BMW, Infiniti & Mercedes Lead with Highest Lease Rates
#1
BMW, Infiniti & Mercedes Lead with Highest Lease Rates
Don't Believe Everything You See
Monday, August 1, 2011 by Tom Libby
Have you ever been driving on a highway, noticed how many BMW, Mercedes-Benz and Audi vehicles there are, and wondered how so many people have the money to buy all those fancy cars? (I have.) Well, in many cases the drivers may not have the money because they don't own the cars!
Industry-wide, leases comprise about a fifth of all new vehicle registrations, but within the luxury market, lease penetration is more than twice as high at 45%. Three premium makes: BMW, Infiniti and Mercedes-Benz, actually have national lease rates at or above 50%.
Furthermore, several popular compact premium cars have lease rates above 60%, with the Mercedes-Benz C-Class approaching 70%. Leasing is not limited to smaller vehicles, as all five of the leading large premium sedans have lease rates above 50%. Two of every three 7-Series are leased.
In the two largest metropolitan areas, New York and Los Angeles, leasing is substantially more popular than in the rest of the country. Almost two thirds of all premium vehicles registered in the New York metropolitan area are leased, and almost as many in LA. More than two thirds of most small premium cars registered in these two metropolitan areas are leased, and we see similar results for the large premium sedan category.
These extraordinarily high lease results lead to several conclusions. First, the price of the vehicle is not the be-all and end-all. Rather, the monthly lease payment is a crucial factor. The monthly payment is not completely linked to the price, as the OEM and dealer have several tools by which to manipulate the monthly payment; these include, among other things, artificially raising the forecasted residual amount and increasing/decreasing the up-front lease payment. Second, if your premium make is not in the leasing business, you need to get there right away. Lastly, your lease rates, residuals and drive-away costs need to be competitive.
Monday, August 1, 2011 by Tom Libby
Have you ever been driving on a highway, noticed how many BMW, Mercedes-Benz and Audi vehicles there are, and wondered how so many people have the money to buy all those fancy cars? (I have.) Well, in many cases the drivers may not have the money because they don't own the cars!
Industry-wide, leases comprise about a fifth of all new vehicle registrations, but within the luxury market, lease penetration is more than twice as high at 45%. Three premium makes: BMW, Infiniti and Mercedes-Benz, actually have national lease rates at or above 50%.
Furthermore, several popular compact premium cars have lease rates above 60%, with the Mercedes-Benz C-Class approaching 70%. Leasing is not limited to smaller vehicles, as all five of the leading large premium sedans have lease rates above 50%. Two of every three 7-Series are leased.
In the two largest metropolitan areas, New York and Los Angeles, leasing is substantially more popular than in the rest of the country. Almost two thirds of all premium vehicles registered in the New York metropolitan area are leased, and almost as many in LA. More than two thirds of most small premium cars registered in these two metropolitan areas are leased, and we see similar results for the large premium sedan category.
These extraordinarily high lease results lead to several conclusions. First, the price of the vehicle is not the be-all and end-all. Rather, the monthly lease payment is a crucial factor. The monthly payment is not completely linked to the price, as the OEM and dealer have several tools by which to manipulate the monthly payment; these include, among other things, artificially raising the forecasted residual amount and increasing/decreasing the up-front lease payment. Second, if your premium make is not in the leasing business, you need to get there right away. Lastly, your lease rates, residuals and drive-away costs need to be competitive.
#3
True...a lot of people lease cars because they can't afford it but there are just as many people who lease because they have a lot of money. It goes both ways really.
Sounds like Tommy Libby there is just jealous because he could't afford a nice car even with lease.
Sounds like Tommy Libby there is just jealous because he could't afford a nice car even with lease.
by Tom Libby
Have you ever been driving on a highway, noticed how many BMW, Mercedes-Benz and Audi vehicles there are, and wondered how so many people have the money to buy all those fancy cars? (I have.) Well, in many cases the drivers may not have the money because they don't own the cars!
Have you ever been driving on a highway, noticed how many BMW, Mercedes-Benz and Audi vehicles there are, and wondered how so many people have the money to buy all those fancy cars? (I have.) Well, in many cases the drivers may not have the money because they don't own the cars!
#5
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iTrader: (4)
nothing is surprising here, we all know most people lease those cars. i mean, i would lease a bmw, i am not very sure buying one. lease is great, less tax, all services paid for, you drive the car it's supposed to be (cough cough).
one thing i found surprising is that 50% of IS are leases (and over 50% overall for all compact). comparing that to the overall number, seems like other higher end models have more real buyers
one thing i found surprising is that 50% of IS are leases (and over 50% overall for all compact). comparing that to the overall number, seems like other higher end models have more real buyers
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#8
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iTrader: (3)
Well no matter what the %'s say.. its all about who is willing to move the cars.. I for one tried to lease a Lexus IS350 and my payments was almost as high as if I was buying the car and I got $6K off Sticker Vs. I had leased a few Infiniti(s) in the past couple years and I had the same deal $6-7K off with same down payment and my lease was $400/month max! Its all about the lease rates.. heck, BMW lease rates are decent these days.. The fact is Lexus don't like people to Lease, they prefer for you to buy..and Thats the point they've made with their position but that is understandable Lexus wants good owners instead of Leasers because people who lease tend to abuse their car more than then the people that buys. Lexus wants to keep their car's value higher by taking this approach and it works though its a pain in the *** because leasing a Lexus is definitely not a deal with their lease rates.. (It worked, I own 2 Lexus and counting)
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