Upfront payments when trading in on and old lease
01-07-16, 06:56 AM
#31
I leased a land rover, up front including fees was 3k, which I used my 142k mile lexus to cover. Between the manufacturer incentives, some hard ball negotiating, and going in the monday before new years, I squeezed out a pretty sweet deal.
I went into the dealer with my laptop and my excel model on the sales guy's desk and pretty much went back and forth with that. My goal was to get a trade-in value with my car (regardless of what they give me), and keep my monthly 3x less than the 36 month financing amount, and did the reverse math to see if they are making a profit (the less they give on trade-in the more i have to squeeze them). Any time they came back with a higher number I kept squeezing them. Their national ad was for a base model car, 2.9k down, 399 a month not included taxes and other fees. I ended up with a upgraded car, 3k down (trade), and 400 a month including all taxes and fees.
I went into the dealer with my laptop and my excel model on the sales guy's desk and pretty much went back and forth with that. My goal was to get a trade-in value with my car (regardless of what they give me), and keep my monthly 3x less than the 36 month financing amount, and did the reverse math to see if they are making a profit (the less they give on trade-in the more i have to squeeze them). Any time they came back with a higher number I kept squeezing them. Their national ad was for a base model car, 2.9k down, 399 a month not included taxes and other fees. I ended up with a upgraded car, 3k down (trade), and 400 a month including all taxes and fees.
Last edited by mikez; 01-07-16 at 07:01 AM.
01-08-16, 11:57 PM
#32
A friend of mine has twice leased a new ES350 for 27 months......at the same dealership. Both times, they gave him a discount off of the total lease-amount if it was all paid up front, and not month-by-month (he didn't tell me the exact amount). There are both advantages and disadvantages to doing it that way, as has already been discussed in previous posts.
That is correct. Multiple Security Deposits (MSD) allow you to "buy down" the money factor and save some money. MSD can be returned if you choose not to lease again, or can be applied to any future lease thereafter.
MSD are only useful if the money factor for you is really high. Its just like for financing, lets say for whatever reason you are not tier 1 credit, so you dont qualify for the lowest rates available - if you put more money down, the banks will lower your rate for you. If for whatever reason you dont qualify for tier 1 MF, you can "buy down" the MF by applying MSD.
MSD are only useful if the money factor for you is really high. Its just like for financing, lets say for whatever reason you are not tier 1 credit, so you dont qualify for the lowest rates available - if you put more money down, the banks will lower your rate for you. If for whatever reason you dont qualify for tier 1 MF, you can "buy down" the MF by applying MSD.
While legally you are renting the vehicle, I (an **** financial guy) look at it like I am buying the difference (essentially the depreciation) between the negotiated capitalized cost and the contracted residual. I know on the front end what my out of pocket is going to be, and it does not matter what the vehicle is actually worth at the end of the lease. At the end, I can hand back the vehicle, or buy at residual, depending on the actual market value and/or if I want to keep the vehicle.
09-03-20, 10:23 AM
#33
My 2017 RX with luxury pkg, 20 inch wheels etc., is up the end of December. It may have only 27,000 miles by then on a 36,000 mile lease. The buyout is $29,800. Thinking of extending the lease or just buying it, My dealer has changed owners so somewhat leery of turning it in and being hit with extra money for wear and tear. What is the extension process like? Do I just keep letting them draft the lease payment or is it a whole new negotiation with the dealer?
09-03-20, 10:29 AM
#34
Lexus Champion
My 2017 RX with luxury pkg, 20 inch wheels etc., is up the end of December. It may have only 27,000 miles by then on a 36,000 mile lease. The buyout is $29,800. Thinking of extending the lease or just buying it, My dealer has changed owners so somewhat leery of turning it in and being hit with extra money for wear and tear. What is the extension process like? Do I just keep letting them draft the lease payment or is it a whole new negotiation with the dealer?
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