Why arent leases cheaoer now? Assuming you can get a car at MSRP, residuals are crazy high now with the used market. So why arent leases cheaper now? Are they assuming lower residual values than whats available now?
mOneY FacToR + dEalEr Add OnS
Do you know of anything that’s cheaper right now?
Those 16 cents I saved on my Independence Day cookout are loooong gone.
There’s a lot to unpack here, but why do you think residual speculation for three to four years from this point would match the market now?
It’s the residual they expect three years from now after inventory recovers. Discounts are poor from low current inventory (use to get 10 percent off etc), no manufacture incentives from low inventory, interest rates climbing… basically all headwinds.
The price of nitrogen has skyrocketed.
It’s a very rare resource and limited in supply. Demand has increased and so has the price.
Well, that nitrogen too! lol
We all became accustomed to a market where manufacturers subsidize lease costs as a form of indirect incentive, to get their vehicles to a more appealing price point and drive volume.
Right now there isn’t enough supply, so there is no reason to spend money to encourage demand. People are buying cars in sufficient numbers that subsidies to our lease costs are largely unneeded.
At the same time, inflation is driving up the cost of the car itself and the cost of money is going up.
Graphics cards, finally. Prices in active collapse last two months.
I have a dealership locally asking $760 for a rogue platinum lease lmao: $394/month 24 months 10k miles with $7400 down + TTL '22 Frontier SV for $293/month 24 months 10k with a mere $5k + TTL. That’s around $580/month for a frontier
I see “ok” deals on a new 4wd Silverado. At some point gas prices would have to start hurting sales of these things.
On a lease, youre paying based on the depreciation from the selling price down to the residual value. If selling prices are high and incentives are unnecessary, even if rvs are bumped up a bit, the delta between selling price and rv is still larger than previously. Add in higher money factors, etc, and it just gets worse.
I don’t see this changing back to the “old way.” Most manufacturers have said they are perfectly happy making gigantic profits on lower sales volume. At some point, someone in the market is going to go the other way and start pumping out cars as quickly as they can (once the supply constraints are gone), but until then, it’s going to be no discounts, high money factor, non-subsidized residuals, and dealer markups. I can’t wait until my M340i lease is up in November. Then I can get a nice Sentra for the same price.
this ^ most people don’t realize that OEMs were buying down rates & inflating residuals.
The 18m Nissan deals illustrate that high residuals are and should stay high near term but that 2-3 years out we’re back to normal depreciation curves.
Dealers want your stimmy checks
The 18m Nissan deals suggest to me that Nissan wants to make damn sure that everyone returns their truck at the end so they can sell it now and sell it again. If you can push a lease out with a very high rv and a very high mf, you can generate a lot of income and completely disincentivize the consumer from ever thinking of buying it out at the end.
With Nissan, I’m good with that.
Incentives are almost non-exist and dealers do not discount much. Interest rates went up. Banks do not adjust residuals suddenly to current market situation since they forecast 3 years ahead value of the car. So overall it is worse than 2 years ago.
But if you are going after cars that were historically not incentivized you may find out some of them cheaper than before.
You know nothing, Jon Snow.