Last post on Jan 28, 2013 at 5:55 PM
You are in the Sedans
What is this discussion about?
Audi A8, BMW 7 Series, Jaguar XJ-Series, Lexus LS 460, Mercedes-Benz S-Class, Volkswagen Phaeton, Maserati Quattroporte, Mercedes-Benz CL-Class, Sedan
Let's try to define this forum as being limited to luxury performance vehicles where the mainstream version in a typical configuration has an MSRP of at least $60k.
A luxury vehicle with a base price of $59k qualifies because it would typically be bought with some additional equipment, bringing the MSRP over $60k.
Vehicles like the E, 5, A6, M, or GS, even if available in certain versions over $60k, don't qualify because they are cars from companies that have higher end cars in their lineups.
Dec 19, 2005 (5:21 pm)
There are lots of rumors, both in American and British press, of Renault acquiring Jag from Ford. It makes perfect sense to me.
Ford could only give the S type old platform/engine from Lincoln LS, and X type a pedestrian platform from Mondeo. But Renault could give Jag thoroughly modern platforms and engines from Infiniti, but allow the Brits to tune the suspensions and lacquer up the interiors . Jag cost structure would decrease dramatically, giving it a distinct advantage in the market.
To me, new Infiniti really started with the introduction of G35 five years ago. And already KBB names M45 and G35c as the luxury sedan and coupe with the very best residuals. So residuals, which are the bane of Jag currently, would take quantum leaps forward.
Renault won the 2005 F1 championship. So they certainly have outstanding chassis and engine engineers. Right now, they don't have any hi performance commercial cars to work on. Or maybe they've been helping Infiniti all along!
Ford has lost so much money on Jag, they might be willing to sell it for a song. RR and Bentley are riding on German cars, so why not Jag on French/Japanese?
When Renault decided to rescue Nissan, not many people thought it could work. I don't know how a rescue of Jag couldn't work. The risk: a couple of billions! Nissan's yearly profits are much bigger than that. The potential rewards are so much greater than the risk this time.
#12229 of 24726 Re: ALG [nvbanker]
Dec 19, 2005 (5:36 pm)
but by the time that 4 year lease came to an end, B of A was begging people to buy their truck at a substantially reduced offering, as its value was much closer to 50% by then, leaving B of A eating millions.....
Picking the exceptions versus the norms in residual predictions distorts the real picture of residual forecasting.
Similarily picking an exceptional company like Enron and claiming that this represents the norm in Corporate America distorts the real picture of corporate America.
It ceases to amaze me at what lengths some forum members will go through to discredit any organiztion that ranks BMW as number one.
BMW is the number one luxury marque in the world! Where are the forum members here that will discredit the whole world and claim that most people in the world are idiots for wanting to buy a BMW?
Dec 19, 2005 (6:03 pm)
The Navigator case was hardly the exception; many other SUV leases were just as bad for the banks, thanks to ALG nonsense. In fact, IMHO, the ALG unrealistic inflation of SUV residual was a big factor in the SUV popularity (the actual cost to the lessee was far less than the MSRP suggested). The case on VW New Beatle was even worse; Passat to a somewhat less degree, ML really bad, etc. etc. Banks don't just stop a branch of its operation on one bad deals; it's the whole series of bad deals due to ALG's nonsensical forecasts that made major banks stop underwriting leases.
I actually took the other side of the trade when I acquired my SAAB 9-5 wagon in 2001. I had the money to buy the wagon outright with cash, but instead chose to lease, betting on the fact ALG was inflating residual. At lease end I knocked nearly $2k off the buy-out price, saving $1.5k compared to outright purchase even without considering the subsidized interest rate (which was financing some $30k at near-zero interest rate, a good deal in itself, to the tune of another $3k or so at savings account rate or $6k at average mortgage rate during that time period).
If you have been watching, ALG incorrect residual projection has been the norm not the exception over the past decade; that's why third-party banks have got out of leasing business, and only the captive financial arms of the manufacturers are still in the game, essentially cooking books by delaying inventory write-downs.
#12231 of 24726 Hey people?
Dec 19, 2005 (6:17 pm)
High - End - Luxury - Marques
Not open season on any lease issue that might cross your mind ...
#12232 of 24726 Re: ALG [brightness04]
Dec 19, 2005 (6:17 pm)
The norm is this:
BMW residuals/retained values have been consistently the highest in the industry for many years!
Taking into account historic performance the ALG and Blue Book residuals for BMWs have been consistently correct. Not consistently incorrect as the obscure examples that were pointed out by forum members.
Comparing a Lincoln Navigator or a Beetle with BMWs is completely pointless. Not even the Lexus brand is comparable to BMW in terms of residuals.
#12233 of 24726 Re: ALG [dewey]
Dec 19, 2005 (6:18 pm)
"Picking the exceptions versus the norms in residual predictions distorts the real picture of residual forecasting."
So B of A quit the business because of the exceptions???
NV banker - I meant the big locals and regionals. Chase has cut way back and uses their own residuals now in those circumstances where it chooses to lease. The ALG rankings have no foundation. Any responsible financial person will say - "show me the past performance and your future predictions and explain any differences please".
In the end this is going to be (and we're getting there rapidly) a business where the auto mfr takes all the risk and lives with his/alg's future predictions.
#12234 of 24726 Let's move on
Dec 19, 2005 (6:20 pm)
This is not a leasing discussion, let's give it a rest ... please.
Dec 19, 2005 (6:21 pm)
ALG residuals for BMWs have been consistently correct.
Based on what?? The overwhelming majority of leased BMW's are returned instead of being bought out at lease end, despite the "disposition fee" (another premium for put option underwriter). That alone should tell you that the residual projection is wrong. If the residual were correct, there should have been an even wash between buy-out and returns.
#12236 of 24726 Re: ALG [brightness04]
Dec 19, 2005 (6:29 pm)
Based on what??
BMW has the best historic retained value performance! Not merely projection but also HISTORIC!
What more proof do you need then that?
Or do you want to prove your arguments based on Banks losing big bucks from leases on Navigators and various SUVs that have no relation whatsoever to BMW?
That to me sounds pointless, dont you think?
Dec 19, 2005 (6:30 pm)
Not even the Lexus brand is comparable to BMW in terms of residuals.
ALG actually gives 4 Lexus models (including ES330 and RX330, the two models that account for some 80% of Lexus sales) 5-star in terms of depreciation. BMW? not a single model received 5-star. Not that I deem ALG reliable, but since you are making your argument based on ALG ratings; you may want to look into some of the consistency issues.