Lexus Newbie Lease Question

[bliksem]

We are currently looking for a new vehicle for my GF. She has a Land Rover we will get rid off. We were looking between the X5, XC90, LR3 and the GX 470. As I currently have a 03 4Runner and like it a lot, the GX sort off became the default choice. We still have to test drive the new 05 with the KDSS and uprated motor.

AS she likes to swap cars often it makes sense to lease, I was however very interested to find the current lease offer the dealer made for the GX470. A fully loaded GX goes for $53k or so with the Nav, Sport package and 3rd row, the Lexus also have the best resale value of the bunch. The X5 is about $63K with a bunch of stuff, the LR3 $54k with some options ,etc. Yet the lease payment without tax was $830 for the GX, $790 for the X5 and $850 for the LR3 (I get this one with the poor past resale value of LRs), but the amount for the GX sound way high given the great resale of these vehicles. Oh yes its a 36 month lease with 15k miles a year.

Anybody got any ideas? Anybody leasing now and how much? Or is the dealer just thinking they can make a good buck?

Thanx for any help.

[lenore]

We are currently looking for a new vehicle for my GF. She has a Land Rover we will get rid off. We were looking between the X5, XC90, LR3 and the GX 470. As I currently have a 03 4Runner and like it a lot, the GX sort off became the default choice. We still have to test drive the new 05 with the KDSS and uprated motor.

AS she likes to swap cars often it makes sense to lease, I was however very interested to find the current lease offer the dealer made for the GX470. A fully loaded GX goes for $53k or so with the Nav, Sport package and 3rd row, the Lexus also have the best resale value of the bunch. The X5 is about $63K with a bunch of stuff, the LR3 $54k with some options ,etc. Yet the lease payment without tax was $830 for the GX, $790 for the X5 and $850 for the LR3 (I get this one with the poor past resale value of LRs), but the amount for the GX sound way high given the great resale of these vehicles. Oh yes its a 36 month lease with 15k miles a year.

Anybody got any ideas? Anybody leasing now and how much? Or is the dealer just thinking they can make a good buck?

Thanx for any help.

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I have always read that leases are a rip off. Consumers Reports agrees.

Unless you use it in business. Sorry that is all I know about it. You could go to Consumers report and do a comparision, or maybe one of the CRedit Union sites, which do comparisons of lease versus purchase.

[denslexusgx470]

lease, in america, is good because our mentallity here is "We will change it soon down the road" but if you live in different countries, changing a car as often as here is out of the question. So lease is great, and cheaper too! ;)

[bliksem]

Thanx for the reply guys. As we are undecided with how long we will keep the GX, lease makes more sense. You only pay tax on the portion you use and you dont have to deal with all the nonsense when you get a new vehicle. We might decide to keep it later, then it will be a small fee to pay to get it out of lease, compared to buying it and then deciding to sell it later.

I was however very disappointed at the lease amount the Lexus dealer quoted vs the competition, given that the GX is almost $10k cheaper than the X5 and is supposed to retain it's value better. Guess they have less confidence in their product's resale than BMW or the dealer is trying to make a quick buck.

Is there anybody leasing a GX, if so how much was the MSRP and what did you end up paying for the lease? AT least it will give me a starting point for negotiation with these guys.

Thanx

[SW03ES]

Leasing isn't a ripoff, its just misunderstood. I've also never read Consumer Reports say leasing was a ripoff, I've heard them say leasing is best only for people who KNOW they are going to be out of the car after the lease is up. Leasing then buying makes no sense.

Anyways check out www.leasecompare.com , Lexus Financial doesn't have a very good lease but these guys do. Make sure you negotiate with the dealer as to the price of the car and not the lease payment.

[ADVocate]

Leasing isn't a ripoff, its just misunderstood. I've also never read Consumer Reports say leasing was a ripoff, I've heard them say leasing is best only for people who KNOW they are going to be out of the car after the lease is up. Leasing then buying makes no sense.

Anyways check out www.leasecompare.com , Lexus Financial doesn't have a very good lease but these guys do. Make sure you negotiate with the dealer as to the price of the car and not the lease payment.

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Other possiblities may be ....

The Lease payments may also be based on the drive off cost. Which has the lower cost at the front end. If they all have the same cost than it is a bit upside down. There is also a possible tail end payment and penalties to consider. One may be more punishing than the other if you trade it in early. Most dealerships seem to arrange their own lease programs. Also, what are the factory incentives to the dealership to get rid of the car through a leasing program. Those all factor into the monthly cost

On another note, Leasing is definetly in your favour if you can write it off to business use. Because you trade in often may not be the best choice for leasing. One HUGE fact for people who are credit conscience is, liablity. If you are planning on buying a home or any other large item. Leasing is a Liability with NO asset. In other words, you are committing money to debt without any added value. If you PURCHASE the vehicle, it is a tangible asset (that can be liquidated), which you can add to your financial net worth. I am not an accountant, but these are all factors that I have become aware of over time.

Just thought I would throw in 2 cents ....:whistles:

[SW03ES]

Those are all good points, BUT when you buy a car you are commiting assets to an object that is guaranteed to loose 50% or more of its value in the time you own it. Many financial analysts will tell you to buy things that will increase in value (real estate for instance) and lease things that will depreciate (like cars).

I do agree, we need more info about the two leases, they could be very different. For instance I know BMW's standard lease is 10k miles per year while Lexus' is 12k, that makes a difference too. Compare them on LeaseCompare where you can control the variables.

[bliksem]

Thanx for the input so far.

Both the BMW and Lexus lease was based on 15k per year. We have leased from BMW and Volvo before and the experience was pretty good, especially BMW as it includes the full maintenance of the vehicle (I only had to put gas in it).

With leasing you only pay tax on a monthly basis, and therefore not on the full selling price rather only the portion of "equity" you use. So you avoid the "double taxation" (you pay full tax when you buy and then the person that buys the car from you has to pay tax and his/her pruchase price again), when you sell the car. This automatically "improves" the residual value at the end of the lease.

My experience with leasing of cars has been good if you only keep them 3 years and want to change at the end, vs buying and selling. But both have upsides and downsides.

My problem at the moment is that on the same lease terms for both the X5 and the GX is that the GX is more expensive to lease than the BMW. That given the fact that the BMW purchase price is almost $10k more, includes full maintenance for the lease period, and the Lexus has a supposedly far better trade in value than the BMW. So far the initial quotes I got from both where $830 (ex. Tax) for the GX vs $790 (ex Tax) for the X5 (both loaded).

Each vehicle has its merits, I was however expecting the GX to be a far better value proposition when leasing compared to the X5. So I figured the dealer is probably just trying to take me for a ride, which I would have thought is not the case for the luxury segment. Any feedback on this would be highly appreciated. How much can I get the dealer to come down from MSRP on a GX? From what I have seen it's not like a Toyota where you shoot for invoice more or less.

Anybody know a good dealer in the South SF Bay Area?

Thanx again

[SW03ES]

Trust me, check out www.leasecompare.com they'll have better leases on BOTH vehicles. The difference is in the money factor, Lexus just plain does not have a good lease. I found that leasecompare was $130 or so a month cheaper than leasing it through Lexus. Occasionally they have some promos that work out well, but usually their leases (and financing in general) are pretty poor.

As for the sales tax, actually that varies by state. Thats called a "Monthly use tax" in Maryland we have no monthly use tax and have to pay sales tax on the full price of the vehicle when leasing just as if you were buying, it sucks.

[bliksem]

Trust me, check out www.leasecompare.com they'll have better leases on BOTH vehicles. The difference is in the money factor, Lexus just plain does not have a good lease. I found that leasecompare was $130 or so a month cheaper than leasing it through Lexus. Occasionally they have some promos that work out well, but usually their leases (and financing in general) are pretty poor.

As for the sales tax, actually that varies by state. Thats called a "Monthly use tax" in Maryland we have no monthly use tax and have to pay sales tax on the full price of the vehicle when leasing just as if you were buying, it sucks.

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Thanx, I'll do that.