Lease Questions - Ask Here

lycanthris · January 2005

Thanks so much!

jbaer · January 2005

car_man -

thanks a million for all your advice. I will be in touch in a few months when I am ready to lease our two new hondas!

Jeff

salamon · January 2005

I have been quoted a monthly payment of $365 for 12K miles/39 months by the dealer using an interest rate of %3.5 (he claims). Residual price is $17,235. The down payment is $2000. Can you tell me if this sounds like a fair deal. I think I did pretty well on negotiating the purchase price in terms of a buy but I am not sure about the lease deal and would really appreciate you thoughts. We would like to purchase soon. Thanks so much!

The vehicle is Pacifica AWD Touring with U package, moonroof, tire pressure monitor, and heated seat group. The price breakdown follows

Base Price $30,925

U Pkg. $2,280

Options $965

Accessories $0

Destination $680

-----------------------

MSRP $34,850 *

Dealer Price $31,761

tax $953

doc fee $389

tag $62

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total $33,165

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rebates $3000

cash down $2000

-----------------------

purchase price $28,165

addi · January 2005

BMW 525i 2004

I was advised this auto has a lease/residual of

63%.

The MSRP is $49050.

I negotiated a price of $45960.

Less a CAP of $3,000.

Adjusted CAP cost $42960.

Residual value: $31,372.

36 months at $518.09 plus tax $31.09.

Question: Does the RESIDUAL always come off MSRP?

Thanks for your service.

gbalcom · January 2005

Dear Car_Man,

Thank you so much for your help! I have a few additional questions for you though....

1. Do you know when the $700 VW cash incentive on leases of the GLS 2.0L Sedan is valid until? Possibly, Feb 28th like the other incentives? Later is better for me at this time, because my current lease expires March 19th. So, I am hoping February.

2. I have the following information that you supplied me with and now I want to make sure I calculated my proposed lease payment correctly, could you please review and tell me if this is correct?

Jetta GLS 2.0 Sedan

- 36 months

- 15,000 miles per year

MSRP - $22,220

Invoice Price - $20.384. I want to offer $500 over invoice, but then subtract the $700 incentive . So, the price I plan to pay is $20,184.

residual - 52%

money factor - .00004

tax rate State of Florida - 6%

I come up with pre-tax rate of $240 per month and with tax $254.40 per month.

Are my calculations correct? Am I missing anything?

3. Last question. I noticed that VW is offering between now and 2/28/05 a $500 cash back loyalty incentive to all current VW owners or lease holders, which I am. In my negotiation. Would I take that $500 from the price of the car, or how do the cash back deals work? VW just sends me a check for $500 after I make the deal? Any suggestions?

Thanks Again!

Gina

CarMan@Edmunds · January 2005

You're very welcome, lycanthris.

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CarMan@Edmunds · January 2005

No problem, Jeff. I'll talk to you then.

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coby03 · January 2005

Car_man,

Are these MF's and residuals valid for the S4 as well? If not, I'm interested in knowing for 36/39/48 months, 1K miles per mo., what the MF and residuals (through AFS) are for the 2005 S4-auto. Thanks a lot.

dzuba · January 2005

Sale price of $32000

1. Is the sales tax - say 6.25% of 32000 = $2000, figured out such as: $2000 divided by 36 months (3 year lease) = $55 per month?

2. I know "everything in negotiable" - but are residual values as well?

CarMan@Edmunds · January 2005

Hi salamon. Let's work up a sample lease payment on this vehicle for you using the information that you provided in your post so that you can compare it to the one that you were quoted. According to my calculations, if you were to lease a 2005 Chrysler Pacifica Touring AWD with an MSRP of $34,850 and a capitalized cost of $28,165 through Chrysler Financial right now for 39 months with 12,000 miles per year, your zero down, pre-tax monthly payment should be right around $360. The payment that you were quoted is pretty close to this. My main advice to you would be to not make any sort of down payment when leasing this vehicle. Doing so puts this money at risk if your vehicle is a total loss for insurance purposes and does nothing to reduce its lease-end purchase price. If you were to lease this vehicle with zero down, its monthly payment would increase to around $419.

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CarMan@Edmunds · January 2005

Hi Addi. I am not exactly sure what you are asking. Vehicles' residual values are based upon a percentage of their full MSRPs plus destination. Does this answer your question?

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CarMan@Edmunds · January 2005

You're welcome, Gina. Volkswagen's current incentives program is scheduled to run through February 28th. It is difficult to say for certain, but if I had to make an educated guess, I would say that this cash will at least continue, if not increase after that date. Again there are no guarantees though.

I just double checked your calculations and I came up with $240 per month as well, $240.98 actually. Good job. I do not know how sales tax is calculated on leased vehicles in your area though.

You should take the $500 loyalty cash incentive into account just like you would any other incentive. So, assuming that you were to negotiate a selling price of $500 over invoice, your actual transaction price would be right at invoice after taking the loyalty cash into account. Also, keep in mind that the $700 lease cash is a dealer incentive. The dealer that you are working with may not acknowledge that it exists. Stay firm and insist that it is taken into consideration.

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ddelise · January 2005

Hello - I am looking for the following information:

Acquisition fee

Lease advertsed rebates

Lease unadvertised dealer cash (i.e. certificates)

24, 30 (if available), and 36 month residual and lease factors (or interest rate) for 12k miles/yr.

Located in Florida.

Thanks! Damon

jlsellers · January 2005

Could you please provide the current money factor and the residual for this vehicle at both 12,000 and 15,000 miles/year on a 36 month lease?

I have heard that the money factor varies on the 2.5i and 3.0i, but North Scottsdale BMW was quoting me .00150 mf and (I think) a .60 residual, which seems higher than earlier suggestions above.

In Arizona, should the acquisition fee not be $525, I was being quoting something much higher.

I am working with a second dealer now, who is quoting me $1000 over invoice, so I want to make the lease numbers conform to BMW's January program.

CarMan@Edmunds · January 2005

No, coby03, Audi's lease program for the S4 is different than it is for the A4 1.8T. If you were to lease a 2005 Audi S4 Sedan through AFS right now for 36 months with 12,000 miles per year, its base lease money factor and residual value should be .00065 and 56%, respectively. Its numbers for otherwise identical 39 and 48 month leases should be .00085 / 53% and .00235 / 47%.

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CarMan@Edmunds · January 2005

Dzuba, sales tax on leased vehicles is calculated differently in different states. If you let me know what state you are in, I can tell you how sales tax is calculated in your area, or at least try to point you in the right direction.

Individual dealers to not have the authority to alter banks published residual value percentages.

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upndwn · January 2005

I am trying to avoid a super long post and still share what I have learned in the market.

I have a GTI scheduled to come off lease 5/1. I have watched this and other boards and expected to wait until April to choose a new vehicle. However, current A4 prices are too good to pass up. (See subsequent posts).

When I contacted VW about my early return I learned:

1. VW will wave the $350 disposition fee at lease end for non-buyers of the vehicle, since I am leasing and Audi - VW family product;

2. The lease agreement treats vehicles returned more than 90 days early differently. To protect the consumer, any vehicle returned earlier than 90 days does not pay additional lease charges (capital cost plus residual x money factor), but only depreciation. This is saving me another ~$150.

3. The vehicle will be auctioned. I am responsible for the lesser of a. the residual value less actual price realized at auction or b. the cost of over miles and damages appraised as over market value. Several weeks from now, I will be billed an amount equal to the depreciation charges remaining on my lease plus the lesser of the two numbers described above.

I am not expecting it, but if the price the car fetches at auction exceeds the residual price, then I am entitled to have that amount credited to against the depreciation charges I owe.

salamon · January 2005

Thanks for that speedy reply Car_man. Correct me if I'm wrong but I believe you are advising that I shoot for a monthly payment between $360 and $410 and offer zero out of pocket. Also since $28,165 is after tax shouldn't the $953 tax be deducted when calculating the cap cost which would then drop to $27,202. I mention that because I believe you said the cap cost was $28,165.

dzuba · January 2005

I am in Illinois - thanks!!

Wondering how my local tax rate of 6.25% is calculated into a 3yr/15k per month lease?

mtgman · January 2005

How low has someone seen the money factor/rate on a 39 month lease through a bank?

thanks

coby03 · January 2005

Thanks Car_man. Sure looks like the 36 month program is the sweet spot.

lycanthris · January 2005

You mentioned in an earlier post that the current MF was nearly 1/2 of what Honda normally offers. How long is this MF scheduled to be offered?

ltrojan · January 2005

Hi Car_man,

Thanks for the info in your last post! I've been working hard and doing my dealer comparisons in the LA area these past 2 weeks and here's a deal that I need some advice on:

2005 Mercedez C230 Sports Sedan - Automatic, Sunroof Package, CD Changer

MSRP: $34,250; Dealer's Invoice: $32,400 (but the internet says it should be $31,900)?; Sale Price: $30,500

Total drive off / downpayment: $1600.00 (1st month payment, plus fees?)

Residual: 59%

Mileage: 12,000 /year

Money Factor: .00220 for a 39 month lease

Monthly Payment: $375.00 + 31.00 tax = $406.00/month

Is this a good deal? Is there any marketing support or dealer cash back because almost every dealer says they can go $1000-$2000 below invoice. Is $1600 drive off normal? I told him I want $0 down (as you recommend), but he said that this there's no way I can do a $0 drive off because of the fees. He said there's a difference between "$0 down" and "$0 drive off"? What else can I do to get a better deal or do you think this is as low as it gets? Thanks for all your help!

rroyce10 · January 2005

... **In a nutshell, we leased a 2004 Toyota Matrix for 5.5 years @ $344 a month roughly a year ago** ...

The perverbial "Kiss of death" ....

Terry.

shopperboy · January 2005

hows this sound for a lease

27 months 05 GS LEXUS PREMIUM PACKAGE,HEATED SEATS. nyc---440 a month and 2200 out of pocket which includes 1st month, bank fee-1045[ny]taxes n a 500 down payment??? does this sound like a good deal? looked at other places and seemed much higher?thanks

rbarone · January 2005

car-man,please work up sample.. lease would be for 3 years, 12k miles per year, no money down..MSRP.. $30,200, destination 650..

selling price.. $27,751. thanks

.

foxsox · January 2005

I leased a vehicle in Ohio and paid all the sales tax up front. After a year I relocated to Missouri where sales tax is made on the payment, so my payment increased to include the extra tax. This means I paid double sales tax for the Lease. Is this the way it is supposed to work or can I get a refund from one of the states?

kyfdx · January 2005

The bad news about Illinois? I think you have to pay the same sales tax, as if you were purchasing the car...

rroyce10 · January 2005

3. The vehicle will be auctioned. I am responsible for the lesser of a. the residual value less actual price realized at auction or b. the cost of over miles and damages appraised as over market value. Several weeks from now, I will be billed an amount equal to the depreciation charges remaining on my lease plus the lesser of the two numbers described above.

    ==================================

            There is a couple of numbers here you kind of missed and/or it wasn't explained to you correctly ...

          1.) If, and thats a big "if" - the vehicle would happen to do over residual at the auction, you wouldn't receive the overage ..

          2.) The final figure is not based on the auction number .. it's based on the auction number -minus- the transport cost, the cost of the auction prep and the cost of the auction fee .. and this figure can be anywhere from $700/$900+ based on the situation and the condition of the vehicle ....

                 I hope this helps ...

                          Terry.

CarMan@Edmunds · January 2005

Here is the info that you are looking for, jlsellers. If you were to lease a 2005 BMW X3 3.0i through BMW Financial Services right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00125 and 57%, respectively. If you were to lease this truck with only 12,000 miles per year its residual value would be 2% higher.

BMW FS recently raised its lease acquisition fee from $525 to $625 in every state but New York, where its fee is even higher. If you are being asked to pay a higher fee than this, the dealer may be trying to mark-up BMW FS' base acquisition fee to add additional back-end profit to your deal.

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CarMan@Edmunds · January 2005

You're welcome, salamon. Assuming that you did not make any sort of down payment on this vehicle, using the current selling price that you have negotiated, its lease payment would be around $419 before tax. How sales tax is calculated on leased vehicles varies from state, so I never include it in my estimated payments. If you let me know what state you are in, I should be able to refer you to a site or two that may explain how sales tax is calculated in your area.

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CarMan@Edmunds · January 2005

No problem, dzuba. Different states use different methods for calculating sales tax on

leased vehicles. There are three main methods of doing so (I suppose that you could say that there are four if you count the states that don't charge sales tax at all). In the first, the state taxes the payment and down payment. Most states, including Florida, Georgia, Missouri, Connecticut, and California use this method. The second way is to tax the entire selling price of the vehicle. This is how

sales tax is calculated on leases in states like Illinois, Texas, and Ohio. Lastly, some states only tax the depreciation portion of leases. This is tax is calculated on leased vehicles in New Jersey. This is a brief explanation on how I believe sales tax is calculated on leased vehicles. For more specific info, you may want to stop by the following sites: CyberDrive Illinois or Illinois Department of Revenue.

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CarMan@Edmunds · January 2005

Lycanthris, Honda's current special lease program on the 2005 Accord is scheduled to run through February 28th, but Honda almost always has some sort of lease support on this car. It will almost certainly have a special lease program on the Accord after that date, it may be a little different though.

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CarMan@Edmunds · January 2005

You're very welcome, ltrojan. This looks like an excellent deal to me. The selling price that you were able to negotiate is amazingly low and the base lease program is being used to calculate this car's monthly payment. I am surprised that so many Mercedes-Benz dealers have been willing to sell you, or lease you in this case, this car for under invoice. I am not aware of any dealer cash on the 2005 C-Class at this time. I just double checked the payment that you were quoted and I also came up with $375 per month before tax. At lease signing, most consumers have to pay their vehicle's first month's payment, a security deposit of that payment rounded up to the nearest $50 increment, and their bank's lease acquisition fee. For this deal, this would be $409 + $400 + $795 = around $1,604. If you like the car, this is a heck of a deal.

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CarMan@Edmunds · January 2005

Hi shopperboy. You never mentioned the selling price or MSRP of the car that you are interested in leasing. These are important number for you as a consumer to know for two reasons. First, the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. Without knowing this car's selling price in relation to its MSRP you don't know how much of a discount you are getting on it. The second reason is that one needs the selling price and MSRP, including the destination charge, of a vehicle to calculate its lease payment. I would be more than happy to work up a sample lease payment on the car that you are interested in for you if you let me know what these numbers are.

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CarMan@Edmunds · January 2005

Hey rbarone. I just checked and apparently this truck's lease program varies, depending upon which one of General Motors' five regions one is in. As a result, in addition to the prices that you just gave me, I also need to know what state you live in. Thanks.

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ddelise · January 2005

Hello - I am looking for the following information:

Acquisition fee from GM

Rebates applicable for a lease

Unadvertised lease rebates/dealer cash (i.e. certificates) that might be available

24, 30 (if available), and 36 month residual and lease factors (or interest rate) for 12k miles/yr.

Located in Florida.

Thanks! Damon

soflkurtz · January 2005

am i am being lied to?

my dealer quoted me .00260 and because i am an existing lease holder (this is another car), a discount down to .00245. if it's official, great. my credit is perfect. if my dealer is skimming the extra points, i will find a new dealer. this is for 2005 G35 6MT sedan.

thanks in advance.

prince812 · January 2005

Car_man,

I am considering the 05 Avalon Limited. Although it is not in showrooms yet, but there is a published MSRP of $37,230 loaded with all options. Because they are so new they are not bargaining much on the price.

I am not sure if you can do this for a car not yet in showrooms, but assuming a 36 month and 15K miles per year what would be a lease payment? Please include residual and money factor if you have it.

Thanks for your help.

pvaldezesq · January 2005

Does anyone have advice on lease turn-in's. I have a car that I leased almost three years ago that I have to turn in soon. I am way over the miles allowed in my lease agreement.

Any helpful advice as to how to get out of this pickle ?

CarMan@Edmunds · January 2005

Thanks for taking the time to re-post your message, Damon. I think that your original message may have slipped in in the middle of one of my posting frenzies

. The last time that I heard about it, General Motors' Acceptance Corp.'s lease acquisition fee was $595 in your area. I do not believe that General Motors is currently providing any cash incentives on leases of the 2005 Pontiac Vibe at this time. It is however, providing cash incentives to current owners of General Motors vehicles who lease a new one, specifically $750, and money to current owners of competitive products. The only brands that I am aware of that GM is currently providing any sort of dealer cash certificates on are Cadillac and Hummer. As far as the lease rate and residual for this car go, if you were to lease a 2005 Pontiac Vibe GT through GMAC in your area right now for 24 months with 12,000 miles per year, its base lease rate and residual value should be 5.0% and 62%. The lease rates for otherwise identical 30 and 36 month leases should be the same, but the residual values would be 56% and 54%, respectively.

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CarMan@Edmunds · January 2005

Hi soflkurtz. If the dealer that you are working with claims that this is Infiniti Financial Services' base lease program they are most likely trying to mark up your car's money factor to add additional back-end profit to your deal. IFS current base lease money factor for the 2005 G35 Sedan 2WD is .00179 for any length lease. Its factor for the '05 G35 Sedan AWD is .00172 for any length lease this month.

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CarMan@Edmunds · January 2005

Hey prince812. I finally had an opportunity to take a look at the redesigned Toyota Avalon. I thought that they might introduce it as a 2006 model, but apparently it is going to be a very late 2005 model. I have absolutely no idea what this car's residual values are like yet, so it would be very difficult for me to estimate a lease payment on it for you at this time. I should be able to give you more information on this car's lease program once it is officially on sale.

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jlsellers · January 2005

Thanks Car Man for the current data on the BMW leasing program. I went to Camelback BMW and we did a deal at the current .00125 buy rate, $625 acquisition fee, 59% residual for 12k/36. Price was $1,000 over dealer invoice, so I am happy, as is my wife who loves her new Mystic Blue X3 3.0.

CarMan@Edmunds · January 2005

You're very welcome, jlsellers. Thank you for taking the time to come back and let us all know how everything turned out. Enjoy your new truck!

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shopperboy · January 2005

i belive the msrp is about 41,000 and purchase price is 36,450 or so.. not sure of destination price..im curious whether or not 440 a month for 27 months is considered a good price with 10,000 miles and 2200 fees up front-includes -500 down payment,bak acquistion fee-1045 and motor vehicle fees120 monthly payment includes my taxes and all..thanks for your help!! shopperboy

king30 · January 2005

Car_Man, Do you have up to date Money Factors and Residuals for the Jeep Grand Cherokee 4x2 laredo and the Jeep Liberty 4x4 limited...Thanks Lee

ssmike · January 2005

Hi,

I am new to leasing, have been learning, and wanted your input on the following VW promo lease:

2005 VW GLI 1.8T 4dr Sedan.

Priced with options I would prefer, MSRP is $25,903 Invoice is $23,389 and the TMV is $24,993.

The "promo" lease offer is :

39 mos @ $229 per month, $1250 Down Payment

$250 Security Deposit, 12000 Annual Mileage

"Restrictions Lease based on 2005 Jetta GLI 1.8T with 6-speed manual transmission.

Comments $2304 total due at signing."

My FICO is 787. Aside from the term being a bit long, what is your input on this?

Thanks

gumtube · January 2005

I have never leased before, but I am considering it. I am strongly anticipating working overseas in about one year's time and have the following questions:

1. It would appear that, all things considered, it would be better to LEASE as opposed to buy given one year ownership and not wanting the hassle of selling when I am trying to move. Does that sound right?

2. Are there one year lease terms out there for new cars?

Thanks in advance!

CarMan@Edmunds · January 2005

Thanks for the additional information, shopperboy. 27 months is an unusual lease term, but I did some digging and found out that Lexus Financial Services' 27 month, 15,000 miles per year lease money factor and residual value for the 2005 GS 300 without navigation are .00155 and 57%, respectively. LFS does lease vehicles with 12,000 miles per year, but I have never seen a lease from it with only 10,000 miles per year. Using the prices that you provided in your post, an MSRP of $41,000 and a selling price of $36,450, and the above numbers, I come up with a $500 down, pre-tax monthly payment of around $558 per month. So when compared with LFS' actual program for a 27 month, 15k lease the payment that you were quoted looks pretty good to me, especially if it includes tax. Perhaps the dealer that you are working with is using the $1,000 dealer cash that Lexus is providing on this car right now to lower its selling price and then running your lease through an independent bank that has an attractive lease program on it. This may be the case, because LFS' lease acquisition fee is only $600 in most states.

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