Lease Questions - Ask Here

CarMan@Edmunds

Congratulations on your financial windfall, Rickster. I am sorry to say that it is usually fairly expensive to get out of leases well before their scheduled end dates. In order to do so, you need to purchase the vehicle that you are currently leasing from the bank that you are leasing it through. It often turns out that it costs more to do so than your vehicle is worth on the open market. Furthermore, many banks expect consumers who end their leases early to still make all, or at least the depreciation portion of their remaining lease payments. As you can see, this can get very expensive. In my opinion, you would probably be better off financially if you just rode out your current lease and financed or paid cash for your next new vehicle.

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CarMan@Edmunds

Hello sjl225. I don't think that there are very many '05 Range Rovers still out there on dealer lots, but if you were to find a 2005 Land Rover Range Rover HSE and lease it through the Land Rover Capital Group for 24 months with 12,000 miles per year, its buy rate lease money factor and residual value should be .00320 and 64%, respectively. Its 10,000 miles per year residual value should be 65%.

If you were to lease a 2005 BMW X5 4.4 through BMW Financial Services right now for 24 months with 12,000 miles per year, its buy rate lease money factor and residual value should be .00250 and 61%, respectively. Its 10,000 miles per year residual value should be 62%.

As you can see, neither of these vehicles lease programs are currently very attractive. This is because their lease money factor support was recently replaced with dealer cash, $6,000 on the '05 Range Rover and $6,500 on the '05 X5 4.4. Make sure to take this cash into account when negotiating your leases on these trucks.

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CarMan@Edmunds

Here is the information that you are looking for arrosen. If you were to lease a 2005 Chrysler Town & Country Limited through Chrysler Financial right now for 36 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00076 and 46%, respectively. The numbers for an otherwise identical lease of the Touring version of this van should be .00163 and 49%.

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CarMan@Edmunds

Hi b55140. I believe that Utah is in Toyota's Denver region. I have not seen its exact lease program for the 2005 Tundra for your area, but in every other area of the country that I have seen its lease program for Toyota Financial Services' current money factor for all '05 Tundra models is an amazingly low .00001. That's as close to a zero percent interest lease as one can get. TFS' current 36 month, 15,000 miles per year residual value for the 2005 Tundra Double Cab 4WD is 60%. Again, I have not seen the lease program for the '06 Tundra for your specific area yet, but in the areas that I have seen TFS' buy rate lease money factor and residual value for an otherwise identical truck are .00082 and 62%.

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CarMan@Edmunds

Welcome karannarang. Since you are new to the world of leasing, you definitely should check out the following informative articles that are available here at Edmunds.com prior to visiting any dealers: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment.

I would be more than happy to give you my opinion of the deal that you were quoted, however in order to work up a lease payment on this car to compare with yours I need you to provide me with its full MSRP (with the destination charge added in). For now I can tell you that the selling price that you were quoted looks good to me.

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CarMan@Edmunds

I sure can cagorm. If you were to lease a 2005 Infiniti G35 2WD Sedan through Infiniti Financial Services right now for 36 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00106 and 57%, respectively.

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CarMan@Edmunds

Hi dfosher. If you were to lease a 2006 BMW 325xi through BMW Financial Services right now for 36 months with 12,000 miles per year, its buy rate lease money factor and residual value should be .00280 and 62%, respectively. The AWD version of the '06 325 does indeed have a residual value that's 1% lower than the RWD version.

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CarMan@Edmunds

Hi eel14. I am sorry to say that it is usually fairly expensive to get out of leases well before their scheduled end dates. In order to do so, you need to purchase the vehicle that you are currently leasing from the bank that you are leasing it through. It often turns out that it costs more to do so than your vehicle is worth on the open market. Furthermore, many banks expect consumers who end their leases early to still make all, or at least the depreciation portion of their remaining lease payments. As you can see, this can get very expensive.

You can determine approximately how much it will cost you to get out of your current lease by comparing its purchase price to its value on the open market at this time. You should place a call to the bank that you are leasing your vehicle through to find out its exact price. Once you know exactly how much money it is going to cost you to buy your leased vehicle you need to compare it to its current value on the open market. You can find out approximately what your vehicle is worth by looking up its Edmunds.com True Market Value in the Used Vehicle Pricing section of this site. You also may want to stop by the following discussion: sysop, "Real-World Trade-In Values" #, 15 Dec 2000 2:07 am. One of our most knowledgeable community members, Terry, frequents that discussion and he is often kind enough to give community members who give him an accurate description of their vehicles with his opinion on their value. Don't forget to check to see if you are still on the hook for your remaining lease payments. The difference between your leased vehicle's current value and how much it will cost you to buy it plus any remaining lease payments that you are obligated to pay will equal the cost of getting out of your lease right now. You may find that you are better off waiting until you are closer to the scheduled end of your lease to get another new vehicle or purchase your current one. Banks are much more likely to negotiate the lease-end purchase prices of vehicles a month or two before their scheduled termination dates than they are well before then.

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CarMan@Edmunds

Here is the information that you are looking for gold233790. According to the latest information that I have seen, if you were to lease a 2005 Jaguar X-Type 3.0 sedan with an automatic transmission through Jaguar Credit right now for 36 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00125 and 41%, respectively. The numbers for an otherwise identical lease of the 2006 version of this car should be .00070 and 46%. When negotiating your lease on the '05 X 3.0, make sure to take the $4,000 dealer cash that Jaguar is currently providing on leases of it into account.

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CarMan@Edmunds

Hello genegray. The selling price that you were quoted for your new 2006 ML350 looks good to me. I just calculated a sample lease payment on the truck that you leased for you using Mercedes-Benz Credit's September lease program and I came up with a zero down, pre-tax monthly payment of $565 not taking any negative equity into account. With your $3,874.75 in negative equity added in, this truck's payment would increase to around $677. A $2,800 capitalized cost reduction would bring that number down to around $596. All of these payments are before tax, but I doubt that tax adds up to $70 per month on this truck so chances are that the dealer that you got it from may have marked-up your vehicle's money factor to add additional back-end profit to your deal.

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CarMan@Edmunds

Thanks desgnconcpts. I can't take credit for the idea, management though that it would make it easier for consumers to find answers to questions about specific vehicles, just like you said. I just created a specific lease discussion for the Buick Rendezvous over on the Prices Paid board for you.

No the $2,000 customer cash that GM is currently providing on the 2006 Rendezvous is not available on GMAC leases, but it is providing $500 lease cash on leases of 2006 Rendezvous CX models. As far as this truck's lease program goes, if you were to lease an '06 Rendezvous through GMAC right now for 24 months with 15,000 miles per year, its base lease rate should be 4.0% and 66%, respectively. The numbers for an otherwise identical 36 month lease should be 4.0% and 57%. GMAC's 12,000 miles per year residual values are 1% higher for 24 month terms and 3% higher for 36 month terms. As you can see, GMAC publishes lease rates instead of money factors for the vehicles that it leases. You can convert its published lease rates into approximate money factor equivalents by dividing them by 2400.

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CarMan@Edmunds

Hello dphantom. I am sorry to say that it is usually fairly expensive to get out of leases well before their scheduled end dates. In order to do so, you need to purchase the vehicle that you are currently leasing from the bank that you are leasing it through. It often turns out that it costs more to do so than your vehicle is worth on the open market. Furthermore, many banks expect consumers who end their leases early to still make all, or at least the depreciation portion of their remaining lease payments. As you can see, this can get very expensive.

You can determine approximately how much it will cost you to get out of your current lease by comparing its purchase price to its value on the open market at this time. You should place a call to the bank that you are leasing your vehicle through to find out its exact price. Once you know exactly how much money it is going to cost you to buy your leased vehicle you need to compare it to its current value on the open market. You can find out approximately what your vehicle is worth by looking up its Edmunds.com True Market Value in the Used Vehicle Pricing section of this site. You also may want to stop by the following discussion: "Real-World Trade-In Values". One of our most knowledgeable community members, Terry, frequents that discussion and he is often kind enough to give community members who give him an accurate description of their vehicles with his opinion on their value. Don't forget to check to see if you are still on the hook for your remaining lease payments. The difference between your leased vehicle's current value and how much it will cost you to buy it plus any remaining lease payments that you are obligated to pay will equal the cost of getting out of your lease right now. You may find that you are better off waiting until you are closer to the scheduled end of your lease to get another new vehicle.

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genegray

dphantom,
It is possible to trade-in the 325i that you're leasing for the SUV that you want, that's just what i did last weekend But i think the process of doing that trade off is less complicated if you do it within the same company (in your case, BMW). It's just like swapping your lease sedan for another vehicle. They'll ask you to sign a notice of release of responsibility for your old car. I'm not sure about trading a lease for a vehicle financing set up though. Contact a bunch of dealers and they'll give you their numbers, then pick out the best offer that attracts you. (TIP- don't pick up the phone until you get the cheapest offer ...in your email). 90% of the transaction time on my new lease program were done on the internet and buy phone. After some consultations here and there, i was able to close the deal (over the phone), signed the papers then drove off my new ML350 a couple of hours later that same day. Goodluck and enjoy shopping.

allinde

Any thoughts on this Car-Man? I would appreciate any advice you could offer.

Thanks

krwest1

Car_Man, do you have any info on the 2006 MX-5 yet? I'm interested in 24 and 36 month (12K and 15K per year) residuals and money factors. In case trim level matters, I'm interested in the Grand Tourning and Limited Edition. Thanks.

dfosher

Thanks Car_man. Are you saying the lowest buy rate I could get for a 325xi is .00280? I was trying to negotiate a lower buy rate as I thought it was .00250 - .00290. I guess my salesman was correct in saying that was the lowest he could go.

Any information on Octobers lease deals on the 3 series. That’s when I take delivery.

thuelbig

I would like to know if I can get out of lease agreement before I sign the leasing papers and take possesion of the car?
The lease is for a 2005 Honda CR-V EX and after leaving the dealership with my head spinning, I realized that I was going to pay $2,000 over invoice for the car (Down payment + 36 lease payments + residual valve)
I know with a mortgage there is a 3 day right to rescind. I hope the same is true with this contract. Thanks

stuartbonia

You will need to research your state law to see if it can be rescinded.

Your (Down payment + 36 lease payments + residual valve) is $2,000 over over invoice includes some other charges. You have plates, doc fees, interest on the lease payments and other things.

Look at the capitalized cost and the down payment to see what you are paying for the vehicle.

jb_turner

As long as you have not signed the pertinent documents you can back out.
With automobiles there is no right to rescind.

dphantom

Thanks guys for your inputs and suggestions. At least I know what to do next...probably I better of wait till my lease end then get a new or used car.
Now i'm thinking of buying not leasing anymore...it seems that it will end up paying more in lease than buy. Well, Thanks Again guys for your help!
:):)

kyfdx

Have you taken delivery of the car?

Until that happens, you can get out of just about any car deal...

regards,
kyfdx
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crock22

Car Man, can you tell me the residual on a 2006 BMW 325i sedan 36months/15K. Can you also calculate a lease payment for me for a MSRP of 35K? Thanks

karannarang

Hello Car_man

The MSRP on the car is $21,440. The invoice price on the car is $18,834. He quoted me $17,650 including destination at first since I was asking about leasing. Later when I asked him what it would cost me if I was buying the car he added $515 for destination. When I asked him about the monthly payment with $1500 down, he came back saying that it would be $256 + taxes for 42 months.

He also refused to give me the money factor and said that it depends on my credit. After approval by AHFC he said that my monthly payment will be at least $20 higher since my credit is Fair (620).
Is it really a good deal? Also, I am really confused about all the other fees and charges like dealer documentation, lease initiation, etc. Please tell me what I can negotiate with and what I cannot. I am going to spend a good portion of my day trying to educate myself. I would really appreciate any help. I need to finalize the car soon ( like today or tomorrow)

Thank You

aggietx

Car Man,

Would you provide me with the Residual & MF on an 06 Accord EX-V6, 6speed with Navi based on 15,000 miles and a 36, 39, 48 month term.

Thanks.

delrick

"If you just lease for the lower payments and couldn't afford the car otherwise, you can't afford to lease.

This is the most important thing anyone needs to know about leasing."

Ok, since you apparently didn't see my question, let me suggest that this statement is utter nonsense.

Obviously one of the strongest inducements to lease has always been the prospect of driving a car you couldn't otherwise afford for less money.

Exactly what is the logic behind your silly assertion to the contrary, other than some elitist notion about the unwashed driving the good stuff.......

steine13

"If you just lease for the lower payments and couldn't afford the car otherwise, you can't afford to lease.

This is the most important thing anyone needs to know about leasing."

[..]
Obviously one of the strongest inducements to lease has always been the prospect of driving a car you couldn't otherwise afford for less money.

Exactly what is the logic behind your silly assertion to the contrary, other than some elitist notion about the unwashed driving the good stuff.......

The benefits of leasing are:
- Don't have to worry about selling the car.
- Don't have to pay tax on residual [most states].
- Don't have to worry about diminished value following a collision.
- Some cars are in fact cheaper to lease than to buy.

The danger is that for whatever reason, you'll wind up in a changed situation where you have to drive a lot of miles, or you move abroad and need to end the lease, or your three-year-old pours Elmer's white glue down the AC vents of your 530i.

When "stuff" happens, it can cost a bunch of extra money to get out from under.

That is why you can't afford to lease cars you can't afford to buy.

Elitist notions have nothing to do with this. We're not snobs here, which you'll see if you spend some time reading.

-Mathias.

delrick

Not to pursure this inordinately, but in the 5 years or so that I have followed this discussion, commenting infrequently, this is the first time that I recall your view being expressed.

In fact among the myriad reasons for leasing, one of the strongest has always been the ability to acquire a better vehicle for less money.

I suppose there is a subtle distinction here between costing less money and ability to afford, but I submit that the same litany of things that can go wrong is equally applicable to financing a purchase..

So perhaps your point is unless you can pay cash for a car, walk.

kyfdx

"let me suggest that this statement is utter nonsense.

Well.. gee.. I find it pretty hard to be elitist when I have to punch a time clock everyday. I think you are the first person to ever accuse me of that... Although, I have been called a clown...

Leasing is just an alternative form of financing... You still have exactly the same costs as purchasing.. Depreciation, financing, maintenance, insurance, etc...

The only difference is the cash flow schedule... On a purchase, you pay more of the money sooner, and less later, than on a lease... But, in the end, driving a car for three years doesn't cost any less by leasing...

As Mathias pointed out, a person's situation and driving needs can change... If you put a decent downpayment on a car, and your loan is for 60 months or less, you can always sell your car to get rid of the debt, or if you can still afford the payment, but your driving needs have changed, you can pile on all the miles you want.. You have options...

But, if instead of buying a $30K vehicle with 20% down and a $500 payment (assuming that is your budget), you go lease a car that MSRPs for 40% more, with the same $500 payment... and then you suffer a financial setback, or your driving needs change.... you are committed to a vehicle that will shortly be much more expensive than you can afford..

So, if you have a 20% downpayment and a budget of $500, and choose to lease that $30K car for $350/mo. instead... then no problem.. But, if your alternative is to use your entire $500/mo. budget to lease a $42K car, that you could never afford to purchase... then you are just setting yourself up for major financial problems..

regards,
kyfdx
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kyfdx

In fact among the myriad reasons for leasing, one of the strongest has always been the ability to acquire a better vehicle for less money.

That was my whole point... You can't acquire a better vehicle for less money.. it just results in a smaller monthly payment... not any sort of real savings..

I agree... this is the reason many people lease... I just think it is the worst reason...

regards,
kyfdx

kyfdx

If you want to see where another member has posted... or how often they post, just click on their member name, and you can see their last ten posts...

regards,
kyfdx
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foolsquirrel

Car_man, I saw you posted last month that for a 36 month, 12,000 miles per year lease of a 2006 Passat 2.0T, the money factor and residual value were .00065 and 59%. Are those parameters still the same for this month's offer ending on 9/30? And do you know what the money factors for the next couple of tiers are?

And is there a way to keep the salesman honest about my credit tier? So I will not be given a quote calculated with tier B, while in fact I am qualified for tier A.

Thank you.

Ning

jmezz

please advise if this is a good deal. journ/tech pkg,15k/yr,39months,612/mo with 1,700 incept. plus multiple sec. dep of $5,600. list is 51,100, sell is 48,724 mf is .0014, residual is 29,369. cars are on lot. please let me know carman

skoontz

Hello,

I'm working a lease deal on a 2006 BMW 530i. In Texas (I live in Austin), sales tax must be paid on the full selling price. So, I'm trying to figure out if I pay the taxes in full at inception or roll them into the capitalized cost.

The deal looks like this:

2006 BMW 530i
MSRP $53,465
Sales Price $51,500
Acq Fee $825
Sales Tax (6.25%) $3223
Sec Dep $700
Residual 62%
MF .00215
36 months; 12K miles/year

Lease payment is ~$690/month

So...

1) Does this look like a good deal?
2) How have others in Texas handled sales tax on a lease?

Many thanks in advance,
Sean

cmks02

Car_man:

Could you provide MF and residual for the following:

2006 Freestyle Limited, FWD, w/o Nav
12,000 miles per year
24, 36, 48 month lease

2006 Explorer Limited, 4x2, w/o Nav
12,000 miles per year
24, 36, 48 month lease

Thanks///

dpav

Gurus -

On a lease - do you calculate your tax on the negotiated sales price of the car then divide by your number of months or do you calculate your monthly lease payment then multiply that by your tax rate ?

kyfdx

Every state calculates it differently.. Where do you live?

dpav

ohio.

foolsquirrel

kyfdx, I live in Indiana. Do you know how the tax is calculated for a lease here? Thank you.

Ning

foolsquirrel

Car_man, do you have the data for the 2006 Honda Accord V6 models? In particular, could you post the residual values and money factors for LX V6 and EX V6, automatic trans. w/o Navi., for 24 month and 36 month terms? Thank you.

Ning

petesamprs

Some data points:
In NY, you multiply your monthly payment by the tax rate (ie, you pay tax on only your depreciation portion, but also on the interest as well).

In NJ, you calculate your total tax by multiplying the tax rate by the depreciation portion (selling price - residual). Then you spread that over the term of your lease. ie, no tax on interest.

CarMan@Edmunds

Hi allinde. I am a little confused by what you mean by "Due to an issue with forged second lease on this car." Are you saying that the dealer that you are working with gave you a better than normal deal on your current lease because you caught them trying to cheat you the first time around? Individual dealers do not have the authority to alter banks' published residual values, so it is not possible that the dealer that you are working with gave you a lower than normal residual on your Grand Cherokee. The only thing that they could have done for you is to lower your truck's selling price, which would in turn lower your lease payment on it. If your leased vehicle is indeed worth more on the open market than you would have to pay for it then it would be a good idea to purchase it and try to sell it on your own or trade it in on your next new vehicle.

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CarMan@Edmunds

Hello krwest1. I am sorry to say that I have not seen Mazda's lease program for the 2006 MX-5 yet. Sorry that I could not be of more help.

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CarMan@Edmunds

You're welcome dfosher. You are correct, BMW is not currently providing any sort of lease support on the '06 325xi. So if you were to lease one through BMW FS, you would have to use its standard lease money factor of .00280. Dealers do not have the authority to lower BMW FS' buy rate for this car, though they may try to mark it up to add additional back-end profit to your deal. Now that you know what the base factor is for this car, you can prevent this from happening. BMW's current lease program for this car is scheduled to run through October 31st, so unless it makes an unscheduled change this is the program that you would have to use to lease this car next month as well.

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CarMan@Edmunds

Hello thuelbig. there is no three day recision period with new vehicle lease contracts, however as long as you have not physically taken delivery of your new vehicle you should be able to get out of your lease. Once you drive it off of the lot, you're stuck with it.

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CarMan@Edmunds

Greetings crock22. According to the latest information that I have seen, if you were to lease a 2006 BMW 325i through BMW Financial Services right now for 36 months with 15,000 miles per year, its buy rate lease money factor and residual value should be .00250 and 61%, respectively. I would be happy to calculate a lease payment on the car that you are interested in for you, however in order for me to do so I need you to provide me with an approximate selling price for it. You should be able to find out approximately how much you will have to pay for this car by visiting the following discussion: "BMW 3-Series: Prices Paid & Buying Experience".

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CarMan@Edmunds

It's strange that the dealer that you are working with added in a destination charge when you asked him how much you would have to pay to purchase this car instead of lease it because even consumers who lease have to pay destination. A credit score of 620 probably does not qualify for Honda Finance's top credit tier. Honda's base factor for a 42 month lease of this car for a consumer who does qualify for its top credit tier should be around .00235. I am not sure exactly what its factor should be like for you though.

At lease signing, consumers usually have to pay their vehicle's first month's payment, a security deposit equivalent to their vehicle's payment rounded up to the nearest $25 or $50 increment, their bank's lease acquisition fee (Honda's is $595), and any required state taxes or fees. Any sort of documentation fee that you are charged goes straight into your dealer's pocket and really is nothing more for them to add additional profit to your deal.

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CarMan@Edmunds

Hello aggietx. Honda is not currently providing any sort of lease support on the 2006 Accord, as a result, if you were to lease one through Honda Finance, you would have to use its standard lease program. Its current 36 month, 15,000 miles per year buy rate money factor and residual value for a lease of a 2006 Accord EX-V6 with Navigation should be .00255 and 55%, respectively. The numbers for an otherwise identical 39 month lease should be .00255 and 50%. The numbers for an otherwise identical 48 month lease should be .00235 and 44%.

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CarMan@Edmunds

Hey foolsquirrel. Yes, VW Credit's lease program for this particular car and lease terms are exactly the same this month as they were last. Unfortunately, I do not know what its money factor for this model would be for consumers who do not qualify for its top credit tier. The only way that I can think of to keep a dealership honest about what credit tier you qualify for is to comparison shop with a few other dealers in a short period of time.

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CarMan@Edmunds

Hi jmezz. The selling price that you were quoted for this car is reasonable, but there still may be a little room left to negotiate. You may want to stop by the following discussion to see how much other community members have paid for similar cars recently: "Infiniti M35/M45: Prices Paid & Buying Experience". I just worked up a normal lease payment on this car for you and according to my calculations, your zero down, pre-tax monthly payment for this vehicle should be around $642. I used a money factor of .00194 and a residual value of 58% to arrive at this payment. I am not sure how much of a reduction Infiniti Financial Services provides for each additional security deposit, but you may want to ask your dealer.

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CarMan@Edmunds

Hi Sean. BMW Financial Services' buy rate lease money factor for the 2006 530i is currently only .00175, so it appears to me as though the dealer that you are working with may be trying to mark-up BMW FS' buy rate to add additional back-end profit to your deal. Make sure that you insist that BMW's buy rate money factor is used to calculate your car's lease payment. It is difficult for me to say exactly how much the dealer that you are working with is making on this car without knowing its exact invoice price, but if I had to make an educated guess I would say that you are paying around $2,000 over invoice. I am not personally familiar with what the market is like for this car in your area, but there may still be some room left to negotiate. You may want to stop by the following discussion to see how much other community members have recently paid for similar cars: "BMW 5-Series: Prices Paid & Buying Experience".

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