Good value lease deals - I don't know how they do it....
Discussion
Please help me understand.
I've never considered leasing a car until recently. I've always thought it was what you did is you needed a repmobile with poverty spec. But having seen top model Mercedes at £500-£600 per month (+ a bit up front) I wonder how they do it.
For instance, if I was to replace my 07 CLS 63 with a 3 year old C63, I'd probably have to pay £30-35k for the car. At the top end of this figure, I'd get a one year warranty as Mercedes Approved Used. Keep the car for 2 years and I'd do well to get more than £20k for it privately (with all that effort involved in selling a big engine car), probably £3-4k less as a trade in. Seemingly, I could lease a new one for 2 years for not much more than £15k. Full warranty for time of ownership plus brand new tyres, brakes etc all of which cost a bit to replace and cheap servicing over the first 20k miles.
How do Mercedes do it and why? Surely, over time, they'll be left with fleets of 2-3 year old ex-lease cars that they can't sell on at a decent price.
I haven't looked at mid range models, say a CLS 350, but I expect it's much the same.
I've never considered leasing a car until recently. I've always thought it was what you did is you needed a repmobile with poverty spec. But having seen top model Mercedes at £500-£600 per month (+ a bit up front) I wonder how they do it.
For instance, if I was to replace my 07 CLS 63 with a 3 year old C63, I'd probably have to pay £30-35k for the car. At the top end of this figure, I'd get a one year warranty as Mercedes Approved Used. Keep the car for 2 years and I'd do well to get more than £20k for it privately (with all that effort involved in selling a big engine car), probably £3-4k less as a trade in. Seemingly, I could lease a new one for 2 years for not much more than £15k. Full warranty for time of ownership plus brand new tyres, brakes etc all of which cost a bit to replace and cheap servicing over the first 20k miles.
How do Mercedes do it and why? Surely, over time, they'll be left with fleets of 2-3 year old ex-lease cars that they can't sell on at a decent price.
I haven't looked at mid range models, say a CLS 350, but I expect it's much the same.
Same with some BMW models. I have a 640d M Sport Convertible on a 2 year contract for £700 per month including VAT and 20,000 miles a year. That would never cover the depreciation.
I think some manufacturers prefer to lock clients in with contracts rather than outright sales.
Take a look at this -
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
I think some manufacturers prefer to lock clients in with contracts rather than outright sales.
Take a look at this -
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Edited by bad company on Saturday 14th December 12:06
Don't forget to add VAT to the lease figures, unless you're already doing that.
Sometimes the car companies do it as a way of increasing the number of cars registered, it gets them to their targets so they get the back end bonuses from the manufacturer. It also gives them control of 2-3 year old used stock, which they can punt on as 'approved used', since they know pretty much what cars they'll be getting, and what mileage they'll have on them.
I suspect there's not a huge amount of up-front profit in them, but it does allow them to shift a decent volume of cars. It's probably no different to them giving big discounts to fleet buyers.
Sometimes the car companies do it as a way of increasing the number of cars registered, it gets them to their targets so they get the back end bonuses from the manufacturer. It also gives them control of 2-3 year old used stock, which they can punt on as 'approved used', since they know pretty much what cars they'll be getting, and what mileage they'll have on them.
I suspect there's not a huge amount of up-front profit in them, but it does allow them to shift a decent volume of cars. It's probably no different to them giving big discounts to fleet buyers.
Super Slo Mo said:
Don't forget to add VAT to the lease figures, unless you're already doing that.
Sometimes the car companies do it as a way of increasing the number of cars registered, it gets them to their targets so they get the back end bonuses from the manufacturer. It also gives them control of 2-3 year old used stock, which they can punt on as 'approved used', since they know pretty much what cars they'll be getting, and what mileage they'll have on them.
I suspect there's not a huge amount of up-front profit in them, but it does allow them to shift a decent volume of cars. It's probably no different to them giving big discounts to fleet buyers.
No VAT needs to be added to PCP deals.Sometimes the car companies do it as a way of increasing the number of cars registered, it gets them to their targets so they get the back end bonuses from the manufacturer. It also gives them control of 2-3 year old used stock, which they can punt on as 'approved used', since they know pretty much what cars they'll be getting, and what mileage they'll have on them.
I suspect there's not a huge amount of up-front profit in them, but it does allow them to shift a decent volume of cars. It's probably no different to them giving big discounts to fleet buyers.
bad company said:
Super Slo Mo said:
Don't forget to add VAT to the lease figures, unless you're already doing that.
Sometimes the car companies do it as a way of increasing the number of cars registered, it gets them to their targets so they get the back end bonuses from the manufacturer. It also gives them control of 2-3 year old used stock, which they can punt on as 'approved used', since they know pretty much what cars they'll be getting, and what mileage they'll have on them.
I suspect there's not a huge amount of up-front profit in them, but it does allow them to shift a decent volume of cars. It's probably no different to them giving big discounts to fleet buyers.
No VAT needs to be added to PCP deals.Sometimes the car companies do it as a way of increasing the number of cars registered, it gets them to their targets so they get the back end bonuses from the manufacturer. It also gives them control of 2-3 year old used stock, which they can punt on as 'approved used', since they know pretty much what cars they'll be getting, and what mileage they'll have on them.
I suspect there's not a huge amount of up-front profit in them, but it does allow them to shift a decent volume of cars. It's probably no different to them giving big discounts to fleet buyers.
However, the OP mentioned leasing rather than PCP, which I took to mean Contract Hire, presumably on a personal basis.
kevinpsw said:
Please help me understand.
I've never considered leasing a car until recently. I've always thought it was what you did is you needed a repmobile with poverty spec. But having seen top model Mercedes at £500-£600 per month (+ a bit up front) I wonder how they do it.
For instance, if I was to replace my 07 CLS 63 with a 3 year old C63, I'd probably have to pay £30-35k for the car. At the top end of this figure, I'd get a one year warranty as Mercedes Approved Used. Keep the car for 2 years and I'd do well to get more than £20k for it privately (with all that effort involved in selling a big engine car), probably £3-4k less as a trade in. Seemingly, I could lease a new one for 2 years for not much more than £15k. Full warranty for time of ownership plus brand new tyres, brakes etc all of which cost a bit to replace and cheap servicing over the first 20k miles.
How do Mercedes do it and why? Surely, over time, they'll be left with fleets of 2-3 year old ex-lease cars that they can't sell on at a decent price.
I haven't looked at mid range models, say a CLS 350, but I expect it's much the same.
The CLS is heavily discounted all round. I was offered £13K off a £55K list price without any discussion at all. I've never considered leasing a car until recently. I've always thought it was what you did is you needed a repmobile with poverty spec. But having seen top model Mercedes at £500-£600 per month (+ a bit up front) I wonder how they do it.
For instance, if I was to replace my 07 CLS 63 with a 3 year old C63, I'd probably have to pay £30-35k for the car. At the top end of this figure, I'd get a one year warranty as Mercedes Approved Used. Keep the car for 2 years and I'd do well to get more than £20k for it privately (with all that effort involved in selling a big engine car), probably £3-4k less as a trade in. Seemingly, I could lease a new one for 2 years for not much more than £15k. Full warranty for time of ownership plus brand new tyres, brakes etc all of which cost a bit to replace and cheap servicing over the first 20k miles.
How do Mercedes do it and why? Surely, over time, they'll be left with fleets of 2-3 year old ex-lease cars that they can't sell on at a decent price.
I haven't looked at mid range models, say a CLS 350, but I expect it's much the same.
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