Lease Questions - Ask Here

CarMan@Edmunds · June 2005

Hey urqmvsu. The lease money factor that you were quoted for this car looks a little high. Audi Financial Services' base money factor for a 36 month lease of an '05 A6 4.2L should be only .00160 with a security deposit. Using this factor, an MSRP of $59,870, and a selling price of $56,353, I come up with a 36 month, 15,000 miles per year lease payment of around $841. It definitely is in your best interest not to make any sort of cap cost reduction when leasing.

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CarMan@Edmunds · June 2005

Hi Lee. Audi's current lease program on the 2005.5 A4 is decent, but I have seen it offer much lower money factors on the previous generation A4 in the past. I suspect that Audi will eventually introduce more lease support on this car. The question is how long will it take them to do so. Its current lease program is scheduled to run through July 5th. It is difficult to say what its new July lease program will be like, but I do not expect it to be much different than the current one. You should be able to easily negotiate a lower selling price than the one that they current advertised lease payment is based upon. This is why you were able to get another $1,000 knocked off of the cap cost reduction and to get the dealer that you are working with to pay your remaining lease payment on your current vehicle. You should stop by the following discussion for feedback on how much you should pay for this car right now: KarenS, "Audi A4: Prices Paid & Buying Experience" #, 23 May 2001 10:21 am.

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alc5 · June 2005

Thanks Carman, for the feedback. I will let you know how it goes.

bethc · June 2005

Car_Man, I have a slightly different question from Lee's Message 21709 regarding Audi's nationally advertised program. In D.C. they are offering $329/month for 36 months @10,000 miles/year on a 2005.5 Quattro, 6 sp, premium package, metallic paint, with 2k down-deal to expire July 5. I have until August 10 to turn in my currently leased Jaguar. Do I act on this now and get them to pay my last payment and reduce the cap cost as they did with Lee or just wait a month since there seems to be alot of inventory on the lots and they will be wanting to get rid of these 2005.5s since the 2006s are almost here? I hope you know how much all of us appreciate you-leasing is very complicated and you arm us with so much more information than we would ever have on our own. Many many thanks-Beth

murphy11 · June 2005

Hey Carman. Want to lease this car soon. Please let me know the money Factor and Res. Thanks! I tell everyone about this site! It is awesome.

peteri44 · June 2005

What a great site!!!
I am looking at both cars. My trade in (for sales tax purposes) is an 04 Audi A6 S-Line. It will show as a $42,000 trade. Both the Audi and Phaeton have $79,000 stickers. I'm looking at 3 years, 50,000 miles and a $73,000 purchase price for the Audi and $71,900 for the Phaeton. I'll pay the sales taxes up front. I was quoted $962/mo for the Phaeton with a $5K down. I've been told I shouldn't consider a cap cost reduction. Could you please advise where I should be?

cindi0401 · June 2005

I just recenly leased a vehicle and they only gave me a rebate of $1250 on a Chevy Trailblazer, when the GM rebates seemed to be $2500...did I get hosed?? The MSRP was 34,800 and my 36 mo lease is $315 with 0 down and 12000 miles a year....how does that sound?

sharmabmw · June 2005

Car_Man, what's the difference between paying $500 to buy down the money factor vs. cap cost reduction? Isn't it the same thing or is the $500 a cheaper price than usual cap cost reduction?
thanks.

cajnboy · June 2005

Car_man
I am looking into leasing a Mazda 6s Hatchback. I would like to know what is Residual and Money Factor. BTW, I am in California.
Thanks in advance for your help

hbomber · June 2005

Where do you find these residuals?

I was looking at alg.com I noticied Altima was a 5 star, accord, civic, mazda 3 are all 3 stars.

thanks

janjon · June 2005

I need help. I have a 2002 Jeep Grand Cher Larado with 67k miles. has a warranty to 100k. I owe 13600. I have been considering leasing a vehicle. I know nothing about leases and to add the confusion of being upside down (at least I think I am) I checked on a 2005 Nissan Murano (s series). List price 28810. I trade in my jeep, pay $2000 and get 20k miles per year for $460 36 months. I have no idea if this is considered a good deal or a rip off. I appreciate any help you can give me.
Thanks
Janjon

dwynne · June 2005

leasecompare.com

They are not listed there, but leasecompare is the only place I know of you can go and do your own lease quotes instantly online. If the MSRP of a car is $50k and the 36/36k residual is $25k the the ALG number must be 50% on that car. Compare to another car and note the residual is higher or lower. LC uses 3rd party banks like US Bank that (AFAIK) all use ALG numbers.

Dennis

CarMan@Edmunds · June 2005

Hi David. I was at the official introduction of the 2006 Lexus IS at the New York Auto Show this year and it looks like it is going to be an incredibly nice car. The highest mileage allowance that most banks publish residual values for is 15,000 miles per year. Consumers who need to drive more than this usually have to purchase additional miles on a per-mile basis. It is less expensive to do so at lease signing than it is to wait until lease-end and have to pay an excess mileage penalty. I do not know exactly how much Lexus Financial Services charges per additional mile purchase at lease signing, but your dealer would know. I suspect that your assumption that this car will initially have a completely unsupported lease and that you will have to pay full MSRP to get one of the first units delivered by this dealership will turn out to be absolutely correct.

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CarMan@Edmunds · June 2005

Thanks for taking the time to share feedback about this site with everyone, leaseshopper. I wasn't aware that Edmunds.com officially recommends this site to consumers. I personally always try to steer consumers towards dealing with manufacturers captive finance companies, or leases through independent banks arranged by dealers.

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CarMan@Edmunds · June 2005

Hi sevenfeet0. 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.

I certainly can understand why you would want the convenience that trading in your vehicle instead of selling it on your own provides. However, rather than having the proceeds of your trade used as a capitalized cost reduction for your new lease, it would be in your best interest to have the dealer that you are working with cut you a check or only use the trade-in allowance for items like your vehicle's first payment, security deposit, and acquisition fee. 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 Cadillac SRX would be exactly the same, regardless of whether you had put several thousand dollars down, or had made absolutely no down payment at all.

One thing that I notice about your deal is that you were quoted a lease rate of 5.7% for this car. GMAC's current published lease rate for the 2005 Cadillac SRX is only 4.7%. It looks to me as though the dealer that you are working with may be marking-up GMAC's base rate for this car to add some additional back-end profit to your deal. According to my calculations, if you were to lease a 2005 Cadillac SRX V6 with an MSRP of $52,695 and a selling price of $46,285 through GMAC right now for 3 years with 15,000 miles per using its base lease program, your zero down, pre-tax monthly payment should be around $669. The payment for an otherwise identical 4 year lease should be around $618.

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CarMan@Edmunds · June 2005

Hey tgp1810. I would be more than happy to give you an idea of what these cars' lease programs are currently like. 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. For now, I can tell you that in your area GM is providing $500 lease cash on the 2005 Chevrolet Cobalt and $1,000 lease cash on the 2005 Chevrolet Malibu.

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CarMan@Edmunds · June 2005

Thanks for the additional information, joker382. OK, according to my calculations if you were to lease a 2005 Honda Accord Coupe EXL without navigation with an MSRP of $25,600 and a capitalized cost of $22,166 through American Honda Finance Corp. right now for 36 months with 12,000 miles per year, your pre-tax monthly payment should be around $273. Without a capitalized cost reduction, it is in your best interest not to make one, I estimate that an otherwise identical lease would have a monthly payment of around $363. The selling price that you are being charged for this car looks way too high to me. Given the dealer cash that Honda is currently providing on the '05 Accord and the current market for this car, most consumers who shop around are able to get one for right around dealer invoice right now. If I was in your situation, I would try to renegotiate with this dealer or comparison shop with another dealer or two.

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CarMan@Edmunds · June 2005

Hey msdavis. Here is the latest information on the car that you are interested in. If you were to lease a 2005.5 Volkswagen Jetta 2.5 (not the Value Edition) through VW Credit on or before July 5th for 48 months with 12,000 miles per year, its base lease money factor and residual value should be .00113 and 47%, respectively. The numbers for an otherwise identical 36 month lease should be .00064 and 56%.

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CarMan@Edmunds · June 2005

You're very welcome alc5.

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CarMan@Edmunds · June 2005

You're very welcome, Beth. That is a very good question. It is difficult to say what Audi's July lease program will be like for this car. I personally don't think that you have much to lose by waiting because if there is any drop in its residual values, Audi will probably lower its money factor by at least enough to make up for the difference in payments, if not more. There is no guarantee that this will be the case though. What I would do if I was in your situation is I probably would wait until next month to lease my new A4 and still try to negotiate a lower capitalized cost than the one that the advertised lease payment is based upon. There is a very good chance that there is a little meat left on the bone so to speak with the advertised deal.

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CarMan@Edmunds · June 2005

Thanks for spreading the word, murphy11. In order for me to five you an idea of what this car's lease program is like, I need you to tell me how long you want to lease it for and how many miles per year you need to be able to drive it. I will let you know as soon as you let me know.

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CarMan@Edmunds · June 2005

I am glad that you enjoy this discussion so much, peteri44. You certainly are interested in two very nice cars. You are absolutely right, it is in your best interest not to make any sort of down payment when leasing. Let's calculate a coupe of sample lease payments on these cars for you and see what we come up with. According to my calculations, if you were to lease a 2005 Audi A8L with an MSRP of $79,000 and a selling price of $73,000 through Audi Financial Services right now for 3 years with 15,000 miles per, your zero down, pre-tax monthly payment should be around $944. The payment for an otherwise identical lease of a 2005 Volkswagen Phaeton V8 with an MSRP of $73,000 and a selling price of $71,900 would be around $847. If you need to drive more than 15,000 miles per year, you will have to purchase additional miles on a per-mile basis. It is less expensive to do so at lease signing than it is to wait until lease-end and have to pay an excess mileage penalty. I am not sure exactly how much AFS and VW Credit charge per additional mile on these cars, but your dealer should be able to tell you.

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CarMan@Edmunds · June 2005

Hi cindi0401. General Motors' normal customer cash incentives cannot be used in conjunction with leases GMAC's special lease program. You are actually luck that you received any sort of cash incentive on your truck. In most of the country, GM is not currently providing any cash incentives on leases of the 2005 Chevrolet Trailblazer EXT. The only area that is has lease cash on this truck is in part of its North Central region, Michigan and several nearby states, where it is providing $1,250 lease cash. I would be happy to give you my opinion on your lease, but in order for me to do so it would be a big help if you would provide me with your vehicle's selling price.

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CarMan@Edmunds · June 2005

That is a good question, sharmabmw. A $500 capitalized cost reduction reduces the amount that you are financing, while $500 to buy down the money factor for your vehicle reduces the interest rate that is used to calculate your vehicle's monthly payment. If the reduction in the vehicle's money factor is significant enough, you will receive a much larger return on your $500 investment that you would have been able to by investing it in most other bonds or CDs. Of course, like making a down payment on a lease there is some risk associated with buying down your vehicle's money factor in that it probably is not refunded if your vehicle is totaled. If the return is great enough, it outweighs this risk.

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CarMan@Edmunds · June 2005

Greetings cajnboy. I would be more than happy to give you an idea of what this car's current lease program is like. However, in order for me to do so I need you to tell me 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 · June 2005

Hi Janjon. You never mentioned the selling price of the car that you are interested in leasing. This is an 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 the price of the car that you want to lease you don't know how good a price you are getting it for. The second reason is that one needs the selling price of a vehicle that they want to lease is that it is necessary to calculate its lease payment. I would be more than happy to work up a sample lease payment on the car that you are interested in for you if you let me know what its selling price is.

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cindi0401 · June 2005

The selling price was 30,414 including tax. We are in northeastern Ohio....is this an area where the 2500 would have been available?

rblnr · June 2005

Car man --

Thanks again. I'm looking at a list of 38,895 including destination fee, discounted to 36,269.

NJ tax is 6% on vehicles. As before, 2K down, and am looking at both 36 and 39 mo. leases as it seems like the 39 is a better deal w/little penalty to me.

davidd3 · June 2005

Car_Man,

Many thanks.

David D

murphy11 · June 2005

Thanks! I did the deal yesterday. I have been on here so I know I did good. Will be looking for an 06 Pilot when they come out. So I will still be "checking" in.

briana · June 2005

Hi CarMan. After a few messages to you throughout the past weeks, I finally got an 05.5 Audi A4 3.2 Quattro last night. The msrp was $39,870. I believe I paid $36,509.49 for it, 3 years, 15K miles, I put $1000 total out of pocket and the payment is $530.49/month (I'm in NJ btw). I think I got a good deal as I emailed 3 other dealers and they said they can't match that price.

The question I have is something that my BMW dealer told me as I was turning in my expiring leased car. They were trying to talk me out of the Audi and they said well, you have 48 hours to change your mind after you get the car, that's the law. So when you get it and see you don't like it come back and see us. Sounds like typical salesman speak, but it did bring up a question. Do you really have 48 hours to bring a car back to a dealer? I asked Audi about this and they said no you can't bring it back and I remember reading you say on here once you drive it off the lot it's yours. I just found it odd BMW would tell me you have 48 hours by law. Thanks a lot for the help and thanks for the advice.

scanty · June 2005

Hi Car Man. I scrolled back a few days to see that Honda is offering great lease rates on the '05 S2000. Quick question. Do you know if they are offering the same rates with even lower mileage limits, such as 36/30? Any help would be appreciated.

kyfdx · June 2005

briana... That looks like a great deal on the Audi!!

I'm not a lawyer, but I'd say the BMW salesman is full of it... Once you've paid for it, it is yours as soon as you drive it over the curb..

regards,
kyfdx

cajnboy · June 2005

Sorry about that Car_Man,
I am pretty open about the term as long as it is shorter than the manufacturer warranty of 48 months. I only need about 12K/year as far as miles. I am also wondering if there are incentives provided by Mazda Credit for me to use a third party bank for the lease. Again, thanks in advance for your help!!

getty · June 2005

Hello,

a friend of mine is looking to get out of his lease and is wondering if I want to assume the lease from him, here's the specs:2004 VW Jetta GL, automatic, has 14,500 miles and is a 4 year lease with 12000/yr so around 1000 miles per month, there are 34 months left on the lease and he pays 218 a month. the buyout price is about 8500. It appears to be in great condition. I've also heard that Jetta GL's are very poor in power, I haven't driven it yet, but does anybody agree with that? so is this a good deal? and should I jump on this, or is it just just an OK deal? any help wound be appreciated? Thanks!

briana · June 2005

Thanks kyfdx, I think I did ok, I'm happy. I was just curious about returning the car, as I was getting conflicting stories, thanks a lot.

sevenfeet0 · June 2005

Thanks so much Car_man for your input. I'm having a little trouble getting the same figures you did out of the lease calculators. First, is the GMS price not considered a rebate but instead a negotiated price? And if so, is the residual rate of 52% based on 36month/15K miles based on the MSRP of the car or the GMS rate?.

wkohler · June 2005

I'm getting ready in a couple of months to turn in a 2002 VW New Beetle. I received in the mail a couple of weeks ago an invitation to turn the vehicle in other than through VW Credit. I lost the card and don't remember the contact number. My question is: where could I turn in the vehicle other than VW Credit and eliminate jumping through their hoops to replace tires, etc. The vehicle was leased for 4 years with 15000 miles per year. The vehicle currently has 37000 miles on it. The lease is up in August. The vehicle is in great shape other than a cracked outside rearview mirror housing which I will take care of. I just wasn't sure if there are other options for turning in other than through VW Credit. I do not wish to trade it in, nor do I have the time to try and sell it. Any guidance here would be appreciated.

fish8 · June 2005

"to turn the vehicle in other than through VW Credit" What does this mean?

wkohler · June 2005

basically what I'm trying to say is I leased the vehicle through VW Credit. They sent me information as to what I need to do to turn it in. They provided me with a number to call to have the vehicle inspected, then turn in through the purchasing dealership.

sevenfeet0 · June 2005

Car_man,

One more followup on the conversations I've been having about getting this SRX. After reading your post, I decided to call the dealer where I bought my 2003 Caddy CTS in Atlanta (we live in Nashville now). Our rep there was extremely honest with my wife and I when we bought this car in Oct 2002 and I knew she could give me the lowdown on what was going on. True to form, she did offer some insights which I think will be helpful to others going for the GMS rate.

First, dealerships are appreciating the extra traffic the GMS rate is bringing into the stores, but it is eating into their profit margins like crazy. To compensate, many (including this dealership) are being much less flexible on trade allowances than they would normally. Second, for people leasing, many are quietly raising their posted lease rates about what the normal GMAC rate is. True enough, the real rate is 4.7%. My local dealership quoted a rate of 5.7%. However, the dealership is Atlanta is doing the same thing, but offered me 5.2%. I appreciate the fact that they were honest with me as to the why they are offering to structure the deal like this, but the lesson here is that everyone needs to cross-check what the lease rate is, and then if it is not the normal published rate, use it in negotiation. In the end, I'll probably will be able to get one of the two dealerships down closer to the real rate.

briana · June 2005

In response to buying more miles over 15K on a lease, I just leased an Audi A4 and the dealer told me that I can't buy extra miles over 15K. And if you do go over it is 25 cents per mile. It's possible I was given bad info, but that is what I was told.

tgp1810 · June 2005

Sorry, in my haste to get the message posted I forgot. The leases would be for 3 years and 15000 miles per year.

Thanks again.

luvboxrs · June 2005

Has anyone done a deal like this? I'm in a 03 Toyota LC. My lease in up in 5 months. Toyota financial says if I lease a new Toy/Lexus they'll let me out of my last 5 months lease payments. Problem is...I am way over my allowed mileage. About 15000 miles over. BUT, the LC is worth $7,000 OVER what my total payoff is at this point.

I'm looking to get into a lease on a GS430 with Nav, ML, with zero down and take the LC from me with no penalties, etc. and continue paying lease payments around what I pay now ($729). In other words I want to give someone the LC, drive away with the GS430 and just keep paying monthly payments with no additional money out of my pocket.

Has anyone had success with a deal like this?

rroyce10 · July 2005

.......... It's hard to say what's going on with this deal, because until they "see, feel and touch" the LC, it's only a conversation ..... we need alot more info here ...

Terry.

cyclone4evr · July 2005

Does anyone know if Honda is going to continue the current lease special and cash back to the dealer on the Pilot? It is set to expire on 5 July, same as the domestics...I would assume they would continue it for another month. Would like to lease now but the trade-in isn't ready yet (on vacation with family).

Thanks!

dwynne · July 2005

No they don't (because I asked). Hurry, the promo rate ends the 5th - but they could extend it or change the terms for better or worse.

You should be able to negotiate the price down to invoice or lower. If you have them waive the security deposit (0.0001 higher MF) and roll the acquisition fee into the lease you would be looking at around $340 a month plus tax for a 36/36k lease with tags and first month's payment due at signing.

Dennis

dwynne · July 2005

Yes, you can get another dealer to buy it from you (and the lease bank), sell it to a private party (you will likely have to go THROUGH a dealer to do this), or trade it in toward your next car. Or turn it in to VW.

This is ASSUMING your bug is worth more than the buyout price on the lease.

According to Edmund's TMV a dark blue GLS with manual and 37k on the clock and no options would be worth $8,793 trade and $9,667 private party. You need to run this yourself with the right color, model, and options and see what computes. Just click on the Edmunds.com link above then used car then appraise car. The "trade" number will likely be higher than what a dealer would REALLY give you for the car. Compare this VS the residual on your lease. If the residual is higher than what you are likely to be able to get for the car then just turn it in. If the residual is a good bit lower, then you may be able to make a modest profit by not turning the car in. I don't know if VW credit negotiates the buy out or not (not lease banks no longer do this), but I suppose if Edmunds TMV is a lot lower than residual you could see if they will lower the buyout.

Dennis

dwynne · July 2005

Who says it is worth $7k more than the payoff? A dealer offering that on a trade, a retail value from an online source (KBB, Edmunds, etc), or a trade in value from one of those sources?

It would seem to me that if you truck is worth that much more than payoff, then "sell" it to a dealer or private party (through a dealer) and pocket the profit. Then go shopping for your new car.

The current rates on the GS430 appear to be 0.00225 MF and 52% for a 36 month, 45k mile lease.

The GS w/ML+NAV would have an MSRP of $55,805 and figure a selling price of $54,805, so plugging those numbers into a lease calculator shows $904.89 a month + tax with security deposit (if any), first month's payment, taxes, tags, and lease acquisition fee due at signing. Since you don't want to pay anything up front, you payment would be higher. Even if you DID pay these up front, to drop the payment to $729 on this car would take an additional $6,000 out of pocket to drop the payment to $724.73 per month plus tax.

So it is possible? Sure - if you can sell your truck and then take the $7k in profit and use it as a cap cost reduction you might end up with close to the same payment.

If the Lexus dealer will allow you $7k over current buyout price for your truck and give you $1k off MSRP, then you should be able to "trade" and keep it close to the same.

Keep in mind that if your new GS is stolen or totaled your insurance will pay of the lease bank and you lose your $7k or whatever you put into the front end of the lease.

Dennis

mnjoe · July 2005

On Caddy STS AWD V8 sticker is 61685; employee price is 54488. What is the m.f. and residual on a 36 mos/ 12k lease or a 36 mos./15k lease through GMAC? What payment would that garner (pre-tax) w/o a cap cost reduction?

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