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My question is this - Would it save me money over the long-term to lease two cars simultaneously for 36 month periods? A smaller down payment would be required with the lease, but with the purchase I will be able to sell the cars after 72 months. I'm guessing the lease payment on each car would be around $300/month, so two lease payments would be close to one car payment. I don't mind keeping a car for 6 to 8 years, so having a new car isn't really important to me. I'm mainly concerned with what makes the best financial sense. And if I were to lease, I would still get a $23K car, rather than trying to "get a lot more car for the same payment". Has anyone been in a similar situation?
Residual comes to $16,748, so your cost of use is $33,601 - $16,748 = $16,853 \ 36 months =$468.00
Rental fee or interest @.75 is great = $16.73
Total Monthly is $484.73 + Tax, Fantastic deal you are driving for 3 years and not paying real interest on the money, that you get to hold.
I looked into the same car in June and the interest was @ 6% that made the monthly cost much higher (about $100.00)
In answer to your second question, yes a vehicle's destination charge is included in its MSRP when calculating its residual value. Lastly, multiple security deposits on a lease do not actually reduce your vehicle's capitalized cost. Instead, for every extra security deposit you make many banks will reduce the lease money factor that they are using to calculate your vehicle's monthly payment by a certain amount.
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What about the money factor for 48 months?
Sorry I wasn't trying to interfere, just that I knew that one having recently looked into the same vehicle.
By the way it is thanks "to you" that I posses the level of lease understanding that I now have.
I still do not have the resources that you do in finding out the correct residuals and Money Factors. I would have to sit in dealership for hours before they provide you that info.
Having the knowledge makes the buying / leasing process so much easier. AS long as I or the buyer understand that they still have to make something on every deal.
It is also helpful in knowing which vehicles are not offering factors that would make the purchase sensible. (Never fall in love with only one specific vehicle) You would have to be very lucky to get a great deal on that particular Make / Model
We are pciking it up tomorro at 4:00 and I just saw your board so I thought I run it by you. Now I see all these people getting loaded ones for only $60 more a month and I wonder if I am getting such a great deal.
Also, with this great lease rate and financing running around 5.9%, how much more is leasing if I decided to buy out the car and keep it for 6 years altogether? If the residual turns out to be too low I just might buy it out!! I am not lthe lease fan in my family, but I can't find the problem with this one compared to purchasing with say $8,000 down.
Thank you!
Car_Man
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Thank you very much. This information will no doubt prove very valuable soon. If I don't procrastinate again.
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I was told by a VW dealer that they would have the 2002 lease numbers today. Could you please tell me, if you know yet, what the numbers would be for a 2002 Passat GLS 1.8T automatic (no other options) 39-month, 12k miles. Residual and money factor (and anything else you know regarding the 2002 deals).
Could you please also tell me residual and money factor for a 2001 Honda CR-V SE model. I'd like to try to get residual numbers for both 39 and 36 month lease (if it is different) and 12k miles.
Thanks.
best offer from the dealer, and it seems to me that something is wrong with this. I have read of people leasing these for between 500-600 a month.
Here is the deal-
$43,028- MSRP
$39,100- sale price
39 mo. lease
15k miles/yr.
53% residual
$2500 dn. payment
.0038 money factor (salesman said "3.8" I assume he meant .0038, still seems high to me)
quoted a payment of $633.00 a month. What do you think? Thanks in advance.
I need your help again.
I went to the Audi dealership today. I still love the car.
Audi has this Premier Purchase Plan, basically a fixed-rate financing plan with a balloon at the end of the term. Meaning it has low monthly payments for the length of the term, then I could keep the car (buy it cash or refinance), or simply return it.
I like this because I'm still not exposed to residual risk. It's also advantageous from a tax point of view. I live in Chicago: On a lease I would pay the sales tax upfront plus a tax on the monthly payment. With the premier purchase plan, I avoid the latter.
I'm still trying to figure out the trick :-) What do you think of such plans in general? Also, would it be reasonable for them to charge a higher rate than for a lease? If so, how much more than the 7.32% (money factor of .00305) they charge for a lease. By any chance, do you know what the current rate for their Premier Purchase Plan for the TT 225, 36 months, 10k miles is? I'd love to know what it is.
Thanks again.
Right now I think that Lexus Financial's Base rate is something like .00300.
The .00080 is, without hitting a calculator, striking me at around $50 or so a month.
Residual looks a touch low but its been a while since I have seen their lease programs.
Bill
Is this a good way to purchase a car. Do you know of any pros or cons to look out for? Any advise would be appriciated. Looking to use it for a new 2002 passat.
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I am looking hard at an '02 Acura TL-S w/ Navi, and am trying to figure out whether leasing makes sense for me on this or any other car...
MSRP $33,710 (Inc $480 dest chg)
Edmunds Invoice $30,430 (inc. 480 dest chg)
NADA Invoice $29,110 (Inc. dest chg)
Still trying to figure out who's right about the invoice price..
Anyway, I am in outside sales, typically drive about 23-25,000 mi a year over the last 3 yrs
I live in NC and have been told for purchasing a car the tax is only 3%, as opposed to our 6% sales tax on other goods, but I don't know about leasing tax
I don't know what kind of money factor is good on a car like this, nor do I know what kind of residual is good (I don't even know if I am supposed to want a high or a low residual, it seems people have different opinions about this).
I would like to drive a car for 3 years and then get something else, as I would already have approx 60-75,000 mi on it by then
If I purchase the car, and were able to negotiate $500 over Edmund's invoice, for example, my out the door would be 32,043-$5,000 down, finance amt: $27,093
48 mo: $655 @ 7.5% (example)
60 mo: $543 @ 7.5% (extra $1130 in interest)
In either example, the way I figure it, I would have equity or break even respectively depending on variables in a 3 yr period of time in case I wanted to trade out. In the 48 mo example, my total out of pocket through 3 yrs would be $28,582 only owing $7,860 on the car with 70k miles on it. I don't know what the car would be worth at this point, but when I figure that out, I could subtract whatever equity I could sell/trade for, from the 28,582 to determine total cost of ownership at that point.
I would like to accurately compare 'ownership' cost between the above example and a lease, but as you can see I am having a real hard time understanding how to lease properly, and would like to have some ammo before I even bring it up w/ a dlr, so I can at least undertand what they are saying.
Also, are there still any tax advantages for someone in my situation (outside sales..etc.) on a lease, that I should factor in? Thank you and apologize for long post.
Karz
I wanted to give you an update on what's happening.
Armed with your data and after requesting bids from several dealers, I visited one last Saturday. We negociated a bit and agreed on a price for the car. So far, so good.
Time for the finance guy. We talked a little bit, especially about the possibility of a balloon note, which Audi calls Premier Purchase Plan. As I said earlier, I like this because of Chicago taxes relative to leases.
The guy did quote the same residual % you gave me (for both lease and balloon note). Fine. But then, he quotes me a rate of 9.89% for the Premier Purchase. He says that it's because of my credit history.
Now that was unexpected! Two days before, I had checked my credit history online. My FICO score is excellent, I have more than enough income to afford the payments, and I have been with the same company for 5+ years. The issue is that I've never had a car loan or a mortgage. Still, it's pretty insulting and discouraging to be treated like that...
And then he's telling me how I should focus on the payment, not the rate. How the payment would be so much higher if I took a loan. Aaaaargh. Of course it would be! But that's not the issue! Aaaargh #2
Since then, they've come down to 9.49%. We're talking again tomorrow. I may propose them ways to have more equity into the deal upfront (higher down payment, higher payment the first 12 months,...). If they're really concerned about the risk, they should decrease their rates. What do you think? By the way, any ideas from anyone are welcome.
Another thing: he said that 0.00305 was not the current lease money factor for the Audi TT, contrary to what you had given me. Very suspicious, isn't it?
When you call the bank and inquire about a pay off amount, and they told you it's $41,000, what does that mean? Does that mean if I send them a check for 41k, the car is mine? Or does that mean I give them 41k just to get out of my lease contract, and the car still belong to them? (since there's a residual value of 20k after the lease). I'm just trying to clearly understand the definition of pay off when you're talking leasing. Thanks in advance for your help...
Check if that includes sales tax (usually does) and you will generally need to re-register the car as well.
For a Payoff to walk away from the lease there's 2 ways to do it. Compare the difference between current value (I.E. what you can expect to sell it for or current wholesale/trade-in) and the payoff. Also, sometimes towards the end of the lease its' cheaper just to make the remaining payments. I.E. Your payoff is $30K, you have 4 pmts of $600 left ($2,400) and the car has a trade-in of, say, $25K.
In that case you make the last 4 payments. If the car's current trade-in was, say, $28,500 then you DONT make the 4 payments as its' cheaper to trade it in for $28,500 and have the dealer pay the $30K. This way it'llonly cost you $1,500 to get out of the lease.
Bill
Even though Acura is not providing any sort of support on the TL yet, this car's lease money factors are actually still fairly reasonable. American Honda Finance Corp.'s standard lease money factors are lower than just about any other bank's rates that I have seen. Their three year lease money factor for this car should currently be .00260, which is equivalent to an interest rate of about 6.24%. The thing that makes evaluating leasing this car in your situation more difficult than normal is all of the mileage that you plan on putting on it. Typical leases allow consumers to drive 10,000 to 15,000 miles per year without penalty. Given the fact that you will need 23,000 to 25,000 miles per year, you will have to purchase excess mileage for this car if you wish to lease it. If I am not mistaken, I believe that AHFC charges its lessees 15 cents per mile for anything over their mileage allowance. So let's say that you were to lease a 2001 Acura TL Type-S with Navigation (MSRP: $33,710 & cap. cost: $31,180) right now through AHFC for three years with 15,000 miles per. According to my calculations, your zero down, pre-tax monthly lease payment on this car would be around $489. If we then take all of the excess mileage that you plan to drive into account (25,000 miles per year) your payment should rise to about $614 per month. This would give us a total cost over the three year period of around $22,099 not including the acquisition fee or tax. As you can see, I really don't think that leasing is the best option for you in this situation. If I was you, I would probably just finance this car rather than lease it. I am not all that well versed in tax law, so I hesitate to say whether there would be any benefit to you tax wise to lease this car.
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I apologize if this subject has been covered before, but I've never leased and I have a few simple and general questions.
I'm in the market for a sedan in the $60-70K range. I've always paid cash for my cars, but after reading this board for a while, I'm realizing that leasing may offer a better way to use my money.
I put about 25-27K miles per year on my car. I understand that it's possible to "buy" miles to compensate for the additional mileage-related depreciation. Is this sort of lease common? Is it something I should pursue with Mercedes, nexus or BMW? Are there any standards that I should be aware of?
Thank you for any advice.
Mike
Love the information you provide. Live in the state of Maryland and whenever I attempt to lease a vehicle (this is my 4th experience), I get charged tax on the full vehicle price, not the monthly payment price. Does this vary from state to state?
Car_Man's example of .15/mile for Honda is, from what I was told tonight the lease-end mileage. (I was out with some people, one of whom is a finance manager at a Honda store) is 8c/mile upfront he thought it was 8c but might have been 10c.
Now, Jaguar was 12c/mile upfront. Thats'... say.. $2,400 for 20,000 miles over the lease allotment if you do it upfront vs $4,000 at lease end. The miles are deducted from the residual upfront.
Say you leased a new Jaguar XJ8 for 24 months in 1999. Back then if I remember right it had a residual of about 57% or so for 24 months (I think 59 but could be wrong.. depends on when in the year you did it). So say it was a standard $55,330 MSRP car and instead of 15K/yr you did 25k/yr.
Standard residual would be $31,538 and change. Deduct even $4,000 from that... you have $27,538. At $2,400 upfront you'd be at a contract residual of $29,038. No way in heck is a 1999 XJ8 with 50,000 miles on it worth even close to that. Car's really worth $23K or so. Heck, car with 30K on it is only worth $28K or so. (talkin wholesale here but a 23K wholesale car is a heck of a tough sell at $29k) Wait. That's a $5K wack.... And if you did it upfront you only paid $2,400....
See my point?
In my family's company (Non-car-biz) we just did this with an XJ8. A Black one. Had about 52K on it at lease end. Got turned in around April or May I think. Interestingly enough A Black one sold at auction in mid-june (Jag Credit sale in PA) for $23,200. I am convinced it was the same car
So it greatly depends on the car. I've figured up a Volvo S80 for someone the same way recently. 36month, 90K mile lease. Residual came out to about $17,000. Again, since a 99 S80 2.9 with 60-70K or so on it is worth about that or maybe a little less.. This car makes no sense for this lady to buy. Especially combined with a roughly .00200 or so money factor last time I checked. IN 3 years that's gonna be a $12-13K wholesale car.
On a 1998 LS400 45K miles versus 90K miles is a spread of $28K or so to $19K or so. $9,000. If you can buy the miles upfront for 10c-15c.... You can save a bundle.
Get the lease program of the car you're looking at... Figure out what the miles cost upfront and I would be happy to help you crunch the numbers.
Sometimes its' the only way to go, sometimes buying is the way to go. But the way that very high mileage absolutely slaughters the value of a highline car... oftentimes the lease programs just cannot keep up with reality so its' to your advantage to take advantage of them.
Bill
I have excellent credit.
Are there any amazing lease deals on Luxury Sport Sedans? I've been looking at the Audi A4, but I'd look at others Volvo, Saab, BMW, etc. If the deals were really good.
I live in Colorado so I'd want front or AWD.
Jeff
I love the car and the 1.8T really goes, esp. in the mountains. I went camping and with myself, a passenger and a couple hundred pounds of camping gear in the back (seats fold down - very useful), we were goin 80-85 up to Eisenhower and up Vail Pass.
And the Quattro is AMAZING in the snow. Easily the equal of my 1998 4Runner, just with less clearance.
Thanks for your advice.
I will do some comparison shopping this weekend.
Is it correct to assume that the interest on the balloon note should be equal (or close) to the rate on a lease, i.e., 7.32% (=.00305 x 24)?
Can you please post when you have any information on lease rates and residuals for the 2002 Nissan Maxima SE? It went on sale yesterday. I am interested in a 24- or 36-month lease with 12K per year.
Is there reason to believe that there will be immediate discounts on this model given the Altima's release at the end of the month?
Thanks
Since I don't drive too much, I was thinking of leasing. I only drove 34,000 over three years with my previous. I also like to get new cars every 3 years. I could use the cash I have to pay off a different car, so that I'm not making 2 monthly payments.
Does anyone know what I should be paying for an A4 lease?
Should I negotiate the $28,500 price, then bring up leasing when I talk to their financial person? Do I need to bring it up before then? Will they raise the price back to MSRP for me to lease?
What type of rate/residual etc. should I be looking at for this car? I have excellent credit. Any help before tomorrow morning would be great. HELP!...
Thanks,
Jeff
Your lease calculations should be based on the negotiated price you and the dealership agree to. I highly recommend you spend a little time getting educated on how leases work and how the lease payment is arrived at, otherwise you risk the possibility of entering into a lease transaction that you do not fully understand and paying more than you want to. This site (Edmunds) has alot of great info on leasing and you can also go to carbuyingtips.com for some in depth education on leasing (to include leasing calculation spreadsheets). Do yourself a favor and get educated BEFORE going to the dealership!
Good Luck!
Bill G
2017 Accord Sport CVT Mod Steel Metallic