Why arent leases cheaper now?

Those too (if you got one) are long gone.

Some states are talking about doing their own. NJs Murphy wants to give $500 to those who filed with tax ID instead of SSN…

Cars come fully loaded with dealer blessings like nitro fill and etch a sketch. these add to the monthly costs as these blessings are paid in full and not residualized.

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The amount of KARR Security System headaches, failures, and misfortunes I have been blessed with over the years is truly astounding.

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Residuals are not crazy high.

I am selling everything I have for about $3800 BELOW Msrp. The residuals are low, money factors are meh and their are zero rebates besides loyalty and 1st responder.

Their used to be 3500 in rebates AND the same if not more of a discount.

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I would venture to say at this point that the residuals are being purposely suppressed so as to shift the risk of unprojected loss of value onto the lessee.

You are the one now gambling whether your car will have equity or not at the end of the term.

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Cheap leases are the quadfecta of:

  • Dealer discount (to drive volume) :x:
  • High RV (with some data behind it) :x:
  • Low rates thus cheap to offer low MF :x:
  • Manufacturers incentives (drive volume) :x:

Also important to remember that not everyone participated. BMW, MB and Lexus were chasing volume expansion and silly bragging rights like “largest luxury brand.” They also had strong CPO conveyor belts to churn those lease returns and thus afford to take some RV risk.

The mainstream brands did not pursue lease penetration to anywhere near the same extent. They were usually in the 20s to low 30s percentage while BMW, Lexus, MB, etc were 50+.

It would be a risk for them to assume today that higher resale values will stick around in 36-42 months’ time.

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And MB made it clear to investors that it isn’t going to be interested in chasing volume in the future:
https://www.thetruthaboutcars.com/2022/05/mercedes-to-focus-on-premium-luxury-vehicles-again/

I think this is the new normal. Manufacturers/dealers hiked up their prices, and the general population is still gobbling up the cars as fast as they can be made (faster, actually).

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my guess is greed

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Best lease deal now is on the Fisker ocean.

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My view of the long-term normal is a pendulum swinging slowly (over years and decades) between

A. Megalomania: chasing growth and crowns like “largest ______” at the expense of margins, profits, and pretty much everything else.

The hype ultimately doesn’t match the reality and shareholders start getting antsy about ballooning costs, shrinking margins and sagging profitability. Cronies on the board often keep these megalomaniacs in the CEO seat for far longer than justified but eventually they resign or are essentially forced out by activist shareholders.

Then the pendulum swings towards

B. A narrow focus on a core mission and profitability, thus jettisoning the fantasies of being in every segment. This can take years (MB is at the start of this process), but when it works it can be immensely profitable.

But the pendulum never stops there. Cash always burns holes in pockets. So it swings back.

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Why doesn’t this have more likes?!

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The market is actually pricing vehicles correctly. Without the brands artificially boosting residuals and lowering money factors while stuffing cash into the trunk, pricing flattened out.

A car loses about 40-50 percent of its value in 3 years. The MSRP is what it is, and there is barely 5% markup in most cars.

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Can you get one today?

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You can get a fisker water bottle today….after someone uses your referral code :joy:

and an ugly hat!

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Faster than current production though. When the shortages resolve (probably not so soon) competition will be back.

Sure competition will be, but that doesn’t mean the deals will be as heavily subsidized as before. There is no shortage of suckers paying 1200/mo for 60k car leases.

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This! Why chase an extra 3% of market share by flooding the market and devaluing your own product? The idea that a $99/mo lease existed just doesnt make sense

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I don’t know anything about manufacturing, but… Why incentive do the car makes have to resolve the shortage when business is apparently booming without it? I mean, I’m sure they’ll make more cars than they are now, but, as others have said below, why flood the market w/ more product than is needed?