Lease Questions - Ask Here

adpcs · December 2003

I am looking at a 2WD RX330. MSRP - 42478, trying to buy around $39000. Has Premium Plus, Navigation, Dual Heated Seats. I am thinking about leasing for 48 or 60 months at 15000 miles per year. I would like to do this by the end of December. What can I expect for the residual, and do you have any advice on whether to choose 48 or 60 months? Also, what do you estimate the payments to be? One more thing, do you know if the lease promotion (no sales tax) will continue past January 2? Thanks in advance!

CarMan@Edmunds · December 2003

No problem, paddyinvegas. You almost made me spit out my coffee with the condo remark

. According to my calculations, if you were to lease a 2004 BMW 330i with an MSRP of $41,620 and a selling price of $40,620 through BMW Financial Services this month for 3 years with 12,000 miles per, your zero down, pre-tax monthly lease payment should be right around $587 or so. This will almost certainly take you over $600 per month once tax is added in. The payment is a little on the high side because, other than the fact that this is an expensive car, BMW is not providing much in the way of lease support on it at this time.

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CarMan@Edmunds · December 2003

Let's take a look at the models that your brother is considering, deejay16. If he was to lease a 2004 Honda Odyssey EX through American Honda Finance Corp. this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be around .00215 and 63%, respectively. The money factor for an otherwise identical 39 month lease would be the same, but the residual value would fall to 61%. AHFC leases for these terms with only 12,000 miles per year would have residual values that are 2% higher than the ones that I just posted. I have not seen if Toyota has changed its standard lease program this month, but if they have not and your brother was to lease a 2004 Toyota Sienna through Toyota Financial Services this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00220 and 48%, respectively. The lease money factor for a 39 month lease of this van would be exactly the same, but the residual value would fall to 45%. Toyota Financial Services' leases with only 12,000 miles per year have residual values that are 2% higher than its 15,000 miles per residuals.

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CarMan@Edmunds · December 2003

Thanks for the helpful sales tax information, jratcliffe.

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CarMan@Edmunds · December 2003

Hi bmwmaybe. Here is the info that you're looking for. If you were to lease a 2004 BMW 530i through BMW Financial Services this month for 42 months with 12,000 miles per year, its base lease money factor and residual value should be .00245 and 55%, respectively. The numbers for an otherwise identical lease of an '04 525i should be .00245 and 58%.

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CarMan@Edmunds · December 2003

Thanks for the additional informaiton, Tim. Let's take a look at what the payment for this car should be like. According to my calculations, if you were to lease a 2004 Audi S4 Sedan with an MSRP and a selling price of $47,990 through Audi Financial Services this month for 39 months with 10,000 miles per year, your zero down, pre-tax monthly lease payment should be right around $726. I calculated this car's lease payment without any down payment because it is in your best interest to lease it without putting any money down. I say this for two main reasons. The first is that if your car is totaled in an accident or stolen and never recovered during your lease, your insurance company pays off the bank that you were leasing it through and your down payment essentially disappears. Also, down payments on leased vehicles do nothing to reduce their lease-end purchase prices. So whether you were to make this $2,000 down payment, or no down payment at all, this car's purchase option price will be exactly the same. Having said this, if you still want to put $2,000 down on this car, it would lower your monthly payment to around $671 for this term and mileage allowance.

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CarMan@Edmunds · December 2003

Seasons greetings, landinggear. A number of manufacturers are running early lease termination programs right now. Off of the top of my head, I know that Volkswagen, Audi, Ford, General Motors, Saturn (I know that it is technically part of GM

), and Jaguar are offering them at this time. Having said this, I have not heard anything about an early lease termination program being offered by Mercedes-Benz. Mercedes has upped the ante with their incentives recently, offering more cash and special financing deals than they have in some time though, so it would not surprise me if they did eventually introduce some sort of early termination program - but this is purely speculation on my part. You can always place a call to Mercedes-Benz Credit Corp., to see if they are offering any sort of program. They might be willing to tell you if there is one. Sorry that I don't have better news.

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CarMan@Edmunds · December 2003

Hi bazoooooka. I do not personally track the specifics of manufacturers' used vehicle lease programs for several reasons. The first is that there is a larger number of variables to keep tabs on with used vehicle leases, such as different model years, different mileage, etc... Not only that, but these programs are often difficult to find out the details of because many dealerships elect not to participate in their manufacturers' programs. Not only that, but used vehicle leases usually do not receive the same level of support from automakers, which often makes them worse deals than new vehicle leases on similar models. Having said this, BMW is one of the manufacturers that does have some attractive pre-owned lease offers from time to time, but it is very hit and miss. I just don't know the details of its current program. Sorry that I couldn't be of more help.

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CarMan@Edmunds · December 2003

Hey wantapassatnow. The policy on the extension of leases will vary from bank to bank. Some captive finance companies will extend their lessees' deals if their are going to purchase a new version of their vehicle that will be introduced in the new future. For instance, hypothetically speaking, BMW Financial Services may have extended the leases of 5-Series lessees if they were interested in leasing the redesigned model but their lease was up before it hit showrooms. It is difficult for me to say whether the bank that you are leasing your Mitsubishi through will allow you to extend your current deal by a month or two. There is a decent chance that they will be willing to work with you, but in order to find out if they will, it is best to place a call directly to them.

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CarMan@Edmunds · December 2003

Hi mlpca. Using the numbers that you provided me with in your post, an MSRP of $44,200, a selling price of $43,000, a lease term of 36 months, a money factor of .00190 and a residual value of 56%, I come up with a zero down lease payment of $636 per month.

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CarMan@Edmunds · December 2003

Hello adpcs. I definitely would not lease anything for 60 months. This is a very long time to lease for. A lot can happen during a five year time period that would cause you to need a different vehicle or even worse exceed your mileage limits and end up having to owe a huge lease-end penalty for excess mileage. Plus this model only comes with a 4 year basic warranty, so if you were to lease it for 5 years you would have to pay for any problems tht it experiences out of your own pocket for the lease 12 months, or possibly face a lease-end penalty for excess wear and tear. Here is the lease info for a 4 year lease of the model that you are interested in. If you were to lease a 2004 Lexus RX 330 2WD with navigation, but without the rear entertainment system through Lexus Financial Services in your area this month for 48 months with 15,000 miles per year, its base lease money factor and residual value should be .00190 and 44%, respectively. Using these numbers, an MSRP of $42,478, and a selling price of $39,000, I estimate that your zero down, pre-tax monthly lease payment would be around $533.

It is difficult to predict what manufacturers will do with their future incentives programs. However, I would not be surprised if Lexus Financial Services' lease money factor increased and residual value fell for this model after the new year, making it more expensive to lease.

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bmwmaybe · December 2003

Thanks for the info RE the 525 and 530

I think I am making lease calculations correctly, but I come up with a different number in your example in the post above, and was hoping you could tell me where I have gone astray....

Cap cost 43,000
lease term 36 months
money factor .00190
residual 56%

43,000 cap cost
x .56
= 24,080 residual

43,000 cap cost
- 24080 residual
= 18,920 total depreciation
/ 36
= 525.56 monthly depreciation

43,000 cap cost
+ 24080 residual
= 67,080 asjusted value
x .00190 money factor
= 127.45 monthly interest charge

525.56 monthly depreciation
+ 127.45 monthly interest charge
= 653.01 monthly payment (you calculated $636)

what am I missing?

As an observation, based on the residuals for a 525i 36 month lease at 15,000 per year (62%) versus a 42 month lease at 12,000 miles (56%) the shorter lease with more miles looks like a much better deal ($554.03 for the 36 month versus $597.84 for the 42 month, by my calculations, which may be wrong...lol...). Interesting. Which leads me to one more question. What are the residuals for a 530i 36 month lease at 12,000 and 15,000 miles? (assuming the payment may be less than on the 42 month lease I was previously considering).

Thanks a ton!

kyfdx · December 2003

The residual percentage is multiplied by the MSRP, not the cap cost. Your calculation with the money factor is correct, but you need to re-do your depreciation numbers.

regards,
kyfdx

adpcs · December 2003

Thanks for the info Carman. Should I be considering a 39 or 42 month lease instead? What is the "sweet spot" duration for leasing the RX330 right now? Also, in Texas with the current December to Remember sale they are telling me that they will waive the sales tax (6.25%), but when I talk to the finance guy, he says that they still have to charge 1.2%. Is this true?
Also, what would the residuals be if I considered 12K miles a year?

bmwmaybe · December 2003

bmwmaybe · December 2003

I confused myself as I was using MSRP as cap cost for my BMW 5 series calculations and failed to make the adjustment RE MSRP v. lower Cap cost when calculating the lease above.

kyfdx · December 2003

Is the 39 month lease better than the 36? Try this:

Determine what percentage of MSRP you are paying for the car. With a new BMW, figure about 97%. Subtract the residual percentage, and divide by the term. (For this example, 97%-61% = 36% divided by 36 mos. = 1% per month depreciation.) If the residual is more than 1% lower for each month the term is extended, its a very bad deal.. If its exactly 1% lower (this happens a lot), then its only fair.. If its less than 1%, then jump on it.

There are other variables, such as money factors changing with different terms, and coming out of warranty with the extended terms, etc., but it gives you a starting point.

regards,
kyfdx

bmwmaybe · December 2003

Carman, kyfdx did a nice job of figuring out my lease error, and offering a few thought RE lease term analysis. I would still love to see the 530i 36 month lease residuals for 12,000 and 15,000 miles per year.

wantapassatnow · December 2003

Thanks again Car_man. I called Mitsu today, and I am allowed to extend the lease month by month for 6 months without having to renegotiate anything, and I only have to make the monthly payment for each month I extend. (I'll have to renew the registration too, but oh well.)

This at least gives me some breathing room. Whew!

lsg123 · December 2003

Hello CAR_MAN.
I would appreciate you response. I am looking to lease a new car and I have some questions:

1.Does Nissan Motor Acceptance Corp offering leasing in NY state ?

2.What could be the good lease per month for Murano 2004, SL AWD. ?

3.Residual ?

4.Money factor ?

Here some data:
1. NY city
2. Nissan Murano 2004, SL AWD
3. MSRP $35400
4. Looking for 36/15000 lease or 39/15000
5. Dealer told me that I can buy it for $31000.

Thanks in advance

CarMan@Edmunds · December 2003

You're welcome, bmwmaybe. Kyfdx is correct (thanks by the way). In order to calculate a vehicle's lease payment you need to multiply its MSRP times its residual value, not its capitalized cost. The depreciation of new leased vehicles is always based upon a percentage of their MSRPs.

As far as a 36 month lease of this car goes, if you were to lease a 2004 BMW 530i through BMW Financial Services this month for 36 months with 15,000 miles per year, its base lease money factor and residual value should be .00235 and 62%, respectively. An otherwise identical lease with only 12,000 miles per year would have a residual value that is 2% higher.

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CarMan@Edmunds · December 2003

You're welcome, adpcs. The special lease money factor that I provided you with earlier is available for 36 to 48 month leases of this vehicle. Lexus Financial Services' residual values drop 3% from 36 to 39 month terms. It is difficult for me to say exactly where the "sweet spot" is for this particular model. I can however, provide you with information on additional terms if you would like to play with some numbers. LFS' residual values for leases with only 12,000 miles per year are 2% higher than its 15,000 miles per numbers. I am not familiar with any sort of sales tax waiver promotion that Lexus is running. This may be some sort of promotion that is being run by an individual dealership rather than Lexus as a whole. If that is the case, then it will cut into your ability to negotiate the best selling price / money factor combo.

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CarMan@Edmunds · December 2003

I am glad to hear that your bank is willing to work with you, wantapassatnow. Now you don't have to be rushed into making any hasty decisions.

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CarMan@Edmunds · December 2003

Seasons Greetings, lsg123. Nissan does lease vehicles to consumers who live in New York, but it has increased its acquisition fee from its normal $550 to $795 for people who have garaging addresses there. If you were to lease a 2004 Nissan Murano SL AWD through Nissan Motor Acceptance Corp. this month for 36 months with 15,000 miles per, its base lease money factor and residual value should be .00224 and 53%, respectively. The numbers for an otherwise identical 39 month lease should be .00223 and 52%. Using these numbers, if you were to lease this vehicle, with an MSRP of $35,400 and a selling price of $31,000 its zero down, pre-tax monthly lease payment should be around $452 for 36 months and $434 for 39 months.

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scottl2 · December 2003

Car man,
I noticed the 2004 G35 sedan money facor was lower and residual higher in December than in prior months. Is this a December special that I should jump on or do you anticipate similar numbers for the next few months? Thanks.

measurer · December 2003

Hi Car_Man,

First of all a belated thank you for giving me the November numbers from Audi Financial. I believe your information will save me about $1200 over the life of the lease compared to what the dealer initially quoted me.

I asked you as a "trust, but verify" measure to check the numbers I was given by the dealer. I was quite surprised when I learned that the lease had been marked up.

When I presented your numbers to the dealer, he told me that the sales manager had used October numbers (silly, silly, careless sales manager). He also offered the lease at the numbers you gave me, no questions asked. I was holding off on my thank you until I could tell you that the deal was done and the savings were in the bank.

However, I ordered the car from the factory back in September (why get a new car if you cannot choose the options you want?). The dealer told me to expect it to arrive late November when my old lease was up, but it has not arrived yet, so I think my lease will end up being based on the December numbers.

So can you give me the Audi Financial December numbers (money factor/residual%) for a 48 month lease with 12,000 miles/year on an S4?

Thanks again Car_Man, I cannot imagine how much money you are saving people month after month.

adpcs · December 2003

Carman, thanks again for your advice. Just FYI, the December to Remember event goes through January 2, 2004. According to the Lexus Dealership that I talked to, and several others have verified, if you lease a new RX, Lexus will pay the sales tax (equivalent to 6.25%) in Texas, however because of some state law, we are still obligated to pay 1.2%. But, hey, that's 5% that you save on sales tax alone...and this is not something offered by a dealership, but Lexus as a whole.

kyfdx · December 2003

36mo/15K.. 24 and 30 month residuals and MF also, if they publish those. Almost forgot... 2-door coupe.

As always.. thanks a lot!!
kyfdx

cdt1 · December 2003

car_man,

Would you be able to tell me the money factor and residual on a 2004 VW Passat GLS 1.8T Auto leased through VW in 12/03? If you could compute the lease payment that would be helpful as well. Thanks alot!

-Chris

topgun7 · December 2003

hello Car_man, I am interested in knowing the money factor and residual for 04 Solara SE 4 cyl and SE sport V6 for 3 year/ 15K mi per year? I am in Northen California. Thanks.

sohoha · December 2003

I realize that there have been a lot of posts about this vehicle lately, and here's one more.
I was wondering what the monthly payment would be for this car with 12k, 0 down, 36 or 39 month lease.
I need it before the end of the year. I am located in NYC/Pa but can travel anywhere in the NE to pick it up. Could you let me know the going rate? thanks ahead of time.

dtate99 · December 2003

Carman, a few weeks ago you gave me November's info and asked me to post again if I needed info for December. I saw another post since then where you gave quotes of money factors for Honda Finance between .00205 and .00215 on the '04 TL.

Are these valid for the entire month, or do they change more freqently. Also, I need residuals on 12,000 mile 36 and 42 month leases. Thanks in advance for the help.

If possible, what strategy would you recommend to negotiate a lower money factor; I saw you recommend trying that in an earlier post to someone else. I thought the MF was "set".

krisdon · December 2003

I have gone over your web page on calculating your own lease payment and I don't yet understand one part. The money factor payment portion (line 13) is the result of the net cap cost plus the residual value multiplied by the money factor. Why do I pay interest on this figure? It seems like I will always pay interest on a number that is higher than the MSRP. Why isn't the money factor payment just figured off of the net cap cost? Thanks for your help.

kyfdx · December 2003

the money factor is a monthly calculation that approximates HALF the interest due on a given amount.. The cap cost and residual are added together. If you divide by two, you'll get the average amount you would be paying interest on in a given month. Instead of dividing by two, they just make the money factor half as large as it would be otherwise.

regards,
kyfdx

CarMan@Edmunds · December 2003

Hi scottl2. I always preface any statement in which I try to predict what a manufacturer with do with its future incentives by saying that it is difficult to do so with 100% accuracy. Having gotten the disclaimer out of the way

, I personally feel that Infiniti Financial Services' revised lease money factors for this model are more of a trend than a December special. Infiniti has been able to get by for some time without really providing much in the way of support on this car. We will probably similar money factors to what they are offering now or perhaps an even more generous offer as the model year progresses, unless interest rates begin to climb in general. As far as the residual values go, I definitely expect them to decrease. Vehicles' residual values naturally fall as the model year progresses. The G35's residuals may not be any different next month, but they definitely will drop eventually.

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CarMan@Edmunds · December 2003

A relatively on-time your welcome to you, measurer

. I am glad to hear that you found the information that I provided you with helpful. Thank you for taking the time to come back and let us know how things are going with your deal. Here is the December info for the model that you are interested in. If you were to lease a 2004 Audi S4 Sedan through Audi Financial Services this month for 4 years with 12,000 miles per, its base lease money factor and residual value should be .00195 and 45%, respectively. Make sure to come back and let us know how you like your new ride when it arrives.

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CarMan@Edmunds · December 2003

You're welcome, adpcs.

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CarMan@Edmunds · December 2003

Hey kyfdx. Honda has a pretty attractive lease program running on the Accord right now. If you were to lease a 2004 Honda Accord EX V6 without navigation through American Honda Finance Corp. this month for 36 months with 15,000 miles per year, its base lease money factor and residual value should be .00150 and 58%, respectively. The base lease money factors for otherwise identical 24 and 30 month leases would be the same, but the residual values would be 66% and 61%.

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CarMan@Edmunds · December 2003

Seasons Greetings, Chris. I would be more than happy to give you an idea of what this car's lease program should be like at this time. However, in order for me to do so, I need you to tell me how long you are interested in leasing it for and how many miles per year you need to be able to drive it, 15,000, 12,000, or 10,000. Once you have provided me with this info I can give you an idea of what this model's program is like. If you want me to calculate a sample lease payment on it for you, I also need you to provide me with its full MSRP and selling price. Talk to you soon.

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kyfdx · December 2003

2004 Acura TSX auto..no navi.. 36 or 39 month.. 15K per year. MF and residual.

Thanks!!
kyfdx

infinitimn · December 2003

Hi Carman. I need some numbers that I haven't seen anyone ask for yet. I am looking for a lease on a 2004 525 or 530 with only 10K miles, 36 months, with NAV system. I'd also be willing to look at 39 or 42 months if BMWFS has a better program at those lengths.

cdt1 · December 2003

car_man,

Thank you for your response. I would be interested in the money factors and residuals for both the 12k and 15k mileage. Please compute a sample lease payment for both based on the TMV of $23,652.00. Thanks again for your assistance.

Chris

hspark · December 2003

If this topic has been posted, I am sorry.
I am wondering what is special lease deal for
ES330 for 3 years.

Thank you in advance.

CarMan@Edmunds · December 2003

Hi topgun7. I have not seen any evidence that Toyota is providing any sort of lease support on the 2004 Solara in any of its regions. If this is the case and you were to lease one through Toyota Financial Services, you would have to use its standard lease program. According to the latest information that I have see, Toyota Financial Services' 3 year, 15,000 miles per base lease money factor and residual value for the 2004 Toyota Solara should be .00220 and 53%, respectively.

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CarMan@Edmunds · December 2003

Hello sohoha. Yes, Lexus models do seem to be extremely popular in this discussion lately. I would be more than happy to calculate a sample lease payment on the a 2004 Lexus RX 330 for you. However, I need some additional information from you first, namely this vehicle's full MSRP and selling price. You can look up the exact MSRP for the model that you are interested in here at Edmunds.com by visiting the following page: Edmunds.com New Car Prices, Reviews & Info. If you are not sure what you should be paying for this vehicle, we can use this model's Edmunds.com True Market Value as its selling price for the purpose of this calculation. This number can be found on the aforementioned page as well. Once you provide me with these numbers I will let you know what your payment should be like. Talk to you soon.

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CarMan@Edmunds · December 2003

Hi again dtate99. American Honda Finance Corp. published revised standard lease money factors on November 25th. If I provided you with information on the TL's lease program before that date, its numbers will be different now. Here is the latest info for you. If you were to lease a 2004 Acura TL without navigation through AHFC this month for 3 years with 12,000 miles per, its base lease money factor and residual value should be .00215 and 61%, respectively. I have not seen this car's 42 month numbers, but its 39 month, 12k factor and residual should be .00215 and 59%.

Consumers can not exactly negotiate lower lease money factors on deals. Banks publish a list of the base lease money factors that they are using to lease vehicles. Dealerships can not lease vehicles using money factors that are any lower than the ones that banks publish. However, many banks do allow dealers to "mark-up" their base lease money factors to add additional back-end profit to deals, usually without consumers having any idea that it was done. This is why many community members come to this forum to ask me about manufacturers' base lease programs. They want to make sure that they dealership that they are working with is not marking up the money factor that is used to calculate their lease payment. So one can negotiate lease money factors in the sense that they can make sure that their payment is being calculated using a bank's base factor, but they can not get dealerships to lower factors below the numbers that banks publish.

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CarMan@Edmunds · December 2003

You're welcome, kyfdx. Here is the latest info that you are looking for. If you were to lease a 2004 Acura TSX without navigation through American Honda Finance Corp. this month for 36 months with 15,000 miles per year, its base lease money factor and residual value should be .00215 and 58%, respectively. The numbers for an otherwise identical 39 month lease should be .00215 and 56%.

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CarMan@Edmunds · December 2003

Seasons Greetings, infinitimn. Let's take a look at the current lease programs for the cars that you are interested in. Unfortunately, BMW is not providing any sort of lease support on the recently redesigned 5-Series at this time. So if you lease one through BMW Financial Services in December, you will have to use its standard lease program. BMW FS' base lease money factor and residual value for a 3 year, 10,000 miles per lease of a 2004 BMW 525i should currently be .00235 and 62%, respectively. The numbers for an otherwise identical lease of a 2004 BMW 530i should be exactly the same. BMW FS's lease money factors are the same for all of the terms that you mentioned, but your monthly lease payment for these models will probably decrease as you increase the length of the lease because you are spreading the initial depreciation hit out over a larger number of payments.

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1234 · December 2003

Hi Carman,
In post 8651, you mentioned that for 3 years, 15K miles, the residuals on the 2004 Honda Odyssey EX and the 2004 Toyota Sienna would be 63% and 48%, respectively. Just wanted to confirm this as it's hard to believe the discrepancy is so large.
Thanks in advance,
Dennis

CarMan@Edmunds · December 2003

Thanks for the additional information, Chris. So far you have told me that you are interested in a 15,000 or 12,000 miles per year lease of a 2004 Volkswagen Passat Sedan GLS 1.8T with a selling price of $23,652. You still haven't told me the full MSRP of the car that you are interested in. This is an important number when one is calculating lease payments. I will assume that you are interested in a 3 year lease of this model. Please correct me if this is not right. The MSRP is the last piece of info that I need to be able to calculate a sample payment for you. We're almost there.

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