calvinnr

Hi folks,

First of all hello to all and thanks for the wonderful community of Lexus owners and fans.

I am planning to lease a lexus IS250 and currently a local dealer here in Dallas TX offered me the following. Can you please tell me if this is a good deal or if I should ask for something better.

Please exclude me if this is not the section to post such a query. I would greatly appreciate it if someone told me where else I could post this.

Thanks for your advice in advance!

The offer for a base edition IS250.

24 month lease with 10,000 miles annual limit.
$3200 down and $249 per month.

This is the out the door price and includes taxes + GAP insurance + first month payment.
Is there anything I need to be wary about?

I greatly appreciate any feedback.

LexBob2

Welcome to CL. You need to post this on the IS forum. You'll get a lot more input over there.

mmarshall

Welcome to CL as a new poster.

You an post questions like this in either the IS forum or here in CAR CHAT...though LexBob is correct that you will probably get a lot of responses in the IS forum. But, here in CAR CHAT, we talk about virtually any subject connected with virtually any car or truck, including their manufacturers/dealers....and sometimes motorcycles as well.

Strictly by the numbers, the deal doesn't look bad to me at all. Including the money down, you will be paying $9200 total for a car for a two-year lease, which is probably just about what a car like a 35-40K IS250 can be expected to depreciate in that period. Most leases are based on the difference between the original list price and the (expected) residual price after the time is up, plus a reasonable dealer profit. 10,000 miles per year is reasonable...most leases are anywhere from 10,000 to 15,000 miles, witha per-mile chargeat the conclusion if that is exceeded.

The main thing to be concerned with is the wear-and-tear clause in the contract.....read that part carefully. That's what gets a lot of people at the end of the lease, and adds extra charges....paint scratches, window cracks, worn/bald tires, torn/worn upholstery, etc.....So, before you sign, make sure that you aren't going to have kids tearing up the interior or be regularly parking in an area where things could fall off of trees and do damage, or where the car will be regularly exposed to severe storms. Then decide if you really want the car for at least two years......early-termination of a lease can also be costly. Last, remember that leases usually don't include long-term insurance....you usually have to provide that yourself.

Good Luck.

.

bagwell

I'd have them roll the down payment into the monthly payment which would equal a ttl $382/mo which is pretty high IMO....but check IS 3rd gen forum here..... https://www.clublexus.com/forums/is-...eneration-249/

LexFather

Money Factor?

Honestly looks good but not a fan of down payments on leases….

RNM GS3

Never put money down on a lease.

Whats the MF, residual, negotiated price?

calvinnr

Thanks everybody for the responses.

calvinnr

Market Value: $38,373.00
Discounts / rebates: $3,506.72

Vehicle price: $34,966.28

Residual value: $29,239.48

Does this look good? Do you suggest that I factor the down payment into the monthly payments?

Thanks!

mmarshall

I'm not sure I agree with that (projected, of course) residual value. My guess is that it will actually, in time, depreciate more than that. Most cars depreciate most in their first three years (especially the first), and then the curve flattens out as it gets older.

calvinnr

Thanks. Can you please tell me how this residual amount affect me? I do not plan to purchase the car after the lease. That is for sure. Any other problem with this?

mmarshall

Well, in general, the residual amount is what a new car car is projected (by either the manufacturer or dealer) to be worth at the end of the lease-term. They usually set the monthly-payments and money-down amounts on that projected figure. The less the car is actually projected to dereciate in that time (usually two to four years), the less the lease-payments have to be for the manufacturer od dealer to actually make a profit off of the deal. So, like you, in effect, the auto manufacturer is really taking a chance...and rolling the dice. Don't forget, at the end of the lease-deal, you will take the car back to the dealership and hand them the keys, and that will be it on your part, (assuming, of course, that you don't owe any more for exceeding the annual mileage-limit or for physical damage to the car). So, then, they once again have the car....and have to re-sell it (or re-lease it) to someone else as a used car. If the car is worth less than the original projected residual price, the dealership/manufacturer will have lost money, because your payments over the lease term will not have totalled all of the car's depreciation. That, for example, is what happened at Nissan several years ago, when they lost a lot of money on many leased cars by underestimating the depreciation. The customers who actually leased them made out on the deal because they did not have to eat the full cost of the depreciation themselves....the company ate part of it.

Conversely, if the dealer/manufacturer overestimates the amountof the actual depreciation (and sets the lease payments and money-down amounts accordingly), then they make out at the end of the lease term, because the car will actually be worth more as a used car (in its residual price) than they figured on, and they, of course, can keep the profit when they resell it.

So, to some extent, you roll the dice on any lease.....but I wouldn't worry too much about it. As long as you keep your part of the bargain, stay within the mileage limit, bring the car back two years later in good shape and without appreciable damage (again, read that wear-and-tear clause in the contract carefully), and don't do anything dumb with the car, then if the dealership or manufacturer loses money after the term is up, that's not your problem...and there's nothing more on you. You will have enjoyed the car for two years, and you won't have the hassles of trading or selling it.

Good Luck.

CPMD

iTrader: (2)

Very informative Although I would never lease a car, this is good information for those who would

mmarshall

Thanks. It's important for potential lease-customers know what they are getting into...both the good and the bad.

One good thing about a lease that I didn't mention, BTW, is that, if one actually uses the vehicle in buisness (as defined by the IRS), then the lease-payments can be deducted on Federal tax forms. That can be a significant deduction.

calvinnr

Thanks mmarshall. That was informative. I did end up leasing the car and pick it up tomorrow. I hope to enjoy it for the next 2 years.

Thanks to all who replied as well.

calvinnr

Wondering if anybody thinks I should buy the road hazard warranty?