New To Land Rover, HSE or HSE LUX?

[horatio8]

For those who bought or financed their LR4, I would guess the resale value (residual) would be higher for a Lux. I especially think the memory seats and keyless entry would be attractive to buyers down the road. The resale value has to be considered to get a total cost of ownership. I would've preferred to lease, but the low residual made the lease terms pretty crappy. It's not like 5-6 years ago when manufacturers subsidized leases, only to get crushed on the turn-in (although it seems like BMW still offers aggressive leases). Next in my order of preference would be to pay cash, but the 0.9% financing was too good an offer to refuse. I think the lease vs. finance vs. cash argument is a combination of preferences and crunching the numbers - none of the choices is inherently bad. I went for a 2010 Lux Plus (everything but towing) as I like to go for the best loaded car I can get that fits in my budget. My wife is the complete opposite, she'll go for the base model, as she would rather get the best car and doesn't care about options. So I understand both viewpoints, it really is a personal preference. I know that I've used, and enjoyed all of the options in the Lux package. The only thing I could've lived without is the surround cameras, but getting the package gave me a better backup camera, which is extremely useful. I've enjoyed this entire thread and don't think any posts have had an unhelpful tone.

 

[Appreciate_LR]

New to this forum, and doing some research before purchasing. I appreciate the comments on the HSE vs LUX as general education. Thanks for that. This will be my first LR, at least to drive myself. My son’s 16th birthday car was a Discovery 2. After a friend totaled that one for him 2 years ago (an interesting learning experience for us all) I bought a slightly used ’06 LR3 for him. We have had a wonderful experience with both cars (well, except for the totaled part). My intention is to buy an LR4 and drive it a couple years before handing it over to him, so I’ll need to purchase it rather than leasing.

I have a leasing experience that might present itself again for some of you, so I thought I would share...

I ordered an ’05 VW Phaeton, which is a wonderful car, but was not long for the US market. VW wouldn’t discount the price of a newly introduced model for a number of PR reasons, but to move cars they offered some smokin’ lease rates. They calculated the lease assuming a full MSRP purchase, but then assumed the car was worth 65% of MSRP after 3 years, or 60% of MSRP after 4! I ordered it as an outright purchase, but changed to the lease while waiting for it to be delivered. It was certainly worth looking at the numbers.

In hindsight, leasing paid dividends. The car was pulled from the US market, and the resale price plummeted. A purchase would have proven to be very expensive.

 

[EIGHTLUG]

You should never look at the vehicle you drive, that's registered to you, for your explicit use, that you pay for monthly as an asset or an investment. It's hands down, a LIABILITY, period end of story. We, ourselves haven't leased a vehicle, but it's a great option. We buy our vehicles with a certificate loan. Best way to do it if it's possible for you. But going into that is another topic all together.

The great thing about a lease is that you never own the vehicle. If you were to run your finances as a company would, it's easier to understand. Making payments on a $60k vehicle that, for the majority of it's life, sits in your garage, does NOTHING for your net worth. It's 100% a liability. You pay to use it, you pay for it when it's not being used. It does nothing but COST YOU MONEY. Why own it? At the end of your 36/48/60 months of payments you will now have spent $65K, or so, on a vehicle that is now worth half that... and still depreciating.You will not win that battle of attrition. You will never get your money back.

So why not pay the minimum of what it costs to USE the vehicle? Makes total sense. You can off road it, never pay for repairs since it will ALWAYS be under warranty, basically enjoy everything great about owning the same vehicle without owning it. Depreciation is none of your concern. In 2 or 3 years you bring it back to the dealer and start fresh. Typically the same payment, same terms, BRAND NEW vehicle. Where's the drawback? Meanwhile the "other guy" has a three year old LR4 with 30K+ miles on it that's now worth $35K with the same $700.00 mo/payment.

 

[horatio8]

You should never look at the vehicle you drive, that's registered to you, for your explicit use, that you pay for monthly as an asset or an investment. It's hands down, a LIABILITY, period end of story. We, ourselves haven't leased a vehicle, but it's a great option. We buy our vehicles with a certificate loan. Best way to do it if it's possible for you. But going into that is another topic all together.

The great thing about a lease is that you never own the vehicle. If you were to run your finances as a company would, it's easier to understand. Making payments on a $60k vehicle that, for the majority of it's life, sits in your garage, does NOTHING for your net worth. It's 100% a liability. You pay to use it, you pay for it when it's not being used. It does nothing but COST YOU MONEY. Why own it? At the end of your 36/48/60 months of payments you will now have spent $65K, or so, on a vehicle that is now worth half that... and still depreciating.You will not win that battle of attrition. You will never get your money back.

So why not pay the minimum of what it costs to USE the vehicle? Makes total sense. You can off road it, never pay for repairs since it will ALWAYS be under warranty, basically enjoy everything great about owning the same vehicle without owning it. Depreciation is none of your concern. In 2 or 3 years you bring it back to the dealer and start fresh. Typically the same payment, same terms, BRAND NEW vehicle. Where's the drawback? Meanwhile the "other guy" has a three year old LR4 with 30K+ miles on it that's now worth $35K with the same $700.00 mo/payment.

I agree with many of your points, as it is also my preference to lease. However, you still have to crunch the numbers to decide between your options. A lease with a high residual and a low money factor makes sense, but Land Rover's low residuals (in the 40s) and mediocre rates made it a lousy choice vs. buying or 0.9% financing. The drawback in your example is that you might end up paying too much for the lease vs. buying the car and selling it when you're done. You are paying for depreciation when you lease, that's why the residual is lower for 36 months vs. 24 months. Again, I prefer to lease, but Land Rover makes it tough. I'll stop here, so as not to get too in depth, or off-topic.

 

[uhur]

You should never look at the vehicle you drive, that's registered to you, for your explicit use, that you pay for monthly as an asset or an investment. It's hands down, a LIABILITY, period end of story. We, ourselves haven't leased a vehicle, but it's a great option. We buy our vehicles with a certificate loan. Best way to do it if it's possible for you. But going into that is another topic all together.

The great thing about a lease is that you never own the vehicle. If you were to run your finances as a company would, it's easier to understand. Making payments on a $60k vehicle that, for the majority of it's life, sits in your garage, does NOTHING for your net worth. It's 100% a liability. You pay to use it, you pay for it when it's not being used. It does nothing but COST YOU MONEY. Why own it? At the end of your 36/48/60 months of payments you will now have spent $65K, or so, on a vehicle that is now worth half that... and still depreciating.You will not win that battle of attrition. You will never get your money back.

So why not pay the minimum of what it costs to USE the vehicle? Makes total sense. You can off road it, never pay for repairs since it will ALWAYS be under warranty, basically enjoy everything great about owning the same vehicle without owning it. Depreciation is none of your concern. In 2 or 3 years you bring it back to the dealer and start fresh. Typically the same payment, same terms, BRAND NEW vehicle. Where's the drawback? Meanwhile the "other guy" has a three year old LR4 with 30K+ miles on it that's now worth $35K with the same $700.00 mo/payment.

It is a myth that leasing is always cheaper than financing. It could be, but only if it is subsidized by the lending bank, i.e. cheap money, and artificially inflated residuals. The trouble is that it almost never happens these days, as the banks got burned doing it in the past. Those days are over (with very few exceptions, and LR isn't one of them)

One the other hand, when financing rates are subsidized, it becomes a better proposition: no need to worry about mileage, easier to get out before the term is up, no need to worry about highly nebulous "wear and tear", no disposition fees etc

 

[EIGHTLUG]

I never said it was cheaper. How and what you negotiate in your deal for your specific vehicle is up to you. How good are your negotiating skills? Simply put, you are purchasing debt and liability in one instance and the right to use a vehicle for a set amount of time and distance in another. Putting pen to paper to assume long term debt, money loss, and liability has no financial positives, no matter how you want to spin it.

 

[EIGHTLUG]

Back on topic...

Get the vehicle you want with the options you want. You're going to have to spend the money. May as well spend it on what makes you happiest. If the HSE can fill that bill and you will never put a ***** eye on the LUX at the other end of the parking lot, get the HSE with the options you desire. Paying for something and always feeling that you wish you had more sucks. Especially at 7, 8, $900.00 a whack.

 

[gfcronus]

You should never look at the vehicle you drive, that's registered to you, for your explicit use, that you pay for monthly as an asset or an investment. It's hands down, a LIABILITY, period end of story. We, ourselves haven't leased a vehicle, but it's a great option. We buy our vehicles with a certificate loan. Best way to do it if it's possible for you. But going into that is another topic all together.

The great thing about a lease is that you never own the vehicle. If you were to run your finances as a company would, it's easier to understand. Making payments on a $60k vehicle that, for the majority of it's life, sits in your garage, does NOTHING for your net worth. It's 100% a liability. You pay to use it, you pay for it when it's not being used. It does nothing but COST YOU MONEY. Why own it? At the end of your 36/48/60 months of payments you will now have spent $65K, or so, on a vehicle that is now worth half that... and still depreciating.You will not win that battle of attrition. You will never get your money back.

So why not pay the minimum of what it costs to USE the vehicle? Makes total sense. You can off road it, never pay for repairs since it will ALWAYS be under warranty, basically enjoy everything great about owning the same vehicle without owning it. Depreciation is none of your concern. In 2 or 3 years you bring it back to the dealer and start fresh. Typically the same payment, same terms, BRAND NEW vehicle. Where's the drawback? Meanwhile the "other guy" has a three year old LR4 with 30K+ miles on it that's now worth $35K with the same $700.00 mo/payment.

I agree with you that a car shouldn't be considered an asset, but to use that point to rationalize leasing over purchasing is pretty silly.

I own and still regularly drive a 2000 BMW 528i, which I purchased for $40-something-thousand dollars and paid off in 48 months (i.e., in 2004). So for the last seven years I have not had a $700-800 car payment. That means that, for the last seven years, I have been able to put those dollars elsewhere, something you can't do when you perpetually lease. And the car has been fantastically reliable. Other than regular service calls and tire changes, it has probably been in the shop for unexpected problems 3 or 4 times, totaling $6,000-7,000 in repairs. What's more, if I want to sell it, Kelly Blue Book indicates that I can probably get $5,000 or so in a private sale, which I can turn around and use as a down payment on a future car. All in all, while the car is not an "asset" per se, it has been money well spent.

Had I leased over the last 11 years, I would be out more than $110,000 versus the $45,000-50,000 I am with the Bimmer. Ok, I'd have a new vehcile every 3-4 years, but again, I'd be $60,000+ poorer. Is the new vehicle smell every 3-4 years worth that kind of money over an 11-year period?

 

[EIGHTLUG]

I agree with you that a car shouldn't be considered an asset, but to use that point to rationalize leasing over purchasing is pretty silly.

I own and still regularly drive a 2000 BMW 528i, which I purchased for $40-something-thousand dollars and paid off in 48 months (i.e., in 2004). So for the last seven years I have not had a $700-800 car payment. That means that, for the last seven years, I have been able to put those dollars elsewhere, something you can't do when you perpetually lease. And the car has been fantastically reliable. Other than regular service calls and tire changes, it has probably been in the shop for unexpected problems 3 or 4 times, totaling $6,000-7,000 in repairs. What's more, if I want to sell it, Kelly Blue Book indicates that I can probably get $5,000 or so in a private sale, which I can turn around and use as a down payment on a future car. All in all, while the car is not an "asset" per se, it has been money well spent.

So you've spent 50K+ on something that, to your own admission, is only worth $5,000, at best. So where does it end? Why not keep it ten more years? I'll tell you why. It's not getting any newer. You have to admit that you've been pretty lucky, as far as the reliability of that BMW. Others are rarely that lucky. That's one of the reasons that luxury vehicles tank in value after five to six years. So yeah, owning one out of warranty for an extended period is a gamble. True it gets cheaper to "own" since you're not paying back the loan but the cost of repairs on the horizon loom large. To each his own.

 

[uhur]

The author of the above post who promotes leasing fails to understand that current residuals (non-negotiable) are extremely conservative and appear to play safe re: the anticipated market value of a leased car when the lease is over. Simply put, residuals are undervalued, as the banks are not willing to take risks. In addition, buy money factors (aka interest rate) are very high in comparison to financing rates available for people with exceptional credit. Compute additional acqusition/disposition fees, mileage/wear and tear penalties in the equation, and it becomes clear that lending institutions are not very interested in leasing vehicles, as they do not provide financial incentives to customers to do so. Exceptions: current BMW programs, and some Mercedes models...maybe, Jags (because they can't sell them)
True though, a high-line luxury car must be disposed of, one way or another, when the warranty is up, as the cost of ownership tends to sky-rocket. If one plansto keep it long-term, get an extended warranty