So, this weekend I was unpleasantly surprised by what I think is a very non-sensical policy.

My current Lexus lease is ending at the end of March 2016, and I was talking to a dealer about getting out of the current lease and into a new Lexus lease this December. I knew that Lexus had a program that would waive the last 3 lease payments, so the timing was supposed to work out great. So, this weekend I stoped by the dealer to select the new car and work out the details of the current lease return, and was told that the 3 payment waiver only applies to leases that are currently ending after a date in early April. My car would not qualify, as I am missing the deadline by a week.

This does not make any sense!!! Why would Lexus allow this program for leases that have 4 or more months left but not for leases that end sooner? What could be the purpose of such restriction?

BTW, I used to lease BMWs, and they had a "pull ahead" program that would get you out of the old and into a new BMW lease within 6 months of lease end without any restrictions.

 

based on the way you described it that's not how it seems to me. it's not that they allow the program for those with 4 or more months left.

they might have a blackout period so dealers don't use the program to bolster year end sales numbers (to improve their next year allocations). in other words they want to stop exactly what you want to do in december.

 

The letter the dealer showed me stated that this waiver program applies to leases that are ending from early April 2016 through some date in June 2016. Based on this, if I had 4 payments left, Lexus would waive 3 payments and I would only pay 1 to end the lease early. How is this any different to Lexus than waiving the 3 payments if only 3 are left?

And why would Lexus not want to accelerate the sales in December when they are adding incentives to get people to do just that? I don't see any logic in this at all.

The reality is that if I am forced to wait until the end of the lease, I will be actively shopping other cars, and might very get a BMW through a European delivery.

 

Looking at BMW's 2016 "Pull Ahead" program, there are plenty of restrictions - including that leases must end by March 31st, 2016 to qualify. (It appears there are also restrictions on models, body types, etc. etc.). So it just seems to be the opposite of Lexus' dates for the promotion. I don't think it's so much that either Lexus or BMW has a "strange policy" as that there are promotional details and/or terms and conditions that happen to fit or not fit your personal circumstance.

 

Most dealers around me here seem to be hungry and willing enough to wave such restrictions. If a salesperson or dealership really wants to make a sale, they will jump through the hoop you list above. Just a thought.

 

Having never leased a car, what is the advantage of leasing? It seems like most of the benefits are for the dealer.

 

New car all the time, and a lot of luxury automakers put more incentives on the lease end rather than the purchase end. So you could be getting a better "deal." Equivalent monthly payment between loan and lease gets you more car on the lease.

Need to be a bit more careful when shopping. Need to know the residual, money factor (the convoluted term and metric for interest on a lease) down payment, purchase price, potential use of multiple security deposits to pay down your money factor, etc.

But most of the shoppers are solely going on "monthly payment" and so there are lots of levers the dealers can pull to make more money on the deal.

 

several advantages to leasing
- you can sometimes right off the lease expense through a business (lower tax bill)
- you're only financing the length of the lease not the whole car price, so you can (if you want) drive a nicer car than you can afford to buy

this is why so many luxury cars are leased and not purchased.

downside - limited miles allowed per year on the car (you pay for overage).

everything you ever did and didn't want to know about leasing and buying in our sticky thread:

https://www.clublexus.com/forums/car...nd-buying.html

 

It all depends on the dealer, they can make it happen despite the rules. My 750 only had 3 months pull ahead but the dealer waived my last 5 months payments, no charge to any damages/tires, not a penny extra fees to get me into my X6M. It all depends on if they want to make the sale.

 

Well they really want to expand their customer base. If the majority of the year end sales are to existing Lexus customers, they are not curating future new customers. Knowing that Lexus customers have high loyalty rates, they can bank on existing customers jumping into another without the year promotions. At least that's my take.

 

Leasing can have many advantages:
1) driving a new car every three year
2) lower monthly payments on nice cars you normally can't afford
3) option to finance the lower buyout price after the lease ends, which becomes a much lower priced car that you can probably afford and was used by only you
4) take it as a 3 year test drive
5) sometimes you can catch an awesome deal. Take the current 2015 promotion at $409 per month with $2k upfront. That works out to $16,700 and the buyout price at end of lease is about $28,000. Total price of the car becomes about $45,000 on a $52,000 car. A savings of about $7,000.

Disadvantage is
1) Mileage limit, not a problem if you dont drive more than 10k a year
2) Money down the drain at the end of the lease cuz you have nothing to show for it after splashing out $14k. Unless of course you like the car and buy it.

 

One of the biggest positives is that, if you use your car regularly for business or charity according to IRS rules (i.e. real-estate agents, charity work, traveling salespersons, etc...), you can deduct the monthly lease payments....and, in some cases, 14 cents a mile for costs or the actual mileage traveled. That can result in significant tax savings.



Also the wear-and-tear clause, where you are responsible for thngs like excessively worn tires, dents/dings, scratches, glass-cracks, seat-upholstery rips/stains, etc...over a certain size or limit.....the specifics are spelled out in the lease-contract, so it has to be read carefully.

 

well there's 'money down the drain' whether leasing or buying. the $14k spent on a 3 year lease will likely be similar in depreciation on a new car.

the more i look at leasing the more attractive it is to me for my next vehicle, although few things held me back from doing it this last time around, 1) i tend to drive more than 12k a year, 2) i tend to keep cars longer than 3 years and in the out years the costs and cashflow are low (providing the car is reliable), and 3) i haven't done enough research to know enough to not be bamboozled by a fast talking dealer.

 

To the OP,

Doesn't Lexus have a March sales event that you can wait until? Some people claim it's just as good as December to Remember.

Ed

 

Interesting.

Ha! This. I'd need my wife as she is really good with numbers.