Rose, if you want to get out of your lease contract this early, you may indeed be upside down. In order to find out exactly how upside down you are, you need to place a call to the bank that you are leasing your vehicle through and ask them exactly how much money it will cost you to purchase it right now. Once you have that figure, look up how much money your vehicle is currently worth by using the Edmunds.com True Market Value figures available on this site and perhaps by asking the helpful gentlemen in the Real World Trade In Values discussion on the Smart Shoppers Message Board. In order to get out of your leased vehicle right now, you are going to have to sell it on your own or trade it in on your new car or truck. Selling it on your own is probably the best way to get the most money that you can for your leased vehicle, but it is often quite a hassle and if you do so you will not be able to roll your negative equity over to your next auto loan. If you don't mind me asking, why are you so desperate to get out of your current vehicle? You likely would save yourself quite a bit of money by just waiting until the scheduled end of your lease contract to get something new.
Hey Mike. I do not believe that Ford Motor Credit has published a residual value for this particular model yet. Please feel free to check back with me in a month or so and I may have a better idea of what this truck's lease program should be like.
Hi bradlake1. It is difficult for me to tell you how good the lease payments that you were quoted are without knowing at least the full MSRP, and ideally the capitalized cost of these trucks as well. I should be able to give you an idea of what the current lease parameters for these trucks should be though. If you were to lease a 2003 Land Rover Discovery SE through their captive finance company right now for 3 years with 15,000 miles per, their base lease money factor and residual value should be .00275 and 56%, respectively. For an otherwise identical lease of a 2003 Discovery S, the lease parameters should be .00191 and 56%. I would be more than happy to let you know what I think of the payments that you were quoted if you provide me with the additional pricing data that I just mentioned.
Welcome aboard, kywon! According to the latest information that I have seen, if you were to lease a 2002 Saab 9-3 SE Convertible through Saab Financial Services Corp. for 3 years with 12,000 miles per prior to July 31st, their base lease money factor and residual value should be .00099 (approximately 2.38%) and 44%, respectively. In addition to this special lease money factor, on this particular model Saab is providing $5,000 lease cash. On the 2002 9-3 Viggen Convertible, the factor and resid for an otherwise identical lease should be .00058 and 48% and the lease cash should be $3,000.
Rmlinn, lease cash is much like normal consumer or dealer cash in that it should be used to help reduce the price of the vehicle that you are interested in. Also, just like consumer or dealer cash one should never assume that they are going to be automatically deducted from the price that they are able to arrive at, but instead should either be taken into account in your offer or your offer should stipulate that all available cash incentives must be subtracted from it. All advertised lease payments likely are already taking any available lease cash into account. It is difficult to say what Saab's August lease program will be like at this point. I will not know the exact details until it is released in about a week and a half. Please feel free to check back with me in early August for an idea of what their new program is like.
Good question, kywon. Interestingly enough at one time Saab was one of the only manufacturers out there that actually did have a lease down payment requirement for their best money factors. However, they just like all of the other manufacturers that I can think of have done away with that policy. As a result you should be able to lease just about any vehicle right now without making any capitalized cost reduction and still be able to utilize the lowest available lease money factors, assuming that your credit rating is good enough to qualify for them.
MSRP....I am being quoted is $39,495 for the 'SE' and $41,495 for the 'HSE'. Because they are still relatively new, I am not certain how much below MSRP I can get....but will certainly try. The lease payments I posted I believe derived from the MSRP figures. Thanks for any advice!
Readers of the forum: can you share experiences of amount paid for the 2003 DISCO(MSRP or how much below)? Thanks!
Thanks for the additional information, bradlake1. According to my calculations, if you were to lease an 2003 Land Rover Discovery SE at full MSRP ($39,495) through their captive finance company for 3 years with 15,000 miles per using their base lease program, your zero down, pre-tax monthly lease payment should be right around $653 or so. For an otherwise identical lease of a 2003 Discovery 'HSE' at full MSRP ($41,495), the payment should be around $688. If you are able to negotiate more of a discount, then naturally the monthly payments on these trucks would drop.
Hello Car Man. I ordered a BMW 325. I decided on 10,000 miles per year for the preliminary paper work. I have reconsidered and now want 12,000 miles a year. The difference is $312 more over the 3 years which is a much better deal than going over by 6000 miles at lease end and paying $1200(at .20cents per). I just e-mailed the dealer about requesting this change. The car is due in about a week around August 2nd. Do you anticipate a hassle from the dealer?
Hi hpowders. Since you have not physically taken delivery of your new car yet and probably have not signed any sort of final lease agreement, I personally do not think that changing from 10,000 miles per year to 12,000 miles per year at this point will be a problem.
Hi CarMan-- You really provide a great service which I really appreciate. 2 questions
I am planning on leasing a loaded volvo s60 AWD, have a trade in worth 5-7K. It seems it would be better to take cash for the trade in rather than use it for a cap cost reduction, don't you think? That way, if the new car gets totalled after 1 mo, I haven't lost the whole trade in value down the drain.
Second question, I know volvo has what sounds like a pretty good advertised lease deal through Jul 31 (2500 down, 388/mo + acquisition fee, residual of 20,600 based on a cap cost of 37,000, 12000 miles/yr). Do you know what will be in the offing for August (i.e., will this be extended or back to Volvo baseline, and what is Volvo's baseline deal for the southeast?) Many thanks in advance Mike
Hi gfelker - It looks like the "great" Volvo deal on this car is to lease you a year-end model 2002 at MSRP. If you run the car and options through the Edmunds TMV invoice/msrp/TMV calculator you get invoice 34,717 msrp 37,200 TMV 35,500 Even though their money factor is very low, they are still making you pay for part of the year model depreciation by only offering a 55% residual. The better question is should you wait for the 03's to come out. I would try to negotiate the deal on 02's which should be much better than MSRP! Also, there's a good lease in the same price range for a well-equipped Lexus IS300 and BMWFS is usually aggressive late in the model year for the 3 series. The 325i/330i are the benchmarks for the luxury/sport sedan market, though sometimes a nutch pricier than the Volvo. The 325xi w/AWD and similarly equipped to the S60T AWD has a MSRP of $35,500 or so. The 330xi is $40,000. The Volvo guys should have to negotiate heavily to keep you from getting away to a BMW for the same or lower money. Enjoy your wheeling and dealing!
Thanks for the reply. Obviously, I was not planning on paying MSRP that is just the deal that is advertised in the paper. Assuming that you could get them down to TMV or less (given that it is near the end of the year), the low money factor would still make it an OK deal, I believe, despite the residual being somewhat lower than I expected.
I have read this board for some time and know that you always give great info. I have a question that I hope you can answer for me. I have a 2000 BMW 328i that I have financed through the BMW Owners Choice program. That contract is coming to an end in a few months and I really want to look at an M3. I was hoping that given the following info you might be able to give me a close figure on the monthly payment for an M3 lease. Price of $51,120, $3000 down, 36 months, 15K miles a year. Not sure what the current residual and money factor are. Any help you could give me would be very much appreciated. Thanks in advance.
Longtime lurker ... you are truly a great source of advice and it is much appreciated! I am looking to lease a Honda CRV EX and wanted to ask a follow-up question to your post #4098. There, you suggested waiting until the 2003s are out because of their higher residuals.
First, do you know when the 2003s will be in dealerships? I'll need to lease by the first week of September.
Second, do you know when exactly the 2002 residuals will be revised down? i.e. maybe I should lease before that point.
Third, does AHFC have set acquisition/disposal fees that I should know about?
Lastly, when will the base MFs and residuals you quoted in #4088 and #4098 expire (i.e. does it change over on Aug 1, or some other date)?
Thanks Car_man for all this information. I think I've ruled out getting another Saab convertible so now I'm in the process of finding that perfect car for the next 2-3 years.
I read another post that you said that the 3-year 12k mi residual on an 2003 Acura TL-S is 65% and a 0.0023 money factor. Can you confirm the 3 year figures above and tell me what the 2 year residual and money factor is in Southern California (all 12k mi/yr)?
Due to the extremely high residual, even with the average MF the lease payments are extremely low. I know you like the G35 but a TL-S lease would be between $50-140/mo cheaper than a G35 depending on options!
Also like the Audi A4. Can you give me the residual and MF on the 1.8T and 3.0 non-Quattro and the 3.0 Quattro, all automatic sedans.
Do you know of any other cars that have higher than 58% 3-year residual (12k mi) that costs between $20k and $40k (other than BMWs)?
AHFC recently increased their acq fee to $550 but they also increased the lease end damage allowance to $500. There is no disposition fee and gap insurance is included. Overall the AHFC program is excellent.
P.S. I don't work for Honda but am very close to leasing also and I do my homework...Good luck!
Sorry for all the questions, I'm turning my car in on Thursday and because it's the end of the month, I think I need to buy by Wednesday, and I'm still deciding on what to get! I'm a number cruncher by profession and I'm a deal hunter by nature... makes for an interesting combo when looking for cars.
Anyway, would you please give me the residuals, money factors and incentives for a 3yr/36k mi lease in So. Cal. on the 9-5 Linear, Arc and Aero sedans.
Oh, could you also let me know what those same terms would be on a 9-3 Viggen 5-door. And also on a Passat GLS 1.8 and V6. Thanks so much again! These all seem to be the cars that you say have the best deals going for them.
what I want to do yet, but I am leaning towards buying a used Navigator if I can find a good one.
I stopped by a Toyota dlr the other day coz I saw somthing on their used lot. Met a salesman, after discussing various things, he started pitching me on leasing an '02 Sequoia.
Ok, I was looking to spend between $20-$27k originally, w/ about $7k down depending on what I can find ('99 Expy EB-'00 Navigator price range). And since the Sequoia hasn't been made long enough to have a '99 or '00, and wouldn't drop as much on a resale anyway, I wasn't looking at them. Otherwise I think they're nice trucks.
All I remember is that a Sequoia Ltd MSRP is in the low to mid $40k's, and I saw on an Edmunds board some people were buying various SR5's in the mid $30k's. I like leather and sunroofs etc., so most likely would like the 4x4 Ltd. or a loaded SR5. The one SR5 they had on lot seemed loaded w/ an MSRP of around $39k had lthr and all, but no roof/ent syst etc.
The dealer said they were doing a $49 over invoice sale on stock, it would be more to do a locate. I said well, unless the other dealer was gouging you, a locate shouldn't be that much, so theoretically I would only be looking at a couple hundred over invoice for a locate, they reluctantly agreed.
So, if I were to get a loaded SR5 or Ltd. at around invoice, what should the lease be?
Assuming -good credit -oh say 24 or 36 mo (you shouldn't lease longer than that should you?)
Please inform me of up front costs and payments, although I understand some leasing stuff, I've never actually done it, and am still somewhat confused by it. I would like to look at the two scenarios, putting $$ down on a used Navigator for example, w/ a payment for 4-5 yrs and owning it, vs not putting money down and having x payment for x term to lease a Sequoia.
Any educational comments regarding that scenario are also appreciated. Thanks,
One thing that confused me, and left me feeling a bit 'slimed' was a tactic initially used to pitch me on the lease...has anyone heard this....??
He asked me 'Are you familiar w/ the NEW types of closed end leases on the market today', I of course said maybe not, I was somewhat familiar w/ traditional types of open and closed end leases, but maybe not the NEW kind.
He proceeded to tell me about the closed end lease, where I can sell the car myself, turn it in and walk away, or trade it in. I said, yeah sounds normal so far. He said, yes except that w/ the NEW kind, if I elected to trade/upgrade w/ them, that it didn't matter what the mileage was. In other words, there is theoretically language in the contract that the leasing company can charge you for overages on miles, if you turn and walk, but if you repurchase/lease at the dlr, somehow this magically disappears. I'm sitting here thinking, instead of me driving the Sedan I purchased to put 25-30k mi on it, and having Mommy driving the new SUV for the kid on the way, day-to-day, maybe I could drive the crap out of this Sequoia and just trade it in for a new one in 3 yrs, that would be worth it.
Then common sense was eating at me, there's got to be a catch, I started thinking, well I am at the mercy of the dealership in that scenario, for them to sell me the next ride at inflated price, coz if I do dump the miles on, I can't sell it for a profit and can't walk away without getting nailed by the FC. I asked him about that, and he said well, I don't think you'd have a problem coz we'll want to sell you a new car, and we can't hurt you on the 'trade' coz the whole thing is regardless of miles, if you trade with us, we'll honor your residual.
It was too much for me to figure out, any thoughts?
karz10- I am in no way any expert of any kind, but that "NEW" lease doesn't smell right to me either. In any lease, if you elect to purchase the car at the end, it doesn't matter what your mileage is at. Mileage only matters if you turn it in and walk away.
In the scenario that saleman proposed, I believe how it would work is that the dealership would purchase the leased vehicle at the end of the lease and that would be your "trade-in". As in any trade-in you can have positive or negative equity. Although he's telling you that they'd honor your residual, if you take it to the extreme, then you could put 300,000 miles on the car they'd still give you the same residual as if you put 36k mi on it. I'd like to see that in writing, from someone that really matters at the dealership. Just doesn't seem like there's any way that could work.
I think it really depends on the T's and C's of the lease. Do they require more cap cost up front for this 'new' lease or a higher money factor ( and Toyota is high anyway ).
Also, is it in writing that the value of the Sequoia at the next trade is residual?
Also, can you trade the Sequoia in on some other kind of Toyota? Let's say you tire of the big SUV thing and want a Matrix. The amount of profit that they may have to play with down the road is much smaller in a lower priced car!
Because the other way that they have some flexibility is how they discount the next car you lease or buy from them.
Let's say you get the Sequoia now at a great deal. Lease it on a 3 yeaer 36K lease and run up 60K miles - 24K over. This would normally cost you 15 to 20 cents per mile extra or $3,600 to $4,800 in extra mileage chartes. However, the wholesale value of the Sequoia is probably only down $1,500 - $2,000 due to the excess mileage, so that's all they have to make up in a deal.
So here's their deal to you in three years: You can trade in your high mileage Sequoia and lease or buy a new one at MSRP ( refusing to take anything off list ) or pay the mileage over charge, or you have to buy out the car you drove assuming you'd have no problem getting rid of it.
Making up the wholesale value drop of a couple of K would be no problem on a MSRP deal on a Sequoia.
I'd be tempted to take a lease with the highest possible residual you can negotiate since that should be the value of the car at trade in time. So that means taking the lowest annual mileage they will give you.
Supposedly all this is in writing, but since, as I stated in my earlier post, I was leaning towards purchasing used 'other', and would need to run the numbers on a Seq lease to see if it was even feasible for me, I didn't pursue his claims to the point of seeing it in writing.
Although, as I said, I did want to consider the claims, and get some feedback from people here, along with looking at the other numbers before I did make a decision.
As kywon said, I forgot about that other option, I could purchase the vehicle, although this scenario always confused me, to get a good lease deal, to me it seems like you don't want to put any money down, have the highest possible residual, the lowest money factor, therefore your payments would be the lowest. So what scenario would make sense to buy the vehicle if you got low lease payments leaving you w/ a high residual that you have to purchase at? But as you said kywon, if it was in writing, and I put alot of extra miles on it and did in fact want to trade in for new, that would be a good thing.
footie, yeah that's what I was afraid of, not getting a good deal on the next car. So even if it is in writing that the value of the Seq will be residual, there's nothing that's going to say they'll sell me the next car at invoice, and if I did go pour on the miles, I'm basically at their mercy, since I can't walk away w/o getting hit, and despite supposedly good resale, may not be able to get out clean selling it myself w/ xtra mi.
And like you said also, what if I don't want another Sequoia, but am willing to buy another Toyota, how does that affect it...
Well, I'll wait and see what kind of numbers I get on this lease and see what happens...
It's funny that you brought up this point karz10... this is exactly what I'm going through now. I leased a '99 Saab and my lease is up. Originally, I intended to buy the car but, as is often the case, you either get "customer cash" OR low financing on a purchase. However, if there is a subsidized lease rate, you can sometimes get lease cash/dealer incentive (which may or may not be less than "customer cash") AND a low money factor/interest rate. This is the case with Saabs and it maye make more sense to lease up front and purchase it at the end of the lease vs. buying it outright.
In my specific case, in 1999 I received a high residual (55%) a low money factor (about 1.4% interest rate), and the dealer incentive ($2000).
Now at the end of my lease, the residual value is way above the market value of the car. (They're only giving 44% residuals on my same car now). Oh, by the way, residuals aren't negotiable as far as I can tell. Because of this I've been able to negotiate my leasing company down from the stated residual by almost $3,000. However, you are not always able to negotiate the residual with the leasing company at the end of the lease due to residual insurance that is often purchased.
Anyway, I look at leasing as a financial tool to get the best deals I can on a car and be able to get into new cars every few years. Also, one of the benefits of leasing is that it effectively gives you a call option at the end of the lease to buy the car. If the car has treated you well, and you love it, then you can buy it. If you hated it, or have had problems (or an accident like me) then you can turn it in and walk away. If I hadn't been in an accident in my car and it was an automatic, I definitely would be purchasing it off lease. But because of those two things, I'm looking to lease something else.
what numbers the host throws at me, i see where you're coming from on the benefits
i was looking at sedans last year, i drive a lot of miles on my primary and only car (about 25k mi yr) and Bill and the Host here had pointed out some things like that before
i was shopping the Acura TL Type-S, Infiniti I30 and I35 primarily, and looked at many sport sedans, Bill explained to me about leasing a Volvo for example, he said maybe if I liked an S60 for example, it would make sense to lease something like that and walk away, even with high miles, due to quality of the car, low resale value, and factory subsidized leasing rates, they showed me some examples, and I took it seriously as an education, although I found the value of the car itself to meet my needs less than others I was looking at
I looked at leasing the Ac and Inf, but I ended up buying closeout '01 I30t for $3k under invoice ($27k), it was blk/blk my preferred color, roof and shade, everything but navi, plus the sport pkg under body and rear spoiler (factory installed so no extra brake light in the rear deck, a pet peeve of mine), on of course the 't' on that means 17" wheels and sport suspension
the comparable I35 would have cost a lot more, a) little/no discounts, b)no 't' in 02, had to buy the sport pkg to get 't' features, still had to buy the roof and shade plus have to buy the spoiler and underbody, so you're looking at like $36k and some change, all for the new body and 28hp
if it came down to the TL-S and the I35, the TL-S would have won, but I didn't like the TL-S dash controls w/o the navi (looked cheap to me), so w/ navi and all the trimmings, I would have been above $32, maybe way above, and that would be getting a good deal, plus if you get a spoiler in the TL-S, you are stuck w/ the brake light in the rear dash, yeah I could disconnect it and tint the windows, but all in all, that's why I made the purchase I did for $27k
The thing I'm concerned about a lease, not good to do any customization to the car, miles, forced to make a decision about future car at a particular time, getting screwed on the deal in general
However, I'm not one to run from something just because I don't understand it, and am trying to weigh my options, as I am now thinking for a family, not just myself, the parameters have changed somewhat. Thanks for the feedback
Again, thanks for this great service. The info is invaluable to many of us! I am trying to figure out if the timing is right to take advantage of an unusual situation and I am looking for your thoughts and suggestions.
Here goes:
Despite the brand's popularity, many of the Boston area BMW dealers have excess inventory of the "lower peformance" models from 2001, including 325's and 525's, some in wagons and AWDs. ( One nearby has 16 325s, 6 5-series and a couple of Z3s ).
I'd like to approach a couple of dealers to see if there is a way to drive a really good lease deal. With the 2003's right around the corner, the 01's are getting more than a bit lot weary.
In today's terms what do you think the residuals ought to be? Mabye residuals like on a 4 year lease but with a 3 year term? If I can drive both a low cap cost and low residual with a low money factor, I might be able to get a great deal!
Any info on current BMWFS lease rates on 2001 325/525's? Do you have any contacts there to check with? Any suggestions on how to approach the dealerships? I have three to shop at and can practice on two of them!
Just wanted to let you guys know that I just completed the sale of my leased truck (2001 Ford F150 Supercrew) and it worked out great. To avoid sales tax the dealer paid off Ford Credit then handled the sale to my buyer at NO CHARGE TO ME!!! They even refunded me 1/2 month's lease payment since the sale took place half-way through the final leased month. I ended up avoiding $1400 in sales tax, making $5200.00 on the sale, and since I have another Ford truck on order from them which I intend to lease; everyone involved is very happy. I paid true invoice for the 2001 which I just sold off a 2 year lease which had a 61% residual. I don't expect 61% on the 2003 since leasing has come back down to earth, but am once again doing the deal at invoice. For all of you in the Denver Metro area the Dealer is Phil Long Ford (Blue Oval)and they will have me as a customer for a long time!!
I have been researching leasing and have seen all sorts of fees for leases. Are there any "basic" fees that you can definitly expect on a lease? Also, what are some fees that a dealer may try and toss at me.
Here are some fees that I have already run across. If someone has the time, could you tell me which of the following fees are legitimate and which aren't? And If you really feel like being nice, post a usual/reasonable $ charge with the fee (I know it's asking a bit much, but had to put it out there)
I leased a 99 Accord and end of term is 4 months away. My lease was purchased by another bank a couple of years back and they recently contacted me regarding end-of-term options. Apparently, they are no longer in the lease biz and are offering 5.9% financing on purchase. I told them that I was not interested in purchasing vehicle and was looking at leasing something else. She finished conversation by stating... "if you know of anyone that might be interested, please have them call and make an offer...we are out of the leasing biz and do not want car back." So I am thinking that this will benefit me when looking at a new lease. I have four months left and am 4200 miles over mileage. Doesn't it make sense that dealer could call them and make offer...hopefully allowing me to lease (or buy) new vehicle without hitting me with end of lease costs? Anyone had a similar experience? Thanks
I know that GM's lease pull ahead program was slated to end July 31. Just wondering if you know if they extended it? It was the program where you could turn your current lease in early as long as you were buying or leasing another one....
I am just an amateur at this and maybe others can help out, but here's my take on the fees:
Acquisition fee - A very normal charge on a lease in the $395 to $595 range, and sometimes waived in special leases. It's about the same as 'points' on a mortgage. You need to be careful with the dealers that place your lease through the manufacturer's leasing arm as they often mark up this fee between you and the leasing company. Sometimes they another $200 to it. If you lease through the manufacturers leasing arm, make sure you know what their standard Acquisition fee is.
Drive-off fee - Never heard of it. Is this the cost to drive off the lot or something?
Manufacturers fee - Never heard of this either. Manufacturers are almost never a party to a lease transaction. They have already sold the car to the dealer. The dealer will be selling it to the leasing company (even if it is a subsidiary of the manufacturer). There should be no "manufacturers fee".
Disposition fee - This can be one of two fees so find out what its for and argue that shouldn't pay it under either circumstance. Case 1: A negotiable fee that you pay at the end of the lease if you DON'T buy the car. This fee should never be paid and be prepared to walk the deal to prove it. The lease company owns the car. Why should you pay them to sell something they own? Case 2: On the other hand if its the fee for you to BUY the car at the end of the lease, then you don't have to pay it if you don't buy the car. Since the purchase price at lease end is generally negotiable, well so is this number, so why agree to it now. It doesn't make sense to agree to a sales transaction fee 3 years from now.
Doc fee / Title fee /Registration fee. Doc fee - in most states this is the fee that the dealers charge to 'document the sale' (most of which they do sitting with you selling it to you. They have to go find the 'certificate of origin' which they filed somewhere, prepare a bill of sale to whoever is buying the car ( you or the leasing company ). It's probably an hour's work max. They usually want at least a $100. I bet the administrator that does this only sees about $18 for their time.
Title fee is for typing up the title documents and is part of the prep. In some states the state charges a fee for this. Find out what it is. If the car is being leased this should be paid by the leasing company. Remember they are getting $395 or more to cover their Acquisition costs. Maybe they can figure out how to cover the Title fee out of $400 or more!
Security Deposit - Very typical for most leases and usually about 1 months lease. You are supposed to get this back at the end if the car only shows normal wear and tear and your mileage is within range. Don't fall for paying multiple security deposits to get the payments down. You are loaning them money at zero interest.
Advertisement Fee - This is a fee some dealers like to add on to the 'invoice' cost of the car. It's a cost of doing business that is back charged to the dealers to support regional marketing. Tell them if they want you to pay for the ads that brought you to their dealership you will shop somewhere else. After, if the dealerships are banding together to advertise their costs should be lower, not higher. Many car makers provide dealers with a specific discount called hold back in many cases that they get that helps cover this. You shouldn't pay an 'advertisement fee'.
Rent charge - I am not sure what you mean here. In some leasing terms 'rent charge' is the monthly amounted computed by adding the capital cost and residual and multiplying that sum by the money factor. For all intents and purposes its the interest expense on the value of the car during the lease. If its anything else, it doesn't sound normal.
Somewhere on Edmunds I ran into a post with simple strategy for taking the dealers 'fees' off the table and also giving buyers the best chance to get what they want at the price they want.
It's called the 3 piles of money strategy. Here goes:
* There are only three piles of money associated with buying ( or agreeing to a price for a lease)" - the price of the car - the taxes manadated by law - the fees associated with transferring the title of the car to the new owner
Here is an approach to dealing with these:
* When you are buying a vehicle, research its prices and use something like Edmund's TMV to figure out what the market is paying for the car. You probably won't get much lower, except for odd colors or strange option mixes.
* Try to narrow your choices down to cars that are likely to be found on lots in colors you like for prices you feel are fair. To do this you should find out if the manufacturer tends to configure certain mixes of options for your area so you are likely to know what you will encounter on dealer lots.
* Once you know the market price' and are satisfied that it represents a fair price to you, this is pile #1 and shouldn't change, no matter what the dealer throws at you.
* Now figure out the sales tax. If you don't know what it is call your local registry and ask. This is pile #2.
* While you have the registry on the phone, ask them for title and documentation fees if you did it yourself. This is pile #3.
If you did a cash deal or even financed it, what you pay for the car, its tax and fees are the same.
However, the dealership doesn't want to let you go so quickly.
Anything that they add to pile #1 makes pile #2 get bigger. Anything that they add to pile #3 is an add-on or just extra profti!
What do you do now? Add in these fees and add them up. This is your 'out the door cash price'.
When you visit the dealership only look at cars that you have done the 'out the door pricing on...'.
Call ahead, find out if they have them or how close they get to what you are looking for. When you are there, don't tell the sales person or the closers anything about your financial situation unless that's really critical to you to get a deal done.
When you find a car you like and want, ask the sales person for an 'out the door' cash price. If he balks or dodges or asks questions about what you mean, tell him, "its simple, it's the amount of money I have to give your dealership in one check to drive this car home with my name on the title with no loans or financing". Tell him to separate it into three numbers: the car, the taxes and all other fees.
No matter what he comes back to you with on whatever passes for offer sheets, always, always put the numbers into those three piles.
If they are having a hard time doing this all at once, offer to help them. Let's agree on the price of the car all by itself first!
When you can agree on that price, pile 1 and pile 2 are now firm.
Then let's talk about the fees. You may have to give some ground here, decide how much you are willing to pay for the documentation fees.
DO NOT agree to Window Etching of VIN number. It's all over the car anyway since the 1992 Federal Car Theft Act or your car already comes with a super duper antitheft system.
Which reminds me, DO NOT buy a Theft Recovery System. The top 10 stolen cars in the U.S. are all mostly 10 year old Toyotas and Hondas. Plus new car key systems are increasingly difficult to thwart.
What does this have to do with leasing?
Now just before signing a cash deal, ask about a lease? Ask if they have a special deal with a lower cap cost than your price in Pile #1? If not, pile #1 is your leased 'cap cost' (not MSRP).
Pile #2 gets reworked for a lease and varies by state. Some states onerously tax the entire cap cost, even though you are only paying for the depreciation.
Pile #3 should remain the same, but there are fees in a less that are associated with the deal. Acquisition fees and security deposits are typical. Make sure yours are reasonal in your market and with your leasing company before signing.
Here's a typical lease laid out: MSRP $20,566 Invoice price $19,612 Capitalized Cost $18,500 (PILE #1) First months payment $259.00 Acquisition FEE $500 (new to Pile 3) Security Deposit $259 (new to Pile 3) Capitalized Cost Reduction $2,500 ( make this as small as possible). Due at signing not including tax/fees $3,518.00 Residual Percentage 55%
Residual Value after 3 years $11,311.30 (this is the residual 55% x the MSRP ) Term Depreciation $4,688.70 ( capcost - residual ) Interest Rate 4.8% (this is an estimate)
Money Factor 0.002 (this is what sets your monthly payments) Monthly Lease Rate $59.62 ("rent"?) Number of months 36 Monthly Depreciation $130.24 Pre-tax monthly price $189.86 (this price doesn't include taxes) State Sales Tax on Payment $9.49
State Sales Tax on Cap Reduction $0.00
Monthly Payment $199.36
Due at signing $3,518.00 Doc fees $100.00 Tax on cap cost reduction $125.00 Total Due at Signing $3,743.00
Hi everyone. As you probably have been able to tell, I have been away on vacation for the past week. I think the easiest way for us to handle all of the posts that were made while I was gone is for those of you who still need answers to post your questions again. I will answer any new questions ASAP. Thanks.
4220 of 4239 I'm not sure by karz10 Jul 29, 2002 (06:46 am) what I want to do yet, but I am leaning towards buying a used Navigator if I can find a good one.
I stopped by a Toyota dlr the other day coz I saw somthing on their used lot. Met a salesman, after discussing various things, he started pitching me on leasing an '02 Sequoia.
Ok, I was looking to spend between $20-$27k originally, w/ about $7k down depending on what I can find ('99 Expy EB-'00 Navigator price range). And since the Sequoia hasn't been made long enough to have a '99 or '00, and wouldn't drop as much on a resale anyway, I wasn't looking at them. Otherwise I think they're nice trucks.
All I remember is that a Sequoia Ltd MSRP is in the low to mid $40k's, and I saw on an Edmunds board some people were buying various SR5's in the mid $30k's. I like leather and sunroofs etc., so most likely would like the 4x4 Ltd. or a loaded SR5. The one SR5 they had on lot seemed loaded w/ an MSRP of around $39k had lthr and all, but no roof/ent syst etc.
The dealer said they were doing a $49 over invoice sale on stock, it would be more to do a locate. I said well, unless the other dealer was gouging you, a locate shouldn't be that much, so theoretically I would only be looking at a couple hundred over invoice for a locate, they reluctantly agreed.
So, if I were to get a loaded SR5 or Ltd. at around invoice, what should the lease be?
Assuming -good credit -oh say 24 or 36 mo (you shouldn't lease longer than that should you?)
Please inform me of up front costs and payments, although I understand some leasing stuff, I've never actually done it, and am still somewhat confused by it. I would like to look at the two scenarios, putting $$ down on a used Navigator for example, w/ a payment for 4-5 yrs and owning it, vs not putting money down and having x payment for x term to lease a Sequoia.
Any educational comments regarding that scenario are also appreciated. Thanks,
Karz
-------------------------------------------------------------------------------- #4221 of 4239 Also, thought this was weird.... by karz10 Jul 29, 2002 (07:04 am) One thing that confused me, and left me feeling a bit 'slimed' was a tactic initially used to pitch me on the lease...has anyone heard this....??
He asked me 'Are you familiar w/ the NEW types of closed end leases on the market today', I of course said maybe not, I was somewhat familiar w/ traditional types of open and closed end leases, but maybe not the NEW kind.
He proceeded to tell me about the closed end lease, where I can sell the car myself, turn it in and walk away, or trade it in. I said, yeah sounds normal so far. He said, yes except that w/ the NEW kind, if I elected to trade/upgrade w/ them, that it didn't matter what the mileage was. In other words, there is theoretically language in the contract that the leasing company can charge you for overages on miles, if you turn and walk, but if you repurchase/lease at the dlr, somehow this magically disappears. I'm sitting here thinking, instead of me driving the Sedan I purchased to put 25-30k mi on it, and having Mommy driving the new SUV for the kid on the way, day-to-day, maybe I could drive the crap out of this Sequoia and just trade it in for a new one in 3 yrs, that would be worth it.
Then common sense was eating at me, there's got to be a catch, I started thinking, well I am at the mercy of the dealership in that scenario, for them to sell me the next ride at inflated price, coz if I do dump the miles on, I can't sell it for a profit and can't walk away without getting nailed by the FC. I asked him about that, and he said well, I don't think you'd have a problem coz we'll want to sell you a new car, and we can't hurt you on the 'trade' coz the whole thing is regardless of miles, if you trade with us, we'll honor your residual.
It was too much for me to figure out, any thoughts?
Hello, Car_Man I am considering leasing a new 2002 X5. Never leased a vehicle before.Would it be too much to ask to give me as much information as possible given the following figures : MSRP:$46,070 Gross Cap Cost:$44,200 Money Factor:(?)What is the current standard money factor through BMW(assuming really good credit)? Lease Term:36 months Miles per year:12K Residual:(?) Is there a standard figure for that? My goal is to lease this vehicle with no downpayment.Would it be better to wait for the 2003 model year(higher residual)? Can you, please give me an estimated monthly payment and expected "normal" fees.
Hey footie. Things are going great. Thanks for asking. OK, let's scroll back and see what sort of questions you have. I am surprised to see that BMW dealers in your area still have so many left over 2001 models on their lots. That certainly is very poor inventory management, unless there was some extremely unusual circumstances. Unfortunately, the later in the model year one gets, the worse vehicles' residual values become. Low residual values are very bad in the world of leasing because they force the lessee to pay for a huge portion of a vehicle's depreciation over the length of their lease. In fact, this huge difference in residual values often makes it less expensive to lease new model year vehicles than it is to lease left over models even if they have more lease support on them. I haven't seen any sort of lease numbers for 2001 BMWs in quite some time. I am not even sure if you could lease one through BMW Financial Services right now. If so, it may end up being more expensive than you think. Consumers are usually better off purchasing or financing really old left over vehicles than leasing them.
Thanks for asking, karz10. My trip was nice and relaxing. I have actually not had an opportunity to take a look at Toyota's August lease program yet, but suspect that I will by some time late this week. If you would like, please check back with me then and I would be more than happy to calculate a sample lease payment for this truck for you.
In response to your second post, karz10. The sort of "New" closed end lease that your salesperson described definitely does not exist. Perhaps they would like you to believe that your lease-end charges will magically disappear if you purchase or lease another vehicle from their dealership at the end of your term, but I can assure you this definitely will not be the case unless you purchase and trade in your vehicle. Even if they were to pay your lease-end charges for you or if they took your truck as a trade, the only thing that would accomplish would be to hamper your ability to negotiate a good deal on your next car or truck. It certainly would not be free.
Hi cashford. I have seen Nissan's August lease program, which was introduced on the first of the month. This program did not contain any sort of money factor or residual value data for the new 350Z (which looks like it will be a neat car BTW). I will keep my ear to the ground to see if NMAC release any sort of lease program for this car, but they may not publish numbers for it until September.
I would be more than happy to help you out, kotarak. Keep in mind though that BMW initially announced this lease program on July 2nd. Although it was originally scheduled to run through September 2nd and unscheduled changes to it are unlikely, there is always a chance that they may have made some slight revisions to it for the month of August. According to the data that I have seen, if you were to lease a 2002 BMW X5 3.0i or 4.4i through BMW Financial Services at this time for 3 years, their base lease money factor should be .00260. The 3 year 12,000 miles per BMW FS residual values for these trucks should be 61% for the 2002 X5 3.0i and 58% for the 4.4i. I would be more than happy to calculate a sample lease payment on this truck for you if you tell me which one of the two trim levels that I mentioned you are getting. Given the lack of lease support on the '02 X5, it certainly would not surprise me if it was indeed less expensive to lease an '03 version of this truck when it is introduced. Whether it is or not will depend upon how much higher BMW's residual values are for the 2003 model and how much of a discount you are able to negotiate on the 2002.
Thanks Gregg. I have not seen Infiniti's August lease program yet, but suspect that I will have had an opportunity to check it out by late this week. Please feel free to check back with me then and I will fill you in on anything that I have been able to find out.
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MSRP....I am being quoted is $39,495 for the 'SE' and $41,495 for the 'HSE'. Because they are still relatively new, I am not certain how much below MSRP I can get....but will certainly try. The lease payments I posted I believe derived from the MSRP figures. Thanks for any advice!
Readers of the forum: can you share experiences of amount paid for the 2003 DISCO(MSRP or how much below)? Thanks!
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You really provide a great service which I really appreciate. 2 questions
I am planning on leasing a loaded volvo s60 AWD, have a trade in worth 5-7K. It seems it would be better to take cash for the trade in rather than use it for a cap cost reduction, don't you think? That way, if the new car gets totalled after 1 mo, I haven't lost the whole trade in value down the drain.
Second question, I know volvo has what sounds like a pretty good advertised lease deal through Jul 31 (2500 down, 388/mo + acquisition fee, residual of 20,600 based on a cap cost of 37,000, 12000 miles/yr). Do you know what will be in the offing for August (i.e., will this be extended or back to Volvo baseline, and what is Volvo's baseline deal for the southeast?)
Many thanks in advance
Mike
It looks like the "great" Volvo deal on this car is to lease you a year-end model 2002 at MSRP. If you run the car and options through the Edmunds TMV invoice/msrp/TMV calculator you get
invoice 34,717
msrp 37,200
TMV 35,500
Even though their money factor is very low, they are still making you pay for part of the year model depreciation by only offering a 55% residual.
The better question is should you wait for the 03's to come out. I would try to negotiate the deal on 02's which should be much better than MSRP!
Also, there's a good lease in the same price range for a well-equipped Lexus IS300 and BMWFS is usually aggressive late in the model year for the 3 series. The 325i/330i are the benchmarks for the luxury/sport sedan market, though sometimes a nutch pricier than the Volvo.
The 325xi w/AWD and similarly equipped to the S60T AWD has a MSRP of $35,500 or so. The 330xi is $40,000. The Volvo guys should have to negotiate heavily to keep you from getting away to a BMW for the same or lower money.
Enjoy your wheeling and dealing!
I have read this board for some time and know that you always give great info. I have a question that I hope you can answer for me. I have a 2000 BMW 328i that I have financed through the BMW Owners Choice program. That contract is coming to an end in a few months and I really want to look at an M3. I was hoping that given the following info you might be able to give me a close figure on the monthly payment for an M3 lease. Price of $51,120, $3000 down, 36 months, 15K miles a year. Not sure what the current residual and money factor are. Any help you could give me would be very much appreciated. Thanks in advance.
Longtime lurker ... you are truly a great source of advice and it is much appreciated! I am looking to lease a Honda CRV EX and wanted to ask a follow-up question to your post #4098. There, you suggested waiting until the 2003s are out because of their higher residuals.
First, do you know when the 2003s will be in dealerships? I'll need to lease by the first week of September.
Second, do you know when exactly the 2002 residuals will be revised down? i.e. maybe I should lease before that point.
Third, does AHFC have set acquisition/disposal fees that I should know about?
Lastly, when will the base MFs and residuals you quoted in #4088 and #4098 expire (i.e. does it change over on Aug 1, or some other date)?
Thanks in advance for your help!
I read another post that you said that the 3-year 12k mi residual on an 2003 Acura TL-S is 65% and a 0.0023 money factor. Can you confirm the 3 year figures above and tell me what the 2 year residual and money factor is in Southern California (all 12k mi/yr)?
Due to the extremely high residual, even with the average MF the lease payments are extremely low. I know you like the G35 but a TL-S lease would be between $50-140/mo cheaper than a G35 depending on options!
Also like the Audi A4. Can you give me the residual and MF on the 1.8T and 3.0 non-Quattro and the 3.0 Quattro, all automatic sedans.
Do you know of any other cars that have higher than 58% 3-year residual (12k mi) that costs between $20k and $40k (other than BMWs)?
Thanks so much!
P.S. I don't work for Honda but am very close to leasing also and I do my homework...Good luck!
Anyway, would you please give me the residuals, money factors and incentives for a 3yr/36k mi lease in So. Cal. on the 9-5 Linear, Arc and Aero sedans.
Oh, could you also let me know what those same terms would be on a 9-3 Viggen 5-door. And also on a Passat GLS 1.8 and V6. Thanks so much again! These all seem to be the cars that you say have the best deals going for them.
Ky-Won
I stopped by a Toyota dlr the other day coz I saw somthing on their used lot. Met a salesman, after discussing various things, he started pitching me on leasing an '02 Sequoia.
Ok, I was looking to spend between $20-$27k originally, w/ about $7k down depending on what I can find ('99 Expy EB-'00 Navigator price range). And since the Sequoia hasn't been made long enough to have a '99 or '00, and wouldn't drop as much on a resale anyway, I wasn't looking at them. Otherwise I think they're nice trucks.
All I remember is that a Sequoia Ltd MSRP is in the low to mid $40k's, and I saw on an Edmunds board some people were buying various SR5's in the mid $30k's. I like leather and sunroofs etc., so most likely would like the 4x4 Ltd. or a loaded SR5. The one SR5 they had on lot seemed loaded w/ an MSRP of around $39k had lthr and all, but no roof/ent syst etc.
The dealer said they were doing a $49 over invoice sale on stock, it would be more to do a locate. I said well, unless the other dealer was gouging you, a locate shouldn't be that much, so theoretically I would only be looking at a couple hundred over invoice for a locate, they reluctantly agreed.
So, if I were to get a loaded SR5 or Ltd. at around invoice, what should the lease be?
Assuming
-good credit
-oh say 24 or 36 mo (you shouldn't lease longer than that should you?)
Please inform me of up front costs and payments, although I understand some leasing stuff, I've never actually done it, and am still somewhat confused by it. I would like to look at the two scenarios, putting $$ down on a used Navigator for example, w/ a payment for 4-5 yrs and owning it, vs not putting money down and having x payment for x term to lease a Sequoia.
Any educational comments regarding that scenario are also appreciated. Thanks,
Karz
He asked me 'Are you familiar w/ the NEW types of closed end leases on the market today', I of course said maybe not, I was somewhat familiar w/ traditional types of open and closed end leases, but maybe not the NEW kind.
He proceeded to tell me about the closed end lease, where I can sell the car myself, turn it in and walk away, or trade it in. I said, yeah sounds normal so far. He said, yes except that w/ the NEW kind, if I elected to trade/upgrade w/ them, that it didn't matter what the mileage was. In other words, there is theoretically language in the contract that the leasing company can charge you for overages on miles, if you turn and walk, but if you repurchase/lease at the dlr, somehow this magically disappears. I'm sitting here thinking, instead of me driving the Sedan I purchased to put 25-30k mi on it, and having Mommy driving the new SUV for the kid on the way, day-to-day, maybe I could drive the crap out of this Sequoia and just trade it in for a new one in 3 yrs, that would be worth it.
Then common sense was eating at me, there's got to be a catch, I started thinking, well I am at the mercy of the dealership in that scenario, for them to sell me the next ride at inflated price, coz if I do dump the miles on, I can't sell it for a profit and can't walk away without getting nailed by the FC. I asked him about that, and he said well, I don't think you'd have a problem coz we'll want to sell you a new car, and we can't hurt you on the 'trade' coz the whole thing is regardless of miles, if you trade with us, we'll honor your residual.
It was too much for me to figure out, any thoughts?
Karz
I am in no way any expert of any kind, but that "NEW" lease doesn't smell right to me either. In any lease, if you elect to purchase the car at the end, it doesn't matter what your mileage is at. Mileage only matters if you turn it in and walk away.
In the scenario that saleman proposed, I believe how it would work is that the dealership would purchase the leased vehicle at the end of the lease and that would be your "trade-in". As in any trade-in you can have positive or negative equity. Although he's telling you that they'd honor your residual, if you take it to the extreme, then you could put 300,000 miles on the car they'd still give you the same residual as if you put 36k mi on it. I'd like to see that in writing, from someone that really matters at the dealership. Just doesn't seem like there's any way that could work.
I think it really depends on the T's and C's of the lease. Do they require more cap cost up front for this 'new' lease or a higher money factor ( and Toyota is high anyway ).
Also, is it in writing that the value of the Sequoia at the next trade is residual?
Also, can you trade the Sequoia in on some other kind of Toyota? Let's say you tire of the big SUV thing and want a Matrix. The amount of profit that they may have to play with down the road is much smaller in a lower priced car!
Because the other way that they have some flexibility is how they discount the next car you lease or buy from them.
Let's say you get the Sequoia now at a great deal. Lease it on a 3 yeaer 36K lease and run up 60K miles - 24K over. This would normally cost you 15 to 20 cents per mile extra or $3,600 to $4,800 in extra mileage chartes. However, the wholesale value of the Sequoia is probably only down $1,500 - $2,000 due to the excess mileage, so that's all they have to make up in a deal.
So here's their deal to you in three years: You can trade in your high mileage Sequoia and lease or buy a new one at MSRP ( refusing to take anything off list ) or pay the mileage over charge, or you have to buy out the car you drove assuming you'd have no problem getting rid of it.
Making up the wholesale value drop of a couple of K would be no problem on a MSRP deal on a Sequoia.
I'd be tempted to take a lease with the highest possible residual you can negotiate since that should be the value of the car at trade in time. So that means taking the lowest annual mileage they will give you.
Regards
Although, as I said, I did want to consider the claims, and get some feedback from people here, along with looking at the other numbers before I did make a decision.
As kywon said, I forgot about that other option, I could purchase the vehicle, although this scenario always confused me, to get a good lease deal, to me it seems like you don't want to put any money down, have the highest possible residual, the lowest money factor, therefore your payments would be the lowest. So what scenario would make sense to buy the vehicle if you got low lease payments leaving you w/ a high residual that you have to purchase at? But as you said kywon, if it was in writing, and I put alot of extra miles on it and did in fact want to trade in for new, that would be a good thing.
footie, yeah that's what I was afraid of, not getting a good deal on the next car. So even if it is in writing that the value of the Seq will be residual, there's nothing that's going to say they'll sell me the next car at invoice, and if I did go pour on the miles, I'm basically at their mercy, since I can't walk away w/o getting hit, and despite supposedly good resale, may not be able to get out clean selling it myself w/ xtra mi.
And like you said also, what if I don't want another Sequoia, but am willing to buy another Toyota, how does that affect it...
Well, I'll wait and see what kind of numbers I get on this lease and see what happens...
Thanks
Karz
In my specific case, in 1999 I received a high residual (55%) a low money factor (about 1.4% interest rate), and the dealer incentive ($2000).
Now at the end of my lease, the residual value is way above the market value of the car. (They're only giving 44% residuals on my same car now). Oh, by the way, residuals aren't negotiable as far as I can tell. Because of this I've been able to negotiate my leasing company down from the stated residual by almost $3,000. However, you are not always able to negotiate the residual with the leasing company at the end of the lease due to residual insurance that is often purchased.
Anyway, I look at leasing as a financial tool to get the best deals I can on a car and be able to get into new cars every few years. Also, one of the benefits of leasing is that it effectively gives you a call option at the end of the lease to buy the car. If the car has treated you well, and you love it, then you can buy it. If you hated it, or have had problems (or an accident like me) then you can turn it in and walk away. If I hadn't been in an accident in my car and it was an automatic, I definitely would be purchasing it off lease. But because of those two things, I'm looking to lease something else.
i was looking at sedans last year, i drive a lot of miles on my primary and only car (about 25k mi yr) and Bill and the Host here had pointed out some things like that before
i was shopping the Acura TL Type-S, Infiniti I30 and I35 primarily, and looked at many sport sedans, Bill explained to me about leasing a Volvo for example, he said maybe if I liked an S60 for example, it would make sense to lease something like that and walk away, even with high miles, due to quality of the car, low resale value, and factory subsidized leasing rates, they showed me some examples, and I took it seriously as an education, although I found the value of the car itself to meet my needs less than others I was looking at
I looked at leasing the Ac and Inf, but I ended up buying closeout '01 I30t for $3k under invoice ($27k), it was blk/blk my preferred color, roof and shade, everything but navi, plus the sport pkg under body and rear spoiler (factory installed so no extra brake light in the rear deck, a pet peeve of mine), on of course the 't' on that means 17" wheels and sport suspension
the comparable I35 would have cost a lot more, a) little/no discounts, b)no 't' in 02, had to buy the sport pkg to get 't' features, still had to buy the roof and shade plus have to buy the spoiler and underbody, so you're looking at like $36k and some change, all for the new body and 28hp
if it came down to the TL-S and the I35, the TL-S would have won, but I didn't like the TL-S dash controls w/o the navi (looked cheap to me), so w/ navi and all the trimmings, I would have been above $32, maybe way above, and that would be getting a good deal, plus if you get a spoiler in the TL-S, you are stuck w/ the brake light in the rear dash, yeah I could disconnect it and tint the windows, but all in all, that's why I made the purchase I did for $27k
The thing I'm concerned about a lease, not good to do any customization to the car, miles, forced to make a decision about future car at a particular time, getting screwed on the deal in general
However, I'm not one to run from something just because I don't understand it, and am trying to weigh my options, as I am now thinking for a family, not just myself, the parameters have changed somewhat. Thanks for the feedback
Karz
Again, thanks for this great service. The info is invaluable to many of us! I am trying to figure out if the timing is right to take advantage of an unusual situation and I am looking for your thoughts and suggestions.
Here goes:
Despite the brand's popularity, many of the Boston area BMW dealers have excess inventory of the "lower peformance" models from 2001, including 325's and 525's, some in wagons and AWDs. ( One nearby has 16 325s, 6 5-series and a couple of Z3s ).
I'd like to approach a couple of dealers to see if there is a way to drive a really good lease deal. With the 2003's right around the corner, the 01's are getting more than a bit lot weary.
In today's terms what do you think the residuals ought to be? Mabye residuals like on a 4 year lease but with a 3 year term? If I can drive both a low cap cost and low residual with a low money factor, I might be able to get a great deal!
Any info on current BMWFS lease rates on 2001 325/525's? Do you have any contacts there to check with? Any suggestions on how to approach the dealerships? I have three to shop at and can practice on two of them!
Regards
Just wanted to let you guys know that I just completed the sale of my leased truck (2001 Ford F150 Supercrew) and it worked out great. To avoid sales tax the dealer paid off Ford Credit then handled the sale to my buyer at NO CHARGE TO ME!!! They even refunded me 1/2 month's lease payment since the sale took place half-way through the final leased month. I ended up avoiding $1400 in sales tax, making $5200.00 on the sale, and since I have another Ford truck on order from them which I intend to lease; everyone involved is very happy. I paid true invoice for the 2001 which I just sold off a 2 year lease which had a 61% residual. I don't expect 61% on the 2003 since leasing has come back down to earth, but am once again doing the deal at invoice. For all of you in the Denver Metro area the Dealer is Phil Long Ford (Blue Oval)and they will have me as a customer for a long time!!
I have been researching leasing and have seen all sorts of fees for leases. Are there any "basic" fees that you can definitly expect on a lease? Also, what are some fees that a dealer may try and toss at me.
Here are some fees that I have already run across. If someone has the time, could you tell me which of the following fees are legitimate and which aren't? And If you really feel like being nice, post a usual/reasonable $ charge with the fee (I know it's asking a bit much, but had to put it out there)
Acquisition fee
Drive-off fee
Manufacturers fee
Disposition fee
Doc fee
Title fee
Registration fee
Security Deposit
Advertisement fee
Rent charge
any help is appreciated, jgw
Leland
Can you please post the August rates for the Infiniti G35 (leather)
Residual & MF
12K miles/year
24, 27, 30, 36 months. Thanks
Gregg
Thanks.
Acquisition fee - A very normal charge on a lease in the $395 to $595 range, and sometimes waived in special leases. It's about the same as 'points' on a mortgage. You need to be careful with the dealers that place your lease through the manufacturer's leasing arm as they often mark up this fee between you and the leasing company. Sometimes they another $200 to it. If you lease through the manufacturers leasing arm, make sure you know what their standard Acquisition fee is.
Drive-off fee - Never heard of it. Is this the cost to drive off the lot or something?
Manufacturers fee - Never heard of this either. Manufacturers are almost never a party to a lease transaction. They have already sold the car to the dealer. The dealer will be selling it to the leasing company (even if it is a subsidiary of the manufacturer). There should be no "manufacturers fee".
Disposition fee - This can be one of two fees so find out what its for and argue that shouldn't pay it under either circumstance.
Case 1: A negotiable fee that you pay at the end of the lease if you DON'T buy the car. This fee should never be paid and be prepared to walk the deal to prove it. The lease company owns the car. Why should you pay them to sell something they own?
Case 2: On the other hand if its the fee for you to BUY the car at the end of the lease, then you don't have to pay it if you don't buy the car. Since the purchase price at lease end is generally negotiable, well so is this number, so why agree to it now. It doesn't make sense to agree to a sales transaction fee 3 years from now.
Doc fee / Title fee /Registration fee. Doc fee - in most states this is the fee that the dealers charge to 'document the sale' (most of which they do sitting with you selling it to you. They have to go find the 'certificate of origin' which they filed somewhere, prepare a bill of sale to whoever is buying the car ( you or the leasing company ). It's probably an hour's work max. They usually want at least a $100. I bet the administrator that does this only sees about $18 for their time.
Title fee is for typing up the title documents and is part of the prep. In some states the state charges a fee for this. Find out what it is. If the car is being leased this should be paid by the leasing company. Remember they are getting $395 or more to cover their Acquisition costs. Maybe they can figure out how to cover the Title fee out of $400 or more!
Security Deposit - Very typical for most leases and usually about 1 months lease. You are supposed to get this back at the end if the car only shows normal wear and tear and your mileage is within range. Don't fall for paying multiple security deposits to get the payments down. You are loaning them money at zero interest.
Advertisement Fee - This is a fee some dealers like to add on to the 'invoice' cost of the car. It's a cost of doing business that is back charged to the dealers to support regional marketing. Tell them if they want you to pay for the ads that brought you to their dealership you will shop somewhere else. After, if the dealerships are banding together to advertise their costs should be lower, not higher. Many car makers provide dealers with a specific discount called hold back in many cases that they get that helps cover this. You shouldn't pay an 'advertisement fee'.
Rent charge - I am not sure what you mean here. In some leasing terms 'rent charge' is the monthly amounted computed by adding the capital cost and residual and multiplying that sum by the money factor. For all intents and purposes its the interest expense on the value of the car during the lease. If its anything else, it doesn't sound normal.
I hope this helps.
It's called the 3 piles of money strategy. Here goes:
* There are only three piles of money associated with buying ( or agreeing to a price for a lease)"
- the price of the car
- the taxes manadated by law
- the fees associated with transferring the title of the car to the new owner
Here is an approach to dealing with these:
* When you are buying a vehicle, research its prices and use something like Edmund's TMV to figure out what the market is paying for the car. You probably won't get much lower, except for odd colors or strange option mixes.
* Try to narrow your choices down to cars that are likely to be found on lots in colors you like for prices you feel are fair. To do this you should find out if the manufacturer tends to configure certain mixes of options for your area so you are likely to know what you will encounter on dealer lots.
* Once you know the market price' and are satisfied that it represents a fair price to you,
this is pile #1 and shouldn't change, no matter what the dealer throws at you.
* Now figure out the sales tax. If you don't know what it is call your local registry and ask. This is pile #2.
* While you have the registry on the phone, ask them for title and documentation fees if you did it yourself. This is pile #3.
If you did a cash deal or even financed it, what you pay for the car, its tax and fees are the same.
However, the dealership doesn't want to let you go so quickly.
Anything that they add to pile #1 makes pile #2 get bigger. Anything that they add to pile #3 is an add-on or just extra profti!
What do you do now? Add in these fees and add them up. This is your 'out the door cash price'.
When you visit the dealership only look at cars that you have done the 'out the door pricing on...'.
Call ahead, find out if they have them or how close they get to what you are looking for. When you are there, don't tell the sales person or the closers anything about your financial situation unless that's really critical to you to get a deal done.
When you find a car you like and want, ask the sales person for an 'out the door' cash price. If he balks or dodges or asks questions about what you mean, tell him, "its simple, it's the amount of money I have to give your dealership in one check to drive this car home with my name on the title with no loans or financing". Tell him to separate it into three numbers: the car, the taxes and all other fees.
No matter what he comes back to you with on whatever passes for offer sheets, always, always put the numbers into those three piles.
If they are having a hard time doing this all at once, offer to help them. Let's agree on the price of the car all by itself first!
When you can agree on that price, pile 1 and pile 2 are now firm.
Then let's talk about the fees. You may have to give some ground here, decide how much you are willing to pay for the documentation fees.
DO NOT agree to Window Etching of VIN number. It's all over the car anyway since the 1992 Federal Car Theft Act or your car already comes with a super duper antitheft system.
Which reminds me, DO NOT buy a Theft Recovery System. The top 10 stolen cars in the U.S. are all mostly 10 year old Toyotas and Hondas. Plus new car key systems are increasingly difficult to thwart.
What does this have to do with leasing?
Now just before signing a cash deal, ask about a lease? Ask if they have a special deal with a lower cap cost than your price in Pile #1? If not, pile #1 is your leased 'cap cost' (not MSRP).
Pile #2 gets reworked for a lease and varies by state. Some states onerously tax the entire cap cost, even though you are only paying for the depreciation.
Pile #3 should remain the same, but there are fees in a less that are associated with the deal. Acquisition fees and security deposits are typical. Make sure yours are reasonal in your market and with your leasing company before signing.
Here's a typical lease laid out:
MSRP $20,566
Invoice price $19,612
Capitalized Cost $18,500 (PILE #1)
First months payment $259.00
Acquisition FEE $500 (new to Pile 3)
Security Deposit $259 (new to Pile 3)
Capitalized Cost Reduction $2,500 ( make this as small as possible).
Due at signing not including tax/fees $3,518.00
Residual Percentage 55%
Residual Value after 3 years $11,311.30 (this is the residual 55% x the MSRP )
Term Depreciation $4,688.70 ( capcost - residual )
Interest Rate 4.8% (this is an estimate)
Money Factor 0.002 (this is what sets your monthly payments)
Monthly Lease Rate $59.62 ("rent"?)
Number of months 36
Monthly Depreciation $130.24
Pre-tax monthly price $189.86
(this price doesn't include taxes)
State Sales Tax on Payment $9.49
State Sales Tax on Cap Reduction $0.00
Monthly Payment $199.36
Due at signing $3,518.00
Doc fees $100.00
Tax on cap cost reduction $125.00
Total Due at Signing $3,743.00
I heard they were releasing the residual and money factor info on 8/2/02.
Any information on the residual/MF, 3years, 15k miles.
Thanks!
I heard they were releasing the residual and money factor info on 8/2/02.
Any information on the residual/MF, 3years, 15k miles.
Thanks!
Car_man
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Can you just check there and share your thoughts with me.
Thanks
4220 of 4239 I'm not sure by karz10 Jul 29, 2002 (06:46 am)
what I want to do yet, but I am leaning towards buying a used Navigator if I can find a good one.
I stopped by a Toyota dlr the other day coz I saw somthing on their used lot. Met a salesman, after discussing various things, he started pitching me on leasing an '02 Sequoia.
Ok, I was looking to spend between $20-$27k originally, w/ about $7k down depending on what I can find ('99 Expy EB-'00 Navigator price range). And since the Sequoia hasn't been made long enough to have a '99 or '00, and wouldn't drop as much on a resale anyway, I wasn't looking at them. Otherwise I think they're nice trucks.
All I remember is that a Sequoia Ltd MSRP is in the low to mid $40k's, and I saw on an Edmunds board some people were buying various SR5's in the mid $30k's. I like leather and sunroofs etc., so most likely would like the 4x4 Ltd. or a loaded SR5. The one SR5 they had on lot seemed loaded w/ an MSRP of around $39k had lthr and all, but no roof/ent syst etc.
The dealer said they were doing a $49 over invoice sale on stock, it would be more to do a locate. I said well, unless the other dealer was gouging you, a locate shouldn't be that much, so theoretically I would only be looking at a couple hundred over invoice for a locate, they reluctantly agreed.
So, if I were to get a loaded SR5 or Ltd. at around invoice, what should the lease be?
Assuming
-good credit
-oh say 24 or 36 mo (you shouldn't lease longer than that should you?)
Please inform me of up front costs and payments, although I understand some leasing stuff, I've never actually done it, and am still somewhat confused by it. I would like to look at the two scenarios, putting $$ down on a used Navigator for example, w/ a payment for 4-5 yrs and owning it, vs not putting money down and having x payment for x term to lease a Sequoia.
Any educational comments regarding that scenario are also appreciated. Thanks,
Karz
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#4221 of 4239 Also, thought this was weird.... by karz10 Jul 29, 2002 (07:04 am)
One thing that confused me, and left me feeling a bit 'slimed' was a tactic initially used to pitch me on the lease...has anyone heard this....??
He asked me 'Are you familiar w/ the NEW types of closed end leases on the market today', I of course said maybe not, I was somewhat familiar w/ traditional types of open and closed end leases, but maybe not the NEW kind.
He proceeded to tell me about the closed end lease, where I can sell the car myself, turn it in and walk away, or trade it in. I said, yeah sounds normal so far. He said, yes except that w/ the NEW kind, if I elected to trade/upgrade w/ them, that it didn't matter what the mileage was. In other words, there is theoretically language in the contract that the leasing company can charge you for overages on miles, if you turn and walk, but if you repurchase/lease at the dlr, somehow this magically disappears. I'm sitting here thinking, instead of me driving the Sedan I purchased to put 25-30k mi on it, and having Mommy driving the new SUV for the kid on the way, day-to-day, maybe I could drive the crap out of this Sequoia and just trade it in for a new one in 3 yrs, that would be worth it.
Then common sense was eating at me, there's got to be a catch, I started thinking, well I am at the mercy of the dealership in that scenario, for them to sell me the next ride at inflated price, coz if I do dump the miles on, I can't sell it for a profit and can't walk away without getting nailed by the FC. I asked him about that, and he said well, I don't think you'd have a problem coz we'll want to sell you a new car, and we can't hurt you on the 'trade' coz the whole thing is regardless of miles, if you trade with us, we'll honor your residual.
It was too much for me to figure out, any thoughts?
Karz
I heard they were releasing the residual and money factor info on 8/2/02.
Any information on the residual/MF, 2 years and 3years, 15k miles.
Thanks!
I am considering leasing a new 2002 X5. Never leased a vehicle before.Would it be too much to ask to give me as much information as possible given the following figures :
MSRP:$46,070
Gross Cap Cost:$44,200
Money Factor:(?)What is the current standard money factor through BMW(assuming really good credit)?
Lease Term:36 months
Miles per year:12K
Residual:(?) Is there a standard figure for that?
My goal is to lease this vehicle with no downpayment.Would it be better to wait for the 2003 model year(higher residual)?
Can you, please give me an estimated monthly payment and expected "normal" fees.
I hope your vacation was great.
Can you please provide the MF & res for August program for Infiniti G35 (lux leather).
12K miles/year, 24, 27, 30, and 36 months.
Thanks
Gregg
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