Lease Questions - Ask Here

mmmc · March 2004

Car_man and kyfdx:

I just got a lease deal for a 2004 BMW 325ci w/ Prem. Pkg, Sport, Auto. It'll be great if you can advise if this is a good deal and check the #'s to see if there are hidden costs. Sounds good so far. Note I"m in the bay area. Thanks!

Lease terms: 36mths, 12K miles/year
Neg. price: 35000 ($500 over invoice)
MSRP: 37320
MF: 0.00165 <-- he won't do it at cost of 0.00125 (are they supposed to check my credit, he gave me that number over the phone)
residual: 59%
acq fee: 725 <-- won't do 525
monthly payment: 516.71 (includes acq fee rolled in)

drive off: 1354.71
security deposit: 550
taxes/license/etc: 283
first month 516.71
tire fee: 5

kyfdx · March 2004

Here is my take... Using your figures (great detail, by the way), I come up with a figure of approx. $476/mo plus tax.. Not sure how they figure tax in your state, but if the rate is near 8%, then the payment seems correct.

1) They aren't checking your credit because they are taking the "buy" rate on the MF and marking it up the maximum that BMWFS allows. The buy rate is .00125 and they are marking it up .0004. This is raising your payment an extra $23 plus tax.
2) Unless you are in the Northeast in one of the vicarious liability states, they are also marking up your acquisition fee. The base fee is $525 and they are marking it up the maximum allowed, $200.

3) It is doubtful you could get a $500 over invoice deal, without them marking these two fees up. So, overall, your deal is decent. But, its really closer to $1300-1400 over invoice.

4) $516/mo with nothing down is a pretty good deal on a car with $37320 MSRP.

5) It seems they could save you money by working the deal at the buy rate on the money factor. BMWFS only pays them a portion of the increased finance charge. I'd ask them if they would take $500 more, and do the deal at the buy rate. They would probably make the same amount, and it would lower your payment by about $10/mo.

regards,
kyfdx

klm2 · March 2004

My lease is coming due and I want to purchase the car. On the automated telephone system it state that the residual (buy out) price is non-negotiable. Has any one out there negotiated to get a lower price?

sbrooks · March 2004

Hi, leasing a 325i bmw. Red, auto, premium pkg, leather, xenon, cd changer, heated seats. Live in MD. No red cars around anywhere. Dealer had to trade with a dealer in OH for the car. MSRP 36415. Dealer offered 34735 which he said was 1000 over invoice which included some advertising fee I had to pay. My father said I could have gotten a better deal if I wasn't so picky on the color and options. I never leased a car before. In fact this is my first new car. Only want a two year lease. Here's the details.

Lease-24 mos
residual-74%
mf-.0018 (read on here it should be .00125)
acq fee-725
init payment- 2004.50 (which includes 1st yrs fees? 159, 1st paymnt 495.5)
sales tax-1736.75
net cap cost- 35846.75
est fees/tm- 318 (not sure what this is, maybe turn-in fees?)

I don't have to sign the papers for a couple of days yet till the car comes in. These are the numbers on the worksheet.

Please help

maxim49 · March 2004

Can you please help me out estimating my monthly payments on a G35 Coupe lease. I live in NJ and the sales tax here is 6% on the cap cost - residual.

MSRP - 37,910 (auto/prem/nav/perf.pkg)
Selling Price = 35,310
Lease Term = 39 Months
Mileage = 15K/yr
Down payment = $0(just inception fees)

Thanks in advance!!

tolear · March 2004

Car Man,
Please provide the MF's,residuals & monthly payments for the following cars:

Honda Accord LX '04
Toyota Camry LE '04

Mileage will be 15K per year
0 down

MSRP on Honda is $20,590 & $20,874 on Toyota.

Thanks for your help!

smitguy · March 2004

CarMan,

my wife and i are looking at leasing an '04 bmw 325it, and we were wondering what mf we should try to get.

the dealer is offering:
- $800 over invoice (plus $200 ad. fees/$198 doc fee)
- Residual of 62% after 36 mo./12k mi per year
- MF of .00165.

i've seen a couple of different mf rates (.00100 and .00125). is either of these correct? do dealers tend to negotiate on these?

thanks for letting me know

gteach26 · March 2004

10000 posts!! You da man carman! You bring so much traffic to this site Edmunds should give you a medal!

I have a lease question if you have a moment:

2004 Lexus LS430
MSRP: $61800
Negotiated Cap cost: $58000

What monthly payment do you get for a sign and drive 48 months 12K miles per year lease assuming excellent credit?

Thanks!

CarMan@Edmunds · March 2004

Hi mmmc. My first problem with your deal is that the person who you spoke with refuses to lease you this car using BMW FS' base lease money factor and acquisition fee. Most dealerships will do so, especially when confronted with the vehicle's actual base factor and acquisition fee. Have you tried shopping around a little bit? You may be able to find a dealer that will give you a comparable selling price and will use base numbers. Though I have to say that $500 over invoice is a good price. You do have to look at your deal as a whole. If you can not find any dealers that will even come close to this price, then despite the money factor and acquisition fee mark-ups this one may be the way to go. Just to show you how much of an impact these mark-ups are having on your deal, I just calculated a sample lease payment on this car for you using BMW FS' base money factor and acquisition fee. I came up with a zero down, pre-tax monthly lease payment of $447 (with the acquisition fee rolled into the cap cost). So as you can see, I think that there is a good chance that you should be able to lease this car for less than the deal that you have on the table right now.

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CarMan@Edmunds · March 2004

I just noticed that we hit 10,000 posts in the discussion. Hooray! Thanks for all of the visits everyone!

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CarMan@Edmunds · March 2004

Hello sbrooks. I do not have a problem with your paying $1,000 over invoice for this car, however much like I just mentioned in my previous post I do have a problem with the dealership that you are working with significantly marking-up your car's lease money factor and acquisition fee. The fact that they increased these two items will have a significant impact upon your monthly lease payment. Of course, the fact that you are having this car shipped in certainly does not strengthen your bargaining position any, but now that you know what this car's base lease money factor and acquisition fee ($525) should be, you definitely should try to get your dealer to calculate your lease payment using them.

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CarMan@Edmunds · March 2004

Greetings maxim49. I would be more than happy to calculate a sample lease payment on the car that you are interested in for you. According to my calculations, if you were to lease a 2004 Infiniti G35 Coupe (MSRP: $37,910 / selling price: $35,310) through Infiniti Financial Services this month for 39 months with 15,000 miles per year, your zero down, pre-tax monthly lease payment should be around $468.

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nber · March 2004

This is really an informative message board.

Looking to lease for 48 months and 15 000 miles a year the new 2004 Passat 1.8T sedan 4Motion.
I probably can't just convert the US currency from the Edmunds site as markets have their own pricing structure.

Any suggestions for Canadian MSRP + Invoice + MF for this type of lease.

Again great discussion. Many thanks

CarMan@Edmunds · March 2004

Hi tolear. First, let me congratulate you on being post #10,000. You win the answer to any lease questions that you have

. Oh boy, I'm sure that you're thrilled. I would be more than happy to give you an idea of what the lease programs are like on these two cars right now. However, in order for me to do so, I need some additional information from you first, including how long you want to lease them for and what state you are in. If you would like me to calculate sample lease payment for you as well, I need to know what sort of selling price you want these payments to be based upon. You can get a good idea of what these cars are selling for right now by looking up their Edmunds.com True Market Values in the New Vehicle Price Guide. Once I have this additional info I should be able to help you out.

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CarMan@Edmunds · March 2004

Hi smitguy. Man what is it with these BMW dealers marking up vehicles' lease money factors lately? It's an epidemic. If you were to lease a 2004 BMW 325iT through BMW Financial Services this month for up to 42 months its base lease money factor should be .00125. It looks to me as though the factor that you were quoted has been marked-up to add additional back-end profit to your deal. The good news is that the selling price that you have negotiated for this car is reasonable. You really should try to get this dealer to calculate your lease payment using BMW FS' base lease money factor though. If they refuse, you can always comparison shop with a few other BMW dealers to see if any of them will give you a comparable selling price and BMW's base lease program.

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CarMan@Edmunds · March 2004

Thanks gteach26. According to Edmunds.com, I've made over 11,000 posts myself. Man my fingers just got tired all of a sudden. It's a good thing that I can hunt and peck at the speed of light

. Let's work up a sample lease payment on you and see what we come up with. According to my calculations, if you were to lease a base 2004 Lexus LS430 without navigation (MSRP: $61,800 / Negotiated Cap cost: $58,000) through Lexus Financial Services in your area this month for 4 years with 12,000 miles per, your zero down, pre-tax monthly lease payment should be right around $732.

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CarMan@Edmunds · March 2004

I am glad that you find this discussion so informative, nber. Unfortunately, most manufacturers' incentives programs, including their lease programs, are much different in the United States than they are in Canada. I do not personally keep tabs on Canadian lease programs. Sorry that I could not be of more help.

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mcwenzel · March 2004

Carman,

Picked up my new Audi A4 last night. Here are the particulars:

2004 A4 1.8 Quattro with Sport, Premium, Xenon and Infotainment packages.

MSRP 33,990
Cap Cost 31,375
Invoice 31,276
39 months
15,000 miles a year
Zero Down
$361 a month, pre tax
Total due at inception: $575 acquisition fee, first months payment and license fees, approximately $1200.

I decided not to roll the acquisition fee into the lease to keep my payments under $400 including tax.

I think the invoice, which was shown to me by the dealer, may have been a bit juiced, but I am happy nonetheless to pay $2600 under MSRP. I was paying $285 a month for a lease on a Honda Accord LX that was almost half the MSRP of the Audi.

The .0002 money rate made it possible. The same car would have been $50 more per month last month. I have only had the car one night, but I absolutely love it.

Could not have done it without your help Carman. Thanks so much!

kyfdx · March 2004

Great deal.

jayivy · March 2004

Carman,

I asked about a G35 Coupe lease and you forgot about me.

maxim49 · March 2004

CarMan - one last question on this lease - do you know what the residual and MF are for this payment of $468/mnth.

Thank you very much for your help!!!

CarMan@Edmunds · March 2004

That's great news, mcwenzel. Congratulations on your new car. Thanks for taking the time to come back and let us all know how everything turned out. Enjoy!

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CarMan@Edmunds · March 2004

Sorry about that, jayivy. Apparently a few post may have slipped through the cracks. I answer so many questions in this discussion that it is bound to happen once in a while.

TO EVERYONE
If I have missed any other posts please let me know

OK, now back to your question about the 2004 Infiniti G35 Coupe, jayivy. In order for me to calculate a sample lease payment on this car for you, I need you to provide me with its full MSRP and selling price. You can find its MSRP in the New Vehicle Pricing section of this site. There you will also find this car's Edmunds.com True Market Value. That will give you an idea of what they are selling for right now. As far as your credit rating goes, Infiniti Financial Services gives its best lease money factors to consumers who qualify for its top three credit tiers. So, as long as your score is over 620 you will qualify for its lowest money factors.

Get back to me with the pricing info that I asked for and I will get you an approximate lease payment for the model that you want. Sorry again about the delay.

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CarMan@Edmunds · March 2004

No problem, maxim49. This car's current 39 month, 15,000 miles per year base lease money factor and residual value are currently .00220 and 58% for all leases through IFS.

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jayivy · March 2004

The MSRP for the vehicle is $35,500 and the selling price is $34,000. That's ok for overlooking me. I understand you have so many questions to answer. Do you think it would make a big difference if i paid cash for the car (price wise) instead of leasing it.

ger3sf · March 2004

Hi car_man...

I wouldn't mind BMW dealers marking up their leases, if they can offer aggressive adjusted caps. Which makes me wonder, if the base rate is .001 and the dealer marks it up to .0014, do they accrue the add'l profit from the mark-up when the deal is signed, or as the lease payments are made? Thanks.

tolear · March 2004

Below is the additional lease information you requested:

Honda Accord LX ' 04 at Cap Cost of $19,646
Toyota Camry LE at Cap Cost of $18,949.

My Cap Cost number broken out is

Honda Accord LX
True market value of $18,846
Bank Fee 500
Motor Vehicle 300

Cap Cost $19,646

Toyota Camry LE
True market value of $19,149 (includes ABS for $266 & mats for $126).
Rebate -1,000
Bank Fee 500
Motor Vehicle 300

Cap Cost $18,949

The lease term is 36 months.
My residence is in New Jersey.

I do not have price quotes from the dealers. However, the price quotes tend
to be around Edmunds TMV & my experience with paying Bank Fees &
Motor Vehicles.

I have the best leverage if I visit the dealer once & make a deal that day.

Thanks!

kyfdx · March 2004

They (and other makes as well) get the money up front from the finance company. But, its just a percentage. Sort of like how a mortgage broker might get a 1% fee if he sells you a mortgage at 3/8% over the base rate.

So, if they mark it up by .0004 and add $25/mo to your payment, equaling $900 over three years, then they might get $350-500 from the BMWFS.

regards,
kyfdx

jam · March 2004

car_man

thanks for all the great info. Looking at the following 04 BMW 325 convertible in Socal:
silver
Sequential Manual Gearbox
Sport Package
Premium Package
Xenon Headlights
Heated Front Seats
MSRP $45,920

Selling Price $43,990
36 month, 18,000 mile-per-year lease
$1036.74 Total Drive off
35 additional payments of $690.74, tax included
No Security Deposit
.0016 money factor

Any thoughts?

thanks

jam · March 2004

ashleyandersin · March 2004

A car I want is coming to a dealer but I think it wise to go ahead and negotiate the deal before it arrives rather than do a deposit and wait?

I know Porsche Credit's base lease money factor and residual value should be .00230 and 56%, for 36 months on the Cayenne but Car_Man do you know of any other fees like say for instance the acquistion fee like the $525 BMW has.. I don't want to go on in and negotiate this and be hit and overcharged on fees. Since you told me they are notorious for marking up money factors makes me wonder what else they will pad!

I know the price margin between the invoice and the MSRP I want is hefty ($4600). I don't even know where to begin with a fair price but I at least want to know all the fees involved. My price quotes have been around 2K off those models that are lightly optioned.

maxim49 · March 2004

Thanks a lot man!!
Carman - Would you mind telling me how you got to the $468 payment with a .00220 MF and 58% residual. The dealer is telling me my payments would be $510 a month including tax. He says he's using the same MF and residual. But a $468 a month payment including tax comes closer to $493 a month. So, do you think he's adding on somewhere the extra $17 a month - which is about an extra $660 throughout the lease term.

Once again, thank you so much for your help!!

siteexpert · March 2004

Curious as to your comments on the following
deal (36m/12K miles)

BMW 330xi (Loaded :-)
Premium Package
Cold Weather
Sports Package
Automatic
Xenon
Rear parking sesnor
GPS Navigation

MSRP: 47,270
Cap: 44,290 (1K over invoice)
Extra Fees:
Maco: 200 (told they charge this on all cars)
Lease Aquisition: 525 (I assume this is not marked up?)
Floor mats: $90 (trying w/o luck to get these thrown in)
Residual: 60%
Money Factor: .001
No security deposit (2nd bmw lease)
Locked for 60 days (car is being ordered)

Minimum off the lot: $791.31 (first month, tax, license)
Monthly Payments: 538.55 + tax

kyfdx · March 2004

Looks like a great deal.. Depending on metropolitan area, MACO is almost a given. That is the base acquistion fee and the base MF. Floor mats are not included in the MSRP. Lease deals are great on 330's right now. A $47K car for $538/mo. That is hard to beat. I ran your numbers and came up with that exact amount, also.

regards,
kyfdx

sjmurray3 · March 2004

BMW had increases to all their 3 series in January from $400 - $500 depending on the model. My question: Does the invoice remain the same or does it increase the same amount or a proportionate amount along with MSRP? I see many cars on the lots with different base MSRPs and that can make a difference in negotiations. Scott

kyfdx · March 2004

I'm not sure if the increase was proportional or identical, but that would be within $30-$40 either way.

CarMan@Edmunds · March 2004

Hey jayivy. Many consumers are under the mistaken impression that they will get a better deal for the vehicle that they are interested in by paying cash for it. As long as you remember that the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them whether you lease or pay cash should not make any difference in your ability to get a good deal. In fact, dealers often make additional back-end money from banks for setting up lease and finance contracts. So many dealerships actually prefer their consumers not to pay cash. Pretty interesting stuff, huh?

OK, let's calculate a sample lease payment on the car that you are interested in. According to my calculations, if you were to lease a 2004 Infiniti G35 Coupe (MSRP: $35,500 / selling price: $34,000) through Infiniti Financial Services this month for 4 years with 15,000 miles per, your zero down, pre-tax monthly lease payment should be right around $453.

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CarMan@Edmunds · March 2004

ger3sf, I believe that dealers are paid their portion of the profit from marking-up lease money factors all at one time. With finance contracts at least, I know that banks charge back dealers if the consumer who had his or her rate marked up refinances within a certain period of time.

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CarMan@Edmunds · March 2004

Thanks for the additional information, tolear. Here are the sample lease payments that you requested. If you were to lease a 2004 Honda Accord Sedan LX (MSRP: $20,590 / cap cost: $19,646) through American Honda Finance Corp. this month for 3 years with 15,000 miles per, your zero down, pre-tax monthly lease payment should be right around $271.

If you choose to lease the Camry that you are interested in through Toyota Financial Services, I do not believe that you can take advantage of the consumer cash that is available on it right now. As a result, this car's approximate cap cost would really be $19,949. If you were to lease a 2004 Toyota Camry LE (MSRP: $20,874 / cap cost: $19,949) through Toyota Financial Services this month for 3 years with 15,000 miles per, your zero down, pre-tax monthly lease payment should be around $285.

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CarMan@Edmunds · March 2004

No problem, jam. The selling price that you have negotiated on this car looks fine to me. My main problem with your deal is that your dealer is marking-up BMW Financial Services' base lease money factor from .00125 to .00160. Doing so will increase your lease payment on this car by around $25 per month, or by around $900 over the length of your lease, which is nothing to sneeze at.

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CarMan@Edmunds · March 2004

Thanks for the repost, Ashley. I think that I accidentally missed a few posts a while ago. Sorry for the delay. It is definitely in your best interest to negotiate your deal prior to paying any sort of deposit. Once you have paid a deposit, the dealer believes that they have you hooked and you lose a lot of leverage in your negotiations. In answer to your question about what other sort of fees Porsche Credit charges on leases, at lease signing for a Porsche you will have to pay your vehicle's first month's payment, an acquisition fee of $595, and a security deposit of your vehicle's payment rounded up to the nearest $25 increment.

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CarMan@Edmunds · March 2004

You're very welcome, maxim49. I used the formula that I outlined in the following post to calculate the sample lease payment that I gave you: Car_man "The Return of "How to Calculate Monthly Lease Payments"" Jun 28, 2001 6:15pm. You can also learn how to calculate lease payments by checking out the following article: Calculate Your Own Lease Payment.

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CarMan@Edmunds · March 2004

Hey siteexpert. I'd say that it looks as though you did an excellent job negotiating this deal. This car's selling price looks very reasonable and the dealership that you are working with is using BMW's base lease money factor. If you like the car, I don't see any reason not to pull the trigger on this deal.

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CarMan@Edmunds · March 2004

Sjmurray3, when manufacturers increase the MSRPs of their vehicles they almost always increase the invoice prices as well. In fact, many manufacturers have actually been tightening the gap between MSRP and invoice in recent years, giving dealers less room to negotiate.

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jayivy · March 2004

One more question what would the final payment be if my tax rate is 8.75%? Also, I have a trade that's worth atleast $2,000.

nickjc · March 2004

Hello Carman. I've followed this forum for quite some time, and believe I have an unusual situation.

The lease on my Audi A6 4.2 expires near the end of this year. I've visited a Mercedes dealership with a brand new 2002 CLK 55 that they are dying to unload. The sticker was approximately $69K, but I know that will drop significantly. Assuming a cap. cost of $50K, 36 month lease at 15K miles/year, what other info. would you need to give me some ballpark figures?

I appreciate your input and assistance.

krishna__j · March 2004

Hi Carman,
I leased a G35 in October 2003 following some of your recommendations, which were very helpful. It was a 39 month lease and I got it at a good price for the time ($0 down and $498/mo) by going through VPP and using the knowledge acquired at Edmunds.

I had every intention of turning in the car in Jan '06 when the lease ends. But, I LOVE the car and I would like to keep it long term.

I am in a position to buyout the lease. I would like to know if there is any financial advantage to buying out the lease NOW as opposed waiting to the end of the lease term.

If buying now is similar to prepaying a home loan and reducing total interest paid, I would buy now. If it does not make a difference, I will just wait until the lease ends and reevaluate my decision at that point.

Thanks for your advice.

Regards,

-Krishna

CarMan@Edmunds · March 2004

You're welcome, jayivy. I usually do not include tax in any sample lease payments that I calculate for consumers because different states calculate tax on leased vehicles differently. You may be able to find out how tax is calculated on leases in your area by calling your Department of Motor Vehicles.

As far as your trade goes, you are much better off selling this car on your own. If the vehicle that you are planning on trading in is older, has high mileage, or both the dealership will not sell it on its lot. Instead it will just turn around and ship it to an auction. As a result, you definitely will not receive top dollar for your trade. You will get the most for your current vehicle by taking out an ad and selling it on your own. If you really don't feel like going through the trouble of doing so and are set on trading your car in, it is in your best interest to have the dealership cut you a check for your trade-in allowance rather than to use it as a down payment on your lease. I always advise consumers against making down payments on leases for two main reasons. The first is if your leased vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you are leasing it through and your down payment essentially disappears. The second main reason is that down payments on leases do nothing to reduce vehicles' lease-end purchase prices. So regardless of whether you pit $2,000 down on this lease or absolutely nothing at all down, its lease-end purchase price would be identical.

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sjmurray3 · March 2004

Can anyone remember what the pre-January price increase base invoice prices were for the 325i, 325ci, and 325Cic? Thanks - End of the month and I want to make another offer today or tomorrow!

CarMan@Edmunds · March 2004

You certainly have good taste in cars, nickjc. Your main problem with getting a new CLK 55 will be that it is likely going to be fairly expensive for you to get out of your A6 lease several months prior to its scheduled termination date. Also, I am not sure if you are going to be able to lease the 2002 CLK that you are interested in. Most banks have stopped leasing 2003 models at this point because their residual values have fallen so much, let alone 2002 models. If you were to lease this car, you would probably have to do so through Mercedes-Benz's used vehicle lease program and I am not even sure that it is eligible for that given the fact that it is still technically a "new" car. In my opinion, you will probably be best off financing this car rather than leasing it.

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