Lease Questions - Ask Here

dave_h2 · May 2003

Thanks for the additional info, Car Man. You are the guru this grasshopper needs.

I will avoid paying any "cap cost reductions".

Getting back to your first response, I actually wouldn't need more than 12,000 miles per year. I leased a Caravan in '97 with 12,000 per and at close of lease was under that. In 2000 I leased another Caravan (my last as I am sick of Caravan's) and negotiated down to 10,000 per (although money factor/interest rates were very high at the time so "got screwed" anyway) and will be returning the car in late June well under that mileage allowance as well.

So - my quetions are this:

I've been reading the "Odyssey Prices" thread and it appears that prices are inching downward due to Sienna's agressive competition. Is it likely I could negotiate a price lower than the $29,440 you quoted for Model EX-L with DVD (damn kids)?

I've noticed that the lower prices tend to be in the south and southwest. Living on Long Island in New York, should I resign myself to paying "top dollar" or is there hope?

nas43 · May 2003

neil55,

I'm looking at a copy of the policy change memo and what is says is:

"To utilize the current Multiple Security Deposit, ALL contracts must be received and funded by June 30, 2003."

I interpret this to mean that you must officially lease the vehicle by June 30th.

neil55 · May 2003

Thanks Car_man and nas43,

I will check with a dealer re your points. Will post to the board when I have the response.

cwadster · May 2003

What is the current money factor on a BMW 330i lease? I'm being told by two dealers that it is .0017 and .00175, but someone on the BMW board says he got .0012. Which is correct, and how do I hold a dealer to the lower one?

lawman10 · May 2003

Just wanted some feed back on this lease deal that I was offered for a 2003 540i sport package with xenon lights. The lease terms are $650/month including tax for 36 month lease with 12kmiles per year. Out of pocket is $2k and this includes first payment. It sounds like alot of money for a lease but I love the car, and all the other BMW dealers are saying this is pretty much cost. Please advise.

razorweb · May 2003

Dealer is willing to give me 1200 over invoice of 32,730 (so he is giving 33,930). Based on current money factors, and residuals, what kind of lease can I expect for 15K miles, 36 months, and a trade in I expect to get 2500 for? how about a $2000 trade in? Should I utilize multiple security deposits to lower the MF?

razorweb · May 2003

the tax rate here is 8.25%. I know, I know.

eaweg · May 2003

Hey Car_Man...long time no e-mail. I recently saw a 2003 Passat W8 wagon, automatic with the sports package. I believe the cost was around $40,700. Could you give me lease figures for a 48 month lease here in North Carolina? I would need only 10K or 12K miles per year. I would pay only tax and title.

navirad · May 2003

Carman:
I haven't reviewed the entire thread, but the replies I have seen have been outstanding. Excuse me if my questions are repeats.

I just returned from a BMW 530I 5-speed test drive. I asked how aggressively the dealership was trying to move their inventory and this was the deal I finally heard (first discussion; no counter on my part, although I told him I thought he could do better on the money factor - .0012 - and told him about the MSD option).

3 years, 10k miles per (I usually put on about 8K), 0 down, but $5500 security, with 0.0003 mf and 62% residual for $519 per month, inc. 6% sales tax.

He said he took $2000 off MSRP, but then he added back in a $774 "bank fee" and a $250 dealer fee.

Is this "bank fee" real, and why do they always slip a "dealer fee" in the back door rather than just starting at $1750 off MSRP?
I've seen that BMW's base mf is .001. Are they keeping the difference? He insisted that .0012 was BMW's base.
What's a reasonable profit above invoice for me to shoot for?
Thanks in advance for your help!

navirad · May 2003

BTW, the above car had sports package, 5-speed, premium package and xenons, bringing MSRP to just above 46K. Thanks.

fielding_yost · May 2003

Car Man/Hero, I need you to clear my thoughts. I'm in the final stages of negotiating a lease for a 2003 525, as follows: 5sp, PP, CWP, heated wheel, xenons, MSRP $41,745, Invoice $38,205. I've been quoted $498/mo (includes 6% Michigan sales tax) on a 36 mo., 12K mi. lease, with $1000 down payment (plus security deposit). What is the MF and what should the residual be? I believe the cap cost is down to $40,400 on this current offer.

I've done the rough calculation using 60% residual and .0012 MF at a cap cost of $40,000. By my (imperfect) count, it seems like they've given me a decent deal, but I'm paranoid and think that they can do better.

My counteroffer will be as follows: reduce the monthly payment to $490 (which incl tax) AND make it a 15K mi. lease. Am I asking too much, just enough, not enough? I'd really prefer a 15K lease.(FYI, I'm not into paying any money for a down payment, but the only reason I'm considering it is to insure that the payment stay below $500 per month due to an upcoming home refi)

Eagerly and thankfully awaiting your info/response. -- Fielding Yost

g17 · May 2003

Car_man...you helped me out a while back when I was negotiating a lease on a TL-S for my sister, and I thank you, but now I need the help!!!

I'm going to lease one of the above sometime in June for sure. I know the 325i has been rehashed over and over, but I need a quick refresher.

Here goes: 325i with Sport, Auto, Xenon, Htd Seats, and the Harmon stereo. (MSRP 34095, INV 31300)

MB 230K sedan w/ C2, Auto, Htd Seats, 6 disc changer. (MSRP 32685 INV 30448)

I need Base M.F. and residuals on both cars for 36 months with 12k/yr and 15k/yr.

Also how long are these M.F. good until?

Thanks in advance...i owe you a beer....or two :-)

alanek · May 2003

Has anyone used MSD (multiple security deposits)with their lease on an RX 330. Can you tell me the numbers and how much you saved?

Car man, can you tell me what I can save on a 48 mos lease,12000 miles,Performance and Nav. MSRP is 46,718?

dave_h2 · May 2003

I feel such a terrible void in my life ;-)

bama60 · May 2003

g17,

I can answer you on the BMW rates because Car Man already provided those to me for May. MF is .0015 and residual is 61% for 12K miles and 59% for 15K miles. Those rates are good till June 2nd.

razorweb · May 2003

will the MF and residual numbers on the 325xi change?

joe2617 · May 2003

Can you help with the money factor and residuals for an IS300. 36 month lease with 12k per year through Lexus financial? I was just told that a NJ lease with $3000 down is $350 per month. I'm getting high 400s on Lease Star but I don't have access to Lexus financial info.

mzinzi · May 2003

CarMan,

I'm looking to lease a 2003 Nissan 350z Enthusiast model through Nissan North America.

Can you tell me the money factor and residual for a 12,000 mile 36 and 39 month lease. Thanks!

dpriwin · May 2003

Just completed a deal and benefitted greatly from the expertise of the great CarMan and from the comments and the comments made by lponz7 and nas43.

I just leased a 2003 MB 320. The MF and residual provided by CarMan saved my a bundle. The finance manager (with whom I had already dealt in two previous purchases but never a lease) quoted a residual of 66% (matching CarMan's #) but a money factor marked up by .0005. At first I told him that I felt that was high. When he dropped it only a bit I told him that I knew the base MF was .00275. He then went on to say that he also needed to make a profit. That's when the arguments presented by lponz7 and nas43 came handy. I asked if he would make a profit if I payed the car in full, to which he answered the obvious NO. We agreed on the base MF.

Before leaving, the finance manager asked me where I found the information on the MF and residual. Not to reveal our extremely valuable information source I answered that a friend in the industry had provided it. We left it at that.

Thanks to all of you and in particular to you CarMan for the great information, awesome attitude and desire to help.

Daniel

330ifan · May 2003

CarMan,

Can you please advise what the June money factors are for the 330i and the 540i? What about residuals for a 15000/yr 36 month lease? Can these money factors be used in conjunction with the 10 security deposit program (which I understand is being cut back significantly July 1)?

Also, is it true that BMW of North America will pay the first month's lease payment for leases inked before July 1 for new 3 series and 5 series cars? (I called the BMW 800 lease number and someone confirmed this for the lease of new cars, although my local dealers of course deny any knowledge).

As always, thanks very much.

CarMan@Edmunds · May 2003

You're welcome, dave_h2. I'm not surprised that Odyssey prices have dropped somewhat now that the redesigned Toyota Sienna is out. The new Sienna is a big improvement over the previous generation. The price that I provided you with was the Edmunds.com True Market Value for the model that you mentioned. The Edmunds.com TMV for vehicles is a good place to start when trying to get an idea as to how much one should spend on a particular model, but it certainly is beatable in most cases if you shop around.

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CarMan@Edmunds · May 2003

Thanks for the additional information, nas43.

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CarMan@Edmunds · May 2003

No problem, neil55. Please do come back and let us know what you are able to find out. I am very curious what BMW's policy is on this matter.

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CarMan@Edmunds · May 2003

Hello cwadster. You didn't mention how long you plan on leasing this car for, but BMW Financial Services' base lease money factor for the 2003 330i is currently .00120 for leases of up to 42 months in length. From your post, it sounds as though there is more than one BMW dealership in your area. This competition for your business is a good thing because you can play them against each other in an effort to get them to lease you this car using BMW's base money factor.

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CarMan@Edmunds · May 2003

Hi lawman10. I would be more than happy to calculate a sample lease payment on this car for you. It would be a big help though if you could provide me with its full MSRP and selling price first. Do you have this information? If not, I can always base my sample lease payment on MSRP and True Market Value estimates that I get here from Edmunds.com, but it may not work out exactly the same as the deal that you have been quoted. Let me know.

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CarMan@Edmunds · May 2003

Hey razorweb. Wow, this must be some sort of record for consecutive BMW questions

. Thanks for providing me with this car's selling price, but I also need its full MSRP to calculate a sample lease payment on it. Do you have this additional piece of information?

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CarMan@Edmunds · May 2003

Welcome back, eaweg. The Passat W8 is a neat car, or wagon in this case. I believe that the W8 is eligible for Volkswagen Credit's normal Passat lease money factors. So if you were to lease a 2003 Passat W8 Wagon through VW Credit this month for 48 months with 12,000 miles per year, its base lease money factor and residual value should be .00175 and 46%, respectively. The 10,000 miles per year residual for this vehicle would increase to 47% for this term. I can calculate a sample lease payment on this car for you if you give me its full MSRP and selling price.

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CarMan@Edmunds · May 2003

Thanks for the compliment, navirad. Marking up BMW Financial Services' base lease acquisition, or bank, fee is another way for dealers to pad deals. Dealerships sometimes use this method to add additional profit to deals when consumers know BMW FS' base lease money factor. BMW FS' base lease acquisition fee is currently only $525. If they charge you any more than that it is going into their pockets. This month though, BMW FS' base lease money factor for all 5-Series models did indeed increase to .00120 from the .00100 that they had available in April. As far as pricing goes, I am not intimately familiar with the market for the 5-Series in your neck of the woods right now. You will probably get much better feedback on this over on the Sedans Message Board or the Smart Shopper Message Board.

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CarMan@Edmunds · May 2003

Hey Fielding Yost. If you were to lease a 2003 BMW 525i through BMW Financial Services right now for 3 years with 12,000 miles per, its base lease money factor and residual value should be .00120 and 62%, respectively. So as you can see, the numbers that you were using in your calculations were pretty close. If the dealership is already using BMW FS' base lease program, the only place that you can negotiate is your vehicle's price. If you feel as though there is still a little too much meat left on the bone, so to speak, you may want to try to get them to lower this car's selling price. You can get a pretty good idea of what this car is selling for by comparing notes with others here at Edmunds.com, or just by comparison shopping at a few dealerships in your area.

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CarMan@Edmunds · May 2003

Hi again g17. Make it three beers and you've got a deal

. In your post you mentioned that you are interested in leasing a 3-Series or a C-Class in June. Unfortunately , BMW's and Mercedes-Benz's current lease programs are both scheduled to expire around June 2nd. A few years ago, manufacturers used to make their incentives programs last for two months or even an entire quarter without much in the way of revisions. However, the automotive marketplace has become so competitive and incentives have become such a part of vehicle pricing today that it is very rare when manufacturers have incentives or lease programs that last for more than one month at a time without any revisions.

I will provide you with the May lease programs of the cars that you are interested in for now so that you have an idea of what they may be like when you are in the market. Please feel free to check back with me about a week or so into June and I should be able to tell you what their new programs are like.

If you were to lease a 2003 BMW 325i through BMW Financial Services this month for 3 years with 15,000 miles per, its May base lease money factor and residual value should be .00150 and 59%, respectively. The lease money factor for a 3 year, 12,000 miles per lease of this car would be exactly the same, but the residual value would increase to 61%.

If you were to lease a 2003 Mercedes-Benz C230K through Mercedes-Benz Credit Corp. this month for 3 years with 15,000 miles per, its May base lease money factor and residual value should be .00275 and 54%, respectively. The lease money factor for an otherwise identical lease with only 12,000 miles per year would be exactly the same, but the residual value would increase to 56%.

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paddler3 · May 2003

Car_Man,

I'm about to make my first new car purchase and am trying to decide whether to buy or lease. We are looking at a 2003 H6 3.0 Outback Wagon. Carsdirect.com lists the MSRP as $32,920, the Invoice as $29,818 and their price as $27,143.

If we lease, we would need to negotiate at least 15K to 20K miles/year.

Would you please provide the money factor, residual, and likely payment for a 36 mo. lease? Also, do advance payments lower the cost of the lease? We have $10,000 on hand to buy/purchase.

Thanks!

eaweg · May 2003

Car_man...thanks again

Full MSRP is $40775 for the W8 wagon.

Hey, when is Edmunds.com going to do their travelling "autoshow" again? I went to one in DC a few years ago and it was a blast.

theeths · May 2003

Car_man:

A colleague just introduced me to your discussion forum, and you give the best info on the web - hands down.

Can you please provide the RV and MF for each of the Audi A6 (3.0 front wheel drive), Infinity I35, BMW 325xi and Lexus ES300? I am not sure if I want to lease for 36 or 48 months, so if you could give me the info for both that would be great. Also, is the info for 39 months (if offered) the same as for 36? I expect to do 10K miles per year if offered, otherwise will do 12K. Finally, can you give me the acquisition fee for each.

Thanks a million.

CarMan@Edmunds · May 2003

Hi alanek. I have not personally leased a 2004 Lexus RX 330 utilizing Lexus Financial Services' multiple security deposit program, however I am very familiar with how it works. On a side note, I just saw a black RX 330 in a parking lot yesterday and it was gorgeous. Basically, for every additional lease security deposit you put down on any vehicle leased through LFS, you receive a .00010 reduction in the vehicle's lease money factor. You can continue putting additional security deposits down until you reach LFS' MSD reduction cap of .00090. Multiple security deposits are attractive for consumers who have the capital to make them because like down payments on leases they reduce your monthly payment, however unlike down payments you actually get this money back at the end of your term, assuming that you are not on the hook for any excess wear and tear or mileage charges.

Let's take a look at the vehicle that you are interested in, alanek. In your post you stated that this truck has an MSRP of $46,718. You didn't mention any sort of selling price for this truck. From what I hear, the market for the RX 330 is still fairly hot, so for the purpose of this exercise, I will assume that you are only getting a small discount, say $500 off of its full MSRP. You may be able to negotiate a larger discount or none at all depending upon the level of competition in your area. Using the assumptions that I just set forth, an extra security deposit on a 48 month lease of a 2004 Lexus RX 330 4WD with navigation & the rear entertainment system will end up saving you around $7 per month. If you were to make the maximum number of additional deposits, you would save $63.46 per month.

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CarMan@Edmunds · May 2003

Ha thanks, dave_h2. I actually am not physically away but somehow managed to catch a brutal summer cold and have been resting a little more than normal. Never fear though I am hacking away at these lease questions as we speak. Have a great weekend!

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CarMan@Edmunds · May 2003

Thanks for the help, bama60.

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CarMan@Edmunds · May 2003

Razorweb, it is difficult to say what manufacturers will do with their future incentives programs with 100% accuracy. However, I suspect that BMW will continue its May lease program through the end of June relatively unchanged. Of course, no one will know for certain what BMW are doing with its June program until it is published late on 6/2 or early on 6/3.

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fielding_yost · May 2003

Thanks so much for the info on the '03 525 lease. You really set my fears aside. Unfortunately, the dealership lowered the price again to $490/mo., then promptly sold the car out from under me just as I was calling to accept. I'm a little skeptical (I think they were not willing to stand by the offer), but I'm left starting at square one again. Boo hoo, no 5 series for Fielding, yet.

You are invaluable; thanks again Car Man.

CarMan@Edmunds · May 2003

Greetings joe2617. Lexus is actually only providing lease support on 39 month leases of the IS 300 right now. Their supported lease program for this model varies depending upon whether you want the SportCross, normal IS 300 with a manual transmission, or the normal IS 300 with the E-Shift transmission. Which one of these are you interested in? Once I have this additional information I should be able to help you out. Talk to you soon.

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CarMan@Edmunds · May 2003

Hello mzinzi. Here is the information that you are looking for. If you were to lease a 2003 Nissan 350Z Enthusiast through Nissan Motor Acceptance Corp. this month for 3 years with 12,000 miles per, its base lease money factor and residual value should be .00240 and 55%, respectively. The money factor for an otherwise identical 39 month lease would be exactly the same, but the residual value would drop to 54%. Keep in mind that this lease program is only scheduled to run through June 2nd and I have not seen what Nissan's June program will be like yet.

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CarMan@Edmunds · May 2003

You're welcome, Daniel. Congratulations on your new car! Enjoy!

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CarMan@Edmunds · May 2003

Hey 330ifan. It's difficult for me to say when I will have had an opportunity to take a look at BMW's June lease program. I suspect that it will be sometime mid next week. Please feel free to check back with me then and I will let you know what I have been able to find out. You should be able to use the June lease program in conjunction with BMW FS' current multiple security deposit program since you will be finalizing your deal before July 1st. I haven't heard anything about BMW waiving vehicles' first lease payments, but I will look into it for you.

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alanek · May 2003

Thanks or the info Car_man. Could you tell me the residual, money factor and lease price you came up with working with the numbers I gave you?

lawman10 · May 2003

Hi Carman and thanks for your help. The MSRP on the vehicle is $57,595. The selling price is $56,595. The lease term is 36months 12kmiles per year, a total of $2k out of pocket which includes first month taxes etc. all for $650/month. Please advise if this is a good deal because I will be leasing one within the next two weeks. Once again thanks for your help. By the way is the 540i worth the extra money per month then the 530i?

wannaudi · May 2003

Hey carman, long time lurker, first time poster here. Looking to lease a 2003 Audi A4 1.8 quattro w/sport, premium, xenons, and I think I can get it for around 30K, which is close to the edmund's tmv for the car with the options I want. My question-dealer quoted me a payment of $430/mo (including MA 5% tax)with $1200 down, 36 month lease, 12K miles/year, based on a price of 31.7K (I think I can get him down on the price). He said he was using MF of .0135 and RV of 59%. Does this sound OK? Thanks for your help.

dave_h2 · May 2003

Hi Car Man,

In reading the advice on this site (specifically the "10 Steps to Leasing a New Car" articles written by Phillip Reed), I see this bit of info:

"In the past, Edmunds.com recommended that the best way to get a good lease payment was to negotiate the lowest selling price for the car. Once that was set, you would get the salesperson to draw up a lease payment based on that figure"

I have now leased two vehicles ('97 Caravan and 2000 Caravan) and this is how I've always proceeded (with varying success).

But now the article continues:

"the reality is, if you're happy with the down payment, monthly payment and mileage allowance, the purchase price of the vehicle is probably right".

Hmmmm. Is Edmunds now advising that it is better to be upfront about Leasing from the start? I know this would save a few steps (and dancing around with the dealer). I'm curious about your opinion on this Car Man.

Also - my current lease is coming to an end and I see by reading the contract that under the "Termination and Return of Vehicle" provision (permanently written on the back of the contract) that "I must pay a Vehicle disposition Fee of $450, if I return the vehicle".

Is there any way to avoid this fee in the future? Or is this just the cold harsh reality of leasing?

Thanks in advance for all your info.

landru2 · May 2003

Here's my take on it. Let me use an example. A buyer would really like a Windstar but sees the $7,000 difference in price and sticks with the Taurus. But since the buyer decided it was smarter to not mention leasing until after the price negotiations, he goes through the whole process of selecting and driving a Taurus, negotiating its selling price and then asking what the lease payments would be. He leases the Taurus, very proud of himself that he negotiated the selling price right down to get his $450/mo payment. Two days later his next door neighbor comes home with a new Windstar. They get talking and the Windstar buyer leased his van for $425/mo. They compare notes and the term and down payments are the very same. Of course, Mr. Taurus believes that the rotten dealer screwed him somehow, but with the rates, rebates, and residuals in place I can lease a $35,000 ($CAN) Windstar for less per month than a $28,000 Taurus. Focusing only on selling price didn't work out so good for Mr. Taurus.

boo20 · May 2003

Car man: thanks for your reply #6628 of my lease question. From your answer I would assume that you would frown upon prepaying the depreciation and interest charges on a lease because of insurance concerns. Would it be possible to purchace 'gap insurance' that would cover this? Also what kind of residual and money factor (and lease payments) can I expect For a 2004 MB S 430 4 MATIC?

samiller45 · May 2003

Hi,

I'm new to this site so please bear with me if I do something incorrectly. My wife and I went to test drive a Mazda MPV and compare it to the Odyssey (dealership handles many lines). While there and before we even discussed price, the salesman said that after May 31st there will be no more leasing but rather some type of financing that appeared like leasing but would require a "balloon" payment at the end of the lease period. Is there any truth to this? We ask since we were seriously considering leasing our next car which probably will be the Odyssey. Thanks for you help.

mzinzi · May 2003

CarMan,

First let me say that the information you provide here is invaluable, and the public service you perform is outstanding!

I'm also looking at leasing a 2003 Saab 9-3 Vector or Arc model. 12,000 miles per/36 months...

What are the MF and Residuals looking like?

Thanks in advance, you're the best!

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