Lease Questions - Ask Here

CarMan@Edmunds · April 2004

Congrats on your new van, billwfriend. Thanks for taking the time to let us all know how everything turned out. Enjoy!

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CarMan@Edmunds · April 2004

Let's see if we can answer some of your questions, carclueless. Yes, you can trade in a vehicle that you are currently financing, but have not finished making payments on. Whether it is in your best interest to do so depends upon how much money you still owe on your car or truck and how much it is currently worth. If you still owe more money on your vehicle than its current value you are what is known in the industry as upside down. This is a very bad position to be in because it means that you will have to pay money out of your own pocket or roll your negative equity into your next loan or lease to get a new vehicle. If your car or truck is worth more than your payoff then you are in good shape. You can trade in a vehicle when leasing, but if you do so it is definitely in your best interest to get the dealership that you are leasing from to cut you a check for your trade rather than apply it to your lease because it is never a good idea to put money down on a leased vehicle. You can use some of the money from your trade to pay the other charges that are due at lease signing though, such as your car's security deposit, first month's payment, acquisition fee, etc... One of the main reasons why it is not a good idea to put money down when leasing is that down payments on leases only serve to reduce the amount of interest that you pay over the length of your lease and do not have any effect upon vehicles' lease-end purchase prices. So your leased vehicle's end of term purchase price would be exactly the same, regardless of whether you applied a $5,000 trade-in allowance towards it or put absolutely nothing down. For more information on how leasing works, make sure to check out the following articles that are available here at Edmunds.com: Calculate Your Own Lease Payment and 10 Steps to Leasing a New Car.

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CarMan@Edmunds · April 2004

Hi spatulaman. While it technically is not an SUV, the 2004 Audi allroad does offer a lot of utility and has a relatively attractive lease program on it at this time. Even though they do not have a ton of support on them, Infiniti's lease program on the FX35 and FX45 is reasonable. The same thing goes for the 2004 Nissan Murano. Other than that there is not much in the way of support available on German or Japanese SUVs right now. These vehicles tend to sell relatively well without much support. A number of these trucks do have reasonable money factors and relatively high residual values, but nothing all that special.

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CarMan@Edmunds · April 2004

You're very welcome, Mark. I am a huge fan of BMWs and Audis to begin with. If I was spending big bucks on a performance car, I would want one that was RWD like the BMW or AWD like the Audi rather than FWD like the Volvo. The M3 and S4 and both faster than the Volvo and subjectively speaking I prefer their looks as well. There's certainly nothing wrong with the Volvo and it will probably cost you less money than the other two, but as far as dream cars go I'd pick either the BMW or Audi first.

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CarMan@Edmunds · April 2004

Hello njdriver1. At least I don't have to ask you what state you plan on leasing these vehicles in

. OK, first if you were to lease a 2004 Volvo XC90 2.5 AWD w/navigation through Volvo Finance in your area this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be around .00320 and 55%, respectively. The numbers for an otherwise identical 4 year lease should be .00320 and 47%. Even though this vehicle's money factor is not very good, Volvo is providing $1,500 lease cash on it in your area that you can use to negotiate a more attractive capitalized cost.

If you were to lease a 2004 Honda Pilot EX w/navigation through American Honda Finance Corp. in your state this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00210 and 57%, respectively. The numbers for an otherwise identical 48 month lease of this vehicle should be .00190 and 50%.

Toyota is not providing any sort of lease support on the 2004 Sienna right now. So if you were to lease one through Toyota Financial Services this month, you would have to use its base standard lease money factor of .00220 for any length lease. The 3 and 4 year 15,000 miles per residual values for a 2004 Sienna non-Limited model should be 59% and 51%, respectively.

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CarMan@Edmunds · April 2004

Honda is running very attractive lease program on the 2004 Odyssey right now, clubguy. It has both special lease money factors and dealer cash on this model in April in an effort to help dealers unload their remaining 2004 models before the all new 2005 Odyssey hits dealers in a few months. This is definitely a good time to lease an Odyssey.

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CarMan@Edmunds · April 2004

Hi hms3. This is a great question for the following discussion: "Lease Questions - Ask Here" Apr 28, 2004 8:29am. Please post it there and I would be more than happy to help you out. Thanks.

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maxhonda99 · April 2004

hms3,

How can you find a better car at this point between the 400h and next gen ML350 when neither is out yet? And especially the case with the next gen ML350 is that nobody knows anything about it.

On top of that, since you are looking to lease, lease rates, residuals, money factors aren't even out yet on the RX400h.

mabubba · April 2004

Thanks for the information on how Indiana taxes leases. Mabubba

kyfdx · April 2004

My opinion: Great deal.

About $1200 over invoice... base MF.. no add-ons except the $200 bump in the acquisition fee.

I figure it at $418/mo. plus tax. You shouldn't have anything upfront except first payment and licensing fees. Ask for floormats. Some BMW dealers charge extra.

Not sure how tax is figured in CA, but I'm betting it is on the whole payment.

Since this is exactly the car you want, and you aren't paying for any extra options you don't need, I wouldn't wait until May. The deals may be comparable then, but it doesn't take much to bump up the payment by $15-$20 per month. And there are no guarantees. People that waited past March 31st to lease a 330 convertible cost themselves $75/mo. with the higher money factors. I doubt that will happen with the sedan, but a bird in hand....

As for window tinting, ask your dealer... but, since it is easily removed, I doubt that would be a problem, as long as you didn't damage the rear window defroster. Since you didn't get the premium package you don't have to worry about it affecting the auto dimming mirror or rain-sensing wipers.

regards,
kyfdx

postnobills · April 2004

Car_Man-
Thanks for the information. One last question (why can I never think of all the questions at one time??) -- do you know what the AFS base interest rate would be under their Premier Purchase Plan for this car (same term -36 mo/12,000 miles)?

rroyce10 · April 2004

....... The RX has a wonderful track record as far as service, customer satisfaction and resale value, as does the MDX .... on the other hand, the X5 has been about almost average and customers are pretty much in the ho-hum phase (except it does say BMW on the back, and to some people, that's all they need) ..

The ML has been an accident going out to happen since 97, silent recalls, problems and it's only been in the last year or so they have been getting their poo-poo together ....... lot's of nice SUV's out there, take your time, look hard and look long ..............

Like I always say: Always buy and drive what YOU like.!

Terry.

307web · April 2004

You said, "You shouldn't have anything upfront except first payment and licensing fees. "

What about the security deposit and aquisition fee?

eagleeye3 · April 2004

In an earlier post I stated that the security deposit was waived by the dealer (using MF of .0014 instead of the base .00125) and I rolled the acq. cost into the cap cost ($34K plus $725 acq fee). According to earlier posts by Car Man, .0014 is a fair MF if the Sec Deposit is waived by BMW.

spatulaman · April 2004

Thanks car_man! I hadn't even thought about an Allroad...I believe that would be perfect...I've always wanted something with that 2.7 twin turbo engine...plus its available with the manual trans. Soooo....what would my residual and MF look like for 3 years 12 and 15k miles, on a 2.7T manual allroad with premium, audio, parktronic, and the upgraded wheels?

njdriver1 · April 2004

Thanks Car Man - it's kind of too bad leasing only happens every 3 or so years, since this is the only time we correspond. You're the best! I'll tell you how it turns out.

roadog · April 2004

Thanks Car_man for the response. Actually, the Lexus 430 that I'm looking at does have navigation as part of a "Modern Luxury Package" that costs an additional $4980 (nondiscounted)with a couple of other minor options for a total MSRP price of $61,755. How would that change the monthly lease prices at 12,000 miles/year? Also, what would be the money factor, and residuals for 36 months and 48 months. Thanks in advance for your reply.

Roadog

307web · April 2004

So, could you roll the DMV fee into the lease also and drive off with no up front cash other than the first lease payment?
Looks like there is no way to drive off on a lease with a true $0 down like I have done with 100% financing (including tax and lic.).

wibble · April 2004

I had a search for this question being posted befoe but couldn't find it, so apologies if I'm rehashing.

Anyway, if I want to lease a car,, is it possible to make a one time payment at the time of lease rather than making 36 (or any period) monthly payments? If so, how is the payment calculated and what pros/cons do I need to be aware of? Thanks in advance.

kyfdx · April 2004

I can't speak for leasing a BMW, but I've driven off with zero up front costs on a Honda through AHFC. Some banks may have rules about rolling in security deposits, but those usually offer a waiver with a slight bump in money factor.

Most banks will allow a cap cost of 110% of MSRP, so that dealers can roll negative equity from a trade into the cap cost, so you should be able to walk out without paying anything. But, in leasing, you pay the payment at beginning of month, while in financing you make payment at end of the month...so, it is a wash either way. (think renting vs. mortgage payment).

regards,
kyfdx

307web · April 2004

I suppose the dealership could shuffle shells. Add the the value of the first month's payment into the cap cost and the dealer pays the first payment in your name with their check instead of yours.
That is one way I could see driving away with no money paid for 30 days, just like a 100% finance deal.
Can it be done? If so, they could do that as a sales gimmic for people who don't want to put any money up front at all.

kyfdx · April 2004

It can definitely be done... They aren't worried about the first payment. You can walk out with 35 payments on a 36 month lease. I did it on an '01 Honda Accord. It makes no difference to the dealer and no shenanigans involved.

regards,
kyfdx

kkdr · April 2004

Thanks for the help Car_man. I will wait a little while- and I'm sure I'll be asking more questions soon. kk

gteach26 · April 2004

Roaddog, coincidentally I've been looking at the exact same car you're asking about ('04 LS430 with modern lux pkg). The lowest I've found in my area (S. Fla) is $717 per month +tax. $900 total due at signing. 48 months 12K miles per year. This assumes top tier credit rating. Also, it seems like they might go even lower. I'm considering waiting for the December to Remember sales event.. my local dealerships go CRAZY at that time and become very aggressive in their pricing.

ogbuffguy · April 2004

Hey carman, thanks for all your previous help. I am lookin for a toyota highlander v6 2wd w/o 3rd row, a toyota 4runner v8 sport 2wd, and a mercedes c230 sport sedan, all with 36 month/12k miles a year, in southern california.

Also does it make a difference on the highlander and 4runner if its a limited or not? and on the 4 runner if its a v6 or a v8? thanks for all your help.

jbowman3 · April 2004

Car Man,

I'm tired. I've driven everything in my 'range', and I'm having trouble picking a winner. The 'everything car' just doesn't exist (at least not yet). Audi has given me an incentive to go back to them, so I'll give it one last try. Please give me lease numbers for an A6 Quattro Wagon, 39 months, 15K/yr. I'm in NY.

I must lay down now.

rroyce10 · April 2004

... ** December to Remember ** ...

          Food for thought: if a lease is the way your going, then that wonderful marketing concept is "not" directed at you and perhaps you might take the swing now .. residuals will be lower on the 04's, which means your payments will be higher, even with a bigger discount you won't be getting much help ..

           It's a great and catchy Ad campaign and it's really focused on the "few" leftovers on a retail basis, then of course you will get the folks that "think" their getting a great deal on a lease .l.o.l....

                       Terry

bmwannabe · April 2004

Hello car_man,
i'm thinking about gettin a less loaded 2004 325i and would really appreciate a sample 30 month/15K lease calc, MSRP $32,100 (selling for $31,500) (Moonroof+Auto+Coldweather)..saw that the April MF was sweet...but i'll probably only close a deal in May ...any thoughts on whether they'll stick with supporting the 325i? What would the may residual and MF be for the 30mo/15K lease?
Thanks much!!

infinitimn · April 2004

What I've read is that many car manufacturers are not leasing in New York because of liability laws. They are structuring purchases that look like leases with a big balloon at the end if you don't return the car. In these deals you would definitely pay sales tax on the residual as you are actually buying the car.

superman5 · April 2004

i have a quick question, i am trying to sell my car and get out of lease earlier, if another party is buying my car, how do i make the transfer? i don't think buyers like the idea of giving the money to me first and then wait for me to receive the pink slip in the mail? i dont want to give the buyer my car first without transfering ownership and liability , is there any other "faster way"? can i go to the bank (leased by CHASE) with the perspective buyer and pay off the "payoff" and get the pink slip and then transfer ownership? thanks for your help in advance

multiplechoice · April 2004

My friend is looking at the Mazda 3S, interested in a 36 month/15K lease. What is the MF and residual? Thanks for the info. Car_man.

CarMan@Edmunds · April 2004

Hi Eagle. I am not personally familiar with how tax is calculated on leased vehicles in California. You may be able to find out more information on this subject by visiting one of the following sites: California Department of Motor Vehicles or California State Comptroller's Office. As far as this car's lease acquisition fee goes, you are correct, it is a little high. I believe that BMW Financial Services' base lease acquisition fee is only $525 in California right now. Let's work up a sample lease payment on this car for you and see what we come up with. According to my calculations, if you were to lease a 2004 BMW 325i with an MSRP of $35,840 and a capitalized cost of $34,725 through BMW Financial Services this month for 3 years with 12,000 miles per, your zero down, pre-tax monthly lease payment should be right around $409 or so. This deal would require a $425 security deposit. If you choose to have this deposit waived, I believe that it would increase your monthly payment to around $418 or so. It is difficult to say if BMW's May lease program for this car will be any more attractive than its current program. I personally think that this car's residual values will drop a little bit in May, actually making it more expensive to lease if BMW does not increase its lease money factor support.

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CarMan@Edmunds · April 2004

Greetings ddelise. Let's take a look at the current lease programs for the models that you are interested in. If you were to lease a 2004 Chrysler Pacifica 2WD through Chrysler financial this month for 36 months with 12,000 miles per year, its base lease money factor and residual value should be .00110 and 51%, respectively. The numbers for an otherwise identical 39 month lease should be .00110 and 50%. Chrysler Financial's current base lease acquisition fee is $550. I am not sure if it leases vehicles with only 10,000 miles per year. In addition to this special lease money factor, Chrysler is providing $3,000 lease cash on the '04 Pacifica that you can use to negotiate a more attractive capitalized cost.

If you were to lease a 2004 Buick Rendezvous 2WD through General Motors Acceptance Corp. this month for 3 years with 12,000 miles per, its base lease rate and residual value should be 3.5% and 53%, respectively. As you can see GMAC publishes lease rates instead of lease money factors. A lease rate of 3.5% is equivalent to a factor of around .00146. GMAC's base lease acquisition fee is $595 in most states. I have not seen any information on 39 month leases or leases with only 10,000 miles per year for this model. According to your profile you are in Florida. If this is the case, there is $500 lease cash on the '04 Rendezvous plus an additional $1,000 "Truckfest" cash for a total of $1,500 that will help you to negotiate a more attractive capitalized cost.

I based all information that I provided you with on 2WD models because you live in such a warm area. Let me know if you wanted info on AWD models instead or if you have any other questions.

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CarMan@Edmunds · April 2004

Hello cjs2002. I would be more than happy to work up a few sample lease payments for you, but in order for me to do so, I need you to provide me with the full MSRP of the car that you are getting. Also, in your post you mentioned that you will not lease this car for another two weeks. I believe that Acura is scheduled to introduce its new May lease program early next week. I will not be able to tell you what it should cost you to lease this car in May until I have had a chance to look at the new program. Please feel free to post a quick reminder containing this car's full MSRP in this discussion late next week and I will be more than happy to work up some payments for you using the latest info. Talk to you then.

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CarMan@Edmunds · April 2004

No problem, postnobills. I believe that Audi Financial Services' current Premiere Purchase Plan interest rate for a 2004 Audi A4 1.8T Cabriolet is 4.5% for contracts of up to 4 years in length. This program is only scheduled to run through May 5th though.

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CarMan@Edmunds · April 2004

You're very welcome, spatulaman. The allroad really is a nice product. It definitely will be a lot more fun to drive than an SUV would. I completely agree that Audi's 2.7T engine is pretty sweet. I always like vehicles that have turbo engines though so perhaps I am a little biased. If you were to lease a 2004 Audi allroad 2.7T through Audi Financial Services this month for 3 years, its base lease money factor should be from .00010 to .00100. Audi's lease program is regional this month. I can be more specific about the exact money factor that you can expect if you let me know what state you are in. The 3 year, 15,000 miles per residual value for this model is currently 56%. The residual value for a lease with only 12,000 miles per year would be 2% higher.

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CarMan@Edmunds · April 2004

You're welcome, njdriver1. I frequent all of the discussions on both the Smart Shoppers and Finance, Warranty, and Insurance Message Boards. Make sure to stop by some of the other interesting discussions on these boards and we can talk all you'd like. The more posts the merrier

. I'm looking forward to hearing which model you pick and how everything turns out.

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CarMan@Edmunds · April 2004

No problem, roadog. Thanks for the additional information. 2004 LS 430 models that are equipped with navigation have residual values that are 1% lower than models that are not equipped with this option. I believe that the navigation system takes this car's 3 year 12,000 miles per payment around $16 higher and its 4 year 12,000 miles per payment around $12 higher. Lexus is not currently providing any sort of lease support that I am aware of on the 2004 LS 430. So if you were to lease one through Lexus Financial Services for any length of time, you would have to use its base standard money factor of around .00200 in most areas. This car's 36 month and 48 month, 12,000 miles per year residual values should be 55% and 47%, respectively.

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CarMan@Edmunds · April 2004

Yes, wibble, a number of banks do allow their customers to pre-pay leases. Doing so does not prevent one from having to pay interest, but it often provides a discount in the lease money factor that is used to come up with the cost of the lease. There is nothing wrong with pre-paying a lease, IF the reduction in the interest that you have to pay is large enough to justify tying up thousands of dollars for a number of years. You need to find out if the captive finance company for the manufacturer of the vehicle that you are interested in offers such a program and how much of a discount they give for pre-payment to calculate whether it makes financial sense to pay for your leased vehicle in advance.

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CarMan@Edmunds · April 2004

Any time, kkdr. Let me know when you have any other questions.

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CarMan@Edmunds · April 2004

I am always glad to help, ogbuffguy. If you are in Southern California, I believe that you are in Toyota's Los Angeles region. You are in luck, because it is currently providing special lease money factors on the 2004 Highlander in your area. The last that I heard, Toyota Financial Services' 36 month April base lease money factor for the '04 Highlander is .00174 in your area. The corresponding 12,000 miles per year residual value for an '04 Highlander (Non-Limited) 2WD is 59%. The residual values for Limited Highlanders are different from the base model's.

If you were to lease a 2004 Mercedes-Benz C230 sport sedan through Mercedes-Benz Credit Corp. this month for 3 years with 12,000 miles per, I believe that its April base lease money factor and residual value should be around .00120 and 57%, respectively.

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CarMan@Edmunds · April 2004

Yeah, jbowman3, Audi is providing $1,000 owner loyalty cash on the 2004 A6 right now. In fact, it also is providing $2,500 dealer cash in addition to this loyalty cash on 3.0L A6 models this month. This cash can make a big difference in your lease payment, if you take it into account when negotiating your wagon's capitalized cost. If you were to lease a 2004 A6 3.0L Avant through Audi Financial Services in New York prior to May 5th for 39 months with 15,000 miles per year, its base lease money factor and residual value should be .00045 and 49%, respectively.

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CarMan@Edmunds · April 2004

You're absolutely right, Terry. Vehicles residual values gradually fall as the model year progresses. If one wanted to lease a new car or truck in December they would be much better off getting a 2005 model than a leftover 2004. Lexus usually does provide at least a little support on its new models, i.e. the '05s, during its annual December "sales event." For example, last December Lexus cut its base lease money factor on the '04 LS 430 from .00200 to .00180. This is not a huge savings though. It really only amounts to around a 0.5% reduction in the interest rate, which is better than nothing but not worth putting off getting a new car for 6 months over.

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CarMan@Edmunds · April 2004

Hey bmwannabe. It is not easy to predict exactly what a manufacturer will do with its future incentives programs. BMW Financial Services usually publishes new residual values every two months. This means that it is scheduled to publish new resids in May. The last time that it came out with new residual values it did not lower the '04 325's resids, but there is a good chance that this car's residuals will fall a percent or two in May. If this happens, this car will become more expensive to lease, unless BMW reduces its money factor in an effort to offset this residual drop. Only BMW knows for certain what its May programs will be like. In fact, it may not have even finalized its May program yet. The amount of support that manufacturers provide on their vehicles is related to how well its products are selling. BMW will probably want to have a good idea of what its April sales figures are before it finalizes its May programs.

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CarMan@Edmunds · April 2004

Superman5, each bank's policies on this matter are a little different. You need to contact the bank that you are leasing your vehicle through directly to find out exactly what you need to do. Generally speaking though the easiest way for consumers to sell their leased vehicles to someone is to go to a branch of the bank that you are leasing your vehicle through and complete the transaction there.

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ksharma01 · April 2004

I sure hope not. I am planning to walk into a BMW dealership in the next day or so and ask for $250 over invoice MINUS $2400 dealer cash incentive. And thats if the lease acquisition fee and money factor have not been priced up. If so, then I'll offer just invoice minus $2400. We'll see...

CarMan@Edmunds · April 2004

Hi multiplechoice. I don't believe that Mazda is providing any sort of lease support on the 2004 Mazda3 at this time. As a result, you may be able to lease one through an independent bank for less than you could through Mazda's captive finance company. Mazda's standard lease money factor on this car is currently probably around .00250 and its 3 year, 15,000 miles per residual value is probably fairly low, like around 40% or slightly higher.

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superman5 · April 2004

thank you for your help , car man you are awesome!!!

scottyt24 · April 2004

Carman-

Looking for the Money Factor on an 04 MDX with Touring/NAV. Do you happen to also have the residual??

spatulaman · April 2004

I'm in Texas. Hopefully that will make for a good MF. If I go to a state that has a really really great MF to buy it, then drive back to TX, does that mean I get the MF for the state in which I purchase? I'm pretty much ready to go get one if the numbers are good....I'm also going to get a $1000 Audi Loyalty discount 'cause I currently have a TT.

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