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2008 Cadillac CTS

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Comments

  • texasestexases Posts: 5,424
    Remember, the big discounts on the current CTS are partly because of the coming 2008. My friend just got an '06 for $9000 off, but they weren't wanting to talk anything like that on an '07, and I bet it'll be a while before '08s see major discounting, what with all the demand this forum's creating!

    Also - didn't I read somewhere the wagon would be export only?
  • 14871487 Posts: 2,407
    You are 100% correct about the discounting. I anticipate this car getting great reviews and I dont see dealers being willing to offer great deals for many months after launch.

    The coupe and wagon have NOT been confirmed in any way, shape or form. If they happen they may not both be sold here since wagons arent all that popular in the states.
  • plektoplekto Posts: 3,708
    $640 a month? You could purchase a CTS for that much.

    2007 CTS with the 3.6 engine.
    Options:
    Luxury Package
    Split-Fold rear seat
    6 Cd changer
    Sunroof
    $35,040 Via Cars Direct.

    First off, NOT $40K. NOT EVEN CLOSE. All of the blather about these costing $45K+ and such - maybe for the V version, but not for the normal one.

    Secondly, and most importantly, that's axactly $640 a month with 0 down at 0% financing(trust me - GM will offer 0% or 1.9% or something silly in a few months). Yes, that includes tax, license, and such here in California.

    Why lease when you can buy with a year longer warranty, no mileage worries, and no fees/condition adjustment when you turn it in?
  • My point about $640/mo was for a car with an MSRP of $53,286.

    I suspect if there is a $40K+ CTS for lease at $640/mo and an Audi A6, BMW 5 or Mercedes E is about the same bucks per month, folks would pause and give consideration to the German cars.

    Why pay $640 per month for a sub $40K car when the same money gets you a $50K+ car?

    On the subject of leasing, suffice it to say that it is not for everyone. O% financing is perhaps the best way to acquire a car -- but even then the purchase of an asset that gains value and the rental of an asset that loses value is not an absurd philosophy.

    My point was that the CTS MAY need to be subvented to lure a potential buyer -- especially if the CTS is thousands less at MSRP but similarly priced at lease to a BMW 5 series, fer instance.
  • It is a little counterintuitive that the high demand for a BMW would make it less expensive to lease.
  • plektoplekto Posts: 3,708
    Why ppay for a 50K+ car what's massively overpriced when you can OWN a simmilar car for less - just without the snob factor?
  • . . .here is an explanation of why BMW's (often) are the lowest priced cars when leasing, at least.

    Note: regardless of the source of the calculation called residual, the residual value of the car at X months in the future has a HUGE impact on the lease payment. Two other factors, of course, are influential and can be, likewise, "sub-vented." On that note, think of sub-venting as "financial support" for a lease (usually provided by the mfgr's leasing arm.)

    BMW's have enjoyed high residuals for some time. Regardless of empirical economic evidence that may or may not actually exist, BMW's are "worth more" after 36 months than many (most?) cars available today. It may be true that the residual percentages are "artificial" or it simply may be the simple simple "Economics 101" supply and demand. A used BMW retains "something" that makes it very desirable (not to me, to the "market.")

    Cadillacs, on the other hand, have not enjoyed as great a residual value after X months.

    Many (most?) cars residual value literally plummets the moment it is sold to a customer. This is one of the reasons a new Chrysler 300 can be leased (although sub-venting changes this, too) for MORE than a car costing over $10,000 more at MSRP.

    Some folks believe BMW USA is NOT in the business of selling cars -- that they are, rather, in the leasing business (75%+ of Bimmers being rented, NOT purchased.)

    It is, very possible a $50K BMW will actually be less money to lease than a $40K Cadillac -- based on similar terms, etc.

    If the residual is NOT a total sham, the buyer of said BMW and Cadillac will experience the exact same things at X months down the road as those who leased experience.

    The purchased Cadillac will cost more at X months than the BMW, that is.

    Of course, if the BMW lease is sub-vented as it pertains to residual, this makes leasing, not buying, even a more frugal financial choice.

    Why?

    If "someone else's money" is being used to allow you to acquire a $50K car for an amount that is the same as it would cost to lease a $40K car (and the $50K car is one that you actually would want) the $50K car is a lay down.

    Likewise 0% interest is another form of sub-venting a purchase.

    Likewise low low low "money factors" (the interest rate contained in a lease) will have yet another similar effect: the lease price per month will decrease.

    High residual and low money factors have a huge impact upon the lease prices. It is sometimes thought that the leasing company called BMW Financial is both a marketing and sales tool helping BMW move thousands of cars per month, often placing them at the top of any category in which they are placed (ELLPS, LPS, etc.)

    GM on the other hand has taken a discount approach due to the fact that even the most conservative estimates of residual have often proven too optimistic and, after all, how much lower than 0% interest can you go?

    The new crop of American cars is, hopefully, turning the tide somewhat. Cadillac should enjoy higher residuals with the newest generation of the CTS. Problem is, it takes years for the new, true residual to become known.

    After the initial launch and hoopla from the auto magazines (hopefully, anyway, there will be hoopla), Cadillac will enjoy a honeymoon period where the cars, however sold, will be sold close to MSRP. Newer models from the competition, time, boredom and other market factors will erode this position probably within 6 - 9 months of launch. Yet in that period of time the 36 month true residual will only be a forecast.

    BMW can, somewhat, rest on its laurels (and I am using BMW as an example, not meaning, i.e., to exclude other Germans, Europeans or Japanese competition.) It can say after 24 months a new 5 series is able to command "X%" of MSRP, meanwhile Cadillac will have to settle for ".8X%" or sub-vent the heck out of the lease.

    My wife enjoyed a $581 lease payment on a $48K BMW while the same could not be said at the time of the lease on a 2005.5 Audi A4 (due to residual.) The $44K A4 had an asking lease price (same terms as the BMW) of $644 per month.

    Since the vehicles, were for her, interchangeable, she made an economic decision.

    If the BMW 5 series is "within spittin' distance" financially of the new CTS, for instance, it matters not if one believes the 5 is "massively overpriced."

    Why?

    Because it costs less to use for 36 months than the "appropriately priced" Cadillac.

    Many folks may cross shop the Cadillac with the BMW (3 and 5) and I am suggesting that many folks within that population may find the "massively overpriced" Bimmers lower cost per month from 24 - 36 months on a $0.00 down lease which includes maintenance.

    The MSRP is almost irrelevant.

    It is the "monthly check I have to write" that will have huge sway on the decision. Cadillac is -- without substantial sub-venting -- the knife in the gun fight.

    Discountarama? Even more massive sub-venting? 0% interest rates? All of the above?

    Probably, at least for the early years of the new CTS -- until its inherent goodness (if it indeed manifests itself) becomes an historical fact (check KBB 36 months from launch, i.e.)

    With all due respect, I submit it is intuitive that the higher buck cars of a certain persuasion will almost always cost less than the lower buck cars of another certain persuasion.

    American cars are on the hunt for higher residual values -- they just haven't yet cornered their prey. :shades:
  • I appreciate your post, and I agree that higher residuals is a key factor in determining lease payments. I do not know enough to formally "disagree" with what you said - I just want to make a comment and hopefully you'll respond:

    With 2 similar cars with similar MSRPs, the car with the highest residual will often have the lower lease payment; however, when comparing a BMW lease to a Cadillac lease, that may not be the case. BMWs are at the top in terms of MSRP, so even if a Cadillac will depreciate more, percentage-wise, what matters is the actual dollar difference between the purchase price and the residual.

    You may have said it in your post and I missed it, but are you saying that BMWs higher residuals results in a smaller difference between purchase price and residual (i.e. purch price - residual) as compared to other cars? I think that's the key - not whether BMW depreciates at a lower rate.
  • "IF" the MSRP of the Cadillac is $40K and the BMW is $50K and the residual of the Cadillac is 40% and the BMW is 60%, the calculation could go this way:

    Residual of Cadillac is $16,000.

    Residual of BMW is $30,000.

    Cost to use Cadillac is $24,000
    Cost to use BMW is $20,000

    If there are similar money factors, the mo pay on the BMW will be lower than the the mo pay on the Cadillac.

    This is a gross oversimplification for purposes of responding and to hopefully not raise the ire of the host, for there are plenty of leasing threads here on e.com.

    The "spirit" of the above is, however, accurate.

    If the term happened to be 24 months and the money factor was 0% the Cadillac would lease for $1,000 per month and the BMW would lease for $833.

    For some people the lure of the BMW at $833 per month would overpower the lure of the less expensive (at MSRP) Cadillac at $1,000 per month.

    Would you pay $1,000 for a Cadillac when the BMW was $833?

    If the residual on the BMW was lowered to 50%, the two cars would have very very similar lease payments. Same question, would you lease a Cadillac for $1,000 per month or a BMW for just slightly more (about $20 per month more in this example?)

    I am not suggesting we all are economic buyers -- for there would surely be folks who would lease the Cadillac for $1,000 rather than a $10,000 more at MSRP BMW.

    I'm just not one of them.

    If both cars lease payments are very very close, I will opt for the $50K car over the $40K car (in this example, which is JUST an example, i.e.) :surprise:
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  • ral1960ral1960 Posts: 74
    I would buy the car I liked better, regardless of cost or prestige. At least, that's how I'm trying to rationalize spending well over $30k for a CTS, when a G8, Aura, or Malibu would meet my requirements (if not satisfy my passions) just as well for thousands less.
  • plektoplekto Posts: 3,708
    Buying the car, though, has a couple of nice features to it.

    1: Compare two BMW leases(6 years) for, say, $640 a month, to a single Cadillac purchase for 6 years. (say you pay a thousand more to up the GM warranty to 6 years as well)

    Btw, I get $625.69 a month - 2.9% for 72 months, plus $1000 for the extended warranty. No trade-in, no down, plus california tax and license, which is one of the highest(Edmunds.com)

    The difference is that the Cadillac at the end of 6 years is cash that you can sell it for - so that lowers the effective price of the car by 10K.

    You quoted $24K for the Cadillac and 20K for the BMW(3 years), but the Cadillac only costs *35-36K*. I get 20K versus 20K. But again, you get nothing at the end, while the Cadillac you can resell for cold, hard cash in three more years.

    ie - it costs you the same $20K for three years but six years only costs you $30K!. But, the cars need to be about 30% apart to make this happen(which is why a Hyundai can also be a better deal than a Civic in some cases)

    2:No mileage deductions of charges. Drive the Cadillac or other purchased car like you stole it or like it's your grandma's car. Your choice.

    3:No bills or problems when you turn it in. Sometimes luxury cars can be harsh and the bill can be ugly if it has a coupl of dents in it or more likely, the bumpers are less than pristene.

    4:GM really DOES offer 0-2.9% financing for long-term leases on these things. It's essentially like a lease at that point, but you own it at the end. :)

    5:You can always drive the car another 5-6 years for very little at that point. $1000 in repairs a year, which is considered excessively high by most people, is *TWO* payments a year on a BMW in effect. Put that way, it's nearly free. Pay for a month or two and the other 10-11 months are free.

    This is how you get wealthy, btw - you drive your cars and use your possessions until they fall apart or close to it. And considering my sister and I managed 18 years each out of our Buicks(my father was the first owner of both) - 10-12 years for a Cadillac is no problem at all.
  • ral1960ral1960 Posts: 74
    If everyone bought and held onto his car (and other stuff) like you suggest, the car business would all but die, and the whole economy collapse with it. Fortunately, few of us are that careful with our money.
  • markcincinnatimarkcincinnati Posts: 5,049
    I appreciate your point of view. I do not think, in any way, shape, manner, form or regard, that it is invalid or flawed.

    I do think it is, in this market, for this class of product, etc, a minority point of view. But, since I'm dredging up my accountant's advice, his comment is most people rent the place they live and buy the car they drive which is counter intuitive considering that "generally, typically, fundamentally" cars lose value (sometimes very) rapidly and houses gain value over time.

    I place a value on having new-er technology. At month 37, I am at a place where I owe nothing and have nothing. You are half way though a purchase and you are perhaps likely to very likely to owe more than your vehicle is worth.

    At month 37 you may need tires and other service items that will certainly cost high 3 figures and in some cases low 4 figures to the left of the decimal point.

    I can make a decision to re up for a more or less expensive car where EVERYTHING is new, and the latest safety, performance, economy, electronic and entertainment devices are mine for the choosing.

    At month 37 the buyer owes more than the car is worth, has four year old technology and safety and performance and entertainment, etc etc etc amenities, features, functions and style.

    Some folks place some value on "a change." Some don't.

    Some folks place some value on the updated, new and different features, functions and amenities (that can effect the driving pleasure, performance, economy and safety.) Some don't.

    Some people are willing to risk a breakdown which is typically more likely in years 4, 5, & 6 than in 1, 2 & 3.

    There are, that is, "opportunity costs" that are quantifiable and some are "qualifiable." They exist. Some people are content to live with the opportunity costs. Some aren't.

    The effect on the economy, noted, would be an interesting study -- for there certainly is "an arguement" that could suggest the cost of maintaining, fueling, repairing, insuring, etc, those "older cars" merely shifts money from new car purchases to maintaining older cars as "fit for road duty."

    I have no problem with either approach. Some of my friends have 5, 6 or more year old vehicles. None of them, however, likes NOT having a younger vehicle. Not one. One of them is so concerned about having a NOT YOUNG vehicle, he will only travel any distance by renting a car from enterprise for any weekend trips over X miles one way.

    It takes all kinds.

    If indeed the new car is $36,000 out the door and is offered at 0% interest for 72 months, the payment will be $500. At month 37, the amount owed will be $18,000 and the worth of the car, based in part on how quickly one needs to convert it to cash will be less than $18,000, and in some cases thousands less. Add the new set of tires for $500+ and at month 37, I have a car that would cost me $1,000 NEXT month were I to first re-tire it and then sell it outright and pay off the $17,500 I owed, from the $16,500 (or less) I would likely get if sold to a private individual.

    Me, I like an equal to or less than 3 MY old vehicle; I like both factory warranty and factory maintenance (a la Audi, BMW, etc.)

    I love the looks, features (on paper) and "ideal" of an American car such as the new CTS.

    I would not pay $1,000 per month (as an example and to repeat a gross oversimplification) for the CTS if the BMW 5 series were but $833 per month; and, were they identical in mo pay, the BMW would still get my vote unless it drove like a log wagon (or worse.)

    Most folks will, given an apples to apples payment and cars that are approximately able to be substituted for each other in at least 50% of the criteria for which one chooses an automobile, go for the more expensive MSRP vehicle.

    Many folks, were the BMW 535xi sold for $39K (and the CTS was the same MSRP) take the Bimmer. This changes, I'd wager, to "most" folks would take the 535xi over the CTS if the 535xi were $50K and the CTS $39K but had similar lease payments. I would assume that GM will probably adjust (i.e., subvent) the new CTS to prevent this.

    If they do, I'm a prospect.

    If they don't and a $10,000 more expensive car (regardless of its country of origin) can be had for the same monthly lease payment, it will be a tough sell for the Cadillac.

    I'm (in this circumstance) an economic buyer. The cars in this and the next class up are more similar than not. Price, then, can have a huge influence on an economic buyer.

    It blew my mind when my secretary bought a USED Saturn for $11,000 when she could have had a new Honda for less money per month on a lease. She had a 5 year finance vs a 39 month lease. Little warranty and used tires, battery, etc on the one car and new everything on the other.

    She could've had the Honda and, I'd bet, more peace of mind and a slightly lower payment.

    Don't meddle with your friends or co-workers finances is a lesson here. Once she made the buy, I loved the Saturn, as far as she knew.

    Anyway -- each POV has its merits.

    I did think it was worth suggesting you consider some of the merits of leasing from another viewpoint. I, too, appreciate knowing the merits from your perspective.

    No approach is perfect. Yours suits you, and vice-versa.

    Drive it like you live. :shades:
  • jimbresjimbres Posts: 2,025
    This is how you get wealthy, btw - you drive your cars and use your possessions until they fall apart or close to it.

    Well put. I couldn't agree more. Buy something you like, take care of it & use it up. Do that & you won't wind up telling your tale of woe on the Smart Shoppers' forum dedicated to the sad sacks who can't make the payments on cars that are worth less than what they owe.

    It may pain some folks to hear this, but cars are appliances. They're endearing, exhilarating & sometimes heart-breaking -- I have & love a BMW 330i -- but appliances nonetheless: tools for getting from here to there quickly & easily. Just as I won't get rid of my microwave oven until it stops working (mine is still going strong, although it dates back to the 2nd Reagan administration), so I won't get rid of an otherwise good car just because it's reached a certain age. Since the beginning of 1985 -- 22 years ago -- we've bought a total of 6 cars for 2 drivers.

    I like what little I've seen of the new CTS. If the driving experience lives up to its styling, it might replace my BMW -- but not until 2009 at the earliest.
  • plektoplekto Posts: 3,708
    I place a value on having new-er technology. At month 37, I am at a place where I owe nothing and have nothing. You are half way though a purchase and you are perhaps likely to very likely to owe more than your vehicle is worth.

    At month 37 you may need tires and other service items that will certainly cost high 3 figures and in some cases low 4 figures to the left of the decimal point.


    You missed my point - I figured an extended waranty in there as well, to make it even - the Cadillac not costing me a dime(and it's 4/48 plus 5/100K on the drivetrain to begin with). A CS with the V6 in it after three wyars is worth almost exactly $16-18K, as well. Ie - it's close to breaking even, like the BMW lease.

    The magic, though, is what happens for the next three years. You start a new lease over and I pay mine off - constantly getting ahead of the game. After three more years, the car is still worth 10K and that's money I can put towards a new CTS or simmilar(or BMW) - and presto - I get a 40K car(figure inflation and such) for $30K. 5K less than my original car, in fact. You lease is still in the $600-700 range and my second car is in the 500 range.

    After 6 yeasrs, though, I can kep the car for $500-1000 a month, and honestly, most new luxury cars are fine as commuters for 12 years. Figure 6 more years with 5K extra maintainence.(stickshift CTS of course - not going to touch that automatic's repair bill, no way) Car is worth 4K at the end.

    I paid 36K+interest/etc(40K)plus 5-6K in repairs, or a whopping 46K for 12 years. Let's say $48K to make the math easy. That's 4K a year for 12 years.

    Leases would cost you 80K in 12 years(~7000 a year). Almost double. Your choice I guess, but the reality is your advisor is partially wrong - you should buy your house AND your cars. And use them for a decade or more between moves if you can.
  • markcincinnatimarkcincinnati Posts: 5,049
    The warranty has nothing to do with having a new car at month 37. The warranty lowers the risk of cost at month 37, it does not imbue the three year old car with the new features, functions and performance/economy.

    I do place value on the having a new model every three years. It does not mean you should, of course, but it just means that there is value to me in keeping it new.

    This is not the forum for continuing this discussion. I am happy to keep on my current track and happy that you are satisfied with your choice.

    There are merits to both approaches.

    Enjoy your approach.

    I must say, I've enjoyed my current car so much, I do wonder if I will continue my current course of action.

    Yet, then there is the case of my in laws -- new Chrysler 300 Limited, 39 month lease $299.

    This is their first lease.

    They calculate this as a better deal for them than their last car, purchased, a 1997 Cadillac that they claim cost them an arm and a leg.
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 11,568
    If everyone bought and held onto his car (and other stuff) like you suggest, the car business would all but die, and the whole economy collapse with it.

    Seriously doubt that. the auto industry would change for sure but the e4conomy would still move on. Unless they are burning it in their back yards people are going to do something with their money.

    There are three types of people in this world. Those who are good at math and those who are not.

  • ral1960ral1960 Posts: 74
    I was using a little hyperbole, but it would be a very different economy if most people weren't buying new stuff all the time. Sort of like the Great Depression. Thankfully?, the auto industry is a smaller slice of our economy now.
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 11,568
    It would be a slightly different economy but nothing like the great depression. People will still have the money they would have to do something with it. Either spend it or ibvest it but they will use that money.

    There are three types of people in this world. Those who are good at math and those who are not.

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