We agreed to lease a 2009 VW CC Sport Automatic. MSRP is 28995. Only money down only is $685, but they are paying our last VW pymt ($500) from our previous lease and waiving our $350 turn in fee. They calculated our pymt to be 525 for 36 months... Is this good or bad? I tried calculating myself, but am totally confused.
You need at least one more piece of information, either the residual or the interest rate (money factor). It would also help to know how many miles you are contracting for.
Dealer changed the terms to 15K/year. The MSRP is $28995. The residual value is $16,504 and the money factor is .0035 which I know is 8.4%. I live in PA. He is asking no money down, just tags, they will pay my first lease payment of $509. This is a lease for 39 months. They are paying my last lease payment of $504 on our expiring lease. They are cancelling the $350 turn in fee. Do you think this is a good deal?
The monthly lease payment is correct for the information that you have provided assuming that the 6% state sales tax is included in the $509 monthly payment. Car lease calculators can be found online: link title
Note that even though the payment was lowered from $525 to $509, you will be paying an extra $951 because of the three extra payments. Of course, you will also have the car for three more months.
Even though you are leasing rather than buying the car, you are still able to negotiate the price down from MSRP. You'll see this in the online calculations. This dealer has you paying full pop.
The dealer isn't doing you any favors with an 8.4 % interest rate. Aim at least two percent less. You probably know that the money factor times 2400 equals the yearly APR equivalent.
My understanding is that in NJ you only pay tax on the lease payment, not cap cost.
My question is thius, is tax figured only the depreciation portion of the lease payment or the depreciation + interest (the entire monthly lease payment)
Can you please send me your spreadhseet? I am still a bit hazy on how the whole leasing process works. I only have 1 dealership in my city, (El Paso, TX) and I think I would get a better deal in Dallas. I plan on going there for a game in December.
I too would love a copy of the spreadsheet. the dealers have been trying to rip me off... maybe because i am a woman. But I would really like to go shopping well prepared.
Folks, that post was made nearly 3 years ago, and I don't believe that member is around anymore.
MODERATOR /ADMINISTRATOR Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name. 2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h) Review your vehicle
If you are excel literate, you can create your own spreadsheet
(I'll expect the experts to proof my work and make any corrections if necessary)
Here are the cell labels and their contents:
MSRP - Sticker price of the car, in dollars (cell A1, B1) Cap Cost - Selling price of the car, in dollars (cell A2, B2) Residual percentage - residual percentage at end of least (cell A3, B3) Residual value - cell B1 * cell B3 (cell, A4, B4) Term (months) - how long is the lease for? Answer in months - 24, 36, etc. (cell A5, B5) Money Factor - money factor, as a decimal value (.0002) (cell A6, B6) Pct Rate - cell B6 * 2400 (cell A7, B7)
Depreciation Amt / Month - cell B2 minus cell B4, divided by cell B5 (cell A8, B8) Interest Amt / Month - cell B2 minus cell B4, multiplied by cell B6 (cell A9, B9) Pre tax Payment - cell B8 plus cell B9 (cell A10, B10) Tax Rate - entered as a percentage (7.5%) (cell A11, B11) Tax Amount - cell B10 multiplied by cell B11 (cell A12, B12) Full Monthly Pmt - cell B10 plus cell B12 (cell A13, B13)
Cell B13 would be the full monthly payment, with tax
(note - for states like Illinois and Texas, the above formula won't work, as the tax is applied to the whole vehicle, not just the depreciated amount)
>>> the money factor times 2400 equals the yearly APR equivalent.
>> Didn't know that
> Now.. you just have to figure out WHY?
Interest rates are expressed as a yearly percentage, but are computed as a decimal, i.e. divide by 100. 6% = .06
Interest is compounded monthly, so divide by 12. 6% yearly interest = 6 / (100 X 12) = .005 monthly interest.
Because a part of the loan is being paid back each month, the average amount owed over the term of the loan is one-half of the amount financed (divide by 2).
So 6% = 6 / (100 X 12 X 2) = 6 / 2400 = .0025 = money factor.
The customer confusion factor doesn't hurt from the dealer's point of view either.
I used to be able to pencil whip a lease by hand with the best of them. A customer could ask me what a payment would be and I could flip a buyers order and figure it quicker then a cat can lick its butt.
Now you could hold a gun to my head and I could not figure one by hand :shades:
Probably because over the last 5 years we have gone from doing 75 leases a month to maybe 1 a month.
Hell Ford is the only Domestic that still has a leasing program. We were not as dumb as the other two to come out and say. "We think so little of our own product we won't lease it to you because we are afraid of the lease end value" We just simply adjusted our lease program so the Residual Value makes sense. In the end it makes buying more attractive. Especially with all the 0% money flying around these days.
Getting the residual value correct is a smart idea. If they really have that right then why not apply some of that 0% interest budget that they have to leasing and give the consumer a choice? Maybe they are a little scared of even their revised residuals?
Our latest car (11 months ago) was leased (first time ever for us) and we did that because we wanted someone else to underwrite the residual.
Because a part of the loan is being paid back each month, the average amount owed over the term of the loan is one-half of the amount financed (divide by 2).
You are paying finance charges on an average of the CAP cost + residual, but in the formula, they are added together... The division by 2 gets you the average.. (CAP cost + residual) / 2
Maybe they are a little scared of even their revised residuals?
What makes you say that????
Perception and dealer greed killed leasing. I can find 3000 post on this board alone where people talk about calling it fleecing. Publications advise against it, and dealers took a good thing and took advantage of it.
Ford by the way was the first manufacture to go to a fully disclosed lease contract years before the guv ever called for it.
Well, if Ford have their residuals correct (not an easy thing to do) then they could afford to grant 0% leases in exactly the same way as they can 0% loans. Maybe the reason they don't is because they are not totally sure of their residual numbers. I realise you can never be certain, but to say a 99% confidence level.
I personally feel that leasing is a perfectly legitimate was to get the use of a vehicle for a period, I have no need to "own" the car I drive. So long as you can drive a financial calculator there is no need to fear "fleecing".
Your community profile has a setting to make your email address visible ("public"). Use the "Community Profile" link at the top of this page (right side) to make the change if you would like to allow other members to have access to your email address. That way you don't have to publish your email address in the Forums and only members have access to it.
Golic (and Host) - I am trying to send you my e-mail address so you can send me your spreadsheet but I have been unable to figure out how. Any tips? I prefer not to set my e-mail address to "public" on my account...
OK, the deal is that you are asking "golic" to do you a favor - it's not really fair to make him work harder to get your contact info. If you make your email address public in your profile, NO ONE can see it apart from registered members. When you've received the email, you can make it private again.
If you post your email address here instead, you are exposing yourself to spambots picking up your address.
MODERATOR /ADMINISTRATOR Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name. 2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h) Review your vehicle
Golic, Just checked back in to the forum. I am setting my e-mail to public so you can send me the spreadsheet. Thank you for your help! Sorry for the confusion.
I've never leased a vehicle before and was wondering if anybody could give me some tips to save as much money as possible. I've got a quote on a ex-l for $31081 (msrp $35,500) and with $6000 down, the payment would be $302.36 for a 39 month lease with 12,000 mile a year. Does this seem like a good deal?
Hi - I see you already found the Honda Pilot Lease Questions discussion - that's the best place to check for lease info on this specific vehicle.
MODERATOR /ADMINISTRATOR Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name. 2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h) Review your vehicle
Here is my advice on leasing. My personal belief is leasing is best suited for the person who can write off the lease payments for business purposes. For the casual consumer if you are considering leasing for financial reasons of a lower payment, then I would steer you to find a less expensive car. Find a car you can afford, pay it off in 3-5 years and drive it for 6-7 years. It makes the best economic sense.
Key things on leasing. One, make sure you can adhere to the mileage limit. You will pay more monthly to get a lease with a 15K allowance, but that increase in monthly payment is far less than if you were to bring in the car with over mileage and have to pay 15-25 cents per mile.
Second, if you have kids or this is the primary family vehicle. Consider that you are responsible for any damage that exceeds normal wear and tear. Cars are just more prone to dings, dents, and damages when shuttling kids around and parking at barks, rinks and ball yards.
Finally, remember. Unlike a purchase you are committed to making those payments over 39 months. You are stuck with this vehicle for 39 months, even if you lose your job, drop in income etc...unlike a car you can always sell or trade in.
Leasing and Financing our ways to "pay" for the use of a vehicle. How you purchase the vehicle does not change. So, shop around. Negotiate the selling price first and get the car for as low as you can go. My personal belief on the EXL is the bottom is around $30,500. (price plus dest.) So, I think you are very close - I would try to shave off another 200-400 hundred.
As far as putting money down. My advice is to avoid it at all costs. In your case $600 is not that significant. But I profess never pay more than tags/regs/ and doc. The main reason being if you total the car - you are the only one that loses. Your insurance covers the amount due to the leasing Company so why put any of your money down, which no one will reimburse you for?
Don't be fooled into seeing a lower monthly payment. In the end you pay the leasing company the same amount. Keep your cash.
I did get your email, and I will send you the lease spreadsheet. Good luck.
Here is my advice on leasing. My personal belief is leasing is best suited for the person who can write off the lease payments for business purposes. For the casual consumer if you are considering leasing for financial reasons of a lower payment, then I would steer you to find a less expensive car. Find a car you can afford, pay it off in 3-5 years and drive it for 6-7 years. It makes the best economic sense.
Nice advice. Sadly, most people can't afford new cars without leasing. Paying off a $35,000 car in 3 yrs is beyond 99% of the car buying public. Even people with money don't do this. Wealthy people are far more likley to lease than buy their cars. Granted, they go for more expensive cars.
Finally, remember. Unlike a purchase you are committed to making those payments over 39 months. You are stuck with this vehicle for 39 months, even if you lose your job, drop in income etc...unlike a car you can always sell or trade in.
Actually, you CAN trade in or sell a leased car. There is a payoff amount just like a purchased car. If you trade in a purchased car early in the term, you will be upside down same as in a lease.
Leasing and Financing our ways to "pay" for the use of a vehicle. How you purchase the vehicle does not change. So, shop around. Negotiate the selling price first and get the car for as low as you can go.
Be careful. Some manufacturers have bigger cash incentives for leasing than purchasing. If you go in and negotiate a cash price, you may be leaving money on the table.
As far as putting money down. My advice is to avoid it at all costs. In your case $600 is not that significant. But I profess never pay more than tags/regs/ and doc. The main reason being if you total the car - you are the only one that loses. Your insurance covers the amount due to the leasing Company so why put any of your money down, which no one will reimburse you for?
Just wanted to say thank you all for the input. I think it's great to have a web site like this, very well done, kudos to all. Thank-You very much. -JMP
Nice advice. Sadly, most people can't afford new cars without leasing. Paying off a $35,000 car in 3 yrs is beyond 99% of the car buying public. Even people with money don't do this. Wealthy people are far more likley to lease than buy their cars. Granted, they go for more expensive cars.
You are right about this volvomax. And here is the system I use for our family car. I bought a car I could afford and pay off over 5 years and drove it for 7. However, in years 6 & 7 I still made those "car payments" into a savings account.
Then I traded-in that old car for a few grand plus used the cash I was saving as a down payment and financed for 48 months. Same cycle. Drive it 2-3 years longer after the payoff and continue to pay myself. Eventually, I will get to the point of having the equity to get a car that meets a budget that I can pay off in 36 years. months.
There are many affordable cars that can be financed for 60 months. It may not be the one to allow you to keep up with the joneses, but as someone once said, one should avoid investing/financing a depreciating asset.
Will I drive Beemers or Lexus? No, but I am content with honda/toyota or a buick .
The point is, you are still making car payments after the car is paid off. Which is fine. Most people would rather have a nicer car if they are always going to be making a car payment.
Can you also send me the excel sheet? I'm about to lease an Infinity 2008 G35 and no money down , $399 for 36 months, 10,000 miles per year. I do not know how they are calculating this on a car that's $30,000.
Comments
tidester, host
SUVs and Smart Shopper
Thanks.
Thanks!
Lymplymp
THanks
mikemetzger1973@yahoo.com
If they won't supply the money factor ask them for the residual. With that you can calculate the money factor.
The monthly lease payment is correct for the information that you have provided assuming that the 6% state sales tax is included in the $509 monthly payment. Car lease calculators can be found online:
link title
Note that even though the payment was lowered from $525 to $509, you will be paying an extra $951 because of the three extra payments. Of course, you will also have the car for three more months.
Even though you are leasing rather than buying the car, you are still able to negotiate the price down from MSRP. You'll see this in the online calculations. This dealer has you paying full pop.
The dealer isn't doing you any favors with an 8.4 % interest rate. Aim at least two percent less. You probably know that the money factor times 2400 equals the yearly APR equivalent.
My question is thius, is tax figured only the depreciation portion of the lease payment or the depreciation + interest (the entire monthly lease payment)
Thanks
But, in both cases, the total amount collected is upfront... Of course, you can add it to your CAP cost and the bank will pay it for you.
regards,
kyfdx
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
Thanks in advance
Jake
Can you please send me your spreadhseet? I am still a bit hazy on how the whole leasing process works. I only have 1 dealership in my city, (El Paso, TX) and I think I would get a better deal in Dallas. I plan on going there for a game in December.
Thnaks for your help!
Please tell me about your experience.
I too would love a copy of the spreadsheet. the dealers have been trying to rip me off... maybe because i am a woman. But I would really like to go shopping well prepared.
Many thanks.
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
(I'll expect the experts to proof my work and make any corrections if necessary)
Here are the cell labels and their contents:
MSRP - Sticker price of the car, in dollars (cell A1, B1)
Cap Cost - Selling price of the car, in dollars (cell A2, B2)
Residual percentage - residual percentage at end of least (cell A3, B3)
Residual value - cell B1 * cell B3 (cell, A4, B4)
Term (months) - how long is the lease for? Answer in months - 24, 36, etc. (cell A5, B5)
Money Factor - money factor, as a decimal value (.0002) (cell A6, B6)
Pct Rate - cell B6 * 2400 (cell A7, B7)
Depreciation Amt / Month - cell B2 minus cell B4, divided by cell B5 (cell A8, B8)
Interest Amt / Month - cell B2 minus cell B4, multiplied by cell B6 (cell A9, B9)
Pre tax Payment - cell B8 plus cell B9 (cell A10, B10)
Tax Rate - entered as a percentage (7.5%) (cell A11, B11)
Tax Amount - cell B10 multiplied by cell B11 (cell A12, B12)
Full Monthly Pmt - cell B10 plus cell B12 (cell A13, B13)
Cell B13 would be the full monthly payment, with tax
(note - for states like Illinois and Texas, the above formula won't work, as the tax is applied to the whole vehicle, not just the depreciated amount)
Edit away!
tidester, host
SUVs and Smart Shopper
Didn't know that
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
>> Didn't know that
> Now.. you just have to figure out WHY?
Interest rates are expressed as a yearly percentage, but are computed as a decimal, i.e. divide by 100. 6% = .06
Interest is compounded monthly, so divide by 12.
6% yearly interest = 6 / (100 X 12) = .005 monthly interest.
Because a part of the loan is being paid back each month, the average amount owed over the term of the loan is one-half of the amount financed (divide by 2).
So 6% = 6 / (100 X 12 X 2) = 6 / 2400 = .0025 = money factor.
The customer confusion factor doesn't hurt from the dealer's point of view either.
I used to be able to pencil whip a lease by hand with the best of them. A customer could ask me what a payment would be and I could flip a buyers order and figure it quicker then a cat can lick its butt.
Now you could hold a gun to my head and I could not figure one by hand :shades:
Probably because over the last 5 years we have gone from doing 75 leases a month to maybe 1 a month.
Really? I'd have thought it would be the complete opposite, people trying to reduce their monthly outgoings.
Our latest car (11 months ago) was leased (first time ever for us) and we did that because we wanted someone else to underwrite the residual.
Because a part of the loan is being paid back each month, the average amount owed over the term of the loan is one-half of the amount financed (divide by 2).
You are paying finance charges on an average of the CAP cost + residual, but in the formula, they are added together... The division by 2 gets you the average..
(CAP cost + residual) / 2
regards,
kyfdx
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
What makes you say that????
Perception and dealer greed killed leasing. I can find 3000 post on this board alone where people talk about calling it fleecing. Publications advise against it, and dealers took a good thing and took advantage of it.
Ford by the way was the first manufacture to go to a fully disclosed lease contract years before the guv ever called for it.
Well, if Ford have their residuals correct (not an easy thing to do) then they could afford to grant 0% leases in exactly the same way as they can 0% loans. Maybe the reason they don't is because they are not totally sure of their residual numbers. I realise you can never be certain, but to say a 99% confidence level.
I personally feel that leasing is a perfectly legitimate was to get the use of a vehicle for a period, I have no need to "own" the car I drive. So long as you can drive a financial calculator there is no need to fear "fleecing".
can you please email me the spreadsheet you prepared. thanks
good luck!! Please let me know of any corrections.
Golic
I am prepping to lease a new car. Please forward me the spreadsheet. Thanks so much!
tidester, host
SUVs and Smart Shopper
I am trying to send you my e-mail address so you can send me your spreadsheet but I have been unable to figure out how. Any tips? I prefer not to set my e-mail address to "public" on my account...
Thanks!
NA_Mom
If you go into "your account" and unclick the keep email private. I will then have a means of emailing you the spreadsheet.
Or the other option would be to post your email, which carries the risk of SPAM.
be well-
Golic
If you post your email address here instead, you are exposing yourself to spambots picking up your address.
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
Just checked back in to the forum. I am setting my e-mail to public so you can send me the spreadsheet. Thank you for your help! Sorry for the confusion.
NA_Mom
Could you please forward your spreadsheet? I really appreciate your help.
Thanks!
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
Here is my advice on leasing. My personal belief is leasing is best suited for the person who can write off the lease payments for business purposes. For the casual consumer if you are considering leasing for financial reasons of a lower payment, then I would steer you to find a less expensive car. Find a car you can afford, pay it off in 3-5 years and drive it for 6-7 years. It makes the best economic sense.
Key things on leasing. One, make sure you can adhere to the mileage limit. You will pay more monthly to get a lease with a 15K allowance, but that increase in monthly payment is far less than if you were to bring in the car with over mileage and have to pay 15-25 cents per mile.
Second, if you have kids or this is the primary family vehicle. Consider that you are responsible for any damage that exceeds normal wear and tear. Cars are just more prone to dings, dents, and damages when shuttling kids around and parking at barks, rinks and ball yards.
Finally, remember. Unlike a purchase you are committed to making those payments over 39 months. You are stuck with this vehicle for 39 months, even if you lose your job, drop in income etc...unlike a car you can always sell or trade in.
Leasing and Financing our ways to "pay" for the use of a vehicle. How you purchase the vehicle does not change. So, shop around. Negotiate the selling price first and get the car for as low as you can go. My personal belief on the EXL is the bottom is around $30,500. (price plus dest.) So, I think you are very close - I would try to shave off another 200-400 hundred.
As far as putting money down. My advice is to avoid it at all costs. In your case $600 is not that significant. But I profess never pay more than tags/regs/ and doc. The main reason being if you total the car - you are the only one that loses. Your insurance covers the amount due to the leasing Company so why put any of your money down, which no one will reimburse you for?
Don't be fooled into seeing a lower monthly payment. In the end you pay the leasing company the same amount. Keep your cash.
I did get your email, and I will send you the lease spreadsheet. Good luck.
BTW I am looking at the EXL myself.
Nice advice. Sadly, most people can't afford new cars without leasing.
Paying off a $35,000 car in 3 yrs is beyond 99% of the car buying public.
Even people with money don't do this. Wealthy people are far more likley to lease than buy their cars. Granted, they go for more expensive cars.
Finally, remember. Unlike a purchase you are committed to making those payments over 39 months. You are stuck with this vehicle for 39 months, even if you lose your job, drop in income etc...unlike a car you can always sell or trade in.
Actually, you CAN trade in or sell a leased car.
There is a payoff amount just like a purchased car. If you trade in a purchased car early in the term, you will be upside down same as in a lease.
Leasing and Financing our ways to "pay" for the use of a vehicle. How you purchase the vehicle does not change. So, shop around. Negotiate the selling price first and get the car for as low as you can go.
Be careful. Some manufacturers have bigger cash incentives for leasing than purchasing. If you go in and negotiate a cash price, you may be leaving money on the table.
As far as putting money down. My advice is to avoid it at all costs. In your case $600 is not that significant. But I profess never pay more than tags/regs/ and doc. The main reason being if you total the car - you are the only one that loses. Your insurance covers the amount due to the leasing Company so why put any of your money down, which no one will reimburse you for?
Very good advice.
Paying off a $35,000 car in 3 yrs is beyond 99% of the car buying public.
Even people with money don't do this. Wealthy people are far more likley to lease than buy their cars. Granted, they go for more expensive cars.
You are right about this volvomax. And here is the system I use for our family car. I bought a car I could afford and pay off over 5 years and drove it for 7. However, in years 6 & 7 I still made those "car payments" into a savings account.
Then I traded-in that old car for a few grand plus used the cash I was saving as a down payment and financed for 48 months. Same cycle. Drive it 2-3 years longer after the payoff and continue to pay myself. Eventually, I will get to the point of having the equity to get a car that meets a budget that I can pay off in 36
years.months.There are many affordable cars that can be financed for 60 months. It may not be the one to allow you to keep up with the joneses, but as someone once said, one should avoid investing/financing a depreciating asset.
Will I drive Beemers or Lexus? No, but I am content with honda/toyota or a buick .
Which is fine.
Most people would rather have a nicer car if they are always going to be making a car payment.
Can you also send me the excel sheet?
I'm about to lease an Infinity 2008 G35 and no money down , $399 for 36 months, 10,000 miles per year.
I do not know how they are calculating this on a car that's $30,000.
Thanks in advance,
jdl1
I would appreciate your sending me the lease calc on excel. Thanks for your help.