Lease Questions - Ask Here

jim52 · January 2002

Hi Carman. A week ago, you posted that the MF for a 36 month lease on a 530 was going to go from .0019 to .00205 starting in Jan. I just wanted to confirm that this in fact was the case. How long will this MF be in effect? Also, did the residuals change at all? Finally, do you know how the multiple security deposit option works to reduce the MF for leases through BMW financial services. I guess what I'm looking for is what multiple results in what new MF? Thanks again.

postoak · January 2002

This term isn't defined in Edmunds leasing glossary. The dealer gets the fee, apparently, not the leasing company -- is that right? Do all leases entail such a fee? It sounds like another charge to get back some of the money the dealer lost in the negotiation with a purchaser who negotiates from invoice or MSRP without regard to the overall picture.

icdchess · January 2002

Hi Car_Man...
Looking to lease an X-Type and know that a Holiday Promotion just ended. Is there something coming? I am looking at a $44,000 X, 36 months, 15,000 (or 12,000 miles), nothing down, 8 1/2% tax included. Any notions?
Thanks.
Steve

CarMan@Edmunds · January 2002

Hi again, Jim. Yes, BMW's new lease money factors for the 530i turned out to be exactly what I expected in my previous post. The 3 year 15,000 miles per residual value for this model should now be 60% and the 12,000 miles per should be 62%. I do not know the exact deduction that BMW Financial Services provides consumers with for each additional security deposit that they make on their leased vehicle, but you may be able to find out by contacting BMW FS directly.

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CarMan@Edmunds · January 2002

Postoak, all lending institutions charge what is commonly called an acquisition fee, sometimes also known as a bank fee, on their leases. This money goes directly to the lending institution and dealerships have no authority to waive it. Some banks do allow their dealerships to mark-up their base acquisition fee however to bake additional profit into a deal. I know what sort of acquisition fee all of the captive finance companies out there charge on their leases and would be more than happy to let you know if I believe your dealership is marking your fee up.

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CarMan@Edmunds · January 2002

Seasons Greetings, Steve. Yes, Jaguar's year-end lease program just ended. I have not had an opportunity to take a look at their latest one yet, but should within the next couple of days. Please feel free to check back with me around the middle of next week and I should be able to fill you in on the details of the new X-Type lease program.

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P.S. When you check back with me, let me know if you are interested in the 2.5 or the 3.0 because they have different money factors and residual values.

icdchess · January 2002

Thanks, Car_Man...
I think I want the 3.0 but might consider the 2.5 if the difference is large. Problem is... I may have to make my deal early next week, and without your help, I am at a severe disadvantage with the dealers. Might there be a chance of getting info earlier? After all, you ARE the (car) MAN!!
Steve

tgif888 · January 2002

Car_man,

Any lease special on the Isuzu Axiom? I am interested in the 2wd base or the XS model.

Thanks.

chrism123 · January 2002

Car Man, I will be taking delivery of my new 02 BMW 530ia in January. I was able to locked in the December lease rates, which I believe, are .0019 and 62% for a 3yr 12k/mile lease. The dealer is stating that the .0019 M.F. is their "buy" rate and my actual lease number is .0023. I'm not sure why there would be two different rates other than the possibility of the dealer trying to make a higher profit. Does this make sense or should I be using the .0019 M.F.

Thanks,
Chris

mookie14 · January 2002

i got a 2000 explorer thru ford credit i do plan on not leasing again with anyone. it ends in 8-03. i want to pay it off before august can i do it? im over miles well i will be like 55000 it was 3yr 36000 can i do it all replies please thank you.

sarah233 · January 2002

Hi Car_man. One of my friends bought a Jeep Liberty about 6 months ago. She has decided that she would prefer a Ford Explorer, and she knows someone who said she could get a 3 year lease from him (I guess he works for a bank and can get a car at wholesale price), and then after 2 years she would "break even" and somehow be able to get out of the lease if she chose or keep it for 3 years and have a residual of about $11,000. The part that sounds fishy to me is the getting out early at 2 years. Is this possible without a lot of trouble? Maybe I am just wary about making deals with friends. I told her to come to this board and ask you, but I am curious myself.

pen101 · January 2002

As far as I know, the BMWFS offical money factor was 0.0019 (the dealer "buy" rate). The other number, 0.0023, includes their mark-up. You could have bought down the rate to 0.0009 (0.0013) with ten security deposits. Note that the new rates as of January 1 are 0.00205 and 0.00245. Dealers get you coming and going and most of the time you don't even know it.

Question for Car_Man: Is the mark-up on the buy rate negotiable?

ajb723 · January 2002

I'm looking to lease a 2002 BMW 330c 4dr for 36 mos- 12,000mi/yr. Can you tell me the current residual and money/lease factor?

seqlady · January 2002

My husband's A4 lease is up in May and we're way under on mileage. He wants to just turn it in and lease another, but I'd like to keep it another 5-6 months until the A4 convertible becomes available. I also feel we'd be leaving lots of money on the table by turning it in with such low mileage. Does Audi Financial allow you to extend your lease at the current payments? Are there any negatives to doing such a thing, and how would you go about it? Thanks for any advice!

jim52 · January 2002

I believe the mark up is negotiable. One dealer I spoke with in December gave me the .0019 right from the start. Another dealer told me the mf was .0023. When I mentioned the other dealer he quickly said they could get there.

Do you (or anyone else) know how the muliple security deposits work with BMW Finance? For example how much does the mf go down with 5X, 6X, or 10X the security deposit? I didn't do it with my current lease but it appears that the money you save each month significanly beats the interest you could earn leaving the money in the bank. What's the catch? Why do finance companies offer it? Does this make it more likely that they will keep more money at the end of the lease?

pen101 · January 2002

To calculate your security payment, take your monthly payment and round up to nearest $50. Then for each 0.0001 that you want the money factor decreased, it will cost you one security payment. BMW allows up to 10 security payments. Thus if the money factor is 0.0019, then 10 security deposits can take the rate down to 0.0009. I do believe that the dealer mark-up on the money factor is negotiable. Remember that the mark-up of 0.0004 (from 0.0019 to 0.0023) by the dealer nets the dealer an extra $1,000 or more on the deal. See, as I said earlier, the dealer makes money on you at every step of the way and may times without you even knowing it!

It appears to me that you get a better return on your money by buying down the rate than by sticking it in the bank or in a CD.

jim52 · January 2002

The return definetly appears to be better assuming you get the full security deposit back at the end of the lease. I'm assuming that finance companies offer this option because they feel that the more money you have on the line the better the chance that you'll return the car in mint condition. My only concern would be that they would have a greater incentive to then nickle and dime you on the wear and tear. They could keep more of the deposit to make up for the lost finance charges due to the lower mf on the lease. Any thoughts?

baseballmom94 · January 2002

Hi Carman~You helped me out with numbers on a Yukon lease a few months ago. I just heard about the GMC $2002 Customer Cash Rebate...I'm assuming this would apply to the Capitalized Cost of a leased Yukon as well, am I correct? Also, any new numbers for the money factor and residual for a Yukon SLT 4WD 36 month/12,000 miles lease? Thank you so much!

KCRam · January 2002

Hi seqlady

I extended a Ford Credit lease myself for 5 months about 9 years ago for almost the same reason - what I wanted wasn't available when the regular term was up.

Call Audi Financial and ask them how long you can extend the lease - they will usually send you to the dealer to sign an extension form, or may send it directly to you to return to them. In these cases, the payment would be the same, the residual would be adjusted accordingly, and the mileage would be allotted at the per-month rate for however many months you extend. For example, if you have a 12,000 mile per year lease, a 6 month extension would give you an additional 6000 miles to work with. Since you are under mileage, the negatives are small, since the vehicle will still probably be worth more than the adjusted residual.

This usually is not a problem with factory financial firms, especially since you want another Audi later. The worst they can say is "no"

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imariquinn · January 2002

OK, I am supposed to go in Monday to do paperwork and pick up my truck. I have them holding while I sleep on their deal. The deal is on the table is $454 a month for 39 months with 15000 miles with a residual of $17200.00 for a 02 Disco II in black ($300) and the rear air conditioning package ($750). At signing on Monday, I am to pay first month lease payment, $400 security deposit & $2495 down payment plus taxes, tag and title fees (estimated $3800 total at signing). I was told I have Tier 0 credit and was waiting for bank approval. Now here is where I am lost, what am I paying for the vehicle as far as invoice or MSRP and what should my money factors be? I have nothing in writing, only told that my lease payment is as written above ($454/mo, 39 mo, 15K miles, $17200 residual and estimated $3800 to pay at signing). Am I getting ripped? If so, what info do I need to bring Monday before I sign to make sure I am hitting the right MF and not paying too much. Thanks! Christine

skobola · January 2002

I will have to order my new Bimmer at the end of January, as the lease on my 99 323i expires on 4/3/02. It would be helpful for me if anyone would share the (recent) lease deals with me. I am looking to lease a 325i or even a 330i if I will be able to have it under $500/mo. I want to lease for 36 months w/30,000 miles, with out-of-pocket payment minimized as much as possible. Other deals will help me a lot as one of the dealers offered me that he will try to match other deals if I bring them to him. Just to keep the bandwidth low, you can also e-mail me at skobola@cyberdude.com. Thanks in advance.

filter1 · January 2002

Hi Carman,

To answer your question, I am very happy with my decision to get the car, as well as with how the leasing process went. One dealership tried to tell me that numbers gotten off the internet were simply incorrect, so I left and found another which was more honest.

I just wanted to check back with you regarding these cars I originally asked about in post #2727, when you get a chance.

Thanks again,

Mike

filter1 · January 2002

Carman or anyone else,

Regarding car insurance, what is the maximum no-fault claim amount that won't make your insurance (full coverage) go up for the next few years or if you change ins. companies?

I'm looking to fix a car, and I've gotten estimates ranging from $800 to $3000 from repair shops of varying reputation.

I just wanted to include the increase of insurance premiums due to this claim in my comparisons.

CarMan@Edmunds · January 2002

Hi tgif888. Isuzu is advertising a special lease on the Axiom right now, but it is only scheduled to run through January 7th (today). Here are the details of the special lease: Lease a 2002 Axiom 2WD through Bank One for $299 per month over 48 months and with $1,394 due at lease signing. The money due at signing includes a $500 down payment, a $299 first months lease payment, no security deposit, but a $595 acquisition fee. They are also advertising a lease on the 2002 Axiom XS 2WD for $339 per month over 48 months with $1,434 due at lease signing. This total due at lease signing includes a $500 down payment, a $339 first months lease payment, no security deposit, but a $595 acquisition fee. It is difficult to say what they will do with their next lease program for this truck, but if I had to guess I would say that it is going to be very similar to the current one.

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CarMan@Edmunds · January 2002

Good question, Chris. The dealer "buy" rate for a lease money factor is the lowest factor that the bank that is running the program allows them to charge. Individual dealerships are allowed to mark-up a bank's base lease money factors to bake additional profit into a deal. However, there are enough car dealerships around that the vast majority of dealerships out there will gladly let you use the base lease money factor to lease a car or truck if you insist upon doing so. I highly doubt that a dealership would let you walk on a deal and go to their competition over a money factor mark-up. Just insist that they use the base money factor and acquisition fees on your deal.

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CarMan@Edmunds · January 2002

Hi again mookie14. In order to find out exactly how much money it will cost you to buy out your Explorer lease at the time, you need to place a call to Ford Motor Credit, or whatever bank you are leasing it through. They are the only people who will be able to provide you with a buy out number for your truck.

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CarMan@Edmunds · January 2002

Good morning, Sarah. It sounds to me as though the person who your friend knows is promising him/her something that they can not guarantee. Sure, lots of vehicles are worth just as much as or more than the amount of money it would cost to buy them out two years into a lease, but many other vehicles (probably the majority) are not worth as much as or more than their purchase price after two years. I don't know of any lease contract that provides consumers with an official option that guarantees they will be able to get out of their car or truck a whole year early without having to pay a dime.

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CarMan@Edmunds · January 2002

Hello ajb723. I would be more than happy to give you an idea of what the lease program should be like for this car right now. If you were to lease a 2002 BMW 330i through BMW Financial Services for 3 years with 12,000 miles per prior to the end of February the base lease money factor and residual value should be .00205 and 62%, respectively.

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CarMan@Edmunds · January 2002

Hi seqlady. The specific policy for whether a lease can be extended varies from bank to bank. For instance, I know that American Honda Finance Corp. will allow their lessees to extend their leases up to three separate times for as long as they would like (within reason) at their current payment. On the other hand, Nissan Motor Acceptance Corp. does not allow its lessees to extend their contracts at all. In order to find out Audi Financial Services' specific policy on this matter you will need to contact them directly.

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icdchess · January 2002

I have someone who appears to be willing to take over the lease of my 2001 Saab convertible (that's why I am looking for an X-Type). It just occurred to me that I paid the New York State sales tax up front for all 36 months. But since I have only actually leased the car for 9 months, does anyone know if I am entitled to get a rebate for the sales tax I paid for the other 27 months?

tgif888 · January 2002

Thanks Car_man on the Isuzu.

What about the Maxima SE Auto? 3 years and 4 years lease with 12K miles per year. Can you tell me the money factor and the residual value?

tgif888 · January 2002

Car_man

One more. Toyota RAV4 2wd automatic. 3 years and 4 years lease with 12k miles per year. Like to know the money factor and residual value.

haplology · January 2002

When the residual is given as a percentage, how is it used? Is it calculated from MSRP, Dealer Invoice or is it the negotiated price of the vehicle?

Thanks.

haplology · January 2002

Is the LeaseWizard software any good? I've seen that the residual values quoted in the software seem to be much, much lower than the ones mentioned on this forum. Is that because of subsidized leases or what? For instance, it showed a 2002 Lexus LX470 at 54% for 3 years at 12K miles??? What should the residual be on such a car?

baseballmom94 · January 2002

Hi Carman~ Just received a quote for a lease rate on a Yukon. Cap Cost: $35,994
36 month/12,000 miles
Residual Value: 51%
Security Deposit/Tags: $1410
Montly Lease Rate: $592.70

Does this sound right to you? They couldn't tell me what the money factor was. Also I thought the residual was supposed to be 55%. The security deposit of $1410 also sounded high. What do you think of this deal....should I try to negotiate a better money factor (if I can find out what it is) and also negotiate a higher residual value? How to do this? Thanks so much.

chrism123 · January 2002

Car Man (msg 2776), one might think that you need to only negotiate a good deal by knowing the invoice price and mfg rebates. Guess not. I didn't realize that the dealer could also make a profit from the lease M.F. Amazing.

Thanks again for the information.

Chris

CarMan@Edmunds · January 2002

I finally got to take a look at Jaguar's latest lease program this weekend, Steve. Hopefully you see this post in time. If you were to lease a 2002 X-Type 3.0 through Jaguar Credit prior to the end of February for 3 years with 15,000 miles per, the base lease money factor and residual value should be .00119 and 55%, respectively. The numbers for the 2002 X-Type 2.5, .00128 and 54%, aren't quite as attractive as the 3.0, but the 2.5 will naturally have a lower monthly lease payment because it is a less expensive car.

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CarMan@Edmunds · January 2002

Hi again, baseballmom94. You are absolutely correct. The $2,002 bonus cash that General Motors has available right now may indeed be used as a capitalized cost reduction for GMAC lease contracts. GM issued a new lease program along with this cash, so the previous numbers that I provided you with are no longer valid. If you were to lease a 2002 Yukon SLT 4WD through GMAC for 3 years with 12,000 miles per now, the base lease rate and residual value should be 6.5% and 51%, respectively.

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CarMan@Edmunds · January 2002

Greeting Christine. The dealership that you are leasing this Discovery from is obligated to tell you its full MSRP and the price that you are paying for it, all you have to do is ask them for this information. I am sorry to say that I have not seen Land Rover's January lease program yet. However, their current program is probably very similar to the one that they were running last month. You may find the following lease that they were advertising in December helpful in your negotiations. In December, Land Rover was advertising a lease on the 2002 Land Rover Discovery Series II SD (MSRP: $33,995 / Capitalized Cost: $30,310) with 10,000 miles per year for $399 per month over 36 months with $2,495 down, a $400 security deposit, and a $475 acquisition fee. If you would like to see exactly what they are doing with their January lease program, please feel free to check back with me later on this week.

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CarMan@Edmunds · January 2002

Hi again Mike. Here is the information that you were looking for in your earlier post. If you were to lease a 2002 Mercedes-Benz E320 through Mercedes-Benz Credit Corp. for 3 years with 12,000 miles per right now the base lease money factor and residual value should be .00246 and 63%, respectively. The same type of lease for a 2002 Mercedes-Benz E430 should have a base lease money factor and residual value of .00241 and 61%, respectively. I am sorry to say that the supported leases that Lexus was advertising in December were not continued. So if you were to lease a 2002 Lexus LS430 through Lexus Financial Services for a 3 years with 12,000 miles per at this time, you should be able to use their base money factor and residual value of .00260 and 55%, respectively.

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CarMan@Edmunds · January 2002

Filter1, different insurance companies have different guidelines as to what will make them raise their customers' premiums. Furthermore, individual companies' policies on this matter will likely vary from state to state, and perhaps even from person to person so I really can not provide you with an answer to your question. Sorry.

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CarMan@Edmunds · January 2002

No problem, tgif888. As far as the Maxima goes, if you were to lease a 2002 Nissan Maxima SE through Nissan Motor Acceptance Corp. at this time for 3 or 4 years, the base money factor should be .00244. I don't have the residual value information in front of me right now, but I should have it tomorrow if you want to check back with me then.

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tzohio · January 2002

Car_Man,

I'm looking at a "used" 2002 Highlander with 100 miles on it. It came from Canada, which understand is not uncommon for this vehicle. I would like to lease the vehicle for 39 or 48 months. Do you have a money factor and residual value for these scenarios? If not, what would they be for a new 2002 Highlander?

thanks!

baseballmom94 · January 2002

Thanks so much for the numbers on the Yukon lease. I truly appreciate your help!

CarMan@Edmunds · January 2002

Tgif888, Toyota's new incentives program is scheduled to begin today. I have not had an opportunity to take a look at it yet, but would be more than happy to fill you in on its details when I have. Please feel free to check back with me in a couple of days. Talk to you soon.

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tgif888 · January 2002

Thanks. I'll check back with you on the RAV4 numbers.

baseballmom94 · January 2002

Hello, I have worked out a potential deal on a Yukon, however, the money factor/interest rate from the dealer is higher than the one you quoted me. You gave me a 51% residual value (which the dealer also has) and a 6.5 % money factor on a 36 month/36,000 miles. The dealer quoted me a money factor/interest rate of 7.5%. I got them to decrease that but they only went to 7.35%. What would you do....take it or leave it? They said that 7.35% is the lowest they will go. It does include Gap insurance.

CarMan@Edmunds · January 2002

Hi haplology. A vehicle's residual value percentage is always multiplied by its full MSRP to come up with an actual residual value dollar figure. The only place that this gets a little tricky is with options. Most standard manufacturer options can be fully residualized, i.e. included in the MSRP figure that you use in your calculations. However, many banks place a cap on the dollar amount that can be residualized or just do not allow certain, usually dealer-installed, options to be residualized.

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CarMan@Edmunds · January 2002

Hi haplology. I personally have not ever used LeaseWizard's software, but rather have created an Excel spreadsheet on my own that I use to calculate monthly lease payments. Now if only I had Excel loaded on my new computer...well, that's a different story. If this program's residual values are lower than the ones that I have posted here, the problem may be that the LeaseWizard may not be using the actual resids that are being used by manufacturers' captive finance companies, but rather ones that come from some source like ALG. The residual values that captive finance companies use to calculate lease payments tend to be higher than the ones that ALG publishes. I don't know for certain that this program does not use actual residual values, but this certainly would be one explanation as to why their residuals seem low to you.

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CarMan@Edmunds · January 2002

You're welcome, Chris. I am glad that I was able to help you out.

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