Currently helping some relatives with a Volvo XC90 lease, but I am not sure if it is even feasible to sign a deal in the current climate (despite having equity in a current BMW lease, which I will discuss below). After sending offers to several dealers (many of which not wanting to go below 6% pre-incentive), this has been the best deal so far:
MSRP: $59825
Pre-incentive discount: $55,029 (8.02%)
Rebates & Incentives: $3250 Volvo Allowance
Money Factor: 0.00140
Residual Value: 57% (36 months/10,000 miles per year)
Monthly Payment: $654 ($611 + 7% sales tax)
Due at Signing: $3,238 ($654 first month’s payment, $995 acquisition fee, $999 dealer fee (a FL norm), $450 in government fees, and $140 in taxes)
Currently they can sell their BMW X5 lease to Carvana with approximately $6850 in equity over the 3rd-party BMW payoff (VROOM, Autonation, CarMax, etc. were much less). They have 10 months remaining at this point.
Based on recent LH forum members’ posts and some broker offerings, this seems to be what an XC90 deal looks like in 2021. However, with the status of the current car market and its unknown future, does signing this deal/a slightly better deal make the equity even worth it? At this point, I am pretty sure that all equity gained from that X5 is being poured into the minimal discount being offered on new leases today. It would be great if I could get some more thoughts on this. Thank you.
Best discount I have seen with incentives right now is 12%, but the 2021 refresh might be adding to this. Still, most dealers have 20-30 XC90s on their lots which is also playing a factor.
I’m probably going to rework the deal with the dealer, but just wanted some idea of if this is even worth pursuing further.
When you factor in the equity, this becomes an attractive lease. They would be paying less than what they are currently paying for the X5. The real question is do they like the xc90 more than the X5?
This is what I have been questioning. Is the XC90 incentives going to get any better (only have gotten slightly worse over the last few months) and if the X5 will retain the same equity.
Nonetheless, nobody has a crystal ball and I think I can get them to make the first payment (no Volvo program on that anyways).
Either way, it is around $50 less per month for a base X5 that would wasn’t even asked about before signing. Even with the current pricing, the X5 deal is horrendous.
Incentives only getting worse, but I should have said programs are only getting worse. Your marketplace thread is probably one the best places to go for news about Volvo market, so much appreciated.
Probably going to continue with upward trend for Volvo pricing for at least 6-7 months. Even my S60 has equity right now, but nobody will go near a $299 payment without a lot of Cap. Cost Reduction.
Don’t even ask about how much they wanted for a new X5.
I’ll go out on a limb here and say that incentives will be good in December, on par with what they are now. MF/RVs on XC90 didn’t change much for a few years.
I agree that programs overall have been affected by inventory levels, but probably will not continue to be changed as much. Even if incentives stay the same, it is really up to dealers and their perceptions of inventory that will determine deals since they can adjust pre-incentive discount accordingly.
One BMW dealer tried to sell them on $3,000 DAS and $650 a month for a X5 until I pointed out that $7,000 of the $10,000 DAS was their current BMW’s equity. Salesperson was not very happy that his customers were not “just focusing on a payment goal.” Basically MSRP plus 40 bps MF markup since they claim “low inventory levels.”
I don’t think XC90s will end up like this, but it seems that Volvo has also not been as severely affected by shortages like BMW.
By the way, is BonusDrive still a thing for new Volvo lessees?
Exactly. I’ve said before that Volvo will use this situation to increase their market share. So, basically at 8% off you are about $1,200-$1,800 off of good times. BTW, in 2019 Volvo cash was $2k in May and $3k in June, with .00162 on the same XC90 T6 MOM. The RV was 4% higher though
I was overestimating by a bit, but I figured that I was losing about 4% discount (~$2400) compared to normal market. Thus, just taking the equity and putting it into MSDs for the Volvo will end up making sense since most of that difference will be made up in reduced MF (I know that this is not exactly apples-to-apples since you could do the same thing in normal market conditions). Discount isn’t there right now, and might not be for months to come.
If they end up liking the XC90, they will probably take this deal unless I can find a dealer that will match on a car with Advanced Package (would would roughly be 9.4% pre-incentive).
, and they are very much the “see it in person” type.