Lease Questions - Ask Here

CarMan@Edmunds · July 2001

Thanks Bill. You beat me by one day

. Lexus also kept its standard lease money factors the same that they were last month and did not introduce any supported factors or dealer cash on this truck. I believe that the only Lexus vehicles with supported money factors right now are the ES 300 and the IS 300. The only Lexus vehicle with dealer cash available on it is the ES 300, with $1,500.

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CarMan@Edmunds · July 2001

Hi kbehnke. I would be more than happy to help you out. If you decide to lease a 2001 Nissan Sentra GXE through Nissan Motor Acceptance Corp. for 36 months and with 15,000 miles per year their lease money factor and residual value should currently be .00140 and 47% respectively. I don't know what sort of shape your credit is in, but this month NMAC is being more lenient with their leases and extending their best rates to consumers who normally may not have qualified for them. Not every single customer will be approved, but those with past credit problems stand a much better chance.

Generally speaking a vehicle's residual values will gradually decrease as the model year progresses. Although it tends to vary from bank to bank and even from vehicle to vehicle, certain models will experience a larger than normal drop in their residuals when the next model year's version begins to appear in showrooms. This drop seems to be even more significant in instances where the new model is completely redesigned. Fortunately, the Sentra was redesigned not that long ago and is not scheduled to have any major changes for '02. Even though the 2002 models will have higher residual values, Nissan probably will not provide as much lease money factor support on them when they are first introduced. As a result, there probably will not be that much of a difference between leasing a 2001 model now and a 2002 model a couple of months down the road.

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markrn · July 2001

Hi Car Man,
What is the current 36/48 money factors and residuals for an xlt, and are the numbers different as i'm looking at buying one using the x plan. Also the costs between 12000 and 15000 miles a year. Thanks for any info md

November · July 2001

Question: The salesman says here is the price of the car and it is $200 over invoice. But he then proceeds to tell you they need $1100 up front at the start of the lease. This $1100 includes a $490 bank aquisition fee. Who is getting the bank fee? Is this another term for more dealer profit so you are not really getting that low price, or is this actually a fee required by the leasing company (in this case VCI)?

fladriver · July 2001

I don't know who VCI is, but typically there is a fee charged by the company that is financing your lease. Usually lease contracts have a fee in the $500 range (like yours). We assume that it all goes to the finance company, which would mean it isn't dealer profit, but for all we know the dealer and the finance company split this fee.

Another wrinkle is why there is not a "loan acquisition fee" but only a "lease acquisition fee." It would seem like the administrative costs are basically equal.

But regardless, I think most people find they can't really do away with this fee, although it's certainly possible to wipe out the dealer prep fee.

CarMan@Edmunds · July 2001

Markrn, in many parts of the country Ford is offering consumers a 36 month lease rate of only 1.5% through its captive finance company on the 2002 Explorer. They usually don't and are not currently providing any sort of lease support on 48 month leases, so the 3 year term is your best bet. Also, the 2002 Explorer XLT V6 4WD has a 3 year 12,000 miles per residual value of 49%. Using these numbers, I come up with a zero down pre-tax lease payment on a typical 2002 Explorer XLT 4WD (MSRP: $33,500 & cap cost: $31,200) of around $440 per month. Keep in mind that Ford has a ton of loyalty programs available on this vehicle that are good through early October. If you currently own or are leasing an Explorer this could provide you with an additional discount of $1,000 to $3,500!

I do not believe that the lease parameters for this truck would be any different if you use Ford's X-Plan. However, you would be able to base its capitalized cost on the special X-Plan price.

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CarMan@Edmunds · July 2001

November, all major banks charge acquisition fees, sometimes known as bank fees, on their leases. Volkswagen Credit is no exception. They charge a lease acquisition fee of $490 on all of their contracts. All of this money goes directly to them. Some banks give dealers the opportunity to mark-up the acquisition fee to bake a little extra profit into a deal, but the fee that you are being charged is VW Credit's base fee and is not being marked-up at all. Other upfront charges that you may encounter will include a security deposit and your first month's payment.

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mmcbride1 · July 2001

If VW credit charges an incpetion fee, why didn't I have to pay one on my A4 lease (through Audi Financial, which is just an arm of VW Credit)? Was that just a special program?

markhampton · July 2001

Hi Car_man,

I can't seem to figure out if BMW has extended the $7,500 incentives on the 7-Series. BMW ran an ad yesterday in the local newspaper which seemed to show that the previous lease special ($799/mo + $3,500 down) had been extended. It looked like one of those nationally run ads.

In the fine print, however, the ad indicated that the deal expired on 7/2. Why would they continue to advertise an expired lease deal?

It appears that BMW is trying to get the 2001 7-series cars off the lots to make room for the all-new 2002 model. Is it a bad idea to lease a car that will soon be replaced by a newer model?

utcarsons · July 2001

We qualify for A-plan pricing with ford. And I was wondering how this affects the value/cost of a lease. We are currently considering a Windstar SEL or SE Sport. Any idea what residual is for these? Also, does Aplan make a lease a better deal or not significantly. Thanks!

Jodie

tgif888 · July 2001

Since you are leasing it, the $7500 incentive is very good. With BMW 7 series car, it doesn't matter you lease the 2001 or the 2002. It is because you are going to lease another one 3 or 4 years later. And the BMW model's style usually last 8-9 years.

im_brentwood · July 2001

Either it was capitalized into the cap cost, waived (And your Money Factor raised) or maybe it was a promotional lease that didnt have one, which happens on occasion...

Bill

enzospeed · July 2001

Edmunds shows under incentives a 325xi for $316/mo with $3025 down. Is this a national campaign?

mmcbride1 · July 2001

I'd guess it was a promo. I got a MF of .00255. They are running great deals on the A4's and A6's right now for leases.

enzospeed · July 2001

Edmunds shows under incentives a 325xi for $316/mo with $3025 down. Is this a national campaign?

CarMan@Edmunds · July 2001

Mmcbride1, Audi Financial Services has been known to waive the security deposit and or the acquisition fee on certain models in the past. For instance, right now AFS is waiving the security deposit and acquisition fee for all 2001 A6 and allroad and the just the security deposit on all TT & S4 leases through the end of July. Normally AFS has a $490 acquisition fee, just like VW Credit.

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CarMan@Edmunds · July 2001

Markhampton, word on the street is that BMW reduced the Dealer Cash that is available on the 2001 7-Series from $7,500 to $2,500 for the month of July. I don't know how much of the Dealer Cash BMW was utilizing to arrive at their advertised lease payment, so it is difficult for me to say if they could still offer the same lease this month. I can tell you though that I have not seen any nationally advertised 7-Series lease price points yet for the month of July. It is tough to say why they would run an old ad, perhaps it was a mix up at their ad agency. It is not necessarily a bad idea to lease a car if a redesigned model is scheduled to arrive in showrooms in the near future, provided that you will be happy with the older model and that you get a good discount on it.

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CarMan@Edmunds · July 2001

Utcarsons, when leasing a vehicle consumers have the ability to negotiate its price just as if they were paying cash for it. The price that they are able to negotiate (minus any down payment that they make) is called a leased vehicle's capitalized cost. If you obtain a new car or truck through Ford's A plan, you will be able to get it for a lower price than you would have normally been able to negotiate. As a result, your vehicle will have a lower cap cost and ultimately a lower monthly lease payment than a non-A-Plan vehicle. I believe that the lease rates and residual values for vehicles leased using the A-Plan are the same as Ford Motor Credit's normal lease program. If you let me know how long you plan on leasing your Windstar for and how many miles per year you want, I would be happy to give you an idea of what the lease rate and residual value should be like on this van.

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jroth33 · July 2001

I am currently leasing a 1999 Honda Accord with six months left on the lease. I'm way under mileage (33k on 45k lease)and the car is in above average condition. The wholesale amount according to Kelley Blue Book is 13,275 with retail of 16,725. The buyout at the end is 12,500 (with $1,800 in payments left). Would any dealer "touch" buying this car if I bought a new car (especially if it is an "A Plan" deal)??? Should I just wait until January???

fazz1 · July 2001

Carman,

Could you please provide the money factors and residuals on an audi TT convertible and the porsche boxster (and S) for a 3-year lease at 10k miles per year? Thanks.

utcarsons · July 2001

That's what I thought regarding the capitalized cost, etc. Glad to see I wasn't overlooking something.

We are considering both a 24 month and 36 month lease. Mileage is 15K but I believe Ford Red Carpet leases are standard 15K?

TIA
Jodie

wildorchid · July 2001

Is it customary for all of the following to be included in inception fees:
security deposit ($400), 1st month payment
"documentary fee" ($99.50), and taxes.
On top of this, the bank fee ($450) is amortized into the monthly payments, which doesn't sound like a good idea to me, but may take the sting off the initial expenses. Any opinions?

s852 · July 2001

Has the new Lexus Finance deal come out yet?
I'm interested in $0 down, 36 months, 45K miles on a Value Package edition with heated seats.

im_brentwood · July 2001

The First Payment, Security Deposit and Bank fee are all legit.

Bank fees are charged by the leasing company.

As far as the doc fee, thats charged by the dealer and generally covers getting your license plates, registration, title work and stuff like that. $99.50 isnt bad for that.

Capitalizing the Bank Fee does reduce your upfronts, but on a 36 month lease also raises your payments roughly $15 or so. I suppose it's a matter of "pay me now or pay me later". it will be cheaper in the long run to pay it upfront, but maybe you have better uses for that $450 today..etc..

Certainly though, you CAN pay it upfront.

Hope this helps!

Bill

vikd · July 2001

Can someone work the equation backwards and tell me what the money factor would be on a 36 mo lease on the 2002 Explorer with $2500 down and $400 per month. This is what the dealer is offering and I,m not sure if the interest rate is good. I would really appreciate the help. Thanks

CarMan@Edmunds · July 2001

Hello fazz1. You certainly have good taste in automobiles. Those two cars would be at the top of my list if I was in the market for a new vehicle and didn't need the space that a larger car provides. If you decide to lease a 2001 Porsche Boxster (without Tiptronic) through Porsche Credit Corp. for 3 years with 10,000 miles per the money factor and residual value should be a reasonable .00290 and 63% respectively. If you lease a 2001 Audi TT Roadster through Audi Financial Services this month for the same terms the money factor and resid should be .00305 and 65% respectively. Plus Audi is waiving the security deposit on all TT leases in July.

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max63 · July 2001

Hey car man, could you please check out the money factor and residual on a c240, 12k and 15k miles. Thanks for your time!

joestein · July 2001

Carman,

Could you please tell me the residuals and money factor on a 36 or 39 month lease of a Jeep Grand Cherokee Laredo (with the 26e or 26f package.

Thanks

CarMan@Edmunds · July 2001

You're welocme, utcarsons. Right now the 24 & 36 month The 15,000 miles per year residual values for the 2001 Windstar SEL are 48% and 40%. They are 45% and 38% respectively on the SE Sport. You should definitely be able to get a better deal on the Windstar that you plan on leasing if you get it through the Ford's A Plan than if you were just a consumer who walked in off the street.

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CarMan@Edmunds · July 2001

Vikd, I am going to need some more information from you before I can estimate the lease money factor that is being used to calculate the monthly payment for the 2002 Explorer that you are interested in. For instance, what trim level is the Explorer, is it 2WD or 4WD, what is the truck's full MSRP, what price are they willing to sell it to you for, and how many miles per year does the lease include? Once I have this additional data, I will let you know what I come up with.

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CarMan@Edmunds · July 2001

S852, the 2001 ES 300 is actually one of the few Lexus models that they are providing lease support on for the month of July. According to my calculations, if you were to lease a 2001 ES 300 Value Package with heated seats (MSRP: $34,455 / selling price: $31,145) through Lexus Financial Services for 3 years with 15,000 miles per, your zero down pre-tax monthly lease payment should be around $466.

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CarMan@Edmunds · July 2001

Jroth33, unless the dealer that you are working with believes that your current Honda is worth significantly more than what it would cost to buy it out at this point, they are not going to be willing to take it off of your hands without rolling negative equity over into your new deal. This is especially true if you are taking advantage of a manufacturers' employee or supplier purchase plan, which usually allow dealers to make very little profit on your deal to begin with. In my opinion, you are probably better off waiting until you are closer to your scheduled lease termination date than trying to break your current lease right now.

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CarMan@Edmunds · July 2001

Hello Max. I would be happy to help you out. Unfortunately, the residual values of this car just fell a little bit. If you decide to lease a 2001 Mercedes-Benz C240 through Mercedes-Benz Credit Corp for 3 years (let me know if you were thinking about a different lease term) the lease money factor should be .00329, the 15,000 miles per year residual value should be 64%, and the 12,000 miles per year residual value should be 66%.

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CarMan@Edmunds · July 2001

Joe, DaimlerChrysler's lease program for the 2001 Jeep Grand Cherokee Laredo varies depending upon what part of the country you live in. If you let me know where you plan on leasing your Jeep, I would be able to give you much more accurate information on what you should be able to expect in terms of its money factor. Talk to you soon.

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s852 · July 2001

What should the total drive off costs be (aquisition fee, security deposit, other fees etc.) and does this deal include gap insurance?
At $466 + 7.5% local CA sales tax I am figuring $501 including tax. I suppose this does not include DMV fees, so I would need about another $600 per year for that.
If I could squeeze by with 12K miles per year, how would the lease numbers look?

max63 · July 2001

Thank you carman, could you please give me both the mf and res. on a four year lease, 12k and 15k.
Thanks again!

joestein · July 2001

Carman,

I currently live in NC, but I am moving in a few weeks to Monmouth County, NJ. The closest part of NYC is only 25 mins from Monmouth so they probably have the same programs running.

I would appreciate any help on the money factor and residual percentage on a 36 or 39 month lease on a 4WD Jeep Grand Cherokee Laredo. (26e or 26f package).

In addition, What is the residual percentage on a Mitsubishi Montero Sport LS 4WD after a 60 month lease? and what would the money factor be.

Thanks for your help.

joestein · July 2001

Sorry.. the above message should say that I currently live in NYC, not NC (north Carolina?)

vikd · July 2001

Carman-
Thanks for the follow up--here is the info you requested: Trim level--4wd xlt w/ cloth third row, running boards and tow package; Full MSRP--35,050, did not quote us a selling price(scary!), Lease term--36 mo/12k per year. Thanks again for your help.

shaker58 · July 2001

can you list mf and res on the following three cars 36/12

land rover disc se7
sequoia limited
acura mdx

thanks again the service u provide is great

im_brentwood · July 2001

I would strongly suggest waiting until you move to NJ (Or at least until you have a NJ License and address) because if you sign the lease in NY City, you're:

A) Taxed differently than in NJ (Higher)

Paying 8.75% vs 6%.

It ends up being $20 or so a month... NJ Taxes the difference between cap cost and residual, not the payment.

Bill

CarMan@Edmunds · July 2001

S852, your total drive-off cost on this car would probably be the first month's payment ($466) plus the security deposit (probably $500) plus the acquisition fee ($450 for LFS) for a total of around $1,416. Lowering your mileage allowance to 12,000 miles per year would lower this car's zero down, pre-tax monthly payment to right around $448.

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CarMan@Edmunds · July 2001

You're welcome, Max. The 4 year factor would be exactly the same and the 15,000 miles per year residual value would drop to 56%.

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CarMan@Edmunds · July 2001

Thanks for the additional information, Joe. You're lucky, New York is one of the areas where DaimlerChrysler is providing special lease support on this vehicle. If you decide to lease a 2001 Jeep Grand Cherokee Laredo 4WD through Chrysler Financial Corporation for 36 months and with 15,000 miles per year in the New York City area, the lease money factor and residual value should be .00275 and a poor 43%.

Before I provide you with the information that you are looking for on the Mitsubishi Montero, I think that I should warn you that I usually advise consumers against leasing a car or truck for such a long period of time. One reason is that 5 years is a long time to be tied to one vehicle. One never knows how their life will change during the course of half a decade. You may have kids and need a different vehicle, or your kids may grow up and you would want something sportier, or you find that for some reason you just can't stand your vehicle, or your work situation might change and you end up putting a lot more mileage on your truck than you thought that you would, etc... Chances are very good on a non-major Japanese or German brand that your vehicle will have a relatively weak resale value, and as a result you will not be able to get out of your lease early without paying a large sum of money out of your own pocket or rolling negative equity over into your next vehicle. Furthermore, one of the mice features of leases is that consumers can drive the car or truck that they want for two or three years and not have to worry about making any repairs to it. If you lease a Montero for 5 years, there will be a period of 2 whole years where your vehicle is not covered by any warranty. As a result, you will be be forced to make any necessary repairs to your truck prior to turning it in at lease-end, or face the possibility of significant excess wear and tear charges. Having said that, the 5 year money factor and 15,000 miles per year residual value for a 2001 Montero leased through Mitsubishi Motors Credit Corp. are currently .00375 and 39%.

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CarMan@Edmunds · July 2001

Vikd, the very first thing that you should do is find out exactly how much money you would be paying for this truck if you decided to lease it from the dealer that you are working with. Consumers who lease are just as entitled to this information as consumers who pay cash for their vehicles. Without it, you can never really know how good a deal you are getting. For all you know, they are charging you full MSRP for this truck. Once you have this number, I can tell you exactly what your payments should be.

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mmcbride1 · July 2001

That's atrocious!

joestein · July 2001

Car Man,

Is the .00275 the special lease incentive? That doesn't seem anything special, as that works out to 6.6% What would the residual be for 3 years on the Jeep with 10,000 or 12,000 miles per year? This will be a second car for my wife, to be used for commuting to the bus station and driving around the town, so I don't think we will be using this over 10,000 miles a year.

In addition, do I qualify for any cash incentives on the lease?

Thanks for your help.

joestein · July 2001

Car Man,

Based upon the information you gave me about the Montero Sport LS, I figured out my lease costa as follows:

MSRP: 28,217

Cap Cost: 24,300 (Includes $2500 rebate, per cars direct)

Residual Value: 28,217 X 39% = 11,004

Monthly Rent: (24,300-11,004)/60 = 221.60

Interest: 28,217+13296 X .00375=155.67

Total monthly paymnet = 377.27

Is this correct?? I can't belive there is a 155.67 monthly interest charge, that is insane.

I have 2 other questions, why was the dealership able to give me an offer of $307/month with no money down while I was there?

And... How come the residual values on Carsdirect.com are less than the residual percentages that you are giving me.

Thanks for all your help.

lelandc · July 2001

Car man,

Can you tell me if Ford Motor Credit is offering any lease support on a 2001 Ford Explorer Sport 4WD (maybe the 2002 Sport is out I don't know)?

I am interested in leasing for 24 months with 15,000 miles per year. Can you tell me the approx. payment and interest rate?

TIA,

Leland

la_max · July 2001

Car_man,

Do you have the residuals and lease money factors for the 2002 Acura RSX and RSX Type-S?

Thanks

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