Leasing is a great way to get into a car and personally, I love it. I’ll pay for the car for as long as I want it, I’ll drive it hard every day and I’ll turn it in three years from now and get something new. Sure, it’s more expensive than purchasing a car and keeping it forever because when purchase payments end, lease payments don’t. That’s a tradeoff I’m willing to accept. Full disclosure- not all of my cars are leases- sometimes it just makes sense to buy. For example, I bought my 2010 GT-R, and I traded it in almost three years and 30,000+ miles later for a spectacular value (thanks, Nissan, for raising the price of new GT-Rs so drastically year over year.) That being said, in the vast majority of circumstances continual leasing is great, if you are willing to pay for it and you can deal with the mileage limits.
Here’s the problem- too often do I hear something along the lines of “Yeah, but they have an amazing lease deal right now!”. Here’s the thing- no, they don’t. Allow me to explain. I’m going to use Cadillac as an example, but don’t think I have some bias against Cadillac, I don’t. You can pick any auto manufacturer (especially luxury manufacturers) and find the exact same thing. A few months ago, I was in the market for an ATS-V or an M4 or a Cayman S/GTS/GT4, and I had quite a few “lease deals” priced out. The numbers I got back were jaw-droppingly different than the advertised “lease deals”, and this post will show you why.
For this post, I wanted to use the exact deal that Cadillac used to have for the ATS-V, but it’s not currently on their website, so instead I will use the CT6 as an example. This ad is right at the top of Cadillac’s website:
So, here we have some numbers- $550 a month for 39 months, 4,969 due at signing. Doesn’t seem terrible for what Cadillac promises is a world-class luxury sedan. But there’s a big problem- those numbers are wrong. Here’s the fine print:
First things first- this is a 10,000 mile lease. I consider 12,000 miles a year a good number for a lease. For most people, you can commute in it, and drive it wherever else you want without fear of overshooting your mileage limit. 12,000 miles a year for 3 years is 1,000 miles a month for 36 months. This offer is for 39 months and 32,500 miles. That’s ~830 miles a month. Not a deal breaker, but certainly something to think about.
Here are the deal breakers: 1) tax, title, license, and dealer fees extra and 2) payments are for 2015 CT6 1SC with an MSRP of $58,395.
Tax, title, license, and dealer fee on this car, at 6% sales tax and $58,000 MSRP (which is also bullshit, but we will get to that in a second) comes out to something near $5,000 dollars. Suddenly, that advertised $4969 down payment (which seemed reasonable) becomes more like a $9969 down payment at signing. Not so great of a deal anymore, huh?
Now, the MSRP. The lease offer, as seen in the fine print, is based off a lease offer of roughly $58,000 dollars. Awesome. Cadillac’s website lets me search national inventory, so let’s do that. I have checked zero option boxes on the search:
As you can see, the closest matches nearby listed with the lowest price first, are all about $4000 dollars more than the “lease deal” is based on. Know what that means? That means your monthly payment is going to be way more than $550 a month.
Let’s talk about actual numbers, priced for me personally. A few months ago, when I was in the market for an ATS-V, a lease deal was still available. Here were the numbers, as reported by Jalopnik:
At face value, this sounds incredible. I test drove a manual ATS-V coupe (a similar lease deal was available for the coupe) and spoiler alert- it is fantastic. I was ready to write a check and jump in my new ATS-V, but there was a problem. Even after negotiation and at almost no profit to the dealer, my payments would have been more than $750 a month, with something like $8000 down, for a 36 month, 36,000 mile lease. This is because tax, title, license and dealer fees were extra, and because the lease offer was based on an MSRP of $60,000, and any well equipped ATS-V cost $10,000 more than that. While this wasn’t out of my budget, it was also loaded manual M4 money, so I left the dealership and I didn’t call back. I did however, visit multiple other Cadillac dealerships and got the same numbers everywhere (in fact, for a fully loaded example, one dealer quoted me at $800+ a month with a $12,000 down payment. If laughter is the best medicine, that dealer visit cured all my ailments instantly.)
Afterwards, I visited both Porsche and BMW dealers, and had leases priced out on cars with similar or slightly higher MSRPs than the ATS-Vs (a Cayman at Porsche, and a lovely black on red leather fully loaded manual M4 at BMW), and both were similar in total lease price to the ATS-V (or cheaper). The point here is these “lease deals” aren’t a rip off- they just aren’t really a deal. A lease costs what it costs- based off residual values, MSRPs, and automaker incentives. Those amazing advertised numbers? They are unrealistic, and you will never get them (unless you want to put ten thousand dollars down on a lease for a 60k Cadillac). The point of those lease specials are to get your butt in a chair at the dealership, and they work. And you will lease a car. And it will cost you more than that number you saw, every time.
As a final point- I am not saying that you can’t get a good deal leasing. You definitely can, and I always do. My point is just that the advertised offers and deals usually aren’t good deals- they are simply low numbers on flashy advertisements designed to get you in the door.