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Residuals go in cycles..... Posted by Mike Lynch [Email]  (#81) [Profile/Gallery]
(more from Mike Lynch) on Sat, 25 Oct 2003 11:48:00
In Reply to: So you're saying..., DaveC, Fri, 24 Oct 2003 15:02:14 Members do not see ads below this line. - Help Keep This Site Online - Signup |
When the leasing industry finds that they are making money at auction, that lease returns are worth the residual, then the tendency is to raise the residuals. This happend in the late 90's so that by model year 2000 the residuals had gotten so high that most people wouldn't consider buying out their lease which are terminating now. With alot of Saabs the dealer could offer you a comparable fully reconditioned and Certified car for less than your lease buyour figure.
Now it's gone the other way. Residuals are down because right now leasing companies are losing their butts on lease turn ins for all makes. Current residuals are 5-10% lower than the were 3 years ago. Saab compensates with higher incentives and better rates. Hopefully in a couple of years when the leases of 2002 and 2003 cars mature the buyouts will seem more like wholesale and be better buys for the lessee.
So Saab is still advertising a convertible for a $399 payment, but the residual/buyout is about $4-5k lower than it was in 2000. They make this up with incentives and a low rate.
Again the residual percentage for a given term and mileage, lower residual for more miles, is looked up on a chart and calculated as a percentage of the original MSRP without regards to incentives or lower rates. You're leasing because you want a lower payment so it doesn't make sense to lower the residual further to enhance the buy out. And you can't raise the residual beyond the fixed percentage of MSRP in the chart.
With a Saab you'll only be using the Saab Financial services lease and you'll need to adhere to the Saab residuals. Other lease companies will do a Saab, but not at a higher residual and definitely at a much, much, higher rate.
posted by 207.158.49...
, Fri, 24 Oct 2003 12:03:15, Fri, 24 Oct 2003 12:12:35, Fri, 24 Oct 2003 12:32:54, Sat, 25 Oct 2003 11:07:37, Fri, 24 Oct 2003 12:40:45, Sat, 25 Oct 2003 11:48:00 <-- Viewing This Message
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