Lease Questions - Ask Here

turbotorque · June 2004

CarMan:

You get a lot of very specific questions on specific makes/models... but I am looking for some broader information...

Generally speaking, which makes/models offer the best leasing deals in the small to mid-sized sedan segment (17k to 30k MSRP)?

The lease on my Passat is set to expire in about five months, so I am beginning to consider my options...

From what I've seen thus far, it appears that Honda offers some sensational deals on the Accord...

Thanks...

stacey_burke · June 2004

This is my 2nd lease, both with an accord. when I turned in my last accord it had 36000 miles and the tires did not look that bad. I was told I needed new tires which I put on the car - there was nothing else wrong. Today I took in my accord to have someone look at it about 1.5 months before it is due to be turned in. I have 44000 miles and the tires look like it has that many miles on them. I was told that I do not need new tires that I had 4/32 of tread and that was OK.

That just does not seem right. I can of course buy a set of cheaper tires (about $250) and turn it in. I do not want to have them tell me at turnin that they must put new tires on it and cost me $400.

Does anyone know how Honda works the tires at turnin? Thanks Stacey

jabber · June 2004

Car-Man,
While you're investigating the G35 do you mind posting for the G35x sedan on 36 mos, 15K miles:

-Residual
-Money Factor
-Bank Fee?
-Security?
-Disposition Fee?
-Over mileage charge?

Do you just post manufacturer leases or do you also have access to bank programs like Chase Auto?

Thanks in advance!

CarMan@Edmunds · June 2004

Thanks for posting your question again, njdriver1. It is difficult to say exactly how much money it cost your dealer to swap with another dealer for the exact model that you are interested in. The exact cost will depend upon whether the vehicle was driven or trucked in, whether it was an actual swap or if he purchased it from the other dealer, etc... The deal that you were offered looks reasonable to me. If you like the truck, at least technically it is a truck

, then go for it.

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njdriver1 · June 2004

Thanks CarMan-

Its hard to know when your getting a good deal or not, it feels as if a dealer is always putting one over on you.

This car was driven, I don't know if it was swapped. In the end, I agree with you. I appears reasonable. I'm going to see if I can get $10/mo off the lease price by working over his cap cost, but, in the end, its the exact car we want.

Thanks again CarMan, and I'll be back in a few months for our 2nd car.

CarMan@Edmunds · June 2004

That definitely explains why the money factors that you were quoted are not the same as the ones that I mentioned earlier, superbeagle. If you do end up leasing this vehicle through a bank other than Volvo Finance, keep in mind that Volvo is providing $2,000 dealer cash on 2004 XC90 2.5T and $2,500 on 2004 XC90 T6 models that are leased through independent banks. This cash should help you to negotiate a more attractive capitalized cost.

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CarMan@Edmunds · June 2004

I had a very nice weekend, wibble. Thanks.

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CarMan@Edmunds · June 2004

Hi ajoe. American Honda Finance Corp. charges any consumer who leases through it a $595 lease acquisition fee. This fee is send directly to AHFC and individual dealers do not have any authority to waive it. The special lease money factor that Honda was offering on the 2004 Odyssey in May is good through the beginning of July. I believe that the $500 dealer cash that was available on this model was only scheduled to run through the end of May. However, Honda will most likely continue or possibly enhance the dealer cash on this model for June. I should know exactly what happened in a few days if you want to check back with me.

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CarMan@Edmunds · June 2004

You're very welcome, Donna. When I said that it is not in your best interest to make a down payment, I was not talking about having to pay your car's first month's payment, security deposit, and acquisition fee. Everyone has to pay those at signing, unless they are waived for some reason. I was actually saying that you should not make a capitalized cost reduction on this car. I advise consumers against making capitalized cost reductions for two main reasons. The first is if their leased vehicle is stolen and never recovered or totaled in an accident during their lease, their insurance company pays off the bank that they were leasing it through and their cap cost reduction essentially disappears. The second main reason is that cap cost reductions do not reduce vehicles' lease-end purchase prices. So your leased Z4's end of term purchase price would be exactly the same, regardless of whether you made a cap cost reduction of say $5,000 or if you had not made any at all.

As far as BMW's May lease program goes, I heard somewhere that it was scheduled to end on June 1st, but I suspect that it will continue through the end of June without any major changes. Please feel free to check back with me at the end of the week and I should be able to let you know for certain whether anything has changed.

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CarMan@Edmunds · June 2004

Thanks, shap1. It's nice to be missed. I am sure that you all missed me for my witty repartee rather than for my answers to your questions about leasing

. I do not believe that Lexus was providing any sort of lease support on the RX 330 in May, at least none that I heard about, so the money factors that you were quoted look very reasonable to me. The factor and the selling price that you were able to negotiate look very attractive. You did well. Enjoy your new truck.

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ajoe · June 2004

Thanks Car_Man & kyfdx!

We are in the market for Odyssey EX-RES and any information for the month of June will be helpful. Car_Man - By when do you think you will know?

Also could you verify for me: The way I read the special lease offer is: AHFC basically is offering a promotion using a attractive money factor and banking on the high residual value to reduce the monthly payment and of course if one is able to get additional discount from the dealer that is just additional help and that will further reduce the lease payments. Correct?

Thanks for your feedbacks in advance.

CarMan@Edmunds · June 2004

Audi's May lease program was scheduled to run through tomorrow, May 3rd. If you don't plan on leasing prior to then, please check back with me at the end of the week with a quick reminder. I should know what Audi's June lease program is like by then.

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kyfdx · June 2004

I turned in an '01 Accord in January with 52K miles, and the tires passed the inspection.

Be sure to take advantage of the pre-turn-in inspection that Honda offers. You should have it inspected 3-4 weeks before turn-in. The inspector has a tire gauge that measures the tread depth on the tires. It either passes or it doesn't. If you wait till turn-in, you are at their mercy, and it may not even be inspected until later, when you are not present.

My inspector gave me a form he printed off his laptop, that showed no excess wear and tear charges.

regards,
kyfdx

jedsplinter · June 2004

Dear Carman,

I own a small company and want to lease two cars for my partner and myself. I have never leased before, believing in keeping my cars for a long time. However, my accountant tells me it is more beneficial from a tax perspective. So some very basic questions:

1. length of lease that is best 36 vs. 48
2. Mileage 12,000 vs. 15,000
3. Down payment or not.
4. Residual value to buy back at the end of the lease (for my wife) or not
5. Leverage with 2 cars from the same place or not
(we want different cars - Passat and Toyota Highlander)

Any leverage points or key tips or pitfalls in negotiating and deciding on the lease. Our credit rating is excellent all around.

Thanks,
Jedsplinter

oidvoid · June 2004

Hi Car_man. Glad you had a good vacation. It would seem I posted right before you took off. Instead of re-posting, I'll just ask you to check message #11071 when you get a chance.

Thanks.

ucistudent · June 2004

Hi Car_Man,
I'm interested in leasing a mercedes C320 Sport coupe 2004 with premium package. i was wondering what is the money factor for 36 and 39 months and what are the residuals? And are there any dealer cash incentives for this model? Thanks!

Regards,

Anthony

fzara2003 · June 2004

Alright, i'm in a dilemma if I should buy or lease the FX35 with Tech/Touring and 1 year of free oil changes.

If I lease...
15,000 miles, $0.15/mile
Monthly Payment: $598.03/39 months
Cap Cost Reduction: 1483.42
Total Cap Cost Reduction (Reg Fees, Title, Monthly Payment, "Tax on Red", Doc Fee: 2397.96
Money Factor: Still awaiting this number from the dealer

If I buy...
he said he'd give it at $500 over invoice, at $40,440, which is a stellar offer.

I'm more inclined to lease it since it would be much cheaper, but I still think that at $600/month I can do much better as lease.

What do you all think, and is the lease a good deal?

Also, what is the money factor for those terms described?

trigger · June 2004

Car_man I'm including a previous post. New incentives just came out today and I can't tell if they will affect the lease or not. $4k GM loyalty on the 04 Corvette coupe is the current offer for sales but I can't find anything on leasing. Thanks for your help.

No problem, trigger. 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 Chevrolet Corvette coupe 1SB (MSRP: $49,000 / cap cost: $49,000 - $7,000 discount = $42,000) through General Motors Acceptance Corp. this month for 3 years with 15,000 miles per, your zero down, pre-tax monthly payment should be right around $568. The payment for an otherwise identical 4 year lease would drop to around $524. I did not include the $3,000 customer cash that General Motors is providing on this car right now in my calculations, because this cash can not be used in conjunction with GMAC leases. Also, I did not take your trade into account either because it is never a good idea to make down payments on leased vehicles. If you really want to trade your current car or truck in, have the dealer that you are working with cut you a check for it instead of applying it to your lease.

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shap1 · June 2004

Thanks Car_Man. And yes, we did miss your witty repartee. It really breaks up the monotony of residuals and money factors!!

michasoo13 · June 2004

can anybody tell me what if any bmw is offering as far as dealer cash for the x3 2.5; also does any1 out there have figures of
how well they are selling; and lastly what are the current june lease deals for
the x3 2.5 thank you...

CarMan@Edmunds · June 2004

Very interesting question. I would be more than happy to give you my opinion on which sedans have the most attractive lease programs available on them right now. However, you need to keep in mind that the lease programs on these cars may be significantly different in five months from now. You mentioned the Honda Accord in your post. You are absolutely correct, Honda has a very attractive lease program on Accords right now. Mazda has a decent lease program on the Mazda 6 most months. Toyota's incentives vary regionally, but it often has fairly attractive leases on the Camry. Nissan often has decent leases on the Altima as well. On a little higher end, Saab always has TONS of lease support on the 9-3 and the 9-5. Last but not least, Volkswagen has a pretty attractive lease program on the Passat and Jetta.

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CarMan@Edmunds · June 2004

Hi Stacey. I assume that your lease is through American Honda Finance Corp. AHFC uses an independent company to inspect vehicles at the ends of leases. If the inspector from this company told you that your tires have enough tread left and do not need to be replaced then you should not have anything to worry about. I do not believe that AHFC can come back and fine you for excess tire wear now that the inspection company pas passed you. Buying new tires would be a waste in my opinion.

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CarMan@Edmunds · June 2004

Hello jabber. I haven't seen Infiniti's new June lease program yet. Please post a quick reminder for me in this discussion in a few days and I will let you know what I have been able to find out.

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CarMan@Edmunds · June 2004

You're welcome, njdriver1. Good luck in your negotiations and definitely make sure to come back and let us all know how you like your new ride.

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CarMan@Edmunds · June 2004

You're welcome, ajoe. I've heard that Honda's lease program and dealer cash for the 2004 Odyssey are exactly the same in June as they were in May. You should be able to find out the details by scrolling back a few messages to a post on this van. Consumers can and always should negotiate the selling prices of leased vehicles. Most, but definitely not all, advertised lease payments assume some minimal discount off of the vehicle's MSRP. Having said this, I have a feeling that you should be able to negotiate a more attractive selling price on an '04 Odyssey right now than the one that is used in Honda's advertised lease.

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CarMan@Edmunds · June 2004

Welcome to the wonderful world of leasing, jedsplinter. I feel as though 36 to 39 month leases are usually the best way to go. Manufacturers often provide reduced interest rates for leases of this length plus your leased vehicle will be covered by its full warranty for the duration of your lease. Four year leases can be OK, if you don't mind being committed to one vehicle for that long, it has a long enough warranty, and the lease money factor that is available for that term is favorable. Which mileage limit you should select completely depends upon your driving habits. If you think that you definitely will drive 15,000 miles per year then you definitely should lease using that mileage allowance because if you go with any less you could end up having to pay a decent sized penalty for excess mileage if you go way over a lower allowance.

You definitely should not make any sort of down payment when leasing. By down payment, I specifically mean a capitalized cost reduction, and not your vehicle's first month's payment, security deposit, and acquisition fee which you will need to pay. I advise consumers against making down payments on leased vehicles for two main reasons. The first is if your leased vehicle is totaled in an accident or stolen and never recovered during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So the end-of-term purchase price for your leased car or truck would be exactly the same, regardless of whether you had put down absolutely nothing or thousands of dollars.

I wouldn't worry about buying your vehicles from the same store. If you are a savvy shopper you will get the best price that the market will allow, regardless of how many vehicles you purchase. A dealership is not going to take a losing deal, just so they can sell you another vehicle at a loss.

You definitely should check out the following article at Edmunds before entering into any serious negotiations: 10 Steps to Leasing a New Car.

Please let me know if you have any other questions.

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CarMan@Edmunds · June 2004

Welcome back, oidvoid. Wow, you were post #800, huh. I certainly have been busy

. Whether or not you should try to lease a 2005 model instead of a 2004 model depends upon how much lease support is being provided on the vehicle in question. I personally would definitely wait until the '05 models arrive to lease an Acura TL because Acura is not providing any sort of lease support on it and you will benefit from the higher residual value. There is at lease some lease support on the Nissan Maxima and the Infiniti G35 sedan so waiting until the 2005 models arrive will not make as big a difference with these cars.

It is difficult for me to say whether you can use your leased Accord to your advantage in your negotiations for your new car. Consumers usually can not purchase their leased vehicles to use as a trade and come out ahead, but this does occasionally happen. In order to know if you can do so, you need to find out exactly how much money it will cost you to purchase your leased Accord at the end of your term and then compare that number to what it is realistically worth on the open market at that time. Most consumers are better off just turning in their leased vehicles and walking away from them at the ends of their terms.

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ajoe · June 2004

Thanks Car_man. I do appreciate your help and feedback. It coincides with I am being told by a local dealer.

I was thrown of by the acquisition fee which he "forgot", but I suppose people are allowed honest mistakes. In any case, besides this one lapse in memory so far it has been fairly smooth. But can't help being wary of dealers!

Car_Man any additional incentives you know off from Honda Odyssey's now or coming up in the near future?

Once again thanks for the feedback. It has been helpful.

Best regards

fish8 · June 2004

How legitimate are Documantation fees when leasing a car? I was quoted a Doc fee of $398 at a local VW dealer.

jas413 · June 2004

Hi Car Man. I still haven't pulled the trigger on a new vehicle. Please provide this months lease numbers for a 48 month 15,000 per year lease on the Durango & Pilot. Thanks again for all your help!

gerry2 · June 2004

Ford Motor is no longer writing leases in New York, but they are offering "balloon" payment deals that are essentially like leases with a big payment at the end if you decide not to turn the car in.

Big question - I have always been able to figure my payment to the dime using your lease information before going to the dealer based upon the capitalized cost I wanted to pay for the vehicle. With this new process, I'm a bit unsure about how to compute what my payment should be and the dealers have been useless in explaining how they got to the figure. Any advice would be greatly appreciated.

Gerry

turbotorque · June 2004

CarMan:

Thanks for the response. By the way, you helped put me into my current Passat 2.5 years ago with your timely info. I like the car a lot, so I am on the fence on the issue of leasing again or buying it at the end of the lease.

With fuel prices the way they are, perhaps it is time to "move down" to a sipper like a Civic? I am tired of funding Middle East sheiks with my gas purchases. Unfortunately, I don't think VW sells their TDIs in California, and I've read on here that the lease deals for the Prius are terrible.

307web · June 2004

You could lease something in the interim for the next 3 years. In 2007, there should be several diesel options in the US in all 50 states. VW is most likely along with several other brands.
Cars should actually start becoming available in 2006, but I'd wait for 2007 models for everything to ramp up and smooth out.

jr_nc · June 2004

Hey Car Man,
Just dropping you a reminder you asked me to give you. It was about the Audi lease rates-message #11130. I appreciate your help-this is my first lease, and have been reading as much as possible, to try to cover all my bases. I have a real problem buying and selling cars in 6mo.-to 1yr. So this way, I will stay with a car for a while. (hopefully). Thanks again-JR

oidvoid · June 2004

Thanks for the info. I'll be calling AHFC tomorrow to inquire about extending my lease. I'm pretty much sold on the TL, but I'd still like to see whether anything interesting pops up in July as far as incentives go. Hopefully I can wait until then to decide about a possible extension.

I'll be back! (using my best AH-nold impersonation)

oidvoid

trigger · June 2004

Hello Car_man. Can you tell me if the money factor has changed for June? Thanks.

Charles

michasoo13 · June 2004

Hello_Car Man!!??? do you know if bmw is having any dealer cash incentives for the month of june? and can you update me on the money factor and residual if it has changed at all since your may posting..thank you very much...this would be greatly appreciated

CarMan@Edmunds · June 2004

Hi Anthony. Mercedes-Benz has not released its June lease program yet. I expect them to at some point today. Please feel free to post a reminder in this area for me in a few days and I will be more than happy to fill you in on what I have been able to find out.

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CarMan@Edmunds · June 2004

Greetings fzara2003. I haven't seen Infiniti's June lease program yet. I will see what I can find out about it for you. Please feel free to post a reminder in this area for me in a few days and I will be more than happy to fill you in on what I have been able to find out.

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CarMan@Edmunds · June 2004

Hey trigger. General Motors main owner loyalty program is not compatible with GMAC leases. However, it is running a separate program that provides $1,000 owner loyalty cash on leases, which the Corvette does qualify for.

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CarMan@Edmunds · June 2004

Hello michasoo13. BMW is providing dealer cash on the 2004 X3 2.5, but only on models that are equipped with automatic transmissions. It has $1,210 dealer cash on these trucks. I have not seen BMW Financial Services' new June lease money factors yet. Please feel free to post a reminder in this area for me in a few days and I will be more than happy to fill you in on what I have been able to find out about its new lease program.

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CarMan@Edmunds · June 2004

You're very welcome, ajoe. I recently saw Honda's June incentives and it has not made any enhancements to the 2004 Odyssey's program. I have not heard anything specific about future enhancements to this van's program, but it definitely is possible that Honda will have to increase its dealer cash on this model as we get closer to the launch of the redesigned model.

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CarMan@Edmunds · June 2004

Ahhhh yes the old doc fee, fish8. Most dealers charge some sort of doc fee on the vehicles that they sell. Some states regulate this charge, while in others dealers are free to make it whatever they like. Despite the fact that there are legitimate expenses associated with the registration of vehicles and the paperwork and legwork that are necessary to do so, doc fees, especially ones that are several hundred dollars, are usually nothing more than another way for dealers to add profit to deals. I always advise consumers to ignore all of the little fees that dealers try to tack onto deals and to look at the big picture -- the total price of the vehicle that they want. Get several out the door price quotes for the model that you are shopping for and go with the dealer that gives you the lowest total price, provided that you feel comfortable with them. It doesn't really matter what sort of fees your dealer adds to your deal if they are able to give you the best total price. This rule applies to leased vehicles as well, just apply it to your car or truck's capitalized cost.

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CarMan@Edmunds · June 2004

Hi jas413. I haven't seen the June lease programs for these models yet. I will see what I can find out about it for you. Please feel free to post a reminder in this area for me in a few days and I will be more than happy to fill you in on what I have been able to find out.

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maxim49 · June 2004

Carman here is a reminder to my previous post - can you please post the June residual and MF for the G35 coupe. 39months and 15K mile/yr.
Thanks!!

Hi maxim49. Infiniti is not supposed to publish its new June lease program until tomorrow, June 2nd. I should be able to give you an idea of what its new program is like in a couple of days. Please post a quick reminder for me at the end of the week and I will be more than happy to fill you in on what I have been able to find out. Talk to you then.

beady23 · June 2004

Keep in mind that since you are technically buying the car you pay tax on the complete price. If you give it back you lose the tax. When you lease a car in NY you only pay taxes on the portion of the car you are using.

ajoe · June 2004

Thanks Car_Man. Your help has been very useful.

We are going to make the move on the vehicle within the next week or so. Need to check and see the best available pricing in the central ohio market. Maybe in this time there may be additional information available on any new programs on the Ody. On that note are new programs/incentives announced through the month or just at the beginning of the month, this would help in how quick to make the decision.

Thanks once again.

superbeagle · June 2004

Car_man:

Dealer who had quoted what you had viewed as a competitive quote changed their tune when I was ready to sign the deal (see post 11116,11121). They now tell me that Volvo won't provide them the lease cash if they also offer the current promo on no charge for the Versatility package (I believe $1800). Have you heard anything about this. Here is what the dealer is telling me:

"I've have run the numbers for both 36 and 48 months using 12K miles in each case. The monthly on the 36 is $674.31 with $1113.31 cash due at signing. The 48 month will run $602.57 with $1041.57 cash due at signing.

After reviewing the quotes you sent me from Dulles, it appears that they have made an error in the applicable incentives. I talked with XXXX at Dulles and pointed out that Volvo will not allow deducting both incentives on lease deals. Sorry for the miscommunication."

A later email from the dealer said:

"I even checked with Volvo directly and they agree that my lease quotes are where they should be given the terms and miles.

The cash due at signing is the same things the Dulles rep was quoting you as upfront costs. First months payment, processing fee, taxes and tags. Our lender/lessor was to be Chase who has no requirement for a security deposit. I could also roll all those things except the first months payment into the lease but that will cause the payment to increase slightly."

Thanks

fzara2003 · June 2004

Car_Man, the numbers posted were from May's specials. We showed up at the dealer the day after Memorial Day, and he let us lock in the numbers from May's programs with a $500 deposit.

ec99ss · June 2004

Hello -
I was curious if you have info behind Infinity's June Lease program, specifically for the G35 Sedan. Thanks for any info.

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