I agree BMW/Benz have higher prestige but that gap is narrowing as Lexus prices upward and simply does not offer cars below the $30,000 door.

TRD is right, BMW and Benzes (in Europe) do not have the cache they have in America. They have fooled Americans. We don't get the 6 cylinder 7 or S class or 635 here. We don't get all the diesel cars here (b/c diesel is still frowned upon here). On top of that, BMW and Benz and Audi have basically Toyota fighters in the 1 series hatch and coupe, the A and B class cars and A2/A3 cars.

I mean, an E-class is a taxi-cab in Europe. So we have to look at the total picture here.

Read my answer in post 13 , Lexus has publicly stated they were worried about over-selling about 4 years ago. Lexus sells over 100,000 RXs a year every year. Only the 3 series sells over 100,000 units like that.

Worldwide, Lexus is 4th in sales around 400,000 units a year.
Audi, BMW and Benz sell over 1,000,000 units EACH a year.

 

So you're one of those people who wouldn't see anything wrong with going to some specialty shop and paying $450 for a pair of jeans and a shirt that are no better at all than ones that cost $100, simply because it costs more and you like the 'prestige' that comes with that. In other words you care more about impressing people with spending lots of money than you care about actually getting VALUE for your money?



Luxury to me is not about 'impressing' the Joneses next door by showing them that money is meaningless to you - because really the people who spend money like that are usually the ones who, in reality, are the poorest and in debt than the ones who are financially wise.

Luxury is about nice, well made, great to drive cars - and I want that, naturally, at the most competitive price I can find. I make good money, but that doesn't mean I want to give it away to impress people.

By the way the 1-series BMW still starts at a higher price than the IS250.

 

That makes no sense at all.

If somebody leases a BMW that has a 45k dollar sticker and has a lease rate of 500/month whereas they lease a Lexus with a 35k dollar sticker and a 500/month lease... what's the difference? Either way they're paying 500 dollars a month. So why are you saying one is more likely to be taken up by an over-extended credit-laden poseur and one isn't? Why is one going to put more financial strain on that poseur than the other? They're both 500/month. To me the one who's likely to be the less intelligent free spender that has little sense of value is the one who spent the same monthly payment on the less valuable vehicle.

I myself could 'afford' a $5,000+/month car payment right now. I'd just have to scale back my retirement contributions and tighten up my budget drastically elsewhere.

Am I over extending myself by looking at a $550/month 335i lease? Or am I being smart?

 

My view of the total picture:

BMW and MB have more prestige than Lexus in Europe.

BMW and MB have more prestige than Lexus in the U.S.

BMW and MB have more prestige than Lexus in Japan.

 

Oh, lastly, you guys have absolutely no idea if Lexus' poor lease rates are 'hurting' their sales or not. How do you know that their sales wouldn't double if they subsidized their residuals by another 10%?

 

Say what????

You're drawing a parallel to the sub-prime mess???

If you follow the news, you know that the problem with sub-primes and "creative mortgages" is that they offer a low "teaser rate" and then reset. People figured they could resell at huge profits by the time they reset and get out of their obligations. When this proved to be impossible because values either stagnated or dropped, they were sitting with a reset mortgage payment that they couldn't afford. Right?

When was the last time you heard about a lease price changing throughout the period of the lease?

And yes, this is "being bled" if you want to lease a Lexus because German cars selling for considerably more, with more prestige and "snob appeal" are leasing for the same or less.

I call that being "bled."

What do you call it?

 

I have to get ready for a dinner engagement, I'll chat 2morrow.

 

Completely, totally, 100%, factually untrue.

Given the right lease rates, leasing can be a FAR less expensive option.

I can show you a total cost of ownership breakdown I just did for my own use where I showed that BUYING a 21,500 dollar 4-cylinder Accord, despite its bargain price/value, low insurance rates, and great gas mileage, would actually cost the SAME to own for 2 years as leasing a 38,000 dollar 328i.

Where the Accord started saving me money is when I started owning it past 2 year mark. By 6 years of owning the same Accord versus leasing a brand new 38,000 dollar 328i, I came out somewhere around 20k ahead in owning the Accord... and that included the gained equity by owning the accord, plus the assumption that I would invest the difference in monthly costs in an investment at 8% interest. I'd be happy to post the spreadsheet for you if you'd like.

But suffice to say when you say "buying is always better than leasing."... that's just flat out wrong. You have to commit to owning a car for quite some time before you come out ahead. Just imagine if I had done by TCO on the difference between buying a 38,000 dollar lexus vs leasing that 38,000 dollar BMW. It would have taken FAR longer than just 2 for the Lexus to catch up and start making money. Especially if it were dealer-maintained.

 

Well you're entitled to your view even if you're wrong

BMW does not have "the" prestige, it has "a" prestige. About 80% of the non BMW owners look at someone in a BMW and call them a *****. That's not quite prestige. That's just the pricky image of BMW. It's a sports car - not a luxo, it's not that prestigious.

MB has "the" prestige no doubt. You may be a rich "a-hole" in a Mercedes to some people, but they won't deny you of the prestige. Plus they figure you have to have a bit of money to keep putting parts on it if it is still on the road. ()

Lexus has a reputation for the upper middle class white collar church going family and is respected by their community members. That's prestige IMO. Sure beats being a *****.

I have all three in my driveway (including a new Jag, totally new argument) and I have owned many various models both before and after the millennium from all three. Each has a purpose and each has a stigma attached. The MB easily gets the most respect on the road. The BMW gets the least, but from an owners perspective I LOVE driving my BMW more than any other car once I am on the road when I want to go DRIVE. The Lexus is like everyone is your friend and they think you're doing well. It has the least attitude from someone when you roll up in it.

As far as the lease, if you want it you'll pay for it. Looking at the sales reports...... people seem to want it.

 

Well I guess if you're leasing there's a substantial premium to be paid to be so damn "friendly" and "church going" (I wouldn't know about that, I'm an atheist Jew and haven't been inside a religious institution in decades....good riddance).

I guess it's cheaper to be a "*****" or a "rich guy" (who would have thought, huh?).

Like I said, Lexus rips off the "nice guys" who decide to lease from them.

Which, BTW, isn't very "nice."

 

As has been pointed out before, it is not a rip off it is simply not as cheap as the others.

Wanna know why? More people OWN a lexus. MB and BMW are lease cars. Doctors buy them on leases and turn them in and get a brand new one while writing the car off. They do more leasing than Lexus because no one wants to buy them knowing what is going to happen when the warranty runs out.

Lexus shoppers are more likely to BUY their car and KEEP their car because they trust the brand. If people would actually BUY MB and BMW more often than lease then the incentives wouldn't be anywhere near as peachy.

That's where they make their money. That's why their leases are dirt cheap. This is not here say, I have personally ask the MB dealer as well as the BMW dealer and they agree they lease pretty much most all of their cars. Lexus is the exact opposite. They SELL most of their cars. Likely due to the fact people aren't scared to own a Lexus off warranty.

 

My fathers UL ES350 is 699 a month, zero down, 12k, 36 months, he wanted it cause of the glass roof could have got a better deal on a BMW 550

Lease rates fluctuate and if you have competing dealers you can make out better then dealers that have no competition but it's a number and the smart customer wins, it's not about the price, but besides the Lexus Lease Rip-Off, why is their so much dealer added BS when you want to get your car serviced, that bleeds me dry.

Lexus has some presitige when no German cars are present but soon as an S550 rolls up an LS460 might as well be an Avalon

 

Hmm..unfortunately your lease comparisons are not accurate to determine Lexus is a rip off because you are comparing apples to oranges.

There are too many different factors which make up leasing mechanics to make any assumptions such as the following:

On the surface there are these:
1. msrp
2. cap cost
3. money factor
4. residual
5. lease term
6. allowed miles

If you analize those you have to also consider:
1. msrp differences make a huge difference in payment because.....
2. residual is based on msrp, even 1% residual difference makes a big difference on payment - add the two differences together and you will see a dramatic change in payment
3. options on car, is there navigation? that changes residual by 2%
4. what kind of good/bad price did you get quoted from sales person? Some will price cut more than others. I'm sorry to say but your $664 ES payment sounds a bit too high to me - the first number in there should be a 5 not a 6.
5. Also important to consider is how new is the body style? Hot new cars tend to have higher residuals, but the lease usually sucks. Is the body style on it's last leg? Then the factory bank will run special leases to help sell them all and the dealer will sell the car at way below invoice to blow out as many cars in as little time as possible to make room for new body style. Sometimes the factory will throw in "trunk money" to further this cause.
6. In addition, hybrids have the worst lease payments for the same reason navigations have lower residuals - the technology will be new and improved in a few years time. You priced out a hybrid against others which are not.

I have leased my last 4 Lexus' and after having worked in the industry I like to think I got a good deal.

 

All this is truly fascinating, but ultimately, utterly unconvincing.

"Cap cost reduction," "residual value," "money factor," blah, blah, blah. "Lexus sells more of their cars than M-B or BMW," blah, blah, blah.

It still comes down to this basic question. Why are Lexus leases, dollar for dollar of car value such poor deals when compared with their higher prestige German counterparts???

Please don't tell me M-B and BMW are actually losing money on each lease, because I think we all know that's preposterous. They lease most of their cars and that would mean that their entire USA operations are running in the red which is certainly NOT the case.

Why are Lexus leases such a rip-off ('cause that's exactly what they are when viewed against their competition)?

 

You got your answer and you don't want it. Much like the same anti lexus BS in this thread you make a thread saying you own a lexus so it must be all good that you prod and poke lexus from every angle you can to stir the pot.

When someone gives you a real answer which is the exact opposite of the one you are looking for, you are dissatisfied and come back with more bashing.

It's a tired old game........ You've had my 5 minutes of attention. If anyone else is bored enough to fall in and play the game, more power to them. I'll be quite surprised anyone falls into your agenda too much further.