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How to get my dealer to lower the Money Factor in the lease

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Old 11-07-13, 11:48 AM   #1
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Default How to get my dealer to lower the Money Factor in the lease

So originally, I was planning to finance my 3IS outright, but now i may go via lease since Lexus has been changing their direction and may have something worth changing for in 2-3 years.

this is my terms below. everything looks good except for the Money factor which is pretty high. Because my dealer said they gave me a good deal, they MF has to be somewhat high for the owner to make some money. I understand the sales price we determined is great. It's 1700 below invoice, but the MF is pretty high at .002 (4.8%). How can i go about lowering the MF with them?

I've already ordered the 3IS UW/RR and its coming in a week or so with this dealer, so its not like i want to "walk away" from this dealer.

They seem pretty stern about .002 MF, but I told them many others have been getting .0013 for Tier 1. my FICO is like in low 800s.

Obviously if i put like $1-$2k down, that will affect my payment like $70-$100 less per month, but I don't want to put any add'l money down.

Thoughts?


MSRP = 48462
sales price = 43883
fees that increase cap cost = 450
residual = 72%
term = 27 month
money factor = .002 (they said they had to increase this because of the good price they gave me of $1700 below invoice)
drive off = $1500 (drive off is paid up front and not in loan incl first month payment, title, some other fees)
$0 additional down payment

$509 + tax (tax is calculated into each payment of the loan and only against the term lease amount, not entire cost of the car)

- or this -

MSRP = 48462
sales price = 43883
fees to increase cap cost = 450
residual = 64%
term = 36 month
money factor = .002
drive off = $1500
$0 additional down payment

$521 + tax (tax is calculated into each payment of the loan and only against the term lease amount, not entire cost of the car)


GAP insurance is automatically included in the Lexus Lease.
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Old 11-07-13, 12:10 PM   #2
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Have you tried another leasing company or bank? Competition does wonders to bring down the price. You've already negotiated the price; now take that price to a competitor and ask them for a better rate. Then take that rate back to the dealer and ask them to match or beat it.
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Old 11-07-13, 12:44 PM   #3
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Quote:
Originally Posted by alexlude View Post
So originally, I was planning to finance my 3IS outright, but now i may go via lease since Lexus has been changing their direction and may have something worth changing for in 2-3 years.

this is my terms below. everything looks good except for the Money factor which is pretty high. Because my dealer said they gave me a good deal, they MF has to be somewhat high for the owner to make some money. I understand the sales price we determined is great. It's 1700 below invoice, but the MF is pretty high at .002 (4.8%). How can i go about lowering the MF with them?

I've already ordered the 3IS UW/RR and its coming in a week or so with this dealer, so its not like i want to "walk away" from this dealer.

They seem pretty stern about .002 MF, but I told them many others have been getting .0013 for Tier 1. my FICO is like in low 800s.

Obviously if i put like $1-$2k down, that will affect my payment like $70-$100 less per month, but I don't want to put any add'l money down.

Thoughts?


MSRP = 48462
sales price = 43883
fees that increase cap cost = 450
residual = 72%
term = 27 month
money factor = .002 (they said they had to increase this because of the good price they gave me of $1700 below invoice)
drive off = $1500 (drive off is paid up front and not in loan incl first month payment, title, some other fees)
$0 additional down payment

$509 + tax (tax is calculated into each payment of the loan and only against the term lease amount, not entire cost of the car)

- or this -

MSRP = 48462
sales price = 43883
fees to increase cap cost = 450
residual = 64%
term = 36 month
money factor = .002
drive off = $1500
$0 additional down payment

$521 + tax (tax is calculated into each payment of the loan and only against the term lease amount, not entire cost of the car)


GAP insurance is automatically included in the Lexus Lease.
I find it hard to believe so many dealers are taking 5 grand off the price of a new released vehicle like this. do you mind sharing what dealer is giving you a deal like that?
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Old 11-07-13, 01:03 PM   #4
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Originally Posted by Bass Mech View Post
I find it hard to believe so many dealers are taking 5 grand off the price of a new released vehicle like this. do you mind sharing what dealer is giving you a deal like that?
I'm in the bay area and going through Putnam Lexus. Granted, I was referred to the dealer by a family friend that knows the sales car manager. I'm sure that has to help some - I rather not give out my salesman name since he probably cant give that exact deal to everyone

On the other hand, you can also call Longo Lexus in Long beach and they are readily giving 1k below invoice which is about 4k off Sticker. Ask for George Kantanto, internet sales manager. I dont know him personally and you can get that price from him anytime.
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Old 11-07-13, 01:20 PM   #5
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Either find another leasing company or be prepared to walk. Saying you don't want to walk because you have a specific color combo on order already puts you behind the 8-ball. Just having an order in means they're going to be less tolerant to negotiating with you.

This is why I'm not specific on colors, dealers will always be more willing to work with you if the car you're trying to buy is already on their lot.
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Old 11-07-13, 03:29 PM   #6
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Believe it or not but a sales person advised me not to do 27 mo because you are paying 12 months worth of DMV fees but you only have the car for 3 months after you pay the 2nd years fees. He said either do 24 and 36 months.
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Old 11-07-13, 03:31 PM   #7
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Believe it or not but a sales person advised me not to do 27 mo because you are paying 12 months worth of DMV fees but you only have the car for 3 months after you pay the 2nd years fees. He said either do 24 and 36 months.
Most states will prorate on your next renewal, so this shouldn't be a factor in the decision.
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Old 11-07-13, 03:35 PM   #8
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Most states will prorate on your next renewal, so this shouldn't be a factor in the decision.
Not in CA. OP is in CA, as am I.
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Old 11-07-13, 03:45 PM   #9
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Originally Posted by Prepboy607 View Post
Not in CA. OP is in CA, as am I.
in Colorado we get to pro rate.
but registration here for a new car like this will probably run about 900 the first year.
most of the rice boys here spend that in the first month on intakes and stickers anyway!
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Old 11-07-13, 03:59 PM   #10
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Quote:
Originally Posted by Prepboy607 View Post
Believe it or not but a sales person advised me not to do 27 mo because you are paying 12 months worth of DMV fees but you only have the car for 3 months after you pay the 2nd years fees. He said either do 24 and 36 months.
Good point but after some research, looks like you can submit an application 20 days before registration is due to say you only want to pay for 3 months extra vs the entire year.

http://www.dmv.ca.gov/pubs/vctop/d03/vc9706.htm
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Old 11-07-13, 04:06 PM   #11
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Quote:
Originally Posted by alexlude View Post
Good point but after some research, looks like you can submit an application 20 days before registration is due to say you only want to pay for 3 months extra vs the entire year.

http://www.dmv.ca.gov/pubs/vctop/d03/vc9706.htm
Good find but looking at the current situation, in 24 months you'll be able to take advantage of the 2015 December to Remember event, presuming there is one.

Also, to lower your payments have you thought about putting down MSD's?
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Old 11-07-13, 04:08 PM   #12
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I was thinking of that and going to inquire my dealer for that option.. i think max of 9 @ 500 each = 4500 total to bring it down .0001 each for a total of .0009.

essentially, so will that bring it down from .002 to .0011 but tie up $4500 that you should get back?

BTW, what are the advantages of a 27 month vs 36 month lease?
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Old 11-07-13, 04:23 PM   #13
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Yes, you should get the MSD's back baring any financial issues on your part.

I think you should sit down with your sales person who you know at a personal level and have him run the numbers for you and don't be afraid to ask question if something doesn't make sense to you.

That's what I did and I have a much better understanding of leases, but every situation different though.
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Old 11-07-13, 04:36 PM   #14
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honestly you might be right on the 27 month vs 36 month. Since the monthly payment difference is so miniscule.. i may go with 36 month loan since i wont have to re-lease another vehicle so quickly again and have to pay those drive off fees after just 2.2 years vs 3 full years.
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Old 11-07-13, 05:32 PM   #15
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Let me know your final lease deal info. I also ordered mine from Putnam though I didn't get as good a deal as yours. Wonder if I could still negotiate price before my car arrives.
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Old 11-07-13, 05:32 PM
 
 
 
 
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