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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.
Not necessarily. Some cars there is a waiting list for and even a leasing company cannot purchase them for less. Leasing companies pay the lowest prices, they have to build in some profit for themselves, and to the dealers they take care of volume, but if there is no reason to discount a particular car, dealers won't. Like the Honda Odyssey. Maybe not now, but years ago the supply could not keep up with demand, so no one paid less than sticker.
If you would even consider buying a 3 year old car for $1k less than a brand new one, you should start a gofundme account. After hearing this, you would likely find enough people feeling sorry for you that you would raise the $1K in no time.
Im not saying it to be mean, but this is just bizarre. The factory warrantee alone is worth more than that.
Not necessarily. Some cars there is a waiting list for and even a leasing company cannot purchase them for less. Leasing companies pay the lowest prices, they have to build in some profit for themselves, and to the dealers they take care of volume, but if there is no reason to discount a particular car, dealers won't. Like the Honda Odyssey. Maybe not now, but years ago the supply could not keep up with demand, so no one paid less than sticker.
In that case, everyone (buying or leasing) is paying MSRP.
Consider the Subaru Crosstrek. Current lease deal is $219/month with $1999 down for 36 months. Used values for a 3 year old model with 20-40k are largely within $1000 of new prices. I am in the Pacific Northwest where Subarus are very popular so that may be a regional anomaly.
So the lease costs $10k when the car only depreciated $1k. Your lease buyout is surely much much less than market value. So you could cash that out by taking to carmax or buying out and selling privately. But you’ll still have paid much more than the $1k depreciation.
So if residual was priced accurately shouldn’t the lease deal be something more like $40/month with $0 down?
Aren't you forgetting the cost of the capital? Nobody lets you borrow money for 3 years for nothing, so regardless of the residual value the leasing company still needs to lay out the money for the car purchase.
Also note the resale "value" isn't what the dealer will pay you for the car 3 years later! So while they can ask anything they want for the car, the trade value will be significantly less!
We're not talking about a 918 Spyder. We're talking about a Subaru.
Because with a less than a 1000 dollar difference it's false savings. You're losing out on the factory warranty and taking a car with 36,000 miles of use. I can see a 5-10k savings. But for 1k difference I'll buy new all day long in this scenario.
If the cost savings was there and I had a good extended warranty I would buy used. But it has to be substantial savings to do it.
A Subaru is never going to depreciate $1000k for fairly obvious reasons though. The only things to talk about that potentially could are things like a 918 Spyder.
Aren't you forgetting the cost of the capital? Nobody lets you borrow money for 3 years for nothing, so regardless of the residual value the leasing company still needs to lay out the money for the car purchase.
Also note the resale "value" isn't what the dealer will pay you for the car 3 years later! So while they can ask anything they want for the car, the trade value will be significantly less!
No, that’s why I said around $40 giving the bank a 44% over the $1k depreciation. That’s a pretty healthy margin.
Used carmax because although their prices can be a bit higher than other dealers the no haggle model means those are pretty close to what they sell for(they do cut prices a little as the cars rot on lot).
Retail market value is relevant in this case as there is no real trade in. At the end of the lease you just have the option to buy the car at what works out to be a substantial discount, around 40% off. That gives you more than enough room to then sell it privately or trade in and still make money.
Bottom line is even if $1k depreciation is the best case scenario, no one is selling a 3 year old off lease Crosstrek for anywhere near what the residual value was set at. So if you’re only paying for depreciation, tax, and interest in a lease these things should easily be under $100/month deals if residual was set correctly.
Only a SUCKER would buy a 3 year old car for 1k less than the new one. After the first 3 years you start to need maintenance/service items that will end up costing more than that anyway. Tires alone can cost 500 dollars plus and they've had 3 years of usage already.
Of course that's why it's CARMAX ads you're showing for the used subaru's. Carmax is for suckers. Just another example. They cost thousands above a normal dealer.
Tell me what the prices are on cargurus for a 3 year old subaru. 3 year old car should have a massive discount off new or it makes zero sense.
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