I just leased a 2020 Infiniti QX60 Luxe FWD with an MSRP of $51,750. Sales price was $39,750.
Monthly Payment: $385 including tax
Drive-Off Amount: $2,000 (all inceptions, zero down) plus first month’s payment
Months: 39
Annual Mileage: 10,000
MF: .0003
Residual: 52% ($26,910)
Incentives: I made it clear I would transact immediately with no further negotiation for $12,000 off MSRP. I had a $1,000 Loyalty bonus. The Coronavirus and attendant realities of the economy were my incentive.
Region: Western (not California)
Leasehackr Score: approx 11
This wasn’t my first choice due to the aging platform, but they gave me a price I felt comfortable proceeding with even though I preferred the Lexus RX350. I needed a car to shuttle old folks around and this fits the bill.
OP here, resurrecting this thread to ask: What would you do in my situation?
I am considering disposing of the QX60 and getting an X5 or GLE because I’m moving to a part of Los Angeles where the QX60 is pretty far below the median car on the road. (I would like to fit in.)
My CarMax offer is $40,600, which is more than the original sales price of the car. (I only have 10,800 miles on it halfway into the 39 month lease, and my QX60 is a heavily optioned car. Yes, a QX60 with substantial equity is a sign of the apocalypse.) The buyout is currently $32.8k. Understanding that IFS does not allow third-party buyouts, I have asked a dealer for a purchase quote, but he is only offering me $37k, which is precisely CarMax minus the state taxes payable on the buyout of the car before flipping it (i.e., pretty shrewd on his part).
Worth taking the $4.2k equity? Shopping around the car a bit more for something closer to $40.6k? Sticking with the QX60 and not getting hosed on the GLE/X5 given prevailing (lack of) leasing deals?
All I can say in response is that Los Angeles’ Westside (i.e., the entire stretch from Santa Monica to West Hollywood, and especially Beverly Hills, Holmby Hills, and Bel Air) is a bubble of credit consumption, and quantitative easing has taught Angelenos precisely the wrong lesson: Overleverage and spend on credit as much as you want, because you will get bailed out. For example, the Westside mansion owners with 15% equity in their $10 million home as of 2014 suddenly have 57.5% equity in a $20 million home due to Fed intervention in the market. Given that those people already had a propensity to overspend, you can imagine how many feel it’s no problem to HELOC out $100k from their house and buy a $100k car with the money. At times, one feels that 80% of the cars in the Golden Triangle of Beverly Hills are above this threshold today.
This country is grossly mismanaged, and the misallocations of capital due to QE are ceaselessly appalling. I do think it’s worse in Los Angeles than in San Francisco or New York (i.e., other economies heavily tied to movement in interest rates), where this consumption culture is less present. As someone who works in highly remunerated professional services in Los Angeles, and has clients who buy into this lifestyle and mindset, I’d just like to fit in. Hope that makes sense.
If it’s a wash between buying it out yourself paying tax then flipping vs Infiniti dealer buying it and you definitely don’t want to keep it for a bit just take the $4.2k and run.
But you’re looking at MSRP or worse on most SUVs right now, insane as it seems. Many used cars & SUVs are selling way too close to their original MSRP if a year or even 2 old.
So not sure what that gets you in todays market, especially if your target vehicles are even pricier. But if you’re good with MSRP on an X5/GLE and can even find one with the features and color you want, then go for it. At this point I think $40k might buy you a ~2014 of either.
A. You’re never gonna fit in. Make your decisions accordingly.
B. If you’re being paid to make decisions about money, then don’t do something as foolish as leasing a 4-cylinder ~$65k MSRP GLE for $1,000+ per month. Purchase something like a Lexus ES instead.
