The current lease deal ($999 down, $399/month)on the 9-5 is awesome. If you bought the car at the end of the lease, your total out of pocket (excluding taxes)is only $32,460 which is $2,850 below invoice and $5,305 below MSRP. This analysis does not factor in the time value of money (i.e. the $32.5k is paid over 3 years with the final payment of $16.7k not due for 3 years). The net present value of the lease payments and the buyout is $27,870 using a 7% discount rate. In other words, you would be crazy to buy a 9-5 for cash unless you could get it for less than $28k which is $7k below invoice. This analysis also does not factor in the option value of the lease (i.e. you can walk away after 36 months). Given the above, it makes no sense that Edmunds TMV for the 9-5 is above invoice.
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.
Thanks for your advise, Carman. What do you think of the 2001 Olds Aurora? What do you expect for depreciation over the next 1-2 years. The offer my dealer gave me is buying me out of my lease for the Jimmy and put me into a financing over 5 years with a monthly payment of $450. The current mileage of the Aurora is about 5K. Thanks, Stefan
To be totally honest with you, Stefan, I am not a very big fan of General Motors' products in general. Most of GM's models typically have low residual values. Not only that, but I would not be surprised if Oldsmobiles have lower future resale values than vehicles from other GM divisions because the brand is being discontinued. Right now the standard residual value for a 2001 Oldsmobile Aurora leased for two years is only 46% of its original MSRP. So this car will likely be worth less than half of its original MSRP two years from now. Of course, if you were to purchase this car, you could do so for thousands of dollars less than its full MSRP so the depreciation isn't quite as bad as it initially looks. Overall though I personally don't think that the Aurora is a car that will hold its value well.
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.....
Oh, I know that's what's really happening, I just think it's terrible that they depreciate that much.
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.
I dunno. I'm sure they have like 1.9% on their leases (GMAC still uses interest rates) and I'm sure there's like a $1,500+ rebate and another $1,500+ in the trunk, plus I bet ya can get another $2,000 at least off of list...
.......... A real Residual, and a real life interest rate is what makes for a great lease going in --- and coming out .
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..
Carman, 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
Car Man, 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
Hi, my sister and brother in-law are about to lease a new 2002 Chrysler Town & Country Limited, which would be very similar to my wife's 2001 Chrysler Town & Country Limited.
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...
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!
I believe the 12% I calculated is right. If you take .00335 (X3600) = 12.06%. I see you put down .00335 (X2400) but I'm figuring a 36 month lease, not a 24 month lease.
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!
Thanks for the compliment, Mark. Nissan's August lease program was scheduled to run through September 4th. I haven't seen their September program yet, but would be happy to look at the deal that you were quoted using August's program. I believe that Nissan had a lease money factor of .00124 available on the 2001 Pathfinder SE in August. This is slightly lower than the factor of .00139 that you were quoted. Using Nissan's actual lease money factor, a NMAC lease on a 2001 Pathfinder SE 2WD (MSRP: $29,505 & cap cost: $27,000) should have a zero down, pre-tax monthly lease payment of around $373. With the higher money factor of .00139 that they quoted you (perhaps they are marking it up to bake additional profit into your deal) I come up with an approximate payment of $379. In answer to your second question, Nissan had $1,500 lease cash available on all 2001 Pathfinder models during the month of August.
Hi purduealum91. Your Boiler Makers sure eeked out a tough win last week. More than I can say for the team that I follow, PSU (ouch!). Volkswagen's August lease program was scheduled to expire within the last couple of days and I have not seen their September lease program yet. I should have a good idea of what it is going to be like tomorrow or the following day. Please feel free to check back with me then and I will be more than happy to fill you in on the details.
As high as the lease money factor on the 2002 Town & Country sounds, it is correct. DaimlerChrysler is not providing any sort of lease money factor support on its minivans at this time. Instead they are providing lease cash which can be used to reduce the van's capitalized cost. Chrysler has done away with the lease money factor and residual value support on their vehicles in the vast majority of the country. The only lease money factor support that they have right now is in Detroit on some models, and in a select few areas on the Durango and Grand Cherokee. The Chrysler Financial standard lease money factor is currently .00335 for a 36 month lease as was mentioned above. Any time you want to convert a money factor into an approximate interest rate equivalent, you always multiply it by 2400 regardless of the lease term. So a factor of .00335 is equal to an interest rate of around 8.04%. If you are set on getting a Town & Country, you might want to see if there are any 2001 models left in your area. About a week ago, DaimlerChrysler enhanced the lease cash that is available on its '01 minivans by up to $2,000 in certain cases.
What is the money factor and residual rates for the VW Passat GLS V6? If I remember correctly, VW Credit has better rates for 48 month leases than they do for 36 month leases. Is this true?
Here is the info that you are looking for, Tom. If you choose to lease a 2002 VW Jetta GLS TDI through VW Credit for 3 years it should have a lease money factor of .00260 and a 15,000 miles per residual value of 58%. The same car leased for 4 years with 15,000 miles per should have a money factor and residual value of .00275 and 50% respectively.
Volkswagen's 48 month lease money factors are usually actually higher than their 36 month lease money factors, as is the case right now. If you were to lease a 2002 Passat GLS V6 Sedan through VW Credit for 36 months the lease money factor should be .00255 right now and the residual values should be 57% with 15,000 miles per year and 59% with 12,000 miles per year. A 48 month lease of the same car should have a money factor of .00270, a 15,000 miles per residual value of 49%, and a 12,000 miles per residual value of 51%.
Hi again, topgun7. I haven't seen Acura's September lease program yet, so I don't know the exact residual values for the 2001 MDX yet. I think that it is safe to assume though that Acura is not providing any sort of lease support on this truck yet. If so, and you wish to lease one through American Honda Finance Corp. you would have to use their standard lease money factor of .00245 for 4 years. This is a very good standard money factor, equivalent to an interest rate of just under 5.9%. I should have an idea of what the residual values for this model are like early next week. Please feel free to check back with me then.
Hsj1906, that's funny isn't it. This discussion was busy as heck a week or so ago and now it has quieted down for a little while. Perhaps it is because by reading back, community members have seen that it usually takes a week or so at the beginning of each month before I have seen all of the new lease programs that are out there.
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.
I am interested in taking over someone's lease for the remaining 16 months for $399pm (Jeep GC Laredo). The vehicle is still under warranty for the remaining period. What should I perhaps double-check? Any views?
I am surprised (well, sort of) that the residual value is so high carman. If I understand you correctly, is the residual value on a 2002 CLK for 4 years at 15,000 miles per year, 67% (I know you said that the resid. val on a 2001 CLK for 3 years is 67%)?
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.
Can anyone help me with lease pricing for the A 4 2.8 Avant? I was planning to lease the 1.8 Avant, but Audi Finance is giving a big incentive for the 2.8 - 1.67% implied interest raste on 39 or 48 month leases. Dealer has offered me the following:
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%
I hate to overstay my welcome Carman, but can you think of any other manufacturers (or models) that have a residual value of 65% or higher for a 3 year lease of 15,000 miles? How about 60% or higher on a 4 year lease of 15,000 miles per year?
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?
Would you also give me the money factor and residual for the 2002 Passat GLX with a 36 month lease and 12,000 miles? That may be an alternative, since that's what I normally put on a car annually anyhow. 15,000 would be a cushion for me.
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?
I've been following the boards in the Town Hall since late spring. I've been shopping for a lease on a new Acura and have taken test drives in the TL Premium, the TL-S, and the RL. To my tastes, each of those are great cars that offer different driving experiences. I thought my decision would rest on whatever deal represented the "best value" overall.
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?
Hsj1906, yes Mercedes-Benz Credit Corp. does have very solid residual values for most models. However, the 4 year 15,000 miles per residual value for a 2002 CLK 320 should only be 62% right now, not the 67% that you guessed. This is still a very high resid.
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.
Residual values and money factors for a 2002 Lexus GS 300 (with a Mark Levinson Audio System Package), with 15,000 miles -- for both 36 months and 48 months.
Hi Tiger182. I would be more than happy to calculate a sample lease payment on this car for you and to let you know what I think of the deal that you were offered. If you were to lease a 2001 Audi A4 2.8L Avant (MSRP: $35,935 & Cap Cost: $34,100) through Audi Financial Services prior to the end of the month for 4 years with 10,000 miles per I come up with a zero down pre-tax monthly lease payment of right around $400 per month. All of the lease figures seem to add up, so the dealership that you are working with is being very straightforward with you. This certainly seems like a fair deal to me, however I would not be surprised if you were able to find another dealership that was willing to sell you this car for a little less (i.e. a lower capitalized cost). The question is, is it worth trouncing around all over the place to find a dealer that will beat this one's price?
You're not overstaying your welcome at all, hsj1906. I am always glad to answer community members' questions. If you are in the market for a car that has high residual values, it is almost impossible to beat leases through Mercedes-Benz Credit Corp. I work in the automotive industry and employees of other manufacturers are often literally stunned when I tell them what MBCC's residuals are like compared to the residual vales of their own vehicles. Now some people believe that Mercedes is artificially inflating their resids, but they adamantly claim that is not the case. Either way, who cares how they are able to provide such high residual values on their cars. Take advantage of them and enjoy the ride .
Michaell, you never mentioned what model year Maxima you are interested in so for now I will assume that you meant the 2001. Please correct me if I am wrong. If you decide to lease a 2001 Nissan Maxima SE (non-Anniversary Edition) through Nissan Motor Acceptance Corp. right now for 3 years with 15,000 miles per the base lease money factor and residual value should be .00180 and 50% respectively. The 12,000 miles per year residual value would be 51% for this term. The same car leased for 4 years with 15,000 miles per would have a lease money factor of .00320 and a residual value of 44%. The 4 year 12,000 miles per resid is 46%.
Thank you for the kind words, Silver Crown. I always appreciate compliments . I believe that all 2002 Volkswagen Passats should have the same lease money factors right now. However, the Passat GLX would have slightly different residual values than the GLS would. You are right, the lease program on the Passat will likely be significantly different when you are in the market for one this spring than it is right now. Still, it is good that you are playing with some numbers now to get a feel for how leases are calculated and so that you can see what price range leases of this car fall into. The last that I heard, the lease money factor for the 2002 Passat was .00255 and the 3 year 15,000 miles per residual value for a 2002 Passat GLS V6 Sedan was 57%.
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.
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.
A $40,000 Mercedes retains a much higher percentage of its value than a $20K Taurus, but it still loses a huge amount more in total dollars especially after you factor in the fact that you can buy a new Taurus for invoice minus the rebates and you would pay around full MSRP for many Mercedes models. 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.
A New Taurus SES Stickers at $21,500 or so with a few options... TMV is about $20,500 or so (There's hardly any markup in these anyways)...
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!
Thanks for your prompt response, Car_Man. I don't know how you keep up with the plethora of queries that you get daily. And I'm about to add to that number. (smile)
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.
SilverCrown, in answer to your new question the residual value for a 2002 Passat GLX Sedan leased for 3 years with 12,000 miles per should currently be 57%.
A Beacon Score is nothing more than another credit bureau's interpretation of an individual's credit.
Hi again wing5nut. I remember speaking with you a few weeks ago. I can confirm that Acura extended the lease program that it had available on the 2002 RL, but I believe that it is actually now scheduled to run through October 31st. I think that taking a look at the Edmunds.com TMV for a new vehicle is a good way to get an idea of what sort of price you have been offered. On this particular car, the 2002 Acura RL w/o Navigation, the MSRP is $43,630 including destination as you mentioned. The Edmunds.com TMV for this car is $40,181. This is right around the price that is used to arrive at the advertised lease payment, the capitalized cost of $39,230 + the $1,000 down payment = $40,230. So the advertised payment looks very reasonable to me. Still, given the fact that this car's dealer invoice price is $38,469, it looks like there may still be some room for negotiation if you comparison shop enough.
Comments
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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