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Volvo XC70 Lease Questions

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  • babycarbabycar Posts: 9
    The MSRP is definitely wrong. You can now see it on Volvo's site, the MSRP is 42,060 with Paint and destination.

    I was quoted $29,810 for a sell price
    $380 per month with Tax
    12,000 per year
    36 month

    The lease deal is $9k, not $10k -- this is by far the best deal I can find. It just may be too good to be true....
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  • meshugymeshugy Posts: 24
    That MSRP seems way high....do you have the Nav system or other expensive options?
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  • meshugymeshugy Posts: 24
    Hi Babycar...what was your down payment? What's the residual?
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  • fargodogfargodog Posts: 13
    Hey babycar,

    Which dealer gave you that quote? thanks
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  • jag_drivejag_drive Posts: 8
    The high MSRP is because the bank the lease is through is taking into account the full value of the package, which is over $8k. This is good for just leasing by raising the residual, but is worse for those that want to purchase at the end of the lease.
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  • jag_drivejag_drive Posts: 8
    If you can get this deal, take it if you won't buy out at lease end! I tried to recreate the numbers you got, and I believe you had a typo in the MSRP...I would expect $42,090. Given your residual of 20,180, which is 50% of $42,090, which is much better than any other residual I have seen (normally 42%).
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  • meshugymeshugy Posts: 24
    I just leased an XC70 w/a MSRP of $43,150. My residual is 18,149. It was originally closer to 19,000, but I haggled them down to almost 18K. They were able to do that by RAISING the mileage to 15K a year. More mileage=more wear=lower residual. My monthly payments stayed the same, buy my residual went down. Since I will probably buy the car at the end of the lease, a low residual is good for me.

    Here's the full deal I got about 2 weeks ago:

    2007 XC70 with climate, convenience, and premium packages

    Term: 36 months
    MSRP: 43,150
    Cap: 31,250
    Residual: 18,149
    Down: 750 (includes 1st payment and all fees)
    Monthly payment: $510 (includes tax)
    Miles: 15000
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  • babycarbabycar Posts: 9
    Hi,

    Yes, I did have a typo on the MSRP, here are the correct numbers for the Adventure Edition:

    MSRP=$42,090
    Sell Price = $29,645 (with $9k lease incentive)
    Residual = $20,147
    Term = 36 months
    Mileage = 12,000 per year
    Monthly payment = $380 (inclusive of tax)
    Up-front fees = $793 (1st payment, title registration unwaivable dealer fee)

    Although I do plan on purchasing at the end of the lease, when I calculate out the payments multiplied by the residual value my total out-of-pocket with purchase after three years is only $34,240. Compared to the second lowest price of $34,555 with a $448 monthly payment this still works out to be a better deal -- not to mention that with a new addition to the family coming in the next couple of months you never know what will happen; although it will probably still make sense to buy it and sell it as one would think that there's still a higher resale value for the car than $20k for a three year old car whose MSRP is $42k.

    With all of that being said, I only have a firm handshake and commitment of the deal, as I am traveling for the next two weeks, but have been assured by the dealer that they are putting aside the car for me when it arrives and that they will stick to their word. I'll let you all know whether or not this changes between now and the time I go to pick it up.
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  • meshugymeshugy Posts: 24
    Great deal Babycar! My total if I bought would be $36,749...about 2K higher. Although my MSRP is $1K more because of extra features. Also, the dealer threw in a 36 month maintenance package ($500) and free cross bars ($200). So it's roughly the same deal.

    I don't think you could do much better!
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  • jag_drivejag_drive Posts: 8
    Can you tell me who the leasing is through and in what state? I have not been able to find anyone who has a redidual value that high and without a $895 bank fee as part of the upfront payment.

    Also, it seems that many sales managers are leaving the cars with Adventure Packages at the docks until July, and trying to sell what is currently at their lots...so they might say that they don't come in until next month.
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  • meshugymeshugy Posts: 24
    You might also consider just getting a car with the three packages: Premium, convenience, and Climate. That's what I got (plus sirius wiring,Air quality, and Metallic paint) and the MSRP was $43,150. These packages have everything the Adventure does, plus:

    Booster seats
    Grocery Bag Holder
    Wood inlays
    Sunglass holder

    If you don't care about the booster seats then the Adventure package is probably better. Also, the Advneture has a 6 CD changer...if you want that. Most people are using ipods, so my guess is they're trying to get rid of some extra changers. But all in all, it doesn't seem to be any big savings. Looks like it's more of a marketing move...my guess is they ran out of the booster seats (the 2008s have newly designed ones), but they still wanted to offer some of the other convenience package options, hence the "Adventure Package."
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  • psychwarlordpsychwarlord Posts: 2
    Hello all

    We are looking to lease a 2007 XC70 w/climate/convenience/premium and bi-xenon lights

    The dealer told us about the $3,000 lease incentive w/Volvo finance but did not mention any $9,000 incentive with a bank.

    He offered for 15,000 miles/year for 36 month lease

    Price: 34,000
    Residual: 17,635
    Money factor: .0027
    $599/month for 35 months with no money down
    $405/month with $6,000 trade-in and no money down
    $350/month with $6,000 trade-in and $1440 down

    My concern: I am seeing cap costs of 29,000 here on the forum, but residuals of like 20,000.

    I like our residual, and the price is a fair one: I don't need to gouge

    But should I look into the $9,000 lease incentive through a private bank? IS this something I need to ask the Volvo dealer or should I just call a bank to find out?

    Thanks - I have never leased before
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  • fargodogfargodog Posts: 13
    Meshguy,

    Spoke with dealer today who has 6 Adventure package models on his lot and he said they do include the booster seats. I have not seen the cars in person and was wondering if you have seen the Adventure model in person. Booster seats are key factor for me and don't want to drive 40 minutes to hear "oh, I meant the other models" or some other snow job from salesperson.
    thanks
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  • jag_drivejag_drive Posts: 8
    fargodog - I have seen at the dealer lots "Adventure Packages" both with and without Booster seats, so I hope the salesperson is not literally taking you for a rds.
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  • jag_drivejag_drive Posts: 8
    The current offer for an Xc70 from a 3rd party bank is actually $10,000. Given the package you are looking at, I ran rough calculation using lease #'s I have seen(assumes metallic paint):
    MSRP 43,500
    Invoice 40,500
    Residual 42% (US Bank #'s)
    Money Factor .00217 (US Bank as of last week)
    Term 36 months

    THis gives you a residual of $18,720.
    Monthly payments are $457.75 before tax. This assumes you get the car at invoice, and you might want to assume a few hundred dollars over invoice. If you throw in all the upfront costs (about $1700 including 1st month payment) and dealer profit of about $500...the monthly payment is $525 before taxes.
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  • psychwarlordpsychwarlord Posts: 2
    Thank you for your help - I talked to the sales manager today and the cap cost is 34,000, with the $3,000 "cash down" from Volvo, the result is $31,000 cap cost. The esidual w/15000 miles per year is around $17,635. The money factor here is .0027

    Thanks again - it looks like a pretty good deal to me.
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  • briandcbriandc Posts: 9
    Thoughts on where these guys can improve? Thanks!

    Volvo Lease Program - which I need to do because it helps tremendously with my local jurisdiction Personal Property Tax

    MSRP: $38,915.00
    Sell Price: $36,821
    Bank Fee $595
    Title: $195
    Rebate: $2,400
    Sale Price: $35,211

    Residual: 59%
    Purchase option: $23,459.85
    Miles: 10,500/YR
    Factor: .63%
    24 Mos
    Base Payment: 547.11
    7% taxe: 41.70
    Total Payment: $588.81

    $650.00 due at signing which is the sec deposit.

    I would look at a 36 month if I can get the payments lower.
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  • parklifeparklife Posts: 5
    Does anyone have the money factor that VFNA is offering for a 12k mi/36 month lease on an XC70? Thanks.
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  • rrhserrhse Posts: 4
    I think I'm being screwed around by my dealer - had what I thought was a good deal arranged on an XC70 with Adventure, using VFNA 24 mos / 24K miles. .00001 money factor and 61% residual, decent cap cost. Dealer then back tracked and said that VFNA had dropped the residual to 55%.
    Anybody out there (Car Man?) know what the terms of the current VFNA 24/24 lease would be? I believe that there is a change scheduled for 7/9.

    Thanks for any help.

    John
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  • blckislandguyblckislandguy Posts: 1,150
    My wife and I are toying with the idea of replacing her '01 XC. By personality (we don't trade cars, we keep 'em), geography (New England), and training (one of has a Ph.D. in Econ), leasing makes no sense to us. (Whenever I see a guy in a -presumably leased- MB S550, I think, "there goes a guy head over heels in debt who is all flash, no cash").

    But. is this one of the few times where it does? Even if you add back in the not so hidden "bank fee", "application fee", etc. it looks like you are getting at least a discount of $8700 from Volvo. Apparently, the best Volvo purshase incentive is 4k. Now, I know that most people turn a car in with more miles on it than the lease agreement and pay thru the nose for excessive mileage, etc. But it seems that right now Volvo has stacked the deck in favor of leasing AND in three years, the new style V70s will have been tested and ready to purchase.

    We hate the idea of leasing. Enlighten us. Or, are we just preaching to the choir?
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  • meshugymeshugy Posts: 24
    Hi....yes, I do believe it is a far better deal to lease and then buy the car after the lease. Right now Volvo is offering $9K incentives to lease, and as you mentioned, only about $4k to buy. I just leased a 2007 XC70 with a cap cost of $30K which incredibly cheap for a loaded model (MSRP $43K).

    Good luck!

    -Michael
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  • aephemeaepheme Posts: 48
    I think the "idea" of leasing is actually far worse than the reality of it. It's taken me a while to convert, but IF* you want a new car, leasing seems to be the rational economic decision (in some cases). I can't speak for this specific deal, but some things to keep in mind:

    1. Your rate of interest (converted to a "money factor" in lease terms) is often significantly lower than straight-out purchase financing. (And unless your investments are making less than 6.5%, the average finance cost, you should ALWAYS finance).

    2. The residual value is often overestimated... that is, if you went to sell your newly purchased car in 2/3/4 years, it wouldn't be worth as much as Volvo is optimistically hoping it will be.

    3. By agreeing on a residual value up front, you remove ALL RISK associated with depreciation. This is HUGE! Gas prices shoot up to $20/gal, or new technology comes out and your car is suddenly worthless. Who cares? The financing company eats the loss.

    4. Even better, you always have the option to purchase. If the market goes the other way (and your residual is worth more than they thought), you have the option to buy at a predetermined price! You have all the potential upside and none of the downside.

    Really, though, if you have some economics / finance background, just price both options out (including when you think you'll finally sell a purchased version) and do a simple NPV. Go with the option that costs less. If you really wanted to get sophisticated, you could use Black-Scholes to calculate the value of the purchase optionality. :)

    Anyway, some thoughts...

    Aepheme

    * [Of course, if you don't want a new car, then purchasing a used vehicle will always be less expensive than either buying new or leasing new... but then you're also taking on a large amount of repair risk (could cost time and money), you're sacrificing the newest safety features (how much is your life worth?), and you're driving something that's probably less luxurious.]
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  • blckislandguyblckislandguy Posts: 1,150
    Geez, Black-Scholes no less. The last time I saw Mryon he and his wife were photographed in the NYT walking out of a court house were they had testified maybe Re: Long Term Capital's blow up. They were not a happy couple. I think they were being sued.

    Just for kicks, what if a grad student were to work on and publish an Black Scholes do it yourself kit for potential leasees? Give me a clue, how would the kit start?

    More to the point, sure leasing looks attractive IFF you are the kind of consumer who is has to be in a not-more-than-three year old car. To my way of thinking, the sweet spot is something between two to 8 years old. Like our impeccably well maintained '01 XC that now is just printing money for us.

    Moreover, I think that the acquisiton, application, and disposition costs associate with leasing easily can total $1300. We won't even mention excess mileage and "wear and tear" charges.
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  • meshugymeshugy Posts: 24
    Of course, if you don't want a new car, then purchasing a used vehicle will always be less expensive than either buying new or leasing new.

    Actually...leasing is so cheap right now, used cars are even more expensive! A used 2006 or 2005 XC70 with similar features and low miles is in the $30-$35K range. We got a brand new leased one for $30K!

    I know this is not normal....but Volvo is offering such big incentives right now it's hard to find anything better then leasing.

    I've never leased before and always thought it was ridiculous. But in this particular situation, the smart $ is on leasing.
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  • fargodogfargodog Posts: 13
    Hello,

    Does anyone have the new numbers for July? I am looking at a 36 month lease, 25,000 miles per year. The dealer told me today that the residual went down about 2%. Thanks

    Dennis
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  • blckislandguyblckislandguy Posts: 1,150
    Hey meshguy, your are a good guy, but exaggeration diminishes the force of your argument. An argument that probably is by and large correct.

    For example,

    1) Pricing. How did you get to 30K on a new leased XC70? The max discount is 10K PLUS lots of fees. Could we agree that your total cost to acquire (and eventually dispose of it) was closer to MSRP (probably 42K with climate/convenience/premium) less the 10K Volvo discount PLUS say $1500 in lease fees? This totals $33,500.

    2) In my Northeastern zip code, there are tonite on cars.com perhaps 15 or 20 very low mileage '07 XC all with climate/convenience/premium for roughly 34-35K ASKING. If one speaks nice to them on the very last business day of the month, you will go home in one for 32K or less. And it will be yours. With no mileage charges. Without any high residual so you can't get out of the three year lease cycle. And if you speak real nice real late at night on that last business day of July, maybe you can get it Volvo certified out to 100K miles. That if you are still with me, is a better warranty than on a new unit.
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  • meshugymeshugy Posts: 24
    Hi....I'm not here to pull the wool over any ones eyes. My Cap cost was $30,472.96. If you really want I'll scan it and send it to you.

    I can't speak for the NE. I just checked Autotrader for Seattle. Only one recent used XC70 under $30K...was a bare bones one with 26K miles for $26. I got A new XC70 totally loaded with free 3 years of matinence, cross bars, a full 4 years of warranty for $30K. See why leasing was a better choice?
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  • babycarbabycar Posts: 9
    Hi,

    I can't speak for other deals, but this is the deal that I just got for a XC70 with Adventure package on June 25th in the Boston area.

    Purchase Price = $29,670
    Residual = $20,320
    36 months
    12,000 miles
    $438 per month (includes tax)
    only 1st month payment ($438) due at signing

    The 1st payment of $438, everything else is included, all tax, title and registration fees.

    I originally started looking at a certified pre-owned, but when I do the math the car is going to cost me $36,088 if I choose to purchase at the end of the lease. This is about 6 or 7 grand more than I would have paid for a 2006 used XC70, but I was going to put down about $15,000 if I purchased a car, this way my money stays in my investment portfolio for the next 3 years, making money for me.

    Not to mention the obvious advanatage that if we want a new car in 3 years we can have that option as well, but we are planning on buying the car at the end of the lease.
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  • fargodogfargodog Posts: 13
    Hi Babycar,

    Are you sure about the 29670? What was the MSRP on it? Which dealer did you get this from? I live in MA as well and just had a terrible experience today with Lee Volvo. Thanks

    Dennis
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  • hedgshedgs Posts: 3
    - 2007 XC70, Black, with Climate Pkg & Premium Pkg
    - $40,785 list, $8,500 discount
    - 7.75% sales tax (Cook County, Illinois)
    - $3,500 out of pocket (mostly tax)
    - $444 per month, 24-month term

    We have not really begun to negotiate. I'm thinking that they can come down a bit more price-wise, perhaps $1,000 - $1,500 based on no negotiation yet. Anyone have advice?
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