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The retail value is $1k less than new but you get to buy it out at $14k because of the negotiated lease. Thus you have “equity” in your lease that you can cash out.
I can't get past this part. I cannot fathom how that can truly be the case.
You get lease on $22k car
Bank bets it will be worth $14k in 3 years(residual)
3 years later, retail value is actually $21k.
Thus you have opportunity to buy a $21k car for $14k. Or take it to carmax and probably walk away with around $3k considering trade in vs retail value.
You get lease on $22k car
Bank bets it will be worth $14k in 3 years(residual)
3 years later, retail value is actually $21k.
Thus you have opportunity to buy a $21k car for $14k. Or take it to carmax and probably walk away with around $3k considering trade in vs retail value.
OK, but brand new one's the same in every other way are still 22k? I guess I'd need to see a brand new one and a 3 year old one side by side in the same area.
What are you using to asses retail value? Will anyone actually pay $21k? If not, it's moot.
I see a hybrid and a premium and other differences from a base-model. I don't think that apples to apples are being compared.
Also comparing to MSRP. Who pays sticker price for a new car? Maybe leases sometimes do, but most purchasers do not. So if apples to apples are being compared, the new one would be cheaper and no one would buy the used one.
Also, carmax may have paid too much for these particular ones and trying to re-coup what they spent, but it doesn't mean they are going to over-pay for MORE of them.......
Never leased a vehicle and don't plan on it no time soon. Buying makes perfect sense and in my 30+ years of car ownership, one has never stranded me on the road.
However, if I owned a business then I'd lease and write them off such as my brother in law does every 2 years or so. Hence his Porsche and Mercedes in his driveway
One factor people here forget is predicting resale value in 3 years. Leasing companies can only make a educated guess at the time of sale.
I once leased a car for 36 months with a buyout/residual of 23 grand. 3 year later the economy went bad and used car values shot up. The value of my vehicle was suddenly worth 26-27 grand retail. It can happen.
One factor people here forget is predicting resale value in 3 years. Leasing companies can only make a educated guess at the time of sale.
I once leased a car for 36 months with a buyout/residual of 23 grand. 3 year later the economy went bad and used car values shot up. The value of my vehicle was suddenly worth 26-27 grand retail. It can happen.
Sure but not 1K less than a brand new one. No one will pay that. Not an individual, a dealer, or carmax.
Also sometimes the residual is intentionally set 'wrongly' for the purposes of making the lease payment lower. An incentive. Usually that can occur when leasing through the manufacturers financing.
I see a hybrid and a premium and other differences from a base-model. I don't think that apples to apples are being compared.
Also comparing to MSRP. Who pays sticker price for a new car? Maybe leases sometimes do, but most purchasers do not. So if apples to apples are being compared, the new one would be cheaper and no one would buy the used one.
Also, carmax may have paid too much for these particular ones and trying to re-coup what they spent, but it doesn't mean they are going to over-pay for MORE of them.......
I’m largely comparing premium to premium and these prices aren’t just found at carmax.
Value may fluctuate a bit in specific scenarios but even if it’s $3-4K less the same scenario is still in play.
Yeah that’s kind of my point the whole model doesn’t make sense when you have vehicles with extraordinary resale value.
Your argument works for any car you can find a patsy for.
Lol...$1k.
And, no. No one pays MSRP for a lease. Except more patsies.
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