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Luxury Performance Sedans

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What is this discussion about? Lexus GS 430, Acura RL, BMW 5 Series, Volvo S80, Audi A6, Infiniti M35, Infiniti M45, Mercedes-Benz E-Class, Cadillac STS, Sedan

Messages Page 560 of 1034

#5590 of 10339 Re: acura rl sales stats [lexusguy] by rjlaero

Dec 27, 2005 (10:07 am)

Replying to: lexusguy (Dec 26, 2005 1:31 pm)
Here's the sales stats for the new Audi A6
 
Thru Nov 2005: 15,740
Thru Nov 2004: 12,096
 
I think Audi is happy moving another 3,700 A6's over last years totals. The new body style cars are doing quite well.
 
Acura has moved 16,294 RL's so far this year.
 
The RL looks too much like a glorified Honda Accord, and it doesn't have the presence of a $50,000 vehicle IMO. I guess that's why the RL is doing OK, but it isn't setting the world on fire sales wise.

#5591 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [hpowders] by rjlaero

Dec 27, 2005 (10:31 am)

Replying to: hpowders (Dec 26, 2005 9:14 pm)
It can be a business expense if your self employeed, and writing off $1000 ++ month lease payments makes the tax accountant happy. That may not be the case for you if it's a personal car that you can't write off.
 
A lot of people also get car allowances from their business. And 9 times out of ten, their company wants them to lease a car and not buy it, so they can deduct it as business expense, whether it's $500 a month or $1500.
 
You also have to consider that people leasing $80,000 cars usually make quite a lot of money. You lease thing that depreciate and buy things that appreciate. If you hold onto a car for 7-8 years and are frugal with your car purchases, then leasing may not make much sense to you.
 
But if you buy a $75,000 Mercedes, BMW, Audi, or Lexus and trade it in 3 years later, it's going to be worth about 1/2 of what you paid for it. Most high-line cars depreciate 40-50% of the original MSRP after 3 years.

#5592 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [rjlaero] by markcincinnati

Dec 27, 2005 (11:35 am)

Replying to: rjlaero (Dec 27, 2005 10:31 am)
The LPS marquis "seem" to "want" their customers to lease, not buy.
 
The warranty/maint programs and subvented leases seem targeted at the 24 - 39 month time frame. The CPO programs, too, seem to support a two tiered approach:
 
Tier One:
 
24+ month lease, turn - in, CPO it, sell or re-lease the "used" car to a tier two customer, lease tier one customer another car via more subventing
 
Tier Two:
 
24+ month lease (with 100,000 mi or 6yr warranty extension), turn - in, see if customer is ready to lease a new car or will be repeating the CPO cycle -- keep enticing tier two customer with loyalty bonuses, deals, subventing and more subventing until they graduate to being a tier one customer.
 
Rinse, lather, repeat.
 
BMW, for one, seems keen on leasing cars for a term that will mean the customer always has a warranty, always has a young car and always has an "affordable" payment.
 
My business is IT [services] -- although we do "advise" our clients with respect to hardware, software (IT infrastructure). Businesses often have a "permanent" IT lease payment and they are constantly upgrading their systems whether they are users of Quickbooks, Oracle, SAP or other "global" whole enterprise solutions.
 
These very same middle and upper managers who make these decisions are the customers of Audi, BMW, Cadillac, Infinti, Lexus, Mercedes, and the rest of the Premium and near Premium cars. Keeping their systems [and their cars] "at the current release level" seems to be the norm.
 
Now, I am the old fart in the crowd, at 54, but my clients are generally in their mid 30's to mid 60's and for the most part their cars are less than 4 model years old and generally are one of the broadly defined LPS cars we drone on and on about here on edmunds (and elsewhere.)
 
Rarely do I pull into my client's parking lot and drive up and down executive row and see a Honda or a Toyota or a Chevrolet or a Ford. Usually, what I see are the Premium cars. We do work for Honda here in Ohio -- what do you think the management (at a certain level and up) drives? Acura's, Toyota in Kentucky is a client -- there too, the cars in the parking lot are from Lexus.
 
Sure the management team knows where its bread it buttered and also they probably get sweet deals as part of their comp packages -- but this same group of folks NOT in the car biz also drives the LPS marquis (plus a smattering of Volvos, Jaguars and even the odd Saab here and there.)
 
Company cars? You bet, for a lot of them. The lease payment is 100% acceptable as a deduct. If you use your car 80% for biz and the payment is $600 -- you have a $480 per month deduct. Buying a depreciating asset (for these people in these positions in these examples) is relatively rare.
 
At Audi (here in River City) over 75% of the cars "sold" are leased -- I think at BMW it has gone even higher.
 
My buddy who owned Audi, Porsche and VW said to me, "hardly anyone leases a VW and hardly anyone buys an Audi or a Porsche."
 
Zinzinnati is a conservative German City full of folks who, apparently, mostly, lease their LPS cars. Doesn't make it right, doesn't make it wrong.
 
LPS cars, then, seem to be overwhelmingly "rentals."
 
After saying all of this, my wife, last night, actually said, "perhaps we should buy the next one and keep it forever."
 
Folks, seems to me, who drive LPS cars like the "latest and greatest" -- a four year old whachamacallit just doesn't get it done for most of us [them.]
 
Of course these are completely and utterly unscientific observations, don't you know?

#5593 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [SergeyM] by rjlaero

Dec 27, 2005 (12:01 pm)

Replying to: SergeyM (Dec 26, 2005 10:49 pm)
Another great point about leasing. If someone smacks your car and it's damaged more than 25%, it's going to affect the resale value of your car. You don't worry about that with leasing. Just turn it in and it's not your problem when your done with it. Try to sell a high-line European car with an accident history on a Carfax. Even if it's minor, it makes it very tough to move high dollar cars that have any blemishes on their history.
 
Also, many states require gap insurance be included included in the lease price. If you total your car, you don't thave to worry about a scenario like....the bank says it's worth 32k, but I owe 45k.

#5594 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [rjlaero] by bmwdoug

Dec 27, 2005 (12:35 pm)

Replying to: rjlaero (Dec 27, 2005 12:01 pm)
Well, I have to respectfully disagree. Do you rent your back yard swimming pool? Pools in my neck of the world start at $40,000 and go all the way up to over $100,000. If you should decide to sell your house at some point in time, there is no way you get back your investment. You might be lucky to get 20% in return, and consider yourself lucky if you get that amount! But, you own the Pool, you get enjoyment out of the pool, you can do what you want with the pool.
 
It is the same with cars. I have been over and over leasing vs buying. I have been all over the map on which is best. People keep saying that you don't take the depreciation hit on a Lease. Well, you are paying the depreciation! So, yes you do take a depreciation hit. Why are leases being pushed so hard by BMW and other manufacturers? Because, they make money for Dealer and Company. A person leases a car for two or three years, then takes the car back to the Dealer and leases another one. The Dealer gets money from the new lease, and makes a lot of money from the car that was traded in by CPO'ing it, then selling it for a very, very nice profit.
 
The person who owns a car can do what they want. They can trade it in, sell it privately, or keep it. They OWN the car. If you can make a nice down payment, buying is much better the leasing. Unless, you can deduct the lease payment as a business expense. In my humble opinion, paying on something for two or three years, then getting ZERO ownership does not make sense. I have ran the numbers over and over, it is the only way to see which way is better. In each case buying wins out, even with depreciation.
 
Yes, there are opportunity costs. But, who is to say that investment is going to return the big money? What if it busts? Also, how many people really take that down payment money and actually properly invest it? Those who are that savvy, have those means, and understand the market that well, I can guarantee you are not worried about the costs of leasing or buying; it is chump change to them. Bottom line is this: A $50,000 plus car is that amount whether it is leased or purchased.

#5595 of 10339 Has Anybody Been Watching... by tayl0rd

Dec 27, 2005 (12:50 pm)

BMW: Birth of a Sports Car on SPEED? It's a BMW propaganda program about the new 6-series. Pretty interesting. It's been cataloging the steps of its creation from design, to testing, to (this past Sunday's episode) production. It's pretty interesting. It airs at 6 or 7 pm each Sunday. But I'm not sure if there will be any shows after the Production episode. If you're lucky, you can catch a rerun of it some time this week.

#5596 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [bmwdoug] by rjlaero

Dec 27, 2005 (1:40 pm)

Replying to: bmwdoug (Dec 27, 2005 12:35 pm)
It's hard to compare leasing a highline car with buying a 40,000 swimming pool in your backyard. I don't know if you're talking million dollar homes in Miami or Beverly hills, but I don't know of any people who have $60,000 swimmimng pools in their backyard.
 
And if you have that much money anyway, you're probably living in a $750,000 -$ 1,000,000 dollar home, in which casy you have quite a bit of extra income to play with anyway.
 
You shouldn't be stressing out over a few thosands dollars on leasing vs. buying a high line car luxury car. Maybe the guy who's leasing an entry level Audi A4 - BMW 3 series car for 369 bucks a month. But that's a different market of clientle.

#5597 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [bmwdoug] by bdr127

Dec 27, 2005 (1:42 pm)

Replying to: bmwdoug (Dec 27, 2005 12:35 pm)
Well, I have to respectfully disagree. Do you rent your back yard swimming pool? Pools in my neck of the world start at $40,000 and go all the way up to over $100,000. If you should decide to sell your house at some point in time, there is no way you get back your investment. You might be lucky to get 20% in return, and consider yourself lucky if you get that amount! But, you own the Pool, you get enjoyment out of the pool, you can do what you want with the pool.
 
Without getting into a big debate about swimming pools, I think the biggest reason you can't compare leasing cars to pools because you can't exactly give the pool back when you're done with it....

#5598 of 10339 Re: There Is Nothing Quite As Wonderful As Reversals! [bmwdoug] by docnukem

Dec 27, 2005 (1:50 pm)

Replying to: bmwdoug (Dec 27, 2005 12:35 pm)
You think you don't get back your investment on pools, you should try darkrooms. A decent one may only set you back 12-20k, but you get nada for it when you sell (particularly now with digital). The one we have now has a very nice sink in it...it would be great for fish-cleaning.
 
If only I could have leased them....
 
(it did make a very nice place to hide gifts this holiday season)
 
But getting back to 50k luxury sport sedans, there are valid arguments on both sides. If you need a new car every three years and know how much you are going to drive, I think a lease makes perfect sense if the payments are going to be the same as a purchase with a large down-payment. This is especially true with brands whose reliability are in question. Others may buy an LPS because the new every three just isn't necessary and/or their driving habits are unpredictable. Personally, I plan on keeping my M35x until the my (almost) 11yo gets out of high school. Hence, I bought.

#5599 of 10339 Don't know if this is true or not. . . by markcincinnati

Dec 27, 2005 (2:41 pm)

. . .but it seems sometimes that LPS cars are not meant to be bought. At least the MFG's certainly don't want that, apparently. They subvent the leases with way below market financing and inflate the residuals (in a closed end lease) to make the payment so low that only a HUGE HUGE discount off of MSRP makes buying them even remotely a sane choice.
 
Having said that, if you can keep one more than 5 or 7 years without breathtakingly expensive repair bills and maintenance costs, go for it.
 
My observation people do not buy and hold LPS cars, but they'll buy a GMC SUV or a Chrylser 300M and keep it "forever" and apparently don't have to put a ton of money into them.
 
My cousin has what I think is an ancient Chevy SUV, it is worthless financially, but it has good tires and brakes, the A/C works and it has a pretty good sound system, it uses regular and it is paid for -- it literally takes a lickin and keeps on tickin' -- perhaps a Lexus would do that too.
 
Once I get to 50,000 miles on one of these cars (or close to it) I start to sweat about the "normal" repair and / or replacement of the power actuated steering column which has a component part price of $1500 and god knows how much for labor. . .but that's jus' me.
 
Seems the cost of buying an LPS car vs leasing is about the same cash-wise. Of course at the end of 5 years, I just think I would feel so vulnerable in my gizmo intensive LPS car, unless I was willing to do without the creature comforts that were part and parcel of the reason I got it in the first place.
 
But, like I said, thas jus me. . .

Messages Page 560 of 1034

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