Lease Questions - Ask Here

megs50 · February 2002

Is leasing a smart idea money wise? they never seem to tell you every thing I don't think , seems to me you would be driving a car that isn't really yours.

megs50 · February 2002

My vehicle is thru Subaru Credit, it is almost at end of term, I wanted to keep this and refinace it, most companies will do that usually at a lower interest rate, Not this company. Is there a way to get a good loan to pick up this balloon payment? And is this wise? I found I sure owed lots more than they told me I would at original buy. Wasn't such a smart buy after all. Now McRee Subaru tells me if I turn it in, I have a $250 disposal fee, plus any thing the deceide is above normal wear and tear, gee does this depend on what kind of a mood there in when they look it over or what? I just have this awful feeling turning this in, I feel it's in real good shape, but I just am afraid I am going to get really Hosed on this Forester.

mikeharriger · February 2002

I am interested in ending a lease on a 2000 323 BMW. I have done some research on how to end leases early and the best option appears to be selling the car on my own and directly transferring the car to the new buyer through the bank/dealer(BMW financial). There is some explanation of this here at edmunds but does not go into specifics. How exactly does this work? How do I set it up with the dealer or bank? Do I have to go through the dealer I bought the car from? Thanks for any help you have.

megs50 · February 2002

there lease is very expensive a toyota hylander is over $500. per month.

quigs0822 · February 2002

Could you help me out here? I need residual & money factors for 36, 39, or 42 months. Can you give me both 12K/yr and 15K/yr resids.? Also, I've already negotiated a deal of $700.00 over invoice, apparently pricing isn't available yet and the car isn't due in until April sometime. Do you think this is a fair deal? Thanks in advance.
Quigs

footie · February 2002

Car_Man,
My friend in Savannah that is trying to lease a new BMW called today to ask an interesting question.
If she elects to buy her 528i at the agreed upon end-of-lease residual, will she have to pay for the excess mileage on the car.
If so, why?
Thanks

ardethan · February 2002

Hi,

I'm in the market for leasing a new Honda Accord EX. I'm getting quoted a residual of 59% for the V6 and 4-cyl automatic. I'd prefer a manual, but the one dealer who has a manual I like is quoting me a residual of 57%. Is that right?

Thanks much,
Ethan

borty · February 2002

Hi Car_Man,

I recently leased a 2002 Montero Sport LTD. The lease was based on a cap cost of $31,800 (which is pretty close to Edmund's TMV of $31,727). I put down $2,000 and leased for 48 months, for a monthly payment of $380. (I think the money factor was .0420 but not sure about this).

I am really pleased with the vehicle and went for it largely because the LTD comes loaded - no options to add.

My previous lease was a '99 Pathfinder XE with sports & conv. package, which I leased for $280. Also liked the PF and probably would have liked the newer version with the 240hp engine, as that was really my only gripe with the '99.

Anyway I went with the Montero as much for variety as anything (have owned Nissan's for >10 years) and am just wondering if you can comment on the deal terms.

Thanks!

footie · February 2002

I just got a copy of the lease offer on a 2002 525 from a BMW Center. It's more than a bit off of the specs listed in the Edmunds Incentives section.
It is direct from BMW FS.N/A South.
Acquisition fee $725, money factor .00245 (almsot a full 1 % higher!) .
Does the Incentives section need updating?

KCRam · February 2002

Hi footie

If you buy out your lease, you should not have to pay any fees. You get your security deposits back. No wear/tear, no over-mileage.

kcram
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ardethan · February 2002

Hi Carman,

I'm worried that my credit may not be so good, and I may get stuck with a high money factor for a lease. When I mentioned this to my honda dealer, he said that even if I get a co-signer, I'd still get a bad rate (about .003 instead of .00135). That's about $65 per month!!

So I have a couple of questions. One, is it usually OK to have the lease in a relative's name (my mom), if she's out of state? Two, if I lease it myself, I'd like to basically prepay it, but I won't have the cash for about a month. Can lessees usually pay the balance in full at any time without any penalties?

Thanks!

Ethan

greg_x · February 2002

Hello Car_Man -

Can you give me the residual and money factor for the QX4? I would be looking at 12K miles / yr at 36 or 39 months

Thanks!

CarMan@Edmunds · February 2002

You're welcome, Shawn. Have fun in your new Pathfinder.

Car_man
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CarMan@Edmunds · February 2002

Megs50, the answer to your question is it depends upon the deal. Leasing can be a very good idea for consumers who want a new vehicle every couple of years and who don't put tons of miles on their vehicles if there is lease support available on the car or truck that they are interested in. Even if there is not lease support available on the vehicle that they want, theoretically consumers who lease and those who finance a vehicle and sell it after the same period of time should come out about the same. Let me explain. Monthly lease payments are composed of two parts, an interest portion and the depreciation portion. The vehicles of consumers who purchase and sell them after a couple of years will still depreciate. So in theory, if the bank that you are leasing through accurately estimated your vehicle's residual value depreciation-wise you will come out about the same by leasing and by buying and selling after the same amount of time. Of course, the more economical way to get around is still to purchase a car or truck and drive it for as long as possible. Still, for those who like to get new vehicles every couple of years, leasing can be a viable option.

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CarMan@Edmunds · February 2002

Good morning, Mike. There are really three basic ways that you can get out of this car early. One is to find someone who is willing to take over your monthly payments. Consumers often use Web sites like www.swapalease.com to advertise cars and trucks that they want to get out of leasing in the hopes that they will be able to find someone to assume their contract. Of course, subsidizing one's deal out of their own pocket usually makes finding someone to assume their contract much easier. Check out the following article for more information on this subject: Lease Trading.

The other two ways are closely related. You can call up the bank that you are currently leasing your car through, probably BMW Financial Services, to find out exactly how much money it would cost you to purchase your car from them right now. Once you have that number you can either purchase your car on your own and try to sell it privately or try to find a dealership that is willing to give you close to that amount for it as a trade-in. Make sure to deal directly with the bank that you are leasing through rather than going back to the dealership that you got your vehicle from.

Car_man
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CarMan@Edmunds · February 2002

Hi Quigs. I would like to help you out, but American Honda Finance Corp. will not publish residual values for the 2003 Acura CL until right around the time that it is expected to arrive in showrooms. If Acura has not officially released pricing for this car yet, there really isn't any way that AHFC could publish residuals for this car because residual values are based upon a percentage of a vehicle's full MSRP. Acura's current lease program is scheduled to expire on February 28th. Feel free to check back with me a week or so after that to see which 2003 models their new program has residual values for. It is difficult for me to say for certain if their March program will have this data in it or if we will have to wait a month or so after that for them to release the residuals for the 2003 CL.

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CarMan@Edmunds · February 2002

Very good question, footie. If your friend opts to purchase her BMW at the end of her lease term she definitely will not have to pay for any excess mileage that she puts on it. Excess mileage penalties are only for lessees who opt to turn in their vehicles at lease end and have exceeded their predetermined mileage allowances.

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CarMan@Edmunds · February 2002

Hello Ethan. I believe that American Honda Finance Corp.'s residual values are exactly the same for vehicles with automatic and manual transmissions. So it does not make sense that you received two different quotes for the same model with different transmissions. The Accord's residual values will vary depending upon what trim level you are interested in though. I would be more than happy to give you an idea of what this car's residual values are like right now if you provide me with a little more information. I need to know the exact model that you are interested in, the length of the lease that you want, and the number of miles per year that you want to be able to drive without being penalized. Once I have this information I will let you know what this car's residual value should be. Talk to you soon.

Car_man
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CarMan@Edmunds · February 2002

Hi borty. If you would like, I can calculate exactly what the monthly lease payment for the truck that you leased would be like right now using Mitsubishi Motors Credit Corp.'s base lease program. In order to do so though, a little more information from you would be helpful. Please tell me this truck's full MSRP, how many miles per year you are allowed to drive without penalty, and if the $2,000 that you paid was all used as a down payment or if that also includes other items, such as your first' month's payment and security deposit. This additional information will make my calculations much easier. Talk to you soon.

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CarMan@Edmunds · February 2002

Footie, the lease offer that you received from the dealership that you are working with does not sound as though it is using BMW Financial Services' base lease program for this car. First of all, BMW FS charges a base acquisition fee of $525 on every vehicle that they lease. Individual dealerships have the authority to mark-up this base acquisition fee a couple of hundred dollars in order to bake additional profit into a deal if they choose to. It sounds as though this is what is happening in your situation. Also, the base BMW FS lease money factor for a 2002 525i is currently only .00205 for leases of up to 42 months in length. Again, individual dealerships have the authority to mark-up this base lease money factor in order to bake additional profit into a deal. This may be what is happening with this number as well.

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waid10 · February 2002

I was wondering if anyone out there has had any experience with leasing a used vehicle. I am considering leasing a 2-3 year old 3 series BMW. Has anyone found that leasing a used model can provide good savings? I have read that sometimes leasing a new car can cost about the same due to lease support from the manufacturer. Is this true?
If anyone has had a good experience with this, what is the best way to go about the negotiation process?
Thanks.

borty · February 2002

Car_man,

The MSRP on the Montero Sport was $33,447 ($32,887 plus $560 dest charge - just as it appears on edmunds!). The $2,000 was all used toward cap cost redux; with security and first month and other fees my total output was $3,071. The lease is for 48 months/12k miles/year.

I think the cap cost before the $2k reduction was $31,800 or about $750 over invoice. (I have to admit I was negotiating more the monthly price which I know it not usually wise...)

Thanks!

mikeelmendorf · February 2002

Carman --

Can you please give me some rough figures on leases on an Audi A4 3.0 Quattro, A6 2.7, and BMW 330xi? Are there any good programs out there?

Thanks.

ME

aak2002 · February 2002

Is there any way around this. Saab wanted $595 Aqc fee. I got them to drop the deposit. I figure with money factor of 1.14% (translated) the finance guys wanted something.

I didn't have and Aqc. fee on my Nissan Lease 3 years ago but then again, no low rate either.

I paid 1999 down, + tax on 1999, DMV, first month and Aqc fee of $595. Residual is just under 15k.

Monthly of 358 tax included for Saab 9-3 SE Manual with premium package and special color I wanted that they didn't have in stock (probably cost me $475).

Looks like cost on the east coast are about $500 cheaper on the cars based on TMV...

I probably paid a little too much down, but they were prepared to let me walk out.

Anyway, should I be upset about the $595.00?

On a good note, a friend with a 99 9-5 SE called and said he negotiated $2k off his residual buyout and got super low financing he wasn't even looking for.

ak

CarMan@Edmunds · February 2002

Hi Ethan. The fact that your mother is co-signing has more to do with making her partially liable if you default on your loan than being an actual driver of the vehicle, so I would think that you should still be able to have your mother co-sign your lease even if she lives out of state. If you are going to lease your car on your own and want to pay for the entire thing in advance, wait until you have the money to do so rather than signing a conventional lease contract and making additional payments. I say this because you will still have to pay the exact same amount of interest on your lease if you sign a conventional contract and pay it off early. However, if you pre-pay your lease entirely in advance, most banks will provide you with a break in the interest rate that they charge you. Advance pay leases still aren't interest-free, even if they are done through a manufacturers' captive finance company, but they can save you money in most instances.

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CarMan@Edmunds · February 2002

Good morning, Greg. If you were to lease a 2002 Infiniti QX4 4WD (let me know if you are interested in the 2WD model instead) prior to the end of February through Infiniti Financial Services for 3 years with 12,000 miles per, the base lease money factor and residual value should be .00148 and 55%, respectively.

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CarMan@Edmunds · February 2002

Thanks for the additional information, borty. OK let's say that you leased this truck, a 2002 Mitsubishi Montero Sport LTD 4WD with an MSRP of $33,447 and a capitalized cost of $29,800, through Mitsubishi Motors Credit Corp. between January 3rd and February 28th for 48 months with 12,000 miles per year. According to my calculations, using these parameters this truck should have a pre-tax monthly lease payment of around $362. So if the $380 payment that you posted in your first message includes tax I think that the dealership that you got this truck from was being very straightforward with you.

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CarMan@Edmunds · February 2002

Hi Mike. Of the three cars that you mentioned in your post, the 2002 A6 2.7T has the most attractive lease program by far. The lease money factors on this model are about half of those that are available on the A4 3.0 and 330xi right now. If you provide me with the length of the lease that you are interested in and the number of miles per year that you are interested in driving, I would be more than happy to fill you in on the details of this car's current program. Both BMW's and Audi's current lease programs are only scheduled to run through February 28th though. So if you don't plan on getting your new car prior to that date, you might as well wait a week or so to ask. By then I should have an idea of what their March programs will look like.

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CarMan@Edmunds · February 2002

All banks charge acquisition fees on their leases. Although I do not know the exact figure off of the top of my head, I believe that Saab Financial Services charges an acquisition fee of around $500 or so. There is no way to get out of paying this charge, unless your vehicle's manufacturer is running some sort of special promotion waiving the fee when you lease through their captive finance company. This is not the case with Saab right now. Individual dealerships do not have any authority to waive lease acquisition fees, but they have been known to mark them up a few hundred dollars in order to bake additional profit into a deal. So don't worry about the acquisition fee that you paid, everyone pays one when they lease. Enjoy your new Saab!

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bagginsd1 · February 2002

I have talked to 2 dealers in the Dallas area.
They both recommended that I use "Owner's choice"
instead of the lease. "The payments work out
cheaper" - "The car is now registered with you
instead of the leasing company - so you
do not have to pay property tax in Texas ".
Is this just a scam ?
bagginsd1

eaweg · February 2002

Car_Man,

Could you please give me the money factor and residual on 3/36 lease for a 2002 Passat GLX SW w/tip? The car has 250 miles on it and the salesman quoted me at .00245 and 56%. He also said the price was $30,125. I have a feeling I can do better .
Thanks!
Edwin

multiplechoice · February 2002

Hi Car_Man,

I have been thinking about leasing a BMW certified vehicle. 2000 740i, For the 36mo/15k program what numbers should I use to plug into a lease calculator. (i.e. where does the residual % come from? Is it based on the wholesale bluebook value or some other source? Also, what is the money factor?

Thanks

is300tm7 · February 2002

i have a dumb question but not too sure who to ask so here it goes, i leased a car from CHASE bank , i am wondering if its ok to add a spoiler on my car, if its ok, does it have to be factory? how is the rule like? if i do put it on, do i have to take it off later?

CarMan@Edmunds · February 2002

Bagginsd1, BMW's Owner's Choice program is essentially a balloon note. Although balloon notes are not as popular as leases in most of the country, they traditionally have been much more popular in the state of Texas because the tax laws in that state have often made balloon notes a better deal than leases. - side note: Texas' tax laws are changing, check out my post on this subject here Car_man "Lease Tax Law Change in Texas" Feb 6, 2002 2:59pm - This program certainly is legitimate. It is tough for me to say if it will provide you with a better deal than a lease on the model that you are looking at would at this time. I suggest that you get quotes on what it would cost you for a traditional lease and a balloon note on the vehicle that you are interested in at a couple of different dealerships in your area to make sure that you are making the right choice.

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CarMan@Edmunds · February 2002

Hi Edwin. Here is the information that you are looking for. Please keep in mind that Volkswagen Credit's lease program is only currently scheduled to run through March 4th. If you were to lease a 2002 Passat GLX Wagon through VW Credit prior to that date for 3 years with 12,000 miles per, their base lease money factor and residual value should be .00185 and 56%, respectively. It definitely looks to me as though the dealership that you are working with is marking up this vehicle's base lease money factor in an effort to bake additional profit into your deal.

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CarMan@Edmunds · February 2002

Hi multiplechoice. BMW is actually one of the few manufacturers that often has attractive leases on certain Certified Used Vehicles. The residual values for used vehicles are usually based on hard dollar amounts rather than the percentages that are used to come up with the residual values for new vehicles. There are tons of variables that will have an effect upon used vehicles' residual values, such as the vehicle's mileage, model year, trim, etc. As a result, I personally am not able to keep track of the exact residual values and lease money factors for used vehicles.

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CarMan@Edmunds · February 2002

That is not a dumb question at all, is300tm7. In fact, you were smart to investigate the consequences prior to making any major modifications to your car. Each banks' policy on modifications to leased vehicles may be slightly different. Your best bet for finding out an answer to your question would be to contact Chase directly. My guess is that as long as the modification that you may to your car is reasonable, meaning adding a normal looking spoiler, you are probably OK. However, if you were to add a huge wing to the back of your car they might have a problem with that. Again, check with Chase directly to find out their exact policy on the matter prior to doing anything to your car.

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eaweg · February 2002

Thanks for the help on the Passat GLX SW...I had a feeling they were trying something funky. Especially since the car has 250 miles on it!

Edwin

km99cobra · February 2002

Car Man,

I have a window of opportunity and wanted to get your (hopefully) quick advice. A friend of mine who sells cars at an area Chrysler dealership has offered to sell/lease a 2002 300M Special to me at invoice. I am interested for two main reasons; first, when my current 1999 300M lease is up in 5 months I don't think a 300M Special will be available (which is at the top of my list for next vehicle) and secondly, there is some great lease cash available right now ($2500). The lease cash will definitely offset my lease buyout on the 1999, and he'll still sell the 2002 to me at invoice. What I don't know is what can I expect through Chrysler Financial regarding MF and residual for a 3 year, 15K per year lease? If the rates are not good, I can see about straight financing and take advantage of the 7 year/100K powertrain warranty they are offering (which expires 3/31/02). But you guessed it, I have to decide by tomorrow (dreaded end of month deal!). Any help is greatly appreciated.

- Ken

is300tm7 · February 2002

thank you for your help!

skobola · February 2002

The lease of my 99 BMW 323i will end in April, and I have already asked BMW to let my friend to buy the car for the contracted residual price of 68%. BMW told me that I will have to buy it first, for which I will pay tax, and then sell it to my friend, when he will pay the same tax again! They are not willing to let him take it directly of my lease! In addition, they will also not let my dealer to sell it to whomever, but they will take the car from Miami to Ohio (!?) and sell it on some auction. Well, one does not to be a finance wizard in order to find that they will loose money in all that when compared to if my friend would buy it. Go figure! Of course, I will pay some of that lost money in my new lease, isn't that precious!

CarMan@Edmunds · February 2002

You're welcome, Edwin. As long as vehicles are still technically considered to be new, they will still qualify for their manufacturers' new vehicle lease and incentives programs. Any mileage that is on new vehicles should make it easier for you to negotiate a good deal.

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CarMan@Edmunds · February 2002

Hi Ken. Fortunately for you, DaimlerChrysler has decided to extend their current incentives program relatively unchanged through April 1st. So you probably don't have to hurry as much as you thought you did. Chrysler Financial does have a special lease program available on the 2002 300M right now. The exact money factors that are associated with this program vary from area to area. If you tell me what state you are in, I would be more than happy to give you an idea of what the lease money factors and residual values should currently be like for this particular car in your area. Talk to you soon.

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CarMan@Edmunds · February 2002

You're welcome.

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CarMan@Edmunds · February 2002

Skobola, have you asked BMW Financial Services is they will let your friend assume your lease now? Many banks will allow their lessees to transfer their leased vehicles to another party during their contract. In fact, there are entire Web sites out there that are just dedicated to helping people who want to get out of leases find people who want to assume contracts. If your friend was able to get this lease transferred into their name prior to the scheduled termination date, they should be able to purchase the car directly from BMW FS at lease-end. This is just a thought and I am not sure if it will work with BMW FS, but it is definitely worth a shot. Good luck.

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km99cobra · February 2002

Car Man,

Thanks for the quick response. I am in Ohio (N.E. if that makes a difference). It's good to hear that they will be extending the incentives to April 1, but I sense this particular deal is being pushed to reach end of month goals. If you can provide the MF and residual, I can determine if it's worth pursuing now or waiting. Thanks again.

- Ken

abrecher · February 2002

Hi Car_man:

I was hoping that the March numbers would be available for the 2003 Acura 3.2TL.

I am looking for the Invoice price for the 3.2TL w/navi, as well as residuals and money factor for 36, 39, and 42 months throuth AHFC. Can you help?

Thank you.

CarMan@Edmunds · February 2002

You're welcome, Ken. Oh, now I see what you meant by having to finalize your deal by the end of the month. I thought that it was more a matter of trying to get the deal completed before the current incentives program expires. OK, let's take a look at the lease program for this car. If you were to lease a 2002 Chrysler 300M through Chrysler Financial in their Cincinnati Zone for 3 years with 15,000 miles per right now, you should be able to use their base lease money factor and residual value of .00230 and 43%, respectively. Don't forget about the lease cash that is currently available on this car as well.

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CarMan@Edmunds · February 2002

Hi abrecher. Acura's current lease program is scheduled to run through February 28th. I have not seen their March incentives program yet. They may release it tomorrow, or as often happens when a new incentives program is scheduled to be introduced on a Friday, they may wait until Monday to introduce their new program. Please feel free to check back with me mid-next week and I should have a better idea of what the March lease program for this car is like.

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km99cobra · February 2002

Thanks Car Man,

My friend at the dealership told me that although the lease cash is good (and would help with the existing lease buyout), their lease rates in general are not too good. That's an understatement, their (3yr/15k) 43% residual value stinks! I guess I be holding on to my 99 until termination and then going somewhere else, like Acura or BMW. I'll be lurking around here to see who's got the best deals at that time. Thanks.

- Ken

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