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Volvo S40 Lease Questions

CarMan@EdmundsCarMan@Edmunds Posts: 38,515
edited March 20 in Volvo
Hi everyone. Please use the following discussion to post any questions that you have about leasing a Volvo S40. Thanks.

Car_man
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Comments

  • cllawcllaw Posts: 32
    Hi All:

    I'm looking into leasing a 2006 S40i with select package, climate package, and automatic transmisson and metallic paint. I got a quote from dealer for $26,480 + tax and other charges. I just want to see if it sounds like a good deal. Since I'm looking into enter a 2 years/ 10,000 miles lease, can anyone give me some idea as to what is a reason captial reduction cost should be and what is a fair amount for the month lease payment etc. I'm a newbie here and I hope the imformation that I provide is enough. Many thanks in advance

    Alex
  • Hello Alex. I would be more than happy to give you my opinion of this deal, however you never mentioned what your car's full MSRP is. This is an important piece of information because it will enable me to see how much of a discount you are being given and it is necessary to calculate a sample lease payment. You may want to stop by the following discussion to get feedback on the price that you were quoted from other community members who have recently purchased similar cars: "Volvo S40: Prices Paid & Buying Experience". Once you provide me with these numbers I can calculate a sample lease payment on this car using Volvo Finance's actual current lease program.

    As far as what sort of down payment to make goes, consumers can and should lease any vehicle that they are interested in without making a down payment. 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 S40 would be exactly the same, regardless of whether you had put several thousand dollars down, or had made absolutely no down payment at all.

    Car_man
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  • cllawcllaw Posts: 32
    Hi Car Man:

    Thanks for your timely response! I really appreciated your help, let me give you the MSRP and I will certainly look into forums that you suggested.

    The MSRP for the S40 i that I'm looking into is $28,750 (not included taxes others fees) Since there is only 3 dealers in the New York area Metro area. I pick Bay ridge Volvo near my house as my first stop of the volvo search this time around.

    The reason I asked about the down payment is because I was surfing volvo's website and there is a lease offer for 3 years, 10,000 miles per year lease for $229 a month and$ 3,924 due at signing. The down payment sounds alright to me until you rise your point today, so I guess I will try to avoid that when I talk to the dealer. By the way, I'm interested in enter a 2 years, 10,000 lease , do you think any dealer in the New York, New Jersey area willing to do that because most of the lease out there is 36 months. Will the monthly lease payment amount be different if it is a 36 months lease, instead of 24 months? Sorry, I still a rookie on this lease contract and I appreciate if you can help me out

    Regards

    Alex :)
  • No problem Alex. You definitely will be able to lease this car for 2 years if you want. The reason why most manufacturers advertise 3 year leases instead of 2 year leases is that in most instances the monthly payments for 3 year leases are lower. This is because vehicles experience their highest rate of depreciation during the first year of ownership. With a 3 year lease consumers have an additional 12 payments to spread out this large depreciation hit over. Let's calculate a sample lease payment on the car that you are interested in and see what we come up with. According to my calculations, if you were to lease a 2006 S40i with an automatic transmission, an MSRP of $28,750 and a selling price of $26,480 through Volvo Finance right now for 2 years with 10,000 miles per, your zero down, pre-tax monthly payment should be around $413. Volvo Finance's lease program on this car is not very attractive right now. I would not be surprised if you were able to lease one for less than this through an independent bank and using the $750 dealer cash that is available on purchases of this car to reduce your vehicle's capitalized cost.

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  • I was quoted after a days worth of being at the volvo dealer in las vegas: s40 white, auto, t5, audio pkg, sunroof pkg(whatever they call it). sticker was $29995 or so. They wanted 2500 down, 4 year lease(so as all maintenance was included for life of the lease), and monthly payments were around $400.00. I would rather buy but the lowest the salesperson at the dealership told me was $500+ per month with 2500 down. should I lease? is it a good deal for 4 years, 400 a month or try to get them lower on a purchase? Is it feasable to buy this car ar 400 per month? I see a lot of postings, but the dealers here do not want to budge it seems. Any other way of going about this? Please help!
    Lost in vegas
  • I have a quote for a 2.4i with leather package, non-sports suspension, climate package, and auto tranny for $2,215.78 up-front and monthly payments of $375.63. The MSRP is $29,900. I requested info for residual value and cost of car and breakdown of up-front fees. The monthly payments are complete. Is this a good deal and how much more would a T5 be a month (same options, no sports suspension, FWD). I'm in the Newark, NJ area. Thanks.
  • Greetings batman702. Volvo's lease program on the 2006 S40 T5 is not very attractive right now. Volvo Finance's lease money factor for this car is currently .00275 for a 3 year lease, which is equivalent to an interest rate of around 6.6%. I would be happy to give you an idea of what your lease payment should be like using Volvo Finance's current lease program if you let me know what this car's selling price is. I can also work up a finance payment on this car for you as well with this number.

    Car_man
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  • Hi benjamins. You never mentioned the selling price of the car that you are interested in leasing. This is an important number for you as a consumer to know for two reasons. First, the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. Without knowing the price of the car that you want to lease you don't know how good a price you are getting it for. The second reason is that one needs the selling price of a vehicle that they want to lease is that it is necessary to calculate its lease payment. I would be more than happy to give you my opinion of this deal if you let me know what its selling price is.

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  • Car Man,

    My wife leased the s40. Hope that it is a good deal. The car looks quite striking in Brilliant Blue.

    The lease numbers are capitalized cost of $26797.12 on a $29,900 MSRP car, $15,274.50 residual, the money factor is .0021, and the monthly payment is $375.63.
  • Benjamins, the selling price that your wife got her S40 for looks very reasonable to me. It looks as though she got a good deal. I hope that she enjoys her new car.

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  • I am about to lease an '06 S40 T5. Everything on here is for the 2.4i, so I was wondering what anyone out there is paying on a T5. The car I am looking at has premium, audio, and climate packages, and electric silver metallic paint. I was quoted $437/mo. on a 36 month lease. I am not sure on figures for residual or interest, however the MSRP for this car is $31,700. Any opinions would be greatly appreciated. Thanks.
  • au94au94 Posts: 171
    sounds like a pretty good deal to me. we got a 06 T5 w/premium for 419. msrp was 31180, dealer dropped it to ~28000
  • Hi grecian713. You never mentioned the selling price of the car that you are interested in leasing. This is an important number for you as a consumer to know for two reasons. First, the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. Without knowing the price of the car that you want to lease you don't know how good a price you are getting it for. The second reason is that one needs the selling price of a vehicle that they want to lease is that it is necessary to calculate its lease payment. I would be more than happy to give you my opinion of your deal if you let me know what its selling price is.

    Car_man
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  • The selling price was ~$26,900, with tax and fees total ~$28,100. Payment of $450/month (higher than originally posted due to hight money factor).
  • How long is your lease term and what is your mileage?
  • au94au94 Posts: 171
    36/mo 12k miles.
  • sdiver68sdiver68 Posts: 119
    Any info on S40 AWD money factors and residuals for November? Specifally 3 yrs/12 and 15K per?

    Thanks!
  • Thanks for the additional information, grecian713. OK, so you were quoted a selling price of around $26,900 on a 2006 Volvo S40 T5 that has a full MSRP of $31,700. That is one heck of a discount on a car that doesn't have a whole lot of profit margin baked into it. I suspect that the dealer that you are working with is running this car's lease through a bank other than Volvo Finance and taking advantage of the $2,500 cash that Volvo is currently providing incentives on leases through outside lending institutions. This is still a good price for this car and $450 a month for it is a good payment considering the incentives that are currently available on it. If you like the car, I don't personally see any reason not to pull the trigger on this deal.

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  • Hi sdiver68. Volvo's October lease program was scheduled to run through November 30th, so baring any unexpected program change if you were to lease a 2006 S40 T5 AWD through Volvo Finance right now for 36 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00190 and 48%, respectively. The residual value for an otherwise identical lease with only 12,000 miles per year would be 2% higher.

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  • I am interested in either purchasing/leasing a new volvo S60. Instead of leasing and having the car sitting in my driveway, since I rarely drive, would it be in my better interest to buy the car and make the money back when I sell it? Does the Volvo retain its value or is there a better car to try to do this with? Any Advice would be greatly appreciated!
  • I was quoted a lease deal on a Met. Silver, 06 S40 T5, Prem, Sport, Audio, Conven. Pkgs. with an MSRP of $32,225 and a sale price of $26,807. The lease is for 36 months with 15k/year and the payment are $491down and $491/Month. The price seems amazing but the payments seem really high for this price. When I go on the Volvo website finance calculator, the payments are closer to $400/month. Can anyone offer me advice about what seems wrong with this deal? We have excellent credit. The residual value is $15,145. Thanks for your help!
  • Hi jcanal. Theoretically, a consumer who leased a vehicle for three years and one who financed it and sold it after three years would come out about the same. One variable here is the mileage that you put on your car. The lowest mileage allowance that I have seen for a lease of a new Volvo through Volvo Finance is 10,500 a year. If you drive way less than this, then one would initially think that you may actually be better off paying cash for or financing your Volvo and selling it when you are tired of it. I said "one would initially think" because Volvo artificially inflates the residual values that it leases through Volvo Finance. For example, a 2006 Volvo S60 2.5T driven 15,000 miles per year and sold after three years would probably be worth at most 44% of its original MSRP. However, Volvo supports this vehicle's residual value, boosting it to 51% for a 3 year 15k lease. This means that you have to pay for much less depreciation if you lease than if you owned the car and has sold it. As a result, I personally would lean towards getting a low mileage lease through Volvo Finance, unless as I said earlier you drive way less than 10,500 miles per year.

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  • Hey sbvolvo. Let's use Volvo Finance's actual lease program to estimate what this car's monthly payment should be compared to the one that you were quoted. According to my calculations, if you were to lease a 2006 Volvo S40 T5 with an MSRP of $32,225 and a selling price of $26,807 through Volvo Finance right now for 36 months with 15,000 miles per year, its zero down, pre-tax monthly payment should be around $379. This is obviously a lot lower than the $491 that you were quoted. What might be happening here is the dealer is using a special incentive that Volvo is providing on this car for leases through independent banks to lower its selling price and then using another bank's standard lease program to calculate your payment. Specifically, Volvo is paying $3,500 dealer cash on leases of 2006 S40 T5 models through independent banks. Unfortunately, this cash is not compatible with Volvo Finance's special lease program. You might want to ask the dealer to give you their best selling price without this car factored in and have them run your lease through Volvo Finance to see what your payment would be like then.

    Car_man
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  • jd728jd728 Posts: 1
    Hi.. I'm new to the idea of leasing a car...I live in NJ and was looking at the volvo s40 T5 awd...the msrp is $34,050...I want my payment to around #350/mo with no money down. I called one of the dealerships in my area to get a small idea what it would take to get it this payment...the salesperson said a down payment of about $3200. I'm assuming he was using the msrp. I was wondering if this sounds right to you? Do you think it is realistic to lease the car for $350/mo with no money down??

    Thanks for your help!!
    -JD
  • vva1vva1 Posts: 4
    Please help, I am being offered a lease for $360 a month on an automatic with select package, lease for 48 months/12,000 miles/yr(MSRP $28,860) I want to buy and the offer is $25,500 plus tax and title, no dealer fee??

    Is this any good? I have to make up my mind by the end of tomorrow as the deal ends tomorrow.

    Help!!!
  • peeshpeesh Posts: 1
    Im looking to lease a volvo S40 T5, MSRP $31,705, Price $25,971. I'd like to put $4,000 down (including a trade-in)..Was quoted monthly payment for 4403, for 48 months, 12,000 miles/year. This seems high to me, but am new to the process. Any advice would be much appreciated. Thanks
  • Hi
    I am new to the posting, but have been reading the board for awhile. I have been research cars and trying to figure out leasing.
    A local Volvo dealership has $0 money down leases, $299/mo for 36 months on S40's - I think MSRP is around $24k, an ad in the paper claims lease selling price around $19k.
    Sounds like a great deal, any opinions?
  • Hi, I just got done talking with my dealer and he wants to lease me a new Volvo S40 2.4i, I would end up paying 1000 due at signing (acquisition fee, first months payment, etc) and would be paying $310 a month for 48 months. This seemed high for me, as it is a BASE S40 2.4i, ZERO options on it. I also get a Ford discount, which I think is something like 6%.

    I see on the VOLVO website theres a deal for 299 a month for 36 months, $0 due at signing now. That is for 10.5k miles per year and I would be getting 12k.

    Still, the difference between 10.5k miles and 12k miles and a 36 and 48 month lease, it doesnt seem to matchup? Especially having a little bit of a discount with Ford. Just curious as to what I should do.

    Mike
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Welcome JD. 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.

    The lease payment for the car that you are interested in will depend upon its selling price. Always remember that the selling prices of leased vehicles are negotiable, just as if you were paying cash for or financing them. Shop around with a few dealers in your area, there should be a number of Volvo dealers in New Jersey, and get a price quote on the car that you want. Then have the dealer that you are working with calculate your car's lease payment using Volvo Finance's buy rate lease money factor and residual value. These numbers will vary depending upon how long you lease for and how many miles per year you need to be able to drive. If you let me know the length and mileage that you are interested in, I would be happy to tell you what this car's lease program is currently like.

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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi vva1. It would be a big help if you were able to provide me with this car's full MSRP. This number will show me how much of a discount you are being given and will enable me to use Volvo Finance's actual lease program to estimate what your lease payment should be for it. Let me know and I'll tell you what I think.

    Don't worry about deadlines that dealers try to push on consumers. While Volvo's lease program are scheduled to end every month or two, it almost always introduced a new program the following month that it at least as attractive, if not more so, than its current one. Manufacturers almost never just pull the plug on their lease support for a particular model.

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