Howdy, Stranger!

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





Mitsubishi Outlander Lease Questions

13»

Comments

  • MichaellMichaell ColoradoPosts: 6,519

    @blindjoni said: Is residual value % a fixed value and if so by whom? What other factors can the dealer alter to change the payments? Got another quote today that is at least $65/mth too high by ANY calculations I do. Thanks so much! This forum has been a great asset to me.

    Residual value is set by the finance company and cannot be altered by the dealer. Only two variables in a lease are the MF and he selling price.

    MODERATOR
    2013 Hyundai Elantra GT / 2010 Mazda CX-7 GT / 2014 MINI Countryman S ALL4
    Need help navigating? michaell@edmunds.com - or send a private message by clicking on my name.
    Share your vehicle reviews

  • ken117ken117 Posts: 196

    If you lease through the OEM (Mitsu), the OEM establishes the residual value. If the lease is through a third party, it is possible they would set the residual value. It is good to research this to know the OEM residuals before visting the dealer. The higher the residual the better the lease.

    The OEM may have subsidized money factors (MF) which can be low. However, dealers may elect to try to lease using some other source or may inflate the OEM's MF. It is important to research this before heading to the dealer to determine what MF you qualify. As with interest, the best MF are reserved for those with good credit, usually 720 or more. The MF can be equated to the interest rate by multiplying the MF by 2400.

    The amount capitalized (financed) through a lease is set via negotiations. You should negotiate the price of the vehicle exactly as you would if you were purchasing the vehicle. Make sure the price negotiated is total excluding only legal fees. Make sure the price includes an dealer concocted fees such as documentation fee.

    Once you settle on a price the only "fees" should be an acquisition fee, which is charged by the financing source and is usually $600-$700, and legal fees such as registration and tax. Regarding tax, some states tax the selling price on a lease and some tax the payment. You should know this before visiting the dealer.

    Any other fee which a dealer attempts to add, such as documentation, is not a fee in any sense of the word. Those amounts are simply part of the selling price. If a dealer states anything to the contrary they are not being honest.

    In no state is a documentatin fee required by law. What is required is if a dealer is successful charging one customer the fee it must show it charged all customers the fee or risk a law suit. Therefore, you will often see the documentation fee printed on the contract. Once again this is simply the dealer trying to give the appearance of legality. If you negotiate a price and later see the doc fee on the contract, simply tell them to reduce the price to compensate for the fee. Usually they will or they will offer some other concession.

    In essence, dealers have learned to separate the selling price into two parts, price and documentation fee. This is intended to give the impression of a better deal. Goggle Earl Stewart On Cars to read an honest dealer's comment on these fees.

13»
Sign In or Register to comment.