Help me understand the lease

Extinction1229

Hello all,
Excuse the many questions but need a little help validating the futures in this lease agreement.
What is the difference in the sale rate and buy rate?
What is “reserve” in interest?
Does this lease seem like a good deal? Had a similar printout with $547 payment on 36 month and 12k lease.

2023 AWD Blazer 2LT in 49014 zip
GM finance A1
MSRP: $40,820
Rebate $3k
Cash down: $513
10k/yr

sale cost: $40,820
Cap cost: 41,799
Cap reduction ($3,513.71)
Net cap: 38,285

Monthly payment 593.28
$1349 down payment
74% residual - $30,206
Depreciation- $8,078

Sell rate: .00326
Buy rate: .00305
Reserve (70%) $241.64

kyfdx

Extinction1229 said:

Hello all,

Excuse the many questions but need a little help validating the futures in this lease agreement.

What is the difference in the sale rate and buy rate?

What is “reserve” in interest?

Does this lease seem like a good deal? Had a similar printout with $547 payment on 36 month and 12k lease.

2023 Blazer 2LT in 49014 zip

GM finance A1

MSRP: $40,820

Rebate $3k

Cash down: $513

10k/yr

sale cost: $40,820

Cap cost: 41,799

Cap reduction ($3,513.71)

Net cap: 38,285

Monthly payment 593.28

$1349 down payment

74% residual - $30,206

Depreciation- $8,078

Sell rate: .00326

Buy rate: .00305

Reserve (70%) $241.64

The difference between rates is how much they marked up the lowest rate, to get extra profit. The reserve is the amount of money the F&I office made from the markup. They get 70% of the total increase, because they get their money upfront from GMF, while you pay the extra amount over the life of the lease.

Your selling price is full MSRP, minus the $3000 rebate from GM. That doesn't seem like a great deal, especially with a money factor markup on top of it.

Also, this quote looks like a 24 month, 10K/yr lease? A 36 month lease could be substantially less, especially if you are paying full MSRP.

Extinction1229

@kyfdx said:
The difference between rates is how much they marked up the lowest rate, to get extra profit. The reserve is the amount of money the F&I office made from the markup. They get 70% of the total increase, because they get their money upfront from GMF, while you pay the extra amount over the life of the lease.

Your selling price is full MSRP, minus the $3000 rebate from GM. That doesn't seem like a great deal, especially with a money factor markup on top of it.

Also, this quote looks like a 24 month, 10K/yr lease? A 36 month lease could be substantially less, especially if you are paying full MSRP.

So if I’m understanding correctly, the base rate they should factor at is .305 but they marked it at .326 to make extra?

I forgot to ask for the couple extra printouts. The only thing I had to compare against is a 36 month 12k/yr which was $547/month. Not as low as I was expecting.

Included incentives should have been a $1250 credit, and returning GM Lease pricing. Don’t qualify for employee pricing, not sure how to get friends/family pricing and how that compares.

I’m targeting them down to $450/month with nothing down on a 36/12k but wanted to know what their starting numbers meant so I can go from there.

kyfdx

Extinction1229 said:

@kyfdx said:

The difference between rates is how much they marked up the lowest rate, to get extra profit. The reserve is the amount of money the F&I office made from the markup. They get 70% of the total increase, because they get their money upfront from GMF, while you pay the extra amount over the life of the lease.

Your selling price is full MSRP, minus the $3000 rebate from GM. That doesn't seem like a great deal, especially with a money factor markup on top of it.

Also, this quote looks like a 24 month, 10K/yr lease? A 36 month lease could be substantially less, especially if you are paying full MSRP.

So if I’m understanding correctly, the base rate they should factor at is .305 but they marked it at .326 to make extra?

I forgot to ask for the couple extra printouts. The only thing I had to compare against is a 36 month 12k/yr which was $547/month. Not as low as I was expecting.

Included incentives should have been a $1250 credit, and returning GM Lease pricing. Don’t qualify for employee pricing, not sure how to get friends/family pricing and how that compares.

I’m targeting them down to $450/month with nothing down on a 36/12k but wanted to know what their starting numbers meant so I can go from there.

Correct, they marked up the money factor.

You don’t need a special program to get a discount from MSRP. Yes, pricing is tougher in this environment, but if the manufacturer is giving $3000 in incentives, then that model isn’t exactly flying out the door.

I don’t know if you can get to $450/mo, but it sure wouldn’t hurt to try. Full MSRP with a money factor markup is no deal. Tell the dealer what you want, and see how close they can get.