And you cant buy those customers out of their leases right now because their RV is laughable.
Believe it not, those are the ones coming back that are breaking even+tax benefit.
My 2018âs and 2019âs returning generally have to overallow and or break even WITH the tax benefit accounted for.
Are you talking about BMW? It wasnât on XC90. My 2019 had 62% RV and 0.00192
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The inflated RV, while not indicative of true resale value, was a direct result of free market forces. I may very well be totally wrong, but this is how I see it. Competition amongst manufacturers for market share led to higher production volumes and, in turn, greater manufacturer support to move those units to achieve the target market share. In my view, a lease program is an artificially-created combination of RV, MF, and incentives (you can move any one of those 3 levers independently to create the same effect) designed to serve the manufacturerâs goals with that particular model. The captive tethers each of those 3 variables to some element of reality (based on true resale, interest rates, and whatever other actual costs they would incur) then determines how much of a loss theyâre willing to take to drive sales volume.
RV should be a real number that makes sense
MF should be +/- Prime rate
incentives should be the only thing that changes that way the leases make sense AFTER the lease is signed.
Brands realized all the mistakes they were making and are now making the same profit if not more.
pre 2020 was just looney tunes. with a bunch brands chasing monthly sales targets that didnt make sense.
Thats the difference between people who dabble in leasing as a hobby and those who work in it every day, we see how its all a house of cards.
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Why? The rv is a contractually agreed on value at the end. Thereâs no obligation that it must accurately reflect true market value. If a bank wants to artificially inflate the rv above true market value, either to incentivize the lease or to ensure that the vehicles are returned to the dealer to boost used sales, thats their prerogative.
Likewise, if they want to incentivize the mf for whatever reason, who cares?
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And dealers should not be allowed to mark it up, right? lol
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I mean i donât but hey some dealers suck
Again, itâs not up to you. If your GM decides to do it, you will.
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Bud my gm gives me free reign. I just have to tell him what Iâm doing. Maybe the people you work with donât have that trust but my people do.
He gives me a number below invoice and a target units sold. After that Iâm responsible for a review meeting every 3rd of the month.
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Good for you. All Iâm saying is IF a GM decides to do it on all deals, a salesperson goes to him for approval.
Idk what gms youâve dealt with, but Iâve never had one, in a decade of doing this, none of mine have
$300 was the market at that time, $600 is the market at thia time. It doesnt make sense to say $300 wasnt the market price this is the correct market price.
That price was also created with supply and demands in the market at point in time. (Subsidizing RVs, interest rates or incentives doesnt mean it wasnt the market value.) Or 3k below invoice, 5k over msrp doesnt mean anything in terms of market value. Market value is the amount of the car seller agrees to sell, buyer agrees to buy. Msrp and invoice are irrelevant to market value, they are just numbers on a piece of paper.
$300 was an outlier even during the F3x giveaway of 2019.
Yes, it was a race to the bottom here on LH (we are definitely an outlier) but as someone who regularly deals with lease returns and appraisals I can tell you the average 3er/4er payment I see coming from that origination time is most often 500âs and up with a few mid 400âs peppered in there.
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Subsidizing mf and rv is just flat out dumb, the latter more so than the forner
Not just 2019 do you recall 2011-2017?
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Wasnât into roundel so much then but I remember some people rocking sick deals.
Why do you say that?
Because when rvs are off you screw yourself at lease end. Discounting mf is just like discounting price
How do you figure?
I cant think of many good reasons why a bank wouldnt be motivated to choose a higher rv with a higher mf than a lower rv with a lower mf that results in the same lease price.