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post #1 of 3 (permalink) Old 05-24-2012, 12:22 PM Thread Starter
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Lease subsidy?

I've never leased before, but I'm looking at a 2012 Equinox 2LT AWD (I4). I'm weighing lease vs. buy options, but just looking at the lease numbers it seems the quote I've been given is very favorable.

When I reverse calculate the residual value based on the quote I was given by the dealer I get 58% after 36 months. (The quote was over e-mail and didn't give any details, just $/month, so I had to back out the residual value.) The Cars.com residual value calculator gives a significantly lower residual value (48% after 36 months).

I'm getting employee pricing, but would that really account for the 10% discrepancy in residual value? Or is the Cars.com residual value not accurate? Or is the dealer subsidizing the lease?
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post #2 of 3 (permalink) Old 05-24-2012, 11:01 PM
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Re: Lease subsidy?

The only reason why you should want a higher residual at the end is if you don't plan on buying the vehicle. Plus there is usually a $500 "disposition fee" if you don't buy the car at the end so they screw you even more. Leasing is nice if you don't want to own something after 3 years, but you get a low interest rate loan you could sell the car after 3 years and still be ahead of depreciation, or if you decide to keep it then you are locked in at a low rate anyways.

I got a loan from penfed for 1.99% for 60 months. https://www.penfed.org/Auto-Loans-Ov...ns-home-mainAd

Unless there is a 0% (0 money factor) lease and very small fees.

2012 Equinox V6 AWD, Average 21.0 MPG
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post #3 of 3 (permalink) Old 05-25-2012, 03:21 PM Thread Starter
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Re: Lease subsidy?

Thanks for the reply. I'm leaning towards the lease, and you're right I don't plan on keeping the vehicle if I lease, so the high residual value is a benefit to me. I was just surprised to see a residual value that much higher than the Cars.com value.

As an update... I was able to get the dealer to give me a breakdown of lease costs. It turns out the difference in the residual value the dealer was using vs Cars.com is only 3-4% (not the 10% I had originally thought). The discrepancy in my original calculation and reality can be explained by some incentives that the dealer was including that I was not aware of.

Regardless, this wasn't meant to be a lease vs buy post (there are plenty of those out there and quite frankly I'm fully aware of the pros/cons and how to do detail calculations for each scenario) but find out if anyone has seen evidence of dealers propping up the residual values.
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