Lease Questions - Ask Here

CarMan@Edmunds · September 2004

Hi grngardn. The best way to find out what the residual value for the vehicle that you are interested in leasing is is to ask the dealer that you are working with. Dealers will be inclined to be honest with you about this number because they do not have the authority to alter banks' published residual values. I am usually able to find out this sort of information for community members, and I can tell you that BMW Financial Services' current residual value for a 36 month, 12,000 miles per year lease of the 2004 X3 2.5 is 59%. For the purpose of calculating this vehicle's dollar residual value, multiply this percentage times this model's full MSRP, including destination charges.

While it is important to know a vehicle's residual value so that you can calculate a lease payment on it, the two most important numbers to know when leasing are your vehicle's lease money factor and selling price. These are the two main profit centers for dealers on leases. BMW FS' base lease money factor for a 36 month lease of this model is currently .00070. The only reason why the money factor would be higher is if you are having BMW FS' security deposit or acquisition fee requirements waived. If you are paying a security deposit and an acquisition fee and the dealer that you are working with is using a higher factor to calculate your lease payment, they may be trying to mark it up to add additional back-end profit to your deal. BMW dealers are notorious for marking up money factors.

Remember that the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. To get a good idea of what it should be like you can look up this model's Edmunds.com True Market Value in the New Vehicle Pricing section of this site. You can also stop by the following discussion that appears here in the Town Hall: "BMW X3: Prices Paid & Buying Experience". If you let me know what sort of selling price you were able to negotiate, I would be more than happy to work up a sample lease payment on this truck for you.

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CarMan@Edmunds · September 2004

You're welcome, mattyo. Dealers have been marking up lease money factors and regular finance rates on vehicles for years. There has been some backlash against this practice recently, causing most banks to limit the amount that dealers can mark up rates even more than they have in the past. You really don't have to do much to negotiate this vehicle's money factor. Tell the dealer that you know what Chrysler Financial's base money factor is for it and if they don't use it to calculate your lease payment you will buy from a different dealership. There are tons of Jeep dealers out there so comparison shopping shouldn't be a problem.

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CarMan@Edmunds · September 2004

Hello aeg. Consumers who drive 10,000 to 15,000 miles per year are typically good candidates for leasing. 15,000 miles per year is the highest mileage allowance that most banks publish residual values for. Consumers who want to drive their leased vehicles more than that usually have to purchase additional mileage on a per-mile basis. It is less expensive to do so at lease signing than it is to wait until the end of a lease and pay the excess mileage penalty. If there is an attractive lease program on the vehicle that you are interested in and the per-mile charge for excess mileage is reasonable, then you may want to consider leasing. Volvo's lease program on the 2005 S80 and Audi's lease program on the 2004 A6 are pretty attractive right now. If I was in the market for either of these cars, I might consider leasing them. Volvo's lease program on the 2005 XC90 is really not that great though. I might be inclined to purchase rather than lease this truck.

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CarMan@Edmunds · September 2004

Hi Thomas. I would be more than happy to work up a sample lease payment on this model for you. According to my calculations, if you were to lease a 2004 BMW X3 2.5 with a full MSRP of $36,500 and a selling price of $35,000 through BMW Financial Services right now for 3 years with 12,000 miles per, its zero down, pre-tax monthly lease payment should be right around $414. The payment for an otherwise identical lease with only 10,000 miles per year would drop to around $404.

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CarMan@Edmunds · September 2004

No problem, vikerii. Sorry that is how leased vehicles are taxed in your state. Don't get me started on a rant about taxes though, GRRRRRRRRRRRRRRRRR

.

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CarMan@Edmunds · September 2004

You're welcome, penn1.

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CarMan@Edmunds · September 2004

Hi xc90fan1. Volvo will definitely introduce a new lease program for the month of October. However, it is very unlikely that the dealer that you spoke with knows what Volvo's October program will be like at this point. I would be very surprised if Volvo itself had even finalized the new program yet. Not only that, but this model's money factors aren't even that great right now. I personally doubt that they will increase next month. If the person who you spoke with at this dealer really wanted to create a sense of urgency to try to get you to buy, they should have told you that this model's residual values will be lower in October. There is a very good chance that this will be the case because vehicles' residual values gradually fall as the model year progresses. Automakers will often lower their lease money factors to help offset the natural decline of vehicles' residual values.

I personally don't anticipate there being much of a difference between the lease program that is available on the XC90 in September and the one that will be available in October, but it is difficult to predict what manufacturers will do with their future programs with 100% accuracy.

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CarMan@Edmunds · September 2004

Greetings sukinsyn. The Pontiac GTO is one of the few 2004 models that General Motors is still running a special lease program on. If you were to lease this car through General Motors Acceptance Corp. right now for 3 years with 15,000 miles per, its base lease rate and residual value should be 3.5% and 53%, respectively. Its 12,000 miles per year residual value for this car would be 3% higher. As you can see, GMAC publishes what is known as lease rates rather than money factors for vehicles. You can convert this lease rate into an approximate money factor equivalent by dividing it by 2400. Given the large cash incentive that is available on leases of the '04 GTO right now, I suspect that you will be better off leasing an '04 model than an '05 at this time.

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CarMan@Edmunds · September 2004

Hi Dennis. Many banks offer pre-paid, aka one pay, leases where all of the lease payments for a vehicle are added up and paid at the beginning of the term. The banks that offer this sort of program do provide a discount in the interest rate that they use to calculate vehicles' lease payments, but even though they are getting all of their money in one lump sum, pre-paid leases are not interest-free. The exact interest rate reduction that is offered varies from bank to bank. I do not know the specific money factor reduction that Toyota Financial Services' provides on pre-paid leases. When you find out what it is, you need to compare the savings that you would get from paying for your entire lease in advance to the interest that you anticipate that you would have earned on that money had you invested it. If your savings for pre-paying your lease is large enough, you may want to consider doing so.

I have not seen TFS' current residual values for the 2005 Highlander yet, but I suspect that I will have an opportunity to find this number out within the next week or so. Please feel free to check back with me in early October 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 · September 2004

You're welcome, a2j. American Honda Finance Corp. usually publishes either new lease money factors, lease residual values, or both on a monthly basis. It's difficult to say what your dealer used to calculate the lease payment that they quoted you on the 2005 TL that you are interested in. They may have just used the lease program for the 2004 version of this car and increased the residual value by a couple of points. Doing this would provide a reasonably accurate payment estimate for an unsupported vehicle like the Acura TL, assuming that next month's program doesn't change much. They probably baked enough profit into your deal to cover themselves if there was a major change in the lease program.

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CarMan@Edmunds · September 2004

Hello edmunds_noob. You never mentioned if you are interested in the Saab 9-3 Aero or 9-5 Aero in your post. Regardless of which vehicle you are talking about, you should be able to lease it for well below its dealer invoice price once the cash incentives that Saab has available are taken into account. For example, Saab is currently providing $3,500 lease cash on the 2004 9-3 Aero Sedan. I would not be surprised if you were able to get this car for right around invoice minus this $3,500.

In your post, I noticed that the dealer that you are working with asked you for a $3,000 capitalized cost reduction. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen 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 your lease-end purchase option price for this car would be exactly the same, regardless of whether you had put $3,000 down, or had made absolutely no down payment at all.

Unfortunately, the lease calculator that is available on this Web site is not very accurate. I would be more than happy to calculate a sample lease payment on this car for you if you tell me how long you want to lease it for and the exact model that you are considering.

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CarMan@Edmunds · September 2004

Hi Lance. Saab certainly is providing a lot of lease support on its cars right now. I would be more than happy to work up a sample lease payment on this car for you. According to my calculations, if you were to lease a 2004 Saab 9-3 Arc Sedan with an MSRP of $35,180 and a capitalized cost of $31,180 through Saab Financial Services Corp. this month for 36 months with 15,000 miles per year, your zero down, pre-tax monthly payment should be right around $437. Given the fact that Saab is currently providing $4,000 lease cash on this model, you should be able to negotiate a selling price that is much much lower than the TMV that you mentioned in your post. Aim for invoice minus this four grand. The lower selling price will provide you with a lower lease payment.

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CarMan@Edmunds · September 2004

Good question, a2j. By base lease money factor, I mean a bank's published money factor. Most banks allow dealerships to mark-up their base lease money factors to add additional back-end profit to deals. Essentially dealers use a higher than normal interest rate to calculate a consumer's lease payment and the bank that the lease is through kicks some money back to them. This sort of thing happens all the time, especially in today's automotive marketplace where knowledgeable consumers are really beating up dealers over selling prices because of all of the invoice price and incentives information that is available on the Internet. The base factor is the lowest rate that is allowed to be charged. While dealers are often allowed to increase banks' money factors, they do not have any authority to lower them.

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CarMan@Edmunds · September 2004

You're very welcome, Arc. Good luck in your negotiations and don't forget to come back and let us all know how everything turns out.

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njl · September 2004

Car Man...Here's a quote I received for a 2005 Sequoia. 810????? Are you kidding me?

MSRP = 51160
Selling price = $ 47175

Lease for 36 mo, 15,000 miles per year, no money down = $ 810/mo (this includes tax).

maxim49 · September 2004

Thanks again Car_man!!

I'll let you know how things workout.
Oh yeah - the brake dust on the front wheels are crazy. I just use the swifter dusting towels every other day to remove the brake dust. As long as you have a nice coat of wax on the wheels, the brake dust comes of pretty easily.

brianj · September 2004

Hi Guys,

I'm new here and eager to learn. After combing through the message board for a while yesterday I came upon a message and reply about states that are not favorable to lease an automobile in. It was because of some tax thing. TEXAS was listed in that reply and I am curious to what all this means. Please explain. Should I buy or lease?

a2j · September 2004

Car-man,

Thanks again for the explanation of base lease money factor. One follow-up question. You mentioned that this is the banks published money factor. Where are they published, and why is it so difficult for consumers to figure out what they are?

Im in a bit of a tough situation right now. I negotiated a good price for the car (did that part right), but I already gave the dealer a deposit to order the car without first agreeing on financing (did that part wrong). The factory lease the dealer offered works out to about $3 per month more than my calculations show using current residual and base factor. Of course, those numbers may change after the first of the month when the car is actually delivered (but I doubt it).

Im just wondering why there is a small disparity in our figures. The quote he gave me works out to about an additional $100 over the 36 month lease term. Is there more than one accepted method of calculating a lease? If not, perhaps theres a $100 administrative fee hes working into the lease, or perhaps hes using a slightly higher money factor. I guess my question is, should I just let the $100 go in light of the good price I got on the car (and the fact that he has my deposit), or is it worth confronting the dealer with the $100 disparity? Perhaps I should just ask for some free accessories?

rsr · September 2004

I subcribe to a sportscar mailing list and posted a message stating that I was looking to buy a certain model car. I got several offers, but the best (at first glance) was from a fellow who offered to sell me his lo-mi. 2004 car if I paid off his lease from the manufacturer's financing arm. His lease can be ended at any time without penalty, and he sent me a copy.

The details: He paid an initial $12,000 in fees and taxes, and has been making payments of approx. $1,600 for six months. It is a 59-mo. lease. The car value was set at a MSRP of nearly $108,000.

So he started out owing over $97k. This fellow now wants out and asks me to pay him about (are you ready... ) $91,000 for the car. Supposedly, he would be out about another $4k on the deal plus, of course, his downpayment.

I know zip about leased cars, but I am stopped by the fact that I would not get a clear title, since he doesn't hold it. The leasing company is the lease holder. So, as he explains it, I would pay him, he turns around and pays them, they send him the title, and he gives it to me for reassignment. This means I would have to give a total stranger some 3,000 mi. away $91,000 in cash for a car that he does not technically own. What am I missing here?

Is this, as he says, a fairly typical transaction that the leasing company can arrange for me? Why wouldn't it be simpler for me to have the lease reassigned to me--then I would have a legal claim and could pay off the car immediately? Help! I know a lot about exotic cars, but as you can see, zero about leasing--which always struck me as a not-so-swell deal.

P.S.-- Anticipating posts from the sharp-witted, I know that deals of this magnitude can and should be run past my lawyer and accountant, and of course, they will. But I'm just trying to get some preliminary info here-- should I pursue this deal or run away as fast as I can?

RSR

grngardn · September 2004

36 Month 12,000 Miles Premium Package with leather, All weather Package,Metallic Paint and xenon lights was given a price of $1,700 out of pocket for security and tax and title stuff and then $513 a month. This is the first time I have tried to negotiated a lease and thought I was getting a good deal but now having second thoughts before I seal the deal. Would someone be so kind to give me feed back. Thanks in advance! I am in the Chicagoland area.

CarMan@Edmunds · September 2004

$810, as in over eight hundred dollars a month to lease a Toyota Sequoia?!?!?!?! HAHAHAHAHA. Given the fact that Toyota is not currently providing any sort of support on it, I am not surprised that this is an expensive truck to lease, but as I am sure you are well aware $800 per month is absurd. You could finance this truck at 5% for 5 years with 10% down for less than that, before taxes. If I was in the market for one, I would probably put a chunk of money down and finance the remainder through an independent bank.

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CarMan@Edmunds · September 2004

You're welcome again, maxim49

.

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CarMan@Edmunds · September 2004

Hi Brianj. The method that is used to calculate taxes on leased vehicles in Texas makes vehicles much more expensive to lease there than they are in most other states. As a result, many banks offer consumers in your state what is known in the industry as balloon notes rather than leases on vehicles. Balloon notes are very similar to leases in that they provide consumers with a low monthly payment with the option to purchase their vehicle at the end of a period of time for a predetermined price. The main difference between balloon notes and leases is that with balloon notes the driver's name is on the title of the vehicle rather than the bank's. Consumers can and often do lease vehicles in Texas, but many consumers who would have normally leased enter into balloon notes or conventional finance contracts.

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CarMan@Edmunds · September 2004

No problem, a2j. The details of banks' lease programs are sent directly to dealers and are not available to the general public, much like the details of dealer cash promotions. As far as dealers are concerned, the less that consumers know about how their lease payment is calculated, the better. As long as a consumer agrees to pay $X per month for a vehicle, the dealer will try to arrive at that payment, allowing the most profit possible for itself.

I am not sure why there is a $3 per month difference in the payment that you calculated on your own and the one that the dealer that you are working with quoted you, but to be honest with you that is not a very large difference anyhow. The formula that is used to calculate lease payments is outlined in the following article that is available right here at Edmunds.com: Calculate Your Own Lease Payment. I personally wouldn't worry about the slight difference in payments, but you certainly are free to discuss it with your dealer if you would like.

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CarMan@Edmunds · September 2004

Hi rsr. Let me begin by saying that I definitely would not give a total stranger thousands of dollars for a vehicle that they did not have the title for. Different banks have different procedures on how to purchase leased vehicles. Consumers who want to purchase leased vehicles or vehicles that an individual has a loan on are often able to visit a branch of the bank that the lease or loan is through to complete this sort of transaction.

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CarMan@Edmunds · September 2004

Hello grngardn. I would be more than happy to give you my opinion on this deal. However, it would be a big help if you would provide me with this vehicle's selling price. Remember that the selling prices of leased vehicles are negotiable, just as if you were paying cash for them. This is an important number to know because it tells you how much of a discount you are being given and it is necessary to calculate its lease payment.

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brianj · September 2004

Car_Man,

Thank You for replying so soon. I guess now I need to determine how to baloon buy/lease? a car. Any leads or areas here at Edmunds that you could direct me to that would help in my persuits?

Let me also say that we are looking at a Honda Accord EX V6 Leather w/Auto. or a Subaru Legacy Outback XT Wagon w/Man. Also, we prefer mileage of 15K miles if it applies.

Take Care,
BJ

CarMan@Edmunds · September 2004

You're welcome, BJ. The best vehicles to lease / take a balloon note out on are those that have manufacturer support available on them. Honda is currently running a special lease on the 2005 Accord and Subaru has a decent amount of lease support on the 2005 Legacy. To take advantage of the lease support that is available on these cars, you need to lease them through their manufacturers captive finance companies, American Honda Finance Corp. and Subaru Motors Finance, respectively. These banks do not deal directly with the general public so you will have to go through a dealer to lease through them. If you tell me the exact models that you are considering and how long you want to lease them for, I can try to give you an idea of what these cars' current lease programs are like.

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sukinsyn · September 2004

Thank you Car_man!

I came up with a money factor of .00146 (approximately) from your numbers....I hope I did that properly. (3.5/2400= .0014583)

I will use these numbers to compare what the dealer gives me.

If I go with the GTO I'll post the numbers the dealers gives me.

I appreciate your help very much. Thank you again.

salaamti · September 2004

I recently leased an Honda Pilot EXL with leather and DVD for 3years with 12K/36K mileage. I am giving $329/month and I gave $3675 for Drive off ($3000 down payment + licence +fees+tax). The Pilot was a Demo model hence had the 5365 mileage on it. The price was $30900 and the residual value after 3 years was $19980. I feel that I did not get a good deal, as I am seeing in the aid that Pilot is leased for $259/month with $2K down. Please advise me, whether I got a good deal. if not, then what should I do now. Thanks.

multiplechoice · September 2004

I am looking to add a Nissan Titan to the driveway. Looking at the Crewcab SE 4X4 for 3 years and 15K. What is the current program-great incentives at this time?

edmunds_noob · September 2004

Car_man.

Thank you kindly for your reply. It seems my screen name was proven true, I posted before I read and did any research...

Now I have read many of your posts and mant lease calculators and I now realize that what I thought was a good deal on the surface wasn't so good.

The exact car I'm looking at is a 2004 93 Aero (SR, TOURING, XENON, CWP, RPA). The MSRP is 37400 with Destination charge.

Based on previous posts, I see that there is a $3500 lease cash. There is also mention of "Dealer Coupons" worth up to $1200. When I called on the phone, the dealer even mentioned these coupons so they may be real.

It also seems that the Aero is getting good MF of .23!!!? This is impressive, but I don't know if true.

If I assume that I can get 50% residual on a 36 month lease with 12k miles per year, and that I can get the car for invoice price, I calculate the following.

$1000 down, $325/month (I have 6.5% sales tax here)

I'm thinking of trading in my 98 Contour SVT to further reduce payment, but the above seems pretty good as is. And I could sell the Contour for more than they offered (wholesale), but maybe I can use that to entice them.

Can you provide feedback on my analysis?

You are very helpful, I'm sorry my first post wasn't educated.

grngardn · September 2004

KYFDX Thank you for your help it is much appreciated. You calculated right and the monthly payment is inclusive of tax.

ethansquare · September 2004

Hello Car Man.. You seem to be the expert on this.. I am gonna go lease hunting soon for the TSX.. I want to get White On Beigew w/spoiler. Maybe NAV if they cut me a good deal. Anyone have ANY GOOD TIPS on getting a good lease deal on the tsx.. From New York and there are around 6 dealerships in the nyc area/long island. There are ads in the paper with 3k down for $269 with no nav. Anyone have tips and tricks to get this car at an awesome lease deal (36 months 12k a yr) I appreciate all your help!
-E

slocko · September 2004

Hi,

This will be my first time leasing.

I have negotiated a price of 37,295.

How can I get a rough idea of what my payments will be with 5k down?

The lease calculators are asking for interest rate and money factor values which I have no idea what they would be. What are some average values that I can use?

edmunds_noob · September 2004

oops. I just realized that I live in Illinois, and they make us pay sales tax on the entire price of the vehicle.

This changes my results above to $1000 down $372/mo for 36 month, 12k miles, 50% residual, .23 MF, $29,300 Net Cap Cost.

That kinda sucks.

anonymousposts · September 2004

Looking for the residual value and money factor for a 36 month/15,000 mile per year lease on the following;

2004 and 2005 Honda Accord LX

Thank you

dyaiser · September 2004

Thank You. It doesn't make any sense 4 me to look into other lease deals- -Looks like I'm stuck for the duration--
dick

kmouradian · September 2004

Car man,

I know this was discussed a couple of weeks ago, but I want to run this by you. My local Chrysler dealership is advertising the following lease for a 2004 Chrysler Crossfire:

$249/month for 36 months @ 12k miles/yr. $1995 down plus ttt. No mention of acquisition fee, security deposit, or dealer fee. It does state there are lease loyalty rebates and lease cash involved through Chrysler Financial. However, I only see a lease loyalty rebate listed on Edmunds. Unfortunately, it doesn't apply to me.

I know Chrysler was recently running $299 lease deals on Crossfires with $2995 cap cost. However, the $249/month deal seems too good to be true. I've contacted the dealership to see if I can get more particulars but they have yet to respond.

In the meantime, what do you think about this deal? Has anything changed recently with Chrysler Fin. as far as rebates or incentives? I know about the .00004 MF with auto trans. What if I wanted one with a manual? Is the residual on the Crossfires still at 56%?

Your help is greatly appreciated. If things work out right, I may pull the trigger within the next couple of days.

brianj · September 2004

Car_Man,

You mentioned available manufacturer support as a cost effective way to take a baloon note out on a car for us Texans. Is this option equal to what one my might receive if leasing an auto in say, Louisina or Oklahoma? I did look at the Incentives & Rebates and saw leasing deals for the Honda Accord and the Subaru Outback however the deals were for models we are not considering, engine size, trim levels etc... Is this where you looked to get your information? Or, do you have privelaged info unfit for us common type? Here is what we are looking for:

2005 Honda Accord EX-V6 w/Leather, NAV and Automatic Trans.

2005 Subaru Outback XT Limited 2.5T w/Manual
Trans

36 months

toddot · September 2004

I am new to leasing - I currently am trading
a 2000 Durango XLT with agreed trade value of $11,250 from dealer (I still owe $6700 to bank).

On a 2004 Honda Pilot EX with cloth seats
our dealer determined monthly lease payment of
$368 with residual of 18,875 (3 yr, 12,000 mile)

This would pay off Durango $6700 and we would get a check for $3471 -(If the dealer said he would give me $11250 - why does he only give 3471 after paying off 6700 due to bank?)

Is their a rule to determine if is
wise to use the $3471 to lower
the monthly lease payment or to use it
for paying off the monthly payments?

Also does this lease as presented look to be
a fair deal on a Pilot?

kyfdx · September 2004

Can't comment on how good your lease deal is, but...

The difference between the equity in your old car ($11250-$6700 = $4550) and the check you get back ($3471) is likely to be the amount upfront due on your pilot lease. ($368 1st pymtn, $400 sec. deposit, licensing fees,etc.. ) He is likely deducting your due-at-signing amount from the amount of equity in your trade.

regards,
kyfdx
(not the expert)

CarMan@Edmunds · September 2004

You're welcome, sukinsyn. I'm glad that I was able to help you out. The converted money factor that you came up with is absolutely correct. Thanks for offering to come back and let us all know how everything turns out. Talk to you then.

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CarMan@Edmunds · September 2004

Congratulations on your new truck, salaamti. Let me begin by saying that now that you have physically taken delivery of your Pilot there is nothing that you can do if you decide that you should have gotten a better deal on it than you did, other than learn a lesson that you can take with you to your next new vehicle purchase or lease. I would be more than happy to give you my opinion on the deal that you got, but it would be a big help if you would provide me with this truck's selling price. Without this number, it is difficult to tell what sort of a discount you were given on this truck and tough to calculate a sample lease payment on it. You should be able to find this number on your lease contract.

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CarMan@Edmunds · September 2004

Hey multiplechoice. Let's take a look at the incentives that are presently available on the 2004 Nissan Titan. Nissan is currently providing $1,000 lease cash on this truck that will help you to negotiate a more attractive capitalized cost on it. It is also running a dealer stairstep program that provides dealers with an additional $500 per '04 Titan if they sell enough in the month to hit a predetermined sales objective. You won't know for certain if your dealership is "in the money" so to speak with this program, but it is good to know that it exists because dealers will be motivated to sell you a Titan, especially before the end of the month. As far as its lease program goes, if you were to lease a 2004 Nissan Titan Crew Cab SE 4X4 through Nissan Motor Acceptance Corp. this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00199 and 52%, respectively.

Well, that pretty much sums up all of the offers that you would be eligible for if you were to lease this truck prior to October 1st. Make sure to let me know if you have any other questions.

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CarMan@Edmunds · September 2004

You're very welcome, edmunds_noob. Don't worry about not knowing as much about leasing in your first post as you do now. Afterall that's why you came here to Edmunds.com, to learn. You were very smart in that you did research on this deal prior to jumping into anything. The lease money factor of .00023 that you mentioned in your post is right on the money if you were to lease an '04 9-3 Aero for 3 years. You were a little optimistic about this car's residual value though. It's 3 year, 12,000 miles per residual value is currently only 45% and vehicles' residual values are not negotiable.

As far as trading in your Contour goes, I personally feel as though you would be better off selling it on your own. Not only will you get more money for it by selling it privately, but I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen 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 your lease-end purchase option price for this 9-3 would be exactly the same, regardless of whether you had used your equity from your current vehicle as a down payment, or had made absolutely no down payment at all.

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CarMan@Edmunds · September 2004

Hello ethansquare. My advice to you is to focus your negotiations on two numbers, the selling price of this car and the lease money factor that is used to calculate its lease payment. These are the two main profit centers for dealers on leases. The selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. In order to get a good idea of what this car is selling for at this time, look up its Edmunds.com True Market Value in the New Vehicle Pricing section of this site. You also should stop by the following discussion that appears here in the Town Hall to find out how much other community members have paid for this car lately: "Acura TSX: Prices Paid & Buying Experience".

Once you have a good idea of what you should pay for this car, stop back here and ask me for American Honda Finance Corp.'s current lease money factor and residual value for it. I am usually able to give consumers who tell me how long they want to lease for and how many miles per year they need to be able to drive and idea of what their vehicle's lease program should be like. Acura's October program for the TSX will probably be different than its September program. So if you aren't going to lease this car until October, wait until a few days into the month before asking me what the new program is like. It is important to know what the base money factor is for the vehicle that you want to lease because most banks allow dealers to "mark-up" their base factors to add additional back-end profit to deals. Basically this involves the dealer charging you a higher interest rate than the bank is charging for this model and getting a kickback for the additional earnings. This is completely legal and happens all the time.

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CarMan@Edmunds · September 2004

Welcome to the wonderful world of leasing, slocko. Since you are new to this sort of deal, you may want to check out the following informative article on the subject that is available here at Edmunds.com: 10 Steps to Leasing a New Car.

I haven't seen Honda's lease program for the 2005 Odyssey yet, but I should be able to give you an idea of what this van's program is like when it introduces its new program in October. Please feel free to check back with me a few days into the month and I will let you know what I have been able to find out.

I noticed in your post that you are considering making a substantial down payment on this lease. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen 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 your lease-end purchase option price for this Odyssey would be exactly the same, regardless of whether you had put $5,000 down, or had made absolutely no down payment at all.

If you want some rough numbers to plug into a lease calculator for now, use a money factor of .00265 and a residual value of 60% for a 3 year 15,000 miles per lease of the '05 Odyssey. I don't know exactly what its program will be like in October, but these numbers should be close. Please feel free to check back with me mid next week and I will try to give you an idea of what the actual program is like. Talk to you then.

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CarMan@Edmunds · September 2004

Here is the info that you are looking for, anonymousposts. According to the latest informaiton that I have seen, if you were to lease a 2005 Honda Accord LX 4-cylinder through American Honda Finance Corp. this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00226 and 56%, respectively. The numbers for an otherwise identical 2004 Accord LX 4-cylinder lease should be .00265 and 51%. As you can see, the lease program for the '05 model is a little better than the program for the '04. The one advantage that the '04 has though is that Honda is providing $1,000 dealer cash on it right now. This money will enable you to negotiate a more attractive capitalized cost on an '04 than you will be able to on an '05.

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CarMan@Edmunds · September 2004

You're welcome, dick. I am sorry that I didn't have better news for you, but I feel as though you are doing the right thing by waiting.

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