Do luxury cars have better or worse lease residual values?

It depends heavily on the brand. European luxury brands like BMW and Mercedes-Benz historically have lower residual values than Japanese or Korean luxury brands, meaning you pay for more of the depreciation in your lease payment. Lexus, Genesis, and Volvo tend to have stronger residuals relative to their price point, which translates to lower monthly payments. A higher residual value is better for the lessee: it means the car holds its value and you finance a smaller portion of it. Always compare residual percentages, not just monthly payments, when shopping luxury leases.