If I pay 40k for a leased car over two years. My cost is actually only about 28k since I get to deduct my lease as a business expense. If I really wanted to buy a car, I would lease it for the first 3-4 years, get as much deduction as possible, then buy it out at lease end.

 

That may very well be the case in Canada. Here in the U.S. Southeast, neither one of those cars would bring that kind of money. Certainly ultra-low mileage cars always command a premium but not to that extent. The guys who really got hosed were the ones who probably leased those cars at 10K/yr and only put on like 3K per year. Perhaps Canada has residuals for ultra-low mileage leases since the cars are only driven when weather allows?

 

The current residual (36 month) in Canada on a 2017 C2/C2S is as follows:

8,000 km (5,000 mile)/year = 62%
12,000 km (7,500 mile)/year = 61%
16,000 km (10,000 miles)/year = 60%

I live in a city of 800,000 and with 2 kids and 2 cars in the family, I drive my BMW 535 about 1,100 kms/month or 13,000kms/year (8,000 miles/year). I think that is pretty typical in smaller centres although the residuals are the same across Canada, based on mileage. I think a 12,000 mile/year lease would put the 36 month residual around 58%. Not sure how that compares to the US.

As I wrote, I think lack of competition from used US cars coming into Canada has something to do with the higher resale prices and residuals. Plus, at present no Canadian dealers have any allocations left for 2016 and there are only a handful of cars left on dealer lots, most have MSRPs above $150,000.

 

You are either buying the depreciation or you are selling it to Porsche. That's the whole game.



If you pay $101,305,
lease under your terms, you will pay $47,800 in 36 mo. -- Turn it in.
purchase under your terms, you will pay $38160 in 36 mo. -- Have to deal with depreciation.

You could pay $10k on the front end to not deal with the volatility of depreciation because you bought all the risk of the projected value of the vehicle in three years.