Residual is set by the captives, it's a fixed value agreed upon signing the contract.
If you have equity in the car by the end of the lease, it's wise to purchase the vehicle, especially have 3rd party like Carvana or Vroom to buyout the vehicle for you and cut you a check. On the other hand, for a lease like this you essentially overpaid every month since the set residual is lower than the true market value.
Dealers don't really care if you buyout the car or not unless you are financing with them, for the most part. The lease returns will be possessed by the captives as they are the original buyers and title holders of the leased vehicles. The reason I said "for the most part" above is that some captives require dealerships to buy back a certain percentage of lease returns at book values (with some holdbacks potentially), therefore if the residual is significantly higher than the market value (looking at you BMW), dealers will be losing money. Most lease returns will go to auctions and dealers have nothing to do with it except they may want to bid on them.
Sometimes dealers will buyout the car and write you a check if it helps to make a new deal with you. And it happens a lot on cars like the MDX/RX350 etc. They can make money on selling those buyouts as well.
【 在 littlebaozi (枫叶愁丝) 的大作中提到: 】 : Residual is set by the captives, it's a fixed value agreed upon signing the : contract. : If you have equity in the car by the end of the lease, it's wise to purchase : the vehicle, especially have 3rd party like Carvana or Vroom to buyout the : vehicle for you and cut you a check. On the other hand, for a lease like : this you : essentially overpaid every month since the set residual is lower than the : true market value. : Dealers don't really care if you buyout the car or not unless you are : financing with them, for the most part. The lease returns will be possessed : ...................
For third party captives, probably. Don't forget rent charges are calculated as (selling price+residual)*MF, which could be some very healthy profits.
For manufacturers' FS, you never know as you never know the true cost of manufacturing a car. Most FS heavily subsidize their leases to start with, in that sense even a conservative residual will result in a loss in dealing the lease return per se. However for the entire deal, the manufacturer may still gain profit.
Let's say a Corolla, which costs Toyota $14k to make, is sold to a dealer @$16k by Toyota. Dealer leased it out @$20k with a $13k residual after 3 years while the true market value is $12k. In this case, Toyota still makes a total gross profit of $1k not even counting rent charges and the interest it makes on dealers.
Most importantly, the car doesn't get to stay on the parking lot and depreciate, manufacturers generate cash flow (crucial to any manufacturers of any kind) by selling the car twice at 2 lower monthly payments, instead of waiting for a well-qualified customer to pay for the full price on the car.
Again back to where we start, most captives charge much higher interest rate on lease compared to financing, that's a significant portion of the income of this industry nowadays. Dealers or manufacturers, barely make any profits on just selling the car, the financing arm is their true cash cow.
多谢解答。包子请收。 【 在 littlebaozi (枫叶愁丝) 的大作中提到: 】 : For third party captives, probably. Don't forget rent charges are calculated : as (selling price+residual)*MF, which could be some very healthy profits.: For manufacturers' FS, you never know as you never know the true cost of : manufacturing a car. Most FS heavily subsidize their leases to start with, : in that sense even a conservative residual will result in a loss in dealing : the lease return per se. However for the entire deal, the manufacturer may : still gain profit. : Let's say a Corolla, which costs Toyota $14k to make, is sold to a dealer @$ : 16k by Toyota. Dealer leased it out @$20k with a $13k residual after 3 years : while the true market value is $12k. In this case, Toyota still makes a : ...................
一般只是笼统地说“市场价”，但是这个是trade-in的市场价吗？
不考虑市场波动，residual value和trade-in value对应比较合理吧？
如果residual value高于trade-in，那么dealer会希望车主尽量buy off
如果residual value低于trade-in，那么dealer会希望车主尽量return car
如果residual value约等于trade-in，那么dealer基本保持中立。
现实世界中，是不是一般dealer都是中立，无所谓的态度？还是特别希望车主在lease
结束时买下？
Residual is set by the captives, it's a fixed value agreed upon signing the contract.
If you have equity in the car by the end of the lease, it's wise to purchase the vehicle, especially have 3rd party like Carvana or Vroom to buyout the vehicle for you and cut you a check. On the other hand, for a lease like
this you
essentially overpaid every month since the set residual is lower than the
true market value.
Dealers don't really care if you buyout the car or not unless you are
financing with them, for the most part. The lease returns will be possessed by the captives as they are the original buyers and title holders of the
leased vehicles. The reason I said "for the most part" above is that some
captives require dealerships to buy back a certain percentage of lease
returns at book values (with some holdbacks potentially), therefore if the
residual is significantly higher than the market value (looking at you BMW), dealers will be losing money. Most lease returns will go to auctions and
dealers have nothing to do with it except they may want to bid on them.
Sometimes dealers will buyout the car and write you a check if it helps to
make a new deal with you. And it happens a lot on cars like the MDX/RX350
etc. They can make money on selling those buyouts as well.
这些我都懂。
但是实际操作中，dealer怎么操作lease returns？同trade-in一样，卖二手车？送
auction？
【 在 littlebaozi (枫叶愁丝) 的大作中提到: 】
: Residual is set by the captives, it's a fixed value agreed upon signing
the
: contract.
: If you have equity in the car by the end of the lease, it's wise to
purchase
: the vehicle, especially have 3rd party like Carvana or Vroom to buyout
the
: vehicle for you and cut you a check. On the other hand, for a lease like
: this you
: essentially overpaid every month since the set residual is lower than the : true market value.
: Dealers don't really care if you buyout the car or not unless you are
: financing with them, for the most part. The lease returns will be
possessed
: ...................
我第三段算是白写了..
【 在 Milanol (米兰醇) 的大作中提到: 】
: 这些我都懂。
: 但是实际操作中，dealer怎么操作lease returns？同trade-in一样，卖二手车？送
: auction？
: the
: purchase
: the
: possessed
也就是说，title holders（银行）用residual value“买”下之后，送auction卖给
dealer，他们不会亏？
换句话说，一般的residual value，设定数额，都是一个比trade-in还低，或者约等于trade-in的数值，才能保证银行的利益？
【 在 littlebaozi (枫叶愁丝) 的大作中提到: 】
: 我第三段算是白写了..
For third party captives, probably. Don't forget rent charges are calculated as (selling price+residual)*MF, which could be some very healthy profits.
For manufacturers' FS, you never know as you never know the true cost of
manufacturing a car. Most FS heavily subsidize their leases to start with,
in that sense even a conservative residual will result in a loss in dealing the lease return per se. However for the entire deal, the manufacturer may
still gain profit.
Let's say a Corolla, which costs Toyota $14k to make, is sold to a dealer @$16k by Toyota. Dealer leased it out @$20k with a $13k residual after 3 years while the true market value is $12k. In this case, Toyota still makes a
total gross profit of $1k not even counting rent charges and the interest it makes on dealers.
Most importantly, the car doesn't get to stay on the parking lot and
depreciate, manufacturers generate cash flow (crucial to any manufacturers
of any kind) by selling the car twice at 2 lower monthly payments, instead
of waiting for a well-qualified customer to pay for the full price on the
car.
Again back to where we start, most captives charge much higher interest rate on lease compared to financing, that's a significant portion of the income of this industry nowadays. Dealers or manufacturers, barely make any profits on just selling the car, the financing arm is their true cash cow.
【 在 Milanol (米兰醇) 的大作中提到: 】
: 也就是说，title holders（银行）用residual value“买”下之后，送auction卖给: dealer，他们不会亏？
: 换句话说，一般的residual value，设定数额，都是一个比trade-in还低，或者约等于
: trade-in的数值，才能保证银行的利益？
多谢解答。包子请收。
【 在 littlebaozi (枫叶愁丝) 的大作中提到: 】
: For third party captives, probably. Don't forget rent charges are
calculated
: as (selling price+residual)*MF, which could be some very healthy profits.: For manufacturers' FS, you never know as you never know the true cost of
: manufacturing a car. Most FS heavily subsidize their leases to start with,
: in that sense even a conservative residual will result in a loss in
dealing
: the lease return per se. However for the entire deal, the manufacturer may
: still gain profit.
: Let's say a Corolla, which costs Toyota $14k to make, is sold to a dealer @$
: 16k by Toyota. Dealer leased it out @$20k with a $13k residual after 3
years
: while the true market value is $12k. In this case, Toyota still makes a
: ...................