Whats going on with Lexus IS residuals???
06-27-19, 10:44 AM
#1
Lead Lap
Thread Starter
Whats going on with Lexus IS residuals???
Hey everyone,
Since my IS lease is ending soon I been looking at other vehicles, but I also wanted to see what Lexus is offering for lease rates currently for the IS.
It looks like the money factor is low, but the residual is terribly low on this car now! A 2019 IS300t F-Sport with an MSRP of around 45k has a residual of 21k after 3 years!!!! The residual rates are like 49% or so currently from what I'm seeing (12k/yr miles). Obviously this is not good for someone leasing since a higher residual and lower MF will result in lower monthly payments. For a 2019 with almost identical features as my 2016, the payment was quoted to me 100 dollars HIGHER than my current monthly.... Obviously I would never agree to this even if I did get back into a new IS.
Just thought I'd share this with the community. My 2016 IS200T F-Sport had a residual of around 27,500 and the IS300T F-Sport has a residual of around 21k...
What are some of the monthly quotes you all have received if anyone has inquired??? And why are the residuals this low now????
Since my IS lease is ending soon I been looking at other vehicles, but I also wanted to see what Lexus is offering for lease rates currently for the IS.
It looks like the money factor is low, but the residual is terribly low on this car now! A 2019 IS300t F-Sport with an MSRP of around 45k has a residual of 21k after 3 years!!!! The residual rates are like 49% or so currently from what I'm seeing (12k/yr miles). Obviously this is not good for someone leasing since a higher residual and lower MF will result in lower monthly payments. For a 2019 with almost identical features as my 2016, the payment was quoted to me 100 dollars HIGHER than my current monthly.... Obviously I would never agree to this even if I did get back into a new IS.
Just thought I'd share this with the community. My 2016 IS200T F-Sport had a residual of around 27,500 and the IS300T F-Sport has a residual of around 21k...
What are some of the monthly quotes you all have received if anyone has inquired??? And why are the residuals this low now????
06-27-19, 11:29 AM
#2
Lexus Champion
Unfortunately, this doesn't really surprise me as I recently had a similar experience with my GS.
I do not remember the residual on my 14 IS350. When I leased my 15 GS350, the residual was 57%. When the GS lease was up earlier this year, I intended to lease another, but this time the residual was at 49%, which meant I'd have essentially the same car, but with a significantly higher payment. In fact, the monthly lease payment wasn't much cheaper than a finance payment, and since I loved the GS, I just ended up buying it. There was no real incentive to lease it.
I would think that Lexus would inflate their residuals to help with sales, but even with the IS and GS sales struggling, they're lowering residuals and making leasing less attractive. I don't quite get it.
For reference, at the same time as my GS purchase, I took a long, hard look at the BMW 535i, which had a residual of around 65%. That meant that I could lease a $75k BMW for slightly less per month than I could lease a $61k GS. Crazy.
I do not remember the residual on my 14 IS350. When I leased my 15 GS350, the residual was 57%. When the GS lease was up earlier this year, I intended to lease another, but this time the residual was at 49%, which meant I'd have essentially the same car, but with a significantly higher payment. In fact, the monthly lease payment wasn't much cheaper than a finance payment, and since I loved the GS, I just ended up buying it. There was no real incentive to lease it.
I would think that Lexus would inflate their residuals to help with sales, but even with the IS and GS sales struggling, they're lowering residuals and making leasing less attractive. I don't quite get it.
For reference, at the same time as my GS purchase, I took a long, hard look at the BMW 535i, which had a residual of around 65%. That meant that I could lease a $75k BMW for slightly less per month than I could lease a $61k GS. Crazy.
06-27-19, 01:47 PM
#3
Lead Lap
Thread Starter
Unfortunately, this doesn't really surprise me as I recently had a similar experience with my GS.
I do not remember the residual on my 14 IS350. When I leased my 15 GS350, the residual was 57%. When the GS lease was up earlier this year, I intended to lease another, but this time the residual was at 49%, which meant I'd have essentially the same car, but with a significantly higher payment. In fact, the monthly lease payment wasn't much cheaper than a finance payment, and since I loved the GS, I just ended up buying it. There was no real incentive to lease it.
I would think that Lexus would inflate their residuals to help with sales, but even with the IS and GS sales struggling, they're lowering residuals and making leasing less attractive. I don't quite get it.
For reference, at the same time as my GS purchase, I took a long, hard look at the BMW 535i, which had a residual of around 65%. That meant that I could lease a $75k BMW for slightly less per month than I could lease a $61k GS. Crazy.
I do not remember the residual on my 14 IS350. When I leased my 15 GS350, the residual was 57%. When the GS lease was up earlier this year, I intended to lease another, but this time the residual was at 49%, which meant I'd have essentially the same car, but with a significantly higher payment. In fact, the monthly lease payment wasn't much cheaper than a finance payment, and since I loved the GS, I just ended up buying it. There was no real incentive to lease it.
I would think that Lexus would inflate their residuals to help with sales, but even with the IS and GS sales struggling, they're lowering residuals and making leasing less attractive. I don't quite get it.
For reference, at the same time as my GS purchase, I took a long, hard look at the BMW 535i, which had a residual of around 65%. That meant that I could lease a $75k BMW for slightly less per month than I could lease a $61k GS. Crazy.
Exactly my thoughts! It makes no sense especially with sales declining..... Are they not trying to have people lease their cars or something? The salesperson who reached out to me told me its a great time to lease since you have an option to buy out end of lease at a lower residual LOL. Not sure if he understood a lower residual will make my monthly higher for a lease. If I wanted to buy I'd just finance it....
BMW residuals sitting around 61% for 3 series and a Lexus IS is 49%, super odd. There must be some reason.
Last edited by premier3IS; 06-27-19 at 01:50 PM.
06-27-19, 02:09 PM
#4
Lexus Champion
Did you buy out your GS lease?
Exactly my thoughts! It makes no sense especially with sales declining..... Are they not trying to have people lease their cars or something? The salesperson who reached out to me told me its a great time to lease since you have an option to buy out end of lease at a lower residual LOL. Not sure if he understood a lower residual will make my monthly higher for a lease. If I wanted to buy I'd just finance it....
BMW residuals sitting around 61% for 3 series and a Lexus IS is 49%, super odd. There must be some reason.
Exactly my thoughts! It makes no sense especially with sales declining..... Are they not trying to have people lease their cars or something? The salesperson who reached out to me told me its a great time to lease since you have an option to buy out end of lease at a lower residual LOL. Not sure if he understood a lower residual will make my monthly higher for a lease. If I wanted to buy I'd just finance it....
BMW residuals sitting around 61% for 3 series and a Lexus IS is 49%, super odd. There must be some reason.
As for BMW, they often subsidize their leases through inflated residuals to make the monthly payments more affordable, which helps to increase sales.
06-27-19, 02:48 PM
#5
Lead Lap
Thread Starter
Well, the flipside of inflated residuals is that they are not a good buy at lease end, so in that aspect your salesman is correct. At the end of my GS lease, I really wanted to just buy it out but the lease buyout was more than the real/retail value of the car by several thousand dollars, and I just couldn't bring myself to pay that much extra just to keep it. So I ended up buying (not leasing) the 19 GS, but I'll just keep this one long term.
As for BMW, they often subsidize their leases through inflated residuals to make the monthly payments more affordable, which helps to increase sales.
As for BMW, they often subsidize their leases through inflated residuals to make the monthly payments more affordable, which helps to increase sales.
Right, a lower residual would help me if I wanted to buy out the lease, but typically that's not what I'd like to do.
It's bad if you just want to lease and give the car back in 3 years. Now I'm considering all options outside of Lexus :/
Not sure what to get lol.
06-28-19, 07:11 AM
#6
Lead Lap
I ended up extending the lease on my IS350 for 6 months. I am looking non-Lexus too. BMW and Alfa seem willing to lease me a car with a High DAS as well. I am Tier 1 credit. I will just end up buying something.
06-28-19, 10:27 AM
#7
Lead Lap
Thread Starter
Same boat here and I started car shopping 45 days out from my lease end. Alfa Giulia and BMW 330i required a substantial amount at lease signing. I have seen great deals that people got and reported on Leasehackr, but dealers here seem to love their cars so much that they don’t want them to leave the lot.
I ended up extending the lease on my IS350 for 6 months. I am looking non-Lexus too. BMW and Alfa seem willing to lease me a car with a High DAS as well. I am Tier 1 credit. I will just end up buying something.
I ended up extending the lease on my IS350 for 6 months. I am looking non-Lexus too. BMW and Alfa seem willing to lease me a car with a High DAS as well. I am Tier 1 credit. I will just end up buying something.
I'm also looking at the BMW and Alfa, but like you said, it's a big amount due at signing. Looked at leasehackr and Edmunds as well and you're right, seems like no one is really getting good deals right now. Extending might be best for me too, and I'm sure they'll want to get rid of the 2019s as soon as the 2020s arrive.
BMW 330i residual was 61% and .00205 MF on the quote I received. I have a 800+ credit score, and being quoted a MF of .00205 is crazy high.
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06-28-19, 10:36 AM
#8
Lexus Champion
Sure you guys want the Alfa? ;-)
https://www.caranddriver.com/reviews...bility-update/
Rarely have we hoped for a car in our possession to succeed more than we did for this Alfa. And rarely have we been more consistently disappointed.
Our honeymoon lasted 2400 miles. Then the Giulia failed us for the first time. We still hadn't taken it to the track to perform our initial battery of tests when, on a 650-mile road trip, our Giulia lit its "service electronic throttle control" warning as well as a check-engine light. The car was still operational, but its mode selector became inoperative, locking the car in its stand*ard suspension and powertrain settings.
For the remaining 12 months of the test, we settled into a routine with the Giulia: periods of praying in vain for the problems to cease interspersed with flashes of pure driving joy. We were elated when we could finish a long drive without scheduling a dealer visit. That's a sad state of affairs.
When we took the car in for its 10,000-mile service, we lost use of it for 31 days. Thirty-one days! That's because, in addition to our requested oil change and inspections and such, we complained about a rear-end whine. The dealer diagnosed the sound as bearing noise from the differential. The solution, after the dealer consulted with Alfa corporate support, was to replace the diff. Problem was, it would have to be ordered.
About 8500 miles later, our QF seemed to have an acute attack of hypochondriasis. It believed its engine-oil level was low and threw a warning. The oil level was fine, though. So the dealer reflashed the sensor. Then at 23,000 miles, our old nemesis, the "service electronic throttle control" warning, lit again. The dealer could find no fault. This would happen once more, at 34,000 miles, at which time the tech found a connector that wasn't fully seated and replaced it.
At 27,000 miles, one staffer was greeted to a kaleidoscopic light-and-sound show while motoring away from a drive-through carwash. The car warned of an open rear door and an inoperative turn signal. The attention tones mixed unhappily and were joined by the beeps of malfunctioning parking sensors for the remaining 10 minutes of his commute. And then it stopped. And never happened again.
At 31,000 miles, the low-oil light came on again during a long drive. And again, the oil level was actually fine. By the end of the Giulia's 19-day stay in the shop, the dealer had reflashed the sensor, replaced the sensor, and then brought in an engineer with a software update for the sensor. Sigh.
It was the absurd frequency and duration of the Giulia's stays at the dealership. During its 14 months with us, the Giulia spent 80 days out of commission. That's unforgivable. We went from recommending that people buy Giulia QFs to recommending that they lease Giulia QFs to recommending that they stay away from Giulia QFs altogether.
You broke our heart, Giulia. You broke our heart.
You broke our heart, Giulia. You broke our heart.
06-28-19, 10:52 AM
#9
Lexus Test Driver
Even if the Alfa had perfect reliability, I still think it's ugly. Its proportions are off, particularly the back doors. I also tend not to like sporty/sports cars that were created over night just to fill a market void. If I'm going for a sporty car in this class, give me something that's been refined throughout several generations.
But in this case it's expensive, has horrible resale, is ugly. AND unreliable? Not really sure who's liking these things.
Yes I know they handle tremendously well but i'd just go out and get an M3/M4 or a Porsche.
The only car from italy worth buying is ferrari
But in this case it's expensive, has horrible resale, is ugly. AND unreliable? Not really sure who's liking these things.
Yes I know they handle tremendously well but i'd just go out and get an M3/M4 or a Porsche.
The only car from italy worth buying is ferrari
06-28-19, 11:06 AM
#10
Pole Position
Even if the Alfa had perfect reliability, I still think it's ugly. Its proportions are off, particularly the back doors. I also tend not to like sporty/sports cars that were created over night just to fill a market void. If I'm going for a sporty car in this class, give me something that's been refined throughout several generations.
But in this case it's expensive, has horrible resale, is ugly. AND unreliable? Not really sure who's liking these things.
Yes I know they handle tremendously well but i'd just go out and get an M3/M4 or a Porsche.
The only car from italy worth buying is ferrari
But in this case it's expensive, has horrible resale, is ugly. AND unreliable? Not really sure who's liking these things.
Yes I know they handle tremendously well but i'd just go out and get an M3/M4 or a Porsche.
The only car from italy worth buying is ferrari
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Rak305 (07-05-19)
06-28-19, 11:15 AM
#11
Lead Lap
Thread Starter
I actually think the Alfa looks pretty nice and would've been willing to try it out honestly. The post above by JDR has me pretty concerned though lol. I mean I hear they are unreliable but to that extent is definitely not something I'd want to go through. Does Alfa cover issues with their cars if its on lease like Lexus does?
06-28-19, 01:11 PM
#12
Pole Position
I actually think the Alfa looks pretty nice and would've been willing to try it out honestly. The post above by JDR has me pretty concerned though lol. I mean I hear they are unreliable but to that extent is definitely not something I'd want to go through. Does Alfa cover issues with their cars if its on lease like Lexus does?
06-28-19, 01:48 PM
#13
Lead Lap
Thread Starter
And they have 24 month leases. In and out in 2 years lol.
Also, Lexus dealer told me they don't keep the car at their dealership once leases are returned and they get 'auctioned' off... Any insights on this and how the auctions are held?
Also, Lexus dealer told me they don't keep the car at their dealership once leases are returned and they get 'auctioned' off... Any insights on this and how the auctions are held?
06-28-19, 03:26 PM
#14
Pole Position
That’s a lie some of the dealerships buy the car off from Lexus (Toyota) Financial and sell them as CPO’s. I’m sure some do get auctioned though but probably mostly bought by Lexus dealers at private auctions.
