Why stop there? Call your financial planner and tell them you are opening a Christmas club account.
OP you are asking us to tell you what stock will increase the most in 3 years: nobody here has a crystal ball.
Accords don’t lease particularly well (RV unreasonably low) which is why certain trims are better to buy.
But to say that (for instance) in 2021 a year into your lease that Porsche won’t start dumping Macans for $449 on a sign and drive and tank black book value, nobody here knows. It’s only “worth more” if the buyout is less than you can sell/trade it for, which (as has been said) means you overpaid for the utility you used.
I’ll give you a concrete example. I leased an Accord and an Altima, both for about $200 per month. The Accord had about $2,000 of equity at the end - the Altima had no equity. Consumers seem to buy/lease both cars at a similar rate and they are similar in many ways. So why wouldn’t you choose to lease the Accord, if you are indifferent to driving an Accord or Altima? Sure you ‘overpaid’ by $50 per month on the Accord, but that is the point. The worst case scenario is you get a car for $200 per month, best case it is $150. If the possibility of $2,000 doesn’t matter to you, and you like the Altima marginally more, the go lease an Altima instead.
You mean hypothetical? Or did you lease both cars on the same day for the same terms?
The take rate has 0 influence on this example (correlation != causation), but continue.
Also not how it works: time cost of money, discounted cash flow, your payments were “taxed”’with rent, but go on:
Question about this concrete example:
Have you been a Used Car manager at a Volume Honda store for 3+ years at lease inception? If not
Were you an Auction specialist at Manheim working the lanes for 3+ years at lease inception?
Did you shop the exact same model Accord for an entire year to trend out the changes in residual and money factor? Also holding US interest rates constant for the observation year until lease inception?
You concrete example falls apart for many many reasons, here are several:
interest rates / money factors change in the macro economy
portfolio managers at Honda FS decide every month what their target number of leases in each credit tier is and adjust accordingly. If the portolio is overstuffed with A-tier and the rates are the same, they can bump the rates on the 1st to disincentivize leasing and push people (except business leasers who can’t get their write off any other way) to finance
if production volumes change, that affects supply and availability, and again in 36 months. All these X1s on stop sale won’t be coming back in Feb/Mar/Apr/May 2022 because they didn’t get leased three years prior.
Those are just a few uncontrollable/invisible variables that affect the deal at inception. Now at disposition:
how stable is black book? This is affected by availability of CPO-able used cars, traded or lease grounded
for how long have trade in/resale values been stable? Today they are inflated by low supply of recent used AND Carvana/Vroom overpaying for cars. That is new and won’t last forever. This changes every minute of every day.
where in the product refresh cycle is your Accord? Are new Accords? If your body style was 2 years old at inception and Honda introduces a refresh a month prior to disposition, that affects your resale value.
Now things you could but can’t control:
was your “good enough” accord in any kind of accident to impair its resale value? Curb rash? Parking lot dings?
how much time are you willing to spend at/prior to disposition shopping to get “the best” resale?
Last:
the house almost always wins. By all means, if you come out ahead, great. The people who price risk at Honda FS have all the financials, stable interest rates for 60-90 days, lease portfolio visibility and kpis, internal product roadmaps for unannounced/upcoming refresh cycles, actuals on lease dispositions back to epoch, auction reports, all in data warehouses, and available to more actuaries than there are active users on leasehackr. The manufacturers too small to have that secret sauce for themselves use Chase, BofA, and US Bank as their lease captives, and they buy access to the information they don’t have in-house.
Anyone who isn’t looking at all that decision support data is guessing, and anyone who does is EDUCATED guessing because we don’t have time machines to see what black book on a 2019 Accord will be in Oct 2022.
@pizza8822 why not get a car that offers MSDs and put those down? That way you buy down the rate and get them back at the end of the lease. It’s basically a high interest savings account that nets 30% over 3yrs (on the high end).
Plenty of examples where a car you BUY or finance might be worth as much or more X years after, but not leases. It’s a financial instrument that balances utility and risk. Because (in a $0 DAS lease) all the risk is on the captive, they price that utility as close to the pin as possible. They have all the information and all the experts they can afford to get as close to the pin as possible. No lender is spitting in the wind on what your 3 year old fart car is worth when you hand the keys back over.
When you say equity are you referring to fair trade in equity, clean retail equity or sell to Vroom/Carvana equity? Totally different things imnsho. I would value trade in equity more as selling a 3 year old Altima or Accord could be challenging.
I think a nice electric where you harvest all the rebates could be a money maker… Not at lease end, perhaps a quick flip
A tesla model 3 can also be in that category. I see them list 6 month to 1 year old on Carvana for pretty much what they go for brand new. Difference is that the seller has harvested the tax credit …
In general, if you have positive equity in a lease, it means you paid too much …
the leasing game is to make sure you have a car with crap resale much much lower than RV. looking at you A6…
You have way to much time on your hands. If there are two similar vehicles I’m considering leasing that are in the same class for a similar payment, picking the one that might have equity at the end is smart financially.
I don’t know for sure if any vehicle will have equity at the end. But can we not agree that an Accord is a lot more likely to have equity at the end of a lease than a Fusion? That’s my only point - if you’re indifferent to the vehicle and the payment is the same, you might pick based on possible equity at the end.
I agree with @pizza8822. You can’t control the RV. If the manufacturer sets a very conservative RV, thereby almost guaranteeing positive equity at lease end and the ability to get out of the lease at anytime via selling it with no financial harm, what’s the downside?
A Civic Si with a 50’s RV is just as nuts as a 5 series with a 60’s RV, but in the opposite way.
I think some of you are thinking waaaaaaay too hard about this.
I don’t know about positive equity, but Subarus are probably pretty easy to sell for payoff amount when your lease is up. They’re generally reliable, but don’t have crazy resale values like Hondas and Toyotas.
