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- 2006 BMW 330Ci Coupe
I'm new to car leasing and have a question for others with experience.
I'm looking to finance $10,000 worth of agreed upon depreciation over 36 months. My credit is just under 800.
Dealer says that loan will cost me, non -negotiable:
$488.28 in interest (.0013 MF = 3.12% APR)
$795 acquisition fee
$1,283 for a 36 month $10,000 secured loan = 8% Interest Rate
Isn't this a very high cost for $10K worth of secured top tier credit?
All leases have an acquisition fee... From your numbers, I'll assume this is a BMW. $795 is the base fee. It's an assignment fee for the bank, which covers GAP insurance, commission to the dealer's finance office for writing the lease and profit for the bank.
Also, you aren't financing $10K of depreciation, you are financing the full CAP cost.. You are only paying down the $10K of depreciation. Your amount financed over the lease term is the average of the NET CAP Cost and the residual. So, if your CAP is $40K and your residual is $30K, then your average amount subject to the money factor is $35K.
After all, the bank doesn't get the car from the dealer for $10K... They pay the full $40K for it.
I was in the Soap Box Derby in 1970. It was still a huge deal in Akron, then. 260 entrants. Chevrolet was the national sponsor
James Drury (smelled of alcohol, hit on my 19 yr old sister)
Lloyd Hanes (Room 222)
many more that I don't remember
We arrived in town on Monday.. One at a time.. Downtown, where we "signed in".
Spent the week at a Boy Scout camp, while our families were put up at the U. of Akron. On Friday evening, a parade downtown, with each entrant in their own Corvette (67 convertible for me)
Saturday, a big banquet after the races.
First class, all the way.6 ·
I have never owned an X5 but I am looking at a 2004 x5 3.0 with 130+k miles. I LOVED it, it had a great feel to it, the inside was in need of some TLC. I have heard they have a history of major engine issues. Anyone have advice on getting into an X5 at this point? Thanks for your input.
I'm a big fan of BMWs, but an old X5 is likely to be a money pit. Especially with 130K+ miles. I advised a friend on buying a similar model about 5 years ago... He only made it 9 months and traded it on a Lexus. He loved the vehicle, but couldn't hack the repair bills.
The M54 engine in that model is not really a trouble spot. That's the same engine they used in a number of models, for years. It's everything else about the car that you'll have to worry about.5 ·
A dealer gets money from the bank for writing a loan or a lease. At the base rate (lease or buy) they would usually get a flat amount, say $150... and, if they bump the rate, they can get more.. Also, especially on a purchase, a larger loan amount may include a larger payment for the dealer... On top of this, there may be bonuses for the dealership and/or the F&I manager, based on performance.
As far as negotiating... most dealerships will honor a quote, even if you pay cash, but they may be stickier in negotiating from that point, as they are giving up the fee for writing the financing. Of course, some dealerships will negotiate an unrealistically low price, and then balk when you don't go for the 6.9% interest financing, or the lease money factor that's marked up double.
The F&I office is a giant profit generator for the dealership.. They can easily clear an extra $1000 on what might be a $500 profit deal for selling the car.. (way more, if you are a rube)5 ·
My wife is carting around our 2 kids and all her PT equipment in a small 2007 Civic and is getting pretty tired of it. We also rent a minivan once or twice a year for longer trips, which costs us $500-$1000/yr.
Problem is, we are still paying $380/mo on my 2010 Outback ($7K left on it). We got a trade in offer on her civic and have a few thousand we can use for a downpayment. So, is this a good plan:
Honda.com is showing 35 months, 0 down. With the internet price of $30,393 I was quoted on an EX, trade in of 6K and 4K down, that brings the honda payment estimator down to $123/mo. We can fit that payment on top of the other car payments until the Outback is paid off. If we went into this expecting to pay the $17000 (based on 56% retention rate) at the end of our lease, is that an ok plan, or is there something else I'm not seeing that makes this a bad idea? I do know that we'll have a higher interest rate on the loan for the residual, but we'll be socking away about $8K before that comes due so we'll probably have a 10K loan.
This is the first time I've looked at leasing, and I don't have hard lease numbers from the dealer yet (going tomorrow). I wouldn't even consider it if we had my car paid off already. Mostly I'm just looking for a good way to get into a bigger car now but we intend to keep it for 8-10 years.
Thanks for any advice!
It's rarely a good idea to lease a vehicle that you really want to own.. You are adding costs (acquisition fee) that you wouldn't have if you did a straight purchase..
You have assets ($6K trade-in plus $4K down).. and, only 20 months of payments left on your Outback... and, the ability to save up to $8K over the next 36 months... I would bargain hard and get the Odyssey for the lowest price possible, put the least amount possible down, and use your $10K to supplement the payment until the Outback is paid off..
$32K loan on the Odyssey at 1.9% AHFC financing for 60 months is $560/mo. It looks like your budget is about $500/mo. total for all car loans.. So, $380/mo. for the Outback, $120/mo. for the Odyssey and pull the other $440/mo. out of the $10K you were going to put down on the lease.. That's $8800 over the next 20 months (paid out of your $10K).. At that point, the Outback is paid off, and you only have 40 payments of $560 left on the Odyssey.
36 months from now... your $10K is gone (just like if you leased), but you own that Odyssey, with a loan balance of $13,200, and just 24 more payments of $560.
The numbers are pretty close to a wash.. whether you buy or lease... but, owning that car and keeping some money in the bank gives you a little more flexibility.... and, if your finances/income improve, you can keep some of that $10K and pay the payment out of monthly cash flow.
If $380/mo. + $560/mo. seems like a lot to spend on two vehicles... well, it is. But, leasing doesn't really change the ultimate math.. She might be tired of that Civic, but is she $560/mo. tired of it? Stick it out for 20 more months until the Outback is paid for.. would be my best advice, if I knew you...5 ·