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Ford Escape Lease Questions

CarMan@EdmundsCarMan@Edmunds Posts: 38,515
Hi everyone. Please use the following discussion to post any questions that you have about leasing a Ford Escape. Thanks.

Car_man
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  • crg4crg4 Posts: 8
    Car_man,

    Having a devil of a time calculating a reliable lease quote on a 2005 Escape XLS (FWD, 4 cyl). There are 2 things that are fouling me up:

    1) How do I figure in the current $2000 cash back promo currently being offered?
    2) What would constitute a reliable money factor and residual value for this SUV?

    I reside in zip code 11209.

    The bottom line monthly payment I calculate is: $332.05 (taxes paid up front). This is based upon a residual value of .53 and 9% interest rate. I used $18,685 as the negotiated price but am quite honestly not sure if this constitutes a "fair" deal.

    Any input you have would be greatly appreciated. Thanks in advance!

    Rob
  • crg4crg4 Posts: 8
    Yeesh! :blush:

    Re-examining my math, I see that my numbers are way too generous. Changing the residual to .55 and 4% interest rate, I came up with a bottom line monthly payment of $259.97 (taxes not included).

    Also, to clarify, the negotiated price of $18,685 includes the destination charge. Again, your thoughts are greatly appreciated!
  • Hi crg4. Ford actually reduced its customer cash on the 2005 Escape from $2,000 to $1,000 this morning. Don't worry though because when it did so, it introduced a $1,000 bonus for vehicles that are financed or leased through Ford Credit. Since you are leasing, effectively you will be eligible for the same $2,000 total cash allowance. Normally you would need to take this cash into account when negotiating your Escape's selling price, but since Ford is providing employee purchase prices on the 2005 Escape to everyone these cash incentives should be automatically deducted from your truck's capitalized cost.

    As far as the lease program that is available on this truck goes, the last time that I saw Ford Credit's lease rate and residual value for a 36 month, 15,000 miles per year lease of a 2005 Escape XLS 2WD they were 7.25% and 43%, respectively.

    Car_man
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  • I just saw Ford's lease deals for X-plan holders today on the 06 V6 Escape XLT with moonroof/Bose stereo. They list the deal as $250 per month with $999 down plus TTL. That sounded great, and might make leasing more interesting to me--I've never leased before, but it might work well for me as I really do not drive that much (8K a year) and don't want a high car payment. I would also like a newer car more frequently.

    So, I contacted my favourite sales rep at the local Ford dealer for details on this plan. She arrived at a final monthly payment of $294.34 in addition to the $1000 down. She claims this payment includes TTL on a vehicle whose MSRP is $24,600, X-Plan price or net capitalized cost is $23,192.96. She says the "total before discount" on which the residual is calculated is $25,185.

    The money factor (she called it the APR) is 1.25%. Is that good or bad, Car_man? I don't really understand why she's calling it the APR.

    I think the "total before discount" has to be wrong, as my calculations of the net cap cost put it at $21,192.96 which includes the $1000 "lease cash" Ford is offering and the required $1000 down payment. If so, that's over $4000 in TT&L, which doesn't seem right.

    It's my understanding that leasing a car was just like purchasing one in terms of how you negotiated the price. If that's the case, Ford is offering an additional $1500 in cash back to regular purchasers of the Escape. Could I expect to get the dealership to knock this money off the net capitalized cost, too? If I was just plain buying the truck, my price before TT&L would be $19,692.96. I'd like to negotiate a lease based on that price. Am I crazy to think that's possible?

    Thank you for your advice, Car_man. I don't know much about leasing but am trying to give myself a crash course.

    thanks, Charlotte
  • Hi there Charlotte. Since you are new to the world of leasing, you definitely should check out the following informative articles that are available here at Edmunds.com prior to visiting any dealers: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment.

    Ford Credit uses actual interest rates to calculate the interest portion of lease payments, instead of the money factors that most other banks use. This actually makes it easier to tell how good a rate you are getting. If you want to convert the 1.25% lease rate that you were quoted to lease this truck (which is very good BTW) into an approximate money factor equivalent, divide it by 2400. So a lease rate of 1.25% is equal to a money factor of around .00052.

    As far as the cash incentives that are available on leases of this truck go, the $1,500 customer cash that Ford is currently providing on the 2006 Escape is not compatible with leases through Ford Credit. As you mentioned, there is a $1,000 bonus for leasing this model through Ford Credit right now though. Also, Ford is running a special program on the '06 Escape that waives the first payment on any lease or finance contact through Ford Credit right now.

    Good luck and let me know if you have any other questions.

    Car_man
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  • bpacbpac Posts: 4
    You should be able to lease an escape for Just under 300 a Month. If you hit them hard it may be less. I havee seen Explorer leases even cheaper but they guzzle gas
  • rws0131rws0131 Posts: 27
    does anyone know the residuals for the escape? 24 month and 36 month? (12k a year)
  • I've just been offered 1750 down + 331.75/mo on a '06 Escape Limited + comfort + moonroof + safety for a 36 month / 12k lease. These are out of the door prices - they include a 6% tax.

    Seems good enough, I'm taking it.
  • Hi rws0131. Ford Credit's current 24 month, 12,000 miles per year residual value for the 2006 Escape XLT 4WD is 61%. Its current residual for a 36 month, 12,000 miles per year lease of this truck is 53%.

    Car_man
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  • I have a trade in that will leave me with $3000 extra and this car has a $1500 incentive deal for a lease (so the dealer told me). That would make $4500 toward the lease price. The MSRP is 29,850 but I got them down to $28,000. They are offering me a lease with all fees and taxes included for $285/month for 36 months w/12k miles a year with a buy-out of 15,000. I only have to pay to transfer the plates and registration out of pocket. Is this a good deal? Please help I am located in NYC tax is 8.25

    Thank You!

    -Stacy
  • Hi Stacy. Let me begin by saying that there's nothing wrong with trading your current vehicle in. If you want to do so though, have the dealer that you are working with cut you a check for it rather than using the proceeds from your trade as a down payment for your lease. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your Focus would be exactly the same, regardless of whether you had put $3,000 down, or had made absolutely no down payment at all.

    Let's work up a sample lease payment on the car that you are interested in using Ford's current lease program and see what we come up with. According to my calculations, if you were to lease a 2006 Ford Escape Limited 4WD with an MSRP of $29,850 and a selling price of $26,500 through Ford Credit right now for 36 months with 12,000 miles per year, your zero down, pre-tax monthly payment should be around $349. A $3,000 down payment would drop this monthly payment to around $263, but again you are better off not putting any money down.

    Car_man
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  • ezzellezzell Posts: 2
    Car_man,
    I am in the process of choosing a vehicle. The best test drive I completed was for a used Ford Escape XLT. The vehicle did have some engine noise, so I am interested in a newer Escape. I was told that there is a way to lease pre-owned 2003 & 2004 Escapes. This is actually the first time I have heard a dealer mention this. I am in the 14222 zip code. I am really stuck with this search at this point. I have spent 3 months test driving, doing research, etc. I would like to choose a vehicle and secure financing online. Do you have suggestions for financing companies as well? Thank you.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    hi ezzell. Many manufacturers lease certified pre-owned vehicles to consumers. The problem with leasing used vehicles is the lack of support on them. Manufacturers have an incentive to provide cash incentives and special low interest rates on the leases of new vehicles because their sale helps their bottom line. Automakers usually do not provide much if any support on leases of used vehicles. As a result, used vehicles often turn out to be as expensive to lease or only slightly less expensive to lease than equivalent brand new vehicles. If you are considering leasing a used Escape, make sure that you compare the cost of doing so with the cost of leasing a new one. You may find that you are better off going new.

    If you decide to finance your new truck instead of lease it, it is in your best interest to get pre-approved to do so before discussing financing with any dealers. Doing so serves two purposes. One, it gives you an idea of what sort of rate you will qualify for and two it often motivates dealers to beat the rate that you already have in hand. You can get pre-approved with a local bank that you do business with, a credit union, or one of the several banks that conduct business on-line.

    Car_man
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  • catlover15catlover15 Posts: 2
    Car_man,

    Help! I am looking at a Ford Escape Hybrid 4WD loaded with MSRP of $34,315. My dealership will sell it to me for invoice but I haven't sprung my latest idea on them. Since I am somewhat questioning the longevity of the hybrid, I think leasing it would suit my worries better. If I like it, I can buy one in 3 years. I am a bit ignorant about residuals, etc. I live in the St. Louis, MO metro area where my tax rate is 7.850%. Missouri is a little archaic since purchasing a vehicle requires paying for the entire tax within 30 days to the Dept of Revenue which is like a 2nd down payment. I miss California where they just lump it into the same payment. Enough regressing, I am wondering what kind of offer I should expect on this. I do have a 1999 Ford Taurus to trade in that I purchased from the same dealership 7+ years ago and have been offered $2500 for. What kind of out of pocket expenses should I expect at signing?

    Thanks for your time.

    Dana :)
  • catlover15catlover15 Posts: 2
    I should say that I would likely turn the vehicle in at the 36 month point, want to look at a 3/60 extended warranty because 3/36 wouldn't quite cut it and I would want a mileage allowance of at least 15,000. Leasing means I don't have to come up with the out of pocket lump taxes on $30k, that is a plus unless the money due at signing a lease is ridiculous. I also hope that the % financing is good on a Ford Red Carpet Lease and the fact my husband and I are 2 years into a 3 year lease on a Sport Trac isn't an issue for Ford Motor Credit.

    Thanks again.

    Dana :)
  • scott31scott31 Posts: 280
    Carman, what are the current lease #'s (resd and mf) on a 3 yr 10k (12k if that is the lowest) on an Escape Limited FWD.

    Do you also have #'s on the Ford balloon note financing?

    Thanks!
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi Dana. You're right about hybrid models' lack of track record. This is why many banks have a tough time setting residual values for them. It is difficult to say what sort of repairs, like the replacement of the battery, hybrids will need down the road and how much these repairs will cost. For this reason, leasing one is a good idea. Unfortunately, the lease programs on most hybrids are not very good. If you were to lease a Ford Escape Hybrid through Ford Credit right now for 36 months, its base lease rate would be a whopping 9%! I find this strange because Ford has really been cranking up the incentives on the Escape Hybrid lately. Its special finance rates on it were enhanced to 0% for up to 60 months and 1.9% for 72 months. This is obviously a lot better than Ford's lease rate for this model. As a result, if I was in the market for one, I personally would probably finance it and just sell it after a couple of years if I did not like it or was concerned about its reliability.

    If you do decide to lease this truck, make sure not to make any sort of capitalized cost reduction, aka down payment, on it. I always advise consumers not to make down payments when leasing because if their leased vehicle is stolen and never recovered or totaled in an accident, their down payment essentially disappears. You can still trade in your Taurus if you want, just have the dealer cut you a check for it. You should be able to lease this truck, only having to pay your first month's payment, a security deposit equivalent to that payment rounded up to the nearest $25 or $50 increment, Ford Credit's $595 acquisition fee, and any required state taxes or fees at signing.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hello scott31. This truck's lease program varies depending upon what part of the country you are in. I would be happy to give you an idea of what its current lease program is like if you tell me what state you are in. Unfortunately, I do not personally keep tabs on banks' balloon note programs so I can't help you out there.

    Car_man
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  • scott31scott31 Posts: 280
    My apologies Car_man. I'm in VA
  • mkjr16mkjr16 Posts: 1
    Hi Car_man,

    I live in Southern California (90266) and am interested in leasing a Ford Escape XLT 3.0. I was recently given the following quote from one of the local Ford dealerships...

    - 36-month lease/12,000 miles per year
    - $25,545 MSRP (includes a $1,500 Rebate)...no money down
    - $352 monthly payment (includes taxes)

    They're offering me a 1.5% APR and the only drive out fees are the first month's payment and a $210 DMV fee. Any idea if am getting a good deal? Is there any room for negotiation?

    Thanks,
    MK
  • Hi Car Man

    Can you explain the pro and cons with leasing and pros and cons with buying. Ford Escape or Jeep Cherokee 2006 in Las Vegas Nevada

    Niecey
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    No need to apologize, scott31. Most community members never mention where they live. OK, if you were to lease a 2006 Ford Escape Limited FWD through Ford Credit for 36 months with 10,500 miles per year on or before July 5th, its base lease rate and residual value should be around 2.75% and 51%.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hey MK. The lease rate that you were quoted for the Escape that you are interested in is very attractive and it's right in line with what Ford Credit's base lease rate is for this model right now. This is a good thing. It would be easier for me to give you my opinion of this deal if you were able to provide me with this truck's selling price. This is a very very important number for consumers to know. Without it, you don't know how much of a discount you are getting on the vehicle that you want to lease. Let me know what this number is and I'll tell you what I think.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi Niecey. Both of the trucks that you are interested in, the Ford Escape and Jeep Grand Cherokee, typically have attractive lease programs available on them. If I personally was in the market for either one of them I probably would lease. Having said this, there's nothing wrong with financing them through their captive finance companies or through an independent bank. The advantage of leasing is that you get to drive both of these trucks without paying much at signing and with a low monthly payment. One of the major disadvantages of leasing is that you're pretty much stuck with your truck for several years, or however long your lease is on it. Sure, consumers can get out of leases early, but it is usually fairly expensive to do so. Not to mention the fact that you never really "own" a leased vehicle.

    Car_man
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  • I am looking to lease a loaded 2007 Escape Hybrid 2wd for 3 years, 12K per year in Chicago, IL. I was wondering if anyone knew what they are using for a residual value? The MSRP is 34,905 cost 32,145, not sure what my x-plan price is yet. Thanks
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi wildfire13. Ford Credit's current 24 month, 12,000 mile per year base lease rate and residual value for the 2007 Escape Hybrid 4WD are an unattractive 9.0% and 61%, respectively. The numbers for an otherwise identical 36 month lease are 9.0% and 52%.

    Car_man
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  • I e-mailed a Ford Dealer and they told me 3.25% and 49% residual. The interest rate is good but the residual stinks. I will wait for the Honda CRV Hybrid next Fall. At least that will be worth something down the road. Thanks.
  • Car bought in Toronto, Ont.
    I own a 2006 Ford Escape, great vehicle btw, coming up to the 12 mth service. Question, do I have to get all the service 'suggested' at that interval? :confuse:
    The want to charge me $400 for things that aren't going wrong. For instance, wheel alignment???
    Do I have the right to say "no" and not be punished at warranty? :P
    I have no desire to keep the car after lease is over, but I would like to lease again at time's up? :blush:
  • Hi homermedic. One of the great things about leasing is that you don't have to spend a whole lot of money on maintenance. Just get your truck's oil changed every several thousand miles and possibly the tires rotated every once in a while and you'll be fine. Performing any other maintenance on your truck would be a waste. You don't even have to go to a Ford dealer to get your oil changed, you can do it yourself or go to a Jiffy Lube type place. If you don't go to a dealer, it would be a good idea to save your receipt though. You really don't have to get your tires rotated either, but if you don't your tires might wear unevenly and it is possible that you would have to pay a penalty for excess wear and tear or buy new ones at lease-end.

    Car_man
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  • Looking at 36 month lease (12k miles) on a 2007 Escape XLT 4WD with moonroof and cargo pkg. Invoices for $24,670.

    What kind of incentives are available? What is the going money factor or interest rate as well as residual value?

    I qualify for X plan. All dealers quote me a price slightly higher then invoice though. What's the true X plan price compared to MSRP or invoice?

    Current ads in my area are for $249/month lease, but I assume this is A plan. Is it realistic to assume I can negotiate a lease for under $270/month?
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