LeftieBiker wrote:You can always raise the residual in a lease deal, and the lessee will get lower payments, at no cost other than it being more expensive to buy the car.
I think we've discovered the root of the problem.
You truly believe that a finance company can raise the residual to any amount they want with no financial consequences to them?
You are familiar with Nissan offering thousand of dollars off the agreed upon residual price to entice people to purchase them. And they still have thousand of returned cars to sell at auction? Nope, no cost to them at all
When they raise the residual, they get LESS money.
LeftieBiker wrote:The inflated residual is generally agreed to be more than the car is actually worth, so it isn't a "savings" in any rational sense, because GMAC has also pocketed $5k in return for doing it.
If they raise the residual by $5K, they get $5K less
in "rent" on the lease. Even if 25% of lessees purchased for above market value (highly unlikely) they would only see $1,250 of that back. The higher the residual is above market value, the lower the percentage of conversions to a sale without a substantial cash incentive.
A lease is not a purchase contract, no matter how desperately you want it to be. It is a means to "rent" (the actual terminology in the lease documents) a vehicle for relatively low monthly payments.
And I'm not defending GM Financial. I think it is a BIG mistake to structure the lease the way they do. Not because they are ripping people off, but because they will be in the same boat as Nissan and have to offer a huge discount at lease end or have to liquidate returned lease vehicles at auction. Either avenue is very likely going to cost them much more than the $5K they "pocketed".
Let's look at your current LEAF.
$149/mo x 36 months = $5,364
Add in the $7,500 tax credit and they will net $12,864.
You are obviously NOT going to purchase it for $23K, so they will sell it at auction for ~$8K (if they are lucky). But they are not "screwing you" because they showed the $7,500 as a CCR? Would you feel any different if they showed $2,500 as a CCR and a $28K residual? Would they "pocket" that extra $5K? Or would their bottom line be the same?
They will get <$21K in total for the car either way, but since you have no intentions of purchasing at lease end, you don't care what the residual is. You only care that the monthly payment is $149 (and it made you happy to see the $7500 as a CCR).
GM Financial is not screwing you any more than NFS did. In order to get the benefits of an artificially low payment, you have to be willing to return the car at lease end. Either they will offer it to you at a lower price than the residual in the contract, or they own the car (and have to sell it for wholesale value).