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I used to do a ton of them. Back in 98 and 99 and early 2000 there were some GREAT programs out there.
Here were some of the deals we used to do:
in 1999:
1997 XJ6: 36 Mos, 12k/yr, $0 cap reduction, $0 sec dep $499/mo. this was on a select edition car with about 28K miles.
That was through GECAL or Bank One.
1997 Mazda Millenia L: $995 cap red plus sec dep, 24mos/12k/yr $209/mo.
A Millenia S was like $229/mo
Those were through Bank of America.
1997 Accord SE 28K miles $189/mo 36 mos $0 cap reduction (GECAL)
1998 Volvo S70 GTAS (Leather, roof, etc) 20K miles. $299/mo 36 mos $995 cap red. (GECAL)
1996 Volvo 850GLT Sedan $239/mo 36 mos $995 cap red (GECAL)
1995 Jaguar XJ6 $399/mo $0 cap red 30 mos (GECAL)
1997 Lincoln Continental $279/mo 36mos $995 cap red (GECAL)
However GE Realised that they were buried badly in all these cares and, unfortunately, the deals on them are over. IMHO the party's over on used car leases but.. man.. for a while it was great! We were leasing 10 of those Millenias, 15 of those Jags, 10 of those Volvos a month and at least 3 or 4 of those Lincolns.
Rates were cheap (.00279 money factor) and the residuals were sky-high.
There's people out there who got some amazing deals when the timing was right.
But I think that nowadays, as a rule, the party's over and new cars are generally a much better bet. Although BMW has some programs that are attractive. Leasing a 1998 or so 740iL that's a certified car ought to save you $200/mo or so on the payment. For a lot of people, driving a used 740iL is preferable to a new 528i or something like that.
Bill
Thanks, Stefan
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My A4 is 57% after 3 years. My 4Runner was 62% after 3 years.
Looks like GMAC's residuals are finally starting to come in line with what I am seeing these puppies sell for at the auction. Seeing as how I can buy a 1999 Aurora at the auction for like $14,000-15,000 (For a clean 30K mile one...) And a 2001 V6 for like $19,500 or so in clean shape with 15K miles or so.....
Them aint absurd residuals....
Bill
Another reason I won't buy American, at least right now. I like to lease my cars and it would cost an arm and a leg to lease an Aurora, even if I really wanted one.
So it might not be that bad. Even so...
Bill
The super clean, super loaded up, low mileage 98 Aurora's are doing under $14,000 at the block -- this is great purchase for the retail buyer.
Having a 8/9% rate and a "high residual" ( that's what supports the high interest rate ) ...doesn't help the consumer that's for sure. Try to trade a Benz, Audi, Vw, etc with only 6/7 months left in a lease -- Yeow, you get crushed.! --- that's what's absurd.
Bill makes a great point here -- A real life rate and a real life residual. I can't tell you how many times a customer has come to me with, let's say 9/10 months left on their lease and a residual of 65% and a rate of whatever, and want to break out -- Gee whiz, the value of the vehicle is $7/$8,000 less than the residual, and that's todays money .. not 10 months down the road! -- Now that's absurd.
Give me a 1.9/3.9/5.9% rate and a real residual -- and the consumer, dealer and the Manufacter will be much, much happier at trade time ... There is nothing absurd about that..
Terry.
I have read thru about 200 posts and you seem like "'da man"
Here are the numbers the dealer gave me and what I am being offered...Any comments/tips as to how this looks:
Nissan '01 PF SE
MSRP - $29,505
Sale price - $27,000(some incentive factored in)
Residual - 49% = $14457.45
Money Factor - .00139 (3.34%)
Lease Length - 39 months
Payment - $397.26 (includes sales tax of 1.5%)
Up front $$$ - $463.25 (1st month+fees(title/processing)
When I run these numbers thru my "calculations" I come up with a $384.92/mo payment...
What incentive/rebate is being offered on leasing a Nissan PF SE?? $500, $1000??
Invoice price = $26788 (edmunds)
Deal is good thru 9/5/01
thanks in advance
Mark
I am interested in leasing the above for 36 or 48 months, 15 k per year with zero down. Purchase price would be $18,000. What are the money factors and residuals? Thanks!
Tom
They've narrowed down a price on the van from a MSRP of $36,840 to a sale price of $31,450.
Now by me just building their van on line at Chrysler.com with their desired options and their cap cost, I come out with a VERY high lease price, which comes out to be $547. Here are the step by step figures I used...
--------------------------------------------------
MSRP - $36,840
Cap Cost - $31,450 (includes $1800 lease cash)
36 mo. residual - $17,683.20 (48% of MSRP)
36 mo. depreciation - $13,766.68
Monthly depreciation - $382.41
Cap Cost + Residual = $49,133.20
Times MF of .00335 (12%) = $164.60
Total Monthly payment - $547
--------------------------------------------------
So my real question is about the money factor Chrysler is using on their web site. By doing some figuring, the money factor comes out to be around 12%. Isn't that a bit high?
Our neighbors with a 2000 T&C Limited only have lease payments of $429 a month with a money factor of .0014 or 5.2%.
For the sake of my sister getting a good deal, what is the expected residual and money factor on a 2001 or preferably, 2002 Chrysler T&C Limited van after 36 months? And just how true are the estimated payments on the Chrysler web page? They seem set very high.
Anyway, if you could shed some light on my two main questions regarding the web site validity and what you might think the residual and money factor on this van would be after 36 months, it'd be great!
Oh and one more thing (sorry this is so long), I was once told by a dealer that you HAD to lease from the MSRP and if you wanted to lower the price, you had to put your own money down or there had to be dealer cash of some sort. While I haven't specifically asked how my sister got the cap cost she got, can't you also just negotiate a cap cost much like you can when you buy a car? Anyway, thanks!
2) .00335 (X2400) = 8.04%. Not that hot (Im surprised there isnt support on this van) but not 12%!
Bill
Please, I'm new at this, since I'm just helping my sister, so if there is anything else I did wrong to get that 12%, tell me. Thanks!
Obviously the longer theterm the higher the total interest tho.
That being said, the factor they quoted you does seem a touch high...
Bill
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Anyway, 36 and 48 months, 12K and 15K miles.
Thanks in advance.
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What are the residual values and money factors for a 2001 and a 2002 Mercedes Benz 2 door CLK 320 coupe (3 years, 15,000 miles)?
Also, would it make the monthly payments cheaper if it was a 4 year lease?
Thanks.
Mercedes-Benz Credit Corp.'s lease programs usually don't have specific end dates associated with them. Having said that their residual values are probably good until the the end of the quarter, around October 1st or so. So, the residual values for the 2002 CLK 320 Coupe leased through MBCC for 3 years, with 15,000 miles per should probably still be 69%. The 2001 model year version of the same car should have a resid of 67%. I won't know until mid-week whether MBCC has issued revised lease money factors. Chances are though that the 3 year lease money factor for this car will be very close to, if not exactly the same as the .00329 factor that they have had on it recently. Given the fact that the 48 month money factor is exactly the same as the 36 month one, a 4 year lease of this car will likely have lower lease payments than a 3 year lease would because you are able to spread the higher initial rate of depreciation that all vehicles experience out over an additional 12 months with the longer lease.
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Also, in your opinion, does it make more sense (or less sense) to lease (instead of buy) a car with this high of resid. value?
Finally, any thoughts on a balloon payment option? I am not too familiar with the pros/cons of that type of financing.
A4 2.8 Avant: santorin blue, cold weather, celebration, leather, auto
Capitalized cost $34,100
Lease payments: $398/month for 48 months; 10K/year
Upfront: taxes, bank fee, 1st month.
Residual 45%
Any thoughts? Thanks!
Thanks!
I am new to this particular forum and a novice to the leasing game. I've done some reading on Edmunds's site as well as a few of the posts in this forum. I must say, I am blown away by your wealth of knowledge on this subject and very impressed by how you answer each individual's questions.
Earlier, you quoted some figures for a 2002 Passat GLS V6 sedan. Would these numbers be different for a 2002 Passat GLX? Although I'm not ready to do a deal now (I'm looking at next Spring perhaps), I am trying to get a sense of what my monthly payments would be with a 36 month lease with 15,000 miles/yr. So, I need the money factor and residual for this car. I realize that this will be different by the time I decide to make a move, but I'd like to get a general idea of what my payments would be.
Also, I was wondering if there is any difference in the difficulty of getting approval for a lease vs. a purchase. I've heard that it is much harder to get approved for a lease than a traditional auto loan. Is this true? Is it the other way around? Or does it even matter?
Also, just to make sure that I'm on track with this, the most advantageous lease plan would be one with a high residual but a low money factor. Is this correct? How do you tell if you are getting a good lease deal?
Thanks in advance.
SilverCrown
Also, what is a beacon score? Is it the same as a Fair Isaac score? Either way, how do I find out what mine is?
Thanks again.
SilverCrown
With that in mind, I have been looking at the lease deal from Acura on the RL with the following numbers:
Down Payment: $1000
Cap Cost: $39,230
Residual Value: 48%
Money Factor: .0005 (1.2%!)
Lease Term: 39 months
Monthly Payment: $499
Total Out-of-Pocket at Lease Signing: $1999
That offer was set to expire on Sept. 4. I rolled the dice and called a dealer in Columbus, Ohio on that day, offering to lease the RL for $499 with $0 out-of-pocket. The wind went out of my sails when the salesman told me that Acura was extending that offer through Oct. 1. He kindly offered to take my offer to the sales manager anyway. The next day I received the answer I expected...no thanks.
I am looking for suggestions from anyone regarding the value that the above terms represents. Is this a good deal for an RL that stickers at $43,630? Would the fax-attack strategy help me lower the up-front costs?
Thanks!
wing5nut
In answer to your question, the only thing that is bad about vehicles that have high residual values is that they tend to be a little on the expensive side when one tries to purchase a used one. Other than that high future resale values are good for people who want to purchase and for people who want to lease. They're great for leased vehicles, because high residual values help keep the monthly payments down. And they're great for vehicles that are purchased with cash or financed because the buyer will be able to get a great deal of their money back when they decide to sell their vehicle.
To be honest with you, balloon notes really aren't that popular in most parts of the country. I personally don't see any advantage to a balloon note and would probably would just lease if that is the sort of financing arrangement I was looking for.
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Thanx.
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I personally don't think that Volkswagen Credit is any more restrictive with whom they approve to lease their vehicles than they are with whom they allow to finance. Of course, this could vary tremendously from bank to bank. If your credit is in pretty good shape I don't see any reason why you would have any difficulty leasing through VCI. Remember though that VW Credit does not necessarily have the best lease program out there on this car right now. There are tons of independent banks that offer leases on new vehicles. It often turns out that an unaffiliated lending institution is able to beat a manufacturer's lease program if it is not heavily supported. Still, knowing the captive finance company's lease program gives you a good baseline that you can use in your negotiations.
You are absolutely correct in your assessment of leasing. As far as low monthly payments are concerned, high residual values and low lease money factors are good things. A low money factor means that you are paying a low interest rate and a high residual value means that you aren't paying for a lot of depreciation on the vehicle that you are getting. The best way to tell if the car or truck that you are interested in makes a good vehicle to lease is to look at its residual value and money factor. You can convert any money factor into an approximate equivalent interest rate by multiplying it by 2400. Residual values are a little more subjective. Three year residuals with 15,000 miles per in the mid-to-high fifties are very solid. Of course if you aren't sure if you are getting a good deal, you can always run your deal past me and I would be more than happy to let you know what I think.
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Seeing as how a new 2002 CLK320 Coupe stickers at $45,000 or so with some options... And that a 1998 CLK320 with, say, 40K miles will do $32K+ at Auction as long as its' in a good color and clean...
That's a realistic residual. If anything, its' a bit low. Say that car had a $43K sticker.. I'm showing a 3-year residual of 74% or so!
Mercedes-Benzes have very high residuals because they have exceptional resale value. There are very few cars that can compare.
Put it this way, Over 3-4 years, A Mercedes-Benz CLK320 is cheaper to own, in terms of dollar depreciation, than a Chevrolet Impala or Ford Taurus.
Scary stuff, huh?
Bill
If it lost less total dollars than a Taurus, you would be able to lease a brand new E-Class Mercedes for less than a new Taurus and you clearly cannot do so.
There's a $2,000 rebate. So you get a new one for $18,500.
And 1998 Tauruses are doing $6-7K at the auction.
$12-11,500 in depreciation.
Why is a Taurus cheaper to lease? Easy!
let's look a hypothetical lease on a CLK...
$45,000 X 162% = $72,900 X .00325 = $236 or so.. That's $150+ a month right there... without even assuming that the Taurus has a subsidised lease...(I'd bet my Beloved Alfa that it does!)
You can generally lease a CLK320 for about $600-650 a month..Closer to $700 using MBCC depending on what's involved (I.E. Which Bank you use... MBCC has great residuals...but many outside banks match them with much lower factors... especially on cars with high cap costs, Fifth/Third and KeyBank and Firstar come to mind)
First, there's absolutely zero subvention on the CLK.There doesn't have to be, these cars sell much faster than MB can ship them across the pond. Heck, the cars actually are worth over their residuals at lease end! A 62% 39mo residual (If I remember right... too lazy to scrollup) is about what a 55K mile one is worth!
Now, let's look at a Taurus. If we assume a $6,000 residual.. (Which will be market correct at roughly 28% of MSRP after 3 years and 40K miles..) and a Cap Cost of $18,500 and a MSRP of $21,500...
18,500 + $6,090 X .00325 = 79.91 + $318.20 in Depreciation over 39 mos... = $398.11
Its' the high Cap Cost of the MB That makes it expensive to lease. Heck, a Ferrari 360 Modena on a 39 month lease based on MSRP probably could safely be leased with a 90% residual! Say that car stickers at $160,000.... At a factor of .00275 It'd still be $836 a month in lease charges alone per month! Heck, the monthly depreciation would only be like $359 or so!
Not trying to be a smartaleck... But if you wrote a check for a new CLK or a new Taurus.. when all is said and done, you might be $1,000-2,000 ahead of the game after 3 years with the MB!
Scary, isn't it?
Bill
I am now looking at leasing a 2001 or 2002 VW Beetle GLS TDI. 15 k/year, 3 or 4 years. What are the residuals and money factors? Thanks!
Tom
1) For a 39-month lease, do the money factors/residuals change? Or does the length of the lease only affect the monthly depreciation calculation using the same numbers as a standard?
2) On a 12,000 mile/yr lease, how much is normally charged if you go over your miles?
3) When figuring the capitalized cost, do you include taxes, etc.? Or just the negotiated price of the car alone?
4) How do you track backwards from a desired lease payment to determine how much you can spend on a car? (for example, if your max is $400/month). Is there an easier, simpler way to do this?
Please forgive me if these questions have already been asked and answered in the past. I have read some of the posts at the very beginning and the most recent, but there were too many for me to read all the ones in the middle. This has been very helpful and educational for me. Thank you so much for all your assistance.
Regards,
SilverCrown
A Beacon Score is nothing more than another credit bureau's interpretation of an individual's credit.
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