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Comments
$44k cap cost less residual value of $24.2k (55% of cap) = total depreciation over 48 months of $19.8k
$19.8k divided by 48 months = $412.50 depreciation per month. That's the first part of your lease payment.
Then, for the second part, you add the cap cost of $44k to to residual value of $24.2k for a total of $68.2k. Then multiply that by the money factor of .00253 (which, by the way, is 6.072% interest, not 6.5%) and you come up with $172.55/month. Add that to the $412.50 above and your total pre-tax monthly lease payment is $585.05.
I think the residual is pretty good and the money factor is ok but not great.
Enjoy your Volvo!
However, I still contend that if you were to borrow $19,800 (the total depreciation) from a bank and pay it back over 4 years at an interest rate of 6.072% then your monthly payment would be $465.66/month. This calculation is easily made on numerous websites that provide financing calculations. This, by the way, is how my monthly payment is calculated for my purchase of the car.
If you are right with the monthly lease calculation then my only conclusion is that they rig the calculation to support a low published interest rate when the "effective" interest rate is much higher.
I calculate an interest rate of approximately 18.5% based on $19,800 borrowed, over 4 years, and a monthly payment of $585.
In fact, if you look at my calculations, the money factor is applied to the cap cost PLUS the residual value - in your case, about $68k.
People that know a lot more about these calculations than I do (like Car_Man here at Edmunds) usually can't answer the obvious question - why are lease payments figured this way?
Beats me - but they are.
With 0 down payment, the interest (money factor) applies to the full $44K price of the car, not just residual - you drive away the whole car, not just its residual, right
Here's the official Edmunds Car_Man method, entitled "How to Calculate Monthly Lease Payments"
Step 1: Calculate the Capitalized Cost
To calculate a vehicle's capitalized cost, take its selling price subtract your down payment.
Step 2: Calculate Your Vehicle's Residual Value
To calculate your vehicle's residual value, multiply its full MSRP (note some banks will only allow consumers to residualize certain options or will place a cap on the amount of money that can be residualized for each option) times its residual value percentage. The residual value percentage is determined by the bank that you are leasing through.
Step 3: Determine Your Vehicle's Total Depreciation
To determine your vehicle's depreciaiotn, subract its residual value from your capitalized cost.
Step 4: Determine Your Vehicle's Monthly Depreciation
To figure out your car or truck's monthly depreciation, divide the total depreciation that you just calculated by the number of months that you are going to lease it for.
Step 5: Determine Interest Charges
To determine the interest portion of your monthly lease payment add your vehicle's capitalized cost and its residual value and then multiply the result times your bank's lease money factor.
Step 6: Calculate Monthly Payment
Finally, add the results from Step 4 (the monthly depreciation) and Step 5 (the monthly interest charge) to come up with your pre-tax monthly lease payment.
Car_Man
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17" alloys, previously a $500 option are now standard.
XC90 T6 went from $39972 to $40565 or $590 increase.
Free scheduled maintenance for up to 30,000 miles is also included.
As for leases, you can really pull your hair out trying to figure them long handed.
Khanvn's steps are crrect, remember to account for the lease fees if your not paying them up front.
The lease sounds like Chase.
There are better ones if your Isaac score allows you to get them.
Some lease companies are regional only as well.
Bottom line , the residuals set by ALG, the auto lease guide are very good and lease rates are anywhere from 3 to 8 % depending on where you go.
DVD Player.
The aftermarket DVD's won't hook directly up to the radio system.
You have to use an FM modulator and play the dvd over an unuseed FM channel.
Having said that, the Sony system we use sounds very good and our customers seem to really like the unit.
Basically, when you drive away a car with no down, you owe someone the full value of the car and have to pay interest on that amount. Near the end of the lease, when you have already paid off the depreciation part, you owe (and pay interest on) the residual value only. For the rest of the lease period, you pay interest on something in b/w the full price and the residual. That's why the money factor calculation involves both the full price and the residual. That's my understanding of how leasing works in plain english. Correct me if I am wrong.
IMO, most leasees get confused by the math and their potential to get ripped-off is much higher than in a straight purchase or conditional sale.
My wife and I were at a Mercury dealer years ago taking delivery on a leased Mountaineer. As we arrived, a distraugh older couple were leaving, with the wife crying. I asked the sales lady what had happened - apparently, this couple THOUGHT they had purchased a Lincoln Towncar three years before through Ford Motor Credit and had arrived to make their 36th monthly payment - only to find out the contract was a lease deal, not a conditional purchase. They owed another $15k or $20k to actually buy-off their vehicle at end-of-lease. Sales lady said she gets one or two clients a month like that, no matter how clear and concise the contract language is.
After all, what could be more simple than 0% financing over 36 months? Divide the out-the-door price by 36 and you got it nailed.
But look at what you have to figure out on a 36-month lease on the same vehicle - "cap" cost, residual, money factor, depreciation, bank fees, return fees, mileage allowance, excess-mileage charges, etc.
Gosh, you know, it's almost..as if...somebody...figured out a way...to...CONFUSE...people.
Nah, forget it - that couldn't be it.
gmark: is this the 3M clear coat for the front of the hood? Can I ask how you are paying for the product plus install? Your accessories post (#1417) was very helpful. Im getting my 2.5T in a few weeks and were discussing the accessories pricing. Thanks.
Zecko: Sorry for the late reply. I received delivery of my T6 last Monday and have only driven it once so far (the vehicle is iced-over from freezing rain and I cant get the doors open). My dealer is arranging for the 3M Scotchcal to be installed on the hood portion for C$199. See the Swedespeed.com XC90 forum to see an install of the product made by xpel.com (they are the only ones with an XC90 pre-cut template).
I took delivery and there was a delay with the mud flaps, a mix-up with the third row mats, and the rear bumper cover was replaced by the seat cushions instead (better deal for me). Since Volvo Canada is paying for C$1000 of the accessories, I am only responsible to pay for the amount over C$1000 and taxes (PST & GST) on the total amount. I paid for this using my credit card separately. I just got the aftermarket tint (35%/15%) for all windows except the front windshield. I paid a premium to get the high-quality, scratch-resistant, breakage shield (works like the laminated glass) tint. My dealer quoted C$500 and I got this done elsewhere for C$250. It looks really sharp.
#1459 of 1487 i_yellow...Britax by zecko Apr 01, 2003 (2:12 pm)
Thanks again for the info. We don't have many Britax dealers above the 49th, so I'll have to think about buying the Roundabout without having the XC90 available to fit. Your experience with the seat and car is reassuring!
Zecko: Although Britax Roundabouts are highly-rated by Consumer Reports, I should point out that a certain model of these seats failed Transport Canada's safety tests. Britax has provided a workaround for this safety recall.
Details about the Britax safety recall are here.
http://www.tc.gc.ca/roadsafety/childsafe/notiavis/dser/d200304/d2- - 00304e.htm
And to close, since all these leasing posts have bumped my child seat posts back, LATCH/ISOFIX anchorage points are found only on the two outboard seats of the second row. CRIKEY: You're welcome, eh?
It's interesting how child seat recalls go. This, compared to the pattern of general recalls, is relatively "ticky-tack." Unlike the truly serious recalls, it apparently has nothing to do with a defect in the seat hardware itself, but a rather bad omission/ambiguity in the instructions. It doesn't hammer home the point that child safety classes teach (about rear-facing harness straps needing to be below or at the baby's shoulder).
Curiously, I could swear that my Roundabout instructions mention the proper strap installation, and my seat was made in the time period specified. Despite the recalls, the Roundabout is still probably the safest convertible seat out there, IMHO. Many of its competitors have been the subject of serious hardware-defect recalls.
What makes deciding on car seats difficult is that many child seats get recalled. The Consumer Reports top-rated Graco SnugRide has been the subject of a massive recall. Apparently a "small number" of the manufacturing run lack the parts to securely attach the infant seat to its base! Interestingly, if one is missing the hardware, it should be pretty obvious to the parent since the seat will not firmly click into place, and stay there.
Rather sad that picking a child seat has to wade through these recall considerations.
The moral here is -- make sure to send in the product registration card, so you are informed of any recalls.
As for the carseats - it seems you can't avoid the recalls no matter what you buy! We got the recall notice regarding the SnugRide but we didn't have a defective unit (as wmquan said - not sure how you would not notice that the key locking latch was missing!). I'm going to look over the Roundabout in a few weeks. Despite the recall note, it still seems to be the safest convertible seat in the market.
Right now, I'm ruminating over getting Running Boards (or not). They do seem to stick out a bit and would give your pants a nice stain right around the calves. However, they also seem to help in loading kids into their carseats (or letting kids load themselves). Any opinions from the group?
Over in the Swedespeed Forums, people have raved about them when the got them. They supposedly even protect your vehicle from door dings too. Now again, there wasn't too much dissenting opinion from those who didn't get them. Personally, I couldn't justify the cost. The step-up assistance was minimal (just as the Lexus running boards) and we did have the 'dirty pants' concern since road sand/salt is very common for a good five months out of year here in Ontario. But considering we have a Thule cargo box, it would've been nice to help poke around in it. Mind you, we can always get it installed later (not sure what the installation charge is though - $$$$$).
No, you aren't the only one. I noticed the same thing the first time my kids got out of the car. I try to remind them to check the seatbelt, but you know how that goes. I have a bunch of little dents in the door panel because of it.
Sharon
The poster who gave you the formula has it down.
A few other things, money factor: multiply by 2400 to get the actual interest rate.
Aqusition fee, everyone has them, some will raise then to eliminate a security deposit, most cover the gap ins cost with this money.
Residual some, not all, lenders will negotiate this number if you want to buy the car at the end.
With all the disclosures required on the contract its pretty hard to get taken, just take your time and go over the lease line by line. Understand your responsibilities. Most people seem to think they don't have to pay wear and tear or milegae charges, or that they can cancel the lease at anytime and not pay.
This is not true. When you lease a car, you have it for the length of the contract, because you have no equity, ever.
04 Delivery Time.
There are 4 classes of Volvo dealer, based on size.
The bigger the dealer the more cars they recieve on allocation. XC90's are allocated on a "turn and earn" status. The more cars of all types you sell the more XC's you recieve.
That being said, no dealer that I'm aware of has an excess of XC's available. Whether they're bis or small. Certainly none of them are discounting the car.
Your probably better off with a bigger dealer than a smaller one if your in a hurry.
More allocation means more opportunity to pick up a car that someone else has cancelled on.
We have sent a number of XC's to neighboring states with small dealers because the local dealers couldn't meet the demand.
Unfortuneately, no dealer can give you a firm date for a car. Too many variables.
Towing, The XC90 AWD's are rated for 5000 lbs.
All you need is the appropriate hitch, which your retaier can install. The installation isn't that complicated, we've done several.
No other modifications are necessary.
If there is a site for me to do the homework please let me know.
Terms are harder.
Each lease company has its own money factors and residuals.
upfront money, typically,
1st payment
Security deposit(waived by some based on ISAAC Score or increased aq fee)
Acqusition fee(anywhere from $400-$900)
Plates- varies by state
Some states require sales tax to be paid up front, most have it as a component of the payment.
Anymore money down is decap, money to lower your payment.
We haven't had any rear seat passengers yet, but this has me quite concerned though (especially the tearing of the leather). Other than warning the passengers, is there anything you can do to prevent this from happening? I'd check myself, but there's been a nasty snowstorm and I don't want to be outside.
Regarding tethering Forward-facing: The Extra strap (D-ring) with a Britax Roundabout cannot be used to tether a forward facing seat. It is not strong enough to hold in a crash. The loads are much greater forward-facing than rear facing in a crash. They certainly do not make this very clear in any instructions, but my source is Tom Baloga, president of Britax.
Lack of tethers for 3rd row: I was able to ask a few questions/make a few comments to a Volvo safety engineer through e-mailing a Ford safety engineer, and one thing I was told is that they will "look into" testing their cargo anchors as potential tether anchors for the 3rd row, but for now they won't recommend it.
Rear-facing in 2nd row center: you can safely move that seat all the way forward for a rear facing seat, that is why they came up with the idea. However, when I tried this with my daughter's roundabout, I felt completely cut off from my 3 year old (FF behind me). So now I have a RF seat behind the driver seat, (my husband can't adjust for more comfort when he drives), a FF seat in the center with the console taken out and his seat moved forward. This gives easy access to the 3rd row for my 2 booster age kids. When just 1 older boy is with me, he can ride in the 2nd row, R outboard. (Sounds crowded, but we really all fit in this vehicle.)
I have been a trained carseat educator for 6 years, and I hope no-one minds my 2 cents in this.
17" alloys now standard
Aluminum trim available instead of wood at no cost
Wood steering wheel available
Leather gearshift knob available
18" alloys available $750
Ice White(614) replaces White(189)
T6 price increase @$600
Aluminum trim available
Wood wheel no longer part of prem pkg, no decrease in pkg price
Leather gearshift available
Ice white paint
Both models come with free scheduled maintenance gor 30,000 miles.
Obviously, the car was not "hot" - there was just limited supply.
Now that supply is increasing, we (at least in the Bay Area) are seeing the expected level of hunger in the dealers - ESPECIALLY for the bigger engine model that no one seems to want. I have two separate dealers calling me offering to sell me that model.
I'm waiting for the 2004s, at least. Meanwhile, I cruise around in my Grand Caravan looking like a dope, but with money in my pocket.
I think it's a good bet to hold off and watch the prices drop.
Since 2004 pricing has not been officially release yet.
Do all dealer have prior notification from Volvo about 2004 pricing before the general public ?
I am concern that some dealers will start charging xtra for standard items or not telling about the free maintenance to people who will receive there 2004's prior to the official release of 2004 Pricing/Specs.
I read that Volvo will release this info at the end of may but some people are getting the 2004's at the end of april/Beginning of May time frame.
Anyway to protect ourselfs from questionable dealers ?
Full Test: 2003 Volvo XC90
My4safekids, we hope to see you in the Child Seats That Fit discussion too!
Steve, Host
In terms of driving I liked the T6 better (unlike many in this forum). I don’t think the steering was sloppy at all but in my opinion more refined than 2.5T.
The ‘moose avoidance’ was quite impressive. I was surprised to see that two test cars had bald front tires. The driver in my car told me they change tires every weekend. So they indeed perform a harsh kind of driving – a kind one probably should not deliberately try. An interesting experience though.
The laminated glass from the security package withstood a smash by a metal rod! Of course cracked but kept its integrity. Wow, I am going to seriously consider this option. The only problem apparently -- it eliminates the original tint. I wonder what kind of tint available with that glass, if any (may be aftermarket?)
Also it’s been said that the 2004 overseas delivery program has some discount percentage (6-7%) over MSRP. But since all 2003 overseas orders have already been sold the 2004 model can be had only in 2004 (I wonder if January is already booked). But then, if in reality you can get a 2004 car in Europe in the spring of 2004 (a year from now) doesn’t it make sense to get a 2005 model (which might have the transmission improvements by then) here in US around May of next year? Besides, we are talking a year and a half from now. All these seem to make the overseas delivery idea sort of dubious.
The rest of the 04 pricing for the other Volvo models will come to the dealers this month.
However, any manufacturer can change pricing whenever it wants to without any prior announcement.
If Volvo changes its pricing structure the dealers will make the appropriate changes.
Early on the computerized ordering system showed the 17" still as an option, this has been corrected.
Free scheduled maintenance has nothing to do with the dealers, we don't control it. If you have it coming, you'll get it.
As for the 2003 owners, you won't.
Not Hot? Volvo last month outsold the other lux SUV's. People are still flocking in to order and buy XC90's. There maybe cars available here and there that were cancelled but the desireable ones, the T6 7 passengers are doing very well.
Almost 90% of our total is the T6.
I found almost no difference in the ride between the T5 and T6. Both felt very composed. Steering seemed identical with both (except for the wood steering wheel on the T6, which is something I'm not used to). Ride was very smooth over the rough road sections of the test, without being "floaty" on the straighaways, and no excessive roll in the twisties. The ride quality compares very favorably to my current Audi A6 Quattro. I have to say I'm very impressed. If it weren't for the higher seating position, you would think you're driving a top luxury sedan. It's that good.
Personally, I'm not that concerned with acceleration. As long as I have "enough" power to get into traffic, I'm good. My Audi A6 has the 2.8 liter non-turbo engine. With the weight of this car and the 4WD drivetrain, it's not exactly a rocket. However, it's certainly not slow. That said, the XC90's acceleration felt very similar to my Audi, meaning "fast enough" for me. I didn't notice a dramatic difference between the T5 and T6, supposedly due to the transmission. I'm told that the big difference is the highway passing power. That may be the case, but that's not a big deal to me. Bottom line, IMO, is the T5 represents a better value considering the lower price and better gas mileage. If you must have a faster SUV, get an MDX or an X5.
I kept reading about the "moose test" wondering what that was all about. Sure enough, there was what appeared to be a huge stuffed moose on the course, with a radar gun alongside. A professional driver floors the gas and drives right at it, reaching about 42 MPH, then while keeping the gas floored, swerves to avoid the moose (stray moose are a big problem in NY City). The computers detect whatever disaster may be about to happen (rollover, etc.) and make appropriate adjustments. Instantly, you're back on track. It would be impressive in a sedan. In an SUV, it's amazing.
The other great part of this demo day is that all the main competitors were on hand. There was an MDX, RX300, X5, and ML all on hand to check out (without driving). You can really see that the XC90 is the cream of the crop (along with the X5), and clearly the best 7-seater of the bunch. I'm 6-2, and I fit in the last row. Headroom is tight (but ok), and I had to straddle my knees around the seatback, but it works. There was another adult right beside me, and there was definitely room for both of us (and certainly plenty for kids). In comparison, I couldn't even climb into the back of the MDX. Enough said on this topic.
I'm ready to order a T5!
What can you tell me about FWD allocations/orders. I live in Southern California, and have had trouble finding a dealer that feels they can get a FWD car before end of summer. I thought I understood that any 2.5T car that is allocated to a dealer can now be ordered as a FWD version. Is that correct? Any reason you know of why there might be a longer delay for FWD XC90's than for the AWD's?
but T6 7 seaters are sitting on the lots here in the SF Bay Area
maybe that's because the NorCal dealers had more pull than a lot of other areas, since they sell lots of Volvos here in granaola-land, I dunno
I have to think the situation in the Boston area and in Larchmont, New York area is the same - excess inventory
or maybe the economy does actually suck worse than those other areas
Huh...I'm 6'3" and I don't really fit into the 3rd row of either the MDX or the XC90 but I found there to be slightly more room in the MDX (which also agrees with the listed specs). However, having me fit in the back row of one of these was not one or our purchase criteria - its for the kids :-)!
OT
If your dealer doesn't have one coming, check with other dealers, or other areas.
Any word on how hard the parts are to get to fix the parking break?
If the brakes are really bothering you then I recommend you find a nice empty road, run your XC90 up to about 35 to 40mph and hit the brakes fairly hard (but not a complete emergency panic stop). Do this a couple of times to seat the brake pads. After you've done this a few times I bet you'll feel the brakes are a bit tighter and more responsive as well.
Good luck.
-rollie
rdollie@att.net
I'll post again when I find out what the problem is. Hopefully nothing major - I was looking forward to driving it this weekend!
Nothing to worry about
Max