Lease Questions - Ask Here

CarMan@Edmunds · April 2005

Thanks for the additional information, 4x4. Very interesting, Ford used to let consumers search for the lease rates that are available in their area on its Web site, but I do not see this information up there now. Perhaps its dealers got irritated that consumers knew the lease rates of vehicles. I am not sure of the lease lease rate that Ford is providing on 3 year leases of the 2005 Expedition Eddie Bauer in Texas right now, but in most areas I believe that its base lease rate for this truck is around 7% or a little less. Its possible that the buy rate is 7.75% in your area. I am sure that there are a ton of Ford dealers near you, perhaps you can comparison shop with a few just to make sure.

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CarMan@Edmunds · April 2005

Hi slaird. You certainly have the option to return to the dealer that you leased your car from and voice your displeasure with this situation to the salesperson who you dealt with, the sales manager, or even the owner if you would like. You don't have anything to lose by doing so. Having said this, once you signed the lease contract for your vehicle and drove it off the lot it was yours. This is why it is very important to do extensive research and comparison shop prior to finalizing any deal. The dealer that you got your vehicle from is under no obligation to give you the better deal. I can't believe that your attorney told you that you have the right to return your leased vehicle within three days. Clearly they are not all that familiar with the laws on this subject, because that definitely is not the case.

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CarMan@Edmunds · April 2005

Hello urbny. I would be more than happy to give you my opinion on this deal. However, in order for me to do so I really need you to tell me this truck's full MSRP. Not only will this show me how much of a discount you are being given on it, but it also will enable me to calculate a sample lease payment on it.

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CarMan@Edmunds · April 2005

Hi ckiggins. Nissan's lease program on the 2005 Nissan Maxima has not changed since it was introduced on April 4th. The current program is scheduled to run through May 2nd.

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CarMan@Edmunds · April 2005

Nope, jdg345, there's no cooling off period for new vehicles. If there was all sorts of random people could purchase or lease nice convertibles on a Friday, enjoy them over the weekend and return them on Monday no questions asked. That wouldn't be right would it? Congratulations on winning the battle for a roadster. Perhaps I'll let you negotiate for me when I am trying to decide on my next vehicle. Let's take a look at the lease program for the car that you are interested in. If you were to lease a 2005 Nissan 350Z Touring Roadster through Nissan Motor Acceptance Corp. right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00235 and 57%, respectively. The residual value for a 12,000 miles per year lease of this car would be 1% higher. This is NMAC's standard lease program, so I would not be surprised if you were able to lease this car for less through an independent bank. I'm not sure what the lease payment would be like on this car, but if you let me know the MSRP and selling price I can tell you.

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CarMan@Edmunds · April 2005

Jdg345, the following article tells all about the formula that you are looking for: Calculate Your Own Lease Payment.

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CarMan@Edmunds · April 2005

I can give you an idea of what this car's lease program is like, Chigirl. According to the latest information that I have seen, if you were to lease a 2005 Mazda3s Sedan through its captive finance company right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00056 and 47%, respectively.

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CarMan@Edmunds · April 2005

I can work up a few sample lease payments on these cars for you using Nissan's lease program, jdg345. According to my calculations, the 3 year, 12,000 miles per zero down, pre-tax monthly payments for these cars should be as follows:

MSRP - $40,750 / selling price - $38,549 ($1,000 over invoice): $561
MSRP - $41,950 / selling price - $39,590 ($1,000 over invoice): $575
MSRP - $38,750 / selling price - $36,814 ($1,000 over invoice): $538

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CarMan@Edmunds · April 2005

Hello jdg1. Mercedes-Benz Credit Corp.'s lease acquisition fee is not negotiable in that individual dealers do not have any authority to waive it. Having said this, dealers usually do have the authority to mark-up banks' base acquisition fees. In your area, MBC's base lease acquisition fee is $795. As you can see, the dealer that you are working with is marking up this fee by a couple hundred dollars. The good news is that it does not appear as though the dealer that you are working with is marking up the lease money factor that they are using to calculate your lease payment. I would be happy to calculate a sample lease payment on this car for you to check your numbers, but I need to know its full MSRP in order to do so.

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CarMan@Edmunds · April 2005

Greetings jreyn. I am not aware of any site that provides information on the lease programs that manufacturers are providing on vehicles to the general public. Generally speaking, vehicles' residual values decline as the year progresses. This does not necessarily mean that they drop every single month though. It is difficult to say whether Nissan Motor Acceptance Corp.'s residual values for the 2005 Murano will be lower next month at this time. Theoretically, vehicles' selling prices tend to decline as we get later in the model year as well. There is a limit to how low dealers will go with vehicles prices though. If you are already at say $500 over invoice on this truck, there isn't much more room for its price to drop without Nissan providing any cash incentives. It is difficult to say why two dealers are quoting you different money factors for the same vehicle. NMAC's base lease money factor for a 3 year lease of this truck is currently .00080. This is equivalent to an interest rate of around 1.92%. This factor assumes that your credit is in good shape and that you pay a security deposit.

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CarMan@Edmunds · April 2005

You're welcome, hkfooey. You never mentioned the selling price or MSRP of the truck 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 truck'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 BMW X3 that you are interested in for you if you let me know what these numbers are.

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CarMan@Edmunds · April 2005

Hi buster6. I have not seen Toyota Financial Services' lease program for the 2006 Solara yet. I may be able to take a look at it when Toyota publishes its new May lease program next month. Sorry that I could not be of any more help.

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urbny · April 2005

From the Honda website I got a price of $23,010

ae5555 · April 2005

Thanks a lot for your reply Car_Man.

Here are all the numbers that i have been working with:

MSRP: 35100 (+570 destinations)

Agreed selling price: most dealers will agree on 32555 (invoice+dest).

Using MF of .0024 and 59% residual (according to dealer).

My numbers indicate that i should arrive at $493 including 8% TAX (NY) with No downpayment.

Dealers consistently come up with 526 (which is exactly $1000 more then the agreed selling price of the car). I feel that they are just trying make a quick buck by assuming i dont know how lease is calculated (even though i told them i do).

Also, does AFHS charge a "bank fee"?

The best deal i was offered so far (via email) is $900 down (first+dmv+sec. deposit) and then $480 for 36/12K lease.

Thanks a lot again!

kyfdx · April 2005

AHFC acquistion fee for NY is $1095, I think..

That would make up the difference between your calculations and the quotes you are getting..

regards,
kyfdx

caleb · April 2005

I live in NY, and I want to find out the current residual values and money factors for an Acura TSX 6 speed manual with NO navigation. Also, what is the bank fee or security deposit that Honda Finance requires? I am looking for either a 36, 42, or 48 month lease. I had an offer of $350/month plus tax, but I thought that was too high. Do you know if the program will be better or worse next month? Thank you in advance for your help.

Caleb

chigirlintexas · April 2005

Hey CarMan,
So, that puts a payment on this puppy at about $544 a month, if I calculate it right(if I pay 21365)....plus 6.25% tax plus title and acquisition fee. I can actually get the much more expensive Honda Accord EX V6 with leather and Nav for a lower monthly payment than this....am I doing something wrong, or is it just the lower residual and higher money factor doing this deal in? What a shame....I was really looking forward to driving that manual with the nav!
Thanks,
Chigirl

dwynne · April 2005

With the $750 dealer money we are finding dealers really dealing on the LX sedans - prices like $18,000-18,200 for the car, destination, and dealer fees for the LX I4 w/AT which is WAY under invoice. At this price you can lease for about $200 a month by paying the acq fee, security deposit, and first month's payment up front - no other money down.

Dennis

dwynne · April 2005

Some lease banks will do a 39 month lease with the same MF and residual as a 36 month lease - and also the same MILES as the 36 month lease. So if you compare a 36/36k lease to a 39/36k lease the payments will be less, since everything is the same except the depreciation is spread out a little more. If you are not going to be in trouble on miles, you do get to keep the car a little longer and pay less per month.

Other lease banks, allow for more miles (39/39k, for example) and will have a lower residual for this lease as well. This may make a 39 month lease not as much of a discount as in the first example.

I would not want to lease past the manufacturer's warranty limit. The Accord, for example is a 36/36k warranty so limit your lease to those same terms.

You can get an Accord LX I4 w/AT for around $18,200 right now and AHFC is doing a < 1% MF on the 36/36k lease. Pretty hard to beat (around $200 a month).

Dennis

dwynne · April 2005

Well, the value TO THE DEALER is likely a lot close to $13k than the $16k you quote.

But to answer your question, in most states the off lease vehicle can only go to YOU (the lessee) or a car dealer. You can't sell it direct to a 3rd party. In most states you would have to pay sales tax to get the truck in your name, then the person who buys it from you would have to pay again. This usually would wipe out most of your profit from the deal. You CAN get a dealer/broker to handle the sale for you for a fee and avoid the double taxation.

As you mentioned, you can also get a dealer to just buy the truck direct. Your lease probably has a $300-400 turn in fee that you would avoid if you get a dealer to buy the truck - plus any profit you can negotiate on the price. Keep in mind you will be looking to grab your new car at a wholesale price, so the dealer will be inclined to give you wholesale for your used one.

Also keep in mind you can get a buy out price from your lease bank at any time, and if you can get more for the truck at that time (from a dealer) than the buyout you can go ahead and "trade" for something else.

Dennis

dwynne · April 2005

I have been getting price quotes around $18,100-18,200 for the Accord LX I4 w/AT. At this price and paying the acq fee, security deposit, and first month's payment up front I would think getting under $250 a month should be easy. The Accord lease promo is $199 month 36/36k, but the 36/45k will be higher. The up front money in the promo deal can be absorbed in dealer discounts this month.

Where is she located? It matters to try to find a cheap dealer, and because the tax situation changes from state to state.

Dennis

minn55441 · April 2005

Hi Car_man,

Thanks for the information on the Lease. In your calculations, what money factor and residual did you use? I have spoken with 3 dealerships on essentially the same transaction and the lowest pretax payment I have been offered so far is $389 with $1,000 dollars down.

Thanks for your help. I am trying to get this finalized by the end of the month.

dwynne · April 2005

http://www.leaseguide.com/lease08.htm

Depreciation Fee = ( Net Cap Cost  Residual ) ÷ Term
Finance Fee = ( Net Cap Cost + Residual ) × Money Factor
Total Monthly Payment = Depreciation Fee + Finance Fee + Tax (if any)

Dennis

dwynne · April 2005

I went to a dealer this weekend and they didn't want to Finance through Nissan; instead choosing a different bank ... not sure why, maybe a better program?

Could be NMAC has bad numbers on this car, or it could be the dealer makes more money on the other lease?

I would:

1) Negotiate your best price on the car

2) Compare the NMAC lease figures that car_man gives you VS what the dealer offers

3) Compare the NMAC and dealer numbers against the ones available online from leasecompare.com

4) Talk to lease-by-tel and other 3rd party lease brokers

Unless the captive lease company has a subsidized lease, quite often a 3rd party bank has a better deal. A lease agent/broker can just buy the car you want (from your dealer at your price) and lease it to you. They also have contacts and may can get a better price on the same car.

It is possible the dealer can save you money with a 3rd party bank - and this would be a sign of a good dealer. But you might can save even more with a little more effort.

Dennis

dwynne · April 2005

The residual is usually adjusted every quarter - but I don't know that the lease bank could not more often if they wanted to.

The residual goes down because the car year is progressing - the close you get to the next model year the less it will be. When you turn the truck in 3yrs from now it will be nearly 4 model years old. Wait until later in the summer and the residual will be even less to reflect this.

In a sense the selling price does go down - manufacturers will put dealer or consumer cash (or both) on models the close they get to end of year to move the "old" cars out. Dealers that may not deal on a "new" car in September will be more willing to accept a lower price the next August, etc.

The residual is set by the lease bank and can't be changed by the dealer.

The money factor is set by the lease bank, but the dealer can mark it up (to some extent) to make extra profit. Anything extra over the "buy" rate is the dealer's extra profit. car_man does a great service by posting the buy rate here, so you know what to shoot for.

Dennis

dwynne · April 2005

I forgot to add, the reason they "won't lease you the 04" is the numbers will be terrible!

To the lease bank (and everyone else) that is a 1 1/2 year old car - no matter that it has 0 miles on it. The residual would be based on the AVERAGE expected future value of all 04 cars at the date at end of the lease. Since 99% of them will be worth a lot less than this one, then the residual will reflect this. The MF will be a "used car" MF as well.

Dennis

andre1 · April 2005

CarMan,
I'm looking for the 36, 39 and 42 month lease numbers (money factor, residual %) for 12k and 15k miles a year for the following vehicles. I found the numbers for February in searching this board, but I assume they have changed since then. Thanks.

1) BMW M3 Coupe
2) Mercedes C55 sedan

pbflorida · April 2005

I can get GM "Supplier" pricing through my company, and want to lease. I am in Florida. The MSRP of the Envoy Denali XL is $43,465; Supplier price to me is $39,791. I believe there is a $4000 total cash discount currently available, if I finance through GMAC, so that would bring the price down to $35,791. First, is that a good enough deal? Second, what lease rates could I expect, on a 48-month, 12k mile lease plan?

Thanks in advance!

johngt · April 2005

What are the residual rates for an '05 Pilot EX/Leather/Navigation for 36 month/12,000 miles and 36 month/15,000 miles? I think they are .58 and .56 respectively but if anyone can confirm that, I'd be most grateful.
I'm also wondering if there are any other factors in the lease calculation for the 15,000 mile lease or is it strictly handled by the lower residual rate?
Thanks.

carnag · April 2005

Car Man

Do you know how the BMW owners choice program works? I live in IL, and was quoted a deal from a dealer in IN that suggested the owners choice program.

jmcd0 · April 2005

I am moving in a couple of months from MA to NY. I want to lease a car, and was wondering if it makes more sense to start the lease now, while in MA, or if it makes more sense to start when we move to NY? I heard NY has additional fees. Also, how do dealerships handle a person who moves while leasing a car?

Thanks!

arache97 · April 2005

Car_man, the selling price for the car is $34,770.

gwarrenfl · April 2005

Car_Man

Just to recap on my Audi A4 Cabriolet Lease. I did agree to Lease a particular vehicle that was on it's way to the US, and still in shipping. I did put down a $500 deposit without any signed agreement or purchase order. We did come up with the deal that was $500 over invoice and the lease payment includes the $575 bank fee and $395 Dealer fee. So with the options in the car and including all fees, taxes, etc, it comes to $580 Monthly. I know the numbers are correct based on the current Money Factor and Residual.

As of right now the vehicle is still not in the States and when it does arrive, it will still take a few days before it arrives at the dealership. So in a case like this, can I expect to sign a Lease agreement and purchase order prior to it's arrival? I also know that the current Audi program is only scheduled through May 4th, and may or may not be extended. As this is now something out of the ordinary and out of my knowledge base, any advice or suggestions are gratefully appreciated.

Gary

cor · April 2005

Car_Man,

I am currently leasing a 2004 Jeep Grand Cheokee Larado 4WD that I acquired in 6/03. I am looking to get out of the vehicle for a lesser priced model (i.e. VW Passat). I'm wondering what would be the best option to get out of the Jeep as gas prices are KILLING me..... My current payoff is 30.6k I am being advised to lease the Passat as it would be the best way to lessen the "blow" of being upside down, but I'm not sure...... Any help you could provide would be greatly appreciated!!!

Thanks,
-Cor

kappajen · April 2005

Hey carman-
Was wondering if you could give me the MF and residual for a Rav4 FWD/Auto. 36 month/15,000 lease. Thanks for all your help.

kappajen · April 2005

Carman-
Sorry- I live in New York.

dwynne · April 2005

"Owner's Choice" is just another form of a lease - aimed at folks who live in states where tax or registration laws make leasing a poor options.

The Owner's Choice is just a balloon note loan. You pay 24/36/48 payments similar to lease payments. At the end of the term, you can either pay off the "balloon" amount (similar to the lease residual), finance it (like buying the car at the end of the lease), or sell it to the dealer for a pre-determined price (like turning the car in at end of lease).

The difference in the ballon payment deal is that the car is titled in your name, registered in your name, and taxed on the full amount. This can be a more attractive option if you live in a state (like NY) where liability laws make leases cost more. Or in places where lease vehicles require commercial registration.

I think in IL they charge sales tax on the full amount of the lease, then if you buy the car at lease end they charge you tax again. With the balloon note scheme you pay the same amount of tax, but I suppose and the end of the term you may get a tax credit (towards the next car) when you "sell" the old one back to the dealer. Other than that, balloon note payments are usually higher than lease payments.

Dennis

dwynne · April 2005

I am not sure what the best deal would be. If you sign the papers May 4th then your lease starts then and you have signed for a car you have not seen or driven - and your lease term is already running w/o a car. If you wait and the residual drops or the MF goes up then you will be paying more. My feeling would be that convertible seasons is coming (actually, it is here where I live as I have been driving mine most days for quite a while) and the incentives and deals would get harder to come by. BMWFS, for example "adjusted" their dealers for April to make the convertible more expensive to lease than it would be in March.

I guess tell the dealer you want the deal (MF and residual) you agreed to in your deal, and if can't get it then you will not be obligated to the car. Some lease banks (3rd party) can lock you into a rate for a bit, not sure if that is an option through a captive bank or not.

Dennis

ct1211 · April 2005

Hi Car_man I hope you can help me with figuring a lease payment. I am looking at the infiniti G35 Coupe 2005 with premium pkg, nav, and splash guards the MSRP for the car is 38,410. I am looking at getting into this car for about 420 per month with no money down if possible. (Michigan sales tax is 6%) what are the current residuals and money factors for the G35 coupe? Your help is greatly appriciated!!

Oh by the way I am looking at 24 - 39 months time period. The dealer is quoting this car at 420.00 for 39 months with $3000.00 down that seems awful high!

Thanks so much!

ca_man · April 2005

Hello Car_Man,

Could you please provide me with the lease factor and the Residual Value for 36 months/ 12K miles per, for a 2005 BMW 545 for the month of April ?

Any dealer incentives on this car that you might be aware of ?
I am also considering taking European Delivery on this car ....

Thanks very much for your help, as always.

carnag · April 2005

So if I understand correctly, it is only beneficial if I plan to buy the car at lease end? Also, when the lease is over do you walk away and owe nothing if you choose not to keep the car?

Have you heard anything about the '06 330 money factors and residuals?

ewegleitner · April 2005

Car_Man,

I knew I forgot something...anyway here's what the dealer offered me today:

2005 Saab Aero wagon with metallic paint, auto trans, vented seats, executive pkg.

$45,335 MSRP
$40,140 cap cost
.00084 money factor
$2500 t.o.p
36mo/10K miles per year = $559/month
48mo/10K miles per year = $529/month

What do you think?
I am acutally trying to locate one w/o the vented seats and metallic paint that will save me around $1500.

Thanks.

dwynne · April 2005

It depends on the state, some states charge more for "commercial" registration and tags (which they collect on lease cars), some states have property tax issues, etc.

From what I have seen that is the main difference: OC is just a balloon note VS the lease. In IL the taxes would be the same, don't know about about the other items. Other than sales tax on the full amount, I though IL was an "OK" state to lease.

2005 330i 36/36k 0.00225 54%

2005 330i 36/36k 0.00265 60%

Two real killers: the current $4,000 dealer incentive on the 2005 330i sedans VS paying close to full MSRP for a 2006, all the problems you are likely to have if you get the 2006 (just as the folks who got the new 5 in the first year).

If I had to choose, I would get the 2005. By the time the 3yr lease is up all the bugs will be out of the new 3 - or they will not and you can avoid it. Perhaps in 3 years, you will be ready for something else anyway.

Dennis

carnag · April 2005

I'm seriously considering an '05 530, there are some decent deals out there. I currently have a 325iC and kind of wanted to move up, but the '06 3 series looks pretty sweet. I agree about 1st year problems, I wouldn't buy, but would lease until the bugs were out. I'm not sure what I'll do, 05 530 vs 06 330....hhmmmmmm what to do. I just don't know if I can get a lease around $550-600/mo on a 330 later in the year. Or should I just get an 05 330? Any input? Thanks Dennis

murph1031 · April 2005

Car man,

I'm looking to lease an 05 4runner with a msrp of $32,700. Can you give me the money factor and residual? I am in NJ. Also, can you tell me if these factors will be going down (therefore hurting my lease numbers) on May 1st?
Are there any rebates for this truck now? Should I address dealer holdback and if so, how much is it on this truck?

Thanks so much!!!

tresmith · April 2005

Hello All,

I am looking to lease a new car and I want to pay the whole lease up front (pay cash). Is paying off a leasing like paying off a loan? For example, it's common knowledge that if you buy a car cash without financing, you don't pay any interest. Does leasing work the same way? What would the money factor be if I was prepared to payoff the lease all at once?

Thanks.

pluvious · April 2005

Carman,

I'm getting this car with an MSRP of $48,795 at:

Sells Price: $40,016.00
$5,000 down
36 months
15K mile per year
$499 per month
Residual value at end of lease: $21,469

Is this a good deal?

Please advise asap.

Thanks in advance.
Pluvious

dpj · April 2005

Can you tell me what the 36 month Residual is for the Lexus GS300 RWD in California? You gave me 49% for 48 months. Also, is the lease rate of .00155 for the LS430 good on 36 and 48 month leases? Warranty is 48 months so wondering if a 48 month lease is a better way to go?

dwynne · April 2005

I know a guy who had his new 5 strand him a number of times, he got a loaner while the worked on it. Got his back "fixed" until the next time it failed and left him stuck again. BMW finally admitted defeat and purchased the car back. I think he got a later production 5 to replace it (but I would have gone to the Lexus dealer or something by that point).

The new 3 and 5 drive/ride quality will be better than the older ones, but I am thinking the reliability is heading into the toilet - for sure for the first year or two. My 01 330i was about 0 problems up until I sold it - and the new owner never called me back complaining of anything later. All of the E46 bugs should be out by now and should be a safe bet - for sure with $4k+ dealer money

Even if you lease, you want a car that starts and runs all the time. I just don't know if you can count on that with a new design BMW (sad to say). Sure they would give you a loaner car while they try to figure out what is wrong, but who wants the hassle?

It is your money and time, so don't let me or someone else sway you from what you REALLY want. Hey, I am not paying ANY of your lease payments so don't let ME pick your next car

I have said before: for ME prior to paying $50k and up for a new 5 with a 6 banger w/auto I would go look at the new RL (LOADED with sat and NAV for $50k or less), the new Infiniti M, or the new GS Lexus. All are new cars, but I would bet MY MONEY that all will be far less trouble in the lease term than the new 5 and for sure the new 3. As much of a driver's car? Sad to say none of them are, though the new M sports model and GS are tons better than the older ones. The RL less so, but as a whole deal is a slick AWD package. But that is just me.....

Dennis

dwynne · April 2005

Some lease banks and captive lease banks give no discount for this. If you do this, be sure to pick one that gives a nice discount for the pre-pay lease - otherwise you are just wasting your money (unless you need the lump sum tax right off).

You STILL have to pay interest - the MF on a pre-pay lease will not be 0.0000 .

Say you decide to get a $50k car with a 50% residual after 3/36k. You hand the lease bank $25k + TTL and they hand you to the keys for a $50k car they just purchased for you. They are out $25k and will be until 3 years from now. So you have to pay interest on the loan of the $25k for 3 years - so that will cost you something. Now they will waive security deposits and lower the MF quite a bit if you do this, but it will not be "free".

BMWFS is one captive lease bank I know will do this for a "discount", but I am sure there are others.

Dennis

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