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Originally Posted by butundo
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.
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I wouldn't say that is completely true.
eg: 100 k vehicle, 60 k residual value
You are 'paying off' the 40 k depreciation, over the term of the lease. That is just as you stated.
However, you are also paying the opportunity cost, or carrying cost, which is the financing on the total (declining) value, over the lease term.
If two cars have the same price, and one has a higher residual value, then yes, it would be cheaper to lease than the other car (all other things being equal).
However, expensive cars have higher carrying costs, so more expensive (high end) cars shouldn't be cheaper to lease just because they may have higher residual values than less high end cars. Add in the risk factor due to the volatility in the resale market, and more expensive cars will not be great deals just because of presumed good residuals, you need to look at the total equation.