Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!





2013 and earlier Lexus IS 250 / IS 350 Lease Questions

13468959

Comments

  • Hi aztudio. Through September 4th, Lexus Financial Services' buy rate lease money factor for a 48 month lease of a 2006 IS 250 is .00265 for consumers who qualify for its "Tier 1+" credit tier. If your credit is in good shape, make sure to insist that this factor is used to calculate your car's monthly payment. Let's take a look at your car's selling price. According to the latest information that I have seen, a 2006 Lexus IS 250 AWD with the Luxury Package and Navigation has an MSRP of $39,630 and a dealer invoice price of $34,690. There is a spread of just over $4,900 on this car. You were quoted a discount of $2,800 on the model that you are interested in, so there is still $2,000 to play with. I am not personally all that familiar with the market for this model right now, but I personally would not be surprised if you were able to beat this offer by at least $500 if you are in an area that has a decent level of competition. Make sure to stop by the following discussion to see how much other community members have paid for similar cars lately: "Lexus IS 250 / IS 350: Prices Paid & Buying Experience".

    Car_man
    Host
    Prices Paid Forum
  • Hello mykal1. I personally feel as though the best way to go with down payments when leasing is to not make one. I always advise community members against making down payments on leased vehicles because if their leased vehicle was totaled in an accident or stolen and never recovered, their down payment essentially disappears. Consumers can lease any vehicle that they want without making any sort of capitalized cost reduction. All you will have to pay at signing to lease a Lexus are your vehicle's first month's payment, Lexus Financial Services' $600 acquisition fee, and any required state taxes or fees.

    Most consumers who lease vehicle just have them inspected and return them at lease-end. Some lessees purchase their vehicles at lease-end, but doing so only makes sense if their vehicle's purchase option price is less than they would have to pay for a similar car on the open market. Lessees can purchase their leased vehicles at the end of their deals and try to sell them on their own or trade them in, but more often than not this is not a good idea because leased vehicles are rarely worth more than their purchase option prices.

    You're right, Lexus' lease program for this car is not that great right now. I do not anticipate it getting any better in the near future either (though it is difficult to predict exactly what manufacturers will do with their future lease programs). If you can get an attractive finance rate through an independent bank, there's nothing wrong with financing this car. I doubt that the money factors for the 2007 model will be any better, but the residual values should be. You may find that it is less expensive to lease a 2007 model than it is to lease a 2006 model right now. Whether this ends up being the case will depend upon how low a selling price you can negotiate on an '07.

    Car_man
    Host
    Prices Paid Forum
  • Hi billmv. Most banks do not let consumers switch their vehicles' mileage allowance mid-lease. I doubt that Lexus Financial Services allows this and I have never heard that Mercedes-Benz Financial Services does either. I suppose that lessees may be able to purchase additional miles on a per-mile basis at a discount up to a certain point in their leases. If you find out any more information on the Mercedes program that you mentioned, I'd love to hear it.

    Car_man
    Host
    Prices Paid Forum
  • Hi billmv. I am not 100% positive, but I believe that Lexus Financial Services does automatically include gap insurance in leases. You need to check with a F&I person at a Lexus dealership to find out of this definitely is the case and if so what exactly what the parameters of the coverage are. I have never heard that Mercedes-Benz Finance's gap insurance program refunds lessees down payments, but if this is the case it is a very interesting program.

    Car_man
    Host
    Prices Paid Forum
  • Hey billmv. I haven't seen Lexus Financial Services' lease program for the 2007 IS 250 / 350 yet. I suspect that I will have a chance to look at this car's new September lease program early this week, like Tuesday or Wednesday. If you don't lease before then, please feel free to ask me for the latest info. As far as this model(s) current lease program goes, I doubt that Lexus is currently providing any sort of lease support on it. If this is the case and you were to lease one through Lexus Financial Services right now you would have to use its standard lease program. The last time that I saw its buy rate standard lease money factor it was .00275 for consumers who qualify for its "Tier 1+" credit tier. This factor may vary slightly by region.

    Car_man
    Host
    Prices Paid Forum
  • Hi car_man, the last question I have left is the option to buy or not to buy at the end of the lease. Will that change residual or money factor that are set by the bank? Who sets the selling price after the lease. Anything that need to aware of? Thanks
  • billmvbillmv Posts: 145
    Car man:
    Thanks for the response.

    After I posted the question about gap insurance, I called my insurance broker to see what I could find out. I was told that I could have gotten gap insurance on my wife's leased '03 MB 230 Coupe from my insurance company, Safeco, for $16 a year. That's only $48 over a three year lease. I paid a one time fee of $125 for it from Bank of the West when I leased the car through a private leasing company 4 years ago. That's what they charged the leasing company, which passed the cost straight through without any markup. The MB dealer in San Jose where we bought the car wanted to mark it up to $525, which I found out later was the max BWE would allow. That's one reason we went with the private leasing company vs. doing it through MB, even though the MB dealer was also using BWE as the bank, had they done the lease.

    Moral of the story......call your insurance person first!

    By the way, it was at my local MB dealer, RAB Motors, where I heard about the "expanded" gap coverage program from a salesman. First I'd ever heard about it too. I won't be going back to discuss leases with them since my wife has since decided she wants a Lexus, so I won't be able to provide any additional intel about it. Perhaps another Marin County forum member knows something about this they could share?
  • billmvbillmv Posts: 145
    No, it will not. The residual is set by the entity providing the financing, whether it's the manufacturer or a private bank, like Bank of America. It's strictly based on the length of the lease and the number of miles allowed during the term of the lease. It's a percentage of the MSRP, and it's not influenced by what kind of price you negotiate for the vehicle. Two identical vehicles driven an identical number of miles are going to be worth exactly the same 36 months from now, even though one buyer may have paid list price and the other buyer got $3,000 off list.

    Do a matrix of nine boxes, like an enclosed tic tac toe. Across the top write 24, 36, and 48, the most common lease terms in months. Down the side write the most common mileage allowances, 10,000, 12,000, and 15,000 per year. You now have nine boxes to fill in with percentages which represent the percentage of the MSRP which will be applied to a lease for that term and mileage allowance. These are either set by the manufacturer or come from the Automotive Lease Guide (ALG) which is the bible of future valuation used by 99% of the banks which do car leases. When Car Man tells you what the residual percentages are for a particular make and model, fill in the appropriate box. I found that was a good way to envision how much change there was between the various terms and mileages. You'll notice that the residuals usually drop quite a bit between 36 and 48 months. That's because the estimated future value of a four year old car is not nearly as good as a three year old car, so keep that in mind when determining how long you want to lease a car for.

    The money factor is based on your credit, and is one of two numbers used to determine a lease payment which may be marked up by a dealer as a source of profit. (The other is the negotiated selling price of the vehicle.) If the manufacturer is providing the dealer with lease financing at a money factor of .00245, the dealer may mark that up to, say .00295, and quote you a payment of say, $400 a month, when the payment would have been say, $360 a month had the dealer used the .00245 money factor. The dealer can then pocket $40 a month and send the manufacturer $360. The dealer then makes an additional $1,440 profit on the deal that most buyers/lessees don't even realize he's making. ($40 x 36 payments = $1,440.)

    The selling price at the end of the lease is the residual value, which is clearly spelled out in the contract, plus whatever "termination fee" the financing entity charges if you buy the car. Perhaps $250, to "cover the paperwork." If you turn the car back to them rather than buy it, then the termination fee will typically be higher because they have to do the paperwork plus clean the car up for disposition, so that costs more. The latter termination fee should be spelled out in the contract, as the contract assumes the car will be coming back.

    Just check any contract VERY carefully. Go sit in a corner with your calculator for half an hour and figure out where every number on that contract is coming from before you go back to the F&I guy. Write down all your questions. Get solid answers you completely understand before you sign anything. Remember, he's a pro who runs these numbers all day every day for a living, so he can make them sing like a convict cutting a deal. You don't stand a chance unless you know exactly how the numbers should be crunched. They don't pay him to sit there and fill out contracts. They pay him to make money for the dealership from people who don't understand ALL the elements of the deal. He does that by playing with the numbers. The really good ones can pour you a cup of coffee with their right hand while running a 10-key under their desk with their left. "And your card was .....the 8 of spades!" "Good golly, Ethel!! How did that feller do that!?"

    Hope all this helps! Get educated and go get 'em! Let us know how you did.
  • billmvbillmv Posts: 145
    Hi Car Man. Glad to see you're back in action. We missed ya!

    Thanks for the reply on the Mercedes mileage switch thing. I too had never heard of that until this sales guy at RAB Motors in San Rafael (just north of San Francisco) told me about it a week ago. I'm pretty sure that a mid-lease purchase such as the one you outlined is what's going on. Unfortunately, I won't be talking to them again as my wife has since decided she wants a Lexus. All I know is that he said at the 12 month mark you could call them up and "adjust the mileage allowance up" if you found that you were driving more than you were allowed.

    Sorry I couldn't be of more help.
    Bill
  • billmvbillmv Posts: 145
    Hey Car Man. Just FYI, I was quoted a 60% residual on an '07 IS 250 (w/o nav) lease on Sept 1, 36/12,000. At 36/15,000 it dropped to 58%. This was at Lexus of Marin.
  • Hi Billmv, so if the MSRP is $44500 and residual is 60% then the selling price at the end lease would be $26700 + TTL fees? I already asked this question before but forgot to mention the lease term. What's average of 48 month residual percentage IS350 with luxury package? Thanks for the infos I'm almost ready for it.
  • It's 4 year lease term with 15K mile a year of 2007 IS350 with luxury package MSRP $44500. Thanks
  • billmvbillmv Posts: 145
    hello sthavorn.
    Yes, your math is correct. The selling price to you would be $26,700. You would also have to pay a (probably reduced) termination fee to the entity which financed the lease, plus sales/use tax on $26,700 to the state. I'm not sure what other fees you would have to pay, but that might vary depending on what state you live in.

    If you negotiate say, $3,000 off MSRP, then the depreciation component of your payment would be the difference between $41,500 and $26,700, or $14,800. Divided by 48 payments that's $308.33 per month. If you just paid list, then you'd divide $17,800 by 48 and the depreciation component would increase to $370.83. So it pays to negotiate price even if you're leasing!

    I'm not sure what the residuals are for the 2007 models, but here are some residuals and money factors I found somewhere which applied to 2006 models in August. I think for 2007 you could increase the residuals by 2%, but I don't think you should rely on the money factors being the same. They probably went up a little. I think they might be .00275 now instead of .00245. I'd confirm that with a couple of dealers. I think they usually change the first of the month, but that might not be the case now, because Lexus has had that Golden Opportunity Event going on for a while, and it runs through tomorrow, so they may still be what they were in August. Any help, anybody?

    2006 Lexus IS350 4dr Sedan

    24 mo/15k mi – Residual Value 62% of MSRP – .00245 Base Money Factor Rate
    36 mo/15k mi – Residual Value 56% of MSRP – .00245 Base Money Factor Rate
    48 mo/15k mi – Residual Value 46% of MSRP – .00245 Base Money Factor Rate
    60 mo/15k mi – Residual Value 37% of MSRP – .00255 Base Money Factor Rate

    36 mo/12k mi – Residual Value 58% of MSRP – .00245 Base Money Factor Rate
    48 mo/12k mi – Residual Value 48% of MSRP – .00245 Base Money Factor Rate
    60 mo/12k mi – Residual Value 39% of MSRP – .00255 Base Money Factor Rate

    2006 Lexus IS350 4dr Sedan w/ Navigation

    24 mo/15k mi – Residual Value 62% of MSRP – .00245 Base Money Factor Rate
    36 mo/15k mi – Residual Value 56% of MSRP – .00245 Base Money Factor Rate
    48 mo/15k mi – Residual Value 46% of MSRP – .00245 Base Money Factor Rate
    60 mo/15k mi – Residual Value 37% of MSRP – .00255 Base Money Factor Rate

    36 mo/12k mi – Residual Value 58% of MSRP – .00245 Base Money Factor Rate
    48 mo/12k mi – Residual Value 48% of MSRP – .00245 Base Money Factor Rate
    60 mo/12k mi – Residual Value 39% of MSRP – .00255 Base Money Factor Rate
  • Yes, you are right about taking some discout of MSRP that's the only way to bargain. Even the residual is off by 2% it wont make a big difference in monthly payment. The average selling price (net cap cost)as of today is between around $40500 - $42000. Thank you so much for all valuable informations.
  • On our first trip to the dealer, we drove the 250 and 350. We decided on the IS350 with all options, excluding navigation. We were interested in a 36 month lease, with 0 down, 12,000 per year. The dealer told us it would cost $700 per month. We didn't show interest and stated that 700 was quite a bit above where we wanted to be.

    The next day, we got a call offering us the same lease for 650. After some calling around, we found the same car at 2 other dealers (one is about 15 minutes away, the other is about an hour). Both offered the lease at 785 above invoice, which came to 580 per month, on a 2006 or a 2007. I was shocked that they would do it on a 2007. Just an FYI as to what some dealers will do, and what others won't.
  • What target price should I look for an IS250 rwd in the San Francisco/Bay area?

    I been offered so far over the internet for package A, $33,500 and $33,300. Also with above normal money factor.
    I appreciate any input, such as dealers and sales staff in the Bay area. I'm willing to drive 50 miles to make the right deal for 36/10,000 miles on a automatic IS250 rwd with HID lights and leather.

    Package A: 18" Alloy Wheels w/225/40R18 Fr + 255/40R18 R
    Summer Tires, High Intensity Headlamps with Adpative Front Lighting System (AFS), Premium Package Includes: Heated and Ventilated Front Seats, Wood Interior Trim, and Perforated Leather Seat Upgrade, Preferred Accessory Package:
    (MSRP: $35,097.00)

    Package B: 18" Alloy Wheels w/225/40R18 Fr + 255/40R18 R
    Summer Tires, High Intensity Headlamps with Adpative Front Lighting System (AFS), Navigation System Includes: Generation 5 Navigation System with Rear Camera, Bluetooth, and Voice-Activation with Destination Input, Premium Package Includes: Heated and Ventilated Front Seats, Wood Interior
    Trim, and Perforated Leather Seat Upgrade, Preferred Accessory Package:(MSRP: $37,647.00)
  • billmvbillmv Posts: 145
    hi eds1300. I think you should target a range of $31,500 to $31,900 for the A package if you live in Marin and go to the local dealer. What town do you live in? Not supposed to mention staff names on this forum.
  • Thanks billmv,

    I live in the Marina district and have sent out a quote request to Lexus of Marin but they have not responded.

    Although, the interior room of the IS250 is smaller than the
    325i, I really enjoy the leather, wood, and the layout of it much more than the 325i. It seems the base money factor of the IS is higher(.00265) vs. 325i(.00225), but I may just purchase the vehicle instead of leasing if the borrowing rate is favorable. I will be using MACRS depreciation and the residuals are close enough. I'm also looking at 06 Acura TL at cost to below dealer invoice. Any suggestions of other dealers that I should stop by?
  • billmvbillmv Posts: 145
    Ahhh, the Marina district. Good place to live. One of my favorite restaurants is there. A101. They sometimes have great dishes that aren't on the menu. The chef's name is Oscar. Call him in the afternoon and find out if they're having one that night, if you don't already know about this. Some of the locals do.

    Sounds like you need a CPA who can run the numbers both ways for you if you want to buy the car and use accelerated depreciation.

    No help on Acura dealers, but the prices seem great if they're below invoice.

    As far as Lexus dealers are concerned, I think some good ones are Concord and Serramonte from what I've seen on this forum. I'd try Marin again. Maybe your email went to someone who's off for a couple of days.

    Yeah, the Lexus MF is higher. It all depends on the desire of the manufacturer to support the leasing program.

    Good luck!
  • Good place to live sometimes, except for my rent expense. I live in Dallas also(primary residence). I've sent out 5 or 6 e-mails each to BMW and Lexus dealers and only a handful have responded. All ignoring my request for money factor, acqusition fee and so on. They just state only the sales price and the monthly payment, which they increased to Ch7 bankruptcy rate, even with my tier1+ rating.

    Acura TL sure does sound good about now. I just hope the G35 and the new C-class will bring these dealers back to earth.
  • ok, sorry for the stupid question. I have searched this forum but can't find how the Money Factor is used/calculated into the leasing calculation. I'm looking at an 07 IS350 in the Atlanta area, with a sticker price of 42,282 (Navi). First attmept at a dealer negotiation was 41,130 selling price, 24,100.74 residual and a payment of $700 a month on a 36 month lease. I told them they were crazy. Unless I'm figuring things in my own little way incorrectly, that doesn't even seem close to what I feel a decent deal should be. He threw the "but this is a Lexus" statement at me. I told him unless they could call me with something better, then NO. Can you help me with that MF calcultaion and maybe what you think is an acceptable deal for an 2007. By the way, I have been using the Lexus.com lease calculator to help me figure out what I am looking for. Thanks
  • billmvbillmv Posts: 145
    No problem..It's easy once you understand the math.

    There are basically four numbers that go into a lease calculation: The MSRP (including destination); the Residual Value at the end of the lease term you have chosen; the negotiated selling price of the car; and the money factor.

    The dealer controls, and can make money on, two of these: the selling price and the money factor. He cannot control the MSRP or the residual, which is set by the manufacturer, and is based on lease term and miles driven.

    If Lexus Financial is giving the dealer a .00265 money factor, then the dealer can use a higher rate when they quote you a payment, or they can make nothing on the financing component and pass that rate straight through to you without a markup. Obviously that's what you want.

    There are two major components to a lease payment: depreciation and interest.

    To calculate the depreciation, you multiply the MSRP by the residual value percentage, to get the RV in dollars. Then you subtract the RV dollar amount from the capitalized cost (negotiated selling price of the car + acquisition fee), and divide the result by the number of months in the lease.

    To get the interest, you add the cap cost to the RV, and multiply the result by the money factor.

    Add these two results together, multiply that result by the sales tax where you live, add the three together, and you have your lease payment. Depn + int + tax = payment.

    Be aware that there is always an "acquisition fee" added to the negotiated selling price, and that results in the cap cost. Lexus' fee is $600, and cannot be altered by the dealer.

    Many dealers will suggest you make a "cap cost reduction" (down payment) to bring down the monthly payment, but that's just moving money around and is not a good idea, since it could be lost if your car is totaled or stolen. Insurance may not cover this "gap." Call your insurance agent and get a quote on gap insurance. It will be MUCH cheaper than buying it from the dealer.

    Hope this helps. Go through the calcs a couple of times and it will become very clear that negotiating a good price and insisting on using a money factor that has not been marked up becomes crucial to getting a good deal on a lease.

    Good luck!
  • billmv or car_man where do you find invoice of 2007 IS? What happened to Edmunds? http://www.edmunds.com/new/2007/lexus/is350/100778075/prices.html
    Thanks
  • kyfdxkyfdx Posts: 29,962
    I don't know why Edmunds doesn't have it, but the spread between base invoice and MSRP on the '07 IS350 is $4285

    regards,
    kyfdx

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • kyfdxkyfdx Posts: 29,962
    No.. the invoice will be lower than that.. The spread is just on the base price.. Each option has an invoice price that is lower than the MSRP, as well...

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • Hi Car_man,

    I just pick up a IS 250 AWD with NAV/WOOD/HID, and this is what I'm paying for, 32 months Lease @ $450/mth and $2600 Upfront.
  • Hey Car_Man,

    I live in Miami and I'm looking to get an IS 250 RWD / Automatic/ Premium Plus Package w/ 18" Wheels. The MSRP for the vehicle is $36,355 and Invoice is $31,740. With December to Remember coming up, I'm hoping to get the price down to $32,500 or at invoice. Do you think there's a chance?

    I'd like to lease the car for either 24 or 36 months with $1500 Out the Door. What do you think the payment will be if I can get it down to about $32,500 or at invoice?

    Thanks for the help Car_Man!
  • from_flfrom_fl Posts: 113
    You can buy a low mileage,used one with same feature for 32500.
  • Hi guys,

    I really need some help with a 2007 IS 250 lease. I was offered a deal in the DFW area for a 15000 miles/year 36 month lease at $590 a month. This is on a IS 250 with Premium package including the nav and hands free package. The MSRP was 37772 and the dealer gave me $2600 off the MSRP. What concerns me is the money factor. They offered .0035 This seems extremely high. Is this the normal money factor or are they trying to screw with me. I have seen in the forum people talking about .00265 money factor for this car. Is this what i should demand for?
13468959
This discussion has been closed.