Lease Questions - Ask Here

footie

The deal I was offered was 1 point lower in residual to 58% and .0023 not .0022 MF for 36mo/12K. No security deposit required. Acquistion fee $550.

It looks like to me that they are marking up the lease via 1 point in the residual and a small increase in the MF.

footie

Would that make a difference with Honda?

kyfdx

That would definitely change the residual. Dealers aren't authorized to change residual percentages... If they are using AHFC, then they have to use whats given.. Money factors are another matter.. they can mark them up.

regards,
kyfdx

reellaw

CarMan,

reellaw here- With the options I want on the 330 all wheel drive the MSRP is $43,195--

Thanks so much--

jmaxe

Thanks Car_man for the Honda Accord MF info. I'm also looking at the 04 Acura TL (48 mos/12K miles) but the central TX dealers are all around .00325 for MF. This is quite a mark up over the .00205 that I've seen on this board. The local dealers are stingy on discounting the price so I'm hoping to negotiate the MF down. Anyone have experience in the Austin/SA area?

hkjang

Hello, Car man,
First time posting here.
I have an offer from local dealer on Odyssey EX with leater/DVD for $306.60 with $3K down.
That $3K includes tax, which is 5%.
And, it's 3 year lease with 12000mile/year.
It think it's pretty good deal, but I'm afraid that there might be a catch here...
What do you think?

nwng

$299/mo, $1525 down, 12k/36 mos

what is the residual on this van? I was thinking about selling it myself after the lease expires, assuming under 40k miles at the end of lease.

Will I be upside down?

thanks

kyfdx

AHFC are real sticklers about end of lease. They won't negotiate lower buyouts. They also won't allow a pass-thru to another private party at end-of-lease. In other words, you'd have to put it in your name and pay the sales tax on it. Also, in my experience, their cars are almost never worth the residuals at end of lease. The residuals are usually pretty strong. I've leased four Hondas, and found this to be the case every time. What makes them an inexpensive car to lease is what makes them expensive to buy at end of lease.

regards,
kyfdx

nwng

so I guess in the ody's case, unless I plan to dump the van in 3 years, it's not worth the lease.

Actually I was thinking about paying whatever the lease buyout is and selling it privately cause the resale is so strong on this van.

kyfdx

If you are going to finance the car, then the lease money factor is probably cheaper financing than what you could get buying it. Of course that is offset by the acquisition fee. But, you are correct, if you think you'll keep the van longer than three years, then buying it is usually preferable. If you usually trade every three years, and like Hondas, then leasing is usually a better deal. Sometimes there are sales tax advantages as well, depending on your state.

regards,
kyfdx

CarMan@Edmunds

Individual dealerships really do not have the authority or any incentive to alter a vehicle's published residual values, footie. It looks like what is happening here is that the 2004 Honda Element EX 2WD has residual values that are 1% lower than the 4WD model for all terms. As far as the money factor goes, AHFC lessees can have their vehicles' security deposit waived in exchange for an increase of .00010 in its money factor. If the security deposit is waived on the deal that you described, then that is why its money factor is slightly higher than the one that I provided you with.

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CarMan@Edmunds

Thanks for the additional information, reellaw. Let's play with some numbers and see what sort of monthly payment we come up with. According to my calculations, if you were to lease a 2004 BMW 330i with a full MSRP of $43,195 and a selling price of $39,970 through BMW Financial Services this month for 3 years with 10,000 miles per, your zero down, pre-tax monthly lease payment should be right around $445. It is definitely in your best interest as a consumer to lease without making any sort of down payment. With a zero down lease, like the one that I laid out above, in most states at lease signing, you would only have to pay this car's first month's payment of $445, a security deposit of $450, and BMW FS' lease acquisition fee of $525 for a total of $1,420.

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carkid21

well I looked at a Xfire today and I actually like the car. I haven't actually sat down or anything with prices but edmunds says its MSRP is like 34650 or something like that. I was wondering a few things.

1. I have the ability to use a friends and family discount on the Xfire and was wondering how that works and what it would work out to be in a 36 month lease (15K miles)

2. I've heard that these aren't selling as well and was hoping to see if there are any lease deals going on, I was reading on the Xfire board that a dealor in Floriday has these for 299 a month for I think 39 months or something close to those wear abouts. I was wondering if I was able to get a dealor up here to match that or don't you think I'd come anywhere near it. I talked to a dealor today who said they haven't sold one in rouphly 5 months and has 12 sitting on the lot all stick shifts. any idea as to what I might want to shoot for as for price haggling?

3. if they are dealing would it be better to have my father haggle a deal or would it be better to use the friends and family discount; also am I able to use the friends and family discount on top of what ever price I may haggle out.

Thank you, after this I plan on making my decision between the Xfire and the G sedan. both of which I like yet I'm begging to like the Xfire. now lets just hope prices work out thank you

CarMan@Edmunds

No problem, jmaxe. Even though Acura is not providing any sort of lease support on it at this time, .00325 is waaaaaaaay too high a money factor for the Acura TL. According to the latest information I have seen, if you were to lease a 2004 Acura TL without navigation through American Honda Finance Corp. this month for 4 years with 12,000 miles per, its base lease money factor and residual value should be .00205 and 52%, respectively. Good luck in your negotiations.

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CarMan@Edmunds

Hello hkjang. This is a good time to be in the market for the Honda Odyssey. This month is the first time that Honda has provided any sort of lease support on it since it was redesigned many moons ago. This may be in part due to increased competition from the new Toyota Sienna and Ford Freestar plus the fact that the current generation Odyssey has been out for a few years now. I would be more than happy to calculate a sample lease payment on the van that you are interested in for you, using Honda's base lease program, so that you have a price point to use for the sake of comparison. However, in order for me to do so, I need you to provide me with this van's full MSRP and selling price. Let me know and I will tell you what I come up with.

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CarMan@Edmunds

Hi nwng. I assume that you are talking about the lease payment that Honda is currently advertising for the 2004 Odyssey. If this is the case, the lease-end purchase price for this van would be $17,312.40.

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CarMan@Edmunds

Hi Carkid21. I helped a friend purchase a DamilerChrysler vehicle through the Friends and Family program several years ago. If I remember correctly, this program allows anyone with a certificate to purchase a new DCX vehicle for a set price that is lower than any that they would be able to negotiate on their own. Like any supplier or employee purchase program, I do not believe that individual dealerships are obligated to sell you a vehicle through this program, but I am sure that most will. They may not have let you buy a Crossfire through it when it was first introduced several months ago and they may be hesitant to during the summer, but consumers are not knocking down dealership doors to buy convertibles during the winter so you should not have too much trouble finding a dealer to sell you one through this program at this time. There should not be any price haggling involved with this program. You need to check with the person who is getting you the Friends and Family Certificate to find out the exact details are.

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nwng

If I have the means to payoff the lease end purchase price and sell it privately, I could conceivably made a few bucks. The private resale on a 01 ody ex with 40k mi and clean condition is about $19250.

I could purchase an ody ex for less than $25k around here.

Of course I will have to start all over again after I sold the van

Tough, tough decision...

glevitt

Car_Man,
been getting some conflicting information on calculating residuals and I am hoping you can clarify for me.

When calculating the residual amount, does one multiply the MSRP and residual percentage or does one multiply the Cap cost and residual percentage.

It seems to me that the former would be a better method b/c it would standardize residual values but logic seems often defeated in the realm of car buying.

Thanks!

floormat

Any information on a lease of a 2004 Subaru WRX Sedan?

kyfdx

It is indeed the MSRP that you multiply by the residual percentage.

carkid21

I don't know specifics, but the dealor said that since they haven't been moving the Xfires and that to get ride of them he would probably accept them because they want to get the new convertables in and get ride of these. my point was though, that people have been negotiating some good deals on these like the one I staited above, yet since I don't know the details I'm not 100% sure. any suggestions would be apriciated.

tomm14

I am looking to lease a 2004 Chevy Suburban LT 4wd. I talked to a dealer in my area and explained what we are looking for. We only like one color the Silver and we want it fully loaded. He tells me that we should just order it from Chevy and have it made the way we like it. Now if I do that can I still try to get the Edmunds TMV of around $41000? I don't know if they will still deal on a vehicle they have to special order. I don't know why he would not just check around and do a dealer swap like they did last time...he did not seem to want to do that...He price it at full price minus the usual $4000 rebate....I don't know if there is room to negotiate on a special order. What do you suggest I do? I know Carsdirect gives me a price of $39800 and they have a large dealer network...maybe I should just do it through them.

jccssc

Hi there Car_man: thank you for your service thruout the time - I've leased a BMW 528i with ease 3 years ago using your info. Now it's time to return it and seeking your help for my next car again. I am interested in getting a SUV this time (with family growing). What does the lease for this FX35 RWD go? Thinking MSRP with the options I want ~ $39ish, planning to go for it with the 1st taker for $36ish sell price. I am looking at $0 down, 15M miles/yr for 3 years. And what do you think the residual value is after 3 years? Thanks!!

jmaxe

Thanks Car_man. I just knew that .00325 was too high so I kept looking and found another Austin dealer at .00250 and a San Antonio dealer at .00215. All were quoting 52% residual on a 48mo/48k lease.

tomm14

I was working with a salesman and the sales manager. I talked to another dealership and they faxed me what they have and did not say anything about trying to get me what I want, just that he would show me what he has and see how close we can come.

CarMan@Edmunds

No problem, nwng. I am glad that I was able to help you out.

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CarMan@Edmunds

Hi glevitt. To calculate a vehicle's residual value in dollars, one has to multiply its residual value percentage times its full MSRP plus the full MSRPs of any options that may be residualized.

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CarMan@Edmunds

Generally speaking, tomm14, most dealers prefer to sell consumers vehicles off of their lots rather than to order vehicles. This is because it is in their best interest to move units that they already are paying floorplan interest on. I am not personally all that familiar with the market for Suburbans in your area, but there is a chance that you sill may be able to negotiate an attractive deal on one, even if you have to order it. When you negotiate your deal, make sure that any price that you are able to negotiate will have any incentives that are available at the time of delivery deducted from it. Unless you really want to get a Suburban with an unusual combination of options that no other dealer is likely to have, I personally feel as though you may be better off shopping around to find a dealership in your area that already has the model that you are interested in in stock.

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CarMan@Edmunds

Welcome back, jccssc. Time sure flies when you're having fun doesn't it . Congratulations on the new additions to your family. I would be more than happy to calculate a sample lease payment on this vehicle for you. Let's play with some numbers and see what we come up with. According to my calculations, if you were to lease a 2004 Infiniti FX35 2WD with a full MSRP of $39,000 and a selling price of $36,000 through Infiniti Financial Services this month for 3 years with 15,000 miles per, its zero down, pre-tax monthly lease payment should be right around $550. This specific model's lease-end purchase price would be 51% of $39,000 or around $19,890.

Please let me know if you have any other questions.

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CarMan@Edmunds

You're welcome, jmaxe. As I just said to the previous poster, please let me know if you have any other questions.

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lobito17

Thanks to the help and information here and with the Expert Lease Pro software, I was able to negotiate what I think is an attractive lease rate on a 2004 Infiniti I-35. Here's the problem:

My current car is an I-30 and the lease ends on Feb 21. I have not gone (nor will I go) over my allotted miles. I have paid the last month's payment of $430, so effectively the car is mine until Feb 21 at no additional cost.

The dealer for the 2004 will not allow me to push my deal into February, as he claims (probably correctly) that he cannot predict money factor or residual will be. Currently, money factor is .00164 and residual on the lease (15k miles) is 53%

What is the risk that the money factor on this car will go up and the residual go down in Feb? I figure that each point of residual loss equals $330 in total cost over a 39 month lease, so if the resid moves down 2 points, I lose ($660 vs. 430 sunk cost). The interest rate (money factor) is even more impacting, although I am assuming that Infiniti will continue to support this car.

Any suggestions?

hkjang

Thanks, Car_man.
MSPR on Odyssey EX-L/RES is $30480 and selling price is $28590.
I'm trading in 2000 Toyota Corolla VE with A/C and automatic tran. (no power window and lock).
It has 54000 miles on it.
I bought Corolla back in Jan. 2002 and it was previously a rental car. It has little dent on front side(size of business card).
I know Edmunds.com recommends no downpayment for lease, but I'm going to put down $3K (including everything, title, fee, etc..)
Thank you!!!

mfullmer

Ok, I'm getting ready to turn my '01 STS in (lease ends April 28 but made my last payment today because I'm getting my new Lexus in a week!).

This is the first lease that I've turned in. Can I call the Cadillac dealer and just go in to have them inspect it? The car is flawless both inside and out and I have 15k fewer miles than I leased for. The only question I have is about the tires. I put the little sheet that GMAC sent me in the grooves and in a few places I can barely see the orange (that tells you the tread is low) but it's highly subjective.

If I DO have to replace the tires (or tire?) I want to do it myself because I have a coupon to get the same tire for "Buy 3 get one free". I'm just concerned that they will want me to leave the vehicle there after they inspect it.

I realize, of course, that I have paid for the vehicle until April 28th but I'm thinking they'll have to reinspect the car again when I bring it back (is that a bad thing?)

Thanks in advance.

pgill

Car Man -

Do you have access to any special financing rates manufacturers offer for their certified pre-owned (or a comparable program) cars? Subsidized financing rates are easy to find for new cars (e.g., Edmunds Incentives and Rebates), not so easy for pre-owned cars. I know at least Lexus is currently offering one, but was wondering if there were others.

Thanks in advance.

mfullmer

I have learned a very important lesson leasing (for myself, that is.).

Although I originally was very enthusiastic about leasing because I wouldn't have to worry about trade-in or sale issues and the fact of owning a depreciating asset, I've now decided that I'm probably not the prime candidate for leasing (at least not longer than 2 years.)

My first lease, a 2001 Cadillac STS, went very well at the dealer. I negotiated a great residual and low money factor as well as a low purchase price. Two things made this lease, however, terrible for me.

First, I negotiated a 15k/yr lease because I lived so far from my office. In the first year of my lease I moved closer to my office (When I should now have 43k miles I only have 29k).

Second, my car is a lemon. From the first week until just last week the car has been in and out of the service department at least every other month. I tried to go through the BBB arbitration but since the problem was intermittent they ruled against me (That process is such a joke, the dealership had report after report of the problem but just because it didn't happen in our 15 minute ride around their parking lot, they ruled that it didn't exist!). I then got a Lemon Law attorney. We ended up settling out of court for $2,500 but they wouldn't do what I originally wanted and just take it back and let me out of the lease.

Now, I'm faced with bringing the car back and, although they will profit from the excellent condition and low, low miles, I have to replace the tires before I turn it in.

I guess I've learned that, for me anyway, owning a car brings much better peace of mind because when I want to get rid of it, I can and I don't have to worry about how many or few miles I put on it.

kyfdx

In my experience (leased five times), don't sweat the turn-in. Do they offer a pre-turn-in inspection? Take a chance on the tires. I've had marginal ones at least 3 times, and never been charged for it. Leasing isn't for a lot of people, and you seem to be one of them. In fact, I bought the two cars we now have, even though I loved leasing in the past.

regards,
kyfdx

pgill

I would actually be glad I leased the STS in your case since I get to give it back instead of worrying about selling a lemon to someone or trading it in (and possibly taking a hit). You will have some unused miles but if you have more than 1 car, you can sometimes "spread" the miles. Anyway, how frequently do you plan to move or change jobs?

Also, I wouldn't worry about the tires unless they are completely bald. I turned in vehicles with 36k and 39k on their original tires. In both cases, I was not charged. You have 29k on yours so unless you have a heavy right foot, your tires should have enough tread. Worse comes to worst, if you find out they will charge you at lease turn-in inspection (I think most leasing companies do this), install the cheapest tires you can find.

mfullmer

Thanks about the tires. I am going to set up an inspection. Hopefully things will go well because the tires are just barely questionable when I compare it to the guide that GMAC sent me last month.

Funny thing about the tires (if I do have to replace them) is that with the option package I ordered with 17" wheels, the CHEAPEST tires are the ones it came with (Goodyear Eagle (something-or-other) ) and I've only been able to find tires that same size in more expensive tires. Hopefully though, it won't be an issue.

Pgill: I do NOT think that the lease was the best thing for this vehicle. My attorney told me that if it would have been a purchased car Cadillac would have just taken it back through the Lemon Law. He's seen them do it on much lesser problems. He said they always want to settle for cash on the leases because they know that the leasee is stuck in the lease.

Regarding selling it. I would have no problem selling it. The car still has another year left on the warranty and I figure people who buy used cars take that risk.

pgill

If you sell it, wouldn't you have to disclose the problems you have had with the car and the attempted repairs (I think) show up on Carfax reports. Granted some people may not care due to the existing warranty but I think it would be tougher to sell.

Interesting observation about he Lemon Law. I've seen other cases where car companies offered to buy back the car or replace with upgraded car...did you lease it through GMAC?

mobofe

just two comments on your situation which probably won't help your immediate situation but:

#1. when I was shopping for a new car, my original dealership (nissan which also sold volvos and jeeps), offered to absorb the remaining 2 months of my lease if i bought my car from them. Now, part of this would probably have been factored in the price the dealership would be willing to negotiate but if knew what you were doing, it would still work. You should let the dealer know that he can have your business immediately if he makes that concession. Bottom line is, you have to take an aggressive tack and get what you want asap. The closer you get to your lease-end, the less leverage you'll have.

#2. Why an I-35? there are so many great cars in that price range - i just can't fathom buying a souped-up maxima of yesteryear. the G35 and acura TL come to mind as great alternatives.

rtde

To all those who spend countless hours responding to requests, I would first like to thank you for your effort and dedication to this board. I would like to thank Car_man in particular for the plethora of insightful posts he has contributed to this forum.

I am considering leasing a 2004 Honda Accord LX 4dr Sedan (2.4L 4cyl 5M). This is my first lease and I want to ensure that I have not overlooked any viable alternatives.

For those who may not be familiar with Honda’s current lease incentives on the new 2004 Accord LX, here are the details:

2004 Accord LX Sedan with Automatic Transmission (Model CM5634PLW)
36 Months
$239.00 per month
$999.00 down payment
$1488.00 total due at signing
$999.00 down
  239.00 first payment
  250.00 security deposit
$1488.00

$20,590.00 MSRP (including destination charge)
$19,133.54 actual net capital cost
$11,942.20 purchase option residual value

12,000 miles per year (0.15 in excess thereof)

The promotional lease factors in a dealer discount of only $457.46 off of MSRP. I feel that I may be able to structure a purchase close to invoice since Honda offers a dealer holdback of 3%, which is still a handsome profit if the car has not been on the lot long.

On to the questions…

1. Car-man you previously stated that American Honda Finance imposes a $550 acquisition fee, but I do not see one listed on the Accord lease promotion. Am I safe in assuming that the acquisition fee is waived for all Accord leases receiving the promoted .00126 money factor?

2. As I stated earlier, I am interested in a Honda Accord LX 4dr Sedan (2.4L 4cyl 5M). Is a negotiated purchase price of $17,864 ($17,374 + $490 destination charge) with an MSRP of $19,790 (including destination charge) feasible?

Below you will find my calculations for a 36 month lease:
$17,864 purchase price
$11,478 residual value (58% of MSRP)
.00126 American Honda Finance Corp promotional base lease money factor
$214.36 monthly payment (without tax)
$214.36 (first payment) + $225 (security deposit) + $550 (acquisition fee) = 989.36 at signing

3. Am I using the correct residual value for this vehicle? Car_man, would you also please provide me with the residual values for the Honda Accord EX 4dr Sedan (2.4L 4cyl 5M)?

4. Could I have the acquisition fee added to the adjusted capital cost to minimize the outlay at signing? Doing so would increase my payment to $230.33 (without tax).

5. I am concerned I might exceed the yearly allotted mileage. What would the residual values be for the Accord LX 5A, LX 5M, EX 5M with 15,000 allotted miles? I assume increasing the mileage and lowering the residual value would be preferable to purchasing miles at origination for 0.05.

6. Are there any other fees or expenses I am omitting? I realize I probably need to factor in approximately $270 for license, tag, title and miscellaneous fees.

Additional benefits I discovered through hondafinancialservices.com:

No disposition fees on leases
Waiver of excess wear and use charges up to $1,500
Gap coverage included at no charge

It is unfortunate that the gap coverage is only included in New York leases.

7. I do not have too much confidence in the $1,500 waiver. I am certain the $225 security deposit will find a way to end up with Honda or are they fair in determining reasonable wear and tear? Is it naive to think I may have the security deposit refunded? Will the waiver cover tire wear?

8. Ideally, I would like to upgrade to an Acura at the end of the lease term. Apart from having the security deposit waived on the new lease, are there any other benefits I should be aware of?

Your assistance is greatly appreciated.

kyfdx

The $550 is figured into the cap cost, which means the dealer is coming about $1000 off of MSRP to make the deal.. Just an fyi.. As Carman will soon tell you, there is always a little more meat on the bone on most factory advertised lease deals.. I would say $500-1000 more at most.

regards,
kyfdx

bazoooooka

Go to a used tire place. They let you hand pick the used tires. Pick some with 50% or more tread left. Should be $100 bucks out the door and they'll mount em. Usually an all cash dealio. Any tire within 20mm will usually work (if yours our 225/60; 205z to 245z would fit those rims).

I just did the same thingie...

kyfdx

I have done 4 leases with Honda Finance.. In fact, I just turned one in this month.. They have never kept a security deposit or added excess wear charges. Over mileage is another matter. You will always pay those charges on turn-in. They use 3rd party inspectors that are very fair.

regards,
kyfdx

rsilsbe

Can you please tell me what the current lease factor and residuals on a 3yr, 15k per yearlease from Mercedes is ? thanks

rxke

Hi Carman

You are really providing a really valuable service and it is appreciated. You have helped me before. I am currently considering a 39 month lease or 42 whatever they are offering for either car. I live in NY(Westchester County)and want a lease with 15,000 miles per year. What are the incentives, money factor, and residuals for each of these cars. I currently own an Audi 1.8 quattro and also would like to know if they are offering any current Audi owner incentives.

Thanks for your help.

mfullmer

Mine are the 235/55 - 70 tires. I hadn't thought of used but I'll have to take a look at that option if it comes up. I think I'm going to do what others have suggested and let them inspect it before I do anything to it (save a nice wash/wax job). It's an extremely clean car and low mileage to boot.

I keep hearing people talk about a waiver. Is that something that was in your lease contract or just something that certain manufacturers do? I don't see it anywhere in my GMAC lease.

CarMan@Edmunds

Hi lobito17. Your dealership will be motivated to get you to purchase this car prior to the end of the month so that they can include it in their January sales total. Plus, the sooner your get your new vehicle, the less likely it is that you will change your mind or find a better deal. Having said this, they are correct in that there is no way for them to know what Infiniti's lease program will be like next month. Infiniti is one of the companies that publishes a new lease program for its vehicles every single month. It is difficult to predict what automakers will do with their future programs with 100% accuracy, but if I had to make an educated guess about what the lease program will be like on the '04 I35, I would say that it probably will be exactly the same next month. It just cut its residual value for this car by 1% last month, so there is a chance that it will not fall again. If it does fall, Infiniti will likely lower its lease money factor by an equivalent amount to keep the payments in a similar zone. So, I don't think that you have much to lose by waiting, but again there is no way to know for certain.

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CarMan@Edmunds

Thanks for the additional informaiton, hkjang. Let's work up some sample payments on this van for you. According to my calculations, if you were to lease a 2004 Honda Odyssey EX-L with the rear entertainment system with a full MSRP of $30,480 and a selling price of $28,590 through American Honda Finance Corp. this month for 3 years with 12,000 miles per, your zero down, pre-tax monthly payment should be around $363. If you were to put $3,000 down on this lease, it would reduce your lease payment to around $274.

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