Lease Questions - Ask Here

CarMan@Edmunds · November 2004

Hi denverg35. Let's work up a sample lease payment on this car for you, assuming no down payment. According to my calculations, if you were to lease a 2005 Subaru Outback Limited with an MSRP of $33,644 and a selling price of $31,000 through its captive finance company right now for 42 months with 12,000 miles per year, your zero down, pre-tax monthly payment should be right around $382.

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CarMan@Edmunds · November 2004

I would be happy to, sandy. You never mentioned exactly which Pacifica model you are considering, so for now I will give you information on the base 2WD model. Let me know if you are interested in a different version of this vehicle. According to the latest information that I have seen, if you were to lease a 2005 Chrysler Pacifica base 2WD through Chrysler Financial right now for 2 years with 15,000 miles per, its base lease money factor and residual value should be .00068 and 60%, respectively. When negotiating your lease on this vehicle, keep in mind that DaimlerChrysler is providing $2,000 lease cash + another $1,000 for deals through Chrysler financial, $3,000 total, that will help you to negotiate an attractive capitalized cost.

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CarMan@Edmunds · November 2004

Let me begin by saying that 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 3-Series would be exactly the same, regardless of whether you had put $2,500 down, or had made absolutely no down payment at all.

Let's work up a sample lease payment on this car, assuming no down payment. According to my calculations, if you were to lease a 2005 BMW 325i with an MSRP of $33,570 and a selling price of $32,570 (you may be able to negotiate a lower selling price than this if you shop around a little bit) through BMW Financial Services right now for 3 years with 15,000 miles per, your zero down, pre-tax monthly payment should be right around $412.

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CarMan@Edmunds · November 2004

Here you go, corsa. If you were to lease a 2005 Audi A4 1.8T Quattro through Audi Financial Services right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00049 and 57%, respectively. The numbers for an otherwise identical 39 month lease should be .00049 and 54%. The money factor for a 42 month lease is probably the same, but I am not sure what the residual value is, perhaps 51%. If you were to lease this car with only 12,000 miles per year, its residual values would be 2% higher and if you were to lease it with only 10,000 miles per year, its residual values would be 3% higher.

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CarMan@Edmunds · November 2004

Hey wasabi911. I do not believe that Lexus is currently providing any sort of lease support on the ES 330. Its unsupported lease program on this car was scheduled to run through November 30th, so unless there has been some sort of unscheduled change to its program that I am not aware of, this is unlikely by possible, the dealer is really just trying to drum up business by touting "specials" that really do no exist. What exactly did the e-mail that your mother got say?

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CarMan@Edmunds · November 2004

Hello mazdax605. You are correct, AVP is Mazda Credit's balloon note program. As you already are aware, balloon notes are very similar to leases in that they provide consumers with low monthly payments with an option to purchase after a specific period of time. As you said, the main difference is that with balloon notes, your sister's name would be on the car's title instead of the bank's. Balloon note payments are calculated differently than lease payments though. Mazda has some very low lease money factors on the 2005 Mazda6 Sport Sedan right now. Its 42 month (it is running a 42 month special instead of 48 months this month) base lease money factor for this model is currently .00026, which is equivalent to an interest rate of around .62%. If I was in your sister's situation, I would continue to drive the Protege for a while. It sounds like the perfect car for a 19 year old and like it has a lot of life left in it.

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CarMan@Edmunds · November 2004

Hi mmbond. The "books" often tend to overestimate how much used vehicles are worth in the real world. Having said this, if your leased vehicle is indeed worth more than it would cost you to purchase it from the bank that you are leasing it through, you may be able to use this to your advantage. In order to "cash out" this equity, you would have to purchase your car from the bank that you are leasing it through and then either sell it on your own or trade it in on your next vehicle. If you opt to trade it in, the dealer that you get your next vehicle from may be able to facilitate this transaction.

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CarMan@Edmunds · November 2004

You're welcome, briden. Let me know if you have any other questions.

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CarMan@Edmunds · November 2004

You may have, denverg35, because I remember responding to a question about the Subaru Outback. Let's see, my answer to your question is in post #14755.

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CarMan@Edmunds · November 2004

Yes, Lee, BMW is indeed still providing lease support on the 2004 M3. If you were to lease a 2004 BMW M3 Coupe through BMW Financial Services right now for 36 months with 15,000 miles per year (I am not aware of any bank that leases vehicles with the "at 15k miles/month" that you asked for

), its base lease money factor and residual value should be .00140 and 56%, respectively. The numbers for an otherwise identical 42 month lease should be .00140 and 52%, respectively. BMW is not providing any lease support on 48 month leases of this car, so its program for that term is much worse. If you are not completely sold on leasing, you may want to consider taking advantage of the special financing program that BMW is providing on 2004 3-Series models this month, 1.9% for up to 5 years.

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CarMan@Edmunds · November 2004

Greetings taboni1. Ford's lease program often varies slightly depending upon what region one is in, but in most areas, if you were to lease a 2005 Mercury Mariner Convenience 2WD (its lease program varies by trim level) through Ford Credit right now for 3 years with 12,000 miles per, its base lease rate and residual value should be an unattractive 6.25% and 49%, respectively. As you can see Ford Credit publishes what are known as lease rates instead of money factors. You can convert this lease rate into an approximate money factor equivalent by dividing it by 2400. Ford is providing $1,000 lease cash on this model that will help you to negotiate a more attractive capitalized cost.

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taboni1 · November 2004

Thanks Carman. I was looking at a Mariner Premier, but 6.25 (.0026) doesn't wow me at all.

corsa · November 2004

Thank you very much!

- corsa

mazdax605 · November 2004

Thanks again Car_Man you are the man!!!!

I really think my sister is crazy wanting to get this car especially because a lease in her situation seems stupid.I was wondering if you could let me know the residual on this 42 month special?I wonder if it makes sense to lease a car that is this inexpensive or is it better to buy it.The cap cost price is in the $21000 range after the negative equity(is that an oxymoron)of around $800 is added to the price.She has not been told the residual price yet for sure on it but was told it would be around $9000 on the 48 month lease she was offered.It seems as though this car is losing alot of value over 48 months,which is bad right?Thanks again.

Chris

powers · November 2004

I'm considering leasing a new Acura TSX, and found the manufacturer's lease more expensive than some offered by independent lease companies. Are there any advantages to leasing through the manufacturer as opposed to independent finance companies?

anniekitty2000 · November 2004

I had a very expensive lapse of sanity when I entered my current lease on a 2002 Toyota Camry XLE in July 2002. I signed for a 60 month lease, paying $382 each month. The sticker was around $26,500 but I believe I got it for $24,500. I have paid 29 months out of 60 so far, with the 30th payment due December 4th. The payout numbers from the hotline scare me, as they are hovering around $20,000. I am incurring excess mileage, also, sitting at around 46,000 after 30 months. What was I thinking? I don't know. I am more concerned with how to make the best of this situation. I have read a ton of articles that say just to stay put until the end of the lease. I have no problem with that, this is our only car payment and it is a really nice car. I just want to seek the cheapest and best option. We obviously would like to get out of the lease to start sinking our money into a car we own, that is what is behind this whole discussion. Since we are at the halfway point, I thought I would ask for your advice. --anniekitty2000

gold233790 · November 2004

Carman-

Thanks for the info re: '04 A6. You mentioned that Audi has altered the lease program on the '05's slightly. Well, if I were to lease an '05 A6 3.2, with an MSRP of $50,020 and a selling price of around $48,750 (could be lower, really the initial quote from a dealer) for 36/39/or 42 months at 15k per year, what would my residuals and money factor be? Thanks.

denverg35 · November 2004

Thanks Carman!

alex123 · November 2004

Car_man, how does multiple deposits option work for BMW FS, How much does it lower a payment?

michael10 · November 2004

Can you work up the current details on a 2005 Lincoln Aviator lease price? I am looking at 36 month lease with as little out of pocket as possible. Vehicle MSRP $52,605 w/ selling price $46,348. Thanks

sopadepollo · November 2004

Hi Car_man, I was wondering if you could do some backwards engineering with the numbers I was quoted. I called three dealers near to where I live and this was the best quote I received. Mind you the MSRP on an 05 Acura TL with Navigation with destination is $35,470.00.

42 months / 12,000 miles per year
$1,303.46 OOP (total out of pocket, includes first month's payment)
$452.14 per month plus tax (with 6% tax would bring the total monthly payment to $479.26)

Of the three dealers I called, this was the best quote. One dealer would NOT give any discounts, ie. full MSRP since I was told it's a hot car and not too many with Navi.

Let me know what you think.

Thanks

fishhead · November 2004

I am working on a 2005 Audi Alroad lease and whenever i do the calculations on leaseguide.com, the monthly pmt always is about $10 lower than the dealers calculations.

When i finally asked him why that is so he claimed is because NY requires the sales tax to be placed in the cap cost calculation.

My example:

MSRP: $45,820
Base Cap cost: $43,638
Then he adds the $2120.00 tax to the cap cost (8.75%)
then subtracts my Audi loyalty disc (-$750)
Adjusted Cap Cost: $45,008

Then he applies the lease numbers:

Residual - 54%
Money Factor - .00085
Term - 42

He's getting $541 for payments (tax included)
I get $532.34.

Is this the way it goes in NY or is this not Kosher?

Thanks

mboyko · November 2004

Am I getting the right number for 2004 Acura TL w/o nav. system.

MSRP - 33,220
Negotiated price - 30,895
Residual - 59%
Money Factor - .000250
Term - 36

I came up with $440+tax, but was quoted $515.
What do you think?

Thanks.

fishhead · November 2004

I am working on a 2005 Audi Alroad lease and whenever i do the calculations on leaseguide.com, the monthly pmt always is about $10 lower than the dealers calculations.

When i finally asked him why that is so he claimed is because NY requires the sales tax to be placed in the cap cost calculation.

My example:

MSRP: $45,820
Base Cap cost: $43,638
Then he adds the $2120.00 tax to the cap cost (8.75%)
then subtracts my Audi loyalty disc (-$750)
Adjusted Cap Cost: $45,008

Then he applies the lease numbers:

Residual - 54%
Money Factor - .00085
Term - 42

He's getting $541 for payments (tax included)
I get $532.34.

Is this the way it goes in NY or is this not Kosher?

Thanks

cgcole · November 2004

Car_Man,

Thanks for responding to my post regarding the leasing of a 4Motion Passat Wagon. It seems that Audi is offering much more support to their lineup than is VW. Specifically, I am being offered the following terms on a 2005 A4 1.8T Quattro Wagon (automatic): 39 months, 15,000 miles per year with a residual value of 54% and a money factor of .00123. The money factor is significantly higher than any of those you list for the S4 or sedans (.00049 - .00055). Is the dealer playing with me?

I don't know if it makes a difference, but my only up front payment is the first month's payment -- no security deposit.

stan36n121w · November 2004

Am I wrong in thinking that a salesman can provide me with a leasing worksheet WITHOUT first running a credit check? Seems to me all they need is the final price of the car, length of lease term, mileage, down payment, and possibly our FICO Score.

Comments?

pjo1966 · November 2004

I've been to a bunch of dealers in the past few months, and I haven't given anyone my SSN yet. I just tell them what my scores were the last time I checked them and ask them to run numbers based on that. I haven't had a problem yet.

stan36n121w · November 2004

That's what I was thinking. It just seemed like this (internet) salesman wanted to get us to the dealership and in "the box" and not give us figures to review ahead of time.

Thanks.

wasabi911 · November 2004

Thanks again for the information. We definitely need the get the car by Dec, but I'll wait for another week or so for the December to Remember event.

I'll be contacting you in early December for the details. Have a great Thanksgiving.

rkw2 · November 2004

I'm looking to lease a Subaru Forester for 48 months. It includes a $400 college grad rebate that I don't qualify for. How much do I add to the monthly payments? I'm figuring about $8.30 per month ($400/48).

Thanks

patricko · November 2004

Car_man,

Thanks for your help. I finalized my deal tonight with Competition Infiniti on Long Island. Here are the details:

2004 G35x w/ premium package, splash guards, trunk mat & sirius satellite radio
MSRP 36,470
Invoice 33,364
Cap Cost 33,074
Res 20,787.90
42 Months / 10K miles per yr.

Putting the $795 bank fee in the payment resulted in a total cap cost of $33,869 for a monthly payment of $400.

Due at signing is tax of $1,470 (8.75%) and first payment of $400 and registration fees.

Thanks very much for your help. I know I probably could have reduced the monthly cost even more, but I don't think a profit of $710 (after taking into account the $1,000 dealer cash)is unreasonable.

azbmwx5 · November 2004

Hi Carman:

You helped me a great deal three years ago when I leased my first BMW. It is time to end that one and start a new one. Last time I used multiple security deposits to buy down the rate, but I am being told that this is not allowed on the special "subvented?" rates offered this month on the 5 series. Is this true? Second, I need the vitals on a 525 3 year deal with 10,000 miles per year, i.e., money factor, residual, non-marked up bank fee(s). I really respect what you do and I appreciate your help!

leeshuck · November 2004

Thanks for the info on the M3 lease program Car_man. Is the money factor you quoted with or without a security deposit? Can this be bought down with additional security deposits?

I spoke with an independent leasing company today and they gave me an overview of their program for an M3 through Wells Fargo leasing. I need to get the details confirmed, but this is what I got over the phone:

Example car: 2005 Base M3 Coupe $47,995 MSRP (no options)

5 year assumable lease (can be assumed after 6 mos if someone can be found to take it over, and they give you a $1700 credit towards the next lease).

12k miles/year
.00190 money factor
residual 43%
monthly payment $612

approx $2000 drive off

Does this sort of lease make any sense to you?

Thanks,

Lee

mazdax605 · November 2004

I come up with $326 before tax on those lease figures.I figure it out like this:

negotiated price - residual/term or
($30895 minus $19600)=$11295 divided by 36 = $313

then (neg+res)* money factor or
($30895 plus 19600)=$50495 multiply by.000250=$13

add these 2 figures up and I get $326 before tax.

Then take that figure and multiply by your tax rate and you have your payment.If you live in Mass like me you will also have to tack on excise tax which would be around another $30-$40 a month,but not all states have excise tax like we do and if they do it may not be at such a high rate.Maybe I missed something but that is how I figure a lease quick.Good luck.

hpowders · November 2004

Uh-sorry but 30895 plus 19600 multiplied by .0025 is 126.2375. mboyko's calculations are correct. If the dealer quoted you the residual, mf and capitalized cost indicated and came up with a much higher pretax monthly figure, run for the hills! $440 pretax is correct.

mwilsontriad · November 2004

Does this pan out?

42 Month Lease (special they are supposedly having) on a new 05 Accord Couple 4c LX

...with rolling one existing payment of $285

MSRP $24,600
Cap Cost $22,651
Money Factor (high?)0.00202
Residual 13,059.80
Upfront - $161 fees + first payment of $347=$508
Monthly payments - $347

....seems high to me - your thoughts?

mazdax605 · November 2004

He said in his original question the money factor was .000250 not .00250 so that is what I went with.It come out to $12.xx so I rounded up to $13.He may have typed the wrong numbers in but according to my math my figures are right.I tend to think the real MF is the figure you came up with but HIS numbers were what I used.

dawnied · November 2004

YOU ARE THE GREATEST, CAR MAN!!

becks · November 2004

Hi:

Please let me know what do you think about this lease op. from the Palm Beach (Florida) area:

Price: $27,750
(Includes leather, 17" alloy & wind blocker)
MF: .0012
Term: 48 months
Zero down plus they'll cover tag, license and first monthly payment
15,000 miles per year
$375 plus tax

Thanks in advance!

sandyl · November 2004

while haggling with the Chrysler dealer, he stated to me that the residuals will get worse and worse on the 05's that thus I MUST buy in
Nov versus Dec. I personally think this is not true. I thought that the best lease deals "peak"
in march from something I read. can someone enlighten me. also, on the pacifica 24 month lease thanks for the numbers for the Base model,
but what is the residual and MF for the Touring
FWD base

thanks once again for your help!
sandy levitt

hpowders · November 2004

The mf of .000250 must be incorrect. This is equivalent to 0.6% interest. The only way he's getting that rate is if he's Mr. Acura's son-in-law.

ponytrekker · November 2004

Let me put it simply: Don't lease an M3 for 5 years.

pjo1966 · November 2004

take it from somebody who's been burned. Do not lease anything for more than 3 years.

mwilsontriad · November 2004

I have also been to a few dealers, and have been able to get the lease figures without them running a credit check. In fact, a Honda salesman said he won't run one through UNLESS a person IS buying/leasing for sure. He asked me what I thought my score was, and just estimated based on that.

gold233790 · November 2004

I've emailed MANY dealers over the past few months with regard to residual and money factors. In almost every case, they responded with the figures I requested without an issue. The one or two who did balk, I don't feel they were being disingenuine. I simply think they were trying to get me to actually walk into the dealership so they can better give me a "hard sell". No problem with that- I just won't do it anymore until I've fully researched the vehicle and know what the dealer is paying for the car, what other consumers are paying/leasing, etc. Then I have a number in mind walking in- and if I don't get it I'll walk out and to the next dealer. If they ALL turn me down, no shame in altering your numbers and starting over.

The dealership gets paid for the car whatever you agree upon as the selling price. They WANT the residuals high and the MF low- more people can afford whatever car they are selling. Granted, you could probably look a little deeper and deduce that in those cases it might be a car that isn't "hot", but on the surface the above is correct.

Anyway, the final point I want to make is NEVER give your SSN to the dealership until you've agreed upon price. Know your credit score- or at the very least your range- before going in. Ask them to configure your lease/finance based on that score. Once you agree on price, THEN let them have it.

leeshuck · November 2004

Thanks for the input ponytrekker - it seemed pretty fishy to me and I don't have all of the info yet, but it does sound like trouble.

mwilsontriad · November 2004

I have also been to a few dealers, and have been able to get the lease figures without them running a credit check. In fact, a Honda salesman said he won't run one through UNLESS a person IS buying/leasing for sure. He asked me what I thought my score was, and just estimated based on that.

leeshuck · November 2004

Hi pjo1966 - thanks for your opinion.

I was considering the Audi S4 lease special which would be for 42 months - the warranty and maintenance program for the vehicle is 4 years, so I thought that would be safe.

I prefer the M3, but it's more than I want to spend now.
I have a '98 M3 and am having a hard time finding a car I like better overall - the Audi does have a much gentler ride, but it's lacking some of the road feel the M3 has - I guess you can't have everything.

Lee

mazdax605 · November 2004

I agree with that,but I was just going by his numbers.I guess I should have figured he meant .0025,but I went with what he had in the message.Thanks for setting me straight.I wish I could have got that sort of MF on either of my leases.That is like free money.

pjo1966 · November 2004

Extending a lease for a lease that has free scheduled maintenance is definitely do-able. Another thing I've been considering since I am in a lease that I am unhappy with... I would like the next car I lease to be listed on Swapalease.com under lenders that fully release you from obligation if someone takes over your lease. That way if I find myself in a similar situation (which is unlikely given the amount of research I am doing) I have the peace of mind knowing there is a possible out.

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