High End Luxury Cars

syswei · January 2007

...on an improving path...

Volkswagen workers like Ronald Wachendorf, a 50-year-old mechanic, have enjoyed the shortest work week in the global auto industry: 28.8 hours, pulling down a full week's pay while working a day less than the 40-hour norm at General Motors Corp. and even less than the 35-hour standard at other German car makers....

But now, Mr. Wachendorf is having to adjust to a more hectic schedule -- at least by Volkswagen standards. In September, Mr. Wachendorf's union agreed to extend working hours at the company's German plants by more than four hours a week, to 33 hours, after the auto maker threatened to shift production outside the country. Volkswagen won't pay the workers extra to compensate for their longer schedule....

The change under way at Volkswagen reflects a broader trend in Europe's largest economy. With unemployment running around 10%, companies have more leverage to demand sacrifices of workers. Increasingly, businesses are pressuring employees to work longer for the same amount of money and threatening to shift production abroad.

In a country that is home to the world's best-paid auto workers, Volkswagen goes even further -- paying $69 an hour, compared with the national average of $44 and the U.S. standard of $34. Because of its reluctance to cut jobs, Volkswagen employs thousands of workers to make seat covers, exhaust systems and steering gears -- work most auto makers outsource.

source WSJ

ctsang · January 2007

Mulally referred to Toyota as "the finest machine in the world, the finest production system in the world," adding that "we (Mulally and Fields) went to study with the master."

lexusguy · January 2007

Well last year the battery gave out around 600 pics or so, the card itself can hold about 700 pics. Sounds like a lot of pics I know, but when I go back on that second day I always realize that I've missed something and its easy to rack up another 200 or so pics.

Wow, I don't even take that many shots when on vacation. What camera do you use?

lexusguy · January 2007

Mulally referred to Toyota as "the finest machine in the world, the finest production system in the world," adding that "we (Mulally and Fields) went to study with the master."

He's right. Compare Toyota to the above VW situation, a textbook example of how to be unprofitable. Porsche may brag about being the "world's most profitable automaker", but its much easier to enjoy that status selling exotics with $15K option packages than it is to be a mass marketer like Toyota.

They might also want to spend some time studying Lexus (or even Cadillac), as those Lincoln guys have no idea what the hell they are doing. If there was a JD Power award for the most time spent stumbling around in the dark without a clue, Lincoln would win it hands down.

tagman · January 2007

Well, stay away from those sporty suspensions for the time being.

No problem... Lotus "Sport Pack" / "Track Pack" suspension is history for me. Believe me, other cars are cream puffs by comparison.

I hope you are correct about the diesel situation. Can you imagine a full-sized SUV averaging 25 mpg? Diesel can make it happen.

It WILL happen. Your location and diesel-fuel availability is certainly a variable. Next time you take the 5-Series to your local gas station(s) and fill-er-up, take a moment to ask the folks at the station(s) if they have any info about upcoming availability of diesel fuel.

If they don't know yet, continue to ask again occassionally throughout the year. Most likely, it's not a matter of IF it will happen, but WHEN it will happen. Hopefully soon enough for YOU.

TagMan

dewey · January 2007

Tagman,

Previously I shared your excitement about diesel HELCs but I think there will be obstacles to their success in North Amercica. My view was expressed on post number 22613:

dewey, "High End Luxury Cars" #22613, 29 Dec 2006 7:39 am

I find a 2.2l diesel Accord far more exciting than any diesel HELC. Interestingly the hyrbid Accord will be discontinued. Unfortunately a Honda V6 diesel will likely have the same Urea issues as the German HELCs.

Honda president Takeo Fukui has been quoted in the Japanese press as saying that a next generation V-6 diesel will be commercialized by Honda, and is set to slot into the Ridgeline along with other unspecified models.

First, though, Honda will kick off with its 2.2-2.4-litre class, four-cylinder super clean turbodiesel thatll run in the next Stateside Accord, appearing around 2009. This is expected be a breakthrough engine, with emissions as clean as clean as a modern gasoline powerplant, able to meet even the toughest regulations in the world (i.e. the EPAs Tier II Bin 5 regulations).

Once this Accord diesel goes on sale, the Accord hybrid will be quietly

SOURCE: WINDING ROAD

I know our disputes always ends up being friendly and I know they will not end up resembling a GasCarFan vs. a Dieselican dispute (God forbid).

dewey · January 2007

Hey ctsang,

I knew you would love that quote from the article I linked regarding Mually's LS cancellation.

Similar quotes were made by CEOs from BMW, MB and VW and other American auto executives. Most auto executives worldwide are in awe with Toyota's production system.

I've never heard such a quote from Nissan's Ghosn or Honda's CEO. I guess they themselves have a great production system (although not as great as Toyota's). Oh well I guess it is harder to compliment a rival when they are just across the road from you. (figuratively speaking ofcourse)

cdnpinhead · January 2007

. . .as those Lincoln guys have no idea what the hell they are doing. If there was a JD Power award for the most time spent stumbling around in the dark without a clue, Lincoln would win it hands down.

To which I will add, amen.

I had one (count it) shot at buying a vehicle designed & manufactured in the USA, and I'll never do it again. The Lincoln LS had quite a bit of promise, all squandered in a few years.

tagman · January 2007

Previously I shared your excitement about diesel HELCs but I think there will be obstacles to their success in North America....

I find a 2.2l diesel Accord far more exciting than any diesel HELC.

Dewey,

I'm personally excited about diesels in ALL segments... including the ones you mentioned.

To say we are early in the game is an understatement. It is always a possibiity that the diesel engines won't turn out to be as expected and/or hoped, but everything so far is pointing to success.

It seems logical, at first, to consider a diesel engine for a truck or SUV. And after that, it is easy to imagine the small diesels such as VW's diesels of recent years. Next, we foresee slightly larger diesels in vehicles like the Accord, which also makes great sense.

It takes a little more of a stretch to really see them in the HELCs, I agree. So far, Mercedes has not placed a diesel in a North American HELC, but has chosen the E-Class as their sedan of choice. Is it because the diesel isn't quite smooth enough for a car like the S-Class? Not enough power? These are questions to be answered as time goes on over the next years, and we will find out.

If a powerful and quiet diesel can indeed make its way into a HELC, and it is not a compromise, then I see it as a terrific step forward. If there are too many compromises for the HELC segment, then it will become known to us. But, I believe in the technological capabilities of the manufacturers and I believe that this point in history is revealing more of their capabilities than in a very long time.

With regards to the use of diesels in this HELC segment, I'm certainly not ruling out their potential in advance, nor am I just automatically expecting diesels to be big winners right out of the gate. Who would have ever expected to see a hybrid in a HELC? Yet, years after the fist generation hybrid, look now at the upcoming Lexus LS600hL, for example. So, progress should also be a factor with this new generation of cleaner-burning, smoother and quieter diesels.

BMW, Audi and Mercedes (in this segment) are amazing companies, and I imagine that great things will likely come from them with regards to their future diesels.

TagMan

hpowders · January 2007

I will. Thanks for the advice!

merc1 · January 2007

Of course I don't use all of them by the time I come back here to do the writeup, but I still post a lot of them.

I have a Cannon PowerShot SD550 Digital Elph.

M

hpowders · January 2007

I rented my 545i for 2.4% interest over 3 years with no money down.

One of the hosts rented a new BMW convertible for 1.9% interest over 3 years also with no money down.

lexusguy · January 2007

There is also the fact that Toyota's JD market share resembles GM's slice of the US market in the 1950's. If I had to compete with that, I wouldn't rush to compliment my archrival either.

cdnpinhead · January 2007

I did a much cruder study than you've been presenting here about 7 years ago, when I chose to buy my present car. I came to the same conclusion in a much less well documented fashion -- for an American car with no subsidized residual/money rate, leasing made no sense (I keep my cars a long time & drive quite a few miles), but for the subsidized situation, it very well might.

You present compelling arguments. Well done. Thanks to you & Mark on another board, I'm seriously considering a lease, for the first time ever for my next vehicle, a highly-subsidized BMW.

The thing I've never been able to work out, though, is how the "system" makes money on the vehicles turned in off lease, with ridiculously high residuals. If they can't sell them for that, it seems that taking that big a hit wouldn't make sense. And if, as so many say, the thing falls apart ten minutes after the extended warranty runs out, how does driver #2 unload the thing at 100,001 miles without taking a bath? Where do all these subsidized off-lease vehicles go & how do they make anybody any money?

dhamilton · January 2007

I think that's one of the reasons Toyota got out of the leasing game [here in the south west anyway] The over augmented residuals had them losing money in the back end.

tagman · January 2007

cdnpinhead,

Before you jump to any conclusions, I strongly suggest you read a professional comparison between leasing and buying. Edmunds, as well as others, has a terrific easy-to-understand analysis. Here is the Edmunds link...

Buying vs. Leasing

Also, realize that "methods of financing" is not the main topic for this board, so we probably shouldn't post too much on the subject. But since there has been SO much talk about it here, I thought I'd at least give you a credible source of information. And there are many others as well. Good luck.

TagMan

tagman · January 2007

I'm just curious. How many of us are leasing and how many of us have purchased?

I realize that we are already aware of some of the posters current financing methods, but let's let everyone officially speak for themselves.

So... are we currently leasing or purchasing?

I have purchased my vehicles.

TagMan

hpowders · January 2007

Of the 7 vehicles I have had, 4 have been leased and 3 have been purchased for cash. My first vehicle back in 1967 was a lease and since 1993, all leases; and one of those I purchased for cash at the end of the lease and kept it for 9 years total. As to the future, I expect to have leased until deceased.

lexusguy · January 2007

Currently, we are leasing the X3, and I own my '01 LS430 and my '07 XK.

houdini1 · January 2007

I usually buy but have leased in the past when the deal is too good to pass up. A lot depends on your specific situation and whether it is a business or personal car, tax situation, etc.

In today's paper a new mitsubishi Galant can be leased for $99. per month with $1600. up front, 24 month lease. Then ther is a new R class Mercedes for sale $53,000 msrp, sale price $39,000. I think the Mercedes is a demo.

designman · January 2007

Im 56 and have never leased. Here are my reasons:

1 - Leases seem to COST more unless a business write-off makes it attractive.
2  You are committed to a CONTRACT (rules) that can be costly or annoying to break.
3  When I have a car, I dont want a DEADLINE on my mind.

Bottom line:
I want to buy and sell cars and be in full control of the process. To me, buying is modular and I think Id feel handcuffed with a lease. However I understand the thinking of those who lease and it seems there are some people who are very savvy about it to their credit.

Having said these things, I cant tell you how much I hate buy/lease talk. If you can afford these cars I dont think it makes a difference which method you choose. It just seems theres a lot of bickering with no real consequence or advantage. But I dont want to spoil the party. Heck, I hosted an astrology klatch several weeks ago.

;-)

anthonyp · January 2007

I have never leased---but hpowders is going to help me figure this out the next time...So far =personally- I have not felt I knew enough, therefore just close my eyes and buy.. I just drove down here to Miami from Charleston, and have noticed the traffic moves along just over eighty to eighty five...Made it in eight hours+ and the computer said I got better than twenty six mpg, which is probably off a little Tony

tagman · January 2007

I personally agree with your post.

So far, the purchasers are at a majority. While not a huge majority, nonetheless it is a majority, and that might be a bit of a surprise to some. We need a few more regular participants to weigh-in, and then our non-scientific survey will be complete.

Thanks for your participation,

TagMan

blkhemi · January 2007

As many of you know, I opt not to keep my vehicles very long(except the collectables and all Vettes), but very often the times that I choose to toss mine are way before a traditional lease is up on a car, typically there gone before two years.

But this is not to say leasing is not beneficial, in fact if I didn't drive so much, leasing may be a more viable option for me. A person that loves to get a vehicle every other year and doesn't drive very often is the perfect candidate for leasing.

I know that when I buy, I'm losing money like mad. But when I sell, I usually get a fair shake. A gent over this weekend has offered me $140k for my S600, again, not close to the 151k I paid for it, but close enough.

In this class of car, you can't go wrong either way. There are plenty of you that are similar to me in that we always like the next big thing(ie: LS460 from the 430 and the S550 from the S500/430), and leasing can afford a person to be able to keep up with changing trends in these cars instead of being bogged down with a 7 year payment.

But if you can afford to buy'em and dump'em, then all means do so, just be smart about it.

I'm thinking seriously about taking the guy up on his offer(he's very legit- he bought my S65 last year) and using the funds to buy either of the following:

Jag XKR Conv.
MB SL550
911 Cab
AM V8 Vantage Conv.

Please enlighten me on what you fellas think of my now shorten list of possible contenders.

hpowders · January 2007

Hey Tony, the only way I can get 26 mpg on my no way out, deadline ticking down, better not scratch it up, how can you live with all that leasing anxiety 2005 545i is when I am cruising on the highway.
I average 21 mpg when I factor in local trips to the bank vault.

Where I live, 85 mph has been the average interstate speed for close to a year now. Looking forward to it creeping up to 90 mph. :shades:

dhamilton · January 2007

We do both. My wife has always leased in the past, and currently leases her Infiniti.

I own my nightmare, 2000 Silverado.

I got pretty close to pulling the trigger on an S4 last year. I would have leased. My Mother moved in with us, and we put money in to restoring our garage apartment for her.

As much as I love cars, I would do it all again.

I tease her by calling her Fraudi [her name is Frana]

tagman · January 2007

I'm thinking seriously about taking the guy up on his offer(he's very legit- he bought my S65 last year) and using the funds to buy either of the following:

Jag XKR Conv.
MB SL550
911 Cab
AM V8 Vantage Conv.

Please enlighten me on what you fellas think of my now shorten list of possible contenders.

I think part of the answer lies in your choice of transmission. Also, I must warn you, a friend of mine recently bought an Aston Martin and the car has had too many problems.

If you are going for an automatic, I'd suggest the Jag or the SL. Tough choice. The SL is an icon, such a great good-looking fun vehicle, but the Jag is new and exclusive and also attractive. Better drive them both hard... very hard. That's the only way to really know.

But if it's a stick, the Porsche 911 Cab is a no-brainer. It's the winner by a country mile. Take it from me, this car just gets better and better. I'm absolutely loving my 911 Cab. Get the Carrera S or 4S, depending upon your preference, but get the S either way. You're a guy that appreciates power and performance, like me, and you don't want to leave any HP on the table with a 911 Cab.

No doubt, I hope you share the 911 experience with me. But if you don't and you get one of those other beautiful cars, I'll completely understand. Keep us posted, and if you want to talk about the 911, just let me know. I'll be glad to chat about it.

TagMan

lexusguy · January 2007

I would definitely recommend the XKR over the SL550, and probably the 911 over the Aston. The XKR is faster, lighter, handles more like a sports car and less like a GT cruiser, has far superior secondary controls, and is more luxurious (IMO). It looks gorgeous in a dark color with the chrome wire grilles and side vents, and is far more exclusive. I cant tell the SL apart from the CLK from the front, and I would not want my car to look almost identical to one that costs half as much.

I enjoyed my CS Cab test drive quite a bit. It had the tiptronic which is a very last gen autobox and has no business being in that car. Unfortunately that was the single 911 on the lot. Its not the car for me (too cramped, no trunk, still kinda cheap on the inside compared to the others, and the autobox is awful) but it was great fun to take one out for a spin. With the PASM system it didn't rattle my teeth like the 996 Cab I drove, and that engine with the top down sounds intoxicating.

How close are you to the AM dealer? There's a good chance you may have to stop by unexpectedly.

2001gs430 · January 2007

I bought my GS and leased my subie.
I would definitely lease with no questions asked if I could find my one of my favourite vehicles with the kind of deals described by Brightness.

dewey · January 2007

Has this forum become a Rip Van Winkel forum? Have all members been on snooze mode these past few days when a very important announcement was made of a supposedly new Benchmark HELC ? The news is already old and recycled by now but here it is anyways:

We proudly present the 2008 Lexus LS 600h L Launch Edition, arriving in mid-2007. It features the worlds first full-hybrid V8 powertrain, is equipped with all-wheel drive and is based on the long-wheelbase Lexus LS, making the ride exemplary.

As for the amenities, they have to be seen to be believed. The lustrous paint is an exclusive Truffle Mica, the interior features sumptuous Alabaster leather-trimmed seats, and each vehicle will be numbered with commemorative Launch Edition badging. This rare luxury sedan even comes with a set of custom-made Italian leather luggage.

While all of the Lexus LS 600h L Launch Edition vehicles are special, the very first one off the line has a rare distinction. Thats because it was donated to raise funds for The Road To A Cure medical research foundation, and offered up on November 16, 2006. Lexus is proud to partner with Cedars-Sinai Medical Center to raise money and awareness for the fight against cancer.
The Lexus LS 600h L Launch Edition features:

The worlds first full-hybrid V8 powertrain
Mechanical all-wheel drive
Exclusive Truffle Mica exterior
Alabaster leather-trimmed interior
Rich black leather-trimmed instrument panel
Distinctive 19-inch chrome alloy wheels
Special Launch Edition floor mats
Numbered interior badge on center console identifying the vehicle as one of the first LS hybrids ever built
Super Ultra-Low Emission Vehicle (SULEV) rating [1]
[1]The Lexus LS 600h L is expected to carry a Super Ultra-Low Emission Vehicle (SULEV) rating.Lexus and Cedars-Sinai Continue on The Road To A Cure;
Winner of First LS 600h L Hybrid to Be Announced

TORRANCE, Calif., (October 26, 2006)  Lexus and Cedars-Sinai Medical Center will partner once again this year to raise funds for medical research. A fundraising gala, The Road To A Cure, will take place Thursday, November 16 at the Beverly Hilton Hotel to benefit The Board of Governors Center for Cancer Research at the Samuel Oschin Comprehensive Cancer Institute in Los Angeles.

Lexus, in its second consecutive year of participation, has donated the first of only 100 special 2008 Lexus LS 600h L vehicles, which will go on sale in mid-2007. The first 100 LS 600h L vehicles will offer unique traits such as Truffle Mica exterior paint coupled with Alabaster leather-trimmed interior, special alloy wheels, a commemorative interior badge, and a custom-made Italian luggage set. The donated LS luxury hybrid sedan, which features the worlds first full-hybrid V8 powertrain, will be presented by Cedars-Sinai in an opportunity drawing with all proceeds going to benefit the center's medical research.

With cancer affecting the lives of millions of patients and their families, Lexus is proud to support Cedars-Sinais ongoing efforts to raise funds and awareness in the field of cancer treatments, and to extend its state-of-the-art care and treatment to thousands of patients each year, said Bob Carter, Lexus Division group vice president and general manager.

Cedars-Sinais Board of Governors and Lexus anticipate that this years gala event, opportunity drawing and silent auction, with Wayne Brady serving as Master of Ceremonies, will generate significant funds to contribute to the progress already made in the field of cancer research and clinical trials. With nearly $100 million in donated medical treatment per year, Cedars-Sinais dedication to this cause is unparalleled.

LEXUS

blkhemi · January 2007

My list has gotten even shorter with the AM being scratched from the table.

Talking with a few golfing buddies and also keying in on a few Aston forums and websites, the Vantage is beginning to look like the Vanquish that I lusted for: A very sexy car that is prone to visiting the doctor due to a malfuntioning immune system that is inherit from it's forebears.

Knowing the XKR very well, and looking at Jag's recent jump in reliability, it's apparent that it's in the top of the running.

But the freshened SL and all-out fun CS 4 Cab have all the marbles to contend also. Will be at the MB dealership tomorrow to test the 550 and will drive the Porsche next week.

Tag, I'm sure you still can't wipe the grin off of your face when you drive your Porsche, and LG you've made me a believer on all fronts that Jag is really serious with the XK. And because of these reasons, making the right choice is as hard as ever, altho the $25k price cut on that leftover '06 $100k XLR-v is looking quite good right now.

brightness04 · January 2007

A quick recap of what I already covered in previous posts:

1. Assume 8% discount is available for both lease and purchase; i.e. 92% MSRP as nominal purchase price, the buyer will finally catch up with the leaseer at 138 month mark (92 * 1.5); 1.5 comes from 27/18.

2. Assuming 100% MSRP; i.e. no discount available, the buyer will catch up at 104 months (100*27/26); 26 comes from 100-74.

At both 138 month and 104 month, it is safe to assume that the expected maintenance and repair cost during all the time since 50th month is equal to if not exceed the resale value that far down the line.

The argument is not about keeping a car for two years vs. keeping a car for 8 years. The apparently absurd reality of keeping a car for 27months costing less than keeping a car for 100k miles is due to the put option BMW is offering at 74% at 27month mark. If anyone is still having difficulty wrapping around this phenomenom. Think this way: if BMW offered 99% residual at 36month, would you still argue that lease is a waste of money compared to buying?? Of course not. A cross-over point takes place somewhere along the line when the residual is raised from a realistic 50% at 36 month to 99% at the same 36mo mark. If you grind through the numbers as I did, you'd realize that 74% at 27mo mark is already on the side of the cross-over point where lease makes financial sense and effectively becomes a subsidy. It's no different from borrowing vs. paying cash. In a normal situation, it would not make any sense to borrow if you have enough money to pay for the car because a normal bank charges more lending money than it gives taking deposits (that's how banks make money). However, when a mfr's captive bank is lending at 1.9% or 0% in an environment where risk-free interest rate is 5+%, borrowing at 1.9% or 0% while putting your 100k cash in a 5+% risk-free account makes perfect sense. Over 5 years, you'd be about $10-12k ahead. The key to understand this is the fact that mfr's captive financial arms are not in the business of making money on financing; they are there to help move cars, at fake MSRP's or "sale prices." Real banks lost hundreds of millions of dollars using ALG residual numbers; when the underwriters lose that kind money, I want to be on the other side of the trade :-)

lexusguy · January 2007

And because of these reasons, making the right choice is as hard as ever, altho the $25k price cut on that leftover '06 $100k XLR-v is looking quite good right now.

I don't get that one. You're a Vette guy. Why would you want to spend even $75K on a slower, clumsier Corvette with a top that dumps water into the trunk when it rains?

brightness04 · January 2007

Thank you for your compliment.

The thing I've never been able to work out, though, is how the "system" makes money on the vehicles turned in off lease, with ridiculously high residuals. If they can't sell them for that, it seems that taking that big a hit wouldn't make sense.

1. Certified preowned program helps put a catch net under that deluge. In essence, the carmaker has to put in more effort to maintain the nominal resale price: i.e. resale price is no longer just the used car, but the used car plus a warranty that would have otherwise cost $2000-5000; wrap all that up in a nominal used car "sale." That's part of the reason why there can be a huge gap between ALG "estimate" of what the used car sells on average vs. what indidivudal sellers can possibly expect when they try to sell their own used cars (obviously unable to offer the buyer a CPO program)

2. The goal of the inflated residual is maintaining "sale price" close to MSRP. If a car is really worth only $30k, dropping down to $15k in 36 months like a normal car, inflating the MSRP by $10k to $40k while inflating the residual by the same $10k to $25k, the leaser would not face no substantial increase in payment (especially if interest rate is subsidized too). The captive financing arm will indeed take a bath when the car that really worth only $15k comes back in 3 years. However, that $10k shortfall can be offset by new leases "sales" signed that month. So long the sales volume is expanding, the ponzi scam can continue. It's typical of vendor financing. Eventually the house of cards always come down. However, until then, it's bonuses for every executive for artificially goosed "sales."

brightness04 · January 2007

Check that link again. It's a comparison for those specific numbers cited in the article, not generic buying vs. leasing in general. For anyone interested in a comparison like that, they should use the real numbers just like the article did (but obviously not the same numbers as in the article). Leasing vs. buying becomes especially relevent for HELC because some of the HELC brands heavily subsidize their lease deals: used car price and lease depreciation are not adding up to MSRP, not even close. That's what makes leasing especially relevent.

brightness04 · January 2007

Both. Of the two vehicles that I currently own, one was purchased with cash, just like all other cars that I had ever had before. The other however was initially leased, then purchased with cash at lease end at a re-negotiated price way below the original lease residual! I put equivalent amount of cash in a treasury account at the beginning of lease. At the end, I came out ahead by $3000 or so than if I had put that cash towards the car in a straight-forward purchase.

pat · January 2007

This is not a leasing vs. buying discussion nor is it a discussion on how to use leasing to the best advantage, so we're going to leave leasing aside as of now. There are other topics where this conversation can continue, but here we are talking about the high end cars, not the intricacies of how to acquire them.

AND we're going to leave off the personal insinuations and wink-wink nod-nod off-topic comments.

A number of posts have been removed. How about we start this new year on the right foot. Let's keep in mind the topic here as well as the Rules of the Road - which are linked on the left for anyone, everyone, who needs a refresher.

Thank you.

brightness04 · January 2007

What you have stated would absolutely make sense under normal circumstances. However, what's been happening in the industry is that, there have been enormous amount of financial engineering to cover up a falling price environment:

1 - Leases seem to COST more unless a business write-off makes it attractive.

Depending on what the residual is. If the residual were 99% after 36 months, it would be obvious to everyone that leasing is more attractive. Is it still more attractive at 90% after 36mo? how about 80%? how about 70%? The devil is in the details.

2  You are committed to a CONTRACT (rules) that can be costly or annoying to break

When you buy a car, money is lost the moment the car is driven off the lot. Are you sure that you can sell a used car at 74% MSRP after owning it for 27 months? Probably not. If not, then you have made a commiment longer than even 27 months. The reason why there is "lease penalty" is because less money has been paid towards the car to begin with. From earlier analysis, if lease is available with 74% residual at 27 month mark, a buyer of the same car would be losing more money if he tries to sell the car before 104 or 138 months, depending on whether the car is selling at MSRP or typical 92% MSRP. In fact, if one is not sure how long he/she is likely to keep a car, so long as it's longer than 1 year or so (perhaps a 1year old used car can fetch more than 74% MSRP), lease actually provides a put option.

3  When I have a car, I dont want a DEADLINE on my mind.

Lease time horizon is much shorter than time horizons for "break-even" point when these subsidized leases are floating around.

brightness04 · January 2007

Point well taken. Sorry about bringing the topic back today; I was away for a few days, and just catching up. Will try to refrain from further indulgence on the topic :-)

blkhemi · January 2007

LG, you don't know a joke when you see one do you(lol)?

There is know way in hell, first off, that I'd pay 75k for a Caddy right now, especially one that is the worst in class right now. It's only calling card is the Vette's chassis, but even messes that up with those wussy tires whcih degrades the handling considerably.

It does however accelerate with authority, but a pre-'07 SL55 would make toast of it.

tagman · January 2007

I'm glad to hear you've wiped the AM off your list. That leaves you with the SL and XKR comparo if you go automatic transmission. Both are terrific cars, and I wouldn't worry about the SL looking like the CLK. The SL is distinctive enough, IMO, and one good look distinguishes it as the one and only SL. The 550 is much better than the 500 was and it's a good thing you've waited. I loved the SL550 on my test drive, but I wanted a manual transmission so I got the 911.

The XK I drove was not the XKR, but I was amazed at how quick it was. It had a transmission problem, however. It would not properly go in or out of automatic mode when I tried to use it manually, and the gears would not shift as they were supposed to when making the change. After some intervention it would suddenly decide to cooperate for a while, but then it would be tempermental again. That aside, it was still an incredible drive and I can only imagine the extra power of the XKR would be fantastic.

I'm a bit biased about my love for Jags, so I'm secretly hoping you get the XKR if you go automatic, but I objectively know you would be happy with either the XKR or the SL550.

Now, as I mentioned yesterday, if you go with the stick, there is no way you will not want the Porsche 911. It is the best of them and will give you so much fun in a nice size package. Not too bloated , but not too small. There is a surprising amount of room behind the front seats, and only a moderate amount under the front. Driver's seat is the most comfortable of them all, IMO. It is perfectly supportive and yet comfy. If you are into cruising, get the XKR or the SL, but if you are really into driving, get the 911. Sure, you can still cruise, but man, when you hit those nice roads, you'll understand why your in a 911.

Anyway, good luck with your test drives. That's ultimately what you need to do. We're just virtual guys on the internet, and you're the one spending the bucks. Whatever you do... have fun.

TagMan

cdnpinhead · January 2007

You're very welcome.

So long the sales volume is expanding, the ponzi scam can continue.

Hmmm. . .just as I suspected. The only difference between Amway & BMW (in this context) is the price of the product. I guess this is yet one more reason to lease heavily subsidized vehicles -- those who own when the house of cards collapses are in an even worse situation.

Note to Pat -- I'm just tying up a loose end here. I'm done now, honest.

Note to brightness -- There are a number of leasing boards on Edmunds. Do you participate on any of them?

dewey · January 2007

Hmmm. . .just as I suspected. The only difference between Amway & BMW (in this context) is the price of the product. I guess this is yet one more reason to lease heavily subsidized vehicles -- those who own when the house of cards collapses are in an even worse situation.

Pat

since a few members have indulged themselves in expressing their last opinions on leases I hope I can respond to the above comment (this will be my last post on leases)

Cdnpinhead,

Nope as far as reality is concerned BMW is not at all like a multilevel player like Amway.

Resale values (acutal used car prices) for BMWs are among the highest in the industry. The high residual are a product of those high actural resale values. Oh yes BMW subsidizes their residuals like any other auto firms. But because of the higher reslae values for BMW their residual are higher than other auto firms. The high demand for used BMWs are what makes high residuals possible

merc1 · January 2007

Driving past my old Mitsu dealership I spotted a 1990 W126 S-Class so I stopped by (Sunday dealers are closed though). The car is in unbelievable shape for what is basically a 17 year old car. It is a 1990 420SEL with only 75K on the clock, some pics from their website:

I forget who had one of these here, was it you LG?

M

dewey · January 2007

Our MB300D keeps on going and going and looks great.

I can still recall the 80s when visiting my parent's condiminion I was offered by their neighbors a 66 MB S Class or SE Class (cant recall since back then I didn't pay much attention to cars as I do now) that happened to be in great condition with low mileage for only a few thousands of dollars. I refused because I was scared about its maintenance --oh how I truly regret that decision. :sick:

dhamilton · January 2007

Let me talk some sense in to you

You have a garage full of great cars to drive. Go get that beautiful Aston Martin. For the simple pleasure of advancing the art of art.

For art's sake blhemi. [I'm shaking you firmly by the shoulders now]

Drive your many other awesome cars, when the Vantage is in the shop.

The others are great. They have purpose. They are all awesome.

But the Aston is just on another planet. If Micheangelo painted a car on that chapel. If Deniro played a car, in a movie. If Scorsesee directed it. If Pam Anderson.....well you get my point.

In case I wasn't clear. Sense when is this purchase about what makes sense? Let the rest of the cars in your garage fill that roll.

dewey · January 2007

If Deniro played a car, in a movie. If Scorsesee directed it. If Pam Anderson.....well you get my point.

Pam Anderson in Taxi Driver? I dont think so! But definitely Borat.

merc1 · January 2007

Oh I'm sure. If this were a 1990 500SL or 1992 500E I'd go for it, but the 420SEL isn't high up enough on my "older Mercedes I want to own list".

M

lexusguy · January 2007

I forget who had one of these here, was it you LG?

My '90 Benz was a 300E. My S-class was the next generation.

ctsang · January 2007

Luxury Car: Most Respected  Lexus LS 460

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