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Old 01-15-2009, 04:54 AM
butundo butundo is offline
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Quote:
Originally Posted by TwinsPoppa
Regardless, I guess the auto industry is losing out when it comes to leases. If they say the residual is high (in this market), then they may be stuck with an overvalued vehicle.

If they say the residual is low, then the customers are not gonna sign up because their payments will be higher.
Right, but why isn't the payments lower on these vehicles? The way leases were designed, you are making monthly payments on the difference of the selling price, minus the residual. If a car has a high residual percentage, the car should be cheaper to lease, but with high end cars, that is not the case. I used to sell cars back in 1993. Leases were the highest money maker for the dealers. Usually $2-2.5k profit per lease. What most people don't realize is that you can negotiate a lease payment. Always ask what is the selling price of the vehicle that determined the lease payment. They do have to tell you, but most will try to give you some bs story. Since the residual value is already determined, if you negotiate a lower selling price, it will lower the lease payment. Plus, most dealers require $2-4K down, which also needs to be deducted from the selling price.
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