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Infiniti M37 M56 Lease Questions

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Comments

  • indemandindemand Posts: 14
    Hi Blastphemy,

    My take on this is just a tad different. Using your numbers and not factoring loyalty, tax, down payments, MSD's (all for the sake of simplicity) I come up with:

    Total cost of a 24 month lease = $27434.50
    Total cost of a 36 month lease = $31,229.90

    So you can then drive your slightly "flawed" M56 in the 3rd year for $3,795.40 or $316.28 monthly.

    If you decide to trade it will cost you:

    Residual $35,907.70 plus
    Remaining payments $10409.97
    Less remaining amortized interest ~ $760 for a total of

    $45557 (Adjusted Lease Balance)

    The big if is the residual value, but at 59% or $39232.05 this leaves you with a balance of $6,324.95 plus the new car payment.

    I just early teminated a lease and made a few K, but I was fortunate. This usually does not happen. I don't anticipate this good fortune on my new M.
  • delta737hdelta737h Posts: 603
    edited July 2010
    blastphemy,

    A common mistake when comparing leases with unequal terms is to look at the total cash outlay. The problem with this approach is the it ignores the time-value of money as the dollars cover different time periods and are associated with different units of time.

    The best way and, perhaps the easiest way, is to perform and incremental cash flow analysis as follows...


    36 mo. Payment = 900
    24 mo. Payment = 1,196
    Incremental difference = 296

    36 mo Lease Bal after 24 mo = 45,010
    24 mo Lease Bal after 24 mo = 39,232
    Incremental difference = 5,778

    For simplicity sake, we'll conveniently ignore front-end and back-end transaction costs (acq fees, purchase option fees, etc) assuming they're the same for both leases. So, essentially, we're assuming that they're a wash. Also, I'm using the base payments (without tax) as these are the payments used to amortize both leases (CA collects taxes on the payment streams as they are received). I've also computed the lease balance for the 36 month lease after 24 months (45,010) using the implit interest rate (4.245%) in the lease using what is known as the actuarial or constant yield method. If you examine the lease termination clause in the IFS lease agreement, more than likely it uses this methodology to determine the lease (adjusted) balance at any point in time. If I'm mistaken, I apologize. The lease balance of the 24 month lease is simply the residual value. The purchase option fee is, as assumed above, identical for both leases and, therefore, a wash. The buyout is assumed to be the lease balance plus the purchase fee plus tax.

    So now, it becomes a no-brainer... As you can see, 24 x 296 = 7,104 exceeds 5,778 clearly indicating that you're better off with the 36 month lease IF YOU'RE GOING TO PURCHASE AFTER 24 MONTHS. Observe that the cost of money for the 24 month lease alone is about 5.76% compared with 4.22% for the 36 month lease ... a 1.54% difference.

    You can stick the $296 per month saved under your mattress by selecting the 36 month lease and you'll have more the enough to cover the difference between the lease balances after 24 months!

    And finally, for whatever it's worth, I do not advise making a cash down payment (i.e., cash cap reduction). A car is a depreciating asset and is purchased for consumption; and so, it's not an investment. No savvy investor would ever invest in stock that they know will depreciate or lose value over time. Also, if the vehicle is lost or stolen and never recovered, the insurance carrier will only pay ACV (actual cash value or est. market value). If your lease balance exceeds the ACV, your GAP protection will cover the difference.

    It might be helpful to remember the following before deciding to make a cash down payment or cap cost reduction...

    If the GAP equals or exceeds 0, then you owe nothing and receive nothing. However, you've lost your entire cap reduction or dp. The insurance company will pay the fund provider the ACV and the GAP carrier will pay the fund provider the difference between the amount owed (lease or loan balance) and the ACV. And so, the fund provider doesn't lose; you do!

    If GAP < 0, then you'll receive, from the fund provider, the difference between the ACV and the lease balance or loan balance plus any transaction costs incurred by the fund provider. However, this may not be sufficient to cover your cap reduction or dp. In which case, you would lose the difference. The only thing the fund provider wants is the outstanding balance owed plus any transaction costs. You, of course, get whatever remains (the scraps so to speak).

    And, yes, you're much much better off applying those cap reduction dollars toward MSD's instead which will lower your cost considerably!

    Hope this helps.

    John
  • ghstudioghstudio Posts: 952
    Just to confuse things a little more, you may find that you actually want the 39 month lease. Don't try to judge it by mf and residual, you really have to run the numbers. You may find that it's a better choice than the 36 mo, even if you sell after 24 mos.

    If you are considering selling before the lease is up, then you definitely should go the Multiple Security Deposit route to reduce the mf/interest rate as much as possible. I'm not sure but isn't the buyout the sum of the remaining payments plus the residual value. If so, the higher the mf/interest rate, the higher the "interest" that's included in all those payments you really aren't making.
  • delta737hdelta737h Posts: 603
    edited July 2010
    ghstudio,

    The early buyout is calculated, in most leases, as follows...

    1st. Calculate the lease balance by finding the present value of the residual plus the present value of the remaining payments discounted at the interest rate implicit in the lease. Lease agreements refer to this rate as the actuarial or constant yield rate.

    2nd. Assess if there is a purchase option fee.

    Adding these plus any miscellaneous fees plus tax determines the buyout price. What people need to do is read the early termination clause in their lease agreement to see exactly how the lease balance is determined. I always create a lease amortization schedule in excel so that I always know my lease balance and buyout at any given point in time. This keeps the fund provider or dealer honest and, believe me, there were dealers that inflated lease balances in the past paving the way for a minefield of moral hazards. This was fairly prevalent in the past when fund providers refused to give customers their lease balances deferring, instead, to dealerships. Well, gee whiz, what do you think was going to happen?

    Today, fund providers will provide lessees with a their lease balances and buyout via an early termination letter IF REQUESTED. However, fund providers have been known to make mistakes and, yes, it happened to me. The greatest protection against being scammed or cheated is EDUCATION. It's pretty difficult to cheat someone especially when they've done their homework correctly.

    John
  • blastphemyblastphemy Posts: 34
    Hi, Car_Man ...

    The web page http://www.newcars.com/Infiniti/M56/rebates shows the lease rates you quoted, but then says "OR" and shows money factors of 4.8%/0.0020 (24-month), 4.44%/0.00185 (36-month), and 3.96%/0.00165 (48-month) without any explanation of how one qualifies for those. Do you have any explanation?
  • carnut12carnut12 Posts: 35
    Leased an M37x w/ premium packaje

    MSRP 52615

    39 months 12k miles

    $0 due at signing 670 with TX sales TAX (6.25 %)

    I did come out of an Infiniti lease (3 months early, they waived the payments and got $1000 loyalty cash which rolled into the deal)
  • pedro45pedro45 Posts: 17
    Pardon my frustration but why do so many people fail to include acquisition cost when giving deal details. I sense many people have no clue about what the actual cost of the car is they are leasing and only care about their monthy payment.

    Of course, we can do the calculation of acquisition cost by backing it out, but why do so many not know or not give that VERY important piece of information?
  • carnut12carnut12 Posts: 35
    why do you care what the acquisition cost was, it was $0 out of pocket and a $670 with tax payment. If you have acquisition cost that you have to pay divide it by the amount of months the lease is for and add it into the payment.
  • delta737hdelta737h Posts: 603
    edited July 2010
    Pedro45,

    I feel your pain. Most folks don't understand leasing and have no idea what's important and what isn't. Yes, it's very frustrating when people just list a few items like MSRP and payment. It doesn't tell me anything.

    What people need to do is ask the dealer for a hard copy of their LEASE WORKSHEET. This is a computer generated document that gives all the details (data) of the lease making it very easy for someone (who knows what they're doing) to analyze and evaluate.

    John
  • bernsterbernster Posts: 27
    HI Car Man

    What are August Infiniti Financial Services' lease money factor and residual value for a 36 month lease of a 2011 M56 with 12,000 miles per year? Any incentives?

    Thanks
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    The lease program details that I have posted here are definitely correct. I'm not sure why other sites say what they say.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi bernster. Here's the information that you're looking for.

    Infiniti Financial Services' August buy rate lease money factor and residual value for a 36 month lease of a 2011 M56 2WD with 12,000 miles per year are .00176 and 56%, respectively for consumers who qualify for its top credit tier.

    Infiniti is currently providing a $1,000 loyalty cash incentive on leases of this car, and some back-end stairstep dealer cash (up to $750, but there's no way to know exactly how much the dealer is getting, if anything) on this car.

    Car_man
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  • Can someone provide clarification on the correct residuals and MF for August. Looking at a M37x Sedan 39 month 15k. I was quoted .00140 and 55%. Very preliminary stages and existing IFS customer so assume tier 1 rate. Thanks.
  • What are the current money factors and residuals for a 2011 M37X for 24 months and 36 months, 15k per year. Also is there a way to get the residual for a 20-25k pear year.
    Also what is the overmileage penalty.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi infiniti51. The numbers that you were quoted are correct.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi spsviggen99. You definitely do not want to lease this car for 24 months. Infiniti no longer provides support on two-year leases.

    Infiniti Financial Services' August buy rate lease money factor and residual value for a 36 month lease of a 2011 M37X with 15,000 miles per year are .00130 and 56%, respectively for consumers who qualify for its top credit tiers.

    15,000 miles per year is the highest mileage allowance that IFS publishes residual values for. If you need to drive more than that, you will have to purchase additional miles on a per-mile basis. It is less expensive to do so at lease signing than it would be to wait until lease-end and have to pay an excess mileage penalty. At lease-end IFS charges $0.25/mile for excess mileage. Again, I'm sure that it provides some sort of discount from that for excess miles purchased at lease signing.

    Car_man
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  • redbullredbull Posts: 26
    Hi Car_man,

    I am looking to do a 36 month lease on a 2011 M37 with Sport and Sport Touring (also including mat package and illuminated kick plates). I have negotiated a price of dealer invoice as follows:

    MSRP: $56,660

    Invoice: $51,801

    My FICO score is around 800.

    I am going from a lease on a 2009 Maxima - the dealer says I can qualify for the $1,000 loyalty rebate, so will use that towards the drive off.

    I am not paying any down payent towards Cap Cost Reduction.

    Can you let me know what the mf and residual would be on this car in August, as well as monthly payment before tax?

    Also, I have the option of having the dealer divert a car arriving on Oct. 10 in Southern California to my local dealer in SF Bay area. Do you think it's risky to wait until then as the lease rates and incentives could change? (It's difficult to get my color combo with a Sport touring car, which is why it's benificial to wait - this way I would get exactly what I want).

    Thank you, I appreciate your time!
  • I am looking at this vehicle with a $52,975 msrp. The dealer has offered a $51,000 buy price plus paying last two payments on present lease totaling $1600. The lease price on a 39 month lease including tax, fees, all in is $800 per month. What do you think about the terms? Residual is 58%
  • ghstudioghstudio Posts: 952
    The "buy price" should be invoice or darn close to it....and if you were leasing a nissan/infiniti, you then get another $1000 loyalty bonus off on the capitalized cost.

    If you don't tell us your tax rate, there is no way anyone can comment on your specific price.
  • redbullredbull Posts: 26
    The Loyalty program ($1,000) doesn't apply if you were leasing a Nissan - only if you are going from Infiniti to Infiniti. I know because I've asked about 10 dealers - one of them read me the policy over the phone.

    They also have something called "Conquest Cash" (also $1,000) if you are coming from another brand to lease an Infiniti. Right now the G is eligible for that - but not the M. Bottom line is there is no cash incentive right now for the M, but that could always change in September.

    They will cover the last 3 months of your Nissan lease to go to an Infiniti, however, but you must do so by Sept. 30 (of course that could be extended into October, you never know).
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    edited September 2010
    Hi redbull. Infiniti Financial Services' current buy rate lease money factor and residual value for a 36 month lease of a 2011 M37 2WD with 15,000 miles per year are .00154 and 57%, respectively.

    Using these numbers, an MSRP of $56,660, and a selling price of $51,801 (which is really around $1,000 over invoice once the loyalty cash is taken into account), I estimate that this car's zero down, pre-tax monthly payment would be around $672.

    This lease program is scheduled to run through September 30th. It's difficult to say what Infiniti's October lease program will be like. October represents the start of a new quarter. It is possible that Infiniti will lower its residual values by a point or two next month. Having said that, I would think that if it does it would lower its money factors by enough to keep its vehicles' payments fairly similar to what they are today. While it's difficult to predict what Infiniti's future lease program on this car will be like, I personally don't see any reason why it would be significantly worse than it is today. If I was dead set on a specific set of color / options and I could get it by waiting a month, I personally would probably do so. On the other hand, if I really didn't care that much I probably would just lease a vehicle off of the lot now.

    Car_man
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  • The lease on my 07 M35 expires this month. I received the following quote to replace with a 2011 M37S

    MSRP - $54,825 Initial Cap Cost - $51,000

    Residual - 56% Money Factor - .00186

    This is a 39 month lease with 20,000 miles a year

    Payments are $785.87 (This includes taxes of $3,125, and acquisition fee of $595 added in. Less the $1,000 loyalty from Infiniti)

    Down Payment is first month plus $270.24 for registration/inspection. Total $1056.11.

    Do the numbers look like there is any room left to negotiate?

    Thanks!
  • giantbeargiantbear Posts: 1
    edited September 2010
    I am deciding if an offer for an m56 all wheel, 15k miles, 39 months with the tech and tour package is a good one for the Nassau county LI area.

    Money at signing is $4694.71 including first month payment of $884.14 ($3,810.57 without). I think there may be a few hundred in play on the down and maybe $10 on the monthly. I am also getting a $500 credit towards damage on the old car.

    MSRP - $67,910
    Cap Cost - $63,000
    money factor .00172
    residual - $33,955, 53.9%

    Down payment is taxes, acquisition fee, $1000 cap reduction ofset by $1000 loyalty and $100 misc.

    Am i getting a good deal or is their room here. I almost feel like the residual is a little low.
  • alfstinky1alfstinky1 Posts: 34
    edited September 2010
    Looks like sales have been so good on these models that Infiniti wants more money. Read this link.

    http://www.realcartips.com/news/0309-infiniti-prices.shtml
  • I am coming out of 24 month M35x lease which is supposed to go back to IFS the middle of October. I could take a car this month or wait. I have a few questions for Car_man or anyone else who knows the answers. What would be the Residual and MF for a 2011 M37x on a 36 month lease with 12,000 miles a yeare? What are they for a 15,000 mile lease? Am I correct in understanding that there are know more IFS 24 month leases?

    I have enjoyed 2 24 month leases from IFS and prefer that but it appears I will need to go to 36 months. Is there another option of the vehicle that makes financial sense.

    Thanks for all the help (al always).

    L
  • I understand that IFS is not currently offering a 24 month lease on the M (and maybe not on anything). Is this a seasonal adjustment or does this appear to be a permenant change? Does anyone think (or know) if there will be a viable 24 month lease in October??

    Thanks

    Larry
  • I am looking into doing a lease on a new M37x with Tech. Could someone let me know what the residual and MF should be on a 36 month lease with 12k miles per year. Also - what is the lowest number of miles per year you can get on a lease through IFS and how would that change the residual and mf?

    Thanks

    njnewcar11.
  • the dealership terminated my lease early by 3 months (G35x $530per month)

    m37X
    premium package
    agreed value of vehicle 49,166.18
    gross cap cost 51173.13
    loyalty credit 1000
    total out of pocket 1957 (first payment, bank fee, $450 down (i wanted a specific payment) DMV, registration)
    depreciation 18,185.70, residual value 31,467.65

    Total monthly payment $575

    I think i did alright?
  • leehallleehall Posts: 3
    edited October 2010
    Called Houston area Infiniti dealership on 10/8/10 for M37 MF and residual, stated 36mth, 15,000 miles per year are .00181 and 57%. Did dealer markup MF because IFS promotions are same as September?

    Here's what the dealer quoted me today for M37 w/ Sport, Premium, Sport Touring, Aero kit and many accessories. Price is using VPP Plan D pricing, which basically gets you invoice. http://www.insidenissan.com/monthly_dplan_infiniti_2011.html

    Storm Front Grey

    MSRP=$59,045
    Invoice=$53,971
    My Quote=$53,325

    Optional Equipment & Accessories
    R01 Sport Package
    U01 Premium Package
    K02 Sport Touring Package
    R94 Aerodynamic Package
    N92 Illuminated Kick Plates
    L92 Carpeted Trunk Mat, Trunk Net & First Aid Kit
    S92 Vehicle Alarm Impact Sensor
    Tint
    Wheel locks
  • Here's the information that you're looking for, lsachs.

    Infiniti Financial Services' current buy rate lease money factor and residual value for a 36 month lease of a 2011 M37X with 15,000 miles per year are .00131 and 57%, respectively for consumers who qualify for its top credit tier.

    IFS' 12,000 mile per year residual value for this car would be 2% higher.

    You are correct about 24 month leases on Infinitis. Technically one could still lease an Infiniti for 24 months, but it is no longer providing support on 2 year leases so it doesn't make sense to do so.

    Car_man
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