Lease Questions - Ask Here

mattingly5 · January 2004

Car_Man,

Can you tell me if the following lease is reasonable:

MSRP: $40,670
Sale price: $39,000
Bank Fee is $525, 0 Cap Cost
Residual=60% and MF = .0024 and 36 months/30K mi
Base Monthly = $557.66 and Tax (PA 6%)= $50.19 for
a Total $607.85.

I think there is a problem with the tax calc they gave me. Why would the money factor be so much higher than the 330xi (message 9043)?

theeths · January 2004

Carman: now that I have visited some dealerships, I need to change my info request. Seems like no one (at least on the NY metro area) carries the A6 FronTrak - only quattro. So, for A6 3.0 quattro sedan lease (10K miles per year), the dealer I negotiated with quoted me MF of .0011 for 36, 39 and 42 months, and .00120 for 48 months, and residual values of 54%, 52%, 50% and 46%. Are these numbers right? Also, when I asked about reducing the MF by giving extra security deposits, he told me I could give up to 9 extra security deposits, with each one reducing the MF by .00008 - meaning I could reduce the MF by .00072 - is this right (almost sounds too good)? Finally, I was told that my up front fees would be, in addition to first month's payment, security deposit and some minimal initial registration fees, a dealer conveyance fee of $225 and a bank acquisition fee of $575. Does this sound right?

Thanks a lot in advance for your help car man.

alx1 · January 2004

Hey kyfdx, thanks for the response. Well, I have had two dealers tell me that the lease acquisition fee can be waived. The thing is, one dealer tells me .00015, while the other .00030. It's a bit confusing to say the least. I figured it would be set by BMWFS, but maybe it's not. Oh well. It probably doesn't matter to me since I am leaning towards buying now anyway. Awesome car loan rates through my credit union. Righton!

Alex

CarMan@Edmunds · January 2004

Yes, theeths, CT would have the exact same lease program as NY and NJ. The only states that Audi has a slightly better lease program on certain models this month are TX, AZ, FL, CA, HI, and NV. Perhaps you can make a nice little trip to HI to pick up your new ride

. Sure the cost of transporting your new Audi to the continental U.S. would eat up all of your savings, but it sure would be fun.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Hello camrybuyer. As you have experienced in the past, certain banks will negotiate lease-end purchase prices of vehicles with consumers. Having said this, this is the exception rather than the rule. If you have placed a call to the bank that you are leasing your Camry through, likely Toyota Financial Services, and have not had any luck in negotiating a cheaper buyout, try working your way up the ladder a few rungs to some sort of manager. They may not be willing to work with you either, but lessees are occasionally able to get better results by speaking with someone who has more authority than their initial contact. Good luck.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

No problem, carkid21.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Hi dasetton. It definitely looks as though the dealership that you are working with is marking-up BMW FS' base lease money factor for this car in an attempt to add additional back-end profit to this deal. BMW's base lease money factor for the 2004 325Xi sport wagon should currently be only .00190 for 3 years. You should insist that the dealership you are working with use this number to calculate your lease payment.

Car_man
Host
Smart Shoppers / FWI Message Boards

dhp75 · January 2004

Hey Car_man, wanted to give you an update. I'm driving in my 2004 Acura TL/nav w/HPT 6MT. Got the dealer to take off $1500 the MSRP for a final price of 34445 including the $550 acquisition fee. 36/12000 miles. monthly price came out to 535.02 Would have liked to have gotten a lower selling price but they wouldn't budge anymore than that. They threw in the protection package for free with up to 4 free oil changes a year. I think a got a good deal...not a great deal but a good one so I took it. Thanks for your help. The car is awesome. Can't wait till its broken in so I can really test it out.

Dave

khanam · January 2004

Hi Car_man,
Your posts have been very informative, especially in recent days - I am currently trying to decide between leases on a host of entry level luxury cars which have some ability to handle Northeast winters. I have narrowed down my choices to BMW 325xi, BMW 330xi, Audi 1.8T Quattro, Audi 3.0 Quattro, Acura TSX, Acura TL, Infiniti G35x, Saab 9-3. I know that there is a decent price variance between all these cars (and options also need to be considered) so I should expect to pay more for the more expensive cars but I would like to figure out how much the lease financing details impact pricing and would like to know the following:
1. What would their money factors and residual values be for a 3yr, 12k lease?
2. Are there any special attractive lease deals being offered by any of the above manufacturers? Is there some place on edmunds.com where I can get such info?
3. Is the correct way to calculate monthly lease payment = [Car cost including TTL*(1+SalesTax%)-PV of ResValue-Any down payments]*Moneyfactor/((1-(1/(1+Moneyfactor)^no of payments))

If the above formula gives you a headache - it gave me one as well.

Thanks in advance

CarMan@Edmunds · January 2004

Hi Sean. Yes, I definitely think that you should be able to negotiate a more attractive deal than the one that you were quoted the other day. BMW Financial Services' base lease money factor for the 2004 330i is currently .00100, not the .00150 that you were quoted. This means that the dealership that you are working with is marking-up BMW FS' base money factor in an effort to add additional back-end profit to your deal. This is not surprising, lots of BMW dealers do this. Just make sure to insist that they use BMW's base lease money factor to calculate your lease payment on this car.

I am not personally all that familiar with what the market is like for this particular model in your area, but full MSRP sounds as though it is a little on the high side to me. You may want to stop by the BMW 3-Series: Prices Paid & Buying Experience discussion that appears over on the Smart Shoppers Message Board to see if anyone there has a better feel for what one should pay for this car right now. You also may want to look up its Edmunds.com True Market Value by visiting the New Car Pricing section of this site.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Hello hspark. Honda is indeed running a special lease program on the 2004 Odyssey right now. This is the first time in a looooooooong time that they have provided any sort of lease support on this model, so it is a good time to get one if you are interested. I have seen the advertised lease payment that you are referring to in your post. It is listed on Honda's Web site, www.hondacars.com, under the "Current Offers" section. When one takes a close look at the details of this lease, you can see that it is based upon a van with a full MSRP of $27,480 and a capitalized cost of $25,299. There is a $2,181 spread between the two. Taking the $1,525 down payment into account, this means that the dealer must provide a discount of right around $656 in order to arrive at this lease payment. I personally feel as though you may be able to negotiate a lower selling price on this van, resulting in a slightly more attractive lease payment. Stop by the Honda Odyssey: Prices Paid & Buying Experience discussion to see what sort of discounts other community members have been able to negotiate on this van recently and then take this into account when you are shopping. The important things to keep in mind when negotiating your deal are to negotiate a reasonable selling price and to make sure that your van's payment is calculated using American Honda Finance Corp.'s base lease money factor of .00181.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Greetings, Chuck. Volkswagen is indeed providing lease support on the Touareg this month. If you were to lease a 2004 Volkswagen Touareg V8 (not the V8X model) through VW Credit this month for 36 months with 15,000 miles per year, its base lease money factor and residual value should be .00185 and 52%, respectively. The numbers for an otherwise identical 39 month lease should be .00205 and 50%. VW is actually providing $500 lease cash on the Touareg this month that may be used to negotiate a lower capitalized cost, however this cash is only available on V6 models and would not be available on the V8 model that you are interested in.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Hi steeler_fan. As you seem to already be aware, the only way for you to avoid paying an excess mileage charge that is in the thousands of dollars is for you to purchase your vehicle at the end of your term. The good news is that the bank that you are leasing your car through is willing to negotiate its lease-end purchase price. From what I have been hearing lately Toyota Financial Services is not very willing to do so. Now that you know that your bank will negotiate, you need to figure out exactly what this car would cost if you were to purchase one on the open market right now. I suggest that you stop by the Real-World Trade-In Values discussion that appears over on the Smart Shoppers Message Board. One of our most knowledgeable community members, Terry, hangs out there. He is usually willing to give community members his opinion of their vehicle's current value. Just make sure to provide a detailed description of your car that includes its options, condition, mileage, color, and where you live. You also should stop by the Used Car Appraiser to see what its True Market Value is listed at. The information that is available at these two places will give you a good idea of what to offer your bank. Remember that even though you are purchasing your leased ES 300, you do not have to keep it. If you are able to negotiate an attractive enough deal on it, you can turn around and sell it privately or trade it in on your next car for close to even money, or even a profit if you are able to negotiate a low enough buyout.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

I'm not sure if you still need this information, Dan, but if you are still interested in getting an idea of what Jaguar's current lease program is like for the X-Type, I need you to tell me if you are interested in the 2.5 or the 3.0. Once I have this additional info I should be able to help you out.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Howdy yourself knockoff

. Let's take a look at the current lease program for the model that you are interested in. According to the latest info that I have seen, if you were to lease a 2004 Porsche Cayenne S through Porsche Credit this month for 3 years with 15,000 miles per, its base lease money factor and residual value should be .00250 and 53%, respectively.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Alex, many banks do allow their lessees to waive their vehicles' lease security deposit in exchange for a slight increase in its lease money factor. I suppose that some banks may also allow consumers to have their acquisition fee waived in exchange for an increased money factor as well, but this is much much less common than the security deposit waiver. According to my calculations, it would indeed be less expensive for you to use a money factor that is .00015 higher than for you to roll the entire acquisition fee into your car's capitalized cost. So if the adder that you provided me with is to waive this model's acquisition fee and not its security deposit, this would probably be the way to go.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Hi Mark. I would be more than happy to help you out. According to the most recent information that I have seen, Chrysler Financial's current 39 month 15,000 miles per year base lease money factor and residual value for the 2004 Pacifica 2WD should be .00110 and 48%, respectively. The numbers for an otherwise identical lease of a 2004 Pacifica AWD should be .00110 and 49%. Chrysler Financial leases for this term with only 12,000 miles per year would have residual values that are 2% higher than the ones that I just mentioned. I believe that Chrysler Financial's lease acquisition fee is currently $550 in most states. Chrysler is not currently providing any sort of owner loyalty cash on the '04 Pacifica, but it is offering $3,000 lease cash that may be used to negotiate a more attractive capitalized cost.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Let's play with some numbers and see what sort of lease payment we come up with, cjs2002. According to my calculations, if you were to lease a 2004 Jaguar X-Type 3.0 with an MSRP of $36,345 and a selling price of $32,900 through Jaguar Credit this month for 3 years with 15,000 miles per, your zero down, pre-tax monthly payment should be right around $527.

Car_man
Host
Smart Shoppers / FWI Message Boards

mikeselld · January 2004

Still need the x-type info. I'm looking at a 3.0 with a few options. MSRP will be 35970. Still working on the final cap cost.
Great board you're running here
Dan

CarMan@Edmunds · January 2004

Hi mattingly5. You get extra credit for naming your user id after my favorite baseball player of all time

. The reason why this vehicle's money factor is higher than the 330i's factor is that it is a brand new model. Manufacturers often introduce new models without any sort of support at all. Initially I thought that this would be the case with the X3. Surprisingly enough, they are actually providing a little lease support on this vehicle. I believe that BMW Financial Services' current base lease money factor for a 3 year lease of the 2004 X3 should be .00225. BMW FS allows its lessees to have their vehicle's security deposits waived in exchange for a slight increase in their lease money factor. If you are not paying a deposit on this lease, your factor would increase to right around the .00240 that you were quoted. This is a good sign because it means that the dealership that you are working with is not trying to mark up BMW's base money factor to add any additional back-end profit to your deal. Overall, the selling price and money factor that you were quoted for this model look reasonable to me. Of course, you can always comparison shop with a couple of other BMW dealers (I am sure that there must be a number of them in the Philly area) to see if you are getting the best possible deal.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

I am glad that you like this discussion so much, Dan. Thanks for the additional information. Based on the latest information that I have seen, if you were to lease a 2004 Jaguar X-Type 3.0L through Jaguar Credit this month for 3 years with 12,000 miles per, its base lease money factor and residual value should be .00174 and 49%, respectively. Please let me know if you have any other questions.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

I can't say that I am completely surprised, theeths. While there are some 2WD Audis around, dealers in areas where it snows usually load up their inventory with quattro models. From watching the football games on TV yesterday, it looks like anyone in the Northeastern U.S. could use quattro right now

. The base lease money factors and residual values that you were quoted by your dealer are right on the money, which is always a good sign that they are being straightforward with you. AFS does have a multiple security deposit program, but I am not sure of the exact deduction that it provides for each additional deposit. .00008 sounds about right. Making additional deposits is a much better way to lower your vehicle's lease payment than making a down payment. At lease signing, you should have to pay your car's first month's lease payment, a security deposit of that payment rounded up to the nearest $25 increment, and AFS' lease acquisition fee of $575. The "dealer conveyance fee" sounds like nothing more than a doc fee that many dealers use to add additional profit to deals. As long as you are happy with the total selling price that you are paying for this car, including the $225 fee, it doesn't really matter how your dealer arrived at it. However, if you feel as though this fee makes your car's price higher than you are willing to pay then try to have them lower the total price by that amount.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Congratulations on your new car, Dave. Thanks for taking the time to come back and let us all know how everything turned out. Enjoy!

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Thanks khanam. Here is a list of the current base lease money factors and residual values for 3 year, 12,000 miles per leases of these vehicles through their captive finance companies: 2004 BMW 325xi - .00190 / 62%; 2004 BMW 330xi - .00100 / 60%; 2004 Audi A4 1.8T Sedan with quattro - .00110 / 56%; 2004 Audi A4 3.0 Sedan with quattro - .00090 / 55%; 2004 Acura TSX - .00215 / 58%; 2004 Acura TL - .00215 / 60%; 2004 Infiniti G35x - .00180 / 60%. In order for me to give you an idea of what the numbers are like on the 2004 Saab 9-3, I need you to tell me exactly which model you are interested in because its program varies by trim level. There is a great article on how to calculate monthly lease payments here at Edmunds.com. Click on the following link to check it out: Calculate Your Own Lease Payment. You can also check out a post that I wrote on the subject many moons ago: The Return of "How to Calculate Monthly Lease Payments". Different states calculate sales tax on leased vehicles differently than others do, so none of these descriptions contain information on taxes.

Car_man
Host
Smart Shoppers / FWI Message Boards

mattingly5 · January 2004

Thank you car_man. I appreciate the information.

When you mentioned a "deposit" I looked at the calc sheet. They have us paying a $650 deposit and a $525 bank fee. So it looks like I should try and get that money factor down to .00225.

Also would there be different residuals and money factors between the 2.5 and the 3.0 X-3?

mellis · January 2004

Thanks Car_Man!

Mark

cjs2002 · January 2004

I was reading past posts and carkid21 has a nice price on a G for rouphly the same price as my jag price, but his\her mothly payments are lower... I don't know mutch about the whole financing thing, but I wonder why the jag payments are higher? could someone please explaine?

joe1520 · January 2004

Car_man...thanks for all the great insight-you've helped so many of us.I'm wondering if you could tell me the res. val rate and MF factor for a '04 TSX with a 48 month lease. Sorry if you've already posted the #s for this lease term. Thanks again!!

jratcliffe · January 2004

Assuming that you're comparing two cars with similiar MSRPs, selling prices, and money factors, then the most likely reason for the difference in payment is the residual value of the car (i.e. what % of the original MSRP it'll be worth in three years). Jags don't hold value well, so the payments would be higher.

clpurnell · January 2004

Jratciffe is right the G has a lower MF and higher residual, Therefore the payment would be less. I thought you were getting the G.

cjs2002 · January 2004

I was, then I started thinking about winter driving so I changed to the Jag X type, but now the the G has AWD I'm thinking I'm gonna stick with the G now. thank you though

hartt · January 2004

I am currently leasing an 03 Honda Pilot. I am facing a potential job loss and I am trying to prepare myself financially for this unfortunate event. I have found someone that is interested in assuming my lease. Here's the problem. I just talked to the folks at Honda Financial Services and they told me they won't allow it. They told me the only way they will allow it is if there is a death in the family or if I was going out of the country. It does not state anywhere on the contract that lease assumptions are not allowed and Honda admitted this.
Has anyone encountered this problem with Honda?
I am looking for any suggestions this forum can offer.

Thanks.

glevitt · January 2004

Car_Man,
You happen to know what the residual is on a TL, TSX and G35x for a 48 mo lease? Lets say 12k miles a year. Also, the residual you posted earlier for these cars, are they negotiable? The Acura ones seem high. Thanks, this is a great forum.

ogbuffguy · January 2004

Hi car man, its been awhile.....i would like to know the lease rates for a bmw 325cic convertable for 12k/36months, and a mazda rx-8 for 15k/36months, both in southern california....thanks for all your help

CarMan@Edmunds · January 2004

You're welcome, mattingly5. I have some good news for you. BMW recently enhanced its residual values for the 2004 X3, which is a fairly unusual event. Its 3 year, 15,000 miles per year resid is now 57% for both the 2.5 and 3.0.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

No problem, Mark.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

Hi cjs2002. Three main factors influence vehicles' lease payments, their price, their money factor, and their residual value. It is possible for two vehicles with the exact same MSRP and selling price to have two completely different lease payments. I don't know what the difference is between the G35's and your Jaguar's lease program is off of the top of my head, but I suspect that the Infiniti has a higher residual value than your Jaguar does. The residual values of vehicles determine how much depreciation their lessees have to pay over the length of their lease. The lower a vehicle's residual value is, the higher its lease payment will be. This is probably what is going on in this situation.

Car_man
Host
Smart Shoppers / FWI Message Boards

CarMan@Edmunds · January 2004

You're very welcome, joe1520. Let's take a look at the lease program for the car that you are interested in. If you were to lease a 2004 Acura TSX through American Honda Finance Corp. this month for 4 years with 15,000 miles per, its base lease money factor and residual value should be .00205 and 49%, respectively. Please make sure to let me know if you have any other questions.

Car_man
Host
Smart Shoppers / FWI Message Boards

keeferb · January 2004

Car_man,

Do you have the money factor and residual for a 2004 Chevy Malibu LS - 36 month, 15k/yr?

Thanks a bunch!

jratcliffe · January 2004

That's weird. When I contacted Honda about a transfer, they were quite helpful, and sent me the forms. You might want to call back again and get a different rep. A few things to know:

1. The transferee has to meet Honda's credit criteria.
2. There's a transfer fee of ~$200 in total.
3. Even after the transfer, you're still liable for the lease payments, and it stays as an open account on your credit report. If the person you're transferring the lease to doesn't pay, you're on the hook.

You might also try working the lease transfer through swapalease.com or leasetrader.com. They should be able to take care of the paperwork for you, and the fees are pretty modest.

....I just checked swapalease, and they're now saying that AHFC doesn't allow lease transfers, so it seems they may have changed their policy. Still, doesn't hurt to call back and ask.

hartt · January 2004

Thanks for the information. Swapalease is where I have it advertised. I have used them twice in the past with no problems. I'll keep trying.
Thanks again.

kyfdx · January 2004

I read on another forum.. you CAN waive the acquisition fee on BMWFS leases. The adder to the MF is .00015, which would only add about $9.00 to the typical 3-series payment. That seems like a no-brainer to get rid of a $525 charge.

regards,
kyfdx

cjs2002 · January 2004

Thank you, I understand it now, I did some researching on it thanks.

joe1520 · January 2004

Thanks! I'm assuming that the 48mon lease based on 12k miles vs. 15k miles should only affect the residual value factor, correct? Would 51% be a safe bet on the TSX non-nav? Based on that, are my pmt calculations reasonable?

Cap cost $25,800.00
Cap cost adjustment $ 0.00 (no dwn pmt)
Adj Cap Cost $25,800.00
Residual $13,787.85 (@51%)
Monthly Depreciation $ 250.25 (based on cap cost?)
Monthly Interest Cost $ 81.35 (.00205)
Monthly Tax Cost $ 24.87 (based pmt only)
Monthly Payment $ 356.48

Is there anything I'm forgetting? Is the depreciation calculated on Cap cost or the MSRP, minus the residual? Thanks very much, hopefully I can pick up my new TSX this weekend!!

mobofe · January 2004

"3. Even after the transfer, you're still liable for the lease payments, and it stays as an open account on your credit report. If the person you're transferring the lease to doesn't pay, you're on the hook."

how then are you protected? it sounds like a bum deal regardless of how badly one needs to get out of a lease.

kyfdx · January 2004

Cap cost is based on MSRP.. You will also have to pay an acquisition fee and security deposit. I always have my acquisition fee rolled into the cap cost, to keep out-of-pocket costs low.

regards,
kyfdx

jratcliffe · January 2004

Well, a couple of things are in your favor:

1. The only way your credit gets screwed is if the person you've transferred the lease to defaults. Given that the lease company won't approve the transfer unless the transferee has good credit, it's pretty likely that the transferee will make the payments on time.

2. Swapalease will actually sell you insurance to cover you against the transferee not paying, turning the car in with excessive damage, etc.

That being said, you are accepting some risk by transferring a lease to someone you don't trust.

joe1520 · January 2004

Right, but is the residual value based on the MSRP or the end capitalized cost? Which figure so you multiply by the 51%? If the MSRP is 27,035 but I get a dealer to come down to 25,800...which is used for the residual? Thanks!

steeler_fan · January 2004

Thanks Car_man. Another thing I did not realize is that if I decide to buy, I'll have to pay tax on the purchase - again. I'm glad I have a few months to think about what I want to do.

dasetton · January 2004

Hi Car_Man,
I re-negotiated my lease based on the information you gave me on my 325XiT. Saves me about $2k over the life of the lease. Thanks a ton. Edmunds is awesome!

Lease Questions - Ask Here

Comments

Helpful Tools

Most popular vehicles