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General Questions about Leasing Vehicles

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    Swapalease is cheap but unreliable - most of the cars on swapalease are already sold, often several months out of date.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

    AVOID LEASETRADER.COM!
  • 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?
  • Kirstie_HKirstie_H Posts: 10,897
    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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  • carnaughtcarnaught Posts: 1,597
    lease mileage vs. time calculator to see how many miles you should have on a leased car, based on your lease contract terms?
  • Kirstie_HKirstie_H Posts: 10,897
    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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  • tidestertidester Posts: 10,109
    Correct!

    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.

    tidester, host
    SUVs and Smart Shopper
  • joel0622joel0622 Posts: 3,302
    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
  • tidestertidester Posts: 10,109
    It makes it higher but it is still cheaper then paying the overage

    I'll bet it's pretty close! :)

    tidester, host
    SUVs and Smart Shopper
  • paisanpaisan Posts: 21,181
    I think it works out much cheaper if you buy it upfront, at least it did for me back in the day in the late 90s.

    -mike
  • joel0622joel0622 Posts: 3,302
    I'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.
  • Kirstie_HKirstie_H Posts: 10,897
    Um... I just wanted to know if I did the math right. :confuse:

    I shoulda picked a better lease term!

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  • carnaughtcarnaught Posts: 1,597
    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?
  • tidestertidester Posts: 10,109
    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.

    tidester, host
    SUVs and Smart Shopper
  • I'm in the market to lease 2 vehicles and I have narrowed it down to a couple of choices.

    My 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
  • Kirstie_HKirstie_H Posts: 10,897
    Are both vehicles the same brand? e.g., two Nissans, vs. a Honda & a Nissan?

    Second, do you consider yourself easy to finance? That is, do you have good credit?

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  • 741 on the credit score -- so not worried about that.

    I'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.
  • Kirstie_HKirstie_H Posts: 10,897
    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?
  • joel0622joel0622 Posts: 3,302
    Is there any requirement to do your service at the dealership from which you obtained the lease?

    No
  • glevittglevitt Posts: 30
    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.

    Thanks
    Greg in CO
  • glevittglevitt Posts: 30
    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.
  • er0si0ner0si0n Posts: 2
    can anyone help me calculate lease pricing?

    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?

    I'm new to this stuff, thanks.
  • tidestertidester Posts: 10,109
    This should help: Calculate Your Own Lease Payment

    tidester, host
    SUVs and Smart Shopper
  • rockfish1rockfish1 Posts: 113
    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.
  • tidestertidester Posts: 10,109
    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!

    tidester, host
    SUVs and Smart Shopper
  • rockfish1rockfish1 Posts: 113
    Thanks Tidester.

    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.
  • tidestertidester Posts: 10,109
    If you and the original poster don't mind, I could just move this thread over to General Questions about Leasing Vehicles.

    tidester, host
    SUVs and Smart Shopper
  • rockfish1rockfish1 Posts: 113
  • grandtotalgrandtotal Posts: 1,207
    I'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.
  • pernaperna Posts: 533
    I'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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