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Comments
My take on this is just a tad different. Using your numbers and not factoring loyalty, tax, down payments, MSD's (all for the sake of simplicity) I come up with:
Total cost of a 24 month lease = $27434.50
Total cost of a 36 month lease = $31,229.90
So you can then drive your slightly "flawed" M56 in the 3rd year for $3,795.40 or $316.28 monthly.
If you decide to trade it will cost you:
Residual $35,907.70 plus
Remaining payments $10409.97
Less remaining amortized interest ~ $760 for a total of
$45557 (Adjusted Lease Balance)
The big if is the residual value, but at 59% or $39232.05 this leaves you with a balance of $6,324.95 plus the new car payment.
I just early teminated a lease and made a few K, but I was fortunate. This usually does not happen. I don't anticipate this good fortune on my new M.
A common mistake when comparing leases with unequal terms is to look at the total cash outlay. The problem with this approach is the it ignores the time-value of money as the dollars cover different time periods and are associated with different units of time.
The best way and, perhaps the easiest way, is to perform and incremental cash flow analysis as follows...
36 mo. Payment = 900
24 mo. Payment = 1,196
Incremental difference = 296
36 mo Lease Bal after 24 mo = 45,010
24 mo Lease Bal after 24 mo = 39,232
Incremental difference = 5,778
For simplicity sake, we'll conveniently ignore front-end and back-end transaction costs (acq fees, purchase option fees, etc) assuming they're the same for both leases. So, essentially, we're assuming that they're a wash. Also, I'm using the base payments (without tax) as these are the payments used to amortize both leases (CA collects taxes on the payment streams as they are received). I've also computed the lease balance for the 36 month lease after 24 months (45,010) using the implit interest rate (4.245%) in the lease using what is known as the actuarial or constant yield method. If you examine the lease termination clause in the IFS lease agreement, more than likely it uses this methodology to determine the lease (adjusted) balance at any point in time. If I'm mistaken, I apologize. The lease balance of the 24 month lease is simply the residual value. The purchase option fee is, as assumed above, identical for both leases and, therefore, a wash. The buyout is assumed to be the lease balance plus the purchase fee plus tax.
So now, it becomes a no-brainer... As you can see, 24 x 296 = 7,104 exceeds 5,778 clearly indicating that you're better off with the 36 month lease IF YOU'RE GOING TO PURCHASE AFTER 24 MONTHS. Observe that the cost of money for the 24 month lease alone is about 5.76% compared with 4.22% for the 36 month lease ... a 1.54% difference.
You can stick the $296 per month saved under your mattress by selecting the 36 month lease and you'll have more the enough to cover the difference between the lease balances after 24 months!
And finally, for whatever it's worth, I do not advise making a cash down payment (i.e., cash cap reduction). A car is a depreciating asset and is purchased for consumption; and so, it's not an investment. No savvy investor would ever invest in stock that they know will depreciate or lose value over time. Also, if the vehicle is lost or stolen and never recovered, the insurance carrier will only pay ACV (actual cash value or est. market value). If your lease balance exceeds the ACV, your GAP protection will cover the difference.
It might be helpful to remember the following before deciding to make a cash down payment or cap cost reduction...
If the GAP equals or exceeds 0, then you owe nothing and receive nothing. However, you've lost your entire cap reduction or dp. The insurance company will pay the fund provider the ACV and the GAP carrier will pay the fund provider the difference between the amount owed (lease or loan balance) and the ACV. And so, the fund provider doesn't lose; you do!
If GAP < 0, then you'll receive, from the fund provider, the difference between the ACV and the lease balance or loan balance plus any transaction costs incurred by the fund provider. However, this may not be sufficient to cover your cap reduction or dp. In which case, you would lose the difference. The only thing the fund provider wants is the outstanding balance owed plus any transaction costs. You, of course, get whatever remains (the scraps so to speak).
And, yes, you're much much better off applying those cap reduction dollars toward MSD's instead which will lower your cost considerably!
Hope this helps.
John
If you are considering selling before the lease is up, then you definitely should go the Multiple Security Deposit route to reduce the mf/interest rate as much as possible. I'm not sure but isn't the buyout the sum of the remaining payments plus the residual value. If so, the higher the mf/interest rate, the higher the "interest" that's included in all those payments you really aren't making.
The early buyout is calculated, in most leases, as follows...
1st. Calculate the lease balance by finding the present value of the residual plus the present value of the remaining payments discounted at the interest rate implicit in the lease. Lease agreements refer to this rate as the actuarial or constant yield rate.
2nd. Assess if there is a purchase option fee.
Adding these plus any miscellaneous fees plus tax determines the buyout price. What people need to do is read the early termination clause in their lease agreement to see exactly how the lease balance is determined. I always create a lease amortization schedule in excel so that I always know my lease balance and buyout at any given point in time. This keeps the fund provider or dealer honest and, believe me, there were dealers that inflated lease balances in the past paving the way for a minefield of moral hazards. This was fairly prevalent in the past when fund providers refused to give customers their lease balances deferring, instead, to dealerships. Well, gee whiz, what do you think was going to happen?
Today, fund providers will provide lessees with a their lease balances and buyout via an early termination letter IF REQUESTED. However, fund providers have been known to make mistakes and, yes, it happened to me. The greatest protection against being scammed or cheated is EDUCATION. It's pretty difficult to cheat someone especially when they've done their homework correctly.
John
The web page http://www.newcars.com/Infiniti/M56/rebates shows the lease rates you quoted, but then says "OR" and shows money factors of 4.8%/0.0020 (24-month), 4.44%/0.00185 (36-month), and 3.96%/0.00165 (48-month) without any explanation of how one qualifies for those. Do you have any explanation?
MSRP 52615
39 months 12k miles
$0 due at signing 670 with TX sales TAX (6.25 %)
I did come out of an Infiniti lease (3 months early, they waived the payments and got $1000 loyalty cash which rolled into the deal)
Of course, we can do the calculation of acquisition cost by backing it out, but why do so many not know or not give that VERY important piece of information?
I feel your pain. Most folks don't understand leasing and have no idea what's important and what isn't. Yes, it's very frustrating when people just list a few items like MSRP and payment. It doesn't tell me anything.
What people need to do is ask the dealer for a hard copy of their LEASE WORKSHEET. This is a computer generated document that gives all the details (data) of the lease making it very easy for someone (who knows what they're doing) to analyze and evaluate.
John
What are August Infiniti Financial Services' lease money factor and residual value for a 36 month lease of a 2011 M56 with 12,000 miles per year? Any incentives?
Thanks
Car_man
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Infiniti Financial Services' August buy rate lease money factor and residual value for a 36 month lease of a 2011 M56 2WD with 12,000 miles per year are .00176 and 56%, respectively for consumers who qualify for its top credit tier.
Infiniti is currently providing a $1,000 loyalty cash incentive on leases of this car, and some back-end stairstep dealer cash (up to $750, but there's no way to know exactly how much the dealer is getting, if anything) on this car.
Car_man
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Also what is the overmileage penalty.
Car_man
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Infiniti Financial Services' August buy rate lease money factor and residual value for a 36 month lease of a 2011 M37X with 15,000 miles per year are .00130 and 56%, respectively for consumers who qualify for its top credit tiers.
15,000 miles per year is the highest mileage allowance that IFS publishes residual values for. If you need to drive more than that, you will have to purchase additional miles on a per-mile basis. It is less expensive to do so at lease signing than it would be to wait until lease-end and have to pay an excess mileage penalty. At lease-end IFS charges $0.25/mile for excess mileage. Again, I'm sure that it provides some sort of discount from that for excess miles purchased at lease signing.
Car_man
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I am looking to do a 36 month lease on a 2011 M37 with Sport and Sport Touring (also including mat package and illuminated kick plates). I have negotiated a price of dealer invoice as follows:
MSRP: $56,660
Invoice: $51,801
My FICO score is around 800.
I am going from a lease on a 2009 Maxima - the dealer says I can qualify for the $1,000 loyalty rebate, so will use that towards the drive off.
I am not paying any down payent towards Cap Cost Reduction.
Can you let me know what the mf and residual would be on this car in August, as well as monthly payment before tax?
Also, I have the option of having the dealer divert a car arriving on Oct. 10 in Southern California to my local dealer in SF Bay area. Do you think it's risky to wait until then as the lease rates and incentives could change? (It's difficult to get my color combo with a Sport touring car, which is why it's benificial to wait - this way I would get exactly what I want).
Thank you, I appreciate your time!
If you don't tell us your tax rate, there is no way anyone can comment on your specific price.
They also have something called "Conquest Cash" (also $1,000) if you are coming from another brand to lease an Infiniti. Right now the G is eligible for that - but not the M. Bottom line is there is no cash incentive right now for the M, but that could always change in September.
They will cover the last 3 months of your Nissan lease to go to an Infiniti, however, but you must do so by Sept. 30 (of course that could be extended into October, you never know).
Using these numbers, an MSRP of $56,660, and a selling price of $51,801 (which is really around $1,000 over invoice once the loyalty cash is taken into account), I estimate that this car's zero down, pre-tax monthly payment would be around $672.
This lease program is scheduled to run through September 30th. It's difficult to say what Infiniti's October lease program will be like. October represents the start of a new quarter. It is possible that Infiniti will lower its residual values by a point or two next month. Having said that, I would think that if it does it would lower its money factors by enough to keep its vehicles' payments fairly similar to what they are today. While it's difficult to predict what Infiniti's future lease program on this car will be like, I personally don't see any reason why it would be significantly worse than it is today. If I was dead set on a specific set of color / options and I could get it by waiting a month, I personally would probably do so. On the other hand, if I really didn't care that much I probably would just lease a vehicle off of the lot now.
Car_man
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MSRP - $54,825 Initial Cap Cost - $51,000
Residual - 56% Money Factor - .00186
This is a 39 month lease with 20,000 miles a year
Payments are $785.87 (This includes taxes of $3,125, and acquisition fee of $595 added in. Less the $1,000 loyalty from Infiniti)
Down Payment is first month plus $270.24 for registration/inspection. Total $1056.11.
Do the numbers look like there is any room left to negotiate?
Thanks!
Money at signing is $4694.71 including first month payment of $884.14 ($3,810.57 without). I think there may be a few hundred in play on the down and maybe $10 on the monthly. I am also getting a $500 credit towards damage on the old car.
MSRP - $67,910
Cap Cost - $63,000
money factor .00172
residual - $33,955, 53.9%
Down payment is taxes, acquisition fee, $1000 cap reduction ofset by $1000 loyalty and $100 misc.
Am i getting a good deal or is their room here. I almost feel like the residual is a little low.
http://www.realcartips.com/news/0309-infiniti-prices.shtml
I have enjoyed 2 24 month leases from IFS and prefer that but it appears I will need to go to 36 months. Is there another option of the vehicle that makes financial sense.
Thanks for all the help (al always).
L
Thanks
Larry
Thanks
njnewcar11.
m37X
premium package
agreed value of vehicle 49,166.18
gross cap cost 51173.13
loyalty credit 1000
total out of pocket 1957 (first payment, bank fee, $450 down (i wanted a specific payment) DMV, registration)
depreciation 18,185.70, residual value 31,467.65
Total monthly payment $575
I think i did alright?
Here's what the dealer quoted me today for M37 w/ Sport, Premium, Sport Touring, Aero kit and many accessories. Price is using VPP Plan D pricing, which basically gets you invoice. http://www.insidenissan.com/monthly_dplan_infiniti_2011.html
Storm Front Grey
MSRP=$59,045
Invoice=$53,971
My Quote=$53,325
Optional Equipment & Accessories
R01 Sport Package
U01 Premium Package
K02 Sport Touring Package
R94 Aerodynamic Package
N92 Illuminated Kick Plates
L92 Carpeted Trunk Mat, Trunk Net & First Aid Kit
S92 Vehicle Alarm Impact Sensor
Tint
Wheel locks
Infiniti Financial Services' current buy rate lease money factor and residual value for a 36 month lease of a 2011 M37X with 15,000 miles per year are .00131 and 57%, respectively for consumers who qualify for its top credit tier.
IFS' 12,000 mile per year residual value for this car would be 2% higher.
You are correct about 24 month leases on Infinitis. Technically one could still lease an Infiniti for 24 months, but it is no longer providing support on 2 year leases so it doesn't make sense to do so.
Car_man
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Car_man
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Infiniti Financial Services' 36 month buy rate lease money factor and residual value for a 36 month lease of a 2011 M37X with with 12,000 miles per year are .00126 and 59%, respectively for consumers who qualify for its top credit tier.
The last time that I checked, IFS' lowest mileage allowance was 10,000 miles per year. IFS' 10,000 mile per year residual values are 1% higher than its 12,000 mile per year residuals.
Car_man
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thanks in advance
Do you have the current lease rates and incentives for a 2011 M37 with Sport Package? Thanks!
Do you have the current Lease money factors and residual values for a 2011 M56 Sport for 10,000 miles per year and 36 months. thanks!
Paragraph 23 addresses the security deposit and says they will use the security deposit to cover any amounts owed under the lease and that if you perform all of your obligations under the lease the security deposit will be returned at the end of the lease term.
Paragraph 26 addresses Damage, Loss. or Potential Loss of the vehicle. This paragraph covers many issues including repair of damages to the vehicle, etc. It includes language that says if the vehicle is stolen (and not recovered), or destroyed, IFS will accept insurance loss proceeds in full satisfaction of the early lease termination liability and you shall have no further liability if you are in compliance with (1) insurance obligations under the lease, (2) your policy covers the casualty and you have paid the deductible required by the policy, and (3) your lease is not in default.
My reading of this is that if you keep your insurance in place and your lease payments up to date that in the event of a total loss of the vehicle you will pay the deductible required by your insurance policy and they will return your security deposit. Please note that if you make a security deposit you will be an unsecurred creditor of IFS and would be at risk if IFS became insolvent.
Car_man
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I heard that Infiniti introduced some brand new dealer cash on this car a couple of days ago, but I don't know the full details of the program. IIRC it was something like $1,000 dealer cash.
Car_man
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Car_man
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SMall correction my previous lease was 532 per month so lease took over 3 payments $1596 total
Car_man
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51% on 39 months for AWD
Money Factors depend on your credit - range from .00163 to .00465
One cannot say good deal or not simply from a payment.
It is not always the same as sales tax, though it often is. In PA, for example, the sales tax is 6%, while the tax for car leases is 9%.