Car Subscription vs. Lease vs. Purchase

mossburgh · December 2019

Hello,
In all of these individual forums, moderators are quoting residuals, money factors ect. Are the money factors what you are suggesting buyers use as a starting point on negotiations. Is this what you are saying would be a good deal? What exactly is it that you are quoting?

kyfdx · December 2019

mossburgh said:
Hello,
In all of these individual forums, moderators are quoting residuals, money factors ect. Are the money factors what you are suggesting buyers use as a starting point on negotiations. Is this what you are saying would be a good deal? What exactly is it that you are quoting?

The base money factor provided by the captive leasing bank.

Some makes don't permit dealers to markup the rate, but many do. By knowing the base rate, you can insist on it.

mossburgh · December 2019

Great! This was my assumption. Thank you so much! As a follow up, if somehow you can convince the dealership to use the base rate, does that mean the dealership does not make any money on that sale or, is that completely separate?

kyfdx · December 2019

mossburgh said:
Great! This was my assumption. Thank you so much! As a follow up, if somehow you can convince the dealership to use the base rate, does that mean the dealership does not make any money on that sale or, is that completely separate?

The money factor is similar to the finance rate on a purchase. The dealer makes money from selling the car. The leasing bank pays the finance office for writing the lease. Marking up the rate is more money for the dealer, just like anything extra they sell you in the F&I office.

Don't worry about the dealership making money. Just get the best deal possible. Why would you care if they lose money on your deal?

mossburgh · December 2019

kyfdx said:

mossburgh said:
Great! This was my assumption. Thank you so much! As a follow up, if somehow you can convince the dealership to use the base rate, does that mean the dealership does not make any money on that sale or, is that completely separate?
The money factor is similar to the finance rate on a purchase. The dealer makes money from selling the car. The leasing bank pays the finance office for writing the lease. Marking up the rate is more money for the dealer, just like anything extra they sell you in the F&I office.

Don't worry about the dealership making money. Just get the best deal possible. Why would you care if they lose money on your deal?

See that is what I am trying to understand. "The dealer makes money from selling the car." How and where? It is not that I care about them losing money. I am trying to determine what is realistic. They have a job to do and I do not want to insult them by asking them to take me for test drives and meet with me and answer questions but then tell them I refuse to give you any of your commission. I am more so trying to understand what the numbers you are quoting represent - baseline, starting point, etc. If they are a little over the baseline figures quoted on here, is that acceptable? At what point are they getting over on me? If they are a half a percentage point over the MF you quote, is that the money they make from selling the car? There must be more to it. With these money factors around 2% or so, are they really only making a couple hundred dollars on a $40k vehicle?

kyfdx · December 2019

mossburgh said:

kyfdx said:

mossburgh said:
Great! This was my assumption. Thank you so much! As a follow up, if somehow you can convince the dealership to use the base rate, does that mean the dealership does not make any money on that sale or, is that completely separate?
The money factor is similar to the finance rate on a purchase. The dealer makes money from selling the car. The leasing bank pays the finance office for writing the lease. Marking up the rate is more money for the dealer, just like anything extra they sell you in the F&I office.

Don't worry about the dealership making money. Just get the best deal possible. Why would you care if they lose money on your deal?
See that is what I am trying to understand. "The dealer makes money from selling the car." How and where? It is not that I care about them losing money. I am trying to determine what is realistic. They have a job to do and I do not want to insult them by asking them to take me for test drives and meet with me and answer questions but then tell them I refuse to give you any of your commission. I am more so trying to understand what the numbers you are quoting represent - baseline, starting point, etc. If they are a little over the baseline figures quoted on here, is that acceptable? At what point are they getting over on me? If they are a half a percentage point over the MF you quote, is that the money they make from selling the car? There must be more to it. With these money factors around 2% or so, are they really only making a couple hundred dollars on a $40k vehicle?

When you negotiate a lease, the dealer sells the car to the bank, who then rents it to you. 2%, 5%, whatever the base rate is, has no affect on the dealer. That is between the manufacturer and the captive bank. But, if they markup the rate, then they make extra money.

We don't track pricing, so can't help you with your numbers, that way. But, you should really take your focus off how the dealer gets paid, and focus on how little you might pay. They make money by selling the car for more than it costs them. And/or taking advantage of poor dupes that don't do their research.

mossburgh · December 2019

OK, so there is built in value that the dealer makes, even when they lease at the rates/residuals you guys quote. That is great to know. I am just trying to understand the whole thing before I try to strong arm a dealer. The dealership is also trying to tell us the rate is based off of credit score. One other thing on the residual. If I find they are quoting a lower residual value, can I reference something to essentially tell them where that rate needs to be? I feel like all I have is my word/Edmonds vs theirs.

qbrozen · December 2019

they can't change the residual. So don't worry about that part. You do want to know base MF, though. As stated here, they can mark that up.

Thinking you can "strong arm" a dealer is a mistake. You can't force them to do anything. This is a business transaction, so don't let them make you think there is emotion involved or you should somehow pity them. If they sell you the car, it is their choice to do so, just as it is your choice to buy it.

mossburgh · December 2019

I am trying to figure out why the residual they quoted is so much different from the values you folks provided 58% vs 67%. That makes a huge difference!

I probably used the wrong wording with strong arm. Just trying to figure out where to put my foot in the ground.

This may be a bit much to ask but, I have found that the rate they are quoting is considerably higher(2.2%) than the quoted rate(1.4%) and that rate is dependent upon credit score in part. My question is, would it be fair to assume an 800 credit score should typically qualify for the rates you quote?

Lastly, Are residuals and interest rates published somewhere?

Much appreciate all of the great info!

qbrozen · December 2019

Which manufacturer is this for? Many dealers use more than one lender. So the residual and rate you are being quoted by the dealer could be from a different lender than for the numbers you got here on Edmunds. If they are using a bank with a lower residual and higher rate, then I would hope that is tied to a very large cash incentive.

mossburgh · December 2019

Its GM whom told us they use GM Financial and a few other banks.

stickguy · December 2019

"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!

mossburgh · December 2019

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!

MichaellMichaell
December 15
mossburgh said:
Would you be able to please provide MF/LR for awd 1.5 Turbo 2020 Equinox at 36 and 39 mo 10k/yr for 15227
mossburgh said:
Any chance you can do LS and LT? I think they are mostly stocking the LT in that package. Thanks ahead of time and sorry for the lack of knowledge.
LS
36/10 - .00077 and 68%
39/10 - .00080 and 62%

LT
.00061 and 67%
.00071 and 61%

$1000 customer incentive

kyfdx · December 2019

mossburgh said:

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!
MichaellMichaell
December 15
mossburgh said:
Would you be able to please provide MF/LR for awd 1.5 Turbo 2020 Equinox at 36 and 39 mo 10k/yr for 15227
mossburgh said:
Any chance you can do LS and LT? I think they are mostly stocking the LT in that package. Thanks ahead of time and sorry for the lack of knowledge.
LS
36/10 - .00077 and 68%
39/10 - .00080 and 62%

LT
.00061 and 67%
.00071 and 61%

$1000 customer incentive

Yeah, those are wrong. I think @Michaell gave you the 24 and 36 month numbers, not 36/39.

mossburgh · December 2019

kyfdx said:

mossburgh said:

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!
MichaellMichaell
December 15
mossburgh said:
Would you be able to please provide MF/LR for awd 1.5 Turbo 2020 Equinox at 36 and 39 mo 10k/yr for 15227
mossburgh said:
Any chance you can do LS and LT? I think they are mostly stocking the LT in that package. Thanks ahead of time and sorry for the lack of knowledge.
LS
36/10 - .00077 and 68%
39/10 - .00080 and 62%

LT
.00061 and 67%
.00071 and 61%

$1000 customer incentive
Yeah, those are wrong. I think @Michaell gave you the 24 and 36 month numbers, not 36/39.

Crap.. can you help?

Michaell · December 2019

mossburgh said:

kyfdx said:

mossburgh said:

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!
MichaellMichaell
December 15
mossburgh said:
Would you be able to please provide MF/LR for awd 1.5 Turbo 2020 Equinox at 36 and 39 mo 10k/yr for 15227
mossburgh said:
Any chance you can do LS and LT? I think they are mostly stocking the LT in that package. Thanks ahead of time and sorry for the lack of knowledge.
LS
36/10 - .00077 and 68%
39/10 - .00080 and 62%

LT
.00061 and 67%
.00071 and 61%

$1000 customer incentive
Yeah, those are wrong. I think @Michaell gave you the 24 and 36 month numbers, not 36/39.
Crap.. can you help?

Top number I gave you is 36/10; subtract 2% from residual for 39/10

kyfdx · December 2019

Michaell said:

mossburgh said:

kyfdx said:

mossburgh said:

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!

stickguy said:
"few other banks" may be the answer. The quotes here are always from the captive lenders. And yes, the rates are assuming top tier credit, but if you have an 800+ score you should be getting the best rate.

But, 58 vs. 67% is a big difference. That sounds more like 24 months vs. 36! But in the end, doesn't really matter what they are using to get the payment, jut what the payment is!
MichaellMichaell
December 15
mossburgh said:
Would you be able to please provide MF/LR for awd 1.5 Turbo 2020 Equinox at 36 and 39 mo 10k/yr for 15227
mossburgh said:
Any chance you can do LS and LT? I think they are mostly stocking the LT in that package. Thanks ahead of time and sorry for the lack of knowledge.
LS
36/10 - .00077 and 68%
39/10 - .00080 and 62%

LT
.00061 and 67%
.00071 and 61%

$1000 customer incentive
Yeah, those are wrong. I think @Michaell gave you the 24 and 36 month numbers, not 36/39.
Crap.. can you help?
Top number I gave you is 36/10; subtract 2% from residual for 39/10

The bottom number is 36/10, for either trim.
The 39/10 MF is the same, but the residual is 2% less.

DAH · January 6

https://collection.mbusa.com Currently for MB, this is only offered in Nashville, Philadelphia, and Atlanta. Maybe I'll consider it when it hits Miami.

stickguy · January 6

That’s expensive.

qbrozen · January 6

wow. $1600/mo plus $500 startup fee. And that's the LOWER plan.

DAH · January 6

https://www.volvocars.com/us/care-by-volvo/?gclsrc=aw.ds&&gclid=CjwKCAiA0svwBRBhEiwAHqKjFunT35WFgbIoPHgHe_oZsEdLTOj25vLJG4NQu0C17LH1SO92pyW6HBoC6EgQAvD_BwE
Has anyone done Care by Volve? Did you experience any problems? $800 a month for 2 years all in sounds like a great deal right now. Of course, I would have to compare the offer to the actual cost of purchasing and leasing outright.

kyfdx · January 6

DAH said:
https://www.volvocars.com/us/care-by-volvo/?gclsrc=aw.ds&&gclid=CjwKCAiA0svwBRBhEiwAHqKjFunT35WFgbIoPHgHe_oZsEdLTOj25vLJG4NQu0C17LH1SO92pyW6HBoC6EgQAvD_BwE
Has anyone done Care by Volve? Did you experience any problems? $800 a month for 2 years all in sounds like a great deal right now. Of course, I would have to compare the offer to the actual cost of purchasing and leasing outright.

Do you have another vehicle? If so, how will this affect your current car insurance?

qbrozen · January 6

It isn't too bad for convenience. A $0 due at signing XC90 can be had for under $600. Insurance (for me) is about $600/yr. So that's $650 total, including tax and reg. But, of course, that locks you in to that same vehicle for 3 yrs.

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