Tallen234

I have been helping my GF look for a new sports luxury sedan. So far, we have looked at the GS300, GS430, BMW 525, BMW 530i, Infinity M45 and Infinity M35. We are going to test drive an Audi A6 and a Mercedes E350 (any others I am missing?). Entering into this process, my GF really wanted a Lexus, either a 300 or 430. Despite my love of Lexus, I am a long term owner of an SC400, I encouraged her to look at a bunch of cars.

The 525 was a no-brainer, throw away for this class of car. The 530 was nice, but, for my GF, the handling was a bit rough and a little too much road feel. I liked it, although it was a touch heavy/underpowered for the weight.

Then we drove the 300. She liked it and thought it was nice and smooth handling. I thought it was a bit underpowered. Next we drove the 430. She didn't really care about the difference in power, so she said she would probably prefer the 300. I liked the 430. Nice handling. Typical Lexus "feel". Not as road-connected as the 530, but a nicer car to cruise in.

Then we drove the M45. I had to drag my GF there because she didn't want to drive a glorified Maxima (her words, not mine). In any event, we were both very impressed. I thought it was a nice middle ground between the 530 and 430. It was a bit more sporty than the 430, but still had a nice luxury feel. I found it quite a bit roomier than both the 430 and 530.

Now, here is the quicker. She has to lease the car through work (they are giving her a nice stipend). Lexus's financials were far and away the worst of the group. Their residual was 51% with a money factor of .00158. The Infinity resdiual was 61% and the money factor was 00167. The difference in the residual, for a car with supposedly great resale, seems way out of wack. The Infinity dealer quoated by 659/month for the G45, while the GS300 was 780. So, she could get the high performance M45 for $120 less per month than the weaker GS300! He didn't even want to give me a number for the 430. He essentially told me that Lexus is not competitive in their leases and with the GS model, they are getting their butts kicked (figuratively). He essentially told us to come back in October when the 350 comes out and the residuals might be better or come back in August when the factory may be giving the dealer some money for the 300 and 430 as they try to clear inventory.

As I said, my DD is a SC400. I love it. But, it seems that Lexus is not interested in competing for this market, at least in terms of leases, where is where a lot of business people do their business...I guess I am most shocked on the residuals. That is such a huge difference.





In terms of full disclose, I am a 6 year owner of a SC400 and completely love it.

LeslieRC

Always remember, it's only hubris if one fails.

I don't lease, but I've purchased 5 Lexus vehicles and I've hardly ever found Lexus' financing competitive with my lender (a Credit Union). In fact, I've bought all the vehicles from the same dealership, so the financing person there knows me, and they always joke with me about how they can't compete with the rates I receive from my lender. That said, leasing could be the smarter alternative when the car is used in connection with a business, which sounds like the case with your GF. If she is able to write-off the lease payments, and her preference is the Lexus GS300, then the fact that the GS300 lease exceeds that of the G45 might not matter that much (depending upon her income). You didn't mention it, but is your GF (are you) negotiating the sticker-price? Although I don't lease, I know that for leasing the price of the vehicle can be negotiated just as if one were purchasing the vehicle. Have you contacted other Lexus dealerships; even dealerships out-of-state?

Tallen234

Thanks Leslie for the response. I know, if it is working for Lexus, then why fix it. My only concern is the long term implications for the GS line. I think there is a majority of folks in this growing market (Luxury Sport Sedans) that are now moving away from Lexus (I know that Lexus is still selling quite a few GS's) because of the "relative" failure of these GS models. I think we can all admit they haven't received rave reviews in the rags. Infiniti is now making a name for the M series, even Acura's RL is gaining a foothold. With BMW, Audi and MB as the usual suspect competition, Lexus must stay on its toes.

It terms of "value" I would hate to lease a GS300 over a superior M45 (miles difference in performance/handling). If the M45 and the GS430 had similar lease terms, then it would be a difficult decision.

We are in the beginning of the process, test driving all the competition, getting some basic numbers together. Hopefully, we can then look at alternative lease options. The lexus dealer had US Bank's lease program at his desk, their residuals were even lower than Lexus's.

HOWEVER, this could just be a "wrinkle" in the market because Lexus is coming out with the 350 and 460, so the residuals are lower thinking that the current GS's will take a "old model" depreciation hit. However, it will be difficult to wait until October to take advantage of her practices lease option.

bitkahuna

iTrader: (20)

My old boss just bought an M35 sport after also looking at GS300 and 530i. He felt it was a no-brainer.

Tallen234

They said the lease payment for the M35 lease was $589/month. So almost $200 a month difference between the M35 and GS300. Ouch! THat is almost real money.

Phknlwyr

I researched several mid-sized sedans over the past four months. The 5 series BMW, the E series Mercedes, the Lexus GS, and the Infiniti M. The Mercedes and BMW were the third and fourth choices, respectively, due to their cost and my concerns about their reliability. I have owned three Toyota vehicles over the past 9 years and beleive that they (and Lexus) are the gold standard of quality. In fact, my DD was a 1997 Toyota 4Runner with 100,000 miles which, to date, has only needed a new starter (besides regular oil changes, tires, and brakes).

I was very excited about the GS. I drove it and was very impressed. I loved the exterior design. The interior was nice, but not spectacular. I drove the GS430 and was seriously considering purchasing it. When I asked about numbers, I was very put off by the salesman's response. He wanted sticker or very close to it. I can understand if the car is brand new, but the GS450h is appearing in the late Spring and the GS460 in the Fall. Pay sticker now for a car that will be devalued in mere months?
Hubris was one of the clean words that came to mind.

I next visted the Infiniti dealership to drive the M45. I drove the M45 first and then the M45 Sport. Big difference between the two. The M45 Sport was a blast to drive! Then again, anything would be fun coming from a 9 year old 4Runner. My main concern with the M45 was the interior. I did not like the dash, the numerous buttons, the signature clock, the embroidered seats. However, once I drove it and realized how impressive it is, those things no longer bothered me. In fact, they grew on me (except for the embroidered seats which I believe to be cheesey). Then I asked about pricing. The decision was made very easy. I was quoted something very reasonable, something based upon invoice pricing, not MSRP. I leased the loaded M45 Sport through my business on Saturday and have not looked back (it has the reverse camera ). .00151 money factor, 59% residual, walked out paying first month's payment of $780.00 and no more. Lexus had quoted me $950.00 for a loaded GS430.

All things being equal, since I have a firm belief in Toyota quality, I would have purchased the GS430 had the price been right. The naysayers will call my M45 a Fuga and talk about the cheesey parts of the M45. That's fine. I am very happy with my purchase, but could have been equally pleased, if not more so, had Lexus not been so arrogant with their pricing. That lost them this sale. Rockville, you had me and then your salesman lost me. I may be back in three years when my lease expires.

2006 M45 Sport, Diamond Graphite, Graphite leather, Technology Package w/ Siruis, Journey Package.

INHOCJP

Sorry to hear about your experience. No discounts? I would have walked also. I picked up my GS430 last June and was able to get $4500 off MSRP pretty easily.

Enjoy the M45, it's a great vehicle and was one I definitely considered.

Tallen234

Well, my guy even ran the lease numbers with the GS300 and GS430 invoice numbers and they couldn't even get within sniffing distance of being reasonable with their residuals and money factors. He suspects that there will be some deep discounts available in August when they try to clear inventory for the new models. Also, the new models will have higher residuals, so, he said, we will likely get a better deal on a lease for the new models.

Good timing for us....