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Most Luxury Cars are Leased: BMW, Mercedes and Infiniti Lead the Pack

31K views 59 replies 27 participants last post by  cadsrbest 
#1 ·
Don't Believe Everything You See
polk.com
August 1, 2011
By Tom Libby


Have you ever been driving on a highway, noticed how many BMW, Mercedes-Benz and Audi vehicles there are, and wondered how so many people have the money to buy all those fancy cars? (I have.) Well, in many cases the drivers may not have the money because they don't own the cars!

Industry-wide, leases comprise about a fifth of all new vehicle registrations, but within the luxury market, lease penetration is more than twice as high at 45%. Three premium makes: BMW, Infiniti and Mercedes-Benz, actually have national lease rates at or above 50%.

Furthermore, several popular compact premium cars have lease rates above 60%, with the Mercedes-Benz C-Class approaching 70%. Leasing is not limited to smaller vehicles, as all five of the leading large premium sedans have lease rates above 50%. Two of every three 7-Series are leased.




Full article at link above.
 
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#11 ·
This much is true!

Mercedes and BMW are always advertising bottom basement lease deals and incentives on TV.
This too is very true.


For the reason of warranty coverage, the high lease rate for the Germans makes sense. I have friends who get new Mercedes all the time and NEVER keep them beyond the lease term, EVEN IF THEY LOVE THE CAR.

But also, there is this: People who can afford luxury cars usually have some money. They didn't get that money by walking into a car dealer and writing out checks for Forty, Fifity, Sixthy, Seventy thousand dollars. To lay this kind of cash out for a depreciating asset is lunacy, and people that do such things are either careless or nouveau riche showoffs.

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#3 ·
Mercedes and BMW are always advertising bottom basement lease deals and incentives on TV. You would think that these so called "high class" German cars wouldn't need to pour on generous leases and incentives to move cars. I don't doubt that some of their big sales increases this year are attributed to that alone.

It doesn't surprise me that Lexus (and Land Rover) has one of the lowest % of leases. Everybody I know with a Lexus owns the car and keeps it for many years. You also hardly see deals advertised from Lexus.
 
#9 ·
Mercedes and BMW are always advertising bottom basement lease deals and incentives on TV. You would think that these so called "high class" German cars wouldn't need to pour on generous leases and incentives to move cars. I don't doubt that some of their big sales increases this year are attributed to that alone



This.
 
#8 ·
For the C-Class crowd, I'd wager that there are a lot of wannabe's that are leasing.

For the 7-series, it's because these cars fare terribly in terms of depreciation (althogh one one pay for the depreciation in the lease rate, but people do not nderstand leasing). Buy one off-lease at three years, and keep for three, but no longer.
 
#5 ·
Many if not most luxury vehicles are "business" vehicles that are written off on someone's taxes. Several years ago, the tax law was changed so the depreciation was spread out over 5 years and the depreciation writeoff wasn't enough when they wanted toi trade. The lease costs can be totally written off on taxes. The lease advantage is with the taxes whether or not the driver has the money to pay for the car outright.
 
#6 · (Edited)
how many are leased in a company name which makes the lease payments tax deductible ??
 
#21 ·
Private leasing is just another form of finance. Instead of buying a car and watching 10 or 20 thou drop off it per year, you lease it where the cost is deductible, it includes servicing and fuel at fleet rates negotiated by your fleet-lease co, insurance - everything.

Unless you're collecting cars, or you really, really want to own a special example of something it's craziness to spend your collateral or borrow money to pay for something that depreciates in value at 20% per annum, and you have to claim tax on over five years; when you can write-off 100% of the leasing costs on tax in the first year.

And it costs you virtually nothing to renew the lease on another car. No downpayments, no trade-in haggling.

That's how all business operates if they can.
 
#27 ·
just remember individuals can NOT write off the lease payments. when you are done at the end of 3 years of lease payments you still do not own the car so you must lease another car or refinance.
 
#26 ·
let me state for the record that i bought an 05 325i and quickly realized what the maintenance costs were going to be ($700.00 for brakes) after a year i took the car back to bmw and leased an 09 328xi. i make a decent living and really dont care what people think about what i drive. i drive the bimmer because it is the best handling sedan on the planet. it's nice to take a 25mph curve at 90mph and know that the car i am driving won't end up all over the road. add the 0 maintenence and it becomes a very good deal. my daily driver is an 87 maxima.
 
#30 ·
Wait, your saying that BMW and MB which are tier 1...leases more cars than Cadillac who is tier 3? How are all those trailer park people and ghetto hoodlums affording these cars on a purchase? But despite these incentivized leases, which encourage higher ATP's since most are done at MSRP there ATP's are only slighter higher than Cadillac's. Meaning people are paying more per month to lease a Cadillac than a BMW or MB typically.
 
#34 ·
leased corvettes killed the market for used corvettes. when GM quit leasing corvettes people with leases that were up dumped the corvettes on the market to get out from under because they could not walk into a dealer and walk out with a new corvette. my dealer told me that between 30%-40% corvette sale were leases
 
#41 ·
i lease because i work in manhattan and live in queens. the miliage i put on the bmw is minimal as i only use it to go to meetings and for trips with the family. i use my daily driver to and from work. the bimmer would fall apart in the pot holes of manhattan. also when i got the bmw the salesman told me they make their money on parts.............not on the sales.
 
#47 ·
Well, I suppose it could come down to how you parse words as to me, "you do not want to own it" speaks to the desireability, but my point really was about the broad stroke specification of "a German car" in the original statement. Anyways I don't think it really matters as I doubt his intent was to be bigoted.

Heh, I'd argue that German cars are high quality, its just that the industry averages happen to be higher. :p:;)
 
#48 ·
I speak very objectively, I own a BMW myself....and other than Cadillac its the brand that I have owned the most of. I sincerely wish my Range Rover had of been more reliable as I would still own it today. However it won't stop me from buying one in the future. Simply because as I said reliability isn't as important to me and those who buy luxury cars in comparison to other intangible things. If that was the case Lexus would have maybe one or two competitors.
 
#49 ·
there are things involved that most don't think of.............i would rather have a vette than a porshe why waste all that money on maintenence $3000 to 5000 on a tuneup???? i get the same or almost same(depends on driver)performance in a vette that i do in a porche. ferrari spends most of it's time in the shop??//?. my bimmer really has'nt given me a hard time.......then again i don't drive it as much as i do my nissan. bcause i know wat the cost would and will be
 
#57 ·
Maybe in Europe you guys get different BMW's because flat out fact is, the Europeans are not known for reliability...but even more so than that BMW and MB are two that have had huge quality and reliability issues, with MB just returning to building quality and reliable cars recently. Oh and your lack of US market knowledge speaks volumes, I will give you a slight hint....its called free maintenance....and most BMW's purchased in the last 4-5 years have it.
 
#58 ·
Maybe in Europe you guys get different BMW's because flat out fact is, the Europeans are not known for reliability
If these cars were so "unreliable", people wouldn't buy them. Period. The fact that people keep buying them and keep coming back to buy them (or even switch from a "reliable" Japanese brand to a European brand) says a lot.

And don't give me that excuse about "badge snobbery". Badge loyalty only goes so far. These cars are high quality and the fact that people keep coming back for more proves this.

Those reliability nightmare horror stories people love to talk about are the exception rather than the rule. And let's be honest: this whole "German cars are unreliable" and "Japanese cars are so reliable" has turned into a stupid "Internet myth". Hell, the only Japanese brands known for quality and reliability have always been Toyota and Honda vaguely followed by Nissan and Mazda. AFAIK Mitsubishi, Subaru, Suzuki, Daihatsu and even Isuzu do not enjoy such a reputation.



...but even more so than that BMW and MB are two that have had huge quality and reliability issues, with MB just returning to building quality and reliable cars recently.
They had quality issues in the mid-1990s and early 2000s. That's roughly about 10 years of their 100+ years in existence and it was due to cost-cutting in order to be more competitive. You're telling me that because of those 10 issue-plagued years that German brands have "always" made unreliable and poor quality cars?

Give me a break.



Oh and your lack of US market knowledge speaks volumes, I will give you a slight hint....its called free maintenance....and most BMW's purchased in the last 4-5 years have it.
What's your point? That BMW Free Maintenance is provided exclusively because BMWs are so "unreliable"?
 
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