A few months ago, we stunned pretty much every premium automaker—and the folks that shop them—by proclaiming the Alfa Romeo Giulia the winner of our Big Test of 2.0-liter compact luxury sport sedans available with a $399/month, 36-month lease.
Brackish coffee was sputtered in Bavaria, a host of Nagoya salarymen were volun-told to work even later into the night, and folks in Detroit just shook their heads at how a brand with a heritage of erratic quality overseas could win such a contest. But there was no arguing with the numbers. When added up, the Giulia lapped the Lexus, mashed the Mercedes, aced the Audi, crushed the Cadillac … you get the point.
Well, we're going to have to recalculate those results. The Alfa Romeo Giulia now has an even more enticing lease deal, one that further skunks the German and Japanese luxury brands, putting it within reach of those who might be shopping for a mundane Honda Accord or Ford Fusion.
In an effort to propel demand for a new-to-market product in a viciously competitive segment, Alfa Romeo has slashed its monthly payment to just $299 for a quickie 24-month Giulia lease—with a modest $3,299 down payment up front. (That down payment is pretty typical number for the segment.) That gets you a two-year lease on a car with a MSRP of $39,985.
How in the name of Nicola Romeo can Alfa get away with that?
Normally, a shorter lease term is more expensive because the bulk of depreciation—which is really what you're paying for in a lease—happens in the first year or two. It seems counterintuitive that Alfa can create a lease that flies in the face of accepted economic theory. Yet here it is, with a car we described as, "efficient, economical, quick, safe, and without question the most fun to drive."
"A 24-month lease is somewhat unusual," says Scot Hall, executive vice president of operations for swapalease.com and wantalease.com. "Alfa is trying to gain some share, not only with the lease payment but also by cycling people through their products a bit quicker."
Alfa Romeo isn't the only player getting aggressive in the compact luxury sedan lease arena. Jaguar is playing an even more aggressive $249/month game for its XE 2.5t, but for 36 months and $3,995 down. But it is offering that deal on a lower-trim model with a MSRP of just $35,895. If you want the equivalent bells and whistles of the Giulia, the Jaguar lease price obviously will cost more. Infiniti's Q50 2.0t also has a cut-rate $309/month lease deal for 39 months and a down payment of $2,499, but it's also based on a lesser-grade MSRP of $34,855.
Lexus is the closest to the Alfa terms, with its three-year lease for the IS Turbo (previously the IS 200t) working at $299/month with $3,999 down on a $39,425 MSRP. (Note: In June, the offer was a slightly modified $319/month, with $3,299 down on a model with the same MSRP. Pay attention to those constantly shifting numbers when shopping, folks.)
Alfa's deal almost seems too good to be true, which means they could be playing fast and loose with lease subsidies by artificially inflating incentives to move the metal. Not like it should matter to those who get a great deal, but the pain FCA's Ally Financial feels when the leases return could be intense if the lease-end values are less than what is on the FCA books.
But Hogeveen says everything is legit, and third-party residual trackers back him up, stating the Alfa has a stronger residual value than the current luxury-brand leaders.
Hogeveen claims the Giulia has a 50 percent residual after 36 months, compared to 41 percent for the Mercedes C300 and 38 percent for the BMW 330i. That 9 to 12 percent difference is equivalent to thousands of dollars—which gives Alfa Romeo more room to play when offering lease terms.
"We are not trying to undercut the segment," says Hogeveen, who is clearly undercutting the segment. He adds that Alfa Romeo is using "conquest cash" (a common national marketing incentive) and applying it to the lease terms to lure customers from other brands to Alfa Romeo.
Alfa Romeo has to do this because it has no customer base to draw from, whereas many long-standing luxury brands perform lease "pull-aheads" of up to five months for existing customers—essentially eating those remaining payments—to keep customers loyal to their brands, Hogeveen says.
Plus, while other luxury brands have to spread their marketing incentive budget to cover discounted sales to corporate and rental fleets, Alfa Romeo is engaging in no such tactics, Hogeveen says.
So how does the $299 Alfa lease stack up to the top finishers in our Big Test? Digging through the fine print, here's a comparison chart, effective as of July 6 (noting that deals might change based on how loudly the CEO screams at the VP of sales):
CAR LEASE MONTHLY DOWN EQUIV
TERM PAYMENT PAYMENT MSRP*
Alfa Romeo Giulia 24 mo $299 $3,299 $39,985
Audi A4 36 mo $399 $2,793 $38,050
Mercedes-Benz C300 36 mo $399 $4,193 $41,725
Lexus IS 200t 36 mo $299 $3,999 $39,425
Cadillac ATS 39 mo $349 $3,279 $35,590
Jaguar XE 25t 36 mo $249 $3,995 $35,895
BMW 330i 36 mo $419 $4,344 $41,395
*including destination charges, before incentives
So, there you have it in plain math. The Alfa is not only the best compact sport sedan according to Motor Trend testers, but it also comes with a screaming lease deal. And for those commitment-phobes who worry about reliability, if your Italian romance indeed goes sour, you're out of the relationship in less than two years. In the meantime, you are driving one of the quickest, most gorgeous, best-handling sedans on the planet.