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.
#9868 of 24726 Re: Oac葉he operative term葉rue driver [ljflx]
Jul 24, 2005 (11:47 am)
Audis have never had great residuals. They dont have the MB or BMW badge, and largely mediocre reliability, so they are in the same boat with companies like Jaguar or Cadillac.
#9869 of 24726 Re: Oac葉he operative term葉rue driver [lexusguy]
Jul 24, 2005 (2:23 pm)
Those MB S residuals are awful. It's not easy to sell a 3 year old MB S-class anymore - at least not where I live. I remember reading about a 55% residual on MB's in the Wall Street Journal a few years back (vs.mid- high 60's in the late 90's) so the slip is getting worse. MB's poor reliability is not able to withstand its brand name based on this.
I went back and put in a fully loaded LS ultra to see how that would score and it did even better than the base car retaining 56% on dealer trade-in, 59.8% on private party sale, 67.3% on dealer sale and 72.8% as a certified vehicle using a $71K initial MSRP. This is really telling as an LS430 ultra is about equal to a stripped S430 in comparable features.
http://www.edmunds.com/used/2002/lexus/ls430/100003418/options.html?tmvaction=vdpresult&ti- - - d=edmunds.u.options.utmv.vdpoption.1.Lexus*
#9870 of 24726 Re: Oac葉he operative term葉rue driver [ljflx]
Jul 24, 2005 (4:43 pm)
Thanks for the presentation of the data. There really isn't much to add.
I did see one curious statistic: the percent retained value of the S500 and an S430 were almost exactly the same. I would have expected that the higher MSRP on the S500 would have translated into a higher percent lost. (This is the line of reasoning usually trotted out to explain the often low resale on lux sedans.) Can anyone explain this?
I'm no fan of Lexus, but as their sales slide, D-C is going to have to subsidize their leases to compensate for the poor resale.
#9873 of 24726 Re: Oac葉he operative term葉rue driver [blckislandguy]
Jul 24, 2005 (5:22 pm)
Or drop MSRP's which is starting to look inevitable. Auditors will only let you BS them on future retention values for so long. Sooner or later they will make you take the cost provision up front on sale rather than at lease end. Then you get a double whammy - the car sold years earlier and the car being sold now (sorry I'm a CFO and ex-auditor by trade). They've actually been subsidizing leases for years now. When I was shopping in 2001 the residual buyout on an $86K S500 after 3 years and 36K miles was $59K (69%). When I checked prices in 2004 at the time I renewed my LS430 lease those 2001s were around $47K (54%).Personally I was mad the other way as the LS430 I leased in 2001 retained a lot more value than the lease retention amount. Whoever financed those 2001 MB leases got killed. I'm sure plenty went to MB Finance and is a solid part of the reason why MB is down to break-even financial results. The E-class I was initially pricing also had a 68% retained value in the lease and 55% in the real world 3 years later. This is also why you need to be real careful with forecasted retention values if your buying rather than leasing. They are based on leases currently being written and not past history. The aggressive risk taking lease writer will always be the highest retention value keeper - in the future prediction world. It's funny how a risky financial move can reward you with great marketing. In the end leasing an MB S or an Audi A8 is the way to go. Let the bank or the Mfr take the risk on future value.
The hope MB must have is that quality is restored in the public's mind to avoid price cuts. That's why they are pushing the line that the quality is already back. But it takes years to prove that one. I'm sure there are many MB execs losing sleep these days.
#9876 of 24726 Re: Oac葉he operative term葉rue driver [ljflx]
Jul 25, 2005 (7:57 am)
All this resale talk....I mean really.
Seriously though it is no secret that the 2000 S-Class is going to take a huge hit in that area due to poor quality of the first half of the production run, the 2000-2002 models were seriously lacking to put it mildly in areas of build compared to previous S-Classes. Then the suspension/comand problems started. I doubt if the re-sale will improve for the 2003+ models, or will the whole line suffer because of the new S-Class, which at least in its physical build is much better, relaibility we'll have to see about.