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Volvo S40 Lease Questions

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  • Hello to all,
    I am interested in a Volvo in Minneapolis. There is a 2006 S40 T5 2WD for sale at a dealer in the area for $27,500. It is new (not a program return or anything), so I am hoping to work out a nice lease for around/under $300/mo. Is this unreasonable given that there aren't incentives or lease support for 2006s now? Or has there been a change? How should I proceed? What should I expect from a bank financed lease (loans for cars in MN are typically a percentage or so higher than the national average, guessing lease money factors are, too?)? The model I am interested in has manual transmission, climate pkg, premium pkg, audio pkg, and traction control. Would it be smarter for me to look at 2007 T5 AWDs? Prices on 2007s at the same dealer are $33,260 and $34,925 for models similarly equipped to the 2006 I like. My credit isn't the greatest (less than 700, over 650). Can I do it?
  • I am looking for help in reviewing a lease offer that I have been quoted for an S40 2.4i in St. Louis, MO.

    Electric Silver Metalic, Automatic, T-Tec,Sunroof, Select Package, Climate Package.
    MSRP - $29,605 - Their Offer $24.995
    Net Cap Cost - $25,590
    Lease Term - 36 Months / 15,000 Miles Per Year
    Money Factor - .00223
    Residual - $14,507 + Lender sets a nominal purchase or disposition fee.
    Monthly Payment - $396+ Tax (Approx 7.5% depending on residence zip code)
    No Down Payment
    Due at Lease Signing - $476 (1st pymt. + $50 License)

    I feel that this is a relatively good deal especially with no down payment. I am wondering if there is any room for me to negotiate a better purchase price. Is there any information that anyone can provide me to possibly negotiate the price down about a $1,000 to $23,995 and get the payments under $400 per month with no money down. Any help would be greatly appreciated.
  • Hi Chris. I see that you are leasing this car through an independent bank rather than VW Credit so that you can take advantage of the special $4,500 cash incentive. The price that you were quoted for this car looks pretty good to me. It's probably around $500 over invoice or so once the cash incentive is backed out, which is a good deal. I'm not sure what the $1,095 "Processing Fee" is though. If this is something like a "doc fee" that is being tacked on by your dealer, it's nothing more than added profit and this deal isn't that good. If it is an acquisition fee that is being charged by the bank that you are leasing through, it is necessary, but still way too high. Most banks charge an acquisition fee of around $600 or so on leases.

    The payment that you were quoted is probably within a few dollars of what it would cost to lease this car through Volvo Finance right now without the $4,500. While I wouldn't say that this is a "good" deal in the sense that I would never pay $500 a month to lease Volvo S40, this isn't a terrible deal for this model once the questionable "proc fee" is backed out.

    Car_man
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    Prices Paid Forum
  • Greetings hatl22. I don't believe that Volvo is providing lease support on 2006 models any longer. If you really want to lease this car, you will probably have to do so through an independent bank. Use the $3,000 cash incentive that is currently available on leftover 2006 S40s to negotiate as low a selling price as possible and then have the dealer work up a lease payment for you. Unfortunately, I suspect that this car is going to cost a lot more than $300 a month to lease. Even a 2007 model, which has a better lease program available on it, will cost more to lease than that. It probably is not a good idea to lease a 2006 S40 right now.

    Car_man
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    Prices Paid Forum
  • Hi c_anvil. It looks as though this lease is being run through an independent bank rather than through Volvo Finance. The advantage of doing this is you can take advantage of a $3,000 cash incentive. When this cash incentive is backed out of this deal, you are getting around a $1,600 discount. This is a pretty good discount on a car that doesn't have much of a spread between its MSRP and dealer invoice price. I doubt that you are going to get much more of a discount than that on this car, but you can always stop by the following discussion to see how much other community members have paid for similar cars: "Volvo S40: Prices Paid & Buying Experience".

    There are a lot of really nice cars out there that one can lease for nearly $500 a month. I personally wouldn't pay this much for a Volvo S40 2.4i, but this is probably as cheap as this car is going to be to lease right now.

    Car_man
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    Prices Paid Forum
  • fhpafhpa Posts: 1
    I leased a 2005 S40 in 2005 for a four year term. I've been considering trading it in and wanted to know if there are any pitfalls that I should be aware of. It currently has very low miles (16k. Any suggestions?
  • gratgrat Posts: 1
    I have a 2004.5 S40 2.4i. I love everything about it but the gas mileage. I only get about 12-14 city and 15-17 highway (no matter what type of gas I use). I've seen reviews where everyone is impressed with mileage, so I'm thinking it's just mine. Can I do anything about this?
  • Just got my first car in 15 years....

    S40 T5 AWD Automatic Titanium Gray Audio/Sirius/Premium/Climate
    3 year and 15K miles/yr

    MSRP $35,625
    Invoice $33,262
    Agreed Price $26,692 (after incentives + dealer discount)
    Gross and adjusted Cap Cost $27,487 (no cap reduction, Price+acquisition fees)
    Residual Value $16,387.50

    Drive off= 1st month + Fees = 729.19
    Payment $400.46 + CA Tax = 433.50

    I hope this is a good deal!
  • Car Man,
    I am thinking about leasing an S40 T5 AWD. What is the money factor and residual for 36 months and 10K miles per year. Also it seems like there is more incentive money available then the $500.00 listed on this web site. I live in the Chicago Area where there is an extra tax hit on leasing. Thanks
  • I am sorry to say that it is usually fairly expensive to get out of leases well before their scheduled end dates. In order to do so, you need to purchase the vehicle that you are currently leasing from the bank that you are leasing it through. It often turns out that it costs more to do so than your vehicle is worth on the open market. Furthermore, many banks expect consumers who end their leases early to still make all, or at least the depreciation portion of their remaining lease payments. As you can see, this can get very expensive.

    You can determine approximately how much it will cost you to get out of your current lease by comparing its purchase price to its value on the open market at this time. You should place a call to the bank that you are leasing your vehicle through to find out its exact price. Once you know exactly how much money it is going to cost you to buy your leased vehicle you need to compare it to its current value on the open market. You can find out approximately what your vehicle is worth by looking up its Edmunds.com True Market Value in the Used Vehicle Pricing section of this site. You also may want to stop by the following discussion: "Real-World Trade-In Values". Some of our most knowledgeable community members frequent that discussion and they are often kind enough to give others their opinions of vehicles' value. Don't forget to check to see if you are still on the hook for your remaining lease payments. The difference between your leased vehicle's current value and how much it will cost you to buy it plus any remaining lease payments that you are obligated to pay will equal the cost of getting out of your lease right now. You may find that you are better off waiting until you are closer to the scheduled end of your lease to get another new vehicle.

    Car_man
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    Prices Paid Forum
  • Hi grat. I'm sorry to hear about your car's poor gas mileage. This particular discussion is for community members to ask questions about leasing this car. You will probably have better luck getting feedback on your gas mileage issue by visiting the following discussion: "Volvo S40".

    Car_man
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    Prices Paid Forum
  • Hi jsevenseven. For some reason, I don't believe that Volvo is running a special lease on the S40 T5 AWD through Volvo Finance this month. As a result, if you want to lease one you will have to do so through an independent bank. The good news is that Volvo is currently providing a special cash incentive of $5,500 on '07 S40 T5 AWD models that are leased through independent banks. Make sure to take this huge incentive into account when negotiating your car's capitalized cost.

    Car_man
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    Prices Paid Forum
  • qbrozenqbrozen Posts: 17,409
    Is that ONLY on the T5 AWD?
    is there any cash on other S40 models? and, if so, how much?

    thanks.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hey qbrozen. Volvo has cash incentives for leases of all variants of the 2007 S40 that are leased through independent banks. Its allowances are $3,000 on the '07 S40 2.4i, $4,500 on the '07 T5, and $5,500 on the '07 S40 T5 AWD. It also is providing $500 owner loyalty / conquest cash on the '07 S40 that you should be able to take advantage of of you are currently leasing or own any vehicle and lease a new one through an independent bank.

    Car_man
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    Prices Paid Forum
  • qbrozenqbrozen Posts: 17,409
    thanks car_man.

    Are those numbers still good for March?

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • kathiewkathiew Posts: 1
    Hi,

    I'm looking at leasing an S40 2.4i with the select package and leather interior for 48 months with 15K miles/year.

    The dealer isn't budging on the MSRP (29, 655) although they were up front about the $3500 in incentives available. They quoted a monthly pmt of $370, including tax. They didn't give me the money factor they used and quoted a residual of 11,063. With, $2,000 out of pocket, I can't get the numbers to jive with any lease calculator I've tried. The monthly payment seems like a decent deal, regardless. Thoughts???
  • qbrozenqbrozen Posts: 17,409
    i haven't checked a calculator, but if they won't budge off MSRP, I'd look elsewhere. If the cars were selling well, it wouldn't need those big incentives.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • Hi Car_man - do you know if the $5,500 incentive for a T5 AWD lease is still on now (it's March 18) and available in Minneapolis? A Google search doesn't find this deal anywhere (except in this forum).

    Thanks much.
    jpierotti
  • bgrobgro Posts: 3
    Went with my friend to help her out with leasing a Volvo S40. She ended up with a 2.4i Select Package w/ Auto Trans. Sticker was $28,160. She ended up paying $300 monthly (tax included) $1200 out of pocket. 36 months 15k miles. I thought this was a really good deal. Thoughts? This was at Maroone Volvo in Delray Beach, FL.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    No problem qbrozen. I believe that Volvo enhanced its cash incentives for leases of '07 S40 models through independent banks for the month of March. It is currently providing $3,500 on non-Volvo Finance leases of the '07 S40 2.4i, $5,000 on the '07 S40 T5, and $6,000 on the '07 S40 AWD. It is still providing $500 owner loyalty / conquest cash on it.

    Car_man
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    Prices Paid Forum
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hello kathiew. A base 2007 Volvo S40 2.4i has a spread of over $1,400 between its full MSRP and its dealer invoice price. I'm surprised that the dealer that you spoke with wouldn't provide you with any sort of discount on this car. It's not a bad vehicle, but it's not like consumers are beating down showroom doors to get it. It definitely would be in your best interest to comparison shop a little bit to see if you can find a dealer that is willing to give you a discount on this car.

    As far as this car's lease program goes, Volvo Finance's March buy rate lease money factor and residual value for a 48 month lease lease of a a 2007 Volvo S40 2.4i with 15,000 miles per year are .00227 and 42%, respectively.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi jpierotti. Volvo actually increased its cash incentive on leases of the 2007 S40 T5 AWD through independent banks to $6,000 in March. You can go with this program, or take advantage of Volvo Finance's special lease program for this car.

    Car_man
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  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Greetings bgro. You never mentioned this car's selling price. This number will show me how much of a discount your friend was given on it and it will enable me to estimate what its monthly payment should be. Let me know what the selling price was and I will be happy to give you my opinion on your friend's deal.

    Car_man
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  • drpie1drpie1 Posts: 5
    any info yet on april if current incentives will continue??
  • smat74smat74 Posts: 9
    How would one go about finding "independent banks" that can take advantage of these incredible incentives? Volvo's own lease program isn't that great, IMHO...
  • drpie1drpie1 Posts: 5
    us bank is the one offering the current deal
  • smat74smat74 Posts: 9
    Should I just call them up? Their website doesn't have much specific info about leasing and how to start. Thanks.
  • drpie1drpie1 Posts: 5
    you need to deal with the dealer i dont believe they deal directly with consumers as most leasing companies do not
  • Hello all - wanted to post the latest deal I've been working on at Volvo of Princeton:

    2007 S40 2.4i with Select, Climate, Auto and Metallic paint (MSRP of $29,310)

    To purchase - final price - $24,602

    To lease for 36 months, 18k/year:
    Cap Cost - $22,852
    Cost Out of Pocket - ~$1600 (includes Acquisition fee, document fee, various NJ state fees [those suck], 1st month)
    Money factor - 0.00207 (or ~4.9%)
    Residual - 47%

    Final lease price - $383.33/mo (Note - this includes NJ tax of 7%)

    I plan on completing by the end of the week - they are motivated by the end of the month and end of the quarter.

    Anyone have any thoughts how we could drive down further?
  • qbrozenqbrozen Posts: 17,409
    well, i ran it through the lease calculator and it seems like it all adds up. Considering you are about $6500 below MSRP, it seems like you are getting full advantage of the dealer cash. So I think you've got all you'll get. Of course, that is my unprofessional opinion.

    By the way, Princeton is the ONLY volvo dealer I have found I like in Jersey.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

This discussion has been closed.