All those accessories may look great on a new vehicle, but they're not worth much in the used-car market.
The leasing industry's residual-setters learned that the hard way. They say they're no longer making the same mistake of including maximum optional equipment packages in their setting of residual values — that is, predicting what a vehicle will be worth when it comes off lease.
The forecasters got burned placing high residual expectations on optional equipment such as sunroofs, fender flares and spoilers.
Turns out those accessories retained little residual value when their off-lease vehicles hit the used-car market, says Raj Sundaram, an analyst for the publisher of the Automotive Lease Guide.
It took time — and money — to figure that one out.
It got so bad that a vehicle with a maximum option package actually leased for less than a vehicle without one. That's because factoring in the optional equipment increased the predicted residual value. That, in turn, pushed down the lease payments.
“Dealers caught on that they could offer a car with more options for less money, and they were allowed to do it,” says Sundaram. “Toyota lost a ton of money that way.”