Automotive

Please define : APA exceptional lease values ?

  • Last Updated:
  • Sep 1st, 2020 8:35 am
[OP]
Member
Jul 26, 2008
371 posts
376 upvotes
Montreal

Please define : APA exceptional lease values ?

I have been reviewing the new car reviews on apa.ca and I keep seeing this on APA reviews

http://www.apa.ca/2019-2020-lemon-aid-n ... Highlander

quote : "The conventional and hybrid versions of the Highlander are both exceptional lease values for 2020"
quote : "The Ascent is an exceptional lease value for 2020"
quote : "Kia Telluride - Good value leasing for 2020.

What do they mean by exceptional lease values ? I don't get it, I don't understand how lease payments are determined vs purchasing a vehicle out write.

what makes leasing an exceptional lease value:

- the interest rates for lease are lower ?,
- if the car depreciation is going to be low the lease amount is lower but purchase option at end of lease will be high ?

Please enlighten me.
3 replies
Member
May 9, 2005
265 posts
18 upvotes
Calgary
It comes down to the TCO or total cost of ownership. You have to do a bit of work and understand if it's going to be more beneficial to lease vs finance a car, all things equal. Will the car be worth more or less than you expect after your lease is over. Will it be able to sell for more than the lease buyout? It really depends on what you want to do with the car long term. After 3/4 years, do you plan to sell it? Re-finance it after the lease is over or just walk away? Are you the type of person who changes their car frequently or drives it into the ground?

But in the articles you're likely reading it's related to the residual that the manufacturer set. If they set a high residual, then your lease payments will be lower, assuming the lease interest rate is the same. You'll get 'more' car for less money. There are calculators out there that can help determine if your lease deal is good or not.
Jr. Member
Oct 25, 2014
163 posts
55 upvotes
Toronto, ON
naimc wrote: I have been reviewing the new car reviews on apa.ca and I keep seeing this on APA reviews

http://www.apa.ca/2019-2020-lemon-aid-n ... Highlander

quote : "The conventional and hybrid versions of the Highlander are both exceptional lease values for 2020"
quote : "The Ascent is an exceptional lease value for 2020"
quote : "Kia Telluride - Good value leasing for 2020.

What do they mean by exceptional lease values ? I don't get it, I don't understand how lease payments are determined vs purchasing a vehicle out write.

what makes leasing an exceptional lease value:

- the interest rates for lease are lower ?,
- if the car depreciation is going to be low the lease amount is lower but purchase option at end of lease will be high ?

Please enlighten me.
basically means low interest rate and high residual rate
a car's lease payment is calculated based on 1) car price, 2)lease length, 3)interest rate, 4)residual rate

if the residual rate is very high and interest low, the lease payment become very low
some vehicle often has rate that makes it cheaper to lease than to own it

e.g. it is better to lease a $50K BMW 330i for $600/month for 36months than to buy it out right, because for 3 years your total lease payment would = $600x36 = $21600.
If you bought the car for $50K, most likely the car would be worth $26K after 3 years, meaning you lost $24000 in 3 years instead of just paying $21600 in lease payment (hence, good lease value)
example is over simplified, but u should get the gist.
Deal Addict
Jan 15, 2017
3441 posts
2786 upvotes
I don't know why the APA considers the Highlander as an Exceptional Lease Value or the Telluride as Good Lease Value as both have very high lease rates which produce really high lease payments. The Highlander is 4.99% for 36 mths and the Kia is 5.99% for the same term. Only the Assent at 0.5% for 36 mths would come close to being a great lease contender, depending on your success during negotiation.

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