G70 Lease Comparisons and Discussion (USA)

TurtleBoy

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mdb801

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You're a champ for checking. Thanks!

I've tried multiple times to explain the bit about allocation to the local dealers. They have sold multiple cars. Unfortunately, the dealers out here are generally clueless. The Genesis experience has been underwhelming, to say the least. At one dealership the salesperson called me and told me the cars had arrived and they're ready for me to check out. Keep in mind that I'd been texting with him for 3 weeks, making it clear that I wasn't coming to the dealership until I could test drive the car. I drive 45 minutes to get there. He takes my license, I wait around for 10 minutes while he makes a copy, and then we finally go find the car. We sit down in the car and then he says, "Oh, you wanted a test drive? We can't do that for another couple hours. The car hasn't been checked in yet." I expressed my displeasure at being jacked around and he tells me that he didn't know I wanted to test drive it—that people come in every day and buy cars without a test drive. I asked, if you didn't know I wanted a test drive, why make a copy of my license? Are you checking licenses to walk through the dealership? No apology. My experience at other dealers in the area hasn't been much better. Genesis has a long way to go before they're at the customer service level of Audi, BMW, MB, Lexus, and other luxury brands. That said, I still want the G70. I've driven everything else in its class and, for me at least, only the Audi S4 comes close (and the G70 still beats it).
 

TurtleBoy

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mdb801

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I didn't know about the Flagstaff dealership. Thanks!
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mdb801

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Arizona
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A local dealership got the exact car I was looking for last night—Santiago Silver, RWD, Sport, gray stitching. Bought it today. My lease was up tomorrow (already extended it for 3 months) so I couldn't wait around for prices to drop. The supply is so limited out West that dealers aren't dropping below MSRP here. Some East Coast dealers would take off a bit, but they didn't have the exact car I wanted and the shipping cost basically nullified the discount. Oh well. It was this or rent some piece of crap off Turo for a few months while I waited for prices to normalize. Love the car so I can live with the situation.
 

xyos

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A local dealership got the exact car I was looking for last night—Santiago Silver, RWD, Sport, gray stitching. Bought it today. My lease was up tomorrow (already extended it for 3 months) so I couldn't wait around for prices to drop. The supply is so limited out West that dealers aren't dropping below MSRP here. Some East Coast dealers would take off a bit, but they didn't have the exact car I wanted and the shipping cost basically nullified the discount. Oh well. It was this or rent some piece of crap off Turo for a few months while I waited for prices to normalize. Love the car so I can live with the situation.
Congrats! There is def plenty of inventory on the east coast and I’ve had a few dealers give some pretty good prices, unfortunately for me I’m still 5 months out on my current gensis so I can’t do any pull ahead programs and rolling in my existing payments would cost too much 😔
 

mdb801

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Arizona
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Genesis G70
They dropped the MF to .0002 for the 3.3. By dropping the MF and decreasing the lease cash, the monthly lease payment stays virtually the same. For example, on a RWD Sport with $0 down, the lease payment is only $7 more in January than it was in December. Over the past few monhts, their strategy seems to have the MF and lease cash go up or down at the same time in order to keep lease payment fairly consistent.
 

JayceM

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They dropped the MF to .0002 for the 3.3. By dropping the MF and decreasing the lease cash, the monthly lease payment stays virtually the same. For example, on a RWD Sport with $0 down, the lease payment is only $7 more in January than it was in December. Over the past few monhts, their strategy seems to have the MF and lease cash go up or down at the same time in order to keep lease payment fairly consistent.
I've always wondered why they do this. Why not just leave it the same since the lease payments stay around the same anyway? Anybody know?
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Beefer

I’m faster
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I've always wondered why they do this. Why not just leave it the same since the lease payments stay around the same anyway? Anybody know?
They have to follow the banks/economy. MF line up with APR’s. So the cash backs are adjusted to keep folks interested.
 

JayceM

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They have to follow the banks/economy. MF line up with APR’s. So the cash backs are adjusted to keep folks interested.
Ah ok. Strange that they have to follow it if they're just adjusting the cash back anyway. Makes sense though. Thanks.
 

mdb801

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Arizona
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Genesis G70
They don't have to follow the banks/economy. Although general trends in APR/MF from year to year are informed by the broader economy (represented by the fed funds rate), these month-to-month G70 lease terms are likely a marketing decision. You can see that it's not driven by banks/economy by charting the MF/APR for various auto lenders (e.g., Genesis) against the monthly fed funds rate (the prime rate is based on the fed funds rate, if that term is more familiar to you). If you chart the monthly federal funds rate against Genesis's MF and APR, they aren't highly correlated. There are some months when the fed funds rate was unchanged from one month to the next but the MF still changed. Sometimes the MF goes down while the fed funds rate goes up. Also, the G70 MF (or APR if you purchase) is currently lower than the fed funds rate. In other words, Genesis is losing money by loaning you the money for the lease/purchase.

My educated guess is that they are trying various combinations of MF and lease cash to determine what is most effective in attracting buyers to lease, while holding their net income per car relatively constant. If they wanted to, they could offer a lot of lease cash, drop the MF to nothing, and drop the residual value even higher. Or, they could follow Audi's model by giving a lot of lease cash ($5k at times), providing a residual around 60%, and then raising the MF to an effective APR of ~5%. There are a lot of ways to achieve a target profit on a car.

There are even more complicated reasons that stem from accounting rules and each lender's projections of the future value of money. (Before someone says that I don't know what I'm talking about... I'm a professor in business management. I literally have a PhD in this stuff.)
 

TurtleBoy

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mdb801

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We're on the same. I said they were "losing money" on the loaning aspect (not on the car itself)—referring to the opportunity cost of lending you the money at a rate lower than they could get from investing the money in a CD or other financial instrument that bears a higher rate of return. That opportunity cost is a loss of potential profit from that cash. I'm not saying they are losing money on the car. Rather, I'm saying that they are loaning you money at a loss. Yes, this loss is more than compensated for by the profit margin on the vehicle.
 
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Electrode

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Is part of the reason Genesis can afford to offer lease cash because the leaser (lessee?) is essentially relieving them of the 100,000 warranty? It doesn't apply to the second buyer, correct?
 

TurtleBoy

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Beefer

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Richmond, VA
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That leads to an interesting question. If a person purchases the car at the end of a lease do they get the 10/100k warranty? What about someone who leases to get the lease cash and then pays the lease off in a month or so, do they get the 10/100k warranty? Technically in other cases they are the second owner since Genesis Finance owned the car during the lease. Anyone know for sure?
Warranty is transferable to next owner.
 
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