Can you negotiate/increase Residual Value?

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Mar 17, 2014 | 08:30 PM

Aeromotive

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From: Montreal, QC

Can you negotiate/increase Residual Value?

Hi all.

Tomorrow I'm heading to my Lexus dealership for a 3IS. Looking at Lexus.ca, I see the RV on a IS350 with F-Sport Premium package is approximately 50% for a 3 year lease and 20k km (12.5k mi), assuming of course that I'm getting MSRP, which isn't going to happen. However this baffles me as I see most people in the US get RV's in the 70's%! The difference is huge... this is the main reason why payments in Canada seem to be higher.

Question is : besides negotiating total price and decreasing my annual mileage, can I do anything to increase my RV? Or is this set by Lexus Financial? Am I missing something here?

Thanks.

Edit : screenshot to illustrate what I'm saying.

Last edited by Aeromotive; Mar 17, 2014 at 08:36 PM.

Mar 17, 2014 | 08:46 PM

an3i7rust

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From: NY

you can drop the money factor by leaving multiple security deposits.. but different month terms have different residuals you can't really negotiate those

Mar 17, 2014 | 08:47 PM

gmanusmc

Lexus Test Driver

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From: CA

Quote:

Originally Posted by Aeromotive

As far as I know, residual values set by manufacturer captive finance companies, in this case, Lexus Financial, are pretty much locked in and not negotiable. Third party lenders might be different but their money factors usually aren't as good.

Bill G

Mar 18, 2014 | 07:26 AM

Aeromotive

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From: Montreal, QC

Thanks guys. I can put the maximum amount of MSD's and lower my mileage to the minimum that's reasonable for me... that will help me save a few bucks but it looks like I still won't escape that Lease-End Value

Any Canadian people here?

Last edited by Aeromotive; Mar 18, 2014 at 07:45 AM.

Mar 18, 2014 | 09:27 AM

WWM

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From: Toronto, ON

Is the 70% RV in the US really for three year leases or was it for 2 year? 70% seems incredibly optimistic for three years. A quick search shows RVs in the low 60's for 3 year leases in the US, which is still much better than what we get in Canada. I have no idea really. My first thought was because RWD cars depreciate like a rock here, but even the RV on an AWD IS350 is ~53% for three years.

Just another way we get screwed I guess.

Last edited by WWM; Mar 18, 2014 at 09:31 AM.

Mar 18, 2014 | 10:31 AM

dbs600

Lexus Test Driver

Joined: Oct 2007

Posts: 1,148

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From: NY

Instead of increasing the "Residual Value", what about lowering the "Purchase Option Price"?

Is that possible? Have dealers done same?

Thanks.

Mar 18, 2014 | 10:39 AM

gmanusmc

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From: CA

Quote:

Originally Posted by dbs600

Instead of increasing the "Residual Value", what about lowering the "Purchase Option Price"?

Is that possible? Have dealers done same?

Thanks.

I believe that the purchase option price IS the residual value

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Mar 18, 2014 | 12:25 PM

dbs600

Lexus Test Driver

Joined: Oct 2007

Posts: 1,148

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From: NY

Quote:

Originally Posted by bgaerttner

I believe that the purchase option price IS the residual value

It is, but it doesn't have to be, at least it didn't have to be (in the past).

I was able to negotiate same on other prior leases, but wasn't able to with the IS, but wonder...

Mar 18, 2014 | 01:07 PM

#10

gmanusmc

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From: CA

Quote:

Originally Posted by dbs600

It is, but it doesn't have to be, at least it didn't have to be (in the past).

I was able to negotiate same on other prior leases, but wasn't able to with the IS, but wonder...

I understand what you are saying but I was only referring to lease terminology, not whether or not the buyout can be negotiated or not - obviously a completely different matter.

Mar 18, 2014 | 01:39 PM

#11

dbs600

Lexus Test Driver

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From: NY

Quote:

Originally Posted by bgaerttner

I understand what you are saying but I was only referring to lease terminology, not whether or not the buyout can be negotiated or not - obviously a completely different matter.

Hmm; So can one still negotiate a separate Purchase Option Price?

I asked, but wasn't able to this recent go around...

Mar 18, 2014 | 02:04 PM

#12

gmanusmc

Lexus Test Driver

Joined: Jul 2009

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From: CA

Quote:

Originally Posted by dbs600

Hmm; So can one still negotiate a separate Purchase Option Price?

I asked, but wasn't able to this recent go around...

I've heard of rare occasions of folks negotiating their buyouts at the end of a lease but don't directly know anyone who has done it. I don't worry about it because so far I've never bought out any of my leases - I just buy or lease a new vehicle when the time comes.

Perhaps someone who has done it can chime in.

Mar 18, 2014 | 02:18 PM

#13

Lost808

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From: California

I have had a friend in the past negotiate a purchase price on a lease he was going to turn in. It was treated just like entering the dealership and negotiating a purchase price for any vehicle. The dealer wants to get rid of the car fast, as prior leased cars don't tend to sell as easy. At first they did not want to do it when they contacted him prior to the lease end. When it got to the actual day of turning it in (after the inspection), the dealer finally relented and agreed to negotiate the price of the vehicle. In that instance though, I am sure the RV was set high, so the dealer had some wiggle room to lower the buy out price.

IIRC, this was on a 2008 or 2009 Mercedes GLK.