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Discussion Starter · #1 ·
I got a leasing quote from my dealer and was very disappointed with the lease residuals on the new XC90. What are others' experiences?

On a Momentum+ with all option packs (incl. B&W sound) they quoted me a residuals of 47% and 40% on a 3 yr vs. 4 yr lease with 20,000 KM/yr (equivalent to about 12,000 mi per year).

I also had a chance to get a quote on the new Audi Q7 and their lease residuals are significantly higher. The same leases on the Audi have residuals of 60% and 53% after 3 and 4 years respectively.

So even though the Audi is a more expensive car and has higher financing rates, the lease payment is actually lower on the Audi relative to the Volvo. And this is despite the whole diesel scandal ripping through VW corporate headquarters right now.

I'm in Canada -- not sure how lease residuals look in other countries. But even if I consider buying in cash, the lease residual is still informative as a proxy for what I can expect to eventually get if I were to sell it down the line; this suggests very low re-sale value for the Volvo.

I had always considered the Volvo to be the cheaper option relative to the Audi, but now it looks like the Audi may actually be cheaper. Very surprising to me at least!
 

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Not surprising at all. That's the worst thing about Volvos. They simply don't hold their value very well compared to other makes.
 

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Discussion Starter · #3 ·
I'm a neophyte when it comes to leasing, but looking at the BMW website, it appears that the X5 would have a 56% residual on a 3 year, 20,000 KM lease.

So even this is lower than the Audi -- though I thought Audi had a worse reliability reputation than BMW.

Is it simply because the new Audi Q7s are being marked as "2017" models in North America whereas the BMW and Volvo are marked as 2016 models that the Audi has higher residual values?

Is there more to it that I'm just not getting due to my own ignorance?
 

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Lease pricing is also a functions of supply and demand, in a that automakers can artificially buy down the monthly payment by offering lower cost of money rates or the buyback value. Mercedes is notorious fo doing this because their cars depreciate so much.

I believe my residual was 54% for 36 months, 15k mikes. Note the residual will change throughout the year.


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Discussion Starter · #5 ·
Lease pricing is also a functions of supply and demand, in a that automakers can artificially buy down the monthly payment by offering lower cost of money rates or the buyback value. Mercedes is notorious fo doing this because their cars depreciate so much.

I believe my residual was 54% for 36 months, 15k mikes. Note the residual will change throughout the year.

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54% is a lot higher than 47% though! Residuals are set by the manufacturer right? Meaning dealerships can't directly adjust the residual, just the MSRP or the financing rate?
 

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I would not compare any lease numbers with BMW's. They are notorious for being very aggressive with their residuals to drive a higher-percentage of their sales as leases (helping to fuel their CPO business).

Audi's are notorious for the opposite. You could have a $300-400/mo payment difference between a comparably MSRP'd BMW and Audi car
 

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I'm a neophyte when it comes to leasing, but looking at the BMW website, it appears that the X5 would have a 56% residual on a 3 year, 20,000 KM lease.

So even this is lower than the Audi -- though I thought Audi had a worse reliability reputation than BMW.

Is it simply because the new Audi Q7s are being marked as "2017" models in North America whereas the BMW and Volvo are marked as 2016 models that the Audi has higher residual values?

Is there more to it that I'm just not getting due to my own ignorance?
The Audi is being marketed as a 2017 model year because it is. They originally planned a 2016 MY but production was delayed. And since they won't reach customers here until 2016 calendar year, and about 7-8 months later than the Volvo, that makes the MY appropriate (in the US where everything is labeled a year, month, week ahead).
 

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There is an independent, third party service that publishes residual values for leases. It is similar to KBB for blue book and black book. I forget the name of the service. Does anyone know what it is? It would be interesting to look up MY 2016 XC90 inscription and see what the residual is....


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54% is a lot higher than 47% though! Residuals are set by the manufacturer right? Meaning dealerships can't directly adjust the residual, just the MSRP or the financing rate?
You have been given erroneous info; for a Momentum Plus, the 3-year residual is 54% for 15,000 miles per year or 57% for 10,000 miles per year.
 

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There is an independent, third party service that publishes residual values for leases. It is similar to KBB for blue book and black book. I forget the name of the service. Does anyone know what it is? It would be interesting to look up MY 2016 XC90 inscription and see what the residual is....


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ALG?
 

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54% is a lot higher than 47% though! Residuals are set by the manufacturer right? Meaning dealerships can't directly adjust the residual, just the MSRP or the financing rate?
Retailers CANNOT adjust the residual for any reason other than miles/year.
 

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Discussion Starter · #14 ·
That site doesn't have the 2017 Audi Q7 listed yet, but the 2015 model (brand new) shows a residual of 48% after 36 months. That's quite comparable w/ the Volvo.

So maybe Audi is just juicing the residuals on the 2017 model to drive sales? Surprising on a brand new car. Maybe this is a response to the diesel scandal?
 

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Discussion Starter · #15 ·
You have been given erroneous info; for a Momentum Plus, the 3-year residual is 54% for 15,000 miles per year or 57% for 10,000 miles per year.
This is very different than what's shown on the site and very different from what my dealer is quoting me here in Canada.

Do you think my dealer screwed up? Should I just be checking with other dealers for another quote? (Should be the same if they're set by the manufacturer, no?)
 

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Lease terms are from Volvo finance Corp. They won't change from dealer to dealer. Only the discount from MSRP or other negotiated items....


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Lease terms are from Volvo finance Corp. They won't change from dealer to dealer. Only the discount from MSRP or other negotiated items....


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Agreed! We have Tier 1 credit and the money factor and residual were not negotiable through the dealer. We leased ours, 36 month lease 12k miles per year, $10,000 down, total sticker price $68,000 minus $2,000 off of sticker discount. Our payment is still $775 per month. I am in California so there is taxes in that payment, so it would probably be less in a region who doesn't have taxes like in CA.
 

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This is very different than what's shown on the site and very different from what my dealer is quoting me here in Canada.

Do you think my dealer screwed up? Should I just be checking with other dealers for another quote? (Should be the same if they're set by the manufacturer, no?)
I am in the U.S. Perhaps, Canada has different residuals?
 

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Yes, that's it! Thanks!
I just went to this site and the residual came up at 47%
Well, I know for sure that the 3-year residual (for 15k/year) is 54%.
 

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Back in May I was quoted 54% residual with 16,000 km/yr for 3 years lease. That was for T8 R-Design $85,000 MSRP.
 
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