Lease Questions - Ask Here

CarMan@Edmunds · January 2002

Hello wasabi911. I see that you are interested in if there are any special lease programs available on these vehicles. Well, as far as Saab and Volvo go, it is pretty safe to say that they almost always have special lease programs on the 9-5 and S80. If you were to lease a 2002 9-5 Arc Sedan through Saab Financial Services this month for 3 years with 12,000 miles per, the base lease money factor and residual value should be a solid .00104 and a weak 49%. Keep in mind though, that Saab currently has $2,000 lease cash available on this car that may be used to reduce its capitalized cost. Overall, this is a pretty strong lease program. Let's look at the S80 now. If you were to lease a 2002 S80 2.9 (let me know if you are interested in the T6) through Volvo Finance for 3 years with 12,000 miles per, the base factor and residual should currently be .00088 and 54%. Lastly, we have the 2002 Lexus GS 300. Unfortunately, Lexus does not have any support on this car right now. So if you choose to lease one this month through Lexus Financial Services, you will have to use their base standard money factor of .00260 and residual value of 58%.

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mgt6103 · January 2002

im_brentwood · January 2002

49% is a lot stronger than what the 9-5s are really worth after 3 years... reality is in the lower 40s..

.00104 factor? I'd sure as heck not buy one!

Bill

annmd · January 2002

Hello car_man & kram!

I'm considering my 1st lease & am looking for some insight (in addition to all the great info on this site!) I live in Colo. & am considering the VW Jetta 1.8T automatic w/sports suspension & leather-MSRP $24,575. I was quoted the following by the dealer:
15,000 mi 36mo-54% residual 48mo-47%
12,000 mi 36mo-57% residual 48mo-49%
The car comes with a 4yr/50,000 mile warranty. They quoted an interest rate btwn 6 and 7%.
I'm not sure if there are any current incentives but the cap cost quoted was 23,626-(hoping to get that down!) Do the residual #'s look right & are you aware of any incentives? Thanks for your help!

seqlady · January 2002

Do you know if the lease #'s will change in February?

wasabi911 · January 2002

Can you also give me the numbers to the Saab 9-5 Aero, Volvo S80 T6 and S60T5 for 36 mo's and 12k mi/yr?

I truly appreciate your help.

haplology · January 2002

I noticed that on "Edmunds.com Incentives and Rebates", it lists special lease incentives on the BMW X5. It has $2500 down 10K per year 36 month leases on the 3.0 and 4.4 X5. What money factor is used to come up with these prices? They seem quite attractive - can we actually get these deals right now at BMWUSA? Will the deals definitely last 'til the end of February? I noticed that the three dealers that come up near me are not actually the closest - does every BMW dealer offer these deals?

If we want to recalculate the price after adding options, how do we figure out the final cost? Is the incentive a special money factor or a Cap Cost discount or what?

Thanks. Any information about these deals would be much appreciated!

haplology · January 2002

Also, I would assume the listed payments for lease incentives are not including sales tax, right?

pondview · January 2002

Hi all, I'm new here and have read many posts about multiple security deposits on a lease. I'm just wondering if this is really a smart thing to do. With a high security deposit, wouldn't the dealer at the end of the lease be more tempted to find litle things wrong with the vehicle to try to get at the high deposit? I was once told by someone at a dealership that if they wanted the security deposit, they could always get it by finding some minor problem with the vehicle. Also, how often do the money factors chamge? i'm currently in a lease that has 3 months left, is it too early to start getting the money factors together, or should i wait until the last month.

Thanks

bluewolf · January 2002

Carman - From info I've found, VWs money factor is .0025 for 36mos & .0027 for 48mos, is this right? Residuals on VWs look higher than average, which makes leasing attractive.

What kind of numbers are we talking for an '02 GTI 1.8T with an msrp of $20760 with options?

I'm confident I can do better than TMV on price. Likely $500 over invoice.

With $1k down, can I get a payment under $300/mo for 36mos/12k miles?

Do you think the soon to be replaced 12V VR6 will have poor residuals? In the past, it's been 1% higher than the 1.8T? If I purchased a 12V now, it wouldn't matter once the contract is written, right?

Thanks!

silvercrown · January 2002

Hi Car_Man,

I keep reading about how the RX300 doesn't cost much more than its more plebian cousin, the Toyota Highlander (fully loaded). I'm not convinced, but I'm curious about what the lease deal would be on the RX300. What is the money factor and residual values for a 36 and 48 month lease with 12k and 15k miles per year?

Thanks a bunch!

SilverCrown

CarMan@Edmunds · January 2002

No problem, mgt6103. I'm glad that I was able to help you out.

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CarMan@Edmunds · January 2002

As far as lease residual values go Saab has some pretty low numbers, but you are absolutely correct they probably are higher than what these cars will actually sell for down the road. They make excellent vehicles to lease, unfortunately I am not personally a fan of their styling or I would probably be driving one right now. Saabs are great lease vehicles for the money.

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CarMan@Edmunds · January 2002

Good morning, annmd. The person who you spoke with was pretty close on this car's residual values. The 48 month numbers are right on the money, but the 36 month 15,000 miles per year number should be 1% higher than what they told you (55%). The thing that troubles me most about their quote to you though is the interest rate that they mentioned. Right now VW Credit has special lease money factors available on the 2002 Jetta that would provide you a 36 month base money factor of .00167 and a 48 month base factor of .00200. These money factors are equivalent to interest rates of around 4% and 4.8%, respectively. Unless your credit is not in very good shape, it appears to me as though the dealership that you are working with was planning on marking up this car's lease money factors in order to bake additional profit into your deal. Volkswagen is not offering any sort of cash incentives on the 2002 Jetta this month, but the special lease program on this car is not bad. If you end up leasing a car through this dealership, insist that they calculate your payment using VW Credit's base money factors. If they balk at doing so, shop around a little bit. I am sure that you will be able to find a dealership that is willing to do so without too much difficulty. Good luck.

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CarMan@Edmunds · January 2002

You're welcome, seqlady. It is difficult to say what exactly Audi will do with their lease program next month with 100% accuracy. I personally do not expect any major changes though.

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CarMan@Edmunds · January 2002

Sure thing, wasabi911. If you were to lease a 2002 Saab 9-5 9-5 Aero Sedan this month through Saab Financial Services for 3 years with 12,000 miles per, the base lease money factor and residual value should be .00161 and 52%, respectively. Remember that Saab has $2,000 lease cash on all 9-5's this month that may be used to reduce your car's capitalized cost. Now let's look at the Volvos. If you were to lease a 2002 S80 T6 through Volvo Finance this month for 3 years with 12,000 miles per, you should be able to use their base lease money factor and residual value of .00096 and 55%, respectively. The numbers for an identical lease of a 2002 S60 T5 should be .00161 and 56%.

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CarMan@Edmunds · January 2002

Hi haplology. Through the end of February, BMW Financial Services has 3 year special lease money factors of .00205 on the 2002 X5 3.0 and .00230 on the 2002 X5 4.4. These are BMW Financial Services' base lease money factors, but you should not have much difficulty finding a dealership that is willing to use them to calculate a lease payment for the truck that you are interested in if you comparison shop a little bit. This program is available through every BMW dealership in the U.S. You should be able to use the same money factors to calculate a lease on a vehicle with more options than the advertised models, the lease payment would be a little higher though because you would be financing a more expensive vehicle. BMW's advertised lease payments do not include tax.

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CarMan@Edmunds · January 2002

Pondview, if you make additional security deposits on a leased vehicle that money goes directly to the bank that you are leasing it through and has nothing to do with the dealership that you bought the vehicle from. As a result, individual dealerships have absolutely no incentive to be extra tough when evaluating your vehicle at lease-end. In fact, if anything I personally would think that dealerships would rather be a more lenient than strict on their evaluations of vehicles in an effort to keep their customers happy. This is why many banks actually use independent inspection companies that are not affiliated with individual dealerships or themselves to assess vehicles at the end of their lease terms.

The frequency with which lease programs change varies from bank to bank. Many captive finance companies' lease programs change on a monthly basis, while others last for two or three months. Generally speaking, the best time to gather specific information on a vehicle's lease program is in the month that you actually plan on taking delivery of it. That way you can be fairly sure that you are using the correct lease data.

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CarMan@Edmunds · January 2002

Bluewolf, the lease money factors that you posted actually look a little high to me. If you were to lease a 2002 Volkswagen GTI GLS 1.8T through Volkswagen Credit this month, the 3 and 4 year money factors should be .00200 and .00230, respectively. The factors for the 2002 GTI GLX VR6 should be .00205 and .00235. This car's residual values are still fairly solid, so I don't think that you have to worry about any major revisions to this model having that much of any effect on its current lease program. As far as what sort of payment you can expect on this car, I just worked up a sample payment for a 2002 VW GTI GLS 1.8T without any options. This car (MSRP: $20,535 & cap cost: $19,641) would have a 3 year 12,000 miles per zero down pre-tax lease payment of around $273.

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jim52 · January 2002

You may want to double check but my guess is that the advertised lease payment uses the MSRP as the Cap Cost (i.e. no discount off of sticker). That means you should be able to do better than that without much negotiating (and maybe a lot better with aggressive negotiating).

jim52 · January 2002

If you can be confident you will get it back and have the cash available, it's tough to argue against using MSDs. I've calculated that on a BMW 530, the annual return on the extra cash is around 16%. I don't know of another fixed income investment that could even come close.

pondview · January 2002

OK, how come I'm not getting this. I have 4 months left on my lease, and called GE Capital to see if I could pay the 4 payments now and turn in the car. I wanted to get something else and take advantage of a cash incentive. I was told I couldn't do this and it would be considered early termination. Can someone explain to me the reasoning behind this. If I pay the 4 payments now, they are still getting all their money and getting the vehicle 4 months ahead of what they expected. The vehicle is obviously worth more now than in 4 months. What am I missing?

im_brentwood · January 2002

Yup. The styling is an acquired taste, that's for sure!

Tell ya tho.. theyre so much car for the money used.. I mean, you can buy a 99 9-3S 5-door Auto with under 40K miles for less than a 99 Camry LE or Accord LX/EX...

They can make a pretty convincing argument!

Bill

Squeke · January 2002

I'm not sure how much difference the model type makes in what you've answered recently, but i'd like the residual and lease factors for a '02 A4 3.0 CVT, 48 months and 12,000 miles. It's due any day now!!!!

silvercrown · January 2002

Hi Car_man,

Earlier I asked about leasing info for a Lexus RX300. I would also like to know if you have any information on Lexus' CPO Leasing program. In addition to the new vehicle leasing info, I am wondering what the residuals and money factor would be for a 2 or 3 year old RX300 under the CPO program. Do you have this information or is it something that you would have to go to a dealer to find out? I have no idea how the CPO program works, I just found out about it a couple of weeks ago.

I would still like the info on a 2002 RX300 for 36 and 48 months, 12k/15k miles per year.

Thanks a lot!

SilverCrown

haplology · January 2002

The $419 per month on the BMW X5 3.0 listed for a CAP COST of $39545 (MSRP) with a 66% residual for 36 months is listed on your incentives page.

The .00205 MF that you quote in your message doesn't work out to $419 per month on a CAP COST of 39545 and a residual of 66% at 36 months.

I calculate $509 per month at $39545 at 66% over 36 months at .00205 money factor. How do they come up with $419 per month? Seems like a big difference.

haplology · January 2002

Whoops. Wrong calculation.

I calculate $449 per month at $39545 minus $2500 cap cost reduction with residual 66% after 36 months on .00205 money factor.

How do they get $419 per month?

bluewolf · January 2002

Glad to see lower money factors than I had listed. Is leasing a new leftover '01 model a bad idea generally? The dealer has a loaded GTI 1.8T with leather/lux pkg/monsoon/17" alloys he'll
sell at invoice. But invoice loaded is still $19949 and I have no idea what money factor he's using, but with $1k down he's telling me $279 for 48 mos @ 12k/yr miles. Sounds high to me, considering I thought $1k down would get me under $300/mo for 36 mos and your numbers reflect this also.

Anyway, I'm not so sure the '01 is the deal I thought it may be...

markhampton · January 2002

Hmmm. The numbers I get from my spreadsheet don't work out either for the X5 (I get $438.61/month for a money factor of .00205, a residual of 66%, 36 month term, a cap cost/MSRP of $39545 minus $2500 down).

To get $419/month, I think one would need a money factor of .00175, or a cap cost of $38,900, or a lease length of something like 39 months (or some mix thereof).

Carman, have I gone wrong somewhere?

haplology · January 2002

Whoops. Wrong calculation.

I calculate $449 per month at $39545 minus $2500 cap cost reduction with residual 66% after 36 months on .00205 money factor.

How do they get $419 per month?

jim52 · January 2002

Now I'm confused too. I can't seem to figure out how they got a payment of 459 for a 2002 530 using .00205 and 63% residual. Is it possible that the MF is lower than .00205 or are we all missing something else?

markhampton · January 2002

Jim, I think you're right. Like the X5, an MF of .00175 for the 530i makes the calculations come out about right (I get $457.01).

Of course, I suppose I could be doing the calculations incorrectly, but in my defense, I must say that I have successfully used this spread sheet to verify other leases. Regardless, I'm sure Carman will enlighten us.

CarMan@Edmunds · January 2002

Hi again SilverCrown. The special lease money factors that Lexus had available on the RX 300 at the end of last year are no longer available. So if you were to lease a 2002 RX 300 through Lexus Financial Services at this time, you would have to use their base standard lease money factor, which is .00260 for both of the terms that you mentioned in your post. The 3 and 4 year, 15,000 miles per residual values for a 2002 RX 300 4WD are currently 57% and 51%, respectively. The 12,000 miles per year residuals would be 2% higher than the ones that I just mentioned.

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CarMan@Edmunds · January 2002

Good morning, Squeke. Yes, Audi's lease program for the A4 does vary depending upon exactly which model you are interested in. If you were to lease a 2002 A4 3.0L quattro through Audi Financial Services this month for 4 years with 12,000 miles per, the base lease money factor and residual value should be .00225 and 51%, respectively.

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CarMan@Edmunds · January 2002

SilverCrown, most manufacturers issue actual dollar values for each model that they have sold over the past several years that vary by trim level and mileage. That is a lot of data to keep tabs on. So given the enormous amount of information contained in pre-owned lease programs I am not personally able to keep track of their details on a monthly basis. In order to find out the specifics of the Lexus CPO lease program for this truck you are going to have to speak with a dealer in your area. If you want to verify that the dealership that you are working with is telling you the truth about the program, you can always comparison shop at another dealership or two.

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CarMan@Edmunds · January 2002

You're welcome, bluewolf. By this point in the model year most manufacturers have discontinued their supported lease programs on left over vehicles. Furthermore, vehicles' residual values naturally decline as the year progresses. This lack of money factor support and low residual values often make leasing the previous model year's vehicles a bad idea. In fact, it often turns out to be just as expensive to lease a left over model as it would to lease an equivalent vehicle from the current model year. Purchasing cars and trucks from the previous model year can be a good idea if you get a good price and can combine it with cash incentives, but leasing left over vehicles is usually not the way to go.

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CarMan@Edmunds · January 2002

Hi everyone. There seems to be come confusion about the sample lease payments that BMW is currently advertising. Let me assure you that the money factor data that I provided you with earlier is definitely correct. The leases that BMW is currently advertising on the X5 and 5-Series are not based on full MSRP. The $419 per month lease that BMW is advertising this month for the 2002 X5 3.0 is based on a capitalized cost of $36,570 and the 5-Series lease is based on a price that is less than full MSRP as well. Furthermore, these advertised payments only allow for 10,000 miles per year. So, the residual values that are used to calculate them are higher than the 15,000 miles per or 12,000 miles per residuals that you are likely using in your calculations. This should explain why your calculations are not jiving with BMW's advertised payments.

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markhampton · January 2002

Ok, I went back and looked up the details on the Saab lease from the Saab web site: <http://www2.saabusa.com/leasen/leaseAds/default.asp?m=93&t=l> . The small print says:

MSRP: $28,620.00

Residual: $13,737.60

Doesn't this make the residual 48%?

jim52 · January 2002

Carman, I'm still confused. The Edmunds page shows a cap cost of 40,095 which is the same as the base MSRP. Also, I was using a 63% residual since I plan to lease for 10k miles per year. Has this residual been revised since you last provided it? If not could you verify the calculation?

wasabi911 · January 2002

Truly appreciate your help.

bluewolf · January 2002

CarMan, where can I as a consumer find out money factor and residual values on '02 VW GTIs without asking the dealer?

The salesman doesn't want to discuss money factor, and the only place I've seen Residuals is Cars.com, but the salesman tells me VW actually will give higher residuals than Cars.com on VWs. Salesman says they have lots of lease programs from VW and different banks, and they run everything through a computer and find the best one.

I just want to know I'm getting a great deal on a lease, and not taken advantage of.

If I use Edmunds lease calculator formula and come within $20/month, is that a good deal? Will anybody realistically match the Edmunds bottom-line lease amount?

Thanks a million.

haplology · January 2002

Thanks for clearing that up - I guess they were quoting MSRP and not the real cap cost. The $36,570 is less than $1000 over invoice - a little optimistic on the X5 3.0?

Also, what is the MF and residual on the X5 3.0 for 42 months at 12K miles per year.

I think you quoted 65% and .00205 for 36 months - but if I lease for 42 months, I will be looking for a new car in the fall of 2005 when new model years are coming out. Any disadvantages to looking for a 42 versus 36 lease?

Thanks.

richard103 · January 2002

CarMan:

What residual % and money factor should I expect for a 2002 Buick Rendevous CXL for a 36-mo/45-kmi lease.

What support, if any, is GMAC offering (besides $2,002 rebate)?

Thanks.

Squeke · January 2002

Thanks for the numbers Car_man, but i'm actually interested in them for the CVT (Continuously Variable Transmission) 3.0 A4. It does not have Quattro (and not offered in this engine configuration currently). Any differences in the numbers from what you provided me on the Quattro model?

markhampton · January 2002

Thanks for the clarification, Car_man. If I'm not mistaken, that $36,570 cap rate you mentioned includes the $2500 down that they're requiring for the advertised lease, correct?

With that cap rate, the calculations come out perfectly ($419/mo). That $2500 down means they're really only knocking $475 off of the MSRP, no? I suppose that's not too far out of line with reality in the BMW world.

silvercrown · January 2002

Hi Car_man,

I saw in an earlier post that VW was offering special lease rates for the Jetta. I was wondering if there are any special deals for the Passat. What is the current money factor and residuals for the Passat GLX and GLX with 4 Motion for 36 and 48 months, 12k and 15k miles per year?

Thanks so much.

SilverCrown

CarMan@Edmunds · January 2002

Jim52, I have seen BMW's official incentives program sheet for this particular lease and I can assure you that the $419 per month $2,500 down X5 3.0 lease is based on a vehicle with an MSRP of $39,545, a capitalized cost of $36,570, and a residual value of 66% (the 36 mo. 15,000 mi/yr BMW FS residual + 3% when the mileage allowance is reduced to 10,000 mi/yr). I don't know where the information that you saw on this site came from, but this lease is definitely not based on the truck's full MSRP. I hope that this clears up the confusion surrounding this particular advertised lease, but if not please feel free to ask any additional questions that you may have.

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CarMan@Edmunds · January 2002

Any time, wasabi911.

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CarMan@Edmunds · January 2002

Hi again, bluewolf. Let me begin by saying I personally would be very irritated if the dealership that I was working with refused to disclose what lease money factor they were using to calculate my monthly lease payments. That is sort of like a dealership offering you a loan on a new vehicle but refusing to tell you what the interest rate is. I know that a lot of dealerships do not like to discuss lease money factors for a number of reasons, some legitimate like the fact that they are not sure if you will qualify for a bank's best rates. However, the main reason that they will not disclose this information is usually that they plan on marking-up the vehicle's base lease money factor in an effort to bake additional profit into a deal. You should be able to find a dealership that is willing to be more straightforward with you without too much difficulty if the one that you are working with right now refuses to cooperate with you in the future. I would be more than happy to give you an idea of what the lease program should be like on the car that you are interested in right now. I just need a little additional information from you first. What exact model are you interested in? How many months do you plan on leasing for? How many miles per year do you wish to drive without incurring an excess mileage penalty? Once you answer these questions for me I will be able to shed a little more light on this car's current program for you. Talk to you soon.

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CarMan@Edmunds · January 2002

Haplology, the capitalized cost that I posted really isn't that close to this truck's invoice, because the cap cost is equal to the vehicle's selling price minus any down payment that is made. So in reality I believe that the cap cost used in this sample lease is actually only $475 less than its full MSRP. As far as a 42 month lease of this truck goes, the BMW FS base lease money factor should still be .00205, but the 12,000 miles per year residual value should drop to 62%. The 42 month lease will likely provide you with a lower lease payment than a 36 month lease of this truck, despite the lower residual value because you are able to spread out the high rate of depreciation that a vehicle experiences early on over a larger number of payments. I often discourage consumers from entering into leases that are longer than 36 to 39 months because many models only have 3 year warranties. However, the X5 comes with 4 yr. / 50,000 mi. bumper-to-bumper coverage so that is not an issue here. The main problem that I see with entering into a 42 month lease on this model is that 42 months is a long period of time. As lot can happen in ones life over such a long time, such as your financial situation or transportation needs could change. Of course one can attempt to sell or trade-in their leased vehicle prior to their scheduled termination date, but this often requires taking a loss and is a hassle. Just make sure that you are ready to make a commitment to driving this model for a long period of time prior to entering into a long lease on it.

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