Saab USA lease offers

I’m hearing a lot of talk about the need for Saab to fix leasing in the United States.

I’ve just taken a look at Saab’s latest leasing offers in the US, and I’m struggling a little bit to see what’s so lacking. In saying that, I fully acknowledge that I live in a market where leasing is not commonplace for private buyers. I’m therefore a little unfamiliar with the options available to customers outside of what’s on the manufacturer’s pages.

The numbers I’ve reproduced below are all from the websites of the manufacturers mentioned, except for the Audi A6. As I couldn’t find lease offers for the Audi A6 on their website, I used LeaseCompare (3.2l FWD model, 15K miles p.a., 780 credit score, $2,600 downpayment).

The Saab 9-5 lease is based on a Turbo4 Sport Sedan, so it’s not as well equipped as some of the higher end Teutonic competition. It’s still a cracking drive, though, and if you opted for a Hirsch upgrade (when they come online) then it’d be even moreso. I think the price differences noted here are pretty compelling.

[table id=14 /]

(1) I couldn’t find a Mercedes E Class offer on any model less than the E350 (if in fact they offer a model smaller than the 350 in the US).

(2) The base model A6 seems to be called ‘Premium’. Maybe I should have used a higher downpayment (upping the downpayment to $3500 lowered the monthly cost to $551).

As mentioned, these figures are from the manufacturer’s own websites and I haven’t gone to the trouble of comparing all equipment levels, etc. I’ve chosen the most basic models I could get a lease figure for and threw in the BMW 3-series for the benefit of those who might have doubted the validity of including a 5-series.

The G37 comes up smelling like roses in this comparo, but bear in mind the loss of rear leg room (some four inches) and a significant loss of cargo space in the trunk as well. The G37 is a bit bigger than the 9-3, but it’s more expensive as well (see 9-3 leases, below).

It might just be me, but if these lease offers are correct, then the 9-5 should be seen as competitively priced. If there’s something I’m missing, please let me know in comments.

IF the 9-5 is indeed competitively priced, as it seems, then maybe there’s something else that needs to be fixed – customer trust, dealership experience, marketing, equipment levels, etc.

——

The Saab 9-3 is going for $299 a month for the 2011 models and there’s 0% finance available on both 2011 and 2010 Saab 9-3 models.

That is unbelievably good value, if you ask me. If I could get a 9-3 for $299 a month, I’d be all over the sucker.

36 thoughts on “Saab USA lease offers”

  1. There’s no E-Class model smaller than E350 in the US.

    I think now it’s just getting the word out. I saw a Saab ad on CNN the other day, so it’s a step in the right direction.

    • That guy’s got nothing for an A6, though, correct?

      There were plenty complaining about it in the US sales post from yesterday. I can see their point if leases are too high, but from this comparo, they don’t seem that high.

      • I’m pretty sure these are subsidized leases, intentionally made for headline-grabbing offers. Most people who drive more than 10,000 miles a year and have a good, but not immaculate, credit score won’t qualify. That pretty much goes for any brand.

        • The 9-5 lease is indeed a ‘low mileage lease’ where a charge of $0.25 is applied for each mile over 32,500 at the end of the term (so, 10K miles per year).

          I recall seeing similar charges on some of the others, too, however. So it’s still apples for apples as far as I can tell. I just checked the BMW 5-series one and it’s the same 10K miles per year, though they have a smaller fee per mile if you’re over that.

  2. I think it may have a little bit to do with the initial payment, but that may just be me. And that does seem like a good deal compared to all of the other numbers from the cars in the same class. But I think the word needs to get spread about how great Saab really is. I haven’t seen much advertising, but I do live in a bubble world where college rules my life. Speaking of which being up in the great snowy north I see a lot of Saabs on campus, about 2 dozen or so for about 1500 cars, so they’re out there. People who have ridden with me in my 9-3 say they love the winter experience in it, how it’s such a great car.

    But putting all of that aside, I think the fact of the matter is that Saab was having trouble a little over a year ago and people still remember that. It might take some time for people to realize Saab is back and better than ever. I personally would like to see some other equipment available on some cars, and aftermarket parts too.

  3. As you noted, most brands require $3-4k+ due plus tax, doc fee, and title/filing. However, most of my customers try to whittle the money due down to $999. Volvo is offering a sign and drive on their convertible. Maybe SAAB should as well.

    • Andy, you’ll have to forgive my Aussie ignorance, but what’s a ‘sign and drive’? What are the terms typically associated with such a deal?

        • Andy, the monthly number on the Volvo is high due to no money up front, correct?
          What is that number, and what is the buy-out in the end?

  4. I feel these are very competitive rates, especially considering I remember 9-5s being offered at this rate about 10 years ago. The kicker is the credit approval, and that may have been made much more stringent over the last few years, limiting some prospective customers. That could be changing in the coming months though.

    My only beef with the lease rate is that it’s for the Turbo4 spec 9-5, which doesn’t have a sunroof at any price, or parking sensors, which I feel is a bit of an oversight of this size and price. To get those features, you need the Turbo4 Premium, which stickers for about $4,000 more and presumably, a much stiffer monthly payment.

    Still, the $399 figure should push a lot of people in the showroom and it’s up to the sales staff to persuade them into a higher trim. These are the offers that need to play at the end of every TV commercial.

  5. I think the “sign and drive” point is a very good one, as that marketing strategy has really started to dominate in the US domestic market. Since saving money seems to be a lost art in the US, many people (yes even those buying nice European automobiles) want the lowest cash out of pocket possible. Also, with all due respect to the 9-3, it doesn’t play in the same league as the G37 IMO. For $60/month differential on a lease the 9-3 doesn’t stand much of a chance FWIW.

  6. So the total cost of driving the car in a little bit more than 3 years will be US$ 19119 (3558 + 39*399 = 19119).

    The list price of a basic Turbo4 is US$ 38525. This means that you will pay around half the price of the car in 3 years time. Wouldn’t it be better to buy the car and drive it during that period? Or is the price on used cars really low in the US?

    Or are some costly things included in the lease price?

    • One thing to be considered is that you don’t have $38525 tied up in the vehicle. If you had the money it could be earning interest or invested in stocks. On the other hand if you don’t you could be paying interest on a loan to buy the car and that would add up over 3 or 4 years.

      Looking at used car prices in the UK across all manufacturers , losing 50% of the RRP in three years is about average. Depreciation per year then declines markedly.

      Therefore if you want a new car after 3 years then leasing is a viable option.

      Looking at the US rates for the 9-3, I’d be down the dealers when ready to change if such deals were available in the UK.

    • As Steve says below, there is a finance charge or opportunity loss with more money in the car for that three-year period. Interest rates are very low now, so its a better time to buy the whole car (if you will finance) now than most times.

      Some cars (BMW, MB) naturally have higher resell prices, while other cars (Lexus, Acura) aggressively re-market “off lease” cars using warranties and financing to artificially prop up the resell price. Both help to offset lease costs.

      In Saab’s case, the residual value is very much in question. It’s a car company that was on the brink of elimination only a year ago. Historically, Saabs have not held their value very well in the first two or three years of life. This is a problem for the lessor.

      The bottom line: Your observation is the exact reason that I’ve never leased a car. I’ve always “done the math” and it never seems to come out in my favor.

      Leasing is best for people that:
      1. Know that their driving habits will be well within the terms of the lease.
      2. Know that they will want a new car fairly frequently (every 3 years or so)
      3. Want to reach for a slightly better car than their cash flow would generally allow, and don’t mind paying the fees and living with the terms of the lease to do it.

      I’ve never fallen into any of those categories, thus I’ve never leased.

      • Eggs: Well said… some people lease because it arms them into a buy with little money in. They buy at the end when the car is cheaper. If they know that they will buy at the end, the miles do not matter. I leased both of my Saab convertibles and purchased them at the end of the lease. At that time, my dealer was giving me full Saab CPO at no additional chage.

        • Funny, I’ve always felt just the opposite. If you’re going to “buy at the end” you might as well buy at the beginning. Every time I ran the numbers, it was more expensive to lease then buy vs. buy, but I guess we all run numbers differently…

          Anyway, this “buy at the end” doesn’t always work out – For example, when I turned in my 08 9-3 last month, I could have bought a slightly less equipped (no memory seat or stereo upgrade, but add bluetooth which the 08 didn’t have), brand-new 2010 9-3 for about $1K more than the buyout price of my lease.

          • Stan: You are correct, in the end you do pay more for the car, however, the lease lets you at least get into the car for a payment that is doable. By time you are ready to buy, the up front monies are a lot less than if you were doing the deal based on the new car price.

  7. It is quite funny that many constantly moan about this and that, but never showing a comparison like this one.

    @AdamS,
    if you think that the G37 (sorry, but to me Infinity is synonym of ugliness) is such a better car, feel free to buy it.

  8. I think these lease rates are not that bad. Maybe it´s so that people have to realize that they can´t have everything for nothing. a SAAB is not an car for everyone.
    I also have to accept that i am only able to buy a car for 6-7 years because I can´t afford changing the car all 3 years. But I´m not telling SAAB they should lower prices that i can´buy a SAAB

  9. We comapred lease prices in the Dutch Market (Leasing in the Netherlands is primarly for company car leasing.

    Lease configuration: Full Operational Lease incl wintertires
    Mileage/year: 37500km
    Lease term: 48 months (4 year)

    Audi A4 Limousine 2.0 TDIE 100KW BUSINESS EDITION 4D 1.040,85
    Saab 9-3 Sport Sedan 1.9 TTID 96KW NORDEN EXKLUSIV 1.084,37
    Opel Insignia hb 2.0 CDTI ECOTEC 96KW EDITION AUTO 5D 1.101,90
    BMW 320D EFFICIENTDYNAMICS ED. BUS LINE 4D 120KW 1.102,56
    Skoda Superb 2.0 TDI COMFORT BUS LINE DSG-6 5D 103KW 1.130,64
    Volvo S60 D3 GEARTRONIC KINETIC 4D 120KW 1215,10
    Volvo S80 D3 GEARTRONIC KINETIC 4D 120KW Prof Line 1.219,12
    Saab 9-3 Sport Sedan 1.9 TTID 118KW NORDEN EXKL AUTO 1.255,89
    Audi A6 Avant 2.0 TDI 100KW MULTITRONIC BUS. ED 5D 1.265,79
    Mercedes E 200 CDI BLUEEFFICIENCY A5 4D 100KW 1.321,18
    Saab 9-5 Sport Sedan 2.0 TID LINEAR AUTO 4D 118KW 1.358,50

    It’s the old A6 (so not the new one) – prices based mid februari.

    • Woops, ignore the Saab 9-3 Sport Sedan 1.9 TTID 96KW NORDEN EXKLUSIV, this one has a manual / not automatic gearbox.
      I tried to get comparable cars, so all have Satnav, parking sensors and Metallic.

  10. Very good table, worth to extend it to other engine and trim levels. Takes a lot of effort, but gives really the feel what this lease thing is about.

    • FWD = FRONT Wheel Drive
      XWD= CROSS wheel Drive (X is a cross) – So All Wheel Drive with a technical twist.

      • XWD is no problem. Im using it everyday myself. 🙂
        And your answer is what I expected it to be. 🙂

        Why I ask is that in the list cars with Front wheel drive are both not labeled FWD and the audi and volvo are labeled FWD. Thats why I came into the belief that someone had misinterpreted the three letters.

  11. I’ve never leased a car. The new cars that I’ve owned have not had a lease deal that I thought made sense for me.

    The mileage limitations are/were one issue in the past. They way that I drive now, I’d put only half of the 32k miles on the vehicle in three years, but then that begs the question of why I’d buy a new car.

    As said above, most of the advertised leases and finance deals are for specific narrow market niches or apply to only small slivers of the inventory on hand. The majority of folks get a different deal when they show up. A personal finance guru based here in Nashville calls them car “fleeces” because he believes (rightly so) that many or most people sign a lease without understanding the terms and that auto dealers take advantage of that ignorance. In some cases advertising further muddies the water.

    All of that to say that leasing is an important sales tool in the arsenal of the luxury car seller, but reality is different than the advertising.

    We shall see how this affects sales. It can only help.

    • Agree 100% with this and your earlier post. I assume you are referring to Dave Ramsey as the finance guru. Not only Mr. Ramsey, but other personal finance gurus such as Suze Orman and Clark Howard say leasing is a bad idea in most cases. What is good about leasing is that it provides a supply of late model used cars that prudent buyers can pick up while avoiding the heavy depreciation hit that the new car buyer suffers.

  12. Why are you comparing hi-end V6 models with a 4 cylinder Saab? It would be better to look at the price of the 2.8T V6 Aero model.

    • Because, O ye doubting BoeBoe, if you go and check the lease offers on Saab’s page, you’ll see that the 4cyl is the only 9-5 they’ve got advertised in terms of a lease deal. It’s the same situation with the other manufacturers – I’ve quoted what’s available on their websites.

  13. I honestly thought leasing was back to not being an option in the US – how sad is that!

    Question: In the US do I have to lease something off the lot – or can I order to suit something I lease? (I really don’t want to be stuck with an automatic transmission.)

    I’ve always done CPO – maybe my next step will be to lease then buy it at the end of the lease. A 300-400 payment might be possible – a $600-700 is not wise for me.

  14. I’ve leased about 9 Saabs over the last 25 years. A good dealer can adjust the “advertized” lease rate for a particular model to suit your needs and the model and the equipment you choose. So no need to lease the exact model in the ad, YOu can order whatever you want and that the dealer can obtain. In the US, most dealers will contact other dealers and trade inventory to obtain what you want. As for mileage, my problem is the opposite of Eggs as I put many more miles on my cars than the base lease mileage which is typically only 10,000 or 12,000 miles per year. And yes, over lease miles get expensive at 20 to 25 cents per mile. However, you normally can “pre-buy” the miles at a greatly reduced rate (typically 10-15 cents) and have them worked into the lease so your lease can be at 15,000 miles, 18,000miles per year, etc.

    One can always go to a bank and try to work out your own lease if you don’t like what the dealer is offering. However, I’ve found through the years that Saab’s “programs” usually are a better deal. I’ve also had the sense that Saab (or GM) underwrote the residual to some degree to keep lease rates competitive. I know for sure that the purchase price of the cars if you wanted to buy them at the end of the lease was usually quite a bit higher than the prevailing used car blue book price.

  15. I just thought that I might chime in on an unmentioned aspect of the American market as I understand it. In the US there are very few “company” cars. A few companies negotiate reduced pricing for a particular brand through fleet sales and offer that price to upper level or even all employees. The customer then buys the car using his own money. Many companies, however, will lease a car on behalf of their top level executives. This is true of large companies and small family-owned businesses. The lease has a tax advantage because the company does not own the car. While this leasing accounts for very few cars in total, most of the cars leased by companies are expensive ones like 9-5s.

    There is one other use of leases not mentioned here and that is to disguise deep discounting. The Detroit habit of advertising massive rebates make it hard to sell when the rebates are off and reduces the resale value. For years, BMW would have unadvertised subsidized lease deals that were better than any purchase price in order to move extra product. The impact on resale can be manipulated and the market is generally none the wiser. I bought a 9-3 in 1999 under similar circumstances.

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