30-36mon lease 2021 CX-5 SIGnature 12k miles/year - not understanding dealer quotes

sugob

I got quotes from several Mazda dealers in MA for the above car
e.g. one dealer gave following monthly lease payments
30 mon $409
33 mon $424
36 mon $421
I was expecting shorter duration to be most [as less payments to pay the initial depreciation] but it was the cheapest
And not sure why middle 33 months was the most expensive

Not so much querying the exact numbers themselves, more how they relate to each other

TIA for any explanations!

Michaell

sugob said:

Hi Michaell

Thanks yet again. So the MF figure you listed is the 'base' number specified by Mazda? I can ask the dealer what MF they used and, if it's alot greater than that, why?
I had a previous quote from same dealer in Nov 2020 [for same car] for 33 & 36 months [yes, I've been a dilly-dally about pulling the trigger] - they gave me the MF of 0.00092 [didn't specify for which lease duration] which seems alot higher [according to my spreadsheet that MF would add $11/month over an MF of 0.00074]

Cheers

Yes, ask them what MF they used.

If they quote a higher number, it's because they are greedy and want more money from you.

Insist on the base MF, or find another dealer.

Michaell

sugob said:

I got quotes from several Mazda dealers in MA for the above car
e.g. one dealer gave following monthly lease payments
30 mon $409
33 mon $424
36 mon $421
I was expecting shorter duration to be most [as less payments to pay the initial depreciation] but it was the cheapest
And not sure why middle 33 months was the most expensive

Not so much querying the exact numbers themselves, more how they relate to each other

TIA for any explanations!

30/12 - .00064 and 63%
33/12 - .00082 and 60%
36/12 - .00074 and 57%

The higher residual on the 30 month term (and the lowest MF) makes it the preferred term, this month.

6% of $35,000 (hypothetical MSRP) is $2100, a big difference even with 6 fewer months in the term.

sugob

Hi Michaell
I'm, not quite sure I understand - the 36mon is the 'worst' deal?
The figures I gave were for $4 down on a MVSP ~$39k [incudes colour option] - dealer quotes also gave the residual which agree with your %
30mon $24.6 [24.6/39 = 63%]
33mon $23.4 [23.4/39 = 60%]
36mon $22.3 [22.3/39 = 57%]
Maybe it's because the Money Factor thing is new to me - I (hopefully!) understand interest rates/depreciation & 'time value of money', but MF [multiple by 2400 to get APR?] seems strange

Thanks again for any clarification :-)

Michaell

sugob said:

Hi Michaell
I'm, not quite sure I understand - the 36mon is the 'worst' deal?
The figures I gave were for $4 down on a MVSP ~$39k [incudes colour option] - dealer quotes also gave the residual which agree with your %
30mon $24.6 [24.6/39 = 63%]
33mon $23.4 [23.4/39 = 60%]
36mon $22.3 [22.3/39 = 57%]
Maybe it's because the Money Factor thing is new to me - I (hopefully!) understand interest rates/depreciation & 'time value of money', but MF [multiple by 2400 to get APR?] seems strange

Thanks again for any clarification :-)

This link should help

kyfdx

Michaell said:

sugob said:

I got quotes from several Mazda dealers in MA for the above car
e.g. one dealer gave following monthly lease payments
30 mon $409
33 mon $424
36 mon $421
I was expecting shorter duration to be most [as less payments to pay the initial depreciation] but it was the cheapest
And not sure why middle 33 months was the most expensive

Not so much querying the exact numbers themselves, more how they relate to each other

TIA for any explanations!

30/12 - .00064 and 63%
33/12 - .00082 and 60%
36/12 - .00074 and 57%

The higher residual on the 30 month term (and the lowest MF) makes it the preferred term, this month.

6% of $35,000 (hypothetical MSRP) is $2100, a big difference even with 6 fewer months in the term.

How much money are you putting upfront? Large upfront amounts amortized over fewer months can make a shorter term appear cheaper, but not necessarily the lowest total monthly cost.

sugob

Michaell - great link on how to calculate lease payment [as it shows how the intermediate vals are calced etc]
Not sure how I didn't find it in my web travels
I used page calc method to create a spreadsheet - my calculated values [I have matrix of 3 lease durations & 3 down payments] are about $15/month less than those on the dealers quote [yes, I checked spreadsheet calcs several times...but infallible I'm not (just ask the missus )]. I don't qualify for any listed rebate
Playing with the numbers [using values for the different lease durations] shows that the MF doesn't matter way as much as residual % [1% makes a $11/month diff] so I'm surprised that residuals aren't quotes to 0.1%

Where do the MF and residual numbers come from - does Mazda issue them monthly (per model)? Can the dealer manipulate the MF and/or residual they use on quote [they only gave me the residual value so I can't compare MF with your values]?
Still seems strange that the MF for 33/12 (.00082) is higher than both 30/12 (.00064) & 36/12 (.00074) rather than somewhere in-between

kyfdx - putting upfront $4k [on a 39k car] on a 36 month lease. Playing with figures shows putting down extra $1000 gives a reduction of $30/month [little more than $1000/36 = $28] presumably due to the lowish MF [interest rate]

Thanks Micahell/Kyfdx for your useful replies

Michaell

sugob said:

Michaell - great link on how to calculate lease payment [as it shows how the intermediate vals are calced etc]
Not sure how I didn't find it in my web travels
I used page calc method to create a spreadsheet - my calculated values [I have matrix of 3 lease durations & 3 down payments] are about $15/month less than those on the dealers quote [yes, I checked spreadsheet calcs several times...but infallible I'm not (just ask the missus )]. I don't qualify for any listed rebate
Playing with the numbers [using values for the different lease durations] shows that the MF doesn't matter way as much as residual % [1% makes a $11/month diff] so I'm surprised that residuals aren't quotes to 0.1%

Where do the MF and residual numbers come from - does Mazda issue them monthly (per model)? Can the dealer manipulate the MF and/or residual they use on quote [they only gave me the residual value so I can't compare MF with your values]?
Still seems strange that the MF for 33/12 (.00082) is higher than both 30/12 (.00064) & 36/12 (.00074) rather than somewhere in-between

kyfdx - putting upfront $4k [on a 39k car] on a 36 month lease. Playing with figures shows putting down extra $1000 gives a reduction of $30/month [little more than $1000/36 = $28] presumably due to the lowish MF [interest rate]

Thanks Micahell/Kyfdx for your useful replies

Mazda Capital Services sets the MF and residual values; the dealer is allowed to mark up the MF for extra profit.

Yes, every $1000 down (or $1000 off the selling price / cap cost) results in about $30/mo off the lease payment.

The MF and residual are set to achieve a certain payment; beyond that, I can't explain why the MF for 33 months is higher than 30/36 months.

sugob

Hi Michaell

Thanks yet again. So the MF figure you listed is the 'base' number specified by Mazda? I can ask the dealer what MF they used and, if it's alot greater than that, why?
I had a previous quote from same dealer in Nov 2020 [for same car] for 33 & 36 months [yes, I've been a dilly-dally about pulling the trigger] - they gave me the MF of 0.00092 [didn't specify for which lease duration] which seems alot higher [according to my spreadsheet that MF would add $11/month over an MF of 0.00074]

Cheers

sugob

Thanks Michaell for your helpful and informative answers...nice one