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Say, would Lexus really challenge MB with 500-600HP engined cars ??? Would these be the new AMG-like tuner division Lexus' Denny Clements promised in his recent speech ?
2006 cannot come any sooner now. At least we are already in 2005, which means just about another year of waiting for this darn LS.... Grrrrrrrr !!!!!
If MB's S-class suffers from the case of electronic/reliability and (maybe) design hicups.
Can one then extrapolate that as long as Lexus' new LS does not fall flat on its face design-wise (we know reliability and luxury will be there), Lexus' next go at the luxury market in the all-important NA market may put a huge hurt into MB and BMW. Can the Germans afford to look Lexus in the eye and call its bluff as in circa 1989 ???
As Len eloquently puts it, Toyota/Lexus is loaded with billions of $$$. FY2004 was a stellar year for TMC/Lexus in the US, with sales exceeding 2M cars/trucks for the first time ever. And Lexus retaining (again) the crown of the #1 luxury name-plate in the US. What could derail Lexus ? What's in MB and BMW's pipeline that will counter Lexus' push for more market share? If the new S is as shown by those spy pics, then MB is not gonna put up much fight; can BMW do something with the 7 ? Audi and Jag are pretty much non-competitive in this space, anyway. What is to stop Lexus from further putting a huge hurt in its competitors ???
Like I said, just thinking out loud here....
The Photoshop artists undoubtedly provide the best designs. Why? Because the images go from their heads to their hands without being ruined by the "logic" of committees.
OAC - Door is wide open for Lexus for sure. But BMW does make a great car and will hold-up well unless Bangle gets even whackier. The 7 was never their benchmark car whereas with Lexus the LS is its staple premium car. MB is the company that has to straighten itself out. High priced unreliable cars will never hold in the face of an onslaught from Lexus and the public coming to its senses. You know every person I talk to that has or had an MB says the cars have gone downhill. You don't get that from a BMW driver. Their gripe (kdshapiro excluded) is the awful new styles and the i-drive.
kd - all kdding aside - your post re WPIX was incomplete.
The element of sheer "fashionabilty" seems to be becoming more powerful in the luxury car market. That's not a force to be trifled with if you're a product manager...
Lexus has been steadily kicking Euro-luxury-butt, and yet to continue at their current pace as they go world-wide they'll need some flexibility.
Personally, I don't see how Audi/Lexus/BMW/MB will design/engineer mainstream luxury cars for such a narrow interest - lease-based - as a business model for their products. For niche cars like the AMG/M/S cars, maybe. These days, far too many people can AFFORD luxury cars than in the past in our parents era. And with the economy, real estate appreciation and baby boomer generation we have today, earning power will continue to go up, as wealth continues to build in many households here in America. Hence, buying and owning a luxury car will only increase not decrease, imo. A good friend of mine, by no means a rich fellow, decided to take a little $$ off the top of his house (equity), and paid in CASH $47K for an MB M350 for himself, $35K in CASH for his wife's G35. This guy could have leased the truck and the G, but he wants pride of ownership. I will suspect there are many people that feel this way with owning luxury cars.
Not sure what you are saying. How does one take a little $$ off the top of his house (equity)?? Did he divide his land and sell a parcel? or did he condominiumized his house and sold some of the condoes? Or did you mean he went into hock and took a second mortgage on his house to pay for cars?
That is what my friend does. Two houses both fully paid for, no bills. When he wants a car, he goes into hock and takes out an equity line. When you bought your house for $100K and it's worth $700K/$800K and you earn a couple/few hundred thousand a year, what's $70K in an equity line?
But as to owning vs leasing - I have spent about $250k since '96 buying new cars, and at the end of the day the "pride of ownership" doesn't tilt the balance. I'll lease in the future. It's hassle-free, predictable and ultimately likely to always be the more enjoyable experience, in my opinion (and experience).
If the carmakers stop subsidizing lease residues, leasing may well become a very expensive insurance policy.
I never said that and you're making assumptions. You don't know the total picture as to why one would pick one way over the other of financing a vehicle. Maybe he has a few million dollars tied up in trusts for the kids that he has no intention of looting for a car?
I do not have a mortgage on my house. I do not have notes on my cars. I do not lease things. I have no credit card debt. I have no personal loans.
My oldest child is only 8, but I have fully funded each of my children's college funds so that if they started college today there is already 4 years of college, and then some, paid for each one. I have funded my 401K so that if I stopped contributing today, it would provide me with a six figure income, in 2005 dollars, for 40 years of retirement. I have been able to do this because I refuse to fall into the trap of paying debt service.
Simply put, I buy what I can afford. When I ordered a car last month, I ordered a 2005 A6 4.2, I did not order a Ferrari. When I bought my house on Long Island's north shore, I did not buy a house on the water.
Why would someone want to be a slave to their possessions? Why would someone want to have to continue to work and generate a cash flow to keep their stuff? Why would someone want to have to sell some of their capital (other stuff) to pay for new stuff.
As I said, if you can't buy something for cash, don't buy it. Buy what you can afford.
Real life example: in 1987, I bought a 1 yr old 735 BMW for $31K cash (big first year depreciation on 7s in those days!). I kept it until 1998 when I traded it in for about $5,000 off on a new MB E320 (again paying cash). So my cost for driving a great car was about $180/month (yes, I know, plus the time value of money)!
Admittedly, the numbers are different these days, but the point is the same. That's why I just bought an '05 LS for cash instead of another MB this time-- I plan on holding it for long time. But if Pablo is right and nobody is going to bother building cars that hold up long term anymore, I will end up paying $700+/month like all the lessees. And I don't really care about getting a new car every 3 or 4 years if I can be driving a fine older one (with low mileage in my case).
Please Lexus, don't try and follow the path of "planned obsolescence". Toyota didn't get where it is by selling short-term fashion plates cheaper than the Germans. There is still a market for people who want quality. Otherwise, Pablo is right and I would lease an S over an LS(I still love the look and feel of the former), and just dump it every 3 years (and hope I get one that doesn't have to be in the shop too often even in those first 3 years!).
We need to discuss the cars and not rip people for making financial decisions with which we do not agree.
If you have hard numbers on this, I'd appreciate learning a source because I'm quite interested in this issue.
But if you're just guessing that people will be so fickle that long term reliability has little value, then who knows... You may turn out to be right.
The positives and negatives about leasing are being discussed on our Smart Shopper board - I hope that those of you who are interested in pursuing this subject will look up appropriate discussions there and continue.
But here we are talking about vehicles, not the ins and outs of various financing methods.
Mortgage tax deduction doesn't really wash very far either. There are severe limits on the tax deductibility of 2nd mortgages for non-home improvement purposes (ie. take-outs), especially for someone who makes "couple/few hundred thousand dollars a year." The usual cap is $100k, and further restrictions kick in as early for gross income as under $70k for single/separate filing, and $140k for couples. KD's friends making "couple/few hundred thousand" per year must have less than $100k eligible for mortgage deduction due to their higher income.
Even with mortgage tax deduction, 5.5% is turned into 3.7% effective, still higher than most car manufacturer's loans and lease money factors.
I'm going to have to start removing these kinds of messages if people persist in posting them. The "I'll just say this and then drop it" does not work because there is never an ending point; someone always has something else to "just say and then I'll drop it".
I again invite those interested to continue this in an appropriate discussion on our Smart Shopper board - you can explore this topic fully there.
Now ... who here is going to be attending the Detroit Auto Show? What are you looking forward to checking out?
I read somewhere that by now over 2 thirds of all cars from entry luxury upwards are leased, and that this is expected to grow even further. To assume that car manufacturers are not going to engineer their cars with this market shift in mind is a dangerous assumption. Again - I am someone who's always owned, but I think the time has come for me to change. My outlook on ownership has not really changed, but the products in my opinion have: more electronics mean more programmed in obsolescence and probably less graceful aging. And with maintenance costs for older cars shooting up... the concept of paying nearly as much for maintaining an old car as I would for leasing an new car is somewhat silly. Older cars seemed engineered for long term ownership. I see little evidence that is still the case.
Or do you mean: Cars today are better in the first 3-5 years, but once the electronics go out, you're dead. Whereas many of the best cars from the 70s and 80s had more niggling problems early, but once ironed out, the cars can be kept going forever at reasonable cost? Is this the argument?
Just curious. And do we have info about this?
Car 1: 2003 754Li; 23k miles. Navigation. Luxury pkg. Shades. Comfort front seats & heated rear seats. Heated steering wheel. Computer. Xenon lights w/ washers. Premium sound pkg. 19” Alloys. Non-BMW dealership, no CPO. Asking price is $57,995.
Car 2: 2003 745Li; 34K miles. Luxury seating package; premium sound pkg; convenience pkg. parktronic. BMW CPO. Asking price is $56700.
Which of these two will be a better deal?
Mind you, this is not nostalgia speaking: today's cars are far better and safer drives than almost any car that's over 10 years old. My everyday driving car is something I probably would not keep for 15 years...
I guess my point simply is that going forward I think I'll lease cars, a major shift in my personal approach to car ownership, and I do that simply because I think the concept of ownership is slowly but surely being obsoleted. Ownership makes little sense if I *have* to buy a new car every 5 years. I need the option to keep the car longer without it becoming a total financial liability, which any modern car has potential to do given its complexity.
Buying vs. leasing is more of a "financing" decision in my book..
Sometimes it is more than nickel/dime... Sometimes the manufacturer lays on lease incentives only.. Then, even if you are a cash customer, you can't ignore the advantages..
Getting the right car IS the most important thing.
regards,
kyfdx
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By the way, I choose to buy for the following reasons:
1 – Feel handcuffed by the duration of the lease
2 – Ditto with mileage
3 – Buying costs less (kyfdx, I expect a response from you here ;-)
One great thing about leasing though, I love the idea of walking away from the car with the option to buy. Now if we REALLY wanted to save money the way to go is buy used and keep the car longterm.
BTW, if I wanted to buy what “suited” me by your interpretation I’d have a 911 Turbo, E39 M5, Boxster and an S55 AMG for the little woman, unless of course she chose the LS which I have a feeling is what she will want the next time around unless BMW comes to its senses. You have no idea how she loves the 530 but hates the new designs—just like me.
One more thing. I can honestly say that this “pride of ownership” thing is something that never crossed my mind. I recognize the fact that some of the smartest investors are always in “hock” using other people’s money to make money. This can be risky business though if you don’t know what you are doing. Remember in the early 90s when the Donald had a negative worth of what, some $500 mil? My father was a cash buyer and always told me never to buy stocks on margin so I guess I inherited some (not all) of his attitude. That missive by kgary kind of reminded me of him although I disagree with some of that.
Oac, you don't want the Carrera GT, you'd be hitting bottom all over the place. You'd need a fork lift to get it into every gas station ;-)
Designman - I've never bought stocks on margin. That is the one line I'll never cross. Leasing and auto financing are small potatoes and loans for property that never seems to stop rising in price are very safe bets always. If I didn't take a mortgage to buy my home I'd have missed a large jump in net worth as a result. You've got to find the right mix where you're not a slave to cash and not a slave to debt.
IMO margin buying isn't much different from rolling dice with house credit.
NJ gas prices must have gone down in two days. I think it was 1.97 on Friday.
http://www.nytimes.com/2005/01/10/automobiles/10BANG.html?oref=lo- - gin
Looks like Bangle's move upstairs was a real promotion and not a way to get him off of a "hands on" approach.
And here's anothe story of interest
http://www.nytimes.com/2005/01/10/automobiles/autospecial/10CARS.- - html
Don't know if the sketch will come across but there is one of a BMW sports car that looks great as their entry into the "Ultimate L.A." Machine competition.
and http://pressroom.toyota.com/photo_library/display_release.html?id- =sp20050109
http://www.nytimes.com/2005/01/10/automobiles/autospecial/10merce- - - - - - - des.html