buying a new lr4

[bromhead]

What's the hype about the diesel engine?

Close to 30mpg on the freeway, obviously much extended range, tons of torque at the low end, and, most importantly, you always want what you can't have

 

[baobay]

Got it. Due to the cost of diesel fuel however, economically is there much difference running a diesel engine versus a gas engine? And aren't gas engines "cleaner" environmentally speaking in terms of emmistions even though the new diesel engines have come a long long way?
I almost pulled the trigger on an Audi Q7 TDI before I got the LR4, but I wasn't impressed with the vehicle as a whole. Nothing to do with the engine though.

 

[bromhead]

So, in my area, premium is $4.35 per gallon, diesel is $4.29...so per gallon its essentially a wash. I believe the reason the SDV6 is not sold in california is due to emissions (california is stricter than most states), obviously their gas engines make the grade. I do, however, wonder how much worse the diesels are in a larger context, when you look at the potential 50% increase (real rough number) in fuel economy...

I like the Q7, and if you didn't need the uber off road capability of the Rover, I think there are a lot of very good options out there (ML350, Q7, X-5, MDX, Cayenne, etc). For me, I am a poser, I value what vehicles like the Land Rover bring to the table, but we always hear that most LR owners do not really take advantage of those capabilities....

Anyway, I might be closer to actually being able to do something soon. Apparently they have completed their buyback analysis and its currently with their audit department for approval. I should get a number on Monday or Tuesday.

 

[EIGHTLUG]

"Most LR owners do not really take advantage of those capabilities."

I hear this all the time. It's the biggest talking point in the Jeep camp. What's the big deal? There are plenty of Grand Cherokees, Patriots, Compass', and Liberties, not to mention RUBICON JK's that never even sniff a dirt road. Just "because" it is VERY CAPABLE off-road doesn't necessarily mean it must be off road to justify its ownership. There are plenty of sports cars able to do near 200 MPH. How many of them have ever gone that fast?! It's just knowing that you can that makes the difference.
For me, just knowing that a foot of fresh snow in the winter isn't going to delay me from making first chair, pays the price of admission. Cleared roads be damned!
If you want a Land Rover, get one. One shouldn't have to justify ownership of the best of the breed.

 

[Finlayforprez]

"Most LR owners do not really take advantage of those capabilities."

I hear this all the time. It's the biggest talking point in the Jeep camp. What's the big deal? There are plenty of Grand Cherokees, Patriots, Compass', and Liberties, not to mention RUBICON JK's that never even sniff a dirt road. Just "because" it is VERY CAPABLE off-road doesn't necessarily mean it must be off road to justify its ownership. There are plenty of sports cars able to do near 200 MPH. How many of them have ever gone that fast?! It's just knowing that you can that makes the difference.
For me, just knowing that a foot of fresh snow in the winter isn't going to delay me from making first chair, pays the price of admission. Cleared roads be damned!
If you want a Land Rover, get one. One shouldn't have to justify ownership of the best of the breed.

As much as I like to go on that a lot of LR owners do not take their rigs "off-road", I gotta agree with EIGHTLUG. Just knowing that you can do it feels pretty good, doesn't matter if you ever do.

 

[bromhead]

It wasn't meant as criticism, it was simply an observation. If you don't need true off road ability, you have allot more options. I think guaranteeing you can hit the first run of the day is important! But, as we all know, lr's are not for everyone. And there is nothing wrong with wanting a capability, even if you dont use it. Look at me, I live in San Diego, not Namibia, what % of my driving really needs the capability of an lr4, especially my desire for the rear locker

 

[bromhead]

Sorry for going on and on, but I wonder if I was off base on my previous thoughts about leases. If my throught process is correct, on a lease, you are essentially paying for the depreciation, interest and profit during the term. Consequently, the lower the % of the buyout is compared to the purchase price, the more depreciation you are paying. So, if you have the buyout below market, you are essentially being over charged during your lease term...if you buy it out, things are little different, but for the purposes of this question, lets just address whether a 3 year lease is competitive.

Currently, you can get a HSE for a 3 year, 30k mile lease with a purchase option @28k. Right now, we are starting to see 2010's become available. Thats essentially a 3 year vehicle in some circumstances. Now what is advertised is certainly not what a purchase price might be, but I am seeing prices around the low $40k (auto trader, LR, kbb)...and thats for a vehicle with about 30k miles....am I missing something? Because I would have thought the implied selling price should be nearing to the current buyout.

Does this mean that, in a way, the current lease is over depreciating the vehicle which is resulting in a higher rate? While a bit of an exaggeration, if i could sell my 3 year car for 40-50% more than the lease buyout, buying the vehicle, and selling it after 3 years would put me ahead. I was always under the impression that LR's depreciated very quickly, but the current used market does not support this. Getting a car for 45k, thats say a year away from being out of warranty for 10k less than a new one doesn't seem very attractive (for the buyer!). But, for all you LR4 owners out there, things look pretty nice...then again, maybe I am an idiot and am not looking at things correctly...

(I really need to pull the trigger and get a vehicle soon rather than continuing to waste everyone's time with my moronic inner thoughts about purchasing....sorry )

 

[horatio8]

Typically, LR has not been aggressive on leases (unlike BMW, who subsidizes their leases by setting artificially high residual values). To evaluate the lease you need to get a spreadsheet (I can send you mine, or there are plenty online) and plug in the price, term, payment, and residual to get the money factor (money factor x 24 equals interest rate). When I got my 2010 LR4, LR was offering 0.9% financing while leases had a money factor near 5%, so of course I financed it. A lease should be a touch more expensive because you own the option to put back the car to LR/Chase at the residual price, which could be higher than the actual market value. So, if you fit the profile of someone who might lease (drive about 10,000 - 15,000 miles a year, don't add a lot of mods, replace cars frequently etc.) it really comes down to crunching the numbers. Two last points - I always avoid putting down cash (cap reduction) at inception - if the car is totaled as you drive off the lot, the insurance pays off the lease, not the replacement value, so your cap cost reduction is lost. Lastly, the dealer can pad the money factor for additional profit, so you need to know the money factor from Chase (the residual is set by Chase and can not be changed). I have online sources to get the current month's bank money factor, if anyone needs them.

You are correct to say that a too low residual means you are paying too much for the car's depreciation during the lease. In that case, it makes sense to buy the car at the residual price and sell at the market price to recoup some of what you paid. The reason LR (and many other brands) leases have been expensive over the last few years is that the banks got killed before the financial crisis by setting residual values too high which led to losses when they had to buy back the cars at inflated prices. So, by setting really low residual values, they are trying to push you towards financing. I haven't checked financing and leasing terms lately, so please correct me if the relative value has changed.

 

[bromhead]

Horatio8,
Thanks, I appreciate the tips. So, looking at the current lease deal, we have the following:
msrp: 55,475 (but i believe they market adjust it down to 53,752, which is the # I use in the calculation)
term: 39 months
cap reduction: 3,000
purchase: 28.4k
payments: 699
all numbers without taxes or licenses.
By my read, that equates to @3.85%. Does that sound rate? Current 5 year rates are anywhere from 1.9 to 2.9% (at least based on what i can find). Not quite the spread that you encountered...this one is a bit closer.

So, I guess it comes down to this:
If I lease, I pay a point more, but 12k less down, for the same monthly payments. I am overpaying on the depreciation, but i can make that up by buying the vehicle if in 3 years the purchase option is substantially less than market value...like it is now. So, how much is putting 12k less as a down payment worth to me? Suggestions? I probably will drive it around 10k a year, not much more, if any, but I never turn a car over within 3 years...but if the diesel came, and it met my probably unrealistic expectations, I would flip the car.

 

[Finlayforprez]

Horatio8,
Thanks, I appreciate the tips. So, looking at the current lease deal, we have the following:
msrp: 55,475 (but i believe they market adjust it down to 53,752, which is the # I use in the calculation)
term: 39 months
cap reduction: 3,000
purchase: 28.4k
payments: 699
all numbers without taxes or licenses.
By my read, that equates to @3.85%. Does that sound rate? Current 5 year rates are anywhere from 1.9 to 2.9% (at least based on what i can find). Not quite the spread that you encountered...this one is a bit closer.

So, I guess it comes down to this:
If I lease, I pay a point more, but 12k less down, for the same monthly payments. I am overpaying on the depreciation, but i can make that up by buying the vehicle if in 3 years the purchase option is substantially less than market value...like it is now. So, how much is putting 12k less as a down payment worth to me? Suggestions? I probably will drive it around 10k a year, not much more, if any, but I never turn a car over within 3 years...but if the diesel came, and it met my probably unrealistic expectations, I would flip the car.

This was exactly my thinking and the deal I got... I have another couple years left on the lease and my current pay off is about $10,000 less than what I could sell it for right now. It gives me a bit of time to figure out if I want to buy-out and options if i want to sell it earlier in case the diesel comes out.

It sounds like it may be a viable option for you.

-David