I think that I understand the basics of a auto lease, but one question I am unclear on is how the residual value is calculated. Is that figure, say for example, 50%, of the MSRP (Say $30k =$15k), or is it of the pretax sales price (Say $24k=$12k)?
My daughter crashed my leased 1999 Navigator by running over several fixed objects (including an Audi A6) and managed to seriously damage the frame (she was OK, though the airbags never deployed).
The body shop is going to replace the frame, which causes me grave concerns about the reliability/stability of the truck. In addition, my lease states that I have to pay for the loss of market value (even though it will be repaired, it will not have the same value as one that was never wrecked).
Any ideas on how bad the "diminished value" might be? Any thoughts on how I can cover my tail and not take a huge financial hit at the end of the lease?
The residual value is calculated against MSRP not sales price. Go to the "Advice" section of Edmunds for a complete explanation of leasing terms and calculations. It's really much simpler than I thought it was.
Could I trouble you to provide me w/ some info on the 2002 Dodge Grand Caravan ES AWD?
I am specifically interested in a 36/12K lease and was wondering if their were any factory incentives available for a current Chrysler Finance customer in my area (NY) as the lease on my Jeep ends shortly.
Also, is it possible to residualize the cost of the new DVD player option into the purchase price?
I am in a 36 month lease on a '99 Honda Civic EX sedan that is up mid-February. I am trying to figure out if I'm upside down or not. I'm told that most people are, so I'm suspicious that I seem to be coming out ahead. I called Honda Finance for a payoff quote--it's $11,358. How do I find out how much the vehicle is worth? Residual value? Blue book? The car will have about 30,000 miles on it at lease end and is in good condition. I definitely do not want to keep it, but am wondering if I should try to trade it in (if possible), just turn it in to Honda at lease end, or buy it and sell it myself.
Could you give me the Money Factor and Residuals for this vehicle (AWD version) @ 36 and 48 mos and12,000 per year. Also, I'm very interested in this multiple security deposit scenario. Does Ford Motor allow this? And if they do what is the usual effect on the MF?
went to dealer today told me mbusa has lease program on this vehicle but must be sold and delivered by end of month. Is this true???? the vehicle is a silver ml320 with m1 m5 m7 packages and bose system. 39 mth lease with 12000m miles per yr 575.43 per mth with almost 2500 upfront that inc taxes plates and first month (bank fee in pyt)
tgi888, It is a jet black 3.0i with premium and climate package, plus upgraded premium stereo system, xenon headlight, in dash cd player and steptronic transmission. Thanks to Car_man who mentioned about the lease incentive about the 01' model and it happened my wife loves its safety history, otherwise I would not even consider X5. And it was so hard to find one with the least packages (every one in the lots was loaded and priced closed to $50k), we were about to pay the dealer to transport one from other state. Then we found this loaded one for the same price we would have paid for that out-of-state vehicle. We decided to jump on this black beauty. Now, I am just waiting for Car_man to show me how to finish the deal from here.
consider the new one only have .0022 money factor, .0037 is quite high. and 10k per year is kind of low, too. maybe mdx4fun can pop in, I believe he just lease one last week.
...... Who is the Lease co...? It doesn't sound like Fomoco to me.
But anyway, if the frame was damaged on a Navigator ... I'm "amazed" the vehicle wasn't just totaled ... let alone replaced ..??? I think your beef is with your Insurance co. not the Lease co.--- 18 years in the auto business, and this is a 1st for me ..
Terry - You are correct - Fomoco is not the lease holder - a local bank holds the lease.
I talked to my ins. agent yesterday and because of the pending "dimished value" class action lawsuit against State Farm in Indiana, he could not give me any advice other than to talk to the claim adjuster about my concern.
That is one of the reasons I have posted messages on a couple of boards here on Edmunds...the more information that I have on hand when I talk to the adjuster, the better. Thanks for your insight!
Mannymoe, the salesperson who you are dealing with gave you some sound advise. I have had some extremely positive lease-end experiences with manufacturers' captive finance companies. I turned in a car not that long ago that someone did a heck of a number on with I am guessing a shopping cart. There were huge gouges (not just scratches) all the way down the side of the car not to mention fairly bald tires and the captive finance company that I dealt with didn't charge me a dime. On the other hand I have heard numerous stories from consumers who have leased through certain outside lending institutions and have had terrible lease-end experiences. Remember that it is in its parent company's best interest for a captive bank to keep you as a happy and hopefully loyal customer, thus increasing the chances of you buying their product again. If there isn't much of a difference in the payment, Lexus Financial Services is definitely the way to go.
I didn't forget about you, Bryan. I just had to do a little more research to find out an answer to your question. For some reason, Mazda does not seem to have issued a lease program for either the 2001 or 2002 Tribute this month. Generally speaking, manufacturers publish standard money factors and residual values for vehicles that don't have any sort of lease support available on them, but no one that I have talked to has even seen the lease program for a Tribute this month. I have a feeling that most people who are leasing this truck right now are doing so through banks other than Mazda American Credit.
As far as the Subaru Outback goes, here is the information that you are looking for. If you were to lease a base 2002 Subaru Outback Sedan through Subaru's captive finance company for 3 years with 15,000 miles per right now the money factor and residual value should be .00255 and 56%. The 4 year numbers would be .00265 and 50%, respectively.
Lotus18, it is much more difficult to keep tabs on the specific details of manufacturers' certified pre-owned lease programs each month. This is for several reasons. One is that not all dealerships take advantage of certified pre-owned programs. Secondly, there are many more variables with used vehicle lease programs than there are with new vehicle lease programs. With used vehicles' the residual values for a particular brand can take up pages and pages, while the regular residual values for a manufacturers' new vehicles usually fit on one or two pages. So I really don't know what this truck's exact lease money factor and residual value should be. The lease money factor of .00375 that you were quoted also sounds a little on the high side to me. BMW's current standard money factors for new vehicles are .00300 for up to 36 months, .00320 for 39 to 48 months, and .00340 for 60 months. It's possible that their used vehicle factors may be slightly higher than these, but they are often exactly the same.
Car_man, That's alright, I just finished off the deal this morning. With their high factor and reluctant to come down (they even said the BMW corp rate is 0.0041 and they had already reduced to 0.00375 for me), I went with an outside leasing agent who quoted me $595/mon, 36 mon/12k with residual $24,875. It was based on $39,000 cap cost because I have already put down $2000 for the dealer to hold the car, the upfront for me is $3947 which includes 1st month payment,TTL and acquisition cost. What do you think about this deal? By the way, you have not answered my question about the tax part, In my case, I told them I would rather pay the TTL and aquisition cost upfront instead of rolling into the monthly payment in order to avoid interest charge. Was I right about that? Thanks again.
Which state are you in? I believe different state and different requirement about the tax part.
When you said outside leasing agent, which bank are you talking about? Be aware the wear and tear part. I believe BMW Financial had the best policy on this part and if you lease through BMW. It even cover your cap cost insurance. Something you might want to ask your outside leasing agent about.
sounds high. I am assuming you are after an x5 3.0, right? have you considered the 4.4? THe deal is much better, making the price about the same if not slightly lower...FYI these ARE the number : they can tell you whatever they want, but this is the truth:
residual is 61% for 12K, 59% for 15K all 36 months their buy rate on a 3.0 is .0022 and .00195 on a 4.4. there is currently a $2500 dealer cash on the 4.4
Well, I live in Texas. To make my question clear, I am confused about the tax part of the TTL. Since everyone has to pay tax on the WHOLE car selling price (no matter you buy or lease, am I correct?), do we still have to pay sale tax on each monthly payment ? From what I learned from Edmunds, after you come up with your monthly payment, you have to add sale tax to it. Also, If you lease, are you supposed to pay tax only on the depreciation of the value of the car? Why are we charged the tax on the selling price of the WHOLE car? I know BMW has lease incentive on the 3.0i and $2500 dealer cash on the 4.4i, but these are for new car only. As I said before, I went to look for the new 3.0i with the least packages attached. No luck. Every 3.0i left are loaded to almost $50k. So, this loaded one with only 3k miles sold for $41k is very attractive. I was even able to talk them into throwing in a LoJack. Pricewise, we are very satisfy. The only thing not so sure about is the leasing part. And yes, gap insurance is included and it is a closed end lease. The company is superiorleasing.com Anyone with experience with this company, your sharing is very much appreciated.
Car_Man, I just wanted to thank you again for all of your help, on my two recent lease /purchases. Thanks to you I had all of the information needed to get very fair or excellent deals on both of my cars. I see that you are still helping other needy people. I will not be looking for a vehicle again for myself for three years (absent any unexpected circumstances). I might ask for help any ways as I sometimes get involved with others that are uneducated when it comes to leasing.
Just a reminder I got the Lexus RX300 in July And the Sebring Convertible Limited two weeks ago. By the way I am really enjoying the new Sebring. Both are 2001's
Thank you so much for your help with my lease. I started with a wide open field and have learned alot about leasing. I finally signed papers on a 2002 ES 300 w/Nav and the Mark Levinson package. I could not get the dealer off MSRP on this new model, but with LFS's 0.0027 the payment was the same as a lower priced I35. My payment is $605 plus tax on a $38,693 car. The one thing that really surprised me (and was a source of confusion early on) is that residuals for cars with nav is lower than cars without nav due to the fact that technology changes so quickly that a nav car will be worth less than a non-nav. I had a client run LeaseLink and this holds true for LFS and all of the other finance sources. In the end, not only am I paying extra each month for the nav option, but I am paying more in depreciation as well! Not a wise financial move, but I am a gadget guy, and I went for all of the gadgets.
Thanks again for all of your help. You have been a great source of information and helped level the playing field.
You're welcome, cupholder1. I don't know exactly what Volkswagen Credit's excess mileage penalty is, but you should be able to find out by asking someone at the dealership that you are working with. In answer to your second question, the lease money factors and residual values for the 2002 Passat will vary quite a bit depending upon the exact trim level that you get. It would be a big help if you could be a little more specific about the model that you are interested in. As soon as I have this additional information, I would be more than happy to let you know what the lease program for this car should be like.
Jim, vehicles' residual values are always calculated by taking a percentage of their full MSRP. The price that you are able to negotiate for your new car or truck is an important number to know, but it does not have anything to do with the depreciation portion of its monthly lease payment.
Teksolver, frame damage to a vehicle that was damaged in an accident is often a very expensive fix. I wonder how close your truck is to being totaled, i.e. the cost to repair it is worth more than or close to the amount of money that it is worth at that time. You may want to check with your insurance company to see if they would total your truck. If not, then you obviously will have to have it repaired. Most banks understand that accidents will happen and only require their lessees to have their vehicles repaired the best that they can be given the circumstances. For instance I was in an accident with several thousand dollars worth of damage to my car. The bank that I was leasing it through was well aware that my car was in an accident and didn't care because I had it fixed properly. Now in reality the fact that my car was in an accident made it worth less than an undamaged car, but I was not liable for this diminished value. It helps if you are leasing your vehicle through a manufacturers' captive finance company (one that is affiliated with the manufacturer of your vehicle). I say this because it is in a captive finance company's best interest to keep you as a happy and hopefully a loyal customer.
Hi vr88. The lease money factors that DaimlerChrysler is currently offering on its minivans really aren't that great. The 3 year Chrysler Financial money factor for all 2002 Caravans is currently .00325. This factor is a slightly lower .00315 for 39 months terms, but still isn't that great. The 3 year 12,000 miles per residual value for the 2002 Grand Caravan ES AWD should currently only be around 41! This is a pretty low residual value. I am sorry to say that the combination of a high money factor and a low residual value make this a lousy vehicle to lease through Chrysler Financial at this time. At least they have lease cash support of $2,900 on this van right now that will help to offset the bad factor and residual. I would think that Chrysler Financial would allow the residualization of most if not all factory options. However, I am not aware of a DVD system being offered by DaimlerChrysler on the Grand Caravan, perhaps I am mistaken. Even if this isn't a factory option, you may be allowed to residualize it. You will need to check with the dealership that you are working with to find out for certain though.
Hi RonD. I am glad that you enjoy this forum so much. Although Ford Motor Credit's lease rates can vary from area to area, I believe that in most of the United States right now the 3 year lease rates for the 2002 Lincoln LS should be 6.75% for the V6 and 3.75% for the V8. The corresponding residual values for this car should be 54% for a 2002 LS with an automatic transmission, 53% for the V6 with a manual transmission, and 52% for the V8.
Sarah, as a rule most people are upside down on their leased vehicles, but you may very well be an exception to this rule. In order to figure out approximately how much money your Civic is worth at this time, I suggest that you check a number of different resources. First, start by calculating your car's True Market Value right here at Edmunds.com. Click here to visit the Used Vehicle Pricing section of this site: Edmunds.com Used Vehicle Prices & Information. Once you have done that you may also want to pay a visit to the Sedans Message Board to see what other owners of this vehicle believe that it is worth. Feel free to use the following link to visit that area: Sedans Message Board. Finally you may want to check other on-line price guides or your local newspaper for prices. Remember to be conservative in your estimate of your vehicle's current value. Nothing would be worst than exercising your lease-end purchase option, going through all of the hassle of selling it yourself, and actually losing money in the process.
Well, shaker58, it is true that the current Mercedes-Benz Credit Corporation lease program is scheduled to expire at the end of the month. It is difficult to say what will happen to its lease money factors for the M-Class after that date. The money factors on some Mercedes-Benz models, like the S-Class and the E-Class which are currently being supported, may indeed increase after that date. However, I personally don't see any reason why the money factors for the M-Class would increase. Of course, as I have said in the past it is difficult to predict exactly what a manufacturer will do with its future incentives programs with 100% accuracy.
Cupholder1, I would be happy to let you know what I think this vehicle's lease program should be like. If you were to lease a 2002 Subaru Impreza WRX Wagon for 3 years with 15,000 miles per through Subaru's captive finance company prior to October 31st the lease money factor and residual value should be .00250 and 53%, respectively.
Hi currently I lease a Jeep Grand Cherokee which is due to expire in Feb 2002. I am well over my alotted mileage (like 30,000miles YIKES). I would like to get rid of it at the end of my lease but am not sure b/c of the over mileage penalties. Does anyone know if other car dealers, such as volkswagon (I'd like a Jetta)will take my car and pay off my over mileage fines? Is this an option or should I be planning to purchase my car at lease end term? My email address is KevinGam@aol.com and I'd like any insight possible into this subject.
Gary, I am glad to see that everything worked out well for you. I always enjoy it when someone who I have helped out comes back to say thanks. I really appreciate your post. Good luck with your new vehicles.
Congratulations on your new Lexus, mannymoe. I bet that you're the first one on your block to have one . Make sure to stop by the Sedans Board to let everyone know what you think of it: Sedans Message Board. Enjoy!
I have recently purchased an 02 530i w/ most of the luxuries (premium pkg, cold pkg, XENON, Steptronic, premium sound & heated wheel). This is a vehicle that I plan on keeping for 150-180k miles (7 years). As a bonus I will be receiving a fixed amount of $550/month plus mileage from my company to cover car expenses. My first thought was to finance the car but now I am considering leasing. That is if I can put $0 down on a lease and if my payments equal what the company is giving me, I can preserve my own savings.
Has anybody been in a similar situation. If so, what has been your experience.
What are the current lease residuals and MF on 02 530i's. The specifics are as follows:
MSRP $47120 Cap Cost $45620 Lease 3yr/12k
I would plan on purchasing the car at the end of the lease.
I'm leasing a 1999 Cherokee and have less than 5,000 miles to go. The tires are looking a little worn, not really bad but if I was keeping the vehicle I would replace them. Will I be charged extra when I turn it in at the end of the lease? Also, looking at the paperwork, there appears to be a $300 fee if I don't buy the vehicle at the end of the lease. Is this normal? The saleman said if I wanted to turn the Cherokee in at the end of the lease I would just turn it in, no other charges, as long as there was no damage or excessive mileage.
Chris, in your post you stated that you recently purchased a BMW 530i. If you already have bought the car, you can not turn around and lease it from BMW Financial Services. Perhaps I am misinterpreting your post. Please correct me if you haven't actually bought this car yet and I would be happy to fill you in on the lease details for it.
What sort of excess wear and tear charges you incur at lease-end will vary from bank to bank. If you are currently leasing your vehicle through a manufacturers' captive finance company, you are in luck because they are usually much more lenient when assessing excess wear and tear charges at lease-end than random unaffiliated banks are. I recently turned in a leased car that the tires were pretty worn on and was not charged for them. If you feel as though you might be able to get by without being charged for your tires, you may want to leave them on and see what happens. The worst that could happen is you would be charged for a new set of tires that you would have had to pay for anyways. Many banks charge lease-end or disposition fees on the vehicles that they lease to consumers. This certainly is not an uncommon charge, although it is quite annoying.
Thanks for the additional information, cupholder1. If you were to lease a 2002 Passat GLS 1.8T Sedan for 3 years with 15,000 miles per through VW Credit prior to the end of the month you should be able to use their base lease money factor of .00174 and residual value of 57%.
"The price that you are able to negotiate for your new car or truck is an important number to know, but it does not have anything to do with the depreciation portion of its monthly lease payment."
Correct me if I'm wrong but I think what you meant to say was that the negotiated price does not have anything to do with the residual value. The negotiated price will indeed affect the depreciation portion of the monthly payment since that is calculated as the negotiated price minus the residual value divided by the term of the lease.
Comments
Thanks,
Jim
36 mth 36000 miles
The body shop is going to replace the frame, which causes me grave concerns about the reliability/stability of the truck. In addition, my lease states that I have to pay for the loss of market value (even though it will be repaired, it will not have the same value as one that was never wrecked).
Any ideas on how bad the "diminished value" might be? Any thoughts on how I can cover my tail and not take a huge financial hit at the end of the lease?
Could I trouble you to provide me w/ some info on the 2002 Dodge Grand Caravan ES AWD?
I am specifically interested in a 36/12K lease and was wondering if their were any factory incentives available for a current Chrysler Finance customer in my area (NY) as the lease on my Jeep ends shortly.
Also, is it possible to residualize the cost of the new DVD player option into the purchase price?
Thanks very much for your assistance.
Wait... who is the lease through? Generally, if it is fixed well, you ought to be OK.
Bill
I am interested in a 36 mo. 12,000 mi./yr lease for a 2002 Lincoln LS. MSRP of the car is 38,500. Cap cost will be about $35,500.
Do you know what the residual and money factor should be for this car?
Thanks for this great resource!
RonD
I am in a 36 month lease on a '99 Honda Civic EX sedan that is up mid-February. I am trying to figure out if I'm upside down or not. I'm told that most people are, so I'm suspicious that I seem to be coming out ahead. I called Honda Finance for a payoff quote--it's $11,358. How do I find out how much the vehicle is worth? Residual value? Blue book? The car will have about 30,000 miles on it at lease end and is in good condition. I definitely do not want to keep it, but am wondering if I should try to trade it in (if possible), just turn it in to Honda at lease end, or buy it and sell it myself.
Thanks.
Thank you.
the vehicle is a silver ml320 with m1 m5 m7 packages and bose system.
39 mth lease with 12000m miles per yr
575.43 per mth with almost 2500 upfront that inc
taxes plates and first month (bank fee in pyt)
It is a jet black 3.0i with premium and climate package, plus upgraded premium stereo system, xenon headlight, in dash cd player and steptronic transmission.
Thanks to Car_man who mentioned about the lease incentive about the 01' model and it happened my wife loves its safety history, otherwise I would not even consider X5. And it was so hard to find one with the least packages (every one in the lots was loaded and priced closed to $50k), we were about to pay the dealer to transport one from other state. Then we found this loaded one for the same price we would have paid for that out-of-state vehicle. We decided to jump on this black beauty. Now, I am just waiting for Car_man to show me how to finish the deal from here.
Yet another question...
Can you tell me the current residual/money factor for the '02 WRX Wagon - 36 months, 15k miles a year.
Thanks.
But anyway, if the frame was damaged on a Navigator ... I'm "amazed" the vehicle wasn't just totaled ... let alone replaced ..??? I think your beef is with your Insurance co. not the Lease co.--- 18 years in the auto business, and this is a 1st for me ..
Terry.
I talked to my ins. agent yesterday and because of the pending "dimished value" class action lawsuit against State Farm in Indiana, he could not give me any advice other than to talk to the claim adjuster about my concern.
That is one of the reasons I have posted messages on a couple of boards here on Edmunds...the more information that I have on hand when I talk to the adjuster, the better. Thanks for your insight!
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Stil in Bay Area and looking at 36/48, 15k.
Is there anything special right now on either the Tribute ES 4wd or Base Outback (Legacy)?
Gracias!!!
As far as the Subaru Outback goes, here is the information that you are looking for. If you were to lease a base 2002 Subaru Outback Sedan through Subaru's captive finance company for 3 years with 15,000 miles per right now the money factor and residual value should be .00255 and 56%. The 4 year numbers would be .00265 and 50%, respectively.
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That's alright, I just finished off the deal this morning. With their high factor and reluctant to come down (they even said the BMW corp rate is 0.0041 and they had already reduced to 0.00375 for me), I went with an outside leasing agent who quoted me $595/mon, 36 mon/12k with residual $24,875. It was based on $39,000 cap cost because I have already put down $2000 for the dealer to hold the car, the upfront for me is $3947 which includes 1st month payment,TTL and acquisition cost. What do you think about this deal?
By the way, you have not answered my question about the tax part, In my case, I told them I would rather pay the TTL and aquisition cost upfront instead of rolling into the monthly payment in order to avoid interest charge. Was I right about that?
Thanks again.
When you said outside leasing agent, which bank are you talking about? Be aware the wear and tear part. I believe BMW Financial had the best policy on this part and if you lease through BMW. It even cover your cap cost insurance. Something you might want to ask your outside leasing agent about.
residual is 61% for 12K, 59% for 15K all 36 months
their buy rate on a 3.0 is .0022 and .00195 on a 4.4.
there is currently a $2500 dealer cash on the 4.4
Agreed with tgif, BMW Financial had the best program and especially the cap cost insurance program. You might want to check it out.
From what I learned from Edmunds, after you come up with your monthly payment, you have to add sale tax to it.
Also, If you lease, are you supposed to pay tax only on the depreciation of the value of the car? Why are we charged the tax on the selling price of the WHOLE car?
I know BMW has lease incentive on the 3.0i and $2500 dealer cash on the 4.4i, but these are for new car only. As I said before, I went to look for the new 3.0i with the least packages attached. No luck. Every 3.0i left are loaded to almost $50k. So, this loaded one with only 3k miles sold for $41k is very attractive. I was even able to talk them into throwing in a LoJack.
Pricewise, we are very satisfy. The only thing not so sure about is the leasing part. And yes, gap insurance is included and it is a closed end lease. The company is superiorleasing.com
Anyone with experience with this company, your sharing is very much appreciated.
I just wanted to thank you again for all of your help, on my two recent lease /purchases. Thanks to you I had all of the information needed to get very fair or excellent deals on both of my cars. I see that you are still helping other needy people. I will not be looking for a vehicle again for myself for three years (absent any unexpected circumstances). I might ask for help any ways as I sometimes get involved with others that are uneducated when it comes to leasing.
Just a reminder I got the Lexus RX300 in July
And the Sebring Convertible Limited two weeks ago. By the way I am really enjoying the new Sebring. Both are 2001's
Gary W
But not on the payment.
Bill
Jim
Thanks again for all of your help. You have been a great source of information and helped level the playing field.
But when I see, say, 1998 LS400s sell at auction.. the NAV cars dont go for anywhere near the premium that they sold for new.
Bill
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Has anybody been in a similar situation. If so, what has been your experience.
What are the current lease residuals and MF on 02 530i's. The specifics are as follows:
MSRP $47120
Cap Cost $45620
Lease 3yr/12k
I would plan on purchasing the car at the end of the lease.
Thanks,
Chris
I would appreciate it if you could please let me know the money factors and residuals on a 3-year/12k or 15k mile lease for the following SUVs.
Land Rover Range Rover
Lexus RX 300
Acura MDX
My other choice is the BMW X5, but you've already provided that info to the board.
Also, in your opinion, what is currently the best lease deal in the luxury SUV market?
Thank you very much for your help.
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"The price that you are able to negotiate for your new car or truck is an important number to know, but it does not have anything to do with the depreciation portion of its monthly lease payment."
Correct me if I'm wrong but I think what you meant to say was that the negotiated price does not have anything to do with the residual value. The negotiated price will indeed affect the depreciation portion of the monthly payment since that is calculated as the negotiated price minus the residual value divided by the term of the lease.