jtrue28

Here's the situation.

I notice that Lexus is offering the 2015 GX460 Base model, for $499/month for 27 months. I've never leased a car. From the details, that payment amount doesn't include taxes, dealer fees, etc and is based on an MSRP of $50K. I'll never find a GX for $50K (new)...so how does that work with the promotion they are running? I noticed that a lot of the vehicles are ~$56K. I would obviously negotiate that down.

That seems like a really good promotion, as all calculators I use don't come anywhere near $499/month for 27 months...

This deal is valid through 11/3/14

I intend to keep all the cash from my current vehicle, since I purchased it...especially with a deal like that. They do want $3,299 down, but whatever.

kerplunk38

I cannot tell you if that is a good deal. However, I can tell you for certain that you should never put money down on a lease. Keep your $3299 and just pay the lease payment once you determine if it is or is not a good deal. If your car gets stolen or totaled you will lose that down payment as most insurance (even gap insurance) pays actual market value of a vehicle when it is stolen or totaled.

jtrue28

So what do these typical "Due at lease signing" payments include? I didn't know they were negotiable...

Eppieguy

Every lease I have ever done I put ZERO down, sign and drive.


Just my .02

kvsm5

Jtrue28,
The lease specials are only for base models and dealers by me (Atlanta) have a few of them in stock. Also note that base models have a money factor of .00070 (1.68 % interest rate). The premium and luxury models have a money factor of (.00170) which equates to 4.08% int rate. To calculate this, multiply money factor by 2400. This is for 2015 models. If you can find 2014 premium/luxury models, the money factor is discounted to .00140.
Everything is negotiable and its best if one does not put down any money for a lease. Usually first month's payment is all that is needed to lease. In some states you will have to pay full tax which can be added to your monthly payments. For example, I live in GA so I will have to pay full tax on the price of the car and divide that amount by the months of the lease. Most other states, you pay tax based on usage.
A dealer by me had a one day deal this past Saturday for a base GX with msrp of $50,270 for $46880 which is a great buy! As you probably now, the base GX does not come with leather interior and navigation is optional. It also does not have heated/cooled seats, trizone climate control, led foglights, etc. But overall its still a great deal.
Usually when I lease a car, I have everything rolled in (taxes, acquisition fee, dealer fees) so my only payment at inception is the first month's payment. I do not put any money down on a lease. Also if a dealer is quoting money factor higher than the ones I mentioned, that is pure profit. If you want to negotiate, start with invoice and take it from there and not MSRP. The dealer still makes money via the dealer hold back which can be 2% or 3% off the invoice or MSRP of the car.
Hope this helps, any questions please ask.
thanks
KRIS

jtrue28

My dealer has 2 "Premium" models. I don't want the base model. Both priced around $56-57K. One is black the other is the dark grey color.

My ultimate goal is to cash out my car, keep the cash, and rent cars from now on.

In order to get to $499/month on $50MSRP and money factor of 0.00070, the residual has to be $40,000..or 80% of the MSRP. I find that extremely hard to believe.

Doing a lease calculation on $56K MSRP...with negotiated price at $52K and residual at $40K and money factor of 0.00170 over 27 months and 10K miles and 6% sales tax....the monthly lease payment is $565. With no reduction in cap cost and no money down. Is the residual % based on negotiated price, or the MSRP?

kvsm5

Jtrue28,
this is how to calculate a lease payment:
MSRP: $56000 (estimate)
Residual 60%= $56000 x .60= 33,600
Sale price of car: $52000 (we will omit sales tax, acquisition fee, dealer fee) for calculations sake and estimate it later.
sale price - residual value= value/ 36 months (time of lease)= depreciation
52000- 33,600= 18,400/36= $511.00
to calculate rent= 52000 + 33,600 x .00170= $145.00

add depreciation cost + rent= $656.00 (this excludes fees mentioned above). So maybe $710-$720 a month or nearly $100 more in states where full tax has to be paid

Kris

kvsm5

Forgot to answer your question. Residual is based on MSRP and is set by Lexus.
Right now its 60% for premium models for 10K a year for 36 months. I do not know what it is for 27 months.

jtrue28

60% is awful. I would think it has to be higher for 27 months. The only reason I even mentioned 27 months, is because that is the "special" they are running.

So it is essentially bait & switch. I'm not even sure Lexus makes the "Base" model...and if they do, what do they sell, like 7? They know you're going to come in wanting that quoted lease price, but then you get there...."oh, that's for this model...we don't have any of those, but we have these....."

kerplunk38

60% residual is excellent. The GX460 is one of the best vehicles money can buy in terms of retaining value.

https://www.alg.com/insights/depreciation-ratings/

kvsm5

Jtrue 28, Kerplunk is right, 60% is excellent! Also I got a quote for a base 2014 GX without NAV. The MSRP is $50,270. My quote is $46,000 plus tax. The dealership has 2 base ones in stock. IF one doesn't want the NAV or heated/cooled seats , leather, etc, its not a bad deal at all. You can sell it at least close to the price you paid. Also this price is a grand more than a fully loaded Toyota 4Runner.
In fact I am going to check one out in a few hours.

jtrue28

Yeah, but I want all that stuff. My apologies on the residual %. I've never leased, so this is all new to me.

I'm coming from a fully loaded GS, so I'm not going to give up everything.

Anyone know what residual % is for the Premium at 27 months? Would it be better to do 36 months?

From everything I have read, the GX is likely on it's way out forever, mid-2016. You would think there would be a lot of deals to be had. One dealership I talked to said they can't keep them on the shelves. They're sold before they ever hit their lot. I find that VERY hard to believe. The GX isn't exactly Lexus' best seller.

JDR76

The GX has had a major resurgence of sales this year. It actually is true that the dealers can't keep them on the lot. Sales are up 125% so far this year. Good for Lexus, bad for the consumers.

FWIW, I do not like 27 month leases. I prefer to deal in full year increments. It'll depend on your state license fees, but I don't like to get to 24 months and pay to renew my tabs for another full year, but turn in the car after only 3 more months. I'd do a 24 month or 36 month instead of 27.

jtrue28

We pay property taxes on the vehicle that we "own" on Jan 1. So length of lease doesn't really apply to me, other than bringing the payment down somewhat from 27 to 36.

Obviously the residual should be a little more with 27, but is the increased residual enough to justify the 9 extra payments if you took the 36 month lease.

kerplunk38

When you lease a vehicle it is not your property so your normal property taxes most likely will not apply.

Based on your questions you need to go speak to someone at your bank or credit union about leasing versus buying. At my credit union the auto loan officer was able to explain it to me very clearly and even gave me some worksheets that helped me to understand which values affect the payment, etc. I took those same worksheets to my dealer and made them give me each value to fill in the blanks. You can very easily be taken to the cleaners on a lease so stop asking questions on an internet forum and go see someone who can clearly explain your options on a professional level. It is your hard-earned money and you probably don't want to spend it unwisely.

You can find information about the Lexus money factors, residual values, etc here:

http://forums.edmunds.com/discussion...ease-questions.

There are several knowledgeable people who contribute to that forum who will give you the numbers so you can validate with your dealer once you are prepared to make a deal.

Good luck. And by the way, my wife has a GS350 F-Sport and I have the GX460. I love the GX but driving her car is always a great departure from the norm.