Following your point, about first-hand experience with lease assumption companies - I'd say be very wary:

Here's my experience.

I was looking to take over a short term lease, so I went to the websites swapalease.com and leasetrader.com. This is what I learned:

Swapalease is cheap but unreliable - most of the cars on swapalease are already sold, often several months out of date.

Leasetrader however is pricier, it charges fees for membership and creditchecks everyone so giving the impression of running a tight ship, in which every buyer and seller is properly vetted. BUT, it will happily take a transfer fee from you for cars that are simply ineligible.

This is what happened - I paid Leasetrader $150 to organise the transfer of a Ford Escape, but the financing company, US Bank, refused - they didn't permit transfers on cars that had less than 13 months left on the lease. The Ford should never have been advertised on the site, Leasetrader should never have taken my money to push through the transfer, but instead, now I have no car, Leasetrader has my $150 and they're refusing to pay it back on account of "it's not our fault, it's the seller".

We have leased Mazada 6 that is due to be turned in 4/21/2007. We want to buy our next vehicle, so can we treat the Mazada as a trade in and negoiate the best trade value? If so, does the dealer we're working with pay the purchase price to the holder of the lease? Then any additional amount we negoiated a could go as down payment?

I'm not an expert, but I believe that in order to treat it as a trade-in, you'd need to purchase it from the leasing company first. If it is worth more than the residual (buyout) value, this could be a good route for you.

Otherwise, you just have to turn it in - you can't sell a vehicle that's not yours.

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Well, I'm no math whiz (that would be my co-host) but here's a simple calculation:

Total number of miles in contract / Total number of months leased x Number of months into the contract

Is that what you mean? e.g., 48,000 total miles / 36 month lease = 1333 miles per month x 17 months into the lease = 22,666 miles (the number of miles you should be close to at this point in the lease to avoid over-mileage charge)

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However, a 16,000 mile per year lease would be somewhat hard to come by. Most are 12,000 which is on the low side for a typical passenger or commuter. The mileage penalty adds up fast at 20 cents per mile or so.

Most are 12,000 which is on the low side for a typical passenger or commuter. The mileage penalty adds up fast at 20 cents per mile or so.

Thats just what most are advertised as. But you can do any mileage you want. The payment will just fluctuate. It makes it higher but it is still cheaper then paying the overage

Depends on how far you go over. For instance on a Fusion the difference between a 12K py and 15 K py lease is about $14 per month. So basic math tells me that over 36 months I will pay a total of $504 more for the benefit of 15K py. If I stuck with the 12K but drove 15K my mileage charge would be $1350. A difference of $846. I believe I would pay the extra $14 a month if it was me.

Thanks, but what I meant is a tool to plug in the lease terms and it calculates for you based on the date, the no. of mi. you should have at that point in the lease. Make sense?

Yes, it makes perfect sense and the answer is, apparently, that none of us know of such a tool. But then the calculation is simple enough, as Kirstie clearly demonstrated, that there is really little need for such a tool. To find out where you should be, simply multiply the miles you're allowed by the fraction of time you have used up.

However, if you need help in calculating the number of days from one date to another, you can use an online date calculator such as this one.

I'm not an expert, so wait for other opinions - but you sound like a salesperson's dream customer. If you go to, say, the Mazda dealership knowing what you want and have researched and established a reasonable purchase price (on which the lease payment is based), you're easy to get financed and you're an easy sale. My thought is that a dealer would be HAPPY to work with a customer like you on two vehicles, and you should get a good deal.

Just remember to make your offer(s) reasonable and you can wrap the deal up quickly.

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The vehicle I want to lease is at a dealership that's 25 miles away. There are other dealerships that are closer that I'd much rather take the car to for service. Is there any requirement to do your service at the dealership from which you obtained the lease?

I am curious if anyone knows the in/outs of used car leasing. I have gotten very good at figuring lease payments for new cars. But it seems different for used ones and I am curious if any of you have had an experience with it.

I would like to know how you set depreciation percentage and whether you use the original MSRP and the new purchase price for the payments or the suggested purchase price and the new agreed upon price.

This is an becoming a more popular way to lease especially expensive vehicles and SUVs and I think its worth shedding some light on.

Of the three vehicles I've leased its never been a requirement. My last vehicle I originated the lease from a dealer in KS and I live in CO. Really, just like buying the car, your lease is between you and the finance company, the dealership gets their piece and is out of the picture (except for the maintenance hopefully). You can take your car anywhere for service even grease monkey as long as you keep records showing you are meeting the minimum maintenance requirements. Now most people take their vehicle to the dealership because its under warranty and you always have little niggles and rattles and things that you want looked at, but in a lease, IMHO, you should only do the most basic maintenance required after all you are only renting the car.

I have been quoted an MSRP of $25,200 for the Nitro SLT.

I want to put 0 down, and lease for 27 months. Can anyone give me an estimate of what I should have for my payments, and a little explanation to tell the dealer as to why i think that price is what i should get?

Tidester, I looked at the Calculate your own lease Payment section on Edmunds as you indicated above. I did not understand the Money factor definition so I looked it up in Edmunds Leasing Glossary. It is Money Factor: Also called a lease factor or even a lease fee, this is the interest rate you are being charged. It is expressed as a multiplier that can be used to calculate your monthly payments. For example, 7.2 percent interest, when expressed as a money factor, is .0033. To convert a money factor to an interest rate, multiply by 2,400. To convert an interest rate to a money factor, divide by 2,400. (Always use 2,400 regardless of the length of the loan.)

My question is: Why is 2400 always used and when I multiply 7.2 percent by 2400 I come up with .0030 not .0033 as indicated in the Edmunds definition.

That's a good question! The money factor is related to the "annual percentage rate." Given an annual percentage rate, the interest rate that you would pay for one month is one twelfth (1/12) of that.

Now, over the course of a loan (lease) the principal on which you are paying interest decreases so your monthly interest payment decreases. If you made a graph of the amount of interest you pay each month you would find that the graph is practically a straight line. This means that your average monthly interest payment is simply the average of your first and last monthly interest payments or one half of their sum!

Since the first payment is based on the full cap cost and the last payment is based on the residual, the average interest payment is monthly interest rate × (cap + residual) ÷ 2. In effect, your average interest rate is annual percentage rate ÷ 12 ÷ 2. That gives you the factor of 24 and an additional factor of 100 converts percentage rate to "percentage points" so you have a factor of 2400!

Finally, the Edmunds number you quoted should be 0.003. Thanks for pointing it out!

I knew a great and esteemed host like you would have the explanation. Just to understand the formula better I ran the calculations on the highest interest payment on cap cost and lowest interest payment on residual value adding them together and divided by 2 and came to the same results as your formula which is the same as using the moneyfactor calculation. As expected all agreed!

I would suggest you add your 2400 explanation to the Edmunds money factor definition in case any other inquisitive member is in need of further info.

I should have asked this question in the leasing forum so your explanation could help others that may have the same question.

## Comments

2Here's my experience.

I was looking to take over a short term lease, so I went to the websites swapalease.com and leasetrader.com. This is what I learned:

Swapalease is cheap but unreliable - most of the cars on swapalease are already sold, often several months out of date.

Leasetrader however is pricier, it charges fees for membership and creditchecks everyone so giving the impression of running a tight ship, in which every buyer and seller is properly vetted. BUT, it will happily take a transfer fee from you for cars that are simply ineligible.

This is what happened - I paid Leasetrader $150 to organise the transfer of a Ford Escape, but the financing company, US Bank, refused - they didn't permit transfers on cars that had less than 13 months left on the lease. The Ford should never have been advertised on the site, Leasetrader should never have taken my money to push through the transfer, but instead, now I have no car, Leasetrader has my $150 and they're refusing to pay it back on account of "it's not our fault, it's the seller".

AVOID LEASETRADER.COM!

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0 · Like LOL10,913Otherwise, you just have to turn it in - you can't sell a vehicle that's not yours.

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0 · Like LOL10,913Total number of miles in contract

/

Total number of months leased

x

Number of months into the contract

Is that what you mean?

e.g., 48,000 total miles / 36 month lease = 1333 miles per month x 17 months into the lease = 22,666 miles (the number of miles you should be close to at this point in the lease to avoid over-mileage charge)

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0 · Like LOL10,109However, a 16,000 mile per year lease would be somewhat hard to come by. Most are 12,000 which is on the low side for a typical passenger or commuter. The mileage penalty adds up fast at 20 cents per mile or so.

tidester, hostSUVs and Smart Shopper

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0 · Like LOL3,302Most are 12,000 which is on the low side for a typical passenger or commuter. The mileage penalty adds up fast at 20 cents per mile or so.Thats just what most are advertised as. But you can do any mileage you want. The payment will just fluctuate. It makes it higher but it is still cheaper then paying the overage

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0 · Like LOL10,109It makes it higher but it is still cheaper then paying the overageI'll bet it's pretty close!

tidester, hostSUVs and Smart Shopper

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0 · Like LOL21,181-mike

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0 · Like LOL3,302I'll bet it's pretty close!Depends on how far you go over. For instance on a Fusion the difference between a 12K py and 15 K py lease is about $14 per month. So basic math tells me that over 36 months I will pay a total of $504 more for the benefit of 15K py. If I stuck with the 12K but drove 15K my mileage charge would be $1350. A difference of $846. I believe I would pay the extra $14 a month if it was me.

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0 · Like LOL10,913I shoulda picked a better lease term!

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0 · Like LOL10,109Make sense?Yes, it makes perfect sense and the answer is, apparently, that none of us know of such a tool. But then the calculation is simple enough, as Kirstie clearly demonstrated, that there is really little need for such a tool. To find out where you should be, simply multiply the miles you're allowed by the fraction of time you have used up.

However, if you need help in calculating the number of days from one date to another, you can use an online date calculator such as this one.

tidester, hostSUVs and Smart Shopper

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0 · Like LOL6My main question is this, given that I am making the deal for a lease on 2 vehicles will my bargaining position be better or worse.

Does it help me to do 2, or should I try to get the best deal on 2 different transactions?

Thanks,

Jerry

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0 · Like LOL10,913Second, do you consider yourself easy to finance? That is, do you have good credit?

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0 · Like LOL6I'm still doing some homework, but I'm looking at possibly

2 Toyota's - highlander and camry

2 Honda's - pilot and accord

2 Mazda's - mazda3 and mazda5

I like the Mitsuibishi Outlander also, but not sold on it yet.

The mazda portion could become a mazda3 and cx9 -

One car needs to be 15k miles the other 12k, the 15k is basically a commuter vehicle.

The SUV is a little more flexible.

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0 · Like LOL10,913Just remember to make your offer(s) reasonable and you can wrap the deal up quickly.

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0 · Like LOL3,302Is there any requirement to do your service at the dealership from which you obtained the lease?No

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0 · Like LOL30I would like to know how you set depreciation percentage and whether you use the original MSRP and the new purchase price for the payments or the suggested purchase price and the new agreed upon price.

This is an becoming a more popular way to lease especially expensive vehicles and SUVs and I think its worth shedding some light on.

Thanks

Greg in CO

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0 · Like LOL30You can take your car anywhere for service even grease monkey as long as you keep records showing you are meeting the minimum maintenance requirements. Now most people take their vehicle to the dealership because its under warranty and you always have little niggles and rattles and things that you want looked at, but in a lease, IMHO, you should only do the most basic maintenance required after all you are only renting the car.

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0 · Like LOL2I have been quoted an MSRP of $25,200 for the Nitro SLT.

I want to put 0 down, and lease for 27 months. Can anyone give me an estimate of what I should have for my payments, and a little explanation to tell the dealer as to why i think that price is what i should get?

I'm new to this stuff, thanks.

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0 · Like LOL10,109tidester, hostSUVs and Smart Shopper

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0 · Like LOL113Money Factor: Also called a lease factor or even a lease fee, this is the interest rate you are being charged. It is expressed as a multiplier that can be used to calculate your monthly payments. For example, 7.2 percent interest, when expressed as a money factor, is .0033. To convert a money factor to an interest rate, multiply by 2,400. To convert an interest rate to a money factor, divide by 2,400. (Always use 2,400 regardless of the length of the loan.)My question is:

Why is 2400 always used and when I multiply 7.2 percent by 2400 I come up with .0030 not .0033 as indicated in the Edmunds definition.

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0 · Like LOL10,109Now, over the course of a loan (lease) the principal on which you are paying interest decreases so your monthly interest payment decreases. If you made a graph of the amount of interest you pay each month you would find that the graph is practically a straight line. This means that your

averagemonthly interest payment is simply the average of your first and last monthly interest payments orone halfof their sum!Since the first payment is based on the full cap cost and the last payment is based on the residual, the average interest payment is

monthly interest rate × (cap + residual) ÷ 2. In effect, your average interest rate isannual percentage rate ÷ 12 ÷ 2. That gives you the factor of 24 and an additional factor of 100 converts percentage rate to "percentage points" so you have a factor of 2400!Finally, the Edmunds number you quoted

shouldbe 0.003. Thanks for pointing it out!tidester, hostSUVs and Smart Shopper

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0 · Like LOL113I knew a great and esteemed host like you would have the explanation. Just to understand the formula better I ran the calculations on the highest interest payment on cap cost and lowest interest payment on residual value adding them together and divided by 2 and came to the same results as your formula which is the same as using the moneyfactor calculation. As expected all agreed!

I would suggest you add your 2400 explanation to the Edmunds money factor definition in case any other inquisitive member is in need of further info.

I should have asked this question in the leasing forum so your explanation could help others that may have the same question.

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0 · Like LOL10,109tidester, hostSUVs and Smart Shopper

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0 · Like LOL533I'm interested in a single payment lease (not on an LR), but everyone I have talked to tells me that is a bad idea, but nobody can tell me why.If the car is totalled, don't you just lose the amount you're upside down? That's probably why.

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