with as much as whisper of issues. I have ben praised for returning a leased vehicle in top condition. But still, I tend to purchase.
I am anticipating a second vehicle. It is very likely the RL will be MINE for a long time. But I can see me leasing a 'toy' car or maybe an SUV for those needs and wants outside the RL offerings. It would also allow me the vehicle turnover I tend to desire with a better target pricepoint for the exchange.
As I always say, unless someone else is writingthe check, what they say is merely opinion. If I lived my life by other's opinions, I likely would be driving a more popular vehicle with less appeal to me!
Leasing is simply a choice. And what appeals to a few may not appeal to the group. It is all about choices, priorities and comfort. Anyone who does properly research and consider the options should make the decision on their own choices and needs. There is nothing wrong with leasing if it works for you. The whole 'ownership' issue is merely a charade as most have a lien on the vehicle anyway and very few actually pay attention to the value / loan balance until they are looking to trade.
Heck, we are all RL owners for a vehicle that is not appealing to the masses. I do not feel in any way, shape or form, I made the wrong decision. I am somewhat amused I am privy to a secret.
I likely would be a good lease driver. I maintain my vehicles meticulously. I drive 10-12k miles / year. And I have perpetuat new car fever. Although I typcally pay off my vehicles in short term, as soon as I do, I start looking! (My hopes is the RL will change that behavior as I can truly see the RL living a long life in my garage).
I have leased before, it it was a very successful venture for me. I have never turned in a vehicle with as much as whisper of issues. I have ben praised for returning a leased vehicle in top condition. But still, I tend to purchase.
I am anticipating a second vehicle. It is very likely the RL will be MINE for a long time. But I can see me leasing a 'toy' car or maybe an SUV for those needs and wants outside the RL offerings. It would also allow me the vehicle turnover I tend to desire with a better target pricepoint for the exchange.
As I always say, unless someone else is writingthe check, what they say is merely opinion. If I lived my life by other's opinions, I likely would be driving a more popular vehicle with less appeal to me!
#30
Senior Moderator
Originally Posted by Mike_TX
I guess I will continue to be puzzled by the negativity toward leases. It's almost like some people feel like they need to use mouthwash after they say the word. ![ugh](https://acurazine.com/forums/images/smilies/ugh.gif)
![ugh](https://acurazine.com/forums/images/smilies/ugh.gif)
![Big Grin](https://acurazine.com/forums/images/smilies/biggrin.gif)
The only reason I don't lease personally is because I put 20k+ miles yearly on my cars. That's too much to make leasing a good option for me. Additionally, in the case of the RL, the lease is simply a bad deal. Obviously not the case in a BMW.
#31
Racer
Originally Posted by Mike_TX
And VoDoc, with all due respect, cap cost reduction isn't money flushed down the toilet ... it's merely advance partial payment of your monthly lease bill, since it reduces those payments. It may not be the best thing to do for other reasons, but it's not money that just goes *poof* and it's gone.
#32
AcurAdmirer
Originally Posted by SpicyMikey
Your absolutely right Mike. Leasing is a smart option under the right circumstances. I think it's gotten a bad rap because it's often misused. A lot of people are "lured" into leasing because the monthly payment is lower without doing the math to see the end result is actually more expensive.
Bottom line; the circumstances must be right for it to make sense from a TCO perspective. I am neither pro or con lease. I do both.
However, you're being guilty of the same thing you're accusing VODoc of saying. You just said buying a car for cash is stupid. The fact is, it depends on your circumstances. Someone who is 65 years old, retired, has a lot of cash invested in conservative investments, and wants a new car should definitely pay cash for it (unless there's some rediculous interest deal available like with the Cady's right now). Paying 7% interest to save 3% is foolish.
Bottom line; the circumstances must be right for it to make sense from a TCO perspective. I am neither pro or con lease. I do both.
However, you're being guilty of the same thing you're accusing VODoc of saying. You just said buying a car for cash is stupid. The fact is, it depends on your circumstances. Someone who is 65 years old, retired, has a lot of cash invested in conservative investments, and wants a new car should definitely pay cash for it (unless there's some rediculous interest deal available like with the Cady's right now). Paying 7% interest to save 3% is foolish.
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
But even in your last example, I think MY financial advisor would recommend against paying cash for a car. He would say it's a lost cash flow opportunity even if not a lost investment opportunity. You can get cars at 6.5 - 6.75% APR all the time, and any well-structured investment portfolio ought to be returning 8% or more these days (or you should fire your investment guy). After all, the stock market has consistently returned 10+% a year over time.
And, interest or investment return rates aside, money tied up in a car is money that can't be used for medical emergencies, vacation trips to Europe, new furniture, etc.
I guess I've subscribed completely to the reality that a car is a disposable commodity, and putting any more money in it than necessary is just bad business. If mfr's want to hang onto a big chunk of the liability and charge me only for the "rental" part, I'll get on that bandwagon.
![Thumbs Up](https://acurazine.com/forums/images/smilies/thumbsup.gif)
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#33
AcurAdmirer
Originally Posted by neuronbob
I agree when you say leasing (gargle-gargle-spit!
) is poorly understood. I certainly had NO idea that leases on luxury cars was essentially the norm.
The only reason I don't lease personally is because I put 20k+ miles yearly on my cars. That's too much to make leasing a good option for me. Additionally, in the case of the RL, the lease is simply a bad deal. Obviously not the case in a BMW.
![Big Grin](https://acurazine.com/forums/images/smilies/biggrin.gif)
The only reason I don't lease personally is because I put 20k+ miles yearly on my cars. That's too much to make leasing a good option for me. Additionally, in the case of the RL, the lease is simply a bad deal. Obviously not the case in a BMW.
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
But I know people who actually go ahead and do a lease with insufficient miles built in (to capture the best leasing deals) and then trade before the lease is up. They rely on getting a good trade-in value, plus the sales tax benefit (diff between trade value and new car price) to make up any deficit in trade value caused by their actual mileage.
For example, trade-in value usually isn't adversely affected by anything less than 12-15,000 miles a year. So they figure they can score a "cheap" 10,000 mile a year lease, then just sell or trade after a year or two and still get close to the car's payoff amount. If not, they still get the benefit of the reduced sales tax that inures from their having a trade-in, and that sometimes closes the gap.
But doing straight leases for more than 15,000 miles a year is generally considered economically undesirable.
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#34
Go Big Blue!
Originally Posted by Mike_TX
Actually, Mikey, I said that most financial experts would say it's stupid. ![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
But even in your last example, I think MY financial advisor would recommend against paying cash for a car. He would say it's a lost cash flow opportunity even if not a lost investment opportunity. You can get cars at 6.5 - 6.75% APR all the time, and any well-structured investment portfolio ought to be returning 8% or more these days (or you should fire your investment guy). After all, the stock market has consistently returned 10+% a year over time.
And, interest or investment return rates aside, money tied up in a car is money that can't be used for medical emergencies, vacation trips to Europe, new furniture, etc.
I guess I've subscribed completely to the reality that a car is a disposable commodity, and putting any more money in it than necessary is just bad business. If mfr's want to hang onto a big chunk of the liability and charge me only for the "rental" part, I'll get on that bandwagon.
.
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![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
But even in your last example, I think MY financial advisor would recommend against paying cash for a car. He would say it's a lost cash flow opportunity even if not a lost investment opportunity. You can get cars at 6.5 - 6.75% APR all the time, and any well-structured investment portfolio ought to be returning 8% or more these days (or you should fire your investment guy). After all, the stock market has consistently returned 10+% a year over time.
And, interest or investment return rates aside, money tied up in a car is money that can't be used for medical emergencies, vacation trips to Europe, new furniture, etc.
I guess I've subscribed completely to the reality that a car is a disposable commodity, and putting any more money in it than necessary is just bad business. If mfr's want to hang onto a big chunk of the liability and charge me only for the "rental" part, I'll get on that bandwagon.
![Thumbs Up](https://acurazine.com/forums/images/smilies/thumbsup.gif)
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Secondly, don't tell me you see a car as just a disposable commodity that you shouldn't put "any more money into than necessary". If that were true you'd be driving a 8-10 year old car and keeping it until repairs exceeded the cost of another one. There are many people that do treat cars like that (and not only because they can't afford it). Those people are the truly financially smart ones. They see a car for what it is; a depreciating piece of metal. It's just a form a transportation for them and the costs should be minimized.
I think you're like the rest of us here. We spend way more money then we should on cars and CERTAINLY way more then is "necessary". How we fund our addiction is almost irrelevant.
#35
My only car is a Bus
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Originally Posted by phins2rt
Does anyone have any idea if the NSX was heavily leased? This is Acura's only real foray into the high priced area. It would be interesting to see how Acura performed with that car with respect to leasing. It might shed some light on their current thinking.
Leasing can make sense under many circumstances. Putting a large 'down' is silly, it is just a Cap Cost reduction. But if you like driving nice cars, will always be making a payment anyway (you trade in every few years) or, with BMW, you have the maintainence paid for while under warranty.
#36
Senior Moderator
Originally Posted by Mike_TX
You're right about the mileage issue, Bob. (But then, you're always right.
)
![Wink](https://acurazine.com/forums/images/smilies/wink.gif)
![Jesus LOL](https://acurazine.com/forums/images/smilies/jesuslol.gif)
![Big Grin](https://acurazine.com/forums/images/smilies/biggrin.gif)
Since I drive 30,000 a year, I get around that by leasing two cars, each at 15,000 year.
#37
Go Big Blue!
Originally Posted by CL6
They had a cheap lease with 7,500 miles on it. I think like $799 per month. Great deal but Honda lost money on every one sold. And they had $5,000 or more trunk money on them.
Leasing can make sense under many circumstances. Putting a large 'down' is silly, it is just a Cap Cost reduction. But if you like driving nice cars, will always be making a payment anyway (you trade in every few years) or, with BMW, you have the maintainence paid for while under warranty.
Leasing can make sense under many circumstances. Putting a large 'down' is silly, it is just a Cap Cost reduction. But if you like driving nice cars, will always be making a payment anyway (you trade in every few years) or, with BMW, you have the maintainence paid for while under warranty.
#38
My only car is a Bus
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Originally Posted by SpicyMikey
I agree. I still think it's foolish to debate the merits of leasing, financing, or buying.
Each has their merits. Another thing is the mileage in a lease is usually per year so a 15,000 mile, three year lease means that if you put 30,000 miles on the car in year one and wreck it you'll be charged over mileage costs even if you were only going to drive it 6,000 miles for the next 2 years.
The NSX lease was great. For that money I wished I could have leased one!
#39
Go Big Blue!
Originally Posted by CL6
What's the point of a discussion board otherwise?
Each has their merits. Another thing is the mileage in a lease is usually per year so a 15,000 mile, three year lease means that if you put 30,000 miles on the car in year one and wreck it you'll be charged over mileage costs even if you were only going to drive it 6,000 miles for the next 2 years.
The NSX lease was great. For that money I wished I could have leased one!
Each has their merits. Another thing is the mileage in a lease is usually per year so a 15,000 mile, three year lease means that if you put 30,000 miles on the car in year one and wreck it you'll be charged over mileage costs even if you were only going to drive it 6,000 miles for the next 2 years.
The NSX lease was great. For that money I wished I could have leased one!
Interesting point about crashing a car early in a lease. I didn't think of that. So, like a mandatory early termination, if you total the car they look at the mileage? What if the car is burned beyond recognition and they can't read the odometer anymore
![Tongue](https://acurazine.com/forums/images/smilies/tongue.gif)
#40
My only car is a Bus
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Originally Posted by SpicyMikey
Interesting point about crashing a car early in a lease. I didn't think of that. So, like a mandatory early termination, if you total the car they look at the mileage?