markrob

I decided to Lease a new 07 LS460 rather than wait until the 08's are available. I figured that any problems or complaints experienced early in the model year should for the most part be corrected. The lease payment for this vehicle for 32 months is $1098/mth ,no money down except for the 1st payment, and Pennsylvania tax included. I would like some opinions from some of you on this deal.

rominl

iTrader: (4)

do you have cap cost, money factor, residual? that will help

markrob

The residual is 64 % for 33 months, and the interest rate(Hann Financial) is .0028. and the cap is $64772. Let me know your thoughts.

rominl

iTrader: (4)

ah sorry, what's the msrp on the car?

the money factor looks reasonable, you ever thought of doing MSD (multiple security deposit)? of course how much you negotiate down the cap cost is another factor. there should be more swb on the lots these days, you should be able to get reasonably good prices

rominl

iTrader: (4)

also, do you know what kind of credit history you have? that will affect the money factor

markrob

The term is actually 32 months, not 33 months. and the msrp is 67300. My credit is right at the top . over 800

jettie1767

That's so much cheaper than here in NJ. I was quoted $1405/mo for 36 mos., 12k miles with no money down. Money factor is .0026 and the car's price is $74k.

rominl

iTrader: (4)

if your credit score if over 800, i think the money factor is a bit on the high side, thought it would be lower like around 0.00265 or so. maybe you want to check. also, like i said, try to look into multiple security deposit. ask about it, it saves you quite a bit of money

jettie, 1400 is very very expensive man, what are other parameters?! unless the residual is very low??

markrob

Rominl, I'm not certain how these multiple sec deposits work. not to be pessimistic, but if money is put down on the lease, it would be lost in the event the car was totaled.

Rocman

Yes, basic rule of thumb is to never put anything down on a lease.

jettie1767

Rominl....residual is $39,800 after 36 months.

rominl

iTrader: (4)

it's late right now, but i will find time tomorrow (asap) to explain about teh multiple deposits

no, it's NOT downpayment. i never put down payment on a lease, it's stupid

rominl

iTrader: (4)

ok so some members (not only here in the ls460 forum) have been asking me about the multiple security deposit (MSD) options when you lease cars, so i'd like to take the chance and explain things.

first of all this service is available only if you lease through lexus financial services (LFS) and you have to decide at the time you sign the lease, you can't do it afterwards. i will use a simple example here to illustrate how it works. all numbers are not real.

for example you want to buy a ls460 msrp 70000. residual after 3 yrs is 50%, so 35000. you want to lease 3 yrs with 12k miles/yr. given your credit history, you are given a money factor os 0.0028. the cap cost you negotiated is say 65000. using simple lease calculator, your lease payment is 1113.33 + tax (i will drop tax on all subsequent calculations).

now, the way MSD works, in general, is you give LFS a multiple of money payments as deposits, up to 9 (so up to 9 x 1133.33 = 10199.97). each MSD will lower your money factor by say 7 base points (this might not be 100% but should be close). so in total you can reduce up to 63 points. meaning your money factor goes from 0.0028 to 0.00217 (i believe this is how they calculate it). with all other variables the same, your payment drops down to 1131.82. this is almost 70 bucks drop in monthly payment.

now at the end of the lease, you actually get 100% of your MSD back!!!!!!!!!! this is where it's different from downpayment, where you will never see it again. so basically by using MSD, you reduce your money payment, and at the end you get your deposits back.

obviously, the higher the payment, the larger the effect on MSD. we used MSD to lease our sc430, a 60k car. back then each MSD reduced a bit more baes points on money factor, and it helped to reduce our money payment by close to $100. now say if i go and lease a ls460l (say the 85k msrp car), i wouldn't be surprised if MSD can help me save $130 bucks or so a month.

let's just say you save 100 bucks a month, over 3 yrs you save $3600. look at it differently, you can think of it as you put ~$10000 into a CD account for 3 yrs, and it pays you $3600 of interest (~$1200 a yr, that's rouhgly 10%).

now of course, someone can argue that they get better return by putting those MSD elsewhere. totally fine, but as shown by my math up here, the MSD is pretty beneficial, if you have that lump sum in the beginning.

hope this explains everything. bottom line, get all the real numbers for YOUR case on the car you want and see if it makes sense. i did that for our sc430 and it came out as a great deal, and i have done several other calculations and MSD been pretty good.

OceanView

If the residual on these cars are 50% after only 3 years, then I think it would make sense to wait the 3 years and get a used one at that price.
Are you sure it's 50% ?

rominl

iTrader: (4)

you can go check, but i am pretty sure most of the ls460/ls460l have residual of around 50% after 3 yrs. that's the price you pay for luxury cars. price wise it might make sense to get one after 3 yrs, but there are a lot of people who prefer new i personally would prefer to pay more for a brand new car that i know i am the first owner