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Thread: Shak, I found your new car

  1. #101
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    Quote Originally Posted by Disoblige View Post
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    In the end, no one wants to put $7k down on a lease.
    That is the main issue here. I know I wouldn't.
    That's one way of looking at it. Or it can be looked at $7K now, but will getting $10K back in 3 years and would have enjoyed the vehicle at cheap as hell cost per month.

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    Quote Originally Posted by shakalaka View Post
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    ^ I don't understand how that makes sense? First, my dealer is telling me that they are not doing any discounts on 2020 at all.
    sorry i stopped reading here...

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    Quote Originally Posted by Darkane View Post
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    I don’t have much to add other than I’m learning quite a bit about leasing here.

    Never leased, always hard cash incentives.

    Hmm. Still don’t think leasing is for me, can’t quite see the benefit.

    Please, carry on
    You just have to pick your battles, Alerks is one that is doing it mostly right everytime.

    I've done cash/lease/finance, Lease makes a lot of sense on certain vehicles. I had a 2018 4runner on a 39 month lease, 1 year later, sold it for 5k over what i owe, my effective payment was something crazy like $300/month.

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    Quote Originally Posted by Team_Mclaren View Post
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    sorry i stopped reading here...
    Always gotta love these sorta rhetorics....

    Anyway, carry on.

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    Quote Originally Posted by shakalaka View Post
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    That's one way of looking at it. Or it can be looked at $7K now, but will getting $10K back in 3 years and would have enjoyed the vehicle at cheap as hell cost per month.
    You can’t really guarantee what it’s really going to be worth on the used market to someone so that’s a bit of a tough sell. Especially on a pretty aged product.

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    You can’t really guarantee what it’s really going to be worth on the used market to someone so that’s a bit of a tough sell. Especially on a pretty aged product.
    Sure that's true, that's just a possibility. But the fact remains you get to enjoy a vehicle for payments that you would have to put $17K down for (now $14K due to incentives) by only putting down $7K. So it makes sense even without the last step and if that happens, then it's even a better deal. But I reckon the problem like ES said above is, during these times not very many people are looking to part with a chunk of cash which is understandable. It is what it is, the Raptor I want maybe even gone by the time anything happens so in that case I won't even bother getting rid of the IS350.

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    Quote Originally Posted by Team_Mclaren View Post
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    I've done cash/lease/finance, Lease makes a lot of sense on certain vehicles. I had a 2018 4runner on a 39 month lease, 1 year later, sold it for 5k over what i owe, my effective payment was something crazy like $300/month.
    That's the one factor I feel makes the biggest difference in whether or not a lease makes sense - resale value.

    It's one thing to have a closed lease, turn the car back and make it the dealer / manufacturer's problem... but it's infinitely better if you have leased a vehicle with a strong resale value so you can recoup some of that equity at the end of the term.

  7. #107
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    yes you are offering a deal, but its a used car not a new car and the is your biggest problem. People will expect a significant deal on a used car and even more so in a economic recession. Those who have 7k to put down on a lease are looking to buy new not used.

    I am curious to know what you end up with cash wise. My bet is around 2-3k of the 7 you are asking for.

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    Quote Originally Posted by austic View Post
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    yes you are offering a deal, but its a used car not a new car and the is your biggest problem. People will expect a significant deal on a used car and even more so in a economic recession. Those who have 7k to put down on a lease are looking to buy new not used.

    I am curious to know what you end up with cash wise. My bet is around 2-3k of the 7 you are asking for.
    My guess is $3500.

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    Quote Originally Posted by shakalaka View Post
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    Sure that's true, that's just a possibility. But the fact remains you get to enjoy a vehicle for payments that you would have to put $17K down for (now $14K due to incentives) by only putting down $7K. So it makes sense even without the last step and if that happens, then it's even a better deal. But I reckon the problem like ES said above is, during these times not very many people are looking to part with a chunk of cash which is understandable. It is what it is, the Raptor I want maybe even gone by the time anything happens so in that case I won't even bother getting rid of the IS350.
    The facts don't matter. People looking for a $333 payment don't have $7K to put down on a lease. Conversely, people with $7K to put down on a lease aren't looking for an IS350.

    3M, Wheels, protection packages don't matter to someone who wants that type of payment.

    I'll break it down to how I would look at buying your car.

    Payment = $385
    Term = 33 months
    Down = $7K
    Xfer fee = $500
    Total Cost = $20,205

    Real payment = $612

    A $0 down payment 2020 is350 = $743
    Total Cost $26,748

    Current KMs = 4000
    Allowance = 12,000 / year
    KMs available to drive per month: 970 km.

    Even with COVID and not having to drive to work at all, I drive more than 970km per month.

    This is a tough deal.
    My Tesla referral link: https://ts.la/moon14483

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    I will keep everyone in the loop. I'll likely end up keeping it. No Raptor for me still most likely.

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    Sorry Shak but I think you need to work on your shrewd negotiation.

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    Quote Originally Posted by benyl View Post
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    The facts don't matter. People looking for a $333 payment don't have $7K to put down on a lease. Conversely, people with $7K to put down on a lease aren't looking for an IS350.

    3M, Wheels, protection packages don't matter to someone who wants that type of payment.

    I'll break it down to how I would look at buying your car.

    Payment = $385
    Term = 33 months
    Down = $7K
    Xfer fee = $500

    Real payment = $612
    A $0 down payment = $743

    Current KMs = 4000
    Allowance = 12,000 / year
    KMs available to drive per month: 970 km.

    Even with COVID and not having to drive to work at all, I drive more than 970km per month.

    This is a tough deal.
    Even doing the math this way, 385 x 33 + $7000 + 500 = $20,205

    So in total if you keep the entire term you paid $20K for a car that has dealer residual of $28,500 and market value of approx $38,000. If this is a tough deal for someone - they should consider purchasing a fucking bullock cart or a rickshaw.

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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    Sorry Shak but I think you need to work on your shrewd negotiation.

    People have short term vision. If I felt that way, I'd understand. But most people do end up keeping their cars the entire term. Not like this a freaking 84 month finance.

  13. #113
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    Quote Originally Posted by Twin_Cam_Turbo View Post
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    You can’t really guarantee what it’s really going to be worth on the used market to someone so that’s a bit of a tough sell. Especially on a pretty aged product.
    I agree with this. This car is a good deal but it is dependent on having some equity at the end of the lease.

    Without equity in the lease at the end, a cash buyer would essentially be paying around $50k for a 2019 model ($7k down + 33 payments + residual + gst on residual + $500 lease transfer fee + $500 buyout fee).

    Without equity in the lease at the end, a buyer who would return the car at the end of the lease would be on the hook for $20.2k over the lease ($7k + 33 payments + $500 lease transfer fee) which is basically equivalent to $612/month.

    The 2 situations above are OK deals, but the equity is what really sweetens the deal and makes it a good deal. Unfortunately the equity is not easy to predict. The N platform/architecture of the current gen Lexus IS is dated as it was released in 2013 and the IS350 engine dates back to the 2006 model. With rumours of a substantial redesign in 2021, it’s difficult to use resale values of 3 year old vehicles as a reference point to estimate the lease end equity.

    It’s unlikely the equity will be 0, but it’s also unlikely the equity would be $10k. I would think it would be somewhere in between.

    Like ES says, this is a complicated situation and there is some math that the average buyer might not care to understand.

  14. #114
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    Quote Originally Posted by richardchan2002 View Post
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    I agree with this. This car is a good deal but it is dependent on having some equity at the end of the lease.

    Without equity in the lease at the end, a cash buyer would essentially be paying around $50k for a 2019 model ($7k down + 33 payments + residual + gst on residual + $500 lease transfer fee + $500 buyout fee).

    Without equity in the lease at the end, a buyer who would return the car at the end of the lease would be on the hook for $20.2k over the lease ($7k + 33 payments + $500 lease transfer fee) which is basically equivalent to $612/month.

    The 2 situations above are OK deals, but the equity is what really sweetens the deal and makes it a good deal. Unfortunately the equity is not easy to predict. The N platform/architecture of the current gen Lexus IS is dated as it was released in 2013 and the IS350 engine dates back to the 2006 model. With rumours of a substantial redesign in 2021, it’s difficult to use resale values of 3 year old vehicles as a reference point to estimate the lease end equity.

    It’s unlikely the equity will be 0, but it’s also unlikely the equity would be $10k. I would think it would be somewhere in between.

    Like ES says, this is a complicated situation and there is some math that the average buyer might not care to understand.
    If you've only paid $20K for the car for the entire term of 3 years and now times comes to return and the dealer is saying the residual is $28,500, you don't think you could even fire sale it privately at $30K? Or $29K? Hell, even at $28,500? When the dealer itself is saying the residual is $28,500? That's a $8500 margin right there, even without factoring what the car might actually be worth in the market (the extra $10K I referred to). I understand future values are unpredictable but this is a Lexus, everyone knows they hold their value well based on current 3 year old IS's. Even with a refresh, it's not going to be worth nothing.

    From the buyers perspective they've spent $20K on a car in 3 years which will then fetch them AT THE VERY LEAST $28,500.

    I dunno maybe I am missing something here but to me this seems like a no brainer...
    Last edited by shakalaka; 05-29-2020 at 09:33 AM.

  15. #115
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    Quote Originally Posted by shakalaka View Post
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    Even doing the math this way, 385 x 33 + $7000 + 500 = $20,205

    So in total if you keep the entire term you paid $20K for a car that has dealer residual of $28,500 and market value of approx $38,000. If this is a tough deal for someone - they should consider purchasing a fucking bullock cart or a rickshaw.
    Updated my post with more numbers.

    I would suggest you update your kijij ad with my numbers so people can see that they save $6K over getting a new 2020.
    My Tesla referral link: https://ts.la/moon14483

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    Quote Originally Posted by shakalaka View Post
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    If you've only paid $20K for the car for the entire term of 3 years and now times comes to return and the dealer is saying the residual is $28,500, you don't think you could even fire sale it privately at $30K? Or $29K? Hell, even at $28,500? When the dealer itself is saying the residual is $28,500? That's a $8500 margin right there, even without factoring what the car might actually be worth in the market (the extra $10K I referred to). I understand future values are unpredictable but this is a Lexus, everyone knows they hold their value well based on current 3 year old IS's. Even with a refresh, it's not going to be worth nothing.

    From the buyers perspective they've spent $20K on a car in 3 years which will then fetch them AT THE VERY LEAST $28,500.

    I dunno maybe I am missing something here but to me this seems like a no brainer...
    But the issue is if it fetches $28500 and the buyout is $28500 (plus gst?) then there’s no equity at the end? The other issue I see is 12k a year is quite low for most people. That might be turning them off. What’s the per km charge over?

    PS not trying to anger you with the shrewd negotiation comment, just referring to a certain YouTube channel.

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    Quote Originally Posted by shakalaka View Post
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    From the buyers perspective they've spent $20K on a car in 3 years which will then fetch them AT THE VERY LEAST $28,500.

    I dunno maybe I am missing something here but to me this seems like a no brainer...
    Well, they would have spent $20k in lease payments and then had to buy the vehicle for an additional $28.5K + gst, so as Twin Cam mentioned, there is no equity and that $20k turns into pure "depreciation" as the car goes back to the dealer and the purchaser is left with nothing. I am sure you understand that, but this post seemed to have forgotten that.

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    Quote Originally Posted by shakalaka View Post
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    I dunno maybe I am missing something here but to me this seems like a no brainer...
    Is this how Lawyers think?

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    Shak, your car flipping is fun, but it's also expensive. If you allocated your flipping costs towards your car budget, you could get into much nice cars per $$$ you spend.

    Just a thought.

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    Quote Originally Posted by Buster View Post
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    Shak, your car flipping is fun, but it's also expensive. If you allocated your flipping costs towards your car budget, you could get into much nice cars per $$$ you spend.

    Just a thought.
    Lol, I have flipped cars over the past. Always less than $15K usually, no accidents, local vehicles, small engines and nothing fancy. Always made a dime, you cannot make $ on newer vehicles as dealers have huge incentives such as financing/lease rates and people do not want to fork up that much cash even if they have it.

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