Lease Questions - Ask Here

rarrieta · May 2005

Hello:

I received a few quotes from dealers on an Audi A4 Avant with premium, sport, audio and winter packages as well as walnut trim and wipers on headlights. The price he was willing to give me ws $36,750 which transalets into a 3-year, 10k mile lease of $632/mo. This seems a bit high. He claims the interest rate was 4.65% (money factor of .0019). Any thoughts? Thanks.

dbrad · May 2005

Car_Man,

Thanks for your reply. I would like to lease a Volvo S60 with premium and cold package. I would like to lease it for 3 years/15,000 miles per year.

Thanks for your help.

Doug

ikramerica · May 2005

that does seem high. what is the residual on that? would have to be something like $17,000 unless my math is way off, and that's pretty low for a 3year 10k lease on an A4.

CarMan@Edmunds · May 2005

OK, captchaos145. I've got the rest of the Acura TL info for you now. American Honda Finance Corp.'s current 4 year, 12,000 miles per base lease money factor and residual value for the 2005 TL with navigation should be .00220 and 50%, respectively. Using these numbers, an MSRP of $34,650 (does this already include destination?) and a selling price of $32,000, I estimate that this car should have a zero down, pre-tax monthly payment of around $415.

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CarMan@Edmunds · May 2005

Thanks for the reminder, steevo. If you live in a state that only charges sales tax on the difference in price between your new vehicle and what you receive on a trade, this probably would extend to leases. Having said this, I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your Nissan would be exactly the same, regardless of whether you had put thousands of dollars down, or had made absolutely no down payment at all. If you really want to trade in your current vehicle, have the dealer that you are getting your Nissan rom cut you a check for it rather than using the proceeds as a down payment on your lease

If you were to lease a 2005 Nissan Altima SE through Nissan Motor Acceptance Corp. right now for 2 years with 15,000 miles per, its base lease money factor and residual value should be .00131 and 68%, respectively. The money factor would be the same for the Altima SE-R, but the residual value would drop to 65%. If you were to lease a 2005 Nissan Maxima SE through NMAC right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00045 and 52%. When negotiating your lease on either of these cars, keep in mind that Nissan is providing $750 lease cash on the '05 Altima and $500 on the '05 Maxima this month. This money will help you to negotiate an attractive capitalized cost.

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CarMan@Edmunds · May 2005

Let's work up a lease payment on this vehicle for your friend and see what we come up with, qbrozen. According to my calculations, if they were to lease a 2005 Chrysler Pacifica Touring FWD (with the 26T package) with an MSRP of $30,940 and a selling price of $25,531 through Chrysler Financial right now for 36 months with 15,000 miles per year, its zero down, pre-tax monthly payment should be around $344. I haven't seen this car's 48 month lease program so I can't help you out there.

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CarMan@Edmunds · May 2005

Congratulations on your new car, madhu2! Thanks for taking the time to stop back and let us all know how everything turned out.

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CarMan@Edmunds · May 2005

Hi John. We can work up sample lease payments on any car that you are interested in right now. All I need you to supply me with is its MSRP, selling price, how long you want to lease it for, and how many miles per year you need to be able to drive it. Of the three cars that you mentioned, I suspect that the BMW 325i is the least expensive to lease right now. Other nice cars in your price range include the Saab 9-5, Mercedes-Benz C-Class (particularly the C230 Sport Sedan), and Volvo S60.

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ddelise · May 2005

Car_Man -

I see you are posting now - so maybe I can catch you.

My mom is looking at a 2005 Jeep Cherokee Laredo 4x4.

What is the 36 or 39 month, 12k miles/year (10k too if they have it) residual and money factor for this car?

Also, what is the aquisition fee and rebates/incentives?

Location is in NJ.

Thanks for your time and help!

Damon

CarMan@Edmunds · May 2005

No problem, eva3b. I am not personally all that familiar with how much the Honda Pilot is selling for in your area right now, but you should be able to get a good idea of what you should expect to pay for this truck by visiting the following discussion: "Honda Pilot: Prices Paid & Buying Experience". There you will find other community members who are either in the market for or who have recently purchased similar trucks. American Honda Finance Corp.'s current base lease money factor and residual value for a 3 year, 12,000 miles per lease of a 2005 Pilot EX-L should be .00137 and 59%, respectively. Yes, AHFC's huge acquisition fee applies to both Acura and Honda models leased in New York. Unfortunately, this fee is not negotiable.

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CarMan@Edmunds · May 2005

Hey captchaos145. I'm not sure if I mentioned this to you earlier, but I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your Acura TL would be exactly the same, regardless of whether you had put $1,000 down, or had made absolutely no down payment at all.

Vehicles' destination charges are essentially part of their price, both MSRP and invoice, and can not be waived.

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CarMan@Edmunds · May 2005

Hi Chris. Vehicles' residual values are always based upon a percentage of their full MSRPs, including the MSRPs of any options that can be residualized. You can see just how lease payments are calculated on vehicles by reading the following informative article that is available here at Edmunds.com: Calculate Your Own Lease Payment.

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CarMan@Edmunds · May 2005

Hi leroybrown71. Using the numbers that you provided in your previous post, an MSRP of $55,790, a selling price of $49,999, and a lease rate of 2.5%, I estimate that this 2005 Lincoln Navigator 2WD should have a 39 month, 12,000 miles per year zero down, pre-tax monthly payment of around $731. I'm not sure where the dealer that you are working with is coming up with this $649 per month payment, but if you can lease this truck for that payment go for it.

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CarMan@Edmunds · May 2005

If you're interested in leasing, woof167, you've definitely come to the right place. Nissan's most attractive program on the 2005 Pathfinder is currently on 39 month leases. This is definitely the way to go when leasing this truck. I would be more than happy to give you an idea of what sort of lease payment you can expect if you describe the truck that you want a little more , i.e. it is a Pathfinder XE 4WD, a Pathfinder SE 2WD, etc..., tell me how long you want to lease it for, what its full MSRP is, and what its selling price is.

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CarMan@Edmunds · May 2005

Hi ny2jeter. I see that you are a Yankee fan

. I think, at least hope, that they will eventually turn things around. This is what happens when a team continuously ignores their farm system, trading away good prospects for old players year after year. Oh well, back to leasing. Technically dealers do not lease vehicles to consumers, banks do. Most banks do indeed offer 24 month leases. The reason why you see 36 and 48 month leases advertised much more frequently than 24 month leases is that the payments for longer leases is usually lower, and as a result more attractive in ads. The reason why longer leases usually have lower monthly payments is that new vehicles experience their highest rate of depreciation during the first year of ownership. The longer one leases for, the larger the number of payments they have to spread out this huge initial depreciation hit out over. Banks' lease programs vary from vehicle to vehicle, so it is impossible to generalize about how much more expensive 2 year leases are than 3 year leases, but if you let me know what car or truck you are considering leasing, its MSRP, and selling price I can tell you the exact difference.

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CarMan@Edmunds · May 2005

Greetings sickeds. Let's work up a sample lease payment on the car that you are interested in and see what we come up with. According to my calculations, if you were to lease a 2005 Saab 9-3 Linear Convertible with an MSRP of $39,670 and a selling price of $32,319 through Saab Financial Services Corp. right now for 2 years with 15,000 miles per, your zero down, pre-tax monthly payment should be around $345. The payments for otherwise identical 3 and 4 year leases of this car should be $370 and $376, respectively. Surprisingly, these payments are higher than this car's 2 year payment. Saab seems to be providing the most support on two leases of this car right now.

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CarMan@Edmunds · May 2005

Hi knt. Toyota is running a very aggressive lease program on the 2005 Tundra right now. This is an excellent time to lease this truck. The one thing that I notice about the deal that you mentioned in your post is that you never mentioned the selling price or MSRP of the car that you are interested in leasing. These are important number for you as a consumer to know for two reasons. First, the selling prices of leased vehicles can be negotiated, just as if you were paying cash for them. Without knowing this car's selling price in relation to its MSRP you don't know how much of a discount you are getting on it. The second reason is that one needs the selling price and MSRP, including the destination charge, of a vehicle to calculate its lease payment. Definitely find out these numbers before you lease a new Tundra. You may find that you are able to negotiate a better price than the one that this advertised lease is based upon.

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CarMan@Edmunds · May 2005

Hi ct1211. Here is the informaiton that you are looking for. Interestingly enough, Infiniti is actually providing a little lease support on the 2005 G35 Coupe this month for the first time ever. If you were to lease a 2005 G35 Coupe through Infiniti Financial Services right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00199 and 59%, respectively.

I noticed in your post that you mentioned putting $3,000 down on your lease of this car. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your G35 Coupe would be exactly the same, regardless of whether you had put $3,000 down, or had made absolutely no down payment at all.

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CarMan@Edmunds · May 2005

Thanks for the reminder, Chigirl. I am glad that you enjoy this discussion so much. OK, if you were to lease a 2005 Infiniti FX35 2WD through IFS right now for 42 months with 15,000 miles per year, its base lease money factor and residual value should be .00179 and 57%, respectively. The numbers for an otherwise identical 48 month lease of this vehicle should be .00202 and 50%. Using these numbers, an MSRP of $38,440, and a selling price of $35,482, I estimate that this vehicle should have zero down, pre-tax monthly payments of around $426 for 42 months and $450 for 48 months.

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CarMan@Edmunds · May 2005

Delrick, GMAC's current lease rate and residual value for a 48 month, 12,000 miles per year lease of a 2005 GMC Envoy are 4.5% and 53%, respectively. I am sorry if I led you to believe otherwise.

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CarMan@Edmunds · May 2005

Hi swampwiz. That's not a stupid question at all. In fact it is a very important one to know the answer to. The selling prices of leased vehicles are always negotiable, just as if you were paying cash for them. You shouldn't ever have to pay full MSRP for a leased vheicle unless it is something that is in very short supply or high demand.

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shayna · May 2005

Car_Man, can you please provide the May MF and residuals for the XC90 for 36 mos., 12K miles/year. Also, are there any incentives on this car, such as the free versatility package, etc.? Thanks

CarMan@Edmunds · May 2005

Congratulations on your new car, Gary W. Thanks for taking the time to stop back and let us all know how everything turned out. Enjoy cruising around in it with the top down this summer!

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CarMan@Edmunds · May 2005

Hi Ryan. Since you are new to the world of leasing, you definitely should check out the following informative articles that are available here at Edmunds.com prior to visiting any dealers: 10 Steps to Leasing a New Car and Calculate Your Own Lease Payment. Once you have perused these articles, stop back and let me know the full MSRP of this car. With this number, I can work up a sample lease payment on it using VW Credit;s actual lease program. You can then compare the number that I came up with to the payment that you have been quoted.

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CarMan@Edmunds · May 2005

Hey Dean. Other than better availability of the car that you are interested in, there is no advantage to leasing a vehicle outside your home state because you still have to pay the sales tax rate of the state where your car will be registered when you lease it.

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CarMan@Edmunds · May 2005

Yep, Dean, Toyota has twelve regions. I'm not sure what happens if a consumer from one region tries to lease a vehicle in another. It is possible that you would be able to use the lease program that is available in the state that you get your vehicle in. It really doesn't matter much with the Avalon anyhow because Toyota is not currently providing any sort of lease support on it. This means that its lease program will be the same in every region that you go to lease it in except for the Southeast and Gulf States regions.

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CarMan@Edmunds · May 2005

I am glad that you enjoy this forum so much, Raj. Most manufacturers' special financing rates are different than the interest rates that they provide on leased vehicles. I would be more than happy to try to give you an idea of what this car's lease program is like right now, however in order for me to do so I need you to tell me what state you are in, how long you want to lease it for, and how many miles per year you need to be able to drive it.

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CarMan@Edmunds · May 2005

Hello ca_man. I would be more than happy to give you an idea of what these cars' lease programs are like. However, in order for me to do so I need you to tell me exactly which models you are considering, i.e. a 2005 A4 1.8T Sedan 2WD, a 2005 A6 4.2L, etc... Yes, Audi has extended the $1,500 owner loyalty cash that it is providing on the 2005 A6 through the end of the month. I am not aware of any other cash incentives on either of these cars at this time.

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CarMan@Edmunds · May 2005

You're right, b55140. In most regions Toyota is providing some amazing lease money factors on the 2005 Tundra this month. Toyota Financial Services' 3 year, 15,000 miles per residual value for a 2005 Tundra DCab 4x4 SR5 is currently 63%.

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CarMan@Edmunds · May 2005

Welcome ttangbee. As one might expect with such a new model, BMW is not currently providing a lot of lease support on this car. BMW Financial Services' current 36 month, 10,000 miles per year base lease money factor and residual value for the 2006 325i are .00255 and 64%, respectively. At least its residual value is decent. When shopping for your new 3-Series, keep in mind that the selling prices of leased vehicles are negotiable. I am not sure how flexible dealers are with '06 3-Series prices yet, but you may be able to find out by visiting the following discussion: KarenS, "BMW 3-Series: Prices Paid & Buying Experience" #, 5 Sep 2002 8:08 am.

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CarMan@Edmunds · May 2005

Captchaos145, American Honda finance Corp.'s current buy rate for 3 year leases of the 2005 TL is .00240.

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CarMan@Edmunds · May 2005

Hi tbenson. I suspect that you will be better off waiting until you are much closer to the scheduled end of your lease to purchase your Subaru. It is usually fairly expensive to purchase leased vehicles well before their scheduled end dates. In order to do so, you need to purchase the vehicle that you are currently leasing from the bank that you are leasing it through. It often turns out that it costs more to do so than your vehicle is worth on the open market. Furthermore, many banks expect consumers who end their leases early to still make all, or at least the depreciation portion of their remaining lease payments. As you can see, this can get very expensive.

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CarMan@Edmunds · May 2005

You're welcome, 2lo. The first problem that I have with this deal is the large amount of money that is due at lease signing. At lease signing, consumers typically have to pay their vehicle's first month's payment, a security deposit equivalent to that payment rounded up to the nearest $25 or $50 increment, their bank's lease acquisition fee (which in this case should be $595 unless you live in New York), and any required state taxes or fees. It sounds to me as though in addition to these items you are making a down payment aka capitalized cost reduction on this car. I always advise consumers against making any sort of down payment when leasing. I do so for two main reasons. The first is if your vehicle is totaled in an accident or stolen during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. The second main reason is that down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So your lease-end purchase option price for your Acura TSX would be exactly the same, regardless of whether you had put several thousand dollars down, or had made absolutely no down payment at all.

I would be more than happy to work up a sample lease payment on this car for you using Acura's base lease program for it and based upon no down payment if you let me know its full MSRP and selling price.

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CarMan@Edmunds · May 2005

Hi ct1211. According to the latest information that I have seen, if you were to lease a 2005 Infiniti G35 Coupe through Infiniti Financial Services right now for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00199 and 59%, respectively.

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kevinjs1 · May 2005

looking to close a deal on an Audi a4 1.8 cabrio, with Premium pkg.,and 17"wheels. i was offered $4200. down(inception,deal prep,1st mo.payment), and a payment of $449. for 24 months, which included taxes. I appently missed the earlier special on the A4 which they say expired on May 4. Expect to close the deal this week Is this a good deal, or can you offer me some advice? Thanks, Kevin

CarMan@Edmunds · May 2005

Here is the information that you are looking for, John. If you were to lease a 2005 GMC Yukon XL Denali with the w/QS8 package through General Motors Acceptance Corp. right now for for 2 years with 15,000 miles per, its base lease rate and residual value should be 5.5% and 62%, respectively. The numbers for an otherwise identical 3 year lease of this truck should be 5.5% and 53%. As you can see, GMAC publishes lease rates instead of money factors for the vehicles that it leases. you can convert its published lease rates into approximate money factor equivalents by dividing them by 2400. Most factory installed options can be residualized on leases through GMAC, but I am not sure if dealer installed options can be, you need to check with your dealer to find out for certain.

The numbers for an otherwise identical lease of a 2005 Cadillac Escalade with the QS7 package should be 3.6% and 58% for 2 years and 3.6% and 49% for 3 years.

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CarMan@Edmunds · May 2005

Hi hgiles. Mercedes-Benz is not currently providing any sort of lease support on the 2005 SLK. As a result, if you were to lease one through Mercedes-Benz Credit, you would have to use its standard lease money factor. Its standard factor varies by credit tier, but I believe that its current base factor for Tier 1 customers is something like .00330. I haven't seen this car's residual values lately. I will make a call or two and see what I can find out for you. Check back with me in a day or two and I will let you know what I have been able to find out.

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CarMan@Edmunds · May 2005

I would be more than happy to give you an idea of what the lease programs are currently like for these trucks, farmdog. However, in order for me to do so I need you to tell me how long you want to lease them for and how many miles per year you need to be able to drive them.

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CarMan@Edmunds · May 2005

Congratulations on your new car, steevo. Thanks for taking the time to stop back and let us all know how everything turned out.

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farmdog · May 2005

Sorry! I am looking at 36 months, 12,000 miles per year.

ckiggins · May 2005

Car_Man: Just to see if I'm doing my math right here: if I were to lease an '05 Maxima with an MSRP of $31730 and a selling price of $28250 for 36mo/15k using the MF and residual you listed, I'm coming up with a $0 down pretax payment of around $347.00. Does this sound correct?

munchmouth · May 2005

Car_man, great forum! Tried to lease a G35 coupe, but unable to get a payment I can live with. The purchase price is no problem since I have access to many affiliated programs. The MF worked out to almost 7%. What MF's and RV's do you show for 24, 36 and 39 12k mile leases?

Also, if this doesn't work out for me who is offering the best lease deal on a sport or luxury car under $40,000 MSRP? I'm not picky, just need power and a great deal. That 2 yr Saab deal mentioned above looks too good to be true.
Thanks!

chigirlintexas · May 2005

Thanks for the info, Car-man. I'm really trying to stay under the magic $400 per month figure, and I knew it would be tough with a vehicle like the FX. I am willing to look at other vehicles, like the the Lexus IS300 w/Nav, the Honda Accord EX (w/Nav if possible), Acura TSX w/Nav....etc yeah, I love Nav)..Would love to get manual trans on these where possible (Hondas are impossible to find), 36 mos/15k miles, leather/sunroofs. Most of their MSRP's run at or just under 30K, but the dealers are reportedly pushing these due to lagging sales or redesigned models coming out. What's your opinion on the ability to get one of these or something like these for my magic $400 month based on money factors, residuals and getting a really good deal (don't forget I have to contend with stupid Texas sales tax)? As much as the Lexus is not my favorite, would it be my best chance to get a good deal right now? I hear they are discounting heavily, and of course, I might be able to get my beloved manual tranny with a nav system....plus, it is a car that will hold up if I have to go 48 months to get the payment a bit lower (although from Car_man's example, it's not always lower to go longer!)

Thanks guys. As always, I appreciate the help and info. It's interesting to read this forum.
Happy Mother's Day to all the moms reading today....
Chigirl

ewegleitner · May 2005

Does anybody know what the May money factors and residuals are for Saab 9-5 aero 36/48 months and 12k miles/year?

Thanks!

hgiles · May 2005

Thanks for your help, Car_man.

wsa10 · May 2005

Car_man,

I just stumbled upon your forum, and wanted to tell you it is great. Now to the facts: I've narrowed my search for a new car down to a loaded 2006 BMW 330i, a loaded 2005.5 Audi S4, and a 2005 MB CLK500. I've gotten lease quotes on the BMW - MSRP $44,165, $1850 down - no cap cost reduction, $758 per month (assumes 15K per year, and 36mos). And for the S4: Selling price is $52,530 including gas guzzler tax. Same miles per year, and number of months, with $1790 down - no cap cost reduction, and a $808 monthly payment. I haven't gotten a quote yet on the MB, and wasn't sure what to expect.

I have 2 questions: First, are the lease payments quoted in line with your expectations?

Second, do you have an opinion on some of the balloon payment loans that Audi (Premier Purchase), BMW (BMW Select), and MB (MB Retail Balloon)?

I have leased cars for years as I cannot see myself keeping a car more than 3 years, thus my reluctance to put $10,000+ down on a car and then attempt to trade it in in 3 years.

Any help would be appreciated.

Thanks,

BRI

mvs1 · May 2005

Just some points between the two balloon vs. lease, since I looked into these as well recently. Most often the lease rate (MF or APR when converted) are traditionally lower then a balloon's rate over the same term, although there are exceptions, Mazda's current programs come to mind.

The other is that with balloons you pay sales tax on the entire selling amount, as opposed to leasing where you pay tax only on the portion you use. Balloons often times do not have acq fees(which often times offset the loss of paying the sales tax for the full amount), both have disposal fees. You have to weigh the particular car and both programs, since in fact sales tax on a higher dollar car would result in one not considering the balloon option. After running the numbers you will see VW/Audi's premier/balloons are not attractive.

scoob · May 2005

Hi,

I want to lease a BMW 3-series convertible. I want lower monthly payments, so thus I will have to put a lot down.

What I don't understand is the following: do I get the down payment back after the lease is complete?

Thanks!

Henry

scoob · May 2005

Hi all,

Can someone help me understand about down payments in a lease? Once the lease term is up, is the down payment returned to the leaser?

Thanks in advance!

sickeds · May 2005

Thanks Car Man, appreciate your time and help. I may also consider a 12K mi/yr lease as my office is only a 3 mile round trip from home, and I've been averaging only 10-11K mi/yr the last few years. What figures are you running so I can plug them into the lease calculator?

With days like today, sunny & 80, after a long northern Chicago winter this car is looking more and more tempting! I'll let you know if I pull the trigger.

Thanks again.

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