Aspiring James Bonds in the U.S. will soon be able slip into an Aston Martin for at least $100,000 less than it used to cost. The blue-blood British carmaker has partnered with Ally Financial to offer manufacturer-backed leases in the U.S.
Starting in late May, a V12 Vantage coupe, which has a starting sticker price of $185,220, can be had for roughly $1,900 a month. After the down payment, driving it for a year will be about as expensive as buying a new Chevrolet Malibu. A Vantage with a small V8 engine can be had for $1,400 a month.
“It’s really significant for us,” said Julian Jenkins, Aston Martin’s president in the Americas. “It gives us an opportunity to reach a new audience … largely individuals that have purchased other vehicles through leasing programs but also want the opportunity to step into a new product.”
Aston Martin, the only global exotic brand that isn't owned by a larger carmaker, has 37 dealers in the U.S., which account for about one-third of its sales.
Indeed, those in the market for extremely nice cars tend to lease rather than buy. In the premium luxury segment—which includes the Mercedes S-Class and the Porsche Panamera—lease penetration hovered at 55 percent last month, vs. 29 percent for the average car or truck, according to Edmunds.com.
What's more, almost two-thirds of drivers who lease a particular car stay with the same brand when it comes time to trade up or buy a vehicle, according to PricewaterhouseCoopers.
And the cozy relationship between a car company and a bank presents a nice, quiet way to spur buying. The carmaker can pay the bank some cash up front, prodding the lender to give buyers a lower monthly lease payment. In the car business, this is called “subventing the residual.” Financially, it’s not so different from those gaudy, money-back deals the local Chevy dealer hollers about on television, but it’s a lot less noticeable. If incentives are roads, leases are lovely, shady little shortcuts. A pristine brand such as Aston Martin can slip down one without anyone noticing.
Aston Martin has had to steer carefully the past few years. Sales flagged in the recession, money grew scarce, and the models got a little long in the tooth. From 2007 to 2012, Aston Martin's annual sales skidded from 7,300 to 3,400, and the company was on the brink of insolvency, which never looks good for a brand built on opulence.
Recently, however, the brand is doing better, thanks to slugs of capital from London private equity firms InvestIndustrial and Tejara Capital, which poured another $305 million into the company this week. In September, the company hired Andy Palmer, a longtime Nissan executive, as chief executive, and sales for 2014 crept up to 4,200. Daimler is in the mix as well, having bought a small stake and worked out an agreement to supply Aston with Mercedes engines.
Later this year, Aston Martin will deliver an all-new model dubbed the DB10 via Spectre, the all-new Bond film. And it plans to roll out, by the end of the decade, an SUV-like model it calls a "crossover GT." By 2021, Aston Martin hopes to sell 7,000 vehicles a year. If all goes as planned, the line for one will be long, regardless of how customers plan to pay for it.
With assistance from Matt Miller