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Always....... Posted by Mike Lynch [Email]  (#81) [Profile/Gallery]
(more from Mike Lynch) on Mon, 20 Sep 2004 15:48:05
In Reply to: Not always..., TheOriginalArcader, Mon, 20 Sep 2004 11:14:28 Members do not see ads below this line. - Help Keep This Site Online - Signup |
For a competitive payment a lower residual is always better. If the lower residual and hence higher depreciation made the payment go up, but for the same payment a lower residual is ALWAYS a better idea.
Higher residuals mean other brands can just charge you higher rates and not give large incentives to cover the difference.
Here's some hard #'s. Residual on a 525i is 58% of MSRP of around $45k, no incentive, but a decent rate of about 3.6%. Residual on a 9-5 Aero is 39%% of MSRP, say also $45k, less a $6k lease incentive, or effectively about 45% after the incentive, but the Saab lease rate is just about 0.75%.
So a $45k strippee 525 BMW leases for $680 a month and a 9-5 Aero, loaded, vent seat, touring, xenon, Aero Academy, leases for $660. Similar MSRP, but calculated only with the incentive, no discount either way. And who is more likely to offer a big discount, a Saab dealer or BMW dealer?
And what would you rather drive? A strippee 525 or a loaded 9-5 Aero, the Aero gets my nod for less payment and a $9k lower residual.
posted by 63.197.222...
, Fri, 17 Sep 2004 12:46:47, Mon, 20 Sep 2004 15:48:05 <-- Viewing This Message, Thu, 16 Sep 2004 15:31:50, Fri, 17 Sep 2004 10:48:22
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