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G70 Lease Comparisons and Discussion (USA)

Electrode

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I don't think the explanation is quite correct. While there are some market/financing influence, the money factor is chosen more for strategic reasons in regards to the best way to get people to lease. Many times the RV is inflated as a way to subsidize the lease or the MF is extremely low, this is done to get people a lower payment or just appear that they are with such a low MF. Many times lease cash is also used as an enticement. In general there is no correlation between the movement of RV and the movement of MF.

There is no principal when it comes to leasing. You pay a rent charge based on the depreciation amount and residual amount. If you would want to purchase the car at the end of the lease then you would pay the residual amount.
Who actually owns the car at the end of the lease? I understand how lease cash can reduce the dollar amount of depreciation, but how do they inflate the residual value and who eats this loss at the end? I thought the RV was set.
I thought I had some idea of how leasing worked, but will have to research it further.
 
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TurtleBoy

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Electrode

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OH; I see. The manufacturer or it's subsidiary owns the car throughout. That gives them leeway to artificially set the residual to whatever they want. I thought the residual really WAS the residual value or at least, the best guess. Thanks for the info!
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COToad

Finally a G70 owner!
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Castle Rock, CO
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And for the 3.3T RWD we got the same numbers. LOL at Edmunds I ask exactly after you and got the answer just behind you with the same numbers for both 3.3T AWD and RWD which BTW didn't change compared to January.
I suppose I can just ask on Edmunds myself next time and post, LOL. Thanks for both answering. I assume that the conquest cash is still available too.
 

HyperM3

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There is no loss, they generally account for that in the profit margin.
Not necessarily true. BMWs are inflated so much on the RV that they are not worth buying out when the leases are up. Dealerships are miserable that they have to buy a certain percent of them from BMWFS because they just sit on the lot with inflated prices or they send them to auction to take the hit. A few years ago, Maserati basically gave away Giblis on leases. Well, there are 300 of them sitting in the parking lot of Manheim auction in NJ because they arent worth crap. Just saying, when the RV is low, you have a better chance of being able to trade or sell your car better.
 

COToad

Finally a G70 owner!
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Castle Rock, CO
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Not necessarily true. BMWs are inflated so much on the RV that they are not worth buying out when the leases are up. Dealerships are miserable that they have to buy a certain percent of them from BMWFS because they just sit on the lot with inflated prices or they send them to auction to take the hit. A few years ago, Maserati basically gave away Giblis on leases. Well, there are 300 of them sitting in the parking lot of Manheim auction in NJ because they arent worth crap. Just saying, when the RV is low, you have a better chance of being able to trade or sell your car better.
Dealerships do not have to buy them at full residual, the dealership I worked for made lots of money selling off lease CPO vehicles.
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HyperM3

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Dealerships do not have to buy them at full residual, the dealership I worked for made lots of money selling off lease CPO vehicles.
They still have to buy them higher than what they are actually worth. Either way, Im interested to see what the actual resale values will be of these G70s in a few years will be. I havent really researched, but I dont see G80 or G90's making it to any "worst depreciation" lists.
 

COToad

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They still have to buy them higher than what they are actually worth. Either way, Im interested to see what the actual resale values will be of these G70s in a few years will be. I havent really researched, but I dont see G80 or G90's making it to any "worst depreciation" lists.
Then they put a CPO on it for very little and mark it up. In the end, it is mostly about keeping the car coming back in for service anyway, that's where a dealership makes most of its money. A car with 3-4 yr/36-50k warranty and maintenance, all paid by the manufacturer, then returns to the dealership for most of its maintenance and warranty service as a CPO as well for for another couple of years.
 

OMG70

Master Bruce!
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Surfing through the pages on this thread seems like a daunting task, so could someone give me an idea on what a good lease deal is for a 3.3t Sport would be?

I was quoted $538 + tax for a 15k mile (I think 36 months, but not sure) lease. RV was 51% and MF was "just shy of 1%" but never specified for me.
This would be in SoCal (92660 is the zip used I think). They used Circle pricing as the value of the car ($46700 or so)

We've never leased a car before, so I'm thoroughly lost on this as well as how buying the car afterwards might look
 

TurtleBoy

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OMG70

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Quite a bit, thanks! That's what I was thinking too about total cost, but it may be beneficial in the short term to have a lease for business purposes. Just trying to explore all my options to make sure I have my bases covered
 

xKingfisher

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Los Angeles
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FYI, unless it changed in the last week, circle pricing is not compatible with the Genesis leasing incentives.

If you go with the Circle Pricing, you're looking at a MF of ~.003(7.2% APR) with a credit score of >800 vs. the lease incentive MF of .00006 (0.14% APR).

When I worked the numbers with my dealer, it was actually cheaper in the end to not use the circle pricing.
 

TurtleBoy

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OMG70

Master Bruce!
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LA/OC, California
Genesis Model Type
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FYI, unless it changed in the last week, circle pricing is not compatible with the Genesis leasing incentives.

If you go with the Circle Pricing, you're looking at a MF of ~.003(7.2% APR) with a credit score of >800 vs. the lease incentive MF of .00006 (0.14% APR).

When I worked the numbers with my dealer, it was actually cheaper in the end to not use the circle pricing.

According to the dealer, that's incorrect for Circle Plan A pricing. It would be applicable to some other plans though (I think he said plan E)

Edit: By that, I mean your statement. He said the incentives would apply to the deal
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TurtleBoy

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OMG70

Master Bruce!
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I think Hyundai Circle was confusing the Genesis Manufacturer incentives with additional Circle pricing incentives. If I remember correctly the Circle pricing website mentions other incentives may apply.

There was a couple of people who posted in your Incentive thread and I'm pretty we have seen others.

Perverse Incentives: Circle Pricing and Leasing
It definitely says it on the generated certificate that other incentives may apply. Maybe it's a dealer decision?
 

KurticusRex

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You price for the car after lease should be the residual value although you may be able to get them to discount it a bit when the time comes.
Getting a discount on the residual value is extremely difficult, if not impossible. OEM captive auto finance companies almost invariably used "closed end" lease agreements, meaning the residual is fixed and neither the dealer nor customer can negotiate the residual (whether at lease inception or lease end). I worked for Toyota/Lexus Financial for 7 years - not once did I see a lease residual value get altered. Even in the 2007/8 market crash when gas prices went through the roof, people were defaulting all over the place, and trucks and SUV values tanked. People were turning in leases on GX and LX and Sequoias and all sorts of cars that were worth WAY less market value than the lease residual.

Imagine turning in a Sequoia lease with a residual value of 35,000, but the market value is 25,000. Most customers in this sort of situation were thrilled to turn in a vehicle at lease end and not have the financial exposure of having car worth way less than would be owed after 36 months. Toyota and Lexus took huge HUGE hits (to the tune of hundreds of millions of dollars) on those selling back to dealers or at auction after lease end.

Even when customers offered to buy a lease end vehicle for less than residual but above market value, Toyota and Lexus wouldn't do it, not once.

Not saying Geneses/Hyundai Financial will work the same, but I doubt it would be any different.

That's why, just as you mentioned, negotiating the sale price/capitalized cost at the beginning is really key to getting a fair price (whether lease or purchase).
 
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