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High End Luxury Cars

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Comments

  • oacoac Posts: 1,594
    Excellent points, Len. When you gross $200K+ in income, and you drive an LS, you must be unable to afford an S-class ! That's what I read from these kind of posts... Let's see, at $90K for an S550, you can probably lease one for the $1400 range (not exact # here, but roughly speaking). So at an income bracket north of $200K, this is going to send you to the poor-house ? Puleaze !

    And now we must believe that Germancarfans who own an S-class could care less about resale values of their German automobiles... Talk about living in fantasy La La land ! Without good resale values, luxury cruisers are doomed to failure. Just ask Jaguar... even Audi to some extent... The strength of leasing is partly that the car will resell well after the leasing period, otherwise you or the leasing company eat the difference. Someone must pay for that resale value calculation/miscalculation in leases.... Meaning EVERYONE cares about resale - buyers/leasees and sellers/lessors...
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    Hey, were you not supposed to be out of action until after Labor Day ? Get back to work, and catch up on those gadzillion e-mails awaiting your attention

    I'm scheduled to be gone again the second half of August, and I do have a million things to catch up on, but I've got this short two to three week window to catch up on things and it is difficult to stay away from the forum after painfully missing a month.

    You are right, my friend . . . I'd better get to work. I'll check in with you later.

    TagMan
  • cyclone4cyclone4 Posts: 2,261
    Len,

    I think that you are probably the most qualified to answer this question. As you know I will be getting the new LS600hL when it becomes available next spring. I currently own (I paid cash) a 2004 LS430. I already have a couple of willing buyers for the LS430. My question is this: Would it be to my advantage to purchase outright or to lease the new LS600hL? At first, I was thinking that I was going to purchase. However, I have been having second thoughts lately. The technology is changing so fast with hybrids, etc. that it might be better if I lease it. In fact, we did lease the RX400h that my wife drives. It was a special one payment ($25,000) lease . We have a choice after 3 years (May 1 of 2008) whether to pay a balance of about $32,500 and own the RX400h or to give it up and get something new. I am very happy that we took this option since it gives us the freedom to do what we want after 3 years. I am almost positive that we will give it up and lease something new at that time. Who knows what the next generation RX hybrid will be like? It may be out of this world. So, what do you think I should do when the LS600hL is available? I know this is still pretty far into the future, but it does not hurt to ask.
  • ljflxljflx Posts: 4,665
    Impossible to answer at this point without knowing lease deals, residuals etc. On the basis of battery changes in the future I'd say its better to lease than to buy and throw the resale risk on Lexus or the financial institution. A simple way to view a lease vs buy financially without net present values and sophisticated caics is estimate your money trail. A 90K purcase after 3 years really cost you about $108K when you calc in the lost interest on the $90K at say 6%. A lease and buy comparison is simple. Lets say your buyout is $54K and the lease deal is $1400 a month, so you are out 50,400 on the lease, about 4,600 on interest income lost, about $500 on lease fee and the $54K buyout, assuming you buy at lease end. Pretty close under those assumptions. Is it worth an extra grand to $1500 to throw the risk onto the financial institution vs being locked in to your purchase? Naturally the better you think you'll do vs 6% the more you are skewed toward leasing.
  • cyclone4cyclone4 Posts: 2,261
    Thanks so much for your expertise Len. This does help out a lot. I guess more will be revealed next spring. I may ask your opinion again at that time.
  • lexusguylexusguy Posts: 6,419
    I am almost positive that we will give it up and lease something new at that time. Who knows what the next generation RX hybrid will be like?

    Well, I wouldn't expect huge changes by 2008. A totally redesigned RX hybrid will probably hit around '10-11.
  • cyclone4cyclone4 Posts: 2,261
    Thanks LG. You are probably right. But at least we will have nice options at that time.
  • blckislandguyblckislandguy Posts: 1,150
    North of 200K puts you in an S Class? Maybe not. If you are living in the Boston-to-Washington corridor or on the West Coast and living an upper middle class life style, filing jointly on 200K isn't a lot of money. It doesn't go very far with Andover costing 45K a year, a modest August rental on the Vineyard going for 15K, etc.

    It seems to me that the whole key to driving a HELM is if you do it with pre-tax money (i.e., through your LLC, etc.) or post tax money. If you're not "running it through the company" as they say, I doubt that on 200K you're going to be driving an S Class.

    YMMV
  • ljflxljflx Posts: 4,665
    "A house is quite different from a car. Among my clients I dont know anybody who is motivated by resale values before buying a car(luxury or non-luxury). Except certain individuals in this forum (including myself)"

    You guys brought up the resale value. Good luck finding a post where someone bought the LS because of future resale value. The resale value being high is the icing on the cake assuming you are selling in a relatively short time. The LS buyers on this board are holding their cars for 7 to as much as 16 years so resale at that lonngevity of ownership is almost irrelevant. If you're holding only 3-4 years and didn't lease than the higher than forecasted resale value is dessert, not the meal, and certainly not the cause of purchase. I look to resale for a different reason. It bothers me that Lexus underestimates the value of their 3 year old cars in lease deals. It means you are paying for depreciation that isn't happening. I also look to resale for future list prices. If a car is not holding up on reasle than the MSRP won't hold up either. You should lease, and not buy a car that is holding resale values poorly as the discounts are built right into the lease in such cases. And by resale I mean what used cars are really selling for, not a high lease residual, as the difference between that and the real used car selling price IS the subsidy built into the lease.
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    I like the point you are making. May I suggest that those geographic areas that are known for their high cost of living generally have residents with higher income figures. It just goes hand-in-hand. I think that is true with most areas on a general average.

    It therefore easily explains why in the most expensive places you still see the most HELMS, as opposed to the places with the lowest cost of living, where you will see more Hyundais and Kias.

    len - there are PLENTY of reasons to buy a Lexus . . . resale not being a necessary consideration.

    TagMan
  • oacoac Posts: 1,594
    The LS buyers on this board are holding their cars for 7 to as much as 16 years so resale at that lonngevity of ownership is almost irrelevant...

    My 1999 LS400 in-service date: Nov 13, 1998 with 13 miles on the odo. July 2006 (almost 8 years later) and with 114K miles, car runs real strong, almost like new... As to its resale value, let's see...my 14yo daughter doesn't want it (she wants an Audi TT), and my wife doesn't want it either (she likes her LX470 better), so I will trade it in (FWIW) for an LS460. Maybe they'd give me a nickel or something for it, eh ? :)
  • oacoac Posts: 1,594
    True...

    I live in San Diego... Not a cheap city to live by any stretch. $200K joint income is pretty much middle class here. For a city harboring one of the richest zip codes in America, an S550 is nothing to shout about. Way too many rich folks in this city of 3 Million. But $200K income, with proper investments can afford lots more than the income suggests. We have been lucky to have moved out of stocks into real estate a tad earlier than many others. And we did good in the red-hot market out here... So if you judge by income you'd say why would I buy an S550... But I sure can afford to lease one if I want to... However, the LS460 fits the bill for me. Luxury, refinement, style, quality, features/gadgetry (love gadgets) and priced right. I won't overpay for a 3-pointed star, period.

    Hey, I got this brochure in the mail from Lexus. It claims the LS600hL will be 208.2" long. That'll put it a few inches LONGER than the S550. Is that going to be the case ? Oh it also says the output will be MORE than 430HP, with SULEV (70% cleaner emission than an S550/A8L/760iL)... Imagine this car priced in the mid-80s ? It'd sell out pretty quick. But here is the caveat: Lexus says the car is still in "development" but will be out in 2007. Huh !!! I'd hope its closer to production by now...
  • lexusguylexusguy Posts: 6,419
    But at least we will have nice options at that time.

    True. If you're interested in something more sporty than the RX, there's the totally redesigned MDX. Infiniti should also have a brand new FX35\45 by '08 or so.
  • deweydewey Posts: 5,243
    SOURCE: Wall Street Journal July 29th, 2006

    Compared with the previous Porsche Turbo model, the new car has a more utilitarian, less cluttered look. Its spoiler, which automatically pops up at high speeds to generate downward force that keeps the car's rear planted on the pavement, is barely noticeable from some angles. Nothing seems to have been added to the exterior as an afterthought.
    The overall look of the leather seats and brushed-metal dashboard trim is racy and well-finished, though more purposeful than luxurious.
    At first glance, the new Turbo looks much like a garden-variety 911 coupe


    The above description should be the description of all German cars. Understated with uncluttered looks, utilitarian, function before form, more purposeful than luxurious.

    Unfortunately not all German cars are Germanic :cry:
  • lexusguylexusguy Posts: 6,419
    Unfortunately not all German cars are Germanic

    This certainly isnt:

    image
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    thanks, lg - I had a terrific dinner tonight and you just ruined it with that pic. Suddenly I feel like barfing. ;)

    TagMan
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    I spent the day yesterday with my wife and another couple who invited us up to Napa for an event at the Silver Oak Winery for a special release of one of their wines. It was a gorgeous drive, with the gals in the back seat and guys up front. He was doing the driving in his fairly new Infiniti M45.

    Of course, with me in the vehicle we were going to be talking cars sooner or later. I asked him about the Mercedes vehicles he previously owned and why he switched. He had owned the M-class suv and the small C-class with the V-6. Apparently, the C-class had 32 visits to the shop in about a year and a half. As he described the situation, just about everything imaginable had gone wrong with his cars . . . some of the situations being dangerous, with regards to the brake failure in the M and electrical meltdown in the C. He said the sunroof dislodged itself somehow in the M, and he was kindly describing all the horrible stuff that he and his wife had endured.

    The surprising thing is that he still loves Mercedes, but he won't buy one again until he knows that they are more reliable. He said that he doesn't need the most reliable cars, just "reliable enough". He had a very balanced view of reliability, and was most patient with his unfortunate circumstances in his Mercedes vehicles.

    As a Mercedes fan, I was sad, but I knew that those were not typical situations, but it left me shaking my head.

    The Infiniti has not given him any troubles to date, and BTW, it was a very comfortable ride, and the interior was very well appointed, and tastefully designed for a car in that price tier. There were many well-thought out amenities and my respect for the marque has increased from this experience.

    I have not lost my love for the Mercedes marque, but the truth is a good thing and it does place the perspective of reliability a bit more in focus for me.

    BTW, I had the pleasure of meeting the owner of the winery and his son, amongst other interesting peple, including former Raiders Gene Upshaw, who happened to be there and signed my glass. Because of my association with my friend, who handles some of the winery's investment banking, I was allowed to purchase some of that delicious wine at a special price . . . so I did so. It was a beautiful day. Good thing I wasn't the designated driver! ;)

    TagMan
  • blkhemiblkhemi Posts: 1,717
    The debates that have come about on this thread makes those old Swift-Boat ads seem tame...

    So I've compiled a ballad of campaigns for the following sets to win the honors of '06:

    Team Lexus: LG, OAC, the good Doc, ljflx, and few others slogans follows as such: We, the people of unprecedented quality, perfection, and luxury hold these truths to be self-evident, that all people should have the chance to own the most reliable car in it's class. While the styling may not be as bold as some of our constituents, but as we say in Washington, we're working on that: We urge you to give us your vote in fall of '06.....

    Team Europe: myself BH, Merc1, hp, tag, dewey, and some others, we say: We, the people of unmatched balance of ride comfort and performance(BMW), impeccable fit/finish(Audi), world-class presence and innovation(MB), heritage and stately classic styling(Jag), we hold these truths to be self-evident, that the people of this great country shall no longer be bogged down with transportation that is boring, unsatifying, and dull. The Great people of this country will have the honor to choose(not be forced) what car suits their needs. Team Europe: The people of Choices.

    This Novemeber will not have squat on what's going(and already happening) to take place in the HELM marketplace...
  • tagmantagman Malibu, CaliforniaPosts: 8,441
    I'm still laughing! :D :D

    BTW, Team Europe will continue to win regardless of the count. According to the Doc, Bush is on our side . . . and he wins elections, regardless of the votes . . . or his reliability. :P

    TagMan
  • blkhemiblkhemi Posts: 1,717
    "As a Mercedes fan, I was sad, but I knew that those were not typical situations.."

    You're absolutely right. Take my previous '01 S500. This was pre-'03 refresh, the very model that CR calls "the worst buy in the last decade". Well, the only problem I had was the usual COMAND failure that everyone experienced and one HID bulb. 41,000 miles of everyday driving and that was it. No ABC/Air-suspension failures, A/C problems, no electrical grimlins(much unlike my '98 LS400), noda..

    And to my '05 S65 AMG. Two new rear tires was all the maintenance it required for 10,000 miles of onwership. Of course the usual oil/lube and other MB/AMG stuff, but nothing out of the scheduled maintenance. And the tires were due to my over-zealous driving habits.

    So many people jump the gun about MB's and Bimmers being hugely unreliable. Take for instance Porsche. 10 years ago, it was thought to be nothing more than a weekend toy because of what people assumed to be unreliable. Now it's the most reliable company in the biz, hands down....

    Despite it's many sophisticated electronic devices, trick suspension, AWD, complicated powertrain, and precious construction, I have not had not one issue with my A8L W12. Yes it's very German, but very reliable, not something I can say about the two Japanese LS400's I've owned, but again, case by case experience. Not all are complete lemons just like not all will be as reliable as advertised.....
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