Uber Gets Run Over by Its Own Subprime Auto Leases
I am not sure to understand.<p>The example 2014 Toyota Corolla at US$122 per week makes in a 130 weeks lease with Xchange some 122x130= 15,860 US$ and a 2.5 years (high mileage) old Corolla may still have some minimal residual value, let&#x27;s say US$ 1,500.<p>I.e. roughly total reimbursement of the list price of the car:<p><a href="http:&#x2F;&#x2F;toyotanews.pressroom.toyota.com&#x2F;releases&#x2F;2014+toyota+corolla+pricing.htm" rel="nofollow">http:&#x2F;&#x2F;toyotanews.pressroom.toyota.com&#x2F;releases&#x2F;2014+toyota+...</a><p>Assuming that cars in such a situation are bought &quot;in bulk&quot; and thus with a 10, maybe 15% discount, very roughly it should mean that in the US$ 15,860+1,500=17,360 of reimbursement some minimal costs for interests and expenses are included on an initial spent sum of around US$ 16,000&#x2F;16,500.<p>So, at least in theory it seems like a &quot;side-business&quot; that is going to make even or maybe loose a few hundred dollars each car (for interests on the loaned money), but this only if everyone keeps the car and pays the leases for the whole period.<p>Now, you get one of those (and you get one of those because you have no money and no good credit record) and after 25 weeks&#x2F;6 months you give it back.<p>You pay US$3,300 (25*122+250).<p>Xchange has in its hands a six month old car with (say) 20,000 miles on it.That still has a market value, but maybe since you sell it wholesale to some second hand dealer and you only get - say - US$8000&#x2F;9000.<p>So, 3,300+8500=11,800<p>So in this case Xchange seems like having lost - roughly - US$ 4,500 per car, half the US$ 9,000 stated.<p>There must have been some large avoidance of repayment (and repossession of the cars, etc.) to make that number on average.