Last post on Mar 14, 2013 at 9:16 AM
You are in the Cadillac CTS/CTS-V
What is this discussion about?
Cadillac CTS-V, Cadillac CTS, Sedan
#648 of 2880 Re: We need some road tests [rockylee]
Feb 27, 2007 (6:51 am)
STS's were "routinely" -$9,000 from MSRP then there were low low low money factor leases, inflated residuals and soon the MSRP of the STS and the TCO were down in Chevy land around here.
We all want a bargain basement Bimmer?
Many of the 2007 CTS's "on the lot" are already at $39K -- these have no nav systems and other than the optional extra cost paint and a sunroof, they seem pretty much equipped as most mfgr's would call "premium."
Yep, I'd order "Premium, Sport, Technology and Cold Weather Packages on my AWD 300HP version." The thing is, using BMW's as a "comparison" -- despite higher MSRP's, they often can be had at lease for prices that apparently take advantage of high residuals and more or less reasonable money factors. My wife's BMW at nearly $48K is $581/mo 36 months, 45K miles, $250 down.
The "comparably" priced cars from America (even Cadillac) often (tit for tat MSRP) are over $100 higher (and no free maintenance.)
Some people claim BMW is not a buyer's car, that the BMW leasing arm's sole purpose in life is to flood the market with Bimmers (75% of them are leased according to our dealer, #10 in the US.)
So where does that leave GM? Discountarama? 0% money factors/interest rates, artificially high residuals making early lease terminations virtually impossible?
One reason, besides a desire to "always" have a young vehicle, that BMW regularly is the sales leader in the LPS world, appears to be they often are the lower cost vehicles -- then I guess, you add badge appeal (for some.)
There are certainly folks HERE that would argue in favor of the CTS (and I do believe they are sincere.)
Yet, the comparisons to the E class and 5 series and I assume A6 class are continuing. Perhaps this comparison is to justify the acquisition of the CTS "as if to say."
I wonder, however, if "the collective we" shop for the new CTS and a BMW 5 series can be had (comparably equipped) for the same lease deal, how many people will still go for the 'merican car?
My A6 was $53,286 -- the lease is $640/mo 36, 45K $350 out the door, sec dep waived, bla bla bla. A Chrysler 300C for $39 months is more and requires a 10% of MSRP "cap cost reduction." Hmmm. The $53K German is "cheaper" than the $39K German/American. Why bother?
Sure sure, check out the "current offers" section and the 300 may come in less (but for 12,000 miles per year, for 42 months with no money down, etc.) The foreign car still seems more attractive.
Now, to those of you (few or many) who are not in favor of leasing for whatever reason, please consider if it is less per month to lease and the lease is made up of cost of money, residual over time and MSRP (and selling price) that the car that costs the least to lease is very likely the car that will cost the least to buy. 0% GM financing is nothing to be sneezed at, and it is a condiseration.
But my trusty old accountant still says, "buy that which appreciates, rent that which depreciates." So, with that, I wonder if the new BMW 5-er at thousands more MSRP won't be an easier sell than a Cadillac CTS if history repeats itself.
I would strongly consider a 5 for $599 month vs the CTS at a like lease. You may or may not concur.
The inherent goodness of the Cadillac needs, perhaps, some incentives. . .perhaps.
#649 of 2880 Re: 08 CTS size vis a vis 530Xi [sandiegan1]
Feb 27, 2007 (8:05 am)
A good looking CTS wagon at a $10K discount would steal away lots of more profitable SRX sales.
#650 of 2880 Re: We need some road tests [rockylee]
Feb 27, 2007 (8:15 am)
I might take you up on that, Rocky. One of the joys with domestics is that their are plenty of dealerships. We only have one Caddy dealer in Austin. However, I can drive any direction to find another dealer within 50-100 miles.
#651 of 2880 Re: 08 CTS size vis a vis 530Xi [biker4]
Feb 27, 2007 (10:20 am)
Remember, the big discounts on the current CTS are partly because of the coming 2008. My friend just got an '06 for $9000 off, but they weren't wanting to talk anything like that on an '07, and I bet it'll be a while before '08s see major discounting, what with all the demand this forum's creating!
Also - didn't I read somewhere the wagon would be export only?
#652 of 2880 Re: 08 CTS size vis a vis 530Xi [texases]
Feb 27, 2007 (12:28 pm)
You are 100% correct about the discounting. I anticipate this car getting great reviews and I dont see dealers being willing to offer great deals for many months after launch.
The coupe and wagon have NOT been confirmed in any way, shape or form. If they happen they may not both be sold here since wagons arent all that popular in the states.
Feb 27, 2007 (6:42 pm)
$640 a month? You could purchase a CTS for that much.
2007 CTS with the 3.6 engine.
Split-Fold rear seat
6 Cd changer
$35,040 Via Cars Direct.
First off, NOT $40K. NOT EVEN CLOSE. All of the blather about these costing $45K+ and such - maybe for the V version, but not for the normal one.
Secondly, and most importantly, that's axactly $640 a month with 0 down at 0% financing(trust me - GM will offer 0% or 1.9% or something silly in a few months). Yes, that includes tax, license, and such here in California.
Why lease when you can buy with a year longer warranty, no mileage worries, and no fees/condition adjustment when you turn it in?
Feb 27, 2007 (7:19 pm)
My point about $640/mo was for a car with an MSRP of $53,286.
I suspect if there is a $40K+ CTS for lease at $640/mo and an Audi A6, BMW 5 or Mercedes E is about the same bucks per month, folks would pause and give consideration to the German cars.
Why pay $640 per month for a sub $40K car when the same money gets you a $50K+ car?
On the subject of leasing, suffice it to say that it is not for everyone. O% financing is perhaps the best way to acquire a car -- but even then the purchase of an asset that gains value and the rental of an asset that loses value is not an absurd philosophy.
My point was that the CTS MAY need to be subvented to lure a potential buyer -- especially if the CTS is thousands less at MSRP but similarly priced at lease to a BMW 5 series, fer instance.
#655 of 2880 Re: Huh? [markcincinnati]
Feb 27, 2007 (8:16 pm)
It is a little counterintuitive that the high demand for a BMW would make it less expensive to lease.
Feb 27, 2007 (10:53 pm)
Why ppay for a 50K+ car what's massively overpriced when you can OWN a simmilar car for less - just without the snob factor?
#657 of 2880 If elected I will not serve. . .
Feb 28, 2007 (6:27 am)
. . .here is an explanation of why BMW's (often) are the lowest priced cars when leasing, at least.
Note: regardless of the source of the calculation called residual, the residual value of the car at X months in the future has a HUGE impact on the lease payment. Two other factors, of course, are influential and can be, likewise, "sub-vented." On that note, think of sub-venting as "financial support" for a lease (usually provided by the mfgr's leasing arm.)
BMW's have enjoyed high residuals for some time. Regardless of empirical economic evidence that may or may not actually exist, BMW's are "worth more" after 36 months than many (most?) cars available today. It may be true that the residual percentages are "artificial" or it simply may be the simple simple "Economics 101" supply and demand. A used BMW retains "something" that makes it very desirable (not to me, to the "market.")
Cadillacs, on the other hand, have not enjoyed as great a residual value after X months.
Many (most?) cars residual value literally plummets the moment it is sold to a customer. This is one of the reasons a new Chrysler 300 can be leased (although sub-venting changes this, too) for MORE than a car costing over $10,000 more at MSRP.
Some folks believe BMW USA is NOT in the business of selling cars -- that they are, rather, in the leasing business (75%+ of Bimmers being rented, NOT purchased.)
It is, very possible a $50K BMW will actually be less money to lease than a $40K Cadillac -- based on similar terms, etc.
If the residual is NOT a total sham, the buyer of said BMW and Cadillac will experience the exact same things at X months down the road as those who leased experience.
The purchased Cadillac will cost more at X months than the BMW, that is.
Of course, if the BMW lease is sub-vented as it pertains to residual, this makes leasing, not buying, even a more frugal financial choice.
If "someone else's money" is being used to allow you to acquire a $50K car for an amount that is the same as it would cost to lease a $40K car (and the $50K car is one that you actually would want) the $50K car is a lay down.
Likewise 0% interest is another form of sub-venting a purchase.
Likewise low low low "money factors" (the interest rate contained in a lease) will have yet another similar effect: the lease price per month will decrease.
High residual and low money factors have a huge impact upon the lease prices. It is sometimes thought that the leasing company called BMW Financial is both a marketing and sales tool helping BMW move thousands of cars per month, often placing them at the top of any category in which they are placed (ELLPS, LPS, etc.)
GM on the other hand has taken a discount approach due to the fact that even the most conservative estimates of residual have often proven too optimistic and, after all, how much lower than 0% interest can you go?
The new crop of American cars is, hopefully, turning the tide somewhat. Cadillac should enjoy higher residuals with the newest generation of the CTS. Problem is, it takes years for the new, true residual to become known.
After the initial launch and hoopla from the auto magazines (hopefully, anyway, there will be hoopla), Cadillac will enjoy a honeymoon period where the cars, however sold, will be sold close to MSRP. Newer models from the competition, time, boredom and other market factors will erode this position probably within 6 - 9 months of launch. Yet in that period of time the 36 month true residual will only be a forecast.
BMW can, somewhat, rest on its laurels (and I am using BMW as an example, not meaning, i.e., to exclude other Germans, Europeans or Japanese competition.) It can say after 24 months a new 5 series is able to command "X%" of MSRP, meanwhile Cadillac will have to settle for ".8X%" or sub-vent the heck out of the lease.
My wife enjoyed a $581 lease payment on a $48K BMW while the same could not be said at the time of the lease on a 2005.5 Audi A4 (due to residual.) The $44K A4 had an asking lease price (same terms as the BMW) of $644 per month.
Since the vehicles, were for her, interchangeable, she made an economic decision.
If the BMW 5 series is "within spittin' distance" financially of the new CTS, for instance, it matters not if one believes the 5 is "massively overpriced."
Because it costs less to use for 36 months than the "appropriately priced" Cadillac.
Many folks may cross shop the Cadillac with the BMW (3 and 5) and I am suggesting that many folks within that population may find the "massively overpriced" Bimmers lower cost per month from 24 - 36 months on a $0.00 down lease which includes maintenance.
The MSRP is almost irrelevant.
It is the "monthly check I have to write" that will have huge sway on the decision. Cadillac is -- without substantial sub-venting -- the knife in the gun fight.
Discountarama? Even more massive sub-venting? 0% interest rates? All of the above?
Probably, at least for the early years of the new CTS -- until its inherent goodness (if it indeed manifests itself) becomes an historical fact (check KBB 36 months from launch, i.e.)
With all due respect, I submit it is intuitive that the higher buck cars of a certain persuasion will almost always cost less than the lower buck cars of another certain persuasion.
American cars are on the hunt for higher residual values -- they just haven't yet cornered their prey.