The results of the analysis are sensitive to the target purchase price. The only vehicle that earned a Gold Star rating that does not appear cheaper to lease under our discounted cash flow method is the Cadillac Catera. The results are summarized in the table below with hyperlinks to the calculations. As a basis of comparison, we also list the net interest rate the ad hoc measure computed by IntelliChoice, hyperlinked to Intellichoice s data and calculations. Similarly, the lessor is writing an option but not receiving any compensation for doing so.
Several explanations are possible.
One is that these special lease deals may simply be loss-leaders. They are advertised with the intent of getting the customer in the showroom and possibly steering him to something pricier. Another hypothesis is that they are a form of price discrimination. They allow the manufacturer to sell more cars without lowering the MSRP for everyone. The fact that the underpriced leases are, in all the cases we examined, manufacturer leases, supports this hypothesis.