Lease Questions - Ask Here

gogoreagan

Hey CarMan:

Does it make sense for me to go into a lease with the sole intent to buy the vehicle at the end of the lease?

The Lincoln Aviator's price tag is a bit steep for me and I was thinking about leasing for 39 months and then refinancing the residual value. One quote that I have received is a 39 month lease with a residual value of $18,200 for $470 per month. (12,000 miles per year) This includes a total initial payment of $5000 which includes everything. They are also paying the sales tax.

Does it make sense to do this?? Thank you sir!!

rmlinn

Thanks for all your help. The dealer took back our 2001 MDX with 8 months to go on a 36 month lease, 28K miles on the vehicle, looking at the 30K service and new tires this summer. We got a new base MDX with a roof rack thrown in, we wrote a check for $675 which includes the first payment and all fees and taxes, $495/month for 36mo/12K miles. Our old payment was $500, based on MSRP in March 2001 because the dealers weren't budging from MSRP. The dealer is happy, we are happy. It still took several hours to do this deal, which is a departure from the Audi we leased last fall - that took all of about 20 minutes! Anyway, thought the above might be of use to the board - this is the best resource that I know about when it comes to leasing.

lawman10

Carman this lease is through SouthTrust Bank and the amount used to calculate base monthly payment is $42429.73. What am I not calculating correclty because all the BMW dealers are telling me that this price is almost at invoice and that they can not match it. The residual value at the end of the lease is $26659.80. The depriciation amount is $15769.93 DOes this help you......I have yet to see a 530i lease for under 500.......please help me out...thanks.

CarMan@Edmunds

Hi Tony. Well, what you were told is partially true. It is true that many banks have stopped leasing vehicles to consumers in the states of NY, RI, and CT. However, it would be incorrect to say that no banks will lease vehicles in these states after July 1st. There is no magic date by which all banks have to cease leasing in these areas. Whether or not they lease vehicles to consumers is up to each individual bank. Some have already ceased leasing in these areas, others have just increased their acquisition fees in these states, and others will continue to do business as usual. Supposedly there are new laws that are in the works that would put an end to these silly vicarious liability laws but to the best of my knowledge none of them have been officially passed yet. I personally feel as though it is only a matter of time before this matter gets straightened out and leasing returns to these states. For now, many banks have replaced their lease programs with balloon note programs which provide similar low monthly payments.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hey Gregg. Here's the info that you're looking for. If you were to lease a 2003 Honda Pilot EX without Navigation, leather, or the RES through American Honda Finance Corp. this month for 3 years with 12,000 miles per, its base lease money factor and residual value should be .00210 and 63%, respectively.

If you were to lease a 2003 Nissan Pathfinder SE 4WD through Nissan Motor Acceptance Corp. this month for 39 months (the 39 mo. program is better than the 36 mo.) with 12,000 miles per, its base lease money factor and residual value should be .00026 and 50%, respectively. The numbers for an otherwise identical lease of a 2003 Nissan Pathfinder LE 4WD should be .00059 and 49%. In addition to these attractive lease money factors, Nissan is providing $500 lease cash on 2003 Pathfinder models.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hi gogoreagan. The wonderful thing about leasing is that you have the option to purchase your leased vehicle at the end of its term. So, let's say that you decide to lease a 2003 Lincoln Aviator right now. You can drive it for 3 years with a reasonable monthly payment and the decide if you want to keep it. If it has given you all sorts of problems or if it has been in a serious accident, you can just walk away from it without having to worry about the normal depreciation hit that you would incur in either of those situations. On the other hand, if you have been happy with the truck and your lease-end purchase price is less than or equal to what an equivalent used Aviator would cost on the open market, you can buy it, financing the purchase option price over a couple of years.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

You're welcome, rmlinn. I am glad that I was able to help you out. Thanks for taking the time to come back and let us know how everything turned out. Enjoy your new truck!

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Lawman10, thanks for letting me know what bank your lease is being run through. The fact that the lease is not through BMW Financial Services explains this car's low selling price. I was wondering how it was so low. BMW is currently providing $4,000 dealer cash on 2003 530i models. The problem with my calculation is that I assumed that you were leasing this car through BMW FS. So in my calculations we were in effect double dipping, taking advantage of both the low lease money factors and the dealer cash that BMW is providing, which is not allowed. Fortunately, I saved my work that I did on your lease the other day. I just went back and added the $4,000 back into this car's cap cost and now come up with a zero down, pre-tax monthly lease payment of right around $599. So the $599 per month, including tax that you were quoted actually looks like a pretty good deal after all.

Car_man
Host
Smart Shoppers / FWI Message Boards

lawman10

Carman I do not know what I would do without you...you are awesome.....Let me ask you if I would go through BMW Financing what would the approx lease payment be for 36 months 12kmiles per year on a MSRRP car of $49370? Thanks again for all your help.

CarMan@Edmunds

Thanks for the compliment, lawman10. The payment that I mentioned in my previous message to you, around $599 per month (it actually is $598 and change without any money down, pre-tax) is based on a 3 year 12,000 miles per lease of this car through BMW FS using the MSRP that you provided me with earlier and the capitalized cost that you gave me earlier with the $4,000 dealer cash incentive added back into it.

Car_man
Host
Smart Shoppers / FWI Message Boards

alanek

Hi Car-man, I was just quoted $565.00 on a MSRP of 45,500 with a 10 mos refundable security deposit. The lease is for 48 mos with 12,000 miles. The car is equipped with Nav and Performance.
My questions are is this a good lease price and what should the RSD be worth per month.( He told me about $40)
Thanks

gogoreagan

Thanks CarMan for helping me with my question.

Now, here is my current quote for a 2003 Lincoln Aviator: 39 months, 12,000 miles, $5000 down (includes everything t,t,l,etc.), residual $18,200, for $470 per month. Based on your excellent knowledge, is this a good deal? If not, what would a good lease deal be for this vehicle? Thanks for all your help!!

im_brentwood

Where do you live? I can give you some ideas for the NY and NJ markets on the lease program for this vehicle.. but Lexus Financial is not a player on it. Numbers you got do seem very good indeed. But how much money in? Tax Rate? Etc... I can help with a tad more info.

(I'm a Lexus dealer.. but worry not, I wont have an RX Nav avialable till after Labor day

im_brentwood

I dunno why they don't do a 10K program...

But to me, very few of our customers even ask for it. Not to mention that it is very rare to see a car off lease with miles that low.

And even if it's the usual (Chase, Hann, etc..) 1%... on a 3 year lease it isn't all that much $$ for the 12K program.

tomcat_mav

it's my 1st time leasing a new vehicle. I am considering either 2003-04 Maxima, Murano, BMW, Acura TL. Ofcourse, I want to get the best deal with my trade-in for '95 Mazda MX3, 75k miles. I should be able to get 3k for it since it has no body damage and little mileage. Question is, I need to know any hidden costs that are usually there. Are there any specials going on? How much should I expect to pay (after taxes, incentives, trade-in, 1st payment, security deposit, etc..)? Is '03 better than '04 with payments? or vice versa? Thanks for your help

alanek

I live in NJ. This lease was with a $5650 refundable security deposit.

roxreps

I take it your either a financial enthusiast (interesting hobby), or in fact you're of the business. I'm fairly new to these forums but perhaps you can answer a question or two. I've been looking to lease the A6 Avant, 525iA, and most recently, an Allroad (2,7T). Is Audi trying to unload the Allroad because of lackluster sales? I've heard that a possible new model introduction will come as early as 05'. Allroad numbers make it quite attractive, more attractive than the Avant. Could I make the assumption that an Allroad could be had below invoice? Would it be wise to wait for better numbers in July/August?

 I'm looking for value, what's your take?

All My Best,
JB

im_brentwood

I'm also at a Lexus dealer in NJ... Nice truck BTW, Wish we had more!

I'll run the numbers through the lease computer in the morning... let ya know. But IIRC the 36/39 and 48 month terms are all pretty close payment-wise.

We use Hann, Lexus, SouthTrust and Chase.

Bill

im_brentwood

I am in the business... Senior management we'll say

I'd say to drive and buy what YOU like. Do I think an Allroad will sell below invoice? From what I know in my market, no. I doubt Audi dealers are desperate to sell them.. the guys I know are doing well with them. I'd say to shop around.. check the boards with a grain of salt..etc.

I say use a grain of salt on the boards as I have in the past seen deals posted that allegedly happened at stores I had an ownership interest in.. let's say they were fabricated a bit

Personally I like the Allroad a lot.. but the 5-Series is still about the best in its' class..etc..

Bill

deejay16

Car_man,
You were instrumental in helping me with my last lease and I am seeking your advise once again. We are looking at a Honda Accord LX, Mazda 6 (with auto trans), Ford Escape XLT, or VW Jetta GLS 1.8T. My questions is which of these vehicles do you think I could negotiate the best lease on? I am hopefull to acquire one of these cars for no money down and less than $280/month for 36-48 months. And if I could manage to get 15,000 miles/year that would be a huge bonus. So tell me am I all wet or is this possible on one of these vehicles?
As always, thank you very much.

Dave

CarMan@Edmunds

Hi alanek. Nice truck. I really like what Lexus has done with the 2004 RX. In your post you never mention this truck's selling price. This is an important figure to know because not only does it tell you exactly how much money you are paying for the model that you are interested in, but it is also necessary to calculate what its monthly lease payment should be. Remember that the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. I suspect that there is not a whole lot of room for negotiation on the recently redesigned RX 330, but this is an important figure to know nonetheless. Once you tell me this truck's selling price, I would be more than happy to calculate a sample lease payment on it for you to give you an idea of what you should be paying. However, since Lexus Financial Services is not providing any support on this model right now and because Bill is in the business he would probably be able to give you a better idea of what bank you should lease this model through and what its payment should be like. By the way, thanks for being so helpful Bill . Talk to you soon.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

You're welcome, gogoreagan. Let me begin by saying that I personally feel as though $5,000 is way too much money to put down on a leased vehicle. I usually advise consumers to put no money down on leases. One usually only needs to pay their vehicle's first month's payment, security deposit, acquisition fee, and any other tax or title related charges at signing. I say this for two main reasons. One is that if your vehicle is stolen and never recovered or totaled in an accident during your lease, your insurance company pays off the bank that you were leasing through and your down payment essentially disappears. Also, down payments on leased vehicle do nothing to reduce their lease-end purchase prices. Vehicles' residual values, and ultimately their lease-end prices, are based upon a percentage of their full MSRPs. So regardless of whether you were to put $5,000 down or $0 down on this truck, its lease-end purchase price would be exactly the same.

It is difficult for me to estimate what the monthly lease payment should be like on this model without knowing its full MSRP and selling price. I would use Edmunds.com's full MSRP and True Market Value prices to give you an approximate lease payment, but you never mentioned if you are interested in a Aviator Luxury or Premium and whether this vehicle has 2WD or AWD. If you can provide me with this vehicle's MSRP and selling price or a more detailed description of it I should be able to tell you approximately what its monthly lease payment should be like. Talk to you soon.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hi again Dave. I am glad that I was able to help you out on your last lease. Let's see what we can do for you this time. It is difficult to say which one would have the most attractive lease payments available on it right now because one has to take several factors, like money factor, residual values, and selling price into consideration. The Accord does not have any sort of money factor support available on it, but it has very strong residual values. The 2003 Ford Escape has terrible residuals, but an attractive lease rate and lease cash available on it. The Mazda 6 also has pretty low residuals, but reasonable money factors. The Volkswagen Jetta has a nice combination of lease cash, supported lease money factors, and reasonable residual values. If I had to make an educated guess as to which one would provide the best lease deal at this time, I would say that the Accord might win in a fairly close race. According to my calculations, if you were to lease a typically equipped 2003 Volkswagen Jetta GLS 1.8T Sedan with automatic transmission (MSRP: $23,465 / Cap Cost: $21,490 - Edmunds.com TMV) through Volkswagen Credit this month for 3 years with 15,000 miles per, its zero down, pre-tax monthly lease payment should be right around $299. This compares with $270/mo. for an identical lease on a 2003 Honda Accord LX 4-cylinder auto leased through AHFC.

Car_man
Host
Smart Shoppers / FWI Message Boards

alanek

He quoted me MSRP as if he was doing me a favor.
Approx $45,500.

Thanks

Bill, His 1st quote was for 39 mos and it was about $620 with $40 taken off for The refundable security deposit.

gogoreagan

Thanks for your quick response.

I am interested in a 2003 Lincoln Aviator Luxury 2WD with a MSRP of $43,341 and TMV of $41,839. I am afraid to see the monthly lease payment on this since I thought that a "down payment" also helped reduce the price and therefore the monthly payments. Yikes, I may have to breathe deeply before opening your response with the monthly payment.

I am also intending to buy this vehicle at the end of the lease. Thanks Boss!!

roxreps

Thanks for your commentary Bill. I've driven both, and If I have to chose on pure fun, hands down I pick the BMW. But with two growing kids, utility creeps back into the equation. If I went with the 525 I might finally entice my wife to LEARN TO DRIVE (city girl refuses to drive because she doesn't have to). The Allroad's fun too, however, not "BMW Fun".

Decisions, decisions...

All My Best,
JB

jmcwhorter

Does or will Nissan offer rebates on remaining 2003 inventory when the 2004 models are released? I'm not familiar with how Nissan does business. I see GM offering 3 to 4000 dollar rebates and am wondering if Nissan will do the same.

roxreps

Bill,

One more item. I live in Westchester, NY, and I'm concerned with the BMW and its handling in snow. Last winter was pretty bad (by NY standards) and even with a dedicated set of snows on a 525i (sports package incl.), am I asking for any trouble? I've been driving FWD for the last four years (also dedicated snows) and I'm sure this would not be an issue with the Allroad.

Your view on the subject would be greatly appreciated.

All My Best,
JB

mparker8

Again Car_man, thanks for the information on the Impala LS. Using leaseguide.com, I get a monthly payment of $332.48($313.66 + $18.82 tax). I inputed the following informaiton:

Base MSRP: $29105
Cap Cost : $22779
Residual : $13388 (46%)
MF : 3.5% (.00146)
36 months
6% Tax

Can you tell me if I screwed up or if you come up with numbers in the same ballpark. The cap cost came from MSRP - GMS, current 1500 lease incentive, and 250 employee rebate.

Thanks.

PS - leaseguide.com also gives this information about the lease:

Depreciation: $9391
Finance Charge: $1901
Sales Tax: $678

Total of All Payments: $11970
Total Lease Cost: $11970

im_brentwood

Buy what ya want

If it comes with 225-55-16s.. Get 205-60-16 snows and with trac they do quite well in the snow. I have skinner snows for my 740iL and it does fine (I run 215-65-16s)

Bill

im_brentwood

I forgot the mileage... But..

At 12K miles per year on an RX330 in NJ, go with Hann financial, they are at 62% residual and .00215 Money factor. Chase has the same residual for 15K miles per year, but then they are at .0027 money factor.

They both have a vetter program than Lexus Financial Serices.

As far as pricing goes... On a Navi around here, it's MSRP. I am in Little Falls and we have a 12-16+ week backlog on orders for RX330s with Navi and are absolutely not discounting them. The other dealers (And we speak frequently with Englewood, prestige, Bay Ridge, etc..) aren't either from what I see.. we shopped one on a lease and were quoted OVER MSRP when we backed into the #s.. It's a supply and demand issue, right now we can't even get the product.

gperr

Car_man,

Thanks again for all of your help. I came across a dealer who disputes the money factor you gave me in Post 7005. This is for a Nissan Pathfinder SE 4WD, 39M/12K miles. You indicated the base rates were 50% residual and MF .00026. The dealer said that the .00026 MF was for past Nissan Lease customers only and that their base rate is .00041. the difference is only $7/month, so it is not a big deal, but are they padding?

Thanks again, Gregg

gmanusmc

CarMan

What do you have for residual and MF for 2003 Corvette Coupe & Convert, 36 mo/12K per year.

Thanks very much in advance!

Bill G

1234

Hi Carman,
I was wondering, if your trade-in brings your net cap cost down so it equals your residual, do you just pay a finance fee+tax and 0 depreciation fee? Also, what if your trade-in brings your net cap cost below the residual amount, how is that usually treated?
I hope this finds you well.

landru2

Speaking only from my experience with Ford Credit, they allow a maximum of 25% of cap cost as downpayment. If you have a trade that is worth more we would be using enough to take us to the 25% mark and cutting you a check for the rest.

CarMan@Edmunds

You're welcome, gogoreagan. Down payments on leased vehicles do reduce their lease payments, but still are not a good idea for the reasons that I mentioned earlier. You really don't want to make a down payment if you plan on purchasing this truck at the end of your lease. According to my calculations, if you were to lease a 2003 Lincoln Aviator Luxury 2WD (MSRP: $43,341 / Capitalized Cost: $41,839) through Ford Motor Credit this month for 39 months with 12,000 miles per year, its zero down, pre-tax monthly lease payment should be right around $586. You may find that you are able to negotiate a lower selling price on this truck, especially given the fact that Lincoln has a dealer volume bonus program available on it in certain areas. Still, even with a slightly reduced selling price this is going to be a fairly expensive vehicle to lease.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hi jmcwhorter. Nissan has actually had consumer and dealer cash incentives on most of its models for many months now. Nissan's cash incentives have been more in the $1,500 to $2,000 range. Even though vehicles' incentives tend to increase as the next model year approaches, I highly doubt that Nissan's incentives will get to the level of General Motors', Ford's, and DaimlerChrysler's current programs.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

No problem, mparker8. I am not sure how tax is calculated on leased vehicles in your area, but the pre-tax monthly lease payment that you calculated is exactly the same as the number that I just came up with for this car.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hey Gregg. I am sorry to say this, but it certainly sounds as though the person who you are working with at this dealership is intentionally trying to mislead you. The lease money factor that I provided you with information on is for everyone who qualifies for Nissan Motor Acceptance Corp.'s top three credit tiers (FICO score of over 620), not just loyal Nissan customers. In fact, I have never never seen special lease money factors for loyal Nissan customers. It definitely sounds like they are marking up NMAC's base money factor on you.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hello Bill. Traditionally, GM hasn't had to provide much in the way of incentives on this car, though recently they have been offering reduced versions of their normal consumer cash and special financing rates on it. The Chevrolet Corvette is one of the few vehicles that General Motors is not providing any sort of lease support on. If you are interested in leasing one, you probably will be better off taking advantage of the $2,000 consumer cash that GM is providing on it and leasing it through a bank other than GMAC. It shouldn't be too hard to beat the 6.75% lease rate that GMAC is providing on it for 3 year terms. GMAC's 3 year, 12,000 miles per residual value for both the 2003 Corvette Coupe and Convertible is currently 54%.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hi 1234. Given the fact that I usually advise consumers to put as little money down as possible when leasing vehicles, I personally think that it would be a very bad idea to put this much money down on a lease. You certainly would be able to get a very low monthly payment by making a gigantic down payment on a lease, but there are definitely better ways to use that money. If you want to lease and have a trade that's worth a lot of money, you should just get the dealership to cut you a check for it or sell it on your own.

Car_man
Host
Smart Shoppers / FWI Message Boards

mparker8

Thanks Car_man for double checking what I got from leaseguide.com. Now my only problem, on the same lease my local dealer quoted me a $375 pre-tax monthly payment.

1234

Hi Carman,
Hope all is well. I'm thinking of buying a new 2003 Honda Odyssey in the next couple months. Do you know what interest rate AHFC will probably charge me on this vehicle if I finance it for 60 months? I'm guessing 4.9% but it could be more. Do you foresee AHFC lowering this rate for Odysseys by year end? Lastly, is there any benefit to waiting 3 or more months for better vehicle pricing if my timeframe is flexible?
Thank you in advance for any insight you can provide!

km99cobra

Car_man,

My wife has a 2001 Pathfinder with the lease terminating early 2004. She'll definitely be over on miles if it goes to lease end. I was wondering if Nissan had any early lease termination programs similar to what Chrysler and GM have for their customers. It's not a big problem if they don't, but we're looking to save a little if possible on the over mileage charge.

She's looking at the Murano as her next vehicle, so I should ask about any lease programs available on that: 3yr/15K, AWD/SE model. Thanks.

sunnybmw

car_man, could you tell me what would be a good/fair lease price base on the following info? And how's the $2500 manufactuer incentive would do good about the lease? Thanks.

2003 325ci, MSRP 34595, sale price 32250 (invoice + 500), 15000mi/yr with 36 months, no down with upfront payment (500 deposit, 1st month payment, 525 bank fee + title, registration, etc. The residual is 56%, money factor 0.0012 according to dealer.

jratcliffe

Hey car_man, how's it going? A query, if you would, on residual and MF:

Honda S2000
36 months
15k miles a year

Thanks!

tammyb6

Carman,
Thank you for all the information. After some thought I decided to go with the smaller motor and get a 3.0. I took delivery last Thursday and I love it!!!!!!

Thanks again,
Tammyb6

jcmet64

Ordered a 540-6 in May due for arrival in July, planning on leasing. Anyone know of possible incentives or lease specials for E39's in July? Given the current June dealer cash of $4500, would it be possible to hedge a bet and make some deal in June? Anyone know MF from BMWFS? Any feedback appreciated...

CarMan@Edmunds

Once again, you're welcome, mparker8 . Good luck.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds

Hey 1234. I'm doing very well. Thanks for asking. Honda is not providing any sort of special financing on the 2003 Odyssey right now. This may change for the 4th of July weekend though. In the past, Honda has offered special financing rates, brand-wide over holiday weekends. Of course, there is no guarantee that they will do so again next weekend, but it is possible. I really do not know what American Honda Finance Corp.'s standard financing rates are at this time. In fact, many banks' standard finance rates vary by state. If I had to make an educated guess, I would say that AHFC's new vehicle standard financing rate is currently probably around 3.9% or so for up to 60 months for consumers who qualify for its top credit tier. Having said this, you may find that you are able to get a lower rate on this van by financing it through another bank. It is in your best interest as a consumer to be pre-approved to finance the vehicle that you are interested in prior to negotiating with dealers. Pre-approval will give you a good idea as to what sort of interest rate you can expect to pay and often gives dealers motivation to try to beat the rate that you have already been given.

As far as the timing of this purchase goes, you may find that dealers are a little more willing to lower their prices on the 2003 Odyssey as the '04 models arrive, but by waiting too long you risk not being able to find the exact color or trim level that you want.

Car_man
Host
Smart Shoppers / FWI Message Boards