Originally Posted by vfr700f2

I went to myfico.com and ran a 3-bureau report with all the fico versions. My best there was the 674. Others are down around 630-640.

If you can tell me the current T2 & T3 MF numbers for the L-Certified lease, I'd really appreciate it. We looked at some other cars and the RX (the car and the deal) is looking REALLY good. Mrs VFR700F2 may have a new ride on Monday....

Originally Posted by vfr700f2

I went to myfico.com and ran a 3-bureau report with all the fico versions. My best there was the 674. Others are down around 630-640.

If you can tell me the current T2 & T3 MF numbers for the L-Certified lease, I'd really appreciate it. We looked at some other cars and the RX (the car and the deal) is looking REALLY good. Mrs VFR700F2 may have a new ride on Monday....

Originally Posted by vfr700f2

Yup.

I didn't have the numbers handy earlier. 2013 RX350 F Sport, 24k miles,

price $35477
residual $22197
T,T&F upfront
15k mi/yr, 36 mo lease
0.0014 MF (unless my credit screws it up)
$447/mo

Killer deal?

edit: not that it matters, but original new MSRP = $52650!

Originally Posted by FastTags

I would like to have some input and share my experience and knowledge when it come to Leasing.

I will be updating this thread daily, as there are lots of information that I cant possibly put it all at once.

I have sold cars in the past, new and used and want to share a few tricks that may help you in the future, If I am wrong or made a mistake please let me know so I could correct it.

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So lets start with Residual Value. Residual value is dictated by the banks, it is what they call it a fair market value after XX months/years. it is a % from a MSRP, the percentage is provide by the BANK. In other words, ITS A BUY OUT AT THE END OF THE LEASE.
In theory you could negotiate the Residual Value, but not many were successful. Residual value will fluctuate depending on the miles you ask for, 10,000 miles, 12,000 miles and 15,000 miles are the most common.

There is MSRP. Manufactures Suggested Retail Price.

MSRP is important because the residual value % come from the MSRP.

MSRP $50,000, When Residual Value is 55%, it is equal to $27,500. This IS what you would pay if you wanted to keep the car at the end of the lease.

Residual value is NOT the same as the Balloon payment. Because you can have a Residual of 55% and a balloon payment of 60%.($30,000).

Balloon payments are usually applied to SMART BUY, where it is not the same as a Lease, because it is actually a purchase of the vehicle with your name on the title in your hand, only that you have an option to either return the vehicle or pay off the BALLOON Payment and keep it.

When you Lease the vehicle, you do not get the title in your hand, the BANK holds the Title.

Money Factor, is a daily Interest rate, similar to % APR that applies ONLY to a Lease.

So, if your MF is .001 Multiply it by 2400 and you get 2.4% APR.

MF is also provided by the bank, occasionally bank has incentives and you can catch a great deal MF like .00065 =1.56%, or better.

When you Lease a car, you do not pay the full price, you only pay Negotiated Price minus the RESIDUAL

Example of a Lease:
MSRP $50,000
Negotiated Price $48,000 AKA : CAPITAL COST
Residual Value 55% (12k miles a year) which is equal to ($27,500) Is how much you would have to pay if you decide to keep the car after you finish the term.

MF.00065 or 1.56% (aprox $500)APR, also called RENT CHARGE for the whole term only in $, is around $500 for 36 month rent. I think they do it to confuse the buyer. On the contract you will not see the APR nor the MF, you will only see the RENT CHARGE
TAX (example) 7% From the Negotiated price, ($3,360)
Payments Aprox. $600/m x36 month x 12k.miles

In another words you are only financing( $23,860) $51,360 - 27,500 = $23,860

You have an option to select your terms, How many month and how many miles you want to Lease for. Most of the time there will be special financing available for 36, 39 or 27 month lease.
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If the Residual value goes UP, your monthly payments go down. So you always want to have a higher residual to keep the payments down.

If you go from 15k miles to 10k miles, the Residual goes UP as well.

If you are planning to keep the car, It really doesn't matter if you would want to have a Higher Residual and Low payments or Higher payments and Lower Residual, it is totally up to you, at the end you pay the same.
Although I would advise to get it with a 10k miles to have a Higher residual, only because you never know what you are going to do in the future, at the end you can always buy it or sell it and not worry about the miles you have.

If you know that you are not keeping the car, you are going to Sell IT, . You are better off signing a Lease with 10k miles, so that you would pay less monthly.
If you are planning to trade it at the end, you might want to think about the Residual (Pay-Off), which will be higher if you sign a Lease with 10k miles a year.
If you are going to Return it, sign a Lease with miles that you are actually going to need. Most folks can do 15k miles a year, you residual will be lower by a few %

So you have a few things to consider.

You only have to worry about the miles, if you plan to Return the car, otherwise who cares.

INVOICE PRICE:

Its a Price that the Dealer pay to purchase the car from Manufacturer.
Dealers also get an additional discounts (5-7%) depending on how many cars they sell a month. That is how some of us buy cars below Invoice Price.

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Now that you have the basics of understanding MSRP, Residual, MF, and Down payment, lets talk about TAXES, Yes in each state they are different, in NY for instance you only pay TAX on the amount you finance, not on the Negotiated price. In Other words, Negotiated price - Residual = The Financed amount. Tax will be collected for Financed amount ONLY

In Texas, you pay FULL TAX on the Negotiated price. Much more costly, and it can increase your payment from $35-60 easy. Now remember NOT all online LEASE CALCULATORS calculate with the Full tax! Most of them will only calculate payments with Tax on the financed amount, there for your result may be different from the dealers by as much as $50 or more!

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TRADE IN - TAX BREAK
Here is the link which states allow trade in tax break : http://www.realcartips.com/selling/0...x-credit.shtml

In addition: when you trading IN your vehicle you can get a TAX break, and in some cases it could be $3,000 and UP.
Example, you bought a car for $25,000, 3 years ago. You paid 7% TAX = $1750

Today, you decided to TRADE the vehicle in, you owe say $12,000. The dealer gives you only $10,000. Since you already paid TAX on the $10,000, which is $700. The $700 will be deducted from YOUR NEW TAX that you about to pay for the NEW car.

Today you decided to buy a Lexus for $50,000, 7% TAX on the $50,000 is $3,500. You are not going to pay $3,500, you are going to pay $3,500-700= TAX ONLY $2,800.

Same thing is applied if you are trading the LEASED vehicle, do not confuse it with RETURNING the vehicle. The only thing is, NOT ALL STATES ALLOW TAX BREAK ON THE LEASED VEHICLES, Texas is one of them.

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Negotiating techniques:

The common mistakes people do when negotiate:
1. they trust the dealer to honor the deal without looking at the contract.
2. they negotiate the monthly payment.
3. Not patient enough. It can take 6-8 hours to get the deal done, so be patient.

What you need to understand is the the salesman is a pawn, he doesn't make the deals nor he writes the contracts. Manager does the deal, Finance manager writes the contract.

The common trick dealers use to pressure you:

1. How much you want to pay a month?

Say for example for MSRP $50,000 the car the payments are actually $500/m term and Down payment doesn't matter.
The manager will tell the salesman to tell you that the payments are $630/m. After going back and forward they will drop it to $530/m just to leave something if your credit is not so good, if your credit is good, they will sell it to you for about $520/m at the MSRP price and a Higher MF. (This technique above is called packing, dealer packs payments with fees then he drops the price to get you better payment.)

As SW13GS said above, the dealer will manipulate either the payment or the MF, he will raise the MF at bring it down to get you "YOUR" payment. Even if you get the price you want, you may end up paying a high MF .002 or 5-6% APR even with 780 FICO Score, while the tier 1 could get 1.5% or .0006MF.
Yes, dealers increase points on the percent to make money!! This is why it is so important to look at the Rent charge on your contract.

Another thing you need to know is that, NOT all CAR makers offer Great Residual and great Money Factor. For instance, Porsche offers MF.002, which is extremely high. It doesn't mean that it is wrong, they just do not offer good incentives like other car makers. Same thing with a residual, some cars just DON"T keep their value, there for the Residual for example: on a FORD TAURUS will be around 47% or less. not an actual values.


2. The Salesman sometimes wants to know if you are serious and committed to buy today. If the dealer feels that you are committed, you more likely to get a good deal. The salesman will take this approach and will ask you to sign a small paper "i am such and such will buy the car TODAY for $400/m" do not panic, the paper doesn't mean jack, in fact it can play in your benefit if you use it right.

when going to the dealer, you should know the following:

If the dealer feels that you are not committed to buy today, he will not give you BEST PRICE because then you can simply go to a different dealership and ask them to beat the price. That is why you have to make them feel like you ready to buy TODAY, even if you are not ready at all. They cant make you do anything. You can get up and leave any time, in FACT this is a very good negotiating technique which shows customer POWER.

3. Another neat trick is REBATE. Know your Rebate amount. Most people are not aware that REBATE can be applied after the negotiated Price, as the REBATE is usually given to the DEALER from the MANUFACTURER.
Do not mistake it for DEALER CASH, which is ONLY given to you at that specific dealership as a form of discount.

4. KBB and Edmunds.com you can find INVOICE price of almost any car with any options. Most cars these days you can buy at Invoice, some even below. Dealer makes money regardless, don't you worry about them.

Generally a pretty good deal is, an Invoice price, or Invoice price minus the rebate.

5. Know exact options on the car you want to buy. Know exact INVOICE price with those options (Dealer will often show it to you, but it doesnt mean they will sell it to you at that price)

6.Know exact Money Factor for your Tier, That will depend on your CREDIT. For example, Tier 1 is .0006 (720-850), Tier 2 .0012 (665-720), Tier 3 (600-665) .0035.

As mentioned above, UNLESS you let the dealer run your credit they will NOT know what Tier you are, so they will quote you just in case as a Tier 3 or worse. So generally when you agree on the price, and you ask them to give you a run down, they will quote you with a Higher MF. Same thing amply is when you Buying a car.

7. Dont forget about calling / emailing around even if the Dealership not near by, this way you can create an illusion that you are willing to buy anywhere as long as the deal is good. The dealers will fight for your business. You tell one dealer that you got an offer for $50k and you tell the other that you got an offer for $48k and so forth.

8. If the negotiation is not going your way, GET UP and say that you are leaving, believe me you can always go back and say "YES". The more you threaten the dealer that you are going to leave the more likely you get a good deal.

Buying car is an ART. you need to understand how the system works, and be a good actor. You go to the dealership and you act, you pretend that you are READY to BUY TODAY if the price is right. Even if the Dealer does not have your car, they can do what's called a Dealers Trade. Dealers trade is when a dealer trades vehicles with another dealer, so that they can sell you the car you want.

You never stop pushing. Even if you got a good number on the phone, when you get there tell them that your wife said that you cannot buy unless the price is such and such, keep pushing them until you get what you want.

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LEASE SWAP INFORMATION:

Lease swap is great, you can find a great deal, since most people already paid the Tax and put down a hefty down payment. Same thing with getting rid of the Lease, it an easy way out of your Lease.

One thing to keep in mind, when you take over the Lease, you are actually financing the rest of the amount owned, which means the BANK will run your credit and if they approve they will put your name on the Lease: BEWARE some BANKS will NOT take the ORIGINAL (Previous) owner off the LEASE
Until the term is finished. In which case the Original owner is just as RESPONSIBLE for the payments as the New owner, and your credit can be ruined if the New buyer does REPO

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NATION WIDE ADVERTISED DEALS. + BAIT AND SWITCH TECHNIQUES

When you see a commercial or a news paper AD:

Come on over, you can lease/buy a Lexus for $299/m -0 Down

You really need to know all the fine print, unless you want to waste a trip to the dealer.

When you see the AD, they are not actually giving you a discount on the price, UNLESS it says Additional Dealers CASH or Dealers Discount is $$$$$$

1. Normally the advertised price is MSRP, what you do get is either a very good Residual value (which helps to keep the payment down)
2. or/and a great MF / APR % for Tier 1 CREDIT (710 and up) customers ONLY
3. they include all the rebates and discounts (Military, College, etc...) which you may or may not be qualified for.
4. they will not Include Taxes + Lic fees, which you have to pay as well, even if it says 0- DOWN

The Below Info is usually applies to a Local AD, not nation Wide.

5. Some times the AD Only reflect 1 specific vehicle they have on the lot (In this case they will post a STOCK #), when you get there it will be either sold or they will try to switch you into another vehicle that cost more $$$ anyway.
6. The car that advertised could be ONLY 2WD, Manual transmission, and BASIC options, Brown color.

When buying/leasing a car, remember that Dealer is in the business of making money, not loosing. If you got a good value on your TARDE IN, that means you are either loosing on APR / MF, or the Price. You cant have Both. occasionally you can get lucky, most of the time you will NOT.

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AFTER THE DEAL IS MADE!

1. GO OVER YOUR CONTRACT. As you may find hidden fees (packing technique) there like: Disposition fees, Documents fees, Outrageous Rent Charges fees etc..

2. Sometimes the dealer will call you the next day and ask you to come back, because there was a mistake, 90% of the time it is not in your benefit. Unless they can explain to you exactly what is it they doing, and unless they are Lowering your payment by a lot, do not AGREE to come down, tell them " I am sorry, I left the country" LOL

3. the finance guy sometimes will try to SELL you additional services, I am not saying that its a bad thing to have, as some of the services can be useful depending on your situation. What you need to know is, the dealer and the sales guy is also making MONEY(commissions) on those services, there for you can negotiate on the price as well.
Obviously if you are not planning to keep the car, do not get Extended Warranty (which is never BUMPER TO BUMPER), same thing with under body coating, not need it in the Southern states.


4. When picking up the car, make sure everything works, make sure all the things like Carpets, wheel nuts, spare tire, is all there. Look for scratches, wheel rashes, even look for body work, dealers do damage their cars, and they will not let you know, so you need to look for any damage.

5. if you bought a car and the next day or even two, realized that you are not happy with it for any reasons, you have the power to RETURN it and get your old car back. It is not an easy task to do, and the dealer will tell you that it cannot be done. Its a LIE. Tell them that you know it can be done, and you will not settle UNTIL it is done, or you will be coming down every day and talking to every customer about the weather, wink wink

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OPTIONS FOR RETURNING THE LEASE.

When you are getting close to the END of the Lease, you have a few options:

1. Return the vehicle to the dealer. It is the easiest choice if you are not over the mileage limit, and you are looking to get another vehicle.

2. Sell the car to an individual. You can sell Leased vehicle at any time, the Bank does not care when or who pays off the vehicle as long as it gets paid off.

A. you find a buyer
B. The buyer sends a check to the bank for the PAY OFF AMOUNT (its called 10 days pay off balance), Normally at the end of the Lease the PAY OFF balance would be equal to the Residual, but if you are selling/trading it earlier, it will be much higher.
C. Once Bank gets the check, the will mail YOU the Title + Lien Release
D. You transfer the title to the NEW owner

3. Trade in the vehicle to the dealer.

What you need to know about trading your lease is:
A. NOT all Banks will have the same PAY OFF amount to the Dealer as it is to YOU. Meaning, if you want to Pay off or Sell the car, the Pay Off may be $22,000, if the dealer purchases the car ( trade in ) his Pay Off may be $25,000.
B. ONLY Some states allow TAX BREAK for trading in your Leased vehicle. Same thing as trading in your financed vehicle, which was explained in the TRADE IN section of this thread.
If your sate allows a TAX break for your Lease trade in, it can be very beneficial Financially to trade it in.

You don't have to worry about over mileage, scratches, you dont have to worry about finding a buyer, and if you are not up-side down you may even make some money.

Example:
You Owe for your Lease $25,000 (pay-off)
Dealers gives you $24,500 ( you are up-side down only $500)

The Tax break on the $24,500 (if sales tax is 7%) is $1,715

So you just made $1715 - $500 = $1,215

Nice, right.

Bellow you will find more Information about Buying a USED car and Diminished Value

Originally Posted by vfr700f2

I may have been wrong on the miles.

But we're changing cars a little. Near identical 2015 F with 14577 mi.

39344 sell
27466 resid
Assuming .0014, waiting on word from finance
423.47 monthly
TT&F upfront

Bill, I really appreciate your advice. Are you a dealer or corporate? Can you give me the tier 2 & 3 rates, so I can respond to whatever my credit comes back with?

Originally Posted by vfr700f2

Lexus uses the equifax score, which for me is a good bit lower. Finance guy says lexus offered .00235 but he got us .0015. Payment will be $430.

Lexus of Greenwich CT is a first class place. Actually, they make first class look like 2nd class!! See Leonardo for your pre-owned needs.

Originally Posted by rld14

Make sure it isn't a Maroon one with 15400 on it tho.