"Wobbles the Mind" (wobblesthemind)
12/19/2016 at 11:34 • Filed to: Man Yells At Clouds
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"Wobbles the Mind" (wobblesthemind)
12/19/2016 at 11:34 • Filed to: Man Yells At Clouds | 1
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I had no idea this was a thing at all! It makes sense now that nearly 1/3 of new vehicles are being leased and as automobiles become seen as “technology.” I can imagine CPO vehicles (especially under the same manufacturer’s financing arm) would be the main targets.
Imagine being a dealer, leasing the vehicle out for 24-36 months, getting it back and certifying that same vehicle to be leased again for 24-36 months and then selling it used 4-6 model years later with only 40,000-72,000 miles on the clock.
I’m seeing a future where the used market prices become inflated by these clean, low mileage, two owner vehicles which would then make leasing rates better and better until new cars turn into a “subscription service.”
Automakers have more control over the vehicles and easy data collection. Warranties become longer, automakers make more in vehicle financing since they can have the same car financed under themselves three times! It’s the same thing those pay-here lots do but completely legal, ethical, and will be praised for simplifying car ownership!
And those that actually buy new will see their trade-in values tank because they can’t compete with all these pristine, factory cared for cars available with higher and higher residual values that the automaker can come close to controlling themselves.
I wish they’d make these tin foil hats less itchy!
Jcarr
> Wobbles the Mind
12/19/2016 at 11:39 |
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Tom McFarland, Jelopnic Contribyuter.
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Wobbles the Mind
> Jcarr
12/19/2016 at 11:42 |
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Autocorrect got me on that one. Sorry.
Jake - Has Bad Luck So You Don't Have To
> Wobbles the Mind
12/19/2016 at 11:43 |
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I worked at a buy-here-pay-here lot that leased early-2000s Grand Ams and shit. No credit checks or anything, someone comes in, hands over stupid large amounts of money, and gets a car. If they make their payments, their credit goes up and we fix anything that breaks that would keep the car from driving and they get a loaner. I never understood why people would do that sort of thing unless they were completely broke, horrid credit, and needed a guaranteed way to get to work every day. The problem was the people who came in expecting to lease a flawless 18 year old car and then bitch and moan when the seat heaters or some shit don’t work. Or every other customer defaulting on their first payment. Or people rolling around with no insurance and getting into wrecks (which falls back on the company since it’s *their* vehicle).
It was a fun time.
bhtooefr
> Wobbles the Mind
12/19/2016 at 12:03 |
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One thing that I’m reminded of is Tatra’s approach for the 603. So, when you wore your Tatra 603 out, you could turn it in and get another one... but the old one wouldn’t be scrapped.
Instead, it would be refurbished and updated to the latest specification, and then would be made available to the pool of people waiting for a 603. Note that I didn’t say you’d get a new 603 - you might, but you might also get a refurb.
A similar approach is actually used for military aircraft, with retrofits updating old aircraft with modern technology, instead of replacing the aircraft.
This really only makes sense if you can stretch the life of a bodyshell a decently long time, but I could see it working in some contexts.
Tom McParland
> Wobbles the Mind
12/19/2016 at 20:06 |
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Used car leasing is a thing...but only really works out in your favor on really high-end cars. Logically you would think it would be super cheap due to the fact that the depreciation rate is so much narrower, but for some reason, the real world math doesn’t work out so well. Toyota and Lexus have legit factory-backed programs. I shopped a CPO lease on a 2015 I350 with 18k miles it was only $70 cheaper than the new I350....cheaper yes, but not enough to really sway people away from the new cars.
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Tom McParland
> Wobbles the Mind
12/19/2016 at 20:11 |
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Also, I don’t visit Oppo as much as I would like so if you have a question or a tip about car buying/leasing etc... please send me an email (AutomatchConsulting@gmail.com)
theloudmouth
> Wobbles the Mind
12/19/2016 at 20:24 |
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My buddy did this for an RS7 and got it ridiculously cheap... then again if it gets in an accident he’s on the line for th depreciation hit rather than the automaker’s credit arm. I’m a fan of calculated risk and all but screw that.
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greenagain
> Wobbles the Mind
12/19/2016 at 23:40 |
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Not really, if you extend the warranty you’re taking away one of the big reasons people trade. Most leases are 3 years on new cars, just as long as the warranty.
I’m sure there are some, but most lenders don’t do used car leases anymore. As technology increases I think the volatility in value 5 years down the road increases too.
RT
> Wobbles the Mind
12/19/2016 at 23:55 |
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Meanwhile on planet Oppo:
Funktheduck
> Tom McParland
12/20/2016 at 08:24 |
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Would anyone take the $70 savings?
Arrivederci
> Funktheduck
12/20/2016 at 08:37 |
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Assuming a three-year lease, that would be approximately $2500 in savings. If the car is no different from a brand new one, then why not save a little scratch? At the very least, the difference would basically cover your insurance premiums.
The only thing that would possibly sway me to get the new one would be if there was a model year upgrade/change that I wanted or if I wanted to buy the car at the end of the lease.
That said, I never lease vehicles, so my oppopinion on this is probably worthless, lol.
Party-vi
> Tom McParland
12/20/2016 at 08:38 |
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YOU HAVE FORSAKEN US!!!
shop-teacher
> Arrivederci
12/20/2016 at 09:58 |
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That $2500 comes with the risk of not having the new car warranty though, which is one of the big reasons people who like to lease do so, they always have that warranty so they never have to worry about repairs.
I don’t lease either though.
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Arrivederci
> shop-teacher
12/20/2016 at 10:12 |
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Ah, maybe I made an incorrect assumption - I thought Tom mentioned the lease was a Lexus CPO, which would have enough warranty to cover the three year period. If no warranty, totally agree, that’s a bigger risk than $70 monthly savings.
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shop-teacher
> Arrivederci
12/20/2016 at 10:19 |
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Good point actually. A CPO would have some sort of warranty with it, although I’m not sure it would be long enough to get through the entire lease period.
For Sweden
> Tom McParland
12/20/2016 at 12:00 |
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Hi I would like your services without paying your fee can you do that
Rusty Vandura - www.tinyurl.com/keepoppo
> Wobbles the Mind
12/20/2016 at 14:09 |
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She’s cute. Just saying.