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2013 and earlier Lexus IS 250 / IS 350 Lease Questions

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  • jaybeejaybee Posts: 17
    I have been offered this lease deal on an IS250 AWD and want to know what everyone thinks:

    36 months, 15K miles per year
    MSRP $35,164
    Cap cost $33,529
    Money factor .00235
    $3800 due at signing, includes $2500 down, $600 acquisition,$170 doc fee, first payment, and taxes

    $442/month (includes 6% sales tax)

    I know people recommend nothing down when starting a lease, but I get paid large amounts sporadically, so it works better for me to have lower monthly payments. Does this sound like a good deal?
  • quest3quest3 Posts: 33
    I have read edmunds leasing info and understand a bit about the in's and out's. But and anyone who can help me out please feel free I'm still not grasping all of it. I leased a A4 a yr ago it's nicely equipped stickered at a little under 37 and I worked out a deal for 35 and some change. My payment is 490 a month for 2 yrs and I paid nothing down.Hey I'm happy thats a nice low payment to me. So now my wife wants us to get in addition to the Audi either the IS350/250 or the new ES350. So I check the prices and they are for the most part in the same range price wise I paid for my Audi give or take a few grand up or down. But when I went to the Lexus dealer they were talking about payments in the low 600$ with a few grand down for the ES350, high 600$'s for the IS350 and alot for even the IS250 well over 500 this was for 3 yrs a full yr more than my Audi which has everything other than Nav and Bose ., I'm baffled the Lexus salesperson said to me "Wow" thats a low lease payment you have on your Audi and I thought isn't that the idea of a lease? Does Lexus not offer leasing specials like that of Audi? I mean I'm sure Audi is still getting over somehow but I don't care as long as I have a low payment and came out of pocket no money. Can some one please explain this to me because to me
    Audi A4 35K vehicle--- 490 a month for 2 yrs --- and
    Lexus ES350 38K vehicle----well over 600 a month for 3 yrs-- does not compute to me. Oh and thats with money down on the Lexus. Please explain anyone
  • liverichlyliverichly Posts: 25
    All you need to know to calculate a lease payment is the adjusted cap cost, money factor, and residual.

    There are two parts to a lease payment, the depreciation fee and the finance fee. (There's a 3rd part, taxes, but that's unique depending on which state you are in)

    To calculate the depreciation fee you take (Cap cost - Residual) / term = depreciation fee

    To calculate the finance fee you take (Cap cost + Residual) x Money Factor = finance fee

    For example if your adjusted cap cost is $43k and the residual on a 5-year is $14.6k, the depreciation fee is ($43k - $14.6k) / 60 months = $473.33/mo

    The finance fee would be ($43k + $14.6k) x (.0024, which is a darn good money factor and also not negotiable) = $138.24/mo

    So the total payment would come out to $611.57

    Go back over your Audi A4 lease numbers and using the above forumula you should come out with your $490/mo payment. Then you can see why your Audi lease was such a great (or not great) deal compared to the Lexus.
  • toydrivertoydriver Posts: 227
    Thanks for going through the details of a typical car lease. I have a question about the "finance fee" which you said equals the (cap cost + residual)x money factor which is then added to the depreciation fee to get your monthly payment.

    My question: Why do you ADD the residual value to the cap cost? The residual value of the car is that portion which you don't use, and return at the end of the lease. It seems more logical to me that one should SUBTRACT the residual from the cap cost then multiply by the money factor. ( but logic rarely enters into a finance agreement when greed is better )

    Please understand that I am just trying to understand the lease calculation process and wonder if this could be an error.
    If the customer is paying a finance charge on that portion of the car value that he/she doesn't use, then I say that is "just not right".
  • kyfdxkyfdx Posts: 29,801
    That is a good question...

    Actually, what you are paying finance charges on, is the average of the residual and the cap cost. (The lease balance is the cap cost at the start of the lease, and the residual at the end of the lease).

    So, you would think that you would add the two figures and divide by 2. But, they factor the divisor into the money factor... So, it is one less calculation that is needed..

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • toydrivertoydriver Posts: 227
    kyfdx (HOST):

    Thanks. sooo, the devil's in the divisor !
  • jaybeejaybee Posts: 17
    Can anybody advise me on this:

    I have been offered this lease deal on an IS250 AWD and want to know what everyone thinks:

    36 months, 15K miles per year
    MSRP $35,164
    Cap cost $33,529
    Money factor .00235
    $3800 due at signing, includes $2500 down, $600 acquisition,$170 doc fee, first payment, and taxes

    $442/month (includes 6% sales tax)

    I know people recommend nothing down when starting a lease, but I get paid large amounts sporadically, so it works better for me to have lower monthly payments. Does this sound like a good deal?
  • liverichlyliverichly Posts: 25
    Did they tell you the residual?
  • jaybeejaybee Posts: 17
    I don't think they mentioned the exact number for the residual, but he said the residual was "around 60%", which I think is incorrect.
  • liverichlyliverichly Posts: 25
    Hmmm, leasecompare.com says it's around 58-60% from their lenders, so that figure might not have been too far off, I've also read here and there that captive financing sources usually have slightly better residuals.
  • rseegerrseeger Posts: 4
    If you take 442 payment from 3800 you get 3358. If you take that and divide it by 36 months you get an extra 93 dollars. So add that to the 442 and you get an average monthly rate of 535. That is 19K plus change you are paying on a car with a sticker of 35K. So 60% of the car is 20K. So minus the interest in the lease you should be paying around 13K from the cap cost for the lease. That would be around 6K in interest to drive around in the lower model of a lexus. I just dont see the logic.

    For example our "family" car is a Subaru Tribeca. 39K car and we pay 420 a month including taxes for same lease specs with no money down other than first month and title. That is a huge difference in cost. Just an opinion of someone going crazy trying to find another good lease on a nice car.
  • ksimm1ksimm1 Posts: 3
    I had a Lexus dealership in Cincinnati run a preliminary lease quote without any negotiations. They came back with a 60% residual and a .00305 money factor for Tier1. I think they are jacking up the money factor for backend gains.

    What are Lexus's money factors for Tier1 & Tier1+ for June on the IS 250 AWD?
  • ksimm1ksimm1 Posts: 3
    I qualified for Tier1+ for an IS250 and they quoted me a money factor of .00295 for June (.00195 for 1Pay). Anyone else get something different?
  • has anyone ever heard of the multiple securities lease???

    apparently you put down money and get it back at the end, minus the interest...

    quoted 457 a month for the is awd no nav

    msrp 35100 selling price 33000

    36 months 12k with the 4275(mult sec)

    we were told the residual was 60..duno about the mf tho...

    how does this sound???
  • liverichlyliverichly Posts: 25
    On an IS350 it was .00275 about 20 days ago for tier 1.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hey ksimm1. Unfortunately, Lexus is not currently providing any sort of lease support on the IS. As a result, if you were to lease one through Lexus Financial Services, you would have to use its standard lease program. Its buy rate standard lease money factor varies depending upon what part of the country you are in, but it should be around .00255 right now for consumers who qualify for its "Tier 1+" credit tier. As you suspected, it appears as though the dealer you are working with is indeed marking your car's month factor up. Make sure to insist that they use its buy rate to calculate its monthly payment.

    Car_man
    Host
    Smart Shopper / Prices Paid Forums
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi christina271. Making multiple security deposits is a great way to lower your vehicle's monthly payment. It's much better than making a large down payment because you actually get the deposits back at lease-end. A base 2006 IS 250 AWD has a spread of a little over $4,100 between its full MSRP and dealer invoice prices. You are being given a discount of $2,100 on the car that you're interested in. This is a decent discount, but you might want to stop by the following discussion to see how much other community members have paid for similar cars recently: "Lexus IS 250/IS 350: Prices Paid & Buying Experience".

    Car_man
    Host
    Smart Shopper / Prices Paid Forums
  • asderikasderik Posts: 1
    Hi all. It's my first time buying (actually renting) a new car. I leased an IS350 from Lexus of Massapequa in NY on May 6. I got the luxury package w/ Navigation, headlamp washers, park assist...From reading the posts sounds like I did a lot of things wrong. Please help...

    Here goes - I paid MSRP of $44537 on a 36mos, 12k/year w/ a monthly payment of $650 on Tier 2 credit. I put $3185 cap cost reduction totalling $6269 at signing (including NY tax of 8.375% and everything else). The car would cost $26,153 to buy at the end of the lease. My money factor is .00310 w/ 60% residual! :mad: Is the money factor so high b/c of the Tier 2 credit?

    What went on here? Did I get slammed? Is there anything I can do now to fix it? I thought high-end car dealerships weren't like the rest.

    I know I didn't get anything thrown in. 3 dealers said IS350 was in high demand, they couldn't take anything off. Maybe I'm just too nice.

    Also, my car had 27 miles when I drove away from the dealership. Isn't that a little high? I also noticed that someone else test drove the car :cry: I bought while I was going into negotiations (what negotiations). Aren't they supposed to have designated cars for test drives?

    The salesperson also said the car was just serviced (maybe said it by mistake). Is it normal for new cars to be serviced? He told me it was being cleaned but the car was still dirty I replied. I wonder what they were fixing.

    Also, after driving it for two weeks, I started noticing the car was pulling to the right so I brought it back to the Lexus of Massepequa service center for an alignment but the problem wasn't fixed!

    Lastly, I was quoted a $595 to a firm $525 from the same salesperson for a factory spoiler. I ended up buying the same one new for half the price on eBay. When I went to get the alignment and the spoiler installed w/ Lexus, I noticed they charged me $219 on the work order for the spoiler I already bought which was later refunded. The interesting part was that the spoiler cost only $219. He quoted me more than double. God...is that legal?

    I'm thinking of filing a complaint against the dealership. What grounds to I have to do so?

    I'd appreciate feedback on how it should've been done. How bad of a deal I got compared to others and what can be done going forward. Thanks all!
  • eddo1eddo1 Posts: 3
    Just offered for IS350 with sport, Nav/ML, spoiler, preferred accessory

    I live in california tax rate 8.5%
    MSRP - $44264
    Selling price $40988

    12k per year "out of pocket" $1070, monthly payment $684including tax

    15k per year "out of pocket" $1094, monthly payment $708 including tax

    Does this sound right? Good Deal? I still need to tell them I'm a return customer, maybe get a lower MF
  • liverichlyliverichly Posts: 25
    Sounds like a good selling price, that include acquisition? What's the term of the lease? Can't really say of those payments are great or not, 36, 48, 60 mo? Did they say what credit tier you are?
  • eddo1eddo1 Posts: 3
    liverichly

    Just bought last night. He wanted me to come right after work. Guess they wanted another sale before the month and quarter is over.
    MSRP 44264 Selling price 40,588 (yea, another $400 discount) With the 40588 price he included perm-plate and some plastic mats(not the rubber all weather ones). I wish he did the clear armor and rubber mats but I guess that's cuttin too much into their profit.

    So, selling price 40,588
    cap cost reduction $0
    Out the door $1040
    month payment $652 including tax
    36month 12k/year
    residual 60%
    MF 0.0029
    My credit score is high,almost 800 so I should qualify for Tier 1, if not tier 1+. So they probably jacked up the MF for some back end profits. I thought Car_man said the MF for june if around 0.0025 or 0.00275. The dealer also refused to take into consideration that I'm a previous lexus owner. I think there is a Encore program where you can get some lower MF. Anyways, I think it's a fair deal. I got sick of the other dealers jerking me around.
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Hi asderik. The selling prices of leased vehicles are negotiable, just as if you were paying cash for or financing them. I believe that the Lexus IS 350 has been selling fairly well lately, so while you may not have been able to negotiate a huge discount on your car you probably should have been able to get at least a slightly lower price. While the money factor that you were quoted is higher than Lexus Financial Services' best buy rate for this car, it appears as though you do not qualify for its top credit tier so this factor may not be nearly as bad as you think. Your main problem was not negotiating your car's selling price, but like I said the IS is selling fairly well, so you car's cap cost may only be $500 to $1,000 higher than it should have been which isn't too bad. You can always stop by the following discussion to see how much you might have been able to get this car for: "Lexus IS 250 / IS 350: Prices Paid & Buying Experience". Unfortunately, now that you have signed your contract and have physically driven off in your car there is nothing that you can do to renegotiate your deal. Just chalk this up as a learning experience and do additional research before you lease next time. 27 miles is not that much mileage for a new car, so don't worry about that. I don't think that you have any grounds to file a complaint against this dealer. All they were trying to do is make money on your sale, like any of us would do if we were in their situation.

    Car_man
    Host
    Prices Paid Forums
  • dr85262dr85262 Posts: 2
    I am new to leasing. Is the residual value or the Money Factor negotiable or are those set by the bank?

    If those are not negotiable, then the only negotiable item is the purchase price of the vehicle?

    Thanks
  • dr85262dr85262 Posts: 2
    What is the "buy rate"? How will I know they are using it?

    Thanks
  • CarMan@EdmundsCarMan@Edmunds Posts: 38,515
    Welcome dr85262. 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.

    In answer to your specific question, vehicles' residual values are set by banks and individual dealers do not have the authority to alter them. Banks set vehicles' buy rate lease money factors as well. Dealers do not have the ability to lower banks' published money factors, but they often are allowed to mark them up to add additional hidden back-end profit to deals. So the best way to get a good deal on the vehicle that you want to lease is negotiate as low a selling price as possible on it and then have the dealer calculate its lease payment using its buy rate money factor.

    Let me know if you have any other questions.

    Car_man
    Host
    Prices Paid Forum
  • aztudioaztudio Posts: 3
    I'm in the market for the IS 250 AWD, with Nav & Luxury Package. The quote I have from a dealership here for a 48mths/15,000mile lease is:
    MSRP: $39,824
    Sale price: $36,998
    Residual Value: 46% $18,318
    Money Factor: .00285
    $570.69/month before taxes. (With my own calculation it should've come up to $546.79/month)

    Has anyone out there made a recent lease transaction in colorado? I'm relocating to redmond/seattle area in washington, so if anyone from Colorado or Washington State had just recently leased the IS250 AWD, with Nav & Luxury, could you please share what offer you got?

    My relocation includes the shipping of my car so I could purchase from either Colorado or Washington.

    Thanks in advance for any help :) I've been following this forum for a few weeks and I've learned a lot.....:) :shades:
  • mykal1mykal1 Posts: 3
    Car Man,

    I am looking to purchase or lease either the IS250/350. I would obviously prefer the 350 but would be open to the 250 to get the navigation system and luxury package for about the same price as a 350 with just luxury package. My goal is to keep my payment under $500/mo including tax(8%). I am flexible as far as term and would like to keep my mileage at 12k/yr. I was wondering what would be the best way to go as far as down payment. Also, would it be best to sell, buy, or trade the car back in at the end of the lease? If I end up selling the car on private party at the end, should I even be concerned about going over the miles? And with money factors realtivley high on the Lexus IS250/350 right now, would it be smarter to finance? The 2007 models will be comming in this next week, should I wait to see if the money factor will be better, or will my payment be more on the new model because they won't be discounting them as much? Thanks!
  • billmvbillmv Posts: 145
    Can anybody tell me if Lexus has a program where you can adjust the miles allowed in the middle of the lease? A Mercedes dealer was recently telling me that you can start with 12,000, then at the one year mark you can switch to 15,000 for the remainder of the term by paying a little more per month. He did not tell me what this would cost.

    Such a program would drop the annual allowance to an average of 14,000 on a three year lease, which would be more in line with our needs. I don't know how much more you would have to pay to increase your allowance mid-term, but it would be worth doing if the incremental cost were comparable to the cost of moving from 12,000 to 15,000 initially. That seems to work out to about 10 cents a mile, or a savings of $300 during the first year of the lease. Not a lot, but it pays for a couple of decent dinners out.

    Any intel would be appreciated. thanks.
  • billmvbillmv Posts: 145
    Does anyone know if Lexus now automatically includes gap insurance in their leases, and if so, what provisions that coverage might include?

    I was very recently told by a Mercedes salesman that Mercedes does provide automatic gap insurance, and that it also protects against loss of "equity" (cap cost reductions, etc.) of up to $50,000. Interesting program if true. It would seem to solve the problem of having any down payment or cap cost reduction at risk in case of theft or total loss. I know from these posts that our host CarMan is definitely against the use of cap cost reductions for exactly this reason, so it would be interesting to hear his thoughts on this subject. Are you listening, CarMan?

    Thanks!
  • billmvbillmv Posts: 145
    Hi Car Man

    Could you (or anyone who really knows) please let us all know ASAP what the residuals and MFs are for Sept. for the '07 250/350s?

    I'm hot on the trail of a deal (36/15,000) and need to know. Thanks!
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