For poops and giggles I was looking at the IS 350 F and RC 350 F for leasing potential… and oh man do these lease terribly. I think of all the lease deals I’ve seen, these are the worst.
Local stealership to me wants 630 bucks a month, 36/10 for an RC 350 F with 5k down. MSRP around 57k.
Went to edmunds for some information on these and while Lexus MF is decent at .00030, the residuals on an RC 350 F was about 50 or 49 percent. If it was the RC F, it was even worse at 48 percent.
I understand that Lexus believes that these will drop in value… but what they’re going for CPO and used is not reflecting that. I was looking last night and I couldn’t find an CPO RC 350 Fs for under 30k that were CPO, and these were 2015 model years. They seem to be holding their value very well compared to 440i/S5.
My opinion of the cars is that they are below the standard when it comes to performance, but boy is there a price premium on them. I guess Lexus takes the whole “reliable-Japanese engineering” thing really to heart. I also think Lexus is taking advantage of this lower-value perception to make some quick bucks in the end. I can’t imagine paying anywhere near MSRP for a car that doesn’t hold it’s “value” well according to Lexus, so hopefully they’re being discounted quite a bit.
This was just something I found interesting and wanted to share my opinions with the community.
The IS can be leased at a decent deal. There have been several threads for it going for under the 1% rule.
The RC is leasing bad is understandable. Most coupes don’t lease wel.
Lexus also got hosed on GS leases a couple years ago and has been much more conservative with leasing and residuals since then. They definitely lost a ton of money due to that fiasco
What fiasco? Did they predict higher-than expected residual values for the GS? The GS has retained some value, I was looking at GS350s and a good number of them CPO, 3 years old are still well in the mid 30’s. Right around where 5-series and A6s are.
What matters to the bank is the wholesale value, not what retail is asking.
Retail can only ask for a price that the market is willing to support. How can wholesale be significantly lower than retail?
Think about it. Of course on trade-in and auction, all pricing is wholesale with the assumption that refurbishment would be required to retail the vehicle. If I have a car that retails for 10k, I would offer 5k for wholesale. Figure I spend 1 to 2k refurbishing and that leaves me enough space to pull in a 25 to 30 percent profit to cover my overhead and operating costs. I’m not going to wholesale it for 2k because that’s unreasonable and the vehicle seller is looking for some value as well.
Lexus retain their value based on the reliability and affordability to own concept. If they’re cheaper to fix, thus refurbish, it doesn’t make any sense that wholesale would be lower than it’s competition, especially more expensive to maintain and own competition (German brands).
This is just a discussion of course and I’m not speaking of a matter of fact. The banks obviously care about wholesale value more than retail.
This has been debated before but the short answer is, the RV on a new car lease today is a projection of market value 3 years from now. A used car price today is a value of the market today. They are not really comparable. Cost of capital is going up, trends change, CUVs are in, etc.
Also re: wholesale, is what the market for the industry ie dealers pay for cars at auction. You can’t benchmark that relative to the consumer retail market and in turn what you then think is a reasonable value.
I realize what wholesale is. That’s why I mentioned dealers buying at auction.
The wholesale price of the car is built with room for profit, operating costs, repairs, so on. Basically the cost of “doing business.” It’s why retail is so much higher and why trade in value are all over the place between dealers.