Lease Questions - Ask Here

desgnconcpts · October 2004

Dear Car_Man,

Thank you for the great information. I do have a few questions:
What % are you using for residual?
What MF are you using?

I also want to confirm that it appears that for every add'l $1,000, the incremental lease cost (without considering tax) is about $15 month.
Best Regards.

atlien · October 2004

Here is the deal.

I have commited to an 05 S4 Avant for $53,170, about $500 off MSRP. Not a great deal, I know, but it is having to be traded for from another dealer and my dealer is eating the shipping costs, approx. $950.
There is no other car with the color/spec that I wanted anywhere in the Eastern US as no more '05 builds are available. The new 05.5 B7 platform cars are about 9 months out and the new grill is hideous IMHOP.

Anyhow, the offered lease is as follows.

39 MO
15K miles/yr
0$ down (except doc fee, etc)
MF = .00195
Res - 52%
Mo Pmt = 879.22/MO incl Tax.

Is this deal straigt? I can also buy the car outright for cash but prefer not to buy depriciating assets and am scared to death of the resale hit I will take when my 6 MO old car, is last year's platform.

Any help or suggestions to try to get that payment down?

I know you are busy but I am supposed to pick the car up Saturday.

Thanks is Advance,
Atlien

kyfdx · October 2004

Just butting in...

Ouch!! I get $823/mo + tax using your numbers, so it appears everything is straight up, assuming those are the base MFs.

Even at these prices and residuals, I would rather lease also.. At least you are locking in a set amount of depreciation.

To get the payment down? Negotiate a lower sale price... Every $1000 less = $30/month.

regards,
kyfdx
(not the expert)

infinitimn · October 2004

Hi Carman,
You asked someone to post a reminder for you to post the October money factors. Have you found them yet, as I am interested in closing a deal on on one soon?

infinitimn · October 2004

Hi Carman,
Do you have the MF and residuals for 36 months, 10K miles for the 2005 Mercury mountaineer Luxury V8 and V6? The dealer is using 50% and .00075 for the V6.
Thanks in advance.

mabubba · October 2004

Audi has a $499/month(42Months) promotion for S4(sedan only?) on it's website. That's with a $1,995 capital cost reduction on the MSRP of $50,520 I calculated a 54% residual for the deal, so the money factor must be really low in addition to a selling price of around $2-3K off of the adjusted cap. cost. Maybe the Avant isn't covered, but a 300+ differential is scary. Even w/ 0 down, the $499 deal would go only to around $550/month. Just my thoughts...

John

norne · October 2004

is this a good deal on 04 honda pilot ex

Total Drive off: $3,500.00
Net Cap Cost: $25,550.48
Residual: $18,275.60
Monthly: $271.07
State Tax: $11.29
Total Mo:$282.36
Lease Term: 36 Months, 15,000 Miles per Year

What is this $3500 total drive off price?

ethansquare · October 2004

MSRP Price: $27,035
Invoice Price: $24,691

will try to get them down to 25,600 is possible... i like the 05.. but this is the price for 04.. u think i can get a deal on 04 or 05.. i think 05 might be 200 differ.. appreciate your help. like i said looking to get a 36 mon lease. 12-15k a yr.. what do u think good lease prices could be with good negotiating.. i dont wanna be in the 400$ a month.. possible high 2's (275-310 range) if possible with your tips! thank you Car Man!

mister22 · October 2004

Hey ethansquare,

Shop around. You can do better on the 2004 model. Residuals on Acuras don't change much from year to year. Expect to bargain down much closer to invoice on the 2004. Good luck.

mister22 · October 2004

Hey norne,

If I could just put my 2 cents in... What's the MSRP of the vehicle? Hidden within the "Drive off" fee is acquisition fee, security deposit, doc fee, and cap cost reduction. You can't get away from paying the first three(either up front or rolled into your lease payment), but you can certainly avoid paying the remainder (est. $2300 of plain cash) up front. This will artificially raise your monthly payment; however, if you put that money in a savings account/money market account, you can draw on it monthly to pay part of your monthly payment while still protecting yourself from losing it all if you were to total or have your vehicle stolen. Hope this helps. Good luck.

mister22 · October 2004

Hey Atlien,

Checkout Post 13513 and 13548 concerning similar vehicle. Good luck.

m3by2003 · October 2004

I have a 2001 Jeep Cherokee Sport SE 4Dr/4WD. I am 39 days from the end of my lease and 52K miles over (@ $.12 per mile). My plan is obviously to purchase the vehicle due to the enormous amount of miles on it but I am getting an amazing amount of resistence in regards to the buyout price from the leasing company.

They are still under the impression that the vehicle has 47K miles on it and want me to pay $11,500 for the buyout plus a $500 transition fee. This is the third call I have received from them asking me what I wanted to do with the car at the end of the lease and each time I tell them that they will have to come down significantly on the price of the car.

I have a couple questions:

1. Is it possible that they really know how many miles are on my car?
2. My cousin works for the leasing company (which no longer leases vehicles) and she said that I should just stick it out until they agree to lower the cost because they don't want to be stuck with it either. Would anyone suggest this?
3. What is a fair price to expect from them on it even if it had 48K miles on it?

CarMan@Edmunds · October 2004

I sure do, edmunds_noob. If you were to lease a 2004 Saab 9-3 Aero Sedan through Saab Financial Services Corp. this month for 3 years, with 12,000 miles per, its base lease money factor and residual value should be .00007 and 45%, respectively. When negotiating your lease on this car, keep in mind that Saab is providing $4,000 lease cash and another $1,000 Aero bonus ($5,000 total) on this model that will help you to negotiate an attractive selling price.

Car_man
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CarMan@Edmunds · October 2004

Hey chevyfan88. I would be more than happy to help you out, but in order for me to do so, I need to know what state you are in first. This is because General Motors' current lease program on the 2005 Chevrolet Equinox varies depending upon which one of its five regions one is in.

Car_man
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CarMan@Edmunds · October 2004

Well, that is very good to know, njl. What did you think of the redesigned Odyssey? I assume that you liked it if you are interested in leasing one. I don't know how long the lease that you were quoted is for, but $569 sounds like an awful lot of money to lease this van. If I had to pay that much to lease one, I would probably just finance it instead. As far as the selling price of this van goes, I bet you a dollar that the dealer that quoted you this lease was charging you at least full MSRP for it.

Car_man
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CarMan@Edmunds · October 2004

No problem, njl. While it isn't much, Toyota is providing a little lease support on the '05 Sienna in your area right now. I suspect that it is doing so in order to help it compete with the all new Odyssey. I already told you what the base lease money factor for this van would be in this area if you were to lease one through Toyota Financial Services. This and the van's selling price are the most important numbers to know when negotiating, because the van's residual values are not negotiable.

Car_man
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CarMan@Edmunds · October 2004

I should be able to find out what this truck's current lease program is like for you in a day or two, eegs2k. Please post a quick reminder for me and I will let you know what I have been able to find out. Talk to you soon.

Car_man
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CarMan@Edmunds · October 2004

You are very welcome, desgnconcpts. For the 3 year, 12,000 miles per lease of the '05 Buick Rendezvous that you are interested in, I used a base lease rate of 4.5% and a residual value of 60%. As you can see, GMAC publishes what are known in the industry as lease rates instead of money factors for the vehicles that it leases. You can convert its lease rates into approximate money factor equivalents by dividing them by 2400. Adding $1,000 to both the MSRP and selling prices of this model would increase its lease payment for this term and mileage allowance by slightly less than $15 per month.

Car_man
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CarMan@Edmunds · October 2004

Hi Atlien. I am not surprised that you are having a difficult time finding the exact combination of color and options that you want for this car. Audi has already begun to offer very attractive deals on the 2005 A4 in anticipation of the redesigned 2005.5 version arriving at dealers some time around March '05.

Unfortunately, it appears as though not only is the dealer that you are working with not providing much of a discount on this car, but it also is probably making a decent amount of back-end profit by marking up its money factor. Audi Financial Services' current 39 month base lease money factor for a lease of an '05 S4 Sedan is only .00055. I just worked up a sample lease payment for you and using Audi's base lease program and the prices that you mentioned in your post, I came up with a zero down, pre-tax monthly payment of right around $725.

Car_man
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desgnconcpts · October 2004

Dear Car_Man,

My sincere thanks for the add'l info on residuals and base lease rate. This is exactly in line with the recent GM ads in this past wk's Chicago Tribune advertising both the Rendezvous & Ranier. Now I know how to determine how much my Dad's lease should be with the options he wants. I'm armed and ready to go to the dealer to negotiate with him.

Have a great day!

mzinzi · October 2004

Hey CarMan, you told me to remind you a little later in the week, hopefully the #'s have come in...

Do you have the MF and Residuals for the following...

2005 Subaru Legacy 2.5 GT Ltd. Sedan
36,39,42 Months
12,000 and 15,000 miles per year

2005 Audi A4 1.8T Quattro Sedan
36,39,42 Months
12,000 and 15,000 miles per year

I'm in CT if it matters, thanks as always!!!!

njl · October 2004

Car_man...the new Odyssey was great. Very nicely appointed, but it's still just a minivan.

I received another quote from a different dealer of..read this..."Your lease quote for a 2005 Honda Odyssey Touring with RES & NAV for 36 months with 12,000 miles per year is $687.50 with $ due at inception. All leases are based on MSRP."

Who are they kidding? It's a minivan for God's sake. It's a family vehicle. Who in their right mind would lease a Honda minivan for $687.50. That's $.69/mile!!

I will let this dealer have it today.

a2j · October 2004

Car-man,

Have you been able to get ahold of Honda's lease numbers for the 2005 TL yet? You said to post a reminder note today. I'm especially interested in 36 and 39 month, 15k mile leases for a car without navigation.

tguerino · October 2004

Car man,

Can you please tell me the current money factor and residual value for a 2004 BMW 545, 36 month lease, with 12k miles per year. Also, same information for the 2005 545. Thanks Carman!

Tony

coolhandluke · October 2004

Car_man,

I am considering leasing a G35 6mt with leather, with options and destination MSRP $36,560. The invoice for this is about $33,500. The invoice price would be a fair purchase price with the '05 coming out soon. I wanted to know what the lease payments would be for 36 months and 12000 miles per year. Also if I decided to purchase at the end of my lease. What would be the residual? would I come out ahead/behind or would it be a wash? Thanks in advance.

CarMan@Edmunds · October 2004

Thanks for the reminder, infinitimn. Here is the information that you are looking for. If you were to lease a 2004 BMW X3 2.5 through BMW Financial Services this month for 3 years with 10,000 miles per, its base lease money factor and residual value should be .00070 and 60%, respectively. The numbers for an otherwise identical lease of an '04 X3 3.0 should be .00050 and 60%.

Car_man
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CarMan@Edmunds · October 2004

Infinitimn, Ford Credit, Lincoln / Mercury's captive finance company, publishes its lease program a little differently than most banks do. It publishes what are known as lease rates rather than money factors for the vehicles that it leases. One can convert its published rates into approximate money factor equivalents by dividing them by 2400. The lease program for this truck may vary slightly depending upon what region one is in, but in most regions, Ford Credit's base lease rate and residual value for a 3 year, 10,500 miles per lease of a 2005 Mercury Mountaineer Luxury AWD should be 1.5% and 50%, respectively. In addition to this special interest rate, it is also providing $2,000 lease cash that will help you to negotiate a more attractive selling price on this model.

Car_man
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jk1971 · October 2004

What is the difference between a open ended lease and a close ended lease?

kyfdx · October 2004

Kind of a technical question, and I can't give you all the details.. mainly because I haven't seen an open-ended lease in over ten years...

But, they are to be avoided at all costs.. almost all leases are close-ended. Basically close-end leases have all the liability and purchase options decided upfront.. While in an open-ended lease, your liabilities at lease end are basically "open".

regards,
kyfdx

jk1971 · October 2004

Thanks

bcfein · October 2004

CarMan, can you please help me find a fair price to pay on a 36 month 12k mile/year lease on a 2004 Honda Pilot Exl with a agreed upon purchase price of $28,700 before tax. I thank you in advance for your help.

Brian

infinitimn · October 2004

Thanks so much for the help, car_man. If I am doing the math right, the dealer is marking up the MF to use an interest rate of about 1.8%. Am I correct? And as I am coming off another Mercury lease, there is another $500 allowance. The lease would be at a capitalized cost of $2,500 under invoice.

But as I may no longer need a truck that big, do you also have similar residuals and interest rates for a Mercury Mariner for 10K miles/36 months?

norne · October 2004

I was looking at the EX cloth and the msrp is $29,500 with freight included.

davidt1 · October 2004

Hi Car_man -

You asked me to post this reminder (from post 13651). To answer your Question...Yes, I have enjoyed the 325CiC this summer!

I forgot to mention in my first message that we are looking at 2004 models.

Last year you helped me on my BMW 325CiC. Your knowledge and support was instrumental in putting a great lease deal together. Thank you!

Now its my Wife's turn - She really would like to lease a BMW as well. We're looking at X3/2.5's and 325XI sedans and wagons. Could you please let me know what cash incentives, MF's and residuals are out for october for these vehicles based on 15K/36M terms?
Thanks
David T

jack15 · October 2004

Have you done this Lease Yet? We are looking at same specs 36/15 ours with NAV. Noticed Car_Mans reply. very similar to our deal. Could you please explain a little about the "multiple deposit" option that you have used successfully? My email is in my profile, if you prefer. Thanks !

jack15 · October 2004

Recently negotiated these terms. Thank You very much. What is the norm for "drive-off" costs, with no cap cost reductions. Could you explain a little about the "additional security deposits" and when you would recommend them?
Thank You.

mia10 · October 2004

Car_Man

This is the deal I'm about to sign on. Not sure if it's the best I can do for a lease deal.

2004 330i, Orient Blue (metallic paint), Automatic, Premium Package, BMW car alarm, xenon headlights.

MSRP $41,645
Residual @ 55%
Sales Price $36,654.12
(which includes $35,785.12 price + $595 for car alarm + $1,024 "capped fees" - $750 "cash cap reduction." That cap reduction is a down pmt. right?)
M.F. .00165
$1,511 inception
(1st month pmt. + $750.00 "cap cost reduction" + $195 "upfront fees" + $52.50 cap reduction/rebate tax)

Monthly pmt $480.19 + tax / 15K / 36 months
Thanks in advance

bkln · October 2004

Car_Man:

I need to lease a reliable car w/ low monthly payment.
The following is the deal I got on a 2005 Honda Civic Value Package (Formerly the EX). MSRP: $15,325.
36 month lease 12,000 miles/yr

No money down
$1200 for origination fees, tax, title, etc.
$195 a month w/o tax, factoring in NY Sales tax $212/mo

Is this a good deal or can they go lower?.

Thank You, I have never leased before and do not understand how they arrive at these numbers!

ponytrekker · October 2004

The Value Package is NOT formerly the EX. Rather, it is the DX with AC and CD. The price you have been given (assuming you are taking the side airbags option) is EXACTLY MSRP. Not a good deal at all. In fact, you couldn't do any worse. You should be looking to pay 14500 or so.

slotmaker · October 2004

Hello,
I leased a 2004 Lexus IS 300 sSHIFT with Rear Spoiler, Full Leather Trip package and Preferred accessories package for $329/month in May with $2700 down. MSRP was $33,449, selling price was $29,700. 42 month lease. Hindsight being 20/20, was this a fair deal?

glermin · October 2004

Looking to lease EX Odyssey with DVD system or similar Sienna in north/Central NJ. Anyone have any luck getting decent price?

mazdax605 · October 2004

Hello again Car_Man,

I was wondering if you could get me some numbers for a friend of mine at work.He is looking getting a 04 ford F350 truck.I told him in his situation he may be better of leasing.He is interested in either a 36-48 month lease.The model he is looking for is F350 standard cab 4X4 with the 6.0 litre diesel,5 speed automatic,snowplow prep package,blackside wall tires,shift on the fly 4wd,and trailer hitch.He is interested in 12K a year.Could you please provide the base money factor,and residual figures for this truck or one similar?Thanks in advance.

Chris

jeans1 · October 2004

I really need your advise on my situation. I have leased a certified pre-owned 2001 Toyota 4-Runner from the Toyota dealer two years ago. I put $3,000 as a down and got $545 monthly payment for 48 months. I have 23 payments left on my contract. I wanted to get out of this contract so I went back to them looking for a deal on 2005 Matrix (sticker price at $16,000)today. Told them I want $1,000 down with no more than $300 a month payment and I want to return my 4-Runner. They told me to go home, come back in another year or so. According to the dealer, the trade-in amount is what the remainder of the lease payment ($11,000) plus the residual value of $11,475. So that would make negative equity on my trade ins. They wanted me to put down almost $10,000 as a down payment today. On a $16,000 car! I don't understand this concept. He tried to explain it to me but I don't understand. Can you help me understand? The area I am having problem is that I went back to the original Toyota dealer who had this vehicle, who leased this vehicle to me. This vehicle belonged to this dealership so I don't understand why they have to pay the residual value on top on the remainder of my contract to own this vehicle. They owned it before and leased it out to me. Thank you.

tjm8 · October 2004

Hi Car Man, I am currently leasing a Honda Pilot which I have 20 months left on a 48 month lease and the payoff is currently $24,280. I am interested in using it as a trade on a 05' Ford Expedition Eddie Bauer 4x2. With the payoff on my trade the Ford dealer offered me, $0 out of pocket, 39 months, 12,000 miles/year, residual 51%, money factor 3.50 at $499/month (this includes tax). Can another dealer accept the trade on a leased vehicle. My lease agreement (AHFC) says no third parties but does this include dealers? Do these numbers seem good on the Expedition? No other dealer could match it, but I just want to make sure. Thanks in advance.

steine13 · October 2004

"[..] I put $3,000 as a down and got $545 monthly payment for 48 months."

That adds up to $29,160 total outlay over four years. I'd say you've been had, but of course nobody here knows how much negative equity you buried in this vehicle from your previous trade.

Their math appears correct; to get out of the lease, you need to come up with the remaining payments (minus the interest portion, which is presumably small), plus the residual value. In return, you own the 4runner, which you then can trade in on the new car.

I can't help you with your argument about this being the original dealer, because I do not follow your logic.

The $10,000 "down payment" is meant to cover you negative equity, I think. I don't know that it's that big a number, though; I'd think a 4-year-old 4Runner would still be worth in the low-to-mid teens, depending on miles.

-Mathias

bigbutr · October 2004

Sounds like they pulled one over on you to start with, probably hitting you with the 'it's cheaper to lease than buy'. Don't know what the selling price was, but doing the math shows you paying $29,160 and still not owning it. That must be some loaded 4-Runner.
I was in a similar situation with a leased brand-new 2000 Montero Sport ES. Tried to get out of it midway through but was faced with nearly $9,500 remaining in payments, plus an inflated residual ($11,500) which wasn't even what the truck was going for after just three years. Initially, I too didn't understand why I had to add in the residual since I was giving it back to the same dealership I bought it from. But after laughing about having to come up with about $6,000 to trade down to an Eclipse RS, I went back and read the lease paperwork. In a nutshell, it has something to do with the finance company, not the dealership, owning the vehicle.
It sounds to me like they were trying to take advantage of you again. Sure you owe both the remaining payments and residual value, but what they likely didn't tell you is your 4-Runner is currently worth more than the residual. You don't say what model, options, or how many miles are on it, but just going by a slim picken's model, you have a roughly $16,500 vehicle on your hands. So you see, that $21,000 quickly turns into a roughly $4000 deficit, far lower than the $10,000 they were asking for. (My problem with the Montero was that it wasn't even worth the residual, thus I had to come up with more.)
If you really want out of it, I'd first stay away from this dealership, then go out and find something with a hefty rebate on it to help you offset this deficit. Sure, you may have to pay MSRP or close to it, but it'll get you out of this 'fleece' of a deal and into something a little newer and better.
At least, that's how I see it.

steine13 · October 2004

You make some good points, esp. about the truck being worth more than residual... this would be worth a trip over to RWTIV to see what it should really bring.

But as far as your advice:

"[..] but it'll get you out of this 'fleece' of a deal",

I have to disagree... the damage is done, there is no way to get "out" of this deal. It's just a matter of how to handle it.

-Mathias

jeans1 · October 2004

Thank you for your comment. I'll stick with another 23 months till the end of the lease, return this vehicle and start fresh since there is no way out for me. It's a matter of how to handle it right?

CarMan@Edmunds · October 2004

Hi norne. While it's often difficult to analyze a lease without knowing the vehicle's full MSRP, I would have to say that the payment that you were quoted is not a very good deal. Right now, Honda is advertising a lease on a 2004 Honda Pilot EX with an MSRP of $29,985 for $259 per month over 3 years with $1,999 down, a security deposit of $275, and an acquisition fee of $595 for a total of $3,128 due at lease signing. This advertised lease assumed a fairly low capitalized cost of $26,016, which means that dealers will likely be fairly willing to deal on their remaining '04 Pilots. I personally feel as though you should comparison shop a little bit to see if you can beat this deal.

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CarMan@Edmunds · October 2004

I am sure that dealers will be more willing to discount 2004 models than they will be 2005 models at this point, but you may be able to get a fairly similar deal, not quite as good, on an '05 TSX because to the best of my knowledge there isn't much of a difference between the '04's and '05's. Let's work up a sample lease payment on the car that you are interested in and see what we come up with. According to my calculations, if you were to lease a 2004 Acura TSX without navigation (MSRP: $27,035 / selling price: $25,600) through American Honda Finance Corp. right now for 3 years with 15,000 miles per, its zero down, pre-tax monthly payment should be right around $384. If you were to lease this car with only 12,000 miles per year, its payment for an otherwise identical lease would drop to around $370. Unfortunately, I don't think that you are going to be able to get down to the high $200's or low $300's per month on this car like you were hoping to. You would be able to get a lot closer to that number if you were to consider a less expensive Acura, like the RSX though.

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