Yeah but it’s right pocket/left pocket. The values 18 months out will be closer to 60% than 100% and their interest income will be mostly offset with the write downs they will need to take when they mark the inventory to market.
Does Nissan have an inspection charge in addition to disposition at least end?
I’m considering going in on this also.
Idk what the payment range on them is exactly, but say you’re paying $350 a month for a $45,000 Pro 4X. After 18 months, you’ve only payed $6500. You return the car to Nissan, and it’s worth $30k. Nissan lost out on that difference and they now have a significantly depreciated asset.
What’s really in it for them by structuring it like this? Why haven’t other captives done it this way?
I have no idea what the answer is I’m just thinking out loud
2 Likes
@xmonger no inspection charges
@NATO their residual analysts come up with these numbers. These captives actually have people who come up with these numbers. I’m sure given the way the market is going you can expect to see these residuals drop
I think this could be part of the equation here. They are banking on the market potentially being not much better than it is now…so the lessors could have a probability of buying the lease out. And if they decide to do financing specials, or toss in OL offers, even sweeter.
“I got this truck brand new, haven’t put a ton of miles on it yet, and there isn’t much to feasibly jump into right now”
Agreed. Lets not kid ourselves… there is still money to be made and/or customer investment happening here.
Let’s assume most people IRL are paying more than those on LH and not doing one-pay leases. $500-550 comes out to around $9-10k over 18 months.
They could structure the same payments with a lower RV and lower MF. Why don’t they?
My guess is that this structure guarantees no flips and very few end-of-lease buyouts. We just went through a period where dealers were crying out for inventory so they created short-term leases that are virtually guaranteed to come back to Nissan dealerships relatively quickly.
3 Likes
Very good point and that never occurred to me. I was stuck in the mindset of the LH world.
It’s simpler than that. Nissan North America has a huge Units In Operation issue. Their 5-year UIO is falling through the floor at an accelerated pace compared to other manufacturers. A cheap 18 top 24-month lease window brings more people into the brand while almost doubling lease turns vs. a normal cycle. One of a few ways I imagine they’re trying to combat the nosedive.
1 Like
Perfect example… got this today from a “reputable” dealer in SoCal. 
1 Like
$900 a Month after 1 Pay…lol
1 Like
Maybe I’m the only one who finds this funny, lol. Dunno how common it is, I would imagine before covid “negative” depreciation might have been possible on specific models at certain times of year (2wd 4 Cyl SR Tacoma on December 31st that a dealer really wanted off of the lot)? EVs with the 7500 credit I guess?
Lease end buyout higher than you actually “paid” for the vehicle at time of lease inception. Like someone else said, right pocket/left pocket.
2 Likes
What protects you when you do a 18/10 one-pay lease if the truck gets totaled 6 months into lease. Are you out the all of the money you paid for the lease or does Nissan reimburse the remaining 12 months that you didn’t use the vehicle?
My research before signing indicated that yes, it is prorated. I tried to find this explicitly stated in the contract but couldn’t find it, presumably because Nissan is behind in general as far as one pay leases.
The contract does say that capitalized cost reductions are not refunded. Since the single payment is a lease payment and not a capitalized cost reduction, I don’t think this wording applies.
2 Likes
The one pay works like an escrow and what would have been your monthly payment is applied to your account monthly. Your credit report actually shows a monthly payment being made.
I would assume that escrow is returned to the payer if the leased car is totaled.
3 Likes
This makes sense, is this stated somewhere in the contract and I missed it? Would like to have something to point to when this question inevitably comes up again. Thanks.
1 Like
That makes more sense. This has been my first lease and I’ve had to coach the dealer along a process.
Thanks to all the LH contributors I was able to negotiate an 18/10 one-pay for $5996 OTD; Frontier Pro4X $48250 MSRP
7 Likes
Someone should post the question on NMAC’s social media. There should be no ambiguity here.
The escrow stuff just sounds like an internet invention. Yeah GAAP accounting requires them to move unearned revenue to “earned” status every month and that’s how the credit reporting works too. None of that means the money is in an escrow account.
3 Likes
What state?
Effective $334pm!!!
Post the details for others to follow
1 Like