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That seems right to me, too. "It's the difference that matters". If a car has a high residual value and a negotiated low selling price, such as is the case with, say, a very high volume Honda Civic, leasing makes the most sense. I think the Passat may be in this category as well. In order to get somewhere near this same formula Saab uses large discount incentives to the lessee as well as, importantly, residual insurance to cover themselves, knowing that if the lessee of a new Saab had to actually cover the entire depreciation both Saab and lessee would be screwed.

Take all of this thinking to a used vehicle and it must be a similar situation. If Saab certified has some way to cover themselves as far as residual is concerned (knowing that a 'twice used' Saab car seems to have almost no value--take my second car, the 97' 900S convt as a perfect example; new = $35k now = $5k) as well as if Saab certified has some way to bring the selling price down for the lessee of the used car then it should work out just as well for both consumer and Saab to lease used. Therefore, tell the dealer you plan to buy the used certified car. Negotiate a low low price. Meanwhile, through some other channel, find out if Saab certified is using residual insurance to cover themselves. Take all of this info, return to the dealer and say you thought about it and now want a lease. Oh, and by the way, I want it at the same price as if I was going to buy it. Oh, and by the way, after your study you know that they do have residual insurance for even used Saabs so there is no need Mr. Dealer for the residual to be so low. Then, in theory, you've accomplished the same thing as if leasing new.

(By the way, I have no idea if any of that is really correct! But, good luck!)

Jon

02' 9-5 --lease
97' 900S convt --own

posted by 12.100.24...

• question for the finance minded, MJP, Wed, 26 Feb 2003 13:02:04
  • You want to lease when the residual is high...., TKC, Thu, 27 Feb 2003 13:37:49
    • Re: You want to lease when the residual is high...., MJP, Thu, 27 Feb 2003 14:38:32
      • Re: You want to lease when the residual is high...., Jon in Chicago, Fri, 28 Feb 2003 14:10:27 <-- Viewing This Message
  • Re: question for the finance minded, Jon in Chicago, Wed, 26 Feb 2003 17:38:08
    • Yeah, where is Mike Lynch? >, ChipJ, Wed, 26 Feb 2003 20:10:07
      • Killer lease! Low pymnt & low residual = win-win...., Mike Lynch , Fri, 28 Feb 2003 15:29:37
      • But if it's 'Certified' then value is pre-set, no?, Jon in Chicago, Thu, 27 Feb 2003 13:33:34
        • Re: But if it's 'Certified' then value is pre-set, no?, MJP, Thu, 27 Feb 2003 16:46:51
  • In a word, "no" >, ChipJ, Wed, 26 Feb 2003 13:39:39
    • Theoretically possible, not likely, gatorcpa, Wed, 26 Feb 2003 13:58:05
      • sorry, above post is mine (-), MJP, Wed, 26 Feb 2003 14:19:50

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