Car Sales / Odd Lease Situations

Tuesday, January 3, 2023 4:30 PM

I’ve talked at length before about how crazy new and used car sales have gotten over the last 3 years. I WANT a new car I do not NEED a new car so I’ve been watching on the sidelines attentively and prices have been significantly dropping since late October. Some cars I’ve been looking at are almost $10,000 cheaper now than they were in October. I’ll wait longer to see what happens. I figure by late February prices will drop more but may stabilize around March when people get their tax returns. You’d be surprised how many dealers are busy that time of year because people have tax returns to put on a down payment for a purchase or lease. By waiting, yes the value of my current cars keeps dropping as well but I don’t see that as much a factor. Anyway, I saw an advertisement this morning for a Nissan truck and the lease was 18 months. Since when does someone lease at $32,000 truck for 18 months? Just seemed weird to me, the only lease I have seen that short before was on an exotic car. BTW the down payment was around $1,800 and monthly payment was $299. This disclaimer said a well equipped model was $335 a month. Typically most leases I see are somewhere in the 3 year range. I am not interested in a lease I was just curious if anyone else had seen deals like this recently?

17 comments

I have actually seen a number of way shorter than typical leases lately. I actually know a few friends who've done it. They were all in similar scenarios, they had a lease that was ending and either their buyout option sucked, didn't exist, or there was some reason they couldn't do it. None of them could find the vehicles they really wanted, so they all did short leases on stuff they didn't really want but could live with. As far as waiting, you do you, but I played the waiting game and finally did it last month. I took about a 15k hit between new car prices rising and used car prices falling. I woulda taken a beating on the loan too, but those rates were so ugly I decided to just pay cash. I didn't have to buy when I did, but I'd been fighting the itch for about a year and couldn't resist anymore. Best of luck to you, hope you time it out better than I did.

Dolfan

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a year ago

Sucks buying a car, new or used, right now. Hold off if you cannot

Studme53

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a year ago

^hold off if you can

Studme53

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a year ago

I need to replace my wife's car. I don't like her driving around with a high mileage vehicle. But I can wait until summertime. Thanks for the tip.

Warrior15

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a year ago

Once sold new and used and leases at a dealership. Lease lengths and payments are based on the inception payment at the start of the lease and the residual value of the vehicle at the end of the lease. If the (pretty well planned) residual is high in value the lease can be short with lower lease payments and inception amounts. If the residual is low the lease is not a good value for the customer nor the dealer/ manufacturer. Inception is another way of saying down payment. A lease generally puts the customer in a new vehicle every 2 to 3 years for a generally lower out of pocket expense. Also. There are cost per miles driven options at the front end of leases. Leases aren't for everyone but are just another tool for both the customer as well as the dealer/ manufacturer.

Goodclubrep

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a year ago

I’ve never leased a personal vehicle, but before I sold my business I used to lease trucks, the deal we had was 4 years at vehicle cost, plus $1. The point was we could write down depreciation in four years, pay the dollar, sell the truck for cash money and pocket the cash as if it was an untaxed bonus. Without an exception like I just described, to me, it never made sense to me to lease a vehicle sort of like renting, you pay for someone else retains value from. Ion not in the market for a new car as mine is great and over the last three years I’ve only put 14000 miles on mine, but if I were to be looking I’d wait until June or July see if that recession they keep promising us actually happens, if so and you’ve got king cash, new car deals will be super cheap.

twentyfive

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a year ago

^ my thoughts exactly. Let’s see how low they go, I’m not in a rush and don’t have to have a loan. Also leasing is not a good option for me, my cars only get used around 3,500 miles a year.

shailynn

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a year ago

Save up and buy what you can afford.

Icee Loco (asshole)

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a year ago

Lol^ Do car salesmen make more off leases/financing vs if people buy with cash? A few salesmen at the same dealer were trying to push me towards leasing or financing, one even claimed they normally dont offer discounts on cars people are buying outright

rickmacrodong

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a year ago

In certain cases, an unusual lease term can be offered by the manufacturer if sales for a specific model are much lower than expected. Since it’s a Nissan truck, my guess is that NMAC is offering the short lease term. It’s just past the start of the year, and generally the new models come out in Sept, so they likely see that a specific pick up model isn’t selling (or they overproduced) and this is an incentive to move sales. With an 18 month lease, it will be over before there are 20,000 miles on the vehicle. It should still retain more than a 65% residual value, so the manufacturer may be able to resell it quickly and for a decent markup. My guess is that it’s an offer from NMAC, so any losses as a result of being aggressive on the residual value can be buried in the accounting as the books should be closely held between the parent and leasing arm of the parent.

Cashman1234

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a year ago

^ yep this was on a national Nissan ad. I still can’t recall ever seeing an 18 month lease advertised. You rarely see 24 months anymore too - or at least I don’t. Most larger dealers DO NOT want cash buyers, they’ll make more money hiding fractions of percentage points on loans or leases. Most smaller independent used dealers could care less either way.

shailynn

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a year ago

^ There’s more play in leasing and financing than there is in cash. As many know, salespeople want to know what you want your monthly payment to be. With financing a vehicle (through a loan), there are fewer variables than with a lease - so there’s less to play with. The manufacturer will know when the model will be redesigned, or other factors, and that can contribute to the shortened lease term. They will clear out the remaining 2022’s and when those leases end, the 2025 redesigned model may be coming out.

Cashman1234

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a year ago

I used to buy cash only, but I financed my last two cars because I got them at essentially 0% interest. I really never understood how they could do that, but I was also able to negotiate the purchase prices, so it wasn't purely moving profit around. I'm sure they made their money somehow, but I was very happy with the deals I got. Even happier now that I'm still paying on a great financing deal with ever cheaper money. But if I had to buy another car right now, I'd be back to cash and carry. I wouldn't want to get stuck with an expensive car loan for years to come.

rickdugan

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a year ago

The Inflation Reduction Act changed the EV tax credit so it would only apply to domestic EVs. Under pressure from foreign carmakers, regulations now look like they will let EV tax credits work for foreign vehicles, but only if they are leased, not if they are purchased. So, we may see most EVs acquired through leasing going forward. Weird.

mark94

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a year ago

Dealers only make a small percent of their profit from selling a new car. Something like 20%. They make more money from leasing, financing, extended warranties, used cars ( much better margins than new ), and servicing vehicles.

mark94

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a year ago

Raising interest rates were implemented with the hopes it would lower inflation. I think the downside would be it makes getting a car loan or any type of long term loan much less attractive or not even feasible for some. Probably the biggest reason we are seeing a lowering in prices but I don’t know if that trend will continue. 🤞

Specialj

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a year ago

^ most of the automakers are sitting on huge piles of cash due to their tremendous profits based on markup to the cost of new vehicles. If we hit a recession they’ll still move large amounts of vehicles by utilizing that cash to offer below market interest rates and continue to be profitable.

twentyfive

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a year ago

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