Cheve Suburban Purchase vs. Lease

I purchase a Cheve Suburban every two years. I always trade back to a dealer that gives me the best deal and pay cash and own the car outright. Would it be cheaper to lease the car for two years vs. what I am doing now?

If you don’t mind throwing that kind of money around, the lease residual values are usually accurate, and the lease incentives are less than the purchase incentives, then I think you are better off doing it your way.

If the lease residual value is inflated and there are really good lease incentives and a low money factor, you would want to consider leasing.

Would it be safe to say that if I found out the residual of my 2015 Suburban at this point in time that that would be the true value of the vehicle and I could use that residual value as a reference to start to negotiate on a new vehicle. I’m talking about an outright purchase not a lease.

You mean you found an old lease residual value from a few years ago and want to use that to negotiate a trade-in price on your vehicle today?

No. I have a 2015 Suburban that is not leased. It’s paid for, I don’t owe anything on it. I am going to trade it or maybe lease one this fall. I will be buying or leasing a 2017 Suburban. I just wondered if I could find out what the banks say the residual value is in November. Then I wondered if that number is the true value of the car that I could use as a reference for negotiating.

I get that, but I don’t get what it has to do with lease residual value.

The residual value for what?

You could find the residual value for the 2017 at the amount of months you plan to have it for and miles you plan to drive for. And then that will help you compare the cost of a lease to purchase or a lease through GM (they will use their own calculated residual).

The residual value won’t be helpful in any other way.

Separating purchase from lease.
Let’s say you do you i.e. trade in the current 15 Suburb to 17 Suburb. You want to know if you can use the whatever percentage was set as residual for the 2015 on the same Suburban as yours as a reference point for negotiation. IMO no, because the manufacturers often play with residuals to get whatever outcome they desire at the end of said lease term, no direct correlation to the actual resale value of the vehicle. Don’t forget, you are talking a wholesale value when you are trading in.
You best bet IMO is to get a hold of NADA black book if you can find a friend of a friend and guess how much your current Suburban is worth. You can use any of the online value guessing sites as well like - to have a guesstimate.
I’d also go to CarMax and get the 7 day price when it gets closer to the day you are ready to purchase. Just like anything else it’s how much work you are willing to put in for how much $ outcome. Your current process of buying lets me to belie that you value time more than money, which is a great thing to do if you can afford it :slight_smile:

You hit the nail on the head in regards to my uneducated thinking of how I might be able to use a residual number on my 2015 Suburban. I am 72 years old and did my first lease last year on my wife’s car which was a 2016 GMC Terrain. I used information in this forum to help me learn about leasing and I think I did OK. I leased her car for two years and 24K miles. Financing did not enter the equation since I paid for the lease up front and I paid over 4K less than I would have had to pay if I had paid cash like I usually do. Another perk was that I owned the car. They had to buy out my equity in the car which of course is a one shot deal since I will probably keep on leasing her car. I am considering a lease on my next Suburban or GMC Yukon XL. I’ll see how that goes.
Can I ask you a question? On the 2017 when I start working on a deal this fall. Is there any way to discover what the real residual actually is during the time period that I am trying to make a deal? GM or whoever has to set a figure to be included in the deal right? If I knew that number I could negotiate off the sticker from there. Or is the residual that is set by the finance companies a big secret? I am not knowledgeable enough to know if the dealers play around with that number or not. This is all new to me and I hope I am not asking stupid questions. Thank you! Bill.

No Bill, you are actually asking typical questions for a lease newbie.
What I would do is to read closely the section titled Lease 101, lots if good information there.
Don’t worry about getting taken advantage of, there is plenty of knowledgeable people here that will help.
I would also advise to look at 3 year leases rather than 2 year. You are still covered with warranty and most cars these day don’t start to fall apart right away, like they used to. Your payment and overall lease cost will be higher on the 2 year but lease because you “lease rent” is pretty much divided by the number of month of your term. And yes the residual has to be disclosed before you sign on the dotted line, most likely you can ask here I.e. on the forum what is the “current” residual when you are ready to lease, this will help to determine of the dealer is trying to stuff you with the lease rate increase masking their pure profit.
You can’t use the residual as a negotiation tool with the dealer. At least I don’t think so, someone please set me straight if I am wrong :blush:

Hope this helps

Hey Bill

I think you are trying to figure out if it was better to lease or buy your Suburban in 2015? If you want to know what the residual was when you bought the car, you need to go to the edmunds forums and then search for the Suburban 2015 lease thread. In that thread you will find what the residual was at the time for 2 years and how many miles you needed. Then compare the residual value to what your suburban is worth when you trade yours in. So if the residual was 65% when you bought, but the dealer is giving you 70% of what you paid then you did well to buy, but if they are only giving 50% you may have been better off leasing.

It will take a lot of sleuthing to figure out though as you also have to find out how much the average sale price under msrp on leases was at the time.

So choice one go into your next purchase/lease with all the info here and start from scratch, or go into the older forums on edmunds and try to deduct what your lease would have been.

Forgot to ask you, how many miles average you do per year. On the lease you definitely don’t want to go much over allotted miles and don’t really want to be any allotted miles. You tradeins are most likely in a pristine condition that makes it very attractive to the dealer as a vehicle to resell for the top $$, this could be the reason they offer you a good deal on the new truck. I’d go and get the CarMax estimate (your wholesale number) on your current truck and then use TrueCar service to feel what other dealers are willing to sell/lease a new 2017 Suburban. This way you have unobstructed “view” of what you are doing without your trade obscuring it.

I always have under 24K miles on the vehicle. On the 2015 I have right now there are about 15500 miles on it but that is a little low for me.

So you can safely have a 36 month 36k mi lease then.