In other words, ALG predicts that the XT5 will be worth 54 percent of its purchase price after 36 months (and a predetermined mileage amount), while the CT6 will be worth 46 percent of its original value. Though the rates are respectable, they trail those of competing vehicles, which could put Cadillac at a competitive disadvantage when it comes to leasing.
To make its lease rates more competitive, Cadillac may potentially need to pay into a lease program for both vehicles. Doing so decreases the cumulative amount of the lease, thereby decreasing the downpayment and/or the monthly payments for the buyer, but also diminishing the brand’s profitability of each model.
Reflecting on ALG’s values, Cadillac President Johan de Nysschen stated that the rates for both vehicles are good enough to allow Cadillac to offer competitive leases, while acknowledging disappointment.
“I believe that they should be better,” de Nysschen told Auto News.
Even so, the division’s chief said that he is confident that residuals will improve over time as Cadillac continues to exhibit discipline on incentives and along with a rigorous focus on remarketing of used cars, particularly Certified Pre-Owned (CPO) vehicles.