Leasing Comparison?? How??
11-08-14, 05:34 PM
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Leasing Comparison?? How??
guys, here is my issue.
I am thinking about leasing either a Lexus or Infiniti.
We all know that for a purchase we can find the dealer invoice and determine rebates, so we know we are getting a good deal.
But, what about Leasing, it's next to impossible to compare lease rates between different brands without visiting a dealership.
How do you find out lease information?
I am thinking about leasing either a Lexus or Infiniti.
We all know that for a purchase we can find the dealer invoice and determine rebates, so we know we are getting a good deal.
But, what about Leasing, it's next to impossible to compare lease rates between different brands without visiting a dealership.
How do you find out lease information?
11-08-14, 05:42 PM
#2
11-08-14, 08:07 PM
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Yes, I saw that.
I am not really asking about "how to lease a car", but more of find out out what is a fair price for a lease.
For example, I want to know what will be a fair lease for a Lexus RX350 with a sticker of $52K with 15,000 miles a year with $2,000 down.
Basically, so I know I am getting a fair deal.
I am not really asking about "how to lease a car", but more of find out out what is a fair price for a lease.
For example, I want to know what will be a fair lease for a Lexus RX350 with a sticker of $52K with 15,000 miles a year with $2,000 down.
Basically, so I know I am getting a fair deal.
11-09-14, 05:42 PM
#4
Lexus Fanatic
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moving to car chat...
11-10-14, 06:29 AM
#5
email all your local dealers on your interest and pricing details, and have them beat out each other...once you see the dealers start to fall out of the race, you'll get a pretty good idea of where the bottom is for the vehicle.
do this the 3-4 days before the end of the month when it comes to quota fulfillments
do this the 3-4 days before the end of the month when it comes to quota fulfillments
11-10-14, 08:54 AM
#6
Lexus Champion
A straight-out cash purchase is easiest -- you just have to know price and incentives.
For financing, you need to know price and incentives, plus financing rates. You can get financing through the dealer or on your own (bank).
For leasing, you need even more information so you have quite a number of factors to balance. You need to know price and incentives as your starting point; you then need to know leasing-specific numbers including lease rates and lease-end value (a high lease-end value will reduce your monthly payments). I don't know how easy it is for you as the buyer to shop around on your own for leasing rates and lease-end value (banks do not usually get into leasing). Manufacturers offer leasing and dealers may have other resources for leasing.
Call around to various dealers -- and not necessarily just Lexus or Infiniti dealers -- for leasing rates. Some dealers may be willing to lease makes that they do not sell so Toyota dealers may be willing to lease Lexus and Nissan dealers may offer leasing of Infiniti.
For financing, you need to know price and incentives, plus financing rates. You can get financing through the dealer or on your own (bank).
For leasing, you need even more information so you have quite a number of factors to balance. You need to know price and incentives as your starting point; you then need to know leasing-specific numbers including lease rates and lease-end value (a high lease-end value will reduce your monthly payments). I don't know how easy it is for you as the buyer to shop around on your own for leasing rates and lease-end value (banks do not usually get into leasing). Manufacturers offer leasing and dealers may have other resources for leasing.
Call around to various dealers -- and not necessarily just Lexus or Infiniti dealers -- for leasing rates. Some dealers may be willing to lease makes that they do not sell so Toyota dealers may be willing to lease Lexus and Nissan dealers may offer leasing of Infiniti.
11-10-14, 09:48 AM
#7
Yes, I saw that.
I am not really asking about "how to lease a car", but more of find out out what is a fair price for a lease.
For example, I want to know what will be a fair lease for a Lexus RX350 with a sticker of $52K with 15,000 miles a year with $2,000 down.
Basically, so I know I am getting a fair deal.
I am not really asking about "how to lease a car", but more of find out out what is a fair price for a lease.
For example, I want to know what will be a fair lease for a Lexus RX350 with a sticker of $52K with 15,000 miles a year with $2,000 down.
Basically, so I know I am getting a fair deal.
The summary version is that you need to know the lease residual, and the interest rate. From that, you can calculate the depreciation, money factor, and rental charge, throw in the appropriate tax scenario for your state, and then have a means to compare the lease. It's not possible to answer your question without you understanding these terms, and how to calculate them (or at least what it means when a tool does the calculation for you).
If you're asking for "What are some leases rate you were offered so I know what to expect or compare against", that's a totally different question, and there are already a lot of threads on such topics that you could reference.
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11-10-14, 10:09 AM
#9
Pole Position
guys, here is my issue.
I am thinking about leasing either a Lexus or Infiniti.
We all know that for a purchase we can find the dealer invoice and determine rebates, so we know we are getting a good deal.
But, what about Leasing, it's next to impossible to compare lease rates between different brands without visiting a dealership.
How do you find out lease information?
I am thinking about leasing either a Lexus or Infiniti.
We all know that for a purchase we can find the dealer invoice and determine rebates, so we know we are getting a good deal.
But, what about Leasing, it's next to impossible to compare lease rates between different brands without visiting a dealership.
How do you find out lease information?
Here's some of my own golden rules for leasing.
Initially focus solely on the purchase price of the car and do not discuss your financing plans with the sales associate. I'm sure you know what to do to negotiate a good deal so we won't get into that, but until you walk into the F&I office it's irrelevant how you choose to finance the car.
Never, ever discuss a monthly payment with the sales guy. If they know you are interested in a lease, they will ask. Never, ever get into this discussion. If you float out a number and that number is higher than you could have leased the car for, your payment will end up higher. Say you discuss a payment of $550. The sales guy makes the deal work at $530. You think you got a deal. Not so good a deal, however, if you could have done it at say $500. Any time you see the dealer start to use the "four square box" to frame a deal or ask you about payment terms, do not get into this conversation. Both end up with you paying more, Remember point 1 - at this time it's ONLY about the purchase price of the car.
Now - you've settled on a price for the car and based on all your research it's a good deal. Let's move on.
When you talk leasing, there are some variables you control and some you don't. Here they are:
Cap cost of the car. This is the purchase price you negotiated. You have control over this, so let's assume it's a good one
Residual value of the car. Broadly, you have no control over this, as they are set by the finance company. Make sure you ask to see the matrix as part of the closing discussions and note that the residuals in the chart will vary based on lease term and mileage. The residuals in the matrix will assume, say, 15,000 miles per year. If you plan to do 10,000 or 12,000 the residual percentage will generally increase. Applying the right percentage to your MSRP will give you the lease residual and dividing it by the term will give you your "base rent". You're broadly funding the cost of the difference (albeit that the calculation doesn't quite work this way) and adding a lease charge to the base rent.
That lease charge is calculated by a money factor. You do have some control over this. Your dealer has base finance rates, known as the buy rate. They can and do try to mark these up. Insist on a) seeing the dealer materials that confirm the finance rates and b) insist on the buy rate with no mark up. Walk away if any mark up is applied and is not taken off. Note that the money factor is usually expressed in a way which is designed to confuse - for example, 0.0012. Multiply it by 2400 to get your APR (that .0012 MF translates to an APR of 2.8%).
Note that there is often a sweet spot where the lease residual and MF combine to give you the best deal. You may, for example, find that a 30 month lease has a better residual and MF than a 33 month or a 27 month. It totally varies. A good sales guy will tell you, if they don't then you need to make them crunch the numbers to find that sweet spot (it's usually readily apparent on the dealer materials and via info shared on boards like this).
Down payment. Do not put any money down. Ever. All you are doing is prepaying some of the lease payments. Plus, if the car is totalled you never see the money back.
Find out if you can lower your money factor by paying multiple refundable security deposits. Some manufacturers let you prepay MSDs and when you do you buy down rate by a considerable margin. Note that this is NOT a downpayment. You get your MSD's back at the end of the term. The effective rate reduction is generally more than you'd make on that cash elsewhere. Think of the MSD as a moderately good investment. BMW definitely does this, and it's what all the smart lessees do. Lots of info on the BMW forums, find out if the manufacturers you're looking at have similar programs.
Anyway - net/net - the only thing you need to do is get right to the source info and make sure that what you're getting is the base buy rate and that you're happy with the purchase price/cap cost of your car. Make them show you - it should be the same for every dealer, and they will all eventually show you even if they initially refuse.
Remember that the main factor driving your deal should be absolutely no different than if you wrote a check or financed the car. Post your deals here and I'm sure many would be happy to help.
11-11-14, 06:46 AM
#10
I have a number of cars and I change them every year or two. I will buy in cash, finance or lease depending on the deals at the time and follow the same process regardless of how I choose to finance.
Here's some of my own golden rules for leasing.
Initially focus solely on the purchase price of the car and do not discuss your financing plans with the sales associate. I'm sure you know what to do to negotiate a good deal so we won't get into that, but until you walk into the F&I office it's irrelevant how you choose to finance the car.
Never, ever discuss a monthly payment with the sales guy. If they know you are interested in a lease, they will ask. Never, ever get into this discussion. If you float out a number and that number is higher than you could have leased the car for, your payment will end up higher. Say you discuss a payment of $550. The sales guy makes the deal work at $530. You think you got a deal. Not so good a deal, however, if you could have done it at say $500. Any time you see the dealer start to use the "four square box" to frame a deal or ask you about payment terms, do not get into this conversation. Both end up with you paying more, Remember point 1 - at this time it's ONLY about the purchase price of the car.
Now - you've settled on a price for the car and based on all your research it's a good deal. Let's move on.
When you talk leasing, there are some variables you control and some you don't. Here they are:
Cap cost of the car. This is the purchase price you negotiated. You have control over this, so let's assume it's a good one
Residual value of the car. Broadly, you have no control over this, as they are set by the finance company. Make sure you ask to see the matrix as part of the closing discussions and note that the residuals in the chart will vary based on lease term and mileage. The residuals in the matrix will assume, say, 15,000 miles per year. If you plan to do 10,000 or 12,000 the residual percentage will generally increase. Applying the right percentage to your MSRP will give you the lease residual and dividing it by the term will give you your "base rent". You're broadly funding the cost of the difference (albeit that the calculation doesn't quite work this way) and adding a lease charge to the base rent.
That lease charge is calculated by a money factor. You do have some control over this. Your dealer has base finance rates, known as the buy rate. They can and do try to mark these up. Insist on a) seeing the dealer materials that confirm the finance rates and b) insist on the buy rate with no mark up. Walk away if any mark up is applied and is not taken off. Note that the money factor is usually expressed in a way which is designed to confuse - for example, 0.0012. Multiply it by 2400 to get your APR (that .0012 MF translates to an APR of 2.8%).
Note that there is often a sweet spot where the lease residual and MF combine to give you the best deal. You may, for example, find that a 30 month lease has a better residual and MF than a 33 month or a 27 month. It totally varies. A good sales guy will tell you, if they don't then you need to make them crunch the numbers to find that sweet spot (it's usually readily apparent on the dealer materials and via info shared on boards like this).
Down payment. Do not put any money down. Ever. All you are doing is prepaying some of the lease payments. Plus, if the car is totalled you never see the money back.
Find out if you can lower your money factor by paying multiple refundable security deposits. Some manufacturers let you prepay MSDs and when you do you buy down rate by a considerable margin. Note that this is NOT a downpayment. You get your MSD's back at the end of the term. The effective rate reduction is generally more than you'd make on that cash elsewhere. Think of the MSD as a moderately good investment. BMW definitely does this, and it's what all the smart lessees do. Lots of info on the BMW forums, find out if the manufacturers you're looking at have similar programs.
Anyway - net/net - the only thing you need to do is get right to the source info and make sure that what you're getting is the base buy rate and that you're happy with the purchase price/cap cost of your car. Make them show you - it should be the same for every dealer, and they will all eventually show you even if they initially refuse.
Remember that the main factor driving your deal should be absolutely no different than if you wrote a check or financed the car. Post your deals here and I'm sure many would be happy to help.
Here's some of my own golden rules for leasing.
Initially focus solely on the purchase price of the car and do not discuss your financing plans with the sales associate. I'm sure you know what to do to negotiate a good deal so we won't get into that, but until you walk into the F&I office it's irrelevant how you choose to finance the car.
Never, ever discuss a monthly payment with the sales guy. If they know you are interested in a lease, they will ask. Never, ever get into this discussion. If you float out a number and that number is higher than you could have leased the car for, your payment will end up higher. Say you discuss a payment of $550. The sales guy makes the deal work at $530. You think you got a deal. Not so good a deal, however, if you could have done it at say $500. Any time you see the dealer start to use the "four square box" to frame a deal or ask you about payment terms, do not get into this conversation. Both end up with you paying more, Remember point 1 - at this time it's ONLY about the purchase price of the car.
Now - you've settled on a price for the car and based on all your research it's a good deal. Let's move on.
When you talk leasing, there are some variables you control and some you don't. Here they are:
Cap cost of the car. This is the purchase price you negotiated. You have control over this, so let's assume it's a good one
Residual value of the car. Broadly, you have no control over this, as they are set by the finance company. Make sure you ask to see the matrix as part of the closing discussions and note that the residuals in the chart will vary based on lease term and mileage. The residuals in the matrix will assume, say, 15,000 miles per year. If you plan to do 10,000 or 12,000 the residual percentage will generally increase. Applying the right percentage to your MSRP will give you the lease residual and dividing it by the term will give you your "base rent". You're broadly funding the cost of the difference (albeit that the calculation doesn't quite work this way) and adding a lease charge to the base rent.
That lease charge is calculated by a money factor. You do have some control over this. Your dealer has base finance rates, known as the buy rate. They can and do try to mark these up. Insist on a) seeing the dealer materials that confirm the finance rates and b) insist on the buy rate with no mark up. Walk away if any mark up is applied and is not taken off. Note that the money factor is usually expressed in a way which is designed to confuse - for example, 0.0012. Multiply it by 2400 to get your APR (that .0012 MF translates to an APR of 2.8%).
Note that there is often a sweet spot where the lease residual and MF combine to give you the best deal. You may, for example, find that a 30 month lease has a better residual and MF than a 33 month or a 27 month. It totally varies. A good sales guy will tell you, if they don't then you need to make them crunch the numbers to find that sweet spot (it's usually readily apparent on the dealer materials and via info shared on boards like this).
Down payment. Do not put any money down. Ever. All you are doing is prepaying some of the lease payments. Plus, if the car is totalled you never see the money back.
Find out if you can lower your money factor by paying multiple refundable security deposits. Some manufacturers let you prepay MSDs and when you do you buy down rate by a considerable margin. Note that this is NOT a downpayment. You get your MSD's back at the end of the term. The effective rate reduction is generally more than you'd make on that cash elsewhere. Think of the MSD as a moderately good investment. BMW definitely does this, and it's what all the smart lessees do. Lots of info on the BMW forums, find out if the manufacturers you're looking at have similar programs.
Anyway - net/net - the only thing you need to do is get right to the source info and make sure that what you're getting is the base buy rate and that you're happy with the purchase price/cap cost of your car. Make them show you - it should be the same for every dealer, and they will all eventually show you even if they initially refuse.
Remember that the main factor driving your deal should be absolutely no different than if you wrote a check or financed the car. Post your deals here and I'm sure many would be happy to help.
11-11-14, 07:16 AM
#11
Lexus Test Driver
This is a great post. This is the best summary of what the lease process should be that I have seen. So many folks focus on the lease payment, when the purchase price/cap cost is the most negotiable factor in the equation and should be determined before the word "lease" (as well as "trade") is ever mentioned.
06-20-15, 05:02 AM
#12
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Just want to bump this thread, as it's a great summary on leasing.
My question is on MSD (Multiple Security Deposits) to lower the MF. If one is quoted an MF of .0012, that translates into an APR of 2.88% which is pretty darn good. Now, one is able to lower/reduce the MF by addition of multiple MSD, that translates into a savings of .00007 per MSD... Lets assume a monthly payment of $435.. each MSD is gonna cost u $450 (round up to the nearest $25 increment)
Is paying down the MF via MSD a big savings.. I believe Lexus allows paying upto 8 MSDs, which is another $3600 (8 x $450) "security deposit", that is supposedly refundable, truly advantageous to the whole leasing matter?. 8 MSD x .00007 = .00056 = 1.344 reduction. Thus 2.88 - 1.344 = 1.536% effective APR. Thats a savings of about $44/month, which equals $1584 in savings over 36 months. Assuming you get your $3600 back.
My question is on MSD (Multiple Security Deposits) to lower the MF. If one is quoted an MF of .0012, that translates into an APR of 2.88% which is pretty darn good. Now, one is able to lower/reduce the MF by addition of multiple MSD, that translates into a savings of .00007 per MSD... Lets assume a monthly payment of $435.. each MSD is gonna cost u $450 (round up to the nearest $25 increment)
Is paying down the MF via MSD a big savings.. I believe Lexus allows paying upto 8 MSDs, which is another $3600 (8 x $450) "security deposit", that is supposedly refundable, truly advantageous to the whole leasing matter?. 8 MSD x .00007 = .00056 = 1.344 reduction. Thus 2.88 - 1.344 = 1.536% effective APR. Thats a savings of about $44/month, which equals $1584 in savings over 36 months. Assuming you get your $3600 back.
06-20-15, 06:38 PM
#13
Pole Position
Just want to bump this thread, as it's a great summary on leasing.
My question is on MSD (Multiple Security Deposits) to lower the MF. If one is quoted an MF of .0012, that translates into an APR of 2.88% which is pretty darn good. Now, one is able to lower/reduce the MF by addition of multiple MSD, that translates into a savings of .00007 per MSD... Lets assume a monthly payment of $435.. each MSD is gonna cost u $450 (round up to the nearest $25 increment)
Is paying down the MF via MSD a big savings.. I believe Lexus allows paying upto 8 MSDs, which is another $3600 (8 x $450) "security deposit", that is supposedly refundable, truly advantageous to the whole leasing matter?. 8 MSD x .00007 = .00056 = 1.344 reduction. Thus 2.88 - 1.344 = 1.536% effective APR. Thats a savings of about $44/month, which equals $1584 in savings over 36 months. Assuming you get your $3600 back.
My question is on MSD (Multiple Security Deposits) to lower the MF. If one is quoted an MF of .0012, that translates into an APR of 2.88% which is pretty darn good. Now, one is able to lower/reduce the MF by addition of multiple MSD, that translates into a savings of .00007 per MSD... Lets assume a monthly payment of $435.. each MSD is gonna cost u $450 (round up to the nearest $25 increment)
Is paying down the MF via MSD a big savings.. I believe Lexus allows paying upto 8 MSDs, which is another $3600 (8 x $450) "security deposit", that is supposedly refundable, truly advantageous to the whole leasing matter?. 8 MSD x .00007 = .00056 = 1.344 reduction. Thus 2.88 - 1.344 = 1.536% effective APR. Thats a savings of about $44/month, which equals $1584 in savings over 36 months. Assuming you get your $3600 back.
You do get the $3600 back, and it's earned you the difference between what the lease payments would have been and what they are with the reduced MF. If you can earn more after tax with your $3600 elsewhere then that's what you should do, but there are no low-risk investments that will deliver the same effective return as the MSD program.
The MSDs aren't the same as a downpayment which is nothing more than you prepaying some of the lease payments upfront, they are returnable and they will generally save you money when they are offered.
Just be careful to ensure that you're already getting the best possible MF before you talk MSDs, as otherwise you're effectively paying for what you could have had for free.
06-21-15, 01:18 AM
#14
Lexus Test Driver
It would be interesting to see how many people actually turn their cars back in when a lease is up. There are accidents and often people end up wanting to sell it themselves or buy the car outright at the end. If these pop up, what happens to those MSD?
Also, wondering how people actually get around NOT answering the question all salespeople ask: "Where would you like your monthly payments to be?" Everytime that answer is avoided, it creates a new problem of the dealer not taking you seriously or not wanting to proceed forward with negotiations. And in their defense, how are they going to know it's not some crazy person wanting a car for $200/mo less than what is really possible? Just curious, and playing devil's advocate to learn for myself.
Also, wondering how people actually get around NOT answering the question all salespeople ask: "Where would you like your monthly payments to be?" Everytime that answer is avoided, it creates a new problem of the dealer not taking you seriously or not wanting to proceed forward with negotiations. And in their defense, how are they going to know it's not some crazy person wanting a car for $200/mo less than what is really possible? Just curious, and playing devil's advocate to learn for myself.
06-21-15, 10:20 AM
#15
Pole Position
It is a question you have to and should avoid.
The question around where you want the payment to be is irrelevant if you handle the deal structure appropriately.
The payment is simply a factor of the variables highlighted in the thread. If you get those to there they should be, the payment is a simple product of those variables.
The salesperson asks the question as it gives them control of the deal. Many if not most customers don't understand the variables that go into the lease calculation and the salesperson is savvy enough to know that if the number you float out is more than it could be then they have an easy way to close the deal in their favor with the customer still being happy as the number is lower than the one they discussed - but probably more than it needed to be.
I stand by the advice. Never, ever discuss payment amounts with a salesperson. The payment will flow from the rest of the deal. Dealers can quickly work out who is a serious buyer and who isn't, and an unwillingness to discuss payment isn't going to change that. While I wish it were different, car buying/leasing is an art as much as it is a science and it takes work and occasionally some friction between you and the seller to get a good outcome.
The question around where you want the payment to be is irrelevant if you handle the deal structure appropriately.
The payment is simply a factor of the variables highlighted in the thread. If you get those to there they should be, the payment is a simple product of those variables.
The salesperson asks the question as it gives them control of the deal. Many if not most customers don't understand the variables that go into the lease calculation and the salesperson is savvy enough to know that if the number you float out is more than it could be then they have an easy way to close the deal in their favor with the customer still being happy as the number is lower than the one they discussed - but probably more than it needed to be.
I stand by the advice. Never, ever discuss payment amounts with a salesperson. The payment will flow from the rest of the deal. Dealers can quickly work out who is a serious buyer and who isn't, and an unwillingness to discuss payment isn't going to change that. While I wish it were different, car buying/leasing is an art as much as it is a science and it takes work and occasionally some friction between you and the seller to get a good outcome.
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