jgscott

iTrader: (1)

That's what I said a few post ago. Its looks like the last lease was based on a $43k selling price. And the ones before that were even higher.

I think Dealer invoice for mark up on the ES is $6k to $8k on the ES. Not including the Rebate Discount.

355F1

Thank you to all of you who have posted.

I know the price of the vehicle needs to be lower--those were just the first couple offers.

I got a couple really good ones today but I HAVE to lease the car to buy it in CA so I don't have to pay CA Sales Taxes. If I purchase the car I need to pay to have it shipped to OR.

The lease money factor is essentially 0%.

What I am doing is comparing leasing versus buying. I just sold my IS with 170,000 miles that I put on in 7 years. If I buy this car my car payment is going to be over $700/month for 5 years. If I lease I can get the same payment but only for 3 years and I can turn the car in if I need to.

I'M OKAY WITH HAVING A HIGH CAR PAYMENT.

Lexus says that residual and cost per extra mile are NOT negotiable.

But what I have found is that CA dealers are offering FAR MORE AGGRESSIVE PRICING than any other state.

I don't really want a new car right now because the ES and maybe GS are being redesigned very soon. But my IS sold to the first person who looked at it right after I listed it for sale. I didn't expect it that quick because I was asking MORE than KBB because the car's interior is in literally brand new condition.

So...I will be leasing one of these ES's next week doing a 15k mile per year lease with 10k miles per year pre-paid to get the lower $0.20 rate. I will probably drive 25-27k miles per year.

And at the end of the lease it will be worth about $4k more than I owe. So I can buy it, or sell it and make money.

Am I really missing something here????? It all seems to be decent, and the lowest price I have gotten thus far is $44,800 on an MSRP of $49,485--which doesn't include the $4k Lexus cash for leasing.

355F1

Yes, $0.20/mile over prepay versus $0.25/mile at the end of the lease.

I can write off the lease. But I don't because I deduct mileage instead.

I get $0.525 per mile and I drive about 25k miles per year as this is a work car. So I deduct a lot more with the mileage method.

SW17LS

At that lease payment I bet If you did the math your expenses would be more than the mileage deduction.

If you don't write off the payment though you should buy the car for sure. Not worth it for you to lease at such high mileage.

lesz

If you are committed to doing the lease, what I'm still not seeing is the value of pre-buying the extra 10,000 miles per year.

If I use the numbers that you posted in the 2nd offer you got (post 11), the 10k extra miles per year that you are pre-buying at $.20/mile will cost you $6000 over the 3 year lease, and that makes your monthly lease payment $167 higher than it would be if you just got a 15k mile/year lease without pre-buying any extra mileage. .

Thus, if you didn't pre-buy the extra miles, your monthly payment would be $544. If you chose that option, the residual at the end of the lease would be $23,743. If you, at that time, bought the car for $23,743, you could then sell it. With the extra 10k miles/year that you put on the car, its actual re-sale or trade value at that point would figure to be about $21,004, based on the fact that, for a 3 year old ES, each extra mile on the odometer subtracts about $.09 from its value. So, if you were to buy the car at the end of the lease and, then, sell it or trade it, you would figure to lose about $2700 by doing so, but, because you would have saved $6000 in monthly payments through the course of the lease, you would be, overall, $3300 ahead.

The reason why you would be better off by getting a 15k/year lease, buying it at the end of the lease, and, then, selling or trading it rather than pre-paying for the extra 10k/year miles is because the $.20/mile charge for those miles is actually over twice as much as the amount that those extra miles will deduct from the value of the car.

lesz

Another alternative that would be better financially than doing the lease with pre-buying the extra 10k miles/year would be to buy the car now with the $700 or so/month payment with the 5 year financing and to sell it or trade it after 3 years.

If you did sell or trade it after 3 years, you would still owe $16,800 in monthly payments at the time, but the trade-in value of the car with 75,000 miles on it should be around $21,000, and that would put you around $3000 better off than if you lease the car with a pre-buy of those extra 10k miles/year.

Because the charge for the pre-buy of those extra miles is about twice is high as the actual impact of the extra miles on the value of the car, either leasing at only 15k miles/year and buying at the end of the lease or buying the car now and selling it after 3 years should put you a few thousand ahead of where you would be by pre-buying the extra mileage.

SW17LS

I agree 100% again.

I'm a big leaser, but I just don't think this makes sense in this situation.

lesz

And what might actually be the best available option, if the OP has good credit, would be to buy the car now with non-Lexus financing. A quick check via the internet indicates that customers with good credit can currently get non-Lexus loans on new car purchases for around 3% on 5 year loans and, in some cases, even a little lower. Using non-Lexus financing would allow the OP to take advantage of the current $2500 Lexus rebate for an ES purchase. And that $2500 rebate would more than offset the marginally higher interest rate of non-Lexus financing, which would, in turn, lower the monthly payment further. Then, if he decided to sell or trade the car in 3 years, he should be able to sell if for $4000+ more than the total of the remaining loan payments on a 5 year loan. The result of doing so would put him substantially ahead of where he would be by pre-paying $.20/mile for 30,000 extra miles. Essentially, paying $.20/mile for those extra miles is the equivalent of giving Lexus back most of the $4000 lease rebate.

I just did a quick check with one of the on-line auto loan calculators. Assuming a $41,000 purchase price for the car (including the $2500 rebate) with non-Lexus financing at 3%, the total payments on a 5 year loan would be $44,203, but, assuming a $43,500 purchase price (with no rebate) using Lexus financing at 1.9%, the total of payments on a 5 year loan would be $46,898. That means that, even with a higher interest rate of non-Lexus financing, the OP would be $2698 better off by using non-Lexus financing and getting the $2500 rebate. Note that, with the current market situation for the ES, the $41,000 price including the rebate or $43,000 price without a rebate should be easily obtainable for a 2017 UL ES

jgscott

iTrader: (1)

I've said it before, but I'll say it again. I would be emailing or calling for a best deal on Selling Price only. Not asking for Lease quotes. Dealers do hope for buyer's to overlook selling price, and shop on payment only. I also said it before that the mileage cost and Residual are not negotiable. The Selling cost is. Work from there.

Then ask for a lease quote based on the selling price. There are also sites that give the - what people are paying for 13' ES 350 (selling price) in your area on the internet you can look at.

I'm not mentioning buying vs leasing because based on your post, its seem you are dead set on leasing only. But this is how you can compare the Lease vs Buying in your situation and thinking. Get you best selling price. Should be the same Leasing price. Add the 3-4 years of total payments plus down payment, and taxes on monthly lease or buying, or including buying at end of lease.

Total Lease payments & Down Pay $ ______ + Residual at end (Tax?) = $ _______ Total Cost

Monthly Buy Payments & Down Pay $ ______ + Months Plus Tax = $ ________Total Cost

As simple as that.

SW17LS

Typically yes but not in this situation. Lexus has incentives that are only for leasing (lease cash), and incentives that you don't get if you get the financing through LFS.

355F1

Damn....this idea actually kind of makes sense. I'm going to do some math.

I understand all of that.

Leasing gives $4k Lexus Cash (but also comes with a $795 Acquisition Fee and $395 Lease-End disposition Fee. Purchasing only offers $2500 cash or 1.9% for 72mos through LFA.


I need to lease the car if I buy from a CA dealer so that I don't have to pay sales tax. I don't want to lease a car, but there aren't any cars that I want anywhere in the Western US. I literally checked every LExus dealer's website West of the Mississippi. I just put in an offer for an UL at a Lexus dealer in AZ but that was 4 hours ago.....obviously their salesman doesn't want to sell me a car.

And Just so all of you know.....MOST of the dealers that have UL's are telling me they are NOT selling below INvoice. So I don't know where all these people are buying their ULs for $6-8k off like I have seen posted here. It's frustrating because 2 dealers already have told me they aren't selling below invoice as its their last UL.

SW17LS

At this time of the year there is very little inventory, you might even be better of waiting for a 2018...

Interesting that if you buy out of state in CA you have to pay their sales tax but don't if you lease...

355F1

I actually thought about waiting, too, and just getting a rental car for a month or 2 as I can write it off completely from my income as its used for work.

Yes, CA is a weird state.....if the wheels touch the pavement in CA on a PURCHASE you have to pay CA Sales Tax. I live in OR, where there is no sales tax. But if you lease it, there isn't any CA sales tax due. Its strange but I have had multiple dealers confirm it.

355F1

Is it true that if you turn a leased car in at it's end that sometimes dealers will forgive some of the over-mileage as a sales tactic to get you into a new car?

SW17LS

The answer is maybe. A lot of times they just wrap it into the new car and people don't realize it.