Consumer perception - lease turn-in vs. trade-in

[wtwo3]

I'm conducting a bit of a personal experiment just out of curiosity (driven by a 1998 study which suggests there may be a difference in the depreciation curve for leased cars vs. purchased cars).

So I wanted to set up a poll. Please select YOUR personal preference, and then in the comments tell me why.

Subject:

Consider you're in the market for a CPO car, and you happen upon 2 identical, CPO cars for sale. The only difference is one was a lease turn-in and the other was a trade-in. Which would you rather purchase and why?

[Burrcold]

If it's a CPO I don't think I'd care either way. Both could have been treated poorly or wonderfully...just gotta hope that the CPO inspections are done well and any deficiencies are fixed or disclosed.

[RelaxIN2]

Originally Posted by Burrcold

If it's a CPO I don't think I'd care either way. Both could have been treated poorly or wonderfully...just gotta hope that the CPO inspections are done well and any deficiencies are fixed or disclosed.

I concur with Burrcold... I've owned cars and leased cars and have treated them both the same way. They were maintained and turned back in, in immaculate condition. This way I get top $$ for my trade.

To be perfectly honest with you... on 3 of my leased cars, I found out what the buyout cost would be 3 months prior to the lease expiring, and put it up for sale for the buyout cost, plus $2k. I would park it in a lot near the associated dealership. for example, one of the cars was a Ford Explorer...I would have it already cleaned up with some high-level information and park it near a Ford Dealership.. People going to the dealership would see a pristine car that was only 3 years old for half the price.

[CHECKERED]

for me personally I prefer leased cars since these tend not to be less modified (at most basic cosmetic stuff)

yes there are folks out there who go all out on a leased car but those are rare psychos and you can usually tell if its been modified and returned to stock

security deposit on lease car means the lessee tends to take care of the car better than someone who owns it outright (on average, not in all cases obviously) no smokers, that's a big one

leased cars tend to have more restriction on where body damage, glass damage, and service can be performed

[KennyFSU]

I would say lease because it will have less chances of being modded and the mileage is capped.

[Humdizzle]

well he said mileage and listing would be the same.

while its nice that lease mileages are capped... thats also not a good thing if you are looking for a low mileage garage queen. since nobody turns in the lease with leftover miles. my 2015 f80 was driven about 3-4k miles a year by the first owner, and about the same by me over the last 2 years. i'm at 31k miles.

i'd think that most leases are treated as daily drivers. although there are cases where someone leases a nice car as a sunday/weekend/nice weather driver.

[Alfisti]

I'd lean lease because more likely to be a single professional driver, a commute car not family hauler.

Our X3 (now totalled) was 2.5 years old and only the drivers' seat showed any wear at all. The other 4 seats were ABSOLUTELY pristine, it was nuts, we saved 30K on a new one and it had 20,000 miles on it and a 2 year CPO.

[TheWatchGuy]

i prefer trade in, but it doesnt matter a whole lot to me.

My thought process is, on the trade in, maybe that person thought they were going to keep it longer than they actually did and treated it better. On a lease, you know you are only keeping it for X amount of years, so you dont care if you do something that could have long term affects on it.

[tdott]

Would not be a huge factor for me. Condition of the car, service history, accident history are factors I would consider more.

2 used cars are never identical. So the premise is flawed.

[wtwo3]

Originally Posted by tdott

2 used cars are never identical. So the premise is flawed.

It's a hypothetical question to gauge consumer behavior. In an experiment you set the control to eliminate variables which would have adverse impacts on the results.

Ultimately you're using the law of averages to balance out those variables in determining, in this case, which way consumer behavior trends in the "real world". But to replicate that concept within an experiment, you set the control, which in this case is maintaining 2 cars as equivalent with the exception of the test, which is the type of ownership.

[tdott]

Originally Posted by wtwo3

It's a hypothetical question to gauge consumer behavior. In an experiment you set the control to eliminate variables which would have adverse impacts on the results.

Ultimately you're using the law of averages to balance out those variables in determining, in this case, which way consumer behavior trends in the "real world". But to replicate that concept within an experiment, you set the control, which in this case is maintaining 2 cars as equivalent with the exception of the test, which is the type of ownership.

Yea I understand that, but it never happens in the real world.

[wtwo3]

Originally Posted by tdott

Yea I understand that, but it never happens in the real world.

I think you missed my point. Controlled experiments typically DON'T happen in the real world. They're meant to test for a specific hypothesis (in this case, answering the question of consumer perception of leased vs. purchased cars). You then use the law of averages to apply the results of the experiment to the real world in your conclusion (i.e. being able to say, typically, trade-in's present a higher/lower deprecation compared to lease turn-ins).

I'll give you an example - the Bobo Doll experiments wanted to test children's observance of violence and the impact it had on them. As part of the experiment, children would watch adults interact with dolls. Some of the adults acted passively towards the dolls, and some of the adults acted violently, by kicking, punching, yelling at the dolls.

In the real world you probably aren't going to find adults kicking and punching a doll in front of a group of children (or at all... cause... it's weird).

But that's not the point. You take the results of this experiment to to then apply it to a real life situation to conclude how children will be impacted upon seeing similar behavior in many different situations. One of the controls in this case was the doll, because they wanted to eliminate the possibility of the receiving subject interfering with the premise of the experiment.

Similarly, the point of my question isn't that you'll see totally identical cars. The point is how consumers perceive leased vs. purchased cars IN GENERAL. How do you come to that conclusion? You control the noise in the data. Of course there will be variables, but that's where the law of averages comes into play.

[TheMidnightNarwhal]

Originally Posted by Burrcold

If it's a CPO I don't think I'd care either way. Both could have been treated poorly or wonderfully...just gotta hope that the CPO inspections are done well and any deficiencies are fixed or disclosed.

Exactly.

But if I REALLY had to choose... lease. But then it comes back to being CPO. My worry is a leased car is better cared for since it's gonna need to be returned.

But if both cars are CPO then I trust that both cars are good enough to be sold so I don't really mind.

[tdott]

Originally Posted by wtwo3

You then use the law of averages to apply the results of the experiment to the real world in your conclusion (i.e. being able to say, typically, trade-in's present a higher/lower deprecation compared to lease turn-ins).

The point is how consumers perceive leased vs. purchased cars IN GENERAL. How do you come to that conclusion? You control the noise in the data. Of course there will be variables, but that's where the law of averages comes into play.

Again, I think it is a worthless conclusion.

A controlled example like say a clinical trail for a drug, you eliminate as many other variables as you can to ensure they don't have a effect on your results.

Try all you want, but you'll never eliminate the variable of mileage, condition, accidents, options, color, location, etc from a used car purchase.

So even if you came to some great, grand conclusion of leased vs. purchased in your research. It's pretty worthless conclusion, because mileage, condition, accidents, options, color, location, etc can be factors that influence a used car purchase decision more and they will never be the same.

Even if you preferred leased vs. purchased, as soon as you find out the condition/accidents/options/etc is not what you want, then no one cares what the average leased vs. purchased preference is.

But carry-on, have fun.

[dscabra]

As already stated, either can be a well-maintained and properly driven car or the opposite. I evaluate any pre-owned car based on what I see, not whether it was a lease or purchase by the previous owner. Particularly for BMW, Mercedes, etc., the first few years of maintenance are covered by the dealer, so people will tend to get it done on schedule. My last BMW was a 328i that was a dealer loner. I bought it with just over 6K miles on the odometer and drove it for about five years with virtually no issues at all until COVID had me working from home and the car sat in my garage for months without use and the mice decided to move in.

[wtwo3]

Originally Posted by tdott

Again, I think it is a worthless conclusion.

A controlled example like say a clinical trail for a drug, you eliminate as many other variables as you can to ensure they don't have a effect on your results.

Try all you want, but you'll never eliminate the variable of mileage, condition, accidents, options, color, location, etc from a used car purchase.

So even if you came to some great, grand conclusion of leased vs. purchased in your research. It's pretty worthless conclusion, because mileage, condition, accidents, options, color, location, etc can be factors that influence a used car purchase decision more and they will never be the same.

Even if you preferred leased vs. purchased, as soon as you find out the condition/accidents/options/etc is not what you want, then no one cares what the average leased vs. purchased preference is.

But carry-on, have fun.

A clinical trial for a drug is NOT the same thing as an experiment to test consumer psychology.

I don't think you understand what the law of averages is. So let's just leave it there.

[Humdizzle]

personally i think the leased car is cared for less since the owner doesn't have to worry about resale value. minor door ding, swirl marks, leave it parked outside instead of garage etc... i wouldn't care. same with servicing... just go by BMWs rec of oil changes every 10-15k miles or whatever ridiculous cost saving number they have now.

[Vivek.]

Originally Posted by Alfisti

I'd lean lease because more likely to be a single professional driver, a commute car not family hauler.

Our X3 (now totalled) was 2.5 years old and only the drivers' seat showed any wear at all. The other 4 seats were ABSOLUTELY pristine, it was nuts, we saved 30K on a new one and it had 20,000 miles on it and a 2 year CPO.

+1

I've always felt lease returns were nice cars to buy. By my perception, customers fear backlash from the dealer upon returning the car more than they fear a potential drop in resale value on an owned vehicle.

My dads e46m zcp was a lease return, most pristine e46 I'd seen (and we looked at several dozen over a few years to find the ideal one). None of the cars that I currently own were leased, though, so I'm only replying to this from my general perception.