Lease or buy the RS6?
10-01-2002, 12:45 PM
#11
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You heard correctly . . .
more accurately they are looking at phasing out leasing as it is currently structured. The motivation for this is as you stated. Manufacturers(their financial arms) are currently doing some significant financial modeling to create various lease hybrid products. This has been a much debated topic in the financial services industry over the last couple of years.
A combination of the evolution of consumer habits, the economy, inaccurate residual estimates (due to various factors)and other variables are creating significant pressure. Read losses. We are at a point in the current cycle where the revenue chain has broken for lease vehicles. There is no capacity to support a loss leader to the degree the lease product has been supported in the previous 8-12 quarters.
In short the hybrids are manipulating residual calcs, depreciation, and lease end alternatives. Will these strategies work? Only if the consumer can perceive equal value/benefit in the hybrid lease vs. conventional lease. Also, look for conventional leases to become less attractive at some point as a result of intentional manipulation.
Naturally, everything concerned is dynamic. The primary point is that some creative work still needs to be done to come up with a lease alternative that is saleable. It has to appear to be very much the same to the consumer.
Virtually all of the manufacturers have a version of the various hybrids now or they will soon. They do not incorporate all of the components of the ideal hybrid but that is intentional. They are trying to move consumers in the direction they wish and therefore the current hybrids need to look very familiar to consumers.
Consumers have been very slow to embrace the watered down hybrids, so much work still needs to be done. It will be interesting to see if the alternative is to evolve to an eight to ten year car loan term if the hybrids fail. In accordance with the laws of economics, the consumers will determine this to a great degree.
Part one of the modern car sale battle has been won. Consumers are addicted to new vehicles and relatively low monthly payments. Most likely the next most popular product will be three-five year note with a balloon option. The financing of the balloon will carry the note out to a realized term of 72-96 months. A version of this is already offerred by some manufacturers. It was not so long ago that a five year repayment term on a car was considered unorthodox and ill advised.
The most profitable version of this formula will probably not be introduced for a year or more.
Bri
A combination of the evolution of consumer habits, the economy, inaccurate residual estimates (due to various factors)and other variables are creating significant pressure. Read losses. We are at a point in the current cycle where the revenue chain has broken for lease vehicles. There is no capacity to support a loss leader to the degree the lease product has been supported in the previous 8-12 quarters.
In short the hybrids are manipulating residual calcs, depreciation, and lease end alternatives. Will these strategies work? Only if the consumer can perceive equal value/benefit in the hybrid lease vs. conventional lease. Also, look for conventional leases to become less attractive at some point as a result of intentional manipulation.
Naturally, everything concerned is dynamic. The primary point is that some creative work still needs to be done to come up with a lease alternative that is saleable. It has to appear to be very much the same to the consumer.
Virtually all of the manufacturers have a version of the various hybrids now or they will soon. They do not incorporate all of the components of the ideal hybrid but that is intentional. They are trying to move consumers in the direction they wish and therefore the current hybrids need to look very familiar to consumers.
Consumers have been very slow to embrace the watered down hybrids, so much work still needs to be done. It will be interesting to see if the alternative is to evolve to an eight to ten year car loan term if the hybrids fail. In accordance with the laws of economics, the consumers will determine this to a great degree.
Part one of the modern car sale battle has been won. Consumers are addicted to new vehicles and relatively low monthly payments. Most likely the next most popular product will be three-five year note with a balloon option. The financing of the balloon will carry the note out to a realized term of 72-96 months. A version of this is already offerred by some manufacturers. It was not so long ago that a five year repayment term on a car was considered unorthodox and ill advised.
The most profitable version of this formula will probably not be introduced for a year or more.
Bri
10-01-2002, 03:24 PM
#13
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Did you even talk to dealers for finance companies if that's even possible????
would be hard for any financial institution to underwrite such lease with limited production and lack of vehicle history. Even if there are lease program available through Audi Financial, the cost could be very high since the resale value for these vehicles are very unpredictable and I would never spend much money on a turbo Audi without knowing the previous owners or looked at the mantainance records.
10-01-2002, 05:30 PM
#14
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Don't mind at all...
Chip w/ 2 programs - $680
Strat Hyperboost Valves - $275
H&R Springs w/ install $500
Tint - $150
Short shift kit - $300
Stereo $1000
I'm think I forgot a few things.
Strat Hyperboost Valves - $275
H&R Springs w/ install $500
Tint - $150
Short shift kit - $300
Stereo $1000
I'm think I forgot a few things.
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