Volvo XC90 math

About to negotiate my first lease.

Is this feasible for selling price for a XC90 Recharge Plug-In Hybrid T8 Inscription Expression 6 Passenger?

MSRP: $70k
A-Plan: -$4.5k
Federal tax credit: -$5.4k
CA Clean Fuel Rebate: -$1.1k
Final selling price: $59k

You don’t get this, unless Volvo passes it as lease incentives. And they currently don’t.

@Ursus is correct; Volvo doesn’t pass it thru and it’s not mandatory. In some cases, they may offer a slightly lower payment…but I definitely wouldn’t count on the federal tax credit going to you.

1 Like

Then buying is probably the better deal than leasing, no?

In this case - yes, if you must have a have Volvo. Or you just need to wait until they start offering this rebate as incentive again (which may not be any time soon).

Was able to get a NorCal dealer to quote me $62,400 + TTL for this $70,800 MSRP car, including the CCFR.

After the Federal rebate I would be paying $57,000 + TTL.

Good deal or great deal?

1 Like

Not with Volvo’s resale values.

Only a small subset of new cars lease well.

And a small subset can be bought due to strong resale values.

All the rest are neither.

Not for purchase. I wouldn’t touch a $70K Volvo for less than 30% off :slight_smile:
Search for 2020 and demo/loaners, if you buy.

1 Like

I’ve read around here that $400/month + TTL is the target price for a XC90 lease ($0 DAS, 36/10).

That’s $14,400 in depreciation & interest over 3 years.

Right now Carvana is offering $40k for a 2018 XC90 Inscription.

$57k is not far off from $54.4K…

Where did you read that? From something 2 years old?

3 Likes

Are you saying that too low? Then my dealer quote for purchase is even better, right?

It was never the case on XC90 T6 or T8, maybe T5 loaners and it has never been the target, for sure.

Yours will be $45K as soon as you drive it off the lot lol

What? How on earth do come to these conclusions?

That $40k offer might as well be a mirage, in 3 years it won’t exist. You’ll be lucky to get low 30s.

Add tax on a purchase price of 57k and then you’ll see how much you’re spending on a 3-year purchase.

IDK how many ways you can be told this.

Most cars don’t lease well. Most don’t hold value well for a purchase either. You cannot change things outside your control through sheer force of will or wishful thinking.

I mean my priority is to pay the least amount of money over the three years I intend to drive it.

This purchase offer is looking like it’ll cost me only $17k + TTL over three years.

If I posted a lease deal for $472+tax with $0 DAS for 36/10 that would be celebrated, no?

You don’t know what kind of loss you’ll take on this car in 3 years when you sell the car. One accident is enough to add $10K to your $17K for 3 years. Add another $5k on top for low residual. The point is - you have no idea what you get for it in 3 years, but we know that Volvos resale values drop like a stone.

p.s. go get it for $472/mo and become a celebrity

1 Like

Of course no one knows what the value will be in 3 years time. That’s true for leases too. But we can look at the lease residual, which is 60%.

So the expected value in three years is $42k.

Which means my purchase offer is equivalent to $15k over 36 months, or $417/month

That means nothing. VCFS RVs have nothing to do with reality. Like I said before - your car will worth $45k 5 minutes after you drive it off the lot. Good luck to you, anyway.

1 Like

Looking at what Carvana is offering now is about as useful as looking at what they were offering May 1, 2020. Covid and then chip shortage makes the current situation unique.

But you can look at recent history. If you lease a Honda and keep a clean Carfax you are probably gonna have solid equity. If you lease a Subaru and keep it clean RV is probably dead on. If you lease a Volvo or BMW and keep it clean…you are gonna be way underwater for the entire lease including the day you turn it in.

1 Like

Given the current covid environment, the prices of used cars are inflated. I expect the true value in a normal market of a 2018 xc90 to be around $5-8k less then what is it now. Also, the EV space and technology are constantly changing which means plug-in hybrids might be obsolete in 3 years which would drive down value even lower. No one knows what the future holds but the odds are against the xc90 holding its value.

Have an appointment with the dealer on Friday for this new 2021 XC90 Recharge Inscription Expression 6 seater. MSRP $70,840. Here is their initial offer before any negotiation:

What are my levers to reduce cost? My thoughts:

  1. Max out MSD.
  2. Zero out the $1,013 downpayment so that we are negotiating on the actual gross cap cost.
  3. Grind them down on the gross capital cost to $60k. The rationale being they get to pocket the $5,400 Federal tax credit, which they really should be passing onto me.

Any other ideas?