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Old 08-07-14, 06:59 AM   #676
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^Yup. I've been thinking about this a lot lately... it wasn't that long ago that $42-44k got you a loaded IS (300), 3 Series (330i) or C Class (C320). They had base prices just above $30k and about $10k worth of options, maybe a little more, and with that you had the best of what each manufacturer offered for "entry level."

Now we've got CLAs, CTs, 1 Series, 2 Series, A3s, inflation has far outpaced increases in income and rapid advancements in technology. Now a days, if you want a loaded IS, 3 or C Class as referenced above, you're shelling over $50k+. I get it, and I understand why, but it's a bit of a shame. It used to be that if you were a few years out of college and landed a decent job, something like a nice 325i or 330i was generally within reach. Now, you're looking at a car that costs almost 40-75% more, and a lot of jobs are paying less now than they were back then. No wonder young people are losing interest in driving...
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Old 08-07-14, 08:51 AM   #677
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I still think it's too much for either a 3 or a C-class.

Way too much.

$45k would be the highest I'd go.
Thats you. $45k wouldn't get you a well optioned top engine anything in this range, including an IS. Anyways, you can buy a C Class for $45k...If all you want to spend is $45k. It just won't be a loaded C400 4 Matic.

People will buy this C I promise you. And every C won't be $60k, in fact the vast majority of C's won't be $60k. just very well optioned ones. Don't blame MB for not being afraid to offer a highly optioned car like Lexus is.

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Originally Posted by MPLexus301
Now a days, if you want a loaded IS, 3 or C Class as referenced above, you're shelling over $50k+. I get it, and I understand why, but it's a bit of a shame. It used to be that if you were a few years out of college and landed a decent job, something like a nice 325i or 330i was generally within reach. Now, you're looking at a car that costs almost 40-75% more, and a lot of jobs are paying less now than they were back then. No wonder young people are losing interest in driving...
This is an American phenomenon. We value size, so if a car is smaller it has to be cheaper, and we compare the maximum optioned prices of cars instead of comparing them equipped similarly. This is why Lexus doesn't offer a fully optioned F Sport IS here and they do elsewhere in the world. They want to keep a loaded IS under $50k for this very reason. Everybody likes to think they'd be looking at a fully loaded model...thats the American mentality.

In reality, these cars are still within reach. An IS can be nicely optioned for $40k. Same with a C Class, same with a 3 Series. Will it have every option? No. Best engine? No.

You also have to look at the difference between "loaded" today, and "loaded" 10-12 years ago. These cars have MANY more options and features today, but can be had equipped similarly to those cars 10-12 years ago and when you compare the prices of cars equipped that way and you adjust for inflation...I think you might be surprised to see that prices have come down

According to an inflation calculator $44k in 2004 is $55,516 today. I think you'll find if you compare a truly comparably equipped modern IS, 3, C whatever including an engine that is similar in performance (not the top engine, an IS300 is very comparable to an IS250), you'll find it won't cost $55,516.
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Old 08-07-14, 09:55 AM   #678
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Seems like most people in USA "lease", especially luxury cars.

Here in Australia leasing is not a option. So most people pay full price for their cars.

I wish we had the same lease programs here, just pay for the 3yrs residual value of a car.
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Old 08-07-14, 09:58 AM   #679
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For luxury cars the lease rate is like 70-80%.
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Old 08-07-14, 10:10 AM   #680
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For luxury cars the lease rate is like 70-80%.
Don't most Lexus have residual of 60% after 3yrs?

Meaning you pay around 40% of price?
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Old 08-07-14, 10:18 AM   #681
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For luxury cars the lease rate is like 70-80%.
It's not quite that high. For luxury brands, the total market average for leasing is closer to 45%.

Brands like Porsche and Land Rover are generally lower than that, while Mercedes and Infiniti are a little higher.

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Don't most Lexus have residual of 60% after 3yrs?

Meaning you pay around 40% of price?
Not even close. Lexus overall average residuals in the market are closer to 45-50%. Now, Lexus Financial can choose to boost residuals as a form of incentive, but then they bear the risk on the resale value at the end, which of course they can possibly recoup through some CPO certification charges to the dealers that buy the cars, etc.

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Old 08-07-14, 10:38 AM   #682
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Originally Posted by yowps3 View Post
Don't most Lexus have residual of 60% after 3yrs?

Meaning you pay around 40% of price?
I mean 70-80% of luxury cars are leased in the US.

Residuals are around 60% yes, high 50s...low 70s for shorter terms.

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Originally Posted by pbm317
It's not quite that high. For luxury brands, the total market average for leasing is closer to 45%.
Have a source for that? Every source I've ever seen has a figure similar to what I quoted, and every dealer I've ever done business with has told me that they see 70-80% leases.

Note that they market leases, not purchase. Why would they consistently market to less than half of their buying pool?

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Not even close. Lexus overall average residuals in the market are closer to 45-50%. Now, Lexus Financial can choose to boost residuals as a form of incentive, but then they bear the risk on the resale value at the end, which of course they can possibly recoup through some CPO certification charges to the dealers that buy the cars, etc.
Not anymore. The residual on my GS is 58%, thats 36 months with 15k per year. LFS residuals are much higher nowadays. We're not talking about resale values, we're talking about lease residuals.
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Old 08-07-14, 11:03 AM   #683
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I mean 70-80% of luxury cars are leased in the US.

Residuals are around 60% yes, high 50s...low 70s for shorter terms.



Have a source for that? Every source I've ever seen has a figure similar to what I quoted, and every dealer I've ever done business with has told me that they see 70-80% leases.

Note that they market leases, not purchase. Why would they consistently market to less than half of their buying pool?



Not anymore. The residual on my GS is 58%, thats 36 months with 15k per year. LFS residuals are much higher nowadays. We're not talking about resale values, we're talking about lease residuals.
I have actual market metrics from Polk, etc. for the lease penetration/registration rates, as well as market residuals, yes lease residuals. And as I noted, Lexus Financial uses subvention to prop up leasing offers to make them competitive, as evidenced by your 58%.

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Old 08-07-14, 11:13 AM   #684
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I have actual market metrics from Polk, etc. for the lease penetration/registration rates, as well as market residuals, yes lease residuals. And as I noted, Lexus Financial uses subvention to prop up leasing offers to make them competitive, as evidenced by your 58%.
But thats totally a different topic. We're talking about lease residuals, and the fact is that these are the lease residuals from Lexus Financial...

98% of Lexus leasers lease through LFS, and these are the lease residuals. The market [b]is[/i] LFS. So if the question is "what kind of residuals are offered on these Lexus models"...your response of 45-50% is incorrect. You wont find a Lexus lease with a residual below 50%, even on the LS, perhaps residuals are that low for the very small percentage of people who lease outside LFS...

Check out Ride with G's lease rate page for Lexus:

http://www.ridewithg.com/lexus-lease-rates/

Not one residual below 57%.

You'll find even higher residuals at BMW and MB.
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Old 08-07-14, 11:17 AM   #685
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But thats totally a different topic. We're talking about lease residuals, and the fact is that these are the lease residuals from Lexus Financial...

98% of Lexus leasers lease through LFS, and these are the lease residuals.

You'll find even higher residuals at BMW and MB.
Yes LFS handles nearly all Lexus leasing, but that doesn't mean that they aren't being boosted/subvented by Lexus Financial above what the financial market lease residuals are. LFS repackages their porfolio as an asset backed security, but cannot do so with those boosted residuals. But this is getting off topic.

Yes, BMW and MB boost their residuals as well. These are seen as less damaging to the brand than cash incentives.
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Old 08-07-14, 11:20 AM   #686
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Yes LFS handles nearly all Lexus leasing, but that doesn't mean that they aren't being boosted/subvented by Lexus Financial above what the financial market lease residuals are. LFS repackages their porfolio as an asset backed security, but cannot do so with those boosted residuals. But this is getting off topic.

Yes, BMW and MB boost their residuals as well. These are seen as less damaging to the brand than cash incentives.
You're overcomplicating this. Nobody is saying that they aren't boosting the residuals. We're just saying that when leasing a Lexus the residuals are in the high 50% range to low 70% range depending on term and model. Thats a fact. What the "financial market lease residuals" are is meaningless because nobody is using those leases.
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Old 08-07-14, 11:24 AM   #687
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You're overcomplicating this. Nobody is saying that they aren't boosting the residuals. We're just saying that when leasing a Lexus the residuals are in the high 50% range to low 70% range depending on term and model. Thats a fact.
Fine, I just wanted to help provide facts on what true values are.
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Old 08-07-14, 11:26 AM   #688
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Fine, I just wanted to help provide facts on what true values are.
What are "true values"? He asked what the lease residuals were not what the resale values of the cars were. The lease residuals through LFS where 99% of all Lexus vehicles are leased through are high 50s-mid 70s depending on model and term. I don't see how values used by banks that make up less than 2% of the market are the "true values". To me the "true values" are those that apply to 99% of leasers, not those that apply to 1%. You said "average residuals" are between 45-50% and thats just not true. The LFS residuals will weigh much harder on the average than these other banks because they make up the vast majority of the market.
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Old 08-07-14, 08:54 PM   #689
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I haven't seen the car in person yet...but I don't think there's anything else in the segment that offers a similar experience.

I wouldn't buy anything in that segment, but I would buy one of these.

And remember, a loaded 3 is $60k plus.
Exactly. If I'm looking to downsize, the IS and 3 Series are several steps below the GS in interior quality. The C Class, on the other hand, may even have it beat. My challenge is that there are few smaller cars that offer the quality of their larger counterparts. Judging by the reviews and pictures, this one does.
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Old 08-08-14, 06:19 AM   #690
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Exactly. If I'm looking to downsize, the IS and 3 Series are several steps below the GS in interior quality. The C Class, on the other hand, may even have it beat. My challenge is that there are few smaller cars that offer the quality of their larger counterparts. Judging by the reviews and pictures, this one does.
I see this and think its worth the coin. It's amazing to see the C class and TLx debut the same time and Acura can say it's competing but there is no way. Thus new C class is amazing. The interior alone is worth the added cost.

As you stated not everyone wants a larger car. The C class offers what's the larger cars do in a smaller package.


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Originally Posted by pbm317 View Post
It's not quite that high. For luxury brands, the total market average for leasing is closer to 45%.

Brands like Porsche and Land Rover are generally lower than that, while Mercedes and Infiniti are a little higher.



Not even close. Lexus overall average residuals in the market are closer to 45-50%. Now, Lexus Financial can choose to boost residuals as a form of incentive, but then they bear the risk on the resale value at the end, which of course they can possibly recoup through some CPO certification charges to the dealers that buy the cars, etc.
Infiniti/BMW are around 75%.. Lexus is around 45%

Lexus only now has really started to engage in attractive leases to attract buyers. Their business model is different in regards to subsidizing leases.
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