Open-ended vs. Closed-ended Leases

Open-ended vs. Closed-ended Leases

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** You may see a lease referred to an "open-ended" or "closed-ended", if you do it's likely to be in the fine print, legalese, or wherever the dealer/manufacturer/lessor has put some important but confusing details they hope you won't read.  Even worse, maybe the advertiser won't put it in the fine print but puts "open-ended lease" or "closed-ended lease" in big print next to some out of this world offer - how do you know whether it's a good deal or not? What's the Difference Between Open-ended and Closed-ended leases? In short, in an open-ended lease the lessee is the one on the hook if the actual value at the end of the lease is below the residual value set at lease inception, and in a closed-ended lease it is the lessor.  Usually, your contract will be a close-ended lease, but it’s still...
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Summer Car Buying Season is Here

Summer Car Buying Season is Here

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   It is once again the unofficial start of summer upon us: Memorial Day Weekend!  As we discussed in the article about holiday weekend shopping last year, holiday weekends tend to be a great time to buy a car for a variety of reasons.  Of course, if you're going to go car shopping over a holiday weekend you don't want to spend your extra day off at the dealership.  So get prepared in advance. Among the holiday weekends Memorial Day weekend is one of the best ones for car buyers for a couple of reasons: The model year traditionally starts in the fall, so dealers use the summer to clear inventory of the outgoing model year.  Memorial Day weekend is a great time to promote the clearance deals that will make room for the new models coming in from the factories. Memorial...
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Leasing a Final Model

Leasing a Final Model

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   On April 24 the Ford Motor Company (Stock Info:[stock_quote symbol = "F"]) announced that it will be ending production of all its existing cars (so not including its trucks, SUVs, or crossovers) in North America with the exception of the Mustang by 2020.  Armchair strategists and analysts can talk all day about whether this is the right move for Ford and how other automakers will react (and many have), but we'll use this opportunity to focus on whether it makes sense to consider leasing a vehicle that won't have a new version for sale by the time your lease expires. First Things First: Follow the Money It's important to consider the most basic reason why Ford made this decision to do away with making and selling sedans in the North American market - they weren't generating sufficient profit on these vehicles.  This...
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Understanding Lease Ad Mailers

Understanding Lease Ad Mailers

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   With the spring thaw finally upon us (more or less), the automotive world is gearing up for another summer sales season.  While everyone assumes that direct mail is out as a marketing strategy, there are still a lot of mailers sent out, both by dealers and by manufacturers, as a way to present and promote vehicles.  And again, as we described in our first article on auto ads (which focused on online ads), presenting a lease deal is particularly advantageous in the small space available, because lease deals require relatively few numbers and text to present the offer to the largest audience. Recap: What the ad will and won't show Any lease ad, regardless of the medium used (online, mail, newspaper/magazine, television, radio, billboard, etc.) will always show a few things to define what is being offered: The monthly payment The term The amount...
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‘Tis The Season

by John KoehlerNo Comments
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   As we come to the last few weeks of the year the automotive industry's sales and marketing engine is revving close to the red line.  Obviously, anyone trying to get attention in the retail business in December needs to do a lot of marketing, and also needs to be ready to make a deal - and car dealers are definitely ready to make a deal this month. A lot of the manufacturers build off a recurring theme that they pull out of storage as the weather cools and the days get short the way people go find the wreath and holiday lights for a month or so of display.  That's why people know "A December to Remember", "Season's Best Event", "The Winter Event", and of course, "Toyotathon" - which didn't even start as a year-end event (the first one was in...
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Innovation Series Summary

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   Through this month we looked at how four areas of innovation are dramatically changing automobiles: how they move, how they’re accessed, and how our experience in them is changing.  Specifically we looked at Vehicle Connectivity, Mobility Solutions, Fleet Electrification, and Autonomous vehicles.  All of these innovations are at least partially rolled out, but at the same time it is clear that there is an expectation of dramatic change in the next 5-10 years, where many of the items that are a novelty today will become at least a substantial minority, and in some cases potentially the dominant technology in place. I had the opportunity earlier this week to attend an excellent conference called AutoMobility LA – it occurs during the 4 days preceding the annual Los Angeles Auto Show.  The conference organizers did a great job of assembling excellent speakers and...
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Autonomous Vehicles

by John KoehlerNo Comments
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   Today we look at the last of the four major automotive innovations reviewed in this series: autonomous vehicles, also known as self-driving cars.  This was placed at the end of the series because it is also the innovation that will be the latest in coming, and especially in becoming dominant, if it does.  As a reminder, the other three innovations we have covered are Vehicle Connectivity, Mobility Solutions, and Fleet Electrification. Autonomous Vehicles Overview Almost every vehicle on the road today has some autonomous features - the first one available was cruise control - but with features like parking assistance, lane departure warnings, more advanced cruise control, and collision avoidance features new vehicles are more autonomous than ever.  Beyond that there are several companies, including Waymo, part of Alphabet (nee Google), that are developing and testing self-driving vehicles.  As we get closer...
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Vehicle Electrification

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   In the earlier parts of this series we covered innovations in automotive that don't impact vehicle manufacturing directly, but now we switch gears to one of the largest changes to automotive design in one hundred years: phasing out the internal combustion engine in favor of electric power, and not just doing it in one model or for one make; but electrification of the entire fleet. What is Fleet Electrification? Fleet electrification refers to the move industry-wide (manufacturer by manufacturer) away from using internal combustion engines that require gasoline or diesel fuel towards designing and building vehicles that use only batteries or fuel cells, potentially with an interim step where the vehicle lineup consists of all hybrids and electric-only vehicles.  Obviously, a single model having an electric propulsion system (either all electric or hybrid) isn't new: the first Toyota Prius was introduced 20...
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Mobility Services

by John Koehler Comment Closed
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** We started this series  on automotive innovation with  “The More Things Change…” and provided an overview on four major innovations coming in automotive – both in how they work and how they are used.  In the last article we discussed vehicle connectivity, and later we'll discuss fleet electrification and autonomous vehicles, but today the focus is on mobility solutions, also sometimes referred to as car sharing. What Are Mobility Solutions? There are a number of start-ups (or new organizations/divisions within very large existing companies) that are focused on the providing "mobility" - meaning solving the specific need of getting people around instead of the existing solution of selling someone a car (and then having them pay for it through a loan, lease, or cash they saved up).  Soon we'll have a feature article on some of the new mobility solutions, since many...
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Vehicle Connectivity

Vehicle Connectivity

by John Koehler1 Comment
**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   In the initial article of this series "The More Things Change..." we set the stage for discussing the four major innovations in automotive - either manufacturing, usage, or both - that are in development now and have been rolled out only in the early stages or to a small amount of the overall market.  While each of the four innovations: Connected Cars, All-Electric Cars, Car Sharing, and Self-Driving Cars, are generally independent of each other, vehicle connectivity is most important to achieving the other three innovations sooner, and is also the further along now, but there's still much more to come.   First and foremost, the "Internet of Things" (IoT) is the idea that every thing would be connected to the internet, and the common, and mundane, example then provided is that even your toaster will be connected to the internet (even...
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