Lease Questions - Ask Here

CarMan@Edmunds

Hi Krishna. I really don't think that there is any advantage to purchasing your leased car now, rather than waiting until the end of your deal. By waiting, you give yourself more options. Let's say for instance that your vehicle is in an accident where it is not totaled but it needs to be repainted or whatever. If you own it, you are stuck with a car that will be worth significantly less when you go to resell it at some point down the road. However, if you are leasing the car, you can turn it in at the end of your lease and not owe a dime, provided it was repaired properly. Furthermore, some banks will negotiate the lease-end purchase prices of vehicles with consumers. These banks usually will only do so for consumers who call close to the scheduled end of their deal. Banks don't want to miss out on all of the interest that they would have been able to collect and also take a hit on the vehicle's residual value. I'm not saying that Infiniti Financial Services will definitely lower your lease-end purchase price, but it is definitely something to think about. Also, different banks have different policies on early lease buy-outs. The bank that you are leasing through may want you to pay some sort of early lease termination penalty to make up for some of the interest that it is missing out on. I would probably hold onto the money that you would have spent to purchase your car and wait until the end of your lease to decide if you want to buy it if I was in your situation.

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CarMan@Edmunds

Hey sjmurray3. When BMW increased its prices on the 2004 3-Series in late January, I believe that the invoice prices of a base 325i went up $270, 325Ci went up $365, and the 325CiC went up $455.

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bja104

I've seen lots of posts re: the '04 Acura TL but I don't recall seeing these specifics. I'd like to do a 3 year lease, 15,000 miles per year, no money down and I'm in suburban Chicago. What are the residuals and money factors for the TL, automatic, no navigation system. Also, what about a BMW 325 coupe. Thanks.

sjmurray3

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

sjmurray3, I responded to the same question that you asked earlier in post #10046. Check there for the answer. Thanks.

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CarMan@Edmunds

Hi bja104. Let's take a look at the current lease programs for the cars that you are interested in. According to the latest information that I have seen, if you were to lease a 2004 Acura TL without navigation through American Honda Finance Corp. this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00210 and 56%, respectively in all of the country except for New York. If you were to lease a 2004 BMW 325Ci through BMW Financial Services this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00125 and 57%, respectively.

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bja104

Thanks, Car_man.

Are the base MF's the best they offer--i.e. to those with the best credit or will an excellent credit sore reduce the MF even more? Also, do you know the acquisition fee for the Acura? Thanks.

krishna__j

Car man,
Thanks for your prompt response. I understand the 'option value' of staying with a lease, which can be significant in case of an accident or if I end up liking a different car and my original lease residual was inflated. As you indicate, the value of this option, while hard to quantify, can be quite significant.

Alternatively, using a very rough calculation, the total interest I pay is about ~$6K (~$30K cap cost, ~$18K residual, ~$19K total payments). If I buy now, I could technically save $3-4K in interest payments. This is probably significantly higher than the break IFS would give me at lease end. I believe they don't have an early termination fee.

If I ignore the option value, it does seem like reasonable savings, especially considering that banks pays out <1% these days. Am I missing something else?

Thanks

kyfdx

If there is any chance you might sell that car before 3.5 -4 years.. Then I would keep paying that lease. If you think you'll keep it for five or more years, then it might make sense to buy it now. I know this is a popular car, but Infinitis have traditionally had poor resale values overall even though the G35 has a strong residual. I would guess that the car won't be worth anywhere close to residual when the lease is up. If you buy it now, and sell in three years, your interest savings may be gone.
You also might check your payoff. Even though it isn't listed as a prepayment penalty, some lessors charge a percentage of the unpaid rent charge if the lease is ended early. The payoff may be more than you think.
regards,
kyfdx

hipreck

Hey Car_Man, you were a ton of help on my last lease so I'm back!

Two options:

BMW 325iT 42 month/12K, MSRP 39,450. Can I get the MF and Residual?

Audi A4 Avant, 42 month/12K. Not sure if Audi is better at 39 or 42 Months.

Thanks much!

Dave

maxim49

Thanks again Car Man! Hopefully I can get my payments around the $490 range. I'll let you know what happens.

Thanks again!

tolear

Hey Carman!

Can you tell me the MFs & Residuals you were using to calculate my lease payments for the Honda Accord LX & the Toyota Camry LE?

Thanks!

k_train

Hi Car_Man,

Please let me know what you think about this lease I received from a local BMW dealer in the SF Bay Area:

04 325i $34530
Black
Black Leather
Premium
Sport
Navigation
MACO $ 245
Training Service fee $160
Cap Cost $35960 ($500 over invoice & $525 Aquisition fee rolled in)
36 months lease/15K miles $467.47/month (tax included)Residual 61%
24 months lease/15K miles $495.79/month (tax included)71%
30 months lease/15K miles $479.08/month (tax included)66%
MF: .00125
Total Drive Off: $1258.47

CarMan@Edmunds

Bja104, all of the base lease money factors that I posted earlier are for consumers who qualify for these banks' top credit tiers. Basically they are as good as it gets. Some banks have higher money factors for consumers who have lower credit ratings and others use a take it or leave it approach, so to speak where they have one lease program and consumers either qualify for it or they don't.

In answer to your question about acquisition fees, I believe that American Honda Finance Corp.'s current base fee is $595.

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CarMan@Edmunds

Krishna__j, I definitely see your point. Using your money to avoid paying 5% to 6% interest is definitely better than sticking it in a money market fund and earning less than 1% on it. The only problem that I see with buying out your lease early is this. When you signed your lease contract, you agreed to pay your bank a certain amount of money over a specific period of time. There is a good chance that they are going to want some, if not all of the interest that you are legally obligated to pay them. I just checked out Infiniti's Web site and found the following quote on this subject: "How is an early termination/quote calculated? -
An early termination fee is the difference, if any, between the unpaid adjusted capitalized cost and the fair market wholesale value of the vehicle. This basically represents the present value of monthly payments not yet due on your lease and the purchase option price less the wholesale value of the vehicle." For more info on leasing through IFS, check out the following site: Frequently Asked Questions Regarding Infiniti Leases.

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bja104

Hi Car_man. Listen to this: making a deal on an '04 w/o nav. Salesman says they are trying to make their best month ever and offers me invoice ($30,300). Sounds too good to be true. Sure enough it was. With the residual and MF you gave me, I calculated a monthly payment of about $490 out the door (6.75% tax where I live). He says the payment will be $580!! I demand to know the residual and MF he's using and he says 54% and .002. That's for a 3 year, 15k/year, no cap cost reduction lease. I told him I thought was lowballing on the residual.

Thoughts? Did I calculate wrong? Thanks.

kyfdx

I plugged all your numbers in.. rolled the acquisition fee into the cap cost. Used the 54% residual on the MSRP of $33,195 (I think thats right), and the MF you gave of .0020, and the tax rate of 6.75%.

I came up with right around $489.00 including tax.

If they are indeed using all those numbers, then something smells. That MF looks just slightly low to me.. But that would only make a difference of a few dollars. My guess is the price he gave you doesn't include destination, document fee, cigarette break fee, and My boat payment is due fee...

Ask them for the cap cost.. It should be $30,300 plus $595 acquisition fee for a total of $30,895. If it is higher than that, then they are playing with you.

regards,
kyfdx

nickjc

Carman--thank you for the quick response.

I suspected I would be unable to lease the CLK 55; perhaps the dealership will discount the vehicle enough that I could afford the purchase. Are there any leasing incentives for 2003 Mercedes E500s? The cap. cost is $55K, 36-39 months, and 15K miles per year.

Thanks again.

CarMan@Edmunds

Welcome back, hipreck. Before I give you an idea of what the lease programs are currently like for the models that you are considering, you should know that most manufacturers' current programs expire at the end of the month and may be different in April. OK having said this let's look at the programs for these vehicles. If you were to lease a 2004 BMW 325iT through BMW Financial Services this month for 42 months with 12,000 miles per year, its base lease money factor and residual value should be .00125 and 54%, respectively. If you were to lease a 2004 Audi A4 1.8T Avant through Audi Financial Services this month for 42 months with 12,000 miles per year, its base lease money factor and residual value should be .00040 and 50%.

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CarMan@Edmunds

You're welcome, maxim49.

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CarMan@Edmunds

Here is the additional information that you requested, tolear. AHFC's current 3 year, 15,000 miles per base money factor and residual value for the 2004 Honda Accord LX should be .00146 and 56% in your state. TFS' March 3 year, 15,000 miles per base lease money factor and residual value for the 2004 Toyota Camry LE should be .00105 and 52% in your state.

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CarMan@Edmunds

Hi k_train. The deal that you were offered looks pretty good to me. Not only are you getting this car at an attractive price, $500 over invoice, but your dealer is also not adding any back-end profit to your deal by marking-up BMW Financial Services' base lease money factor or acquisition fee. I can not calculate a sample lease payment on this car to double check the payments that you were quoted without knowing its full MSRP. If you would like me to run some payments just to make sure everything adds up, let me know the MSRP and I will see what I can do.

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CarMan@Edmunds

Hi bja104. I am pretty sure that AHFC's current 3 year, 15k residual value for a 2004 Acura TL without navigation is 56%. Individual dealerships do not have the ability to alter banks' published residual values. So either this deal is through a bank other than AHFC or your salesperson is mistaken. I just calculated a sample lease payment on a 2004 Acura TL for you (MSRP: $33,195 / cap. cost: $30,300) and according to my calculations this car's zero down, pre-tax payment for a 3 year 15,000 miles per lease should be right around $428. The payment that you were quoted is waaaaaay to high for this car so they may be playing games with you. This is a nice car, but not for $600 a month.

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CarMan@Edmunds

No problem, nickjc. I don't believe that Mercedes-Benz is offering lease support on 2003 models any longer either. It does have a tiny bit of lease support on 2004 E500 Sedans though.

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bja104

Thanks, guys.

I really lit into him last night on the phone when he quoted me $580/54% residual. I told him I know the residual is 56, you're playing games and ticking me off, you should be at about $490 out the door w/ 56% and invoice. Told him get real if he wants to sell the car. Well, this morning I got a contrite, tail-between-the-legs apology in my voicemail claiming he was using the navi residual of 54% by mistake. Yeah, right.

I've got another dealer who I've told I will do $490 out the door. I'll keep you posted. Thanks for all your help.

kyfdx

At that price and with cap cost rolled in, I get about $471 including tax, using the 56% residual and the .0020 MF.

Now that you know about where it should be, I would focus on my monthly payment and drive-off costs. $475/mo with $1000 due at signing with all taxes included would be what I would shoot for.

regards,
kyfdx

shap1

The lease on my 325i is up in June. BMW sent me a letter with one of those early termination offers (i.e. turn the car in now and get another BMW). I'm planning on getting either an X3 or another 325 for sure. My question is, if I terminate early does the dealer roll the last two payments into my new lease? The ONLY reason I'm even considering their offer is because BMW is offering a rebate on the Steptronic ($1275) for the X3 3.0 through the end of April. And, from what I hear, the 3.0's aren't moving as well as the 2.5's so there are deals to be had. Your thoughts??

k_train

Hi Car_Man,

The MSRP is $37820.
Where do you think the sweet spot is on my lease? 36, 30 or 24 months?

Thanks again.

kyfdx

Your deal looks great. Unless you get the new car bug a lot, I see no reason to go with the shorter terms. You will have warranty and free maintenance for the entire term of the lease either way. Also, it is likely that if you go with the 24 month term, and want to stay with BMW, the new E90 model will be in its first year in 2006, and prices may be stiff, along with other first year issues.

Two things:
1) Why is drive off so high? Registration or DMV fees in addition to the security deposit?

2) You might ask if they can waive the acquisition fee.. They can do that by adding .00015 to the MF, giving you an MF of .0014. Taking the ACQ fee out of the cap cost and using the higher MF lowers your payment by about $7/mo. on the 36 month lease.

regards,
kyfdx

CarMan@Edmunds

No problem, bja104. Make sure to let us know how things turn out.

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CarMan@Edmunds

Hi shap1. Under normal circumstances, when one gets out of their leased vehicle a month or two before their contract's scheduled end date they would have to roll the remaining payments into their next lease or pay them out of their own pocket. However, many manufacturers offer early lease termination programs from time to time that allow their lessees to get out of the last few months of their leases for free if they purchase or lease another one of their vehicles. BMW does not normally offer this type of program but it is possible that they are and I just haven't heard about it yet.

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CarMan@Edmunds

BMW's special lease money factors are good for 24 to 42 month terms. The longer you lease this car for, the lower your monthly payment will be. Using the pricing info contained in your posts, I came up with the following zero down, pre-tax, 15,000 miles per year lease payments for this car: $432 for 36 months, $443 for 30 months, and $458 for 24 months.

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krishna__j

Car Man, kyfdx,
Thanks for the advice. I will follow up with IFS and see what the actual numbers are.

k_train

Thanks for your advice Car_Man & kyfdx, you guys are awesome.

k_train

Drive off includes:
Sec Dep. $500
Lic. $286
Tire fee $5,
Acq. Doc $5 and
first payment $467.47
Thanks for your advice on the Acq. fee., I'll check with the dealer.

Thanks Again,
k-train.

CarMan@Edmunds

You're welcome, krishna__j. If you wouldn't mind, I would love to hear what IFS tells you about paying off your lease early.

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CarMan@Edmunds

No problem, k_train. Good luck and make sure to let us know how everything turns out.

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bja104

Well, the salesman left me a voicemail saying the payment is $507 per month w/ 56%, .002 MF, sale at invoice price and roling in the acquisition fee. Of course, by the time I called him back, there was "a problem." His manager would no longer let him sell the car for invoice and he would have to raise the price by $500. I know these cars are selling well but that takes some stones. Needless to say I walked away. Unbelievable.

CarMan@Edmunds

Your research definitely paid off, bja104. The reason why this salesperson's manager would no longer let him sell you the car at invoice is because they were probably planning on giving you a cheap selling price and then making money on the bank-end of your deal. When you called them on padding your lease payment the incredible selling price mysteriously disappeared. Not that $500 over invoice is a bad price for this car, but these guys are definitely playing games with you. Most dealers have TONS of '04 TLs on their lots. I am sure that you will be able to find a dealer who will sell you this car at a reasonable price without playing all of these games if you shop around a little bit.

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bjp

Hi Carman or anyone could you give me some help? I would greatly appreciate it.
My quote:BMW 325ci coupe
Titanium silver metallic
Black Leather
Premium package
Sport package
Steptronic automatic
Heated front seats
MSRP $37,895.00
Sell price $35,900 with floor mats
Lease 15,000 miles per year
36 months
$492.32 / month(seems high)
New plates, reg , tire fee etc $167.50
Security deposit ( refundable at lease end ) $500
Taxes $1,462.19
Total amount cash down $2,612.01
Deposit $1,000
Total amount due at signing $1,612.01
Also he said the lease acquisition was $800.
This drive off seems high.

Also he said you have to pay taxes up front. Is it because we are in NY?
Thanks for your help.

bjp

Sorry, MF .00125 and 57% residual.

bjp

Ok I see how they got their numbers. They added the acqusition fee to the selling price of the car. But I thought it was $525? may be I can ask to get rid of the security deposit also.

jfgobraves

2004 cadillac cts msrp $43,045
selling price $37,996.56
+gmac capital cost reduction $1400
+gm card bonus $1000.
=2400 down payment
48 month lease 12k miles a year
also please state money factor along with residual. thanks car man

earth777

Hello Car_Man,

  I am looking into leasing a 3-series pretty soon. I was told to run the following by you before I lock the deal.

325 Ci (coupe) 36 months residual 60.1%, 24 months residual 67.7%
OR
325 i (sedan) 36 months residual 64%, 24 months residual 73.5%

Money factor 0.0018, bank fee $725

Can I do better? I was told that I can not negotiate the residuals but I can negotiate the money factor and bank fee.

Thanks a lot in advance!

missing_pgh

Is there someplace that lists current "best values" on lease plans based on things like particularly good current money factors? I hate to ask for numbers on lots of different cars if there is a place I can scan myself. I thought Edmunds used to maintain such a list, but I'm probably mistaken. If no such place exists, then I'll ask like this: I am particularly interested right now in entry-level luxury sport sedans. Based on recent posts, it appears the Audi A4 is a good deal right now - good MF, high residuals, and good negotiation room given Audi/VW's need to make sales...What other good values are there in this segment right now?

jayivy

Thanks for all the info!

CarMan@Edmunds

Hi bjp. I just worked up a sample lease payment on the car that you are interested in. According to my calculations, if you were to lease a 2004 BMW 325Ci with an MSRP of $37,895 and a selling price of $35,900 through BMW Financial Services in March for 3 years with 15,000 miles per, your zero down, pre-tax monthly lease payment should be right around $469. At lease signing, you would owe your car's first month's payment, a security deposit equal to that payment rounded up to the nearest $50 increment, and BMW FS' lease acquisition fee which is normally $525, but since you are in New York it is $800 for a total of around $1,769. Different states have different rules about how tax is calculated on leased vehicles. I am not personally familiar with how it is calculated in New York, but it definitely is possible that you will have to pay this car's tax at lease signing as well. If your dealer added any sort of taxes or fees into your vehicle's capitalized cost it would make this car's lease payment higher than what I just calculated. Also, the lease program that I used to calculate this sample payment only runs through the end of March. BMW's April program will likely be a little different.

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CarMan@Edmunds

Greetings jfgobraves. I am more than happy to calculate a sample lease payment on this car for you, but keep in mind that General Motors is scheduled to publish a new lease program for the month of April tomorrow. According to my calculations, if you were to lease a 2004 Cadillac CTS with an MSRP of $43,045 and a capitalized cost of $35,596.56 ($37,996.56 selling price - $1,400 GMAC lease cash - $1,000 GM card cash) through GMAC this month for 4 years with 12,000 miles per, your pre-tax monthly payment should be right around $429. I used a lease rate of 3.95% and a residual value of 45% to arrive at this payment.

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CarMan@Edmunds

You've come to the right place to talk about leasing, earth777. Let me begin by saying that BMW is scheduled to publish a new lease program for the month of April tomorrow. This new program may be a little different than its current one. Is the salesperson who quoted you the residual values and money factor that you mentioned in your post running your lease through BMW Financial Services? I assume that they are, but the numbers that you posted don't look much like BMW FS' March program. First off, BMW FS' residual values are always whole numbers. Next, its March base lease money factor for the models that you are interested in is only .00125. The fact that you were quoted a money factor of .00180 leads me to believe that the dealer that you are working with may be attempting to mark-up BMW's base money factor to add additional back-end profit to your deal. Lastly, BMW's current base lease acquisition fee is only $525 in all states except for New York. Individual dealers do have the authority to mark-up BMW FS' base lease acquisition fee to again add additional profit to deals. This may be why you were quoted a higher fee. You definitely should be able to negotiate a lower money factor and acquisition fee.

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CarMan@Edmunds

Hi missing_pgh. Some time ago, I believe that Edmunds published a list of manufacturers' advertised lease payments. While Edmunds.com does not publish that list any longer, you can find advertised lease payments for certain models by visiting the Incentives section of this site. Also, Edmunds.com does allow its visitors to look up vehicles based upon a desired lease payment range. You can so do by scrolling halfway down the following page: Edmunds.com New Car Prices, Reviews & Info. I have to tell you though that I do not believe that the payments that are used in this search are calculated using the current lease programs that are being offered by vehicles' captive finance companies. As a result, the real-world lease payments for these models may be different than the ones listed there.

You are correct. Audi had a very aggressive lease program available on the 2004 A4 in March. Somewhat similar vehicles that had attractive lease programs available on them in March include the BMW 3-Series, Saab 9-3 / 9-5, Volkswagen Jetta / Passat, Jaguar S-Type / X-Type, Nissan Maxima, and Volvo S60 / S80. Having said this, the majority of these vehicles' March lease programs only run trough today and it is difficult to say what their April programs will be like. If you see any models on this list that interest you, take them out for a spin to decide if you like them. If you do, feel free to ask me what their April lease programs are like in a few days.

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