Achilles11

Hey I talked my local dealer down to give me the 2010 ES350 with navigation at invoice. He worked out the payment to be $698 at signing, with 15k miles per year for 36 months for a total of $600.72 per month. I was wondering a few things. Can you guys tell me some of the lease prices you pay? This was in NY by the way. Should I get all the residual, money factor and other numbers of that sort so you guys can see it better? I'm wondering if I they have one with the UL package if it will be close to the same price if they give it to me at invoice. I appreciate the help and responses, i'm going back to the dealership tomorrow.

Achilles11

so i guess no one here leases?

CJS57

Can't help, I don't lease. Go to Edmunds Lexus Forum for lots of good info on prices and leasing.

Achilles11

i got the exact numbers here . . .

2010 Lexus ES350
All options except Ultra Luxury

MSRP $40,840
Selling Price $37,151

58% Residual
15k miles per year for 36 months

$705 due at start

$23,687.20 Buy Out

Tier 1 Credit MF is .00245
Tier 2 Credit MF is .00255

What do you guys think?

JRey350hou

what are they quoting you for monthly investment

ThePhantom

Something doesn't add up...

Is the $600 payment inclusive of tax and GAP? What is it without those?

Multiply the money factor by 2400 to get an annual "interest rate" that you effectively pay that's used to leverage the cap cost of the car ($37000).


So, your $600 payments for 36 months comes out to 21.6K. Add the residual of 23.6K, and you're at 45.2K -- $8,200 over the capitalized cost. While calculating the interest on the outstanding leveraged amount over the term is tricky, giving even $5,000 (at about 5.8% based on your money factor quote) for 36 months of interest is being awfully generous.

hughh

Preliminary deal:

ES 350 all options except UL

MSRP $41,126/ Cap Cost 39,500

36 month/10,000
Monthly payment $570

No out of pocket money. Everything included/License/tags/sales tax/1st payment
Just sign and drive

Achilles11

thephantom i was really thinking the same exact thing? does that work out as a better deal on my end or worse though? i'm pretty confused

ThePhantom

Don't be confused, and don't let them hose you. It's not all that complicated, regardless of how they present it to you.

Keep in mind that when you're leasing, you're RENTING the car. What you're covering while you're renting it is the depreciation of the vehicle, which is the purchase price (capitalized cost) that you've negotiated (on behalf of Toyota), less the residual (buyout) amount. In your case, it's this:

$37151.00 - $23687.20 = $13463.80

So, to cover the depreciation, you're paying:

$13463.80 / 36 = $373.99 per month


In an ideal world, that's what you'd pay. However, we're not living in an ideal world. Toyota has "purchased" the car for the cap cost ($37151), and is financing the entire amount. Since you're RENTING the vehicle, they're giving you the privilege of covering their interest payment on the entire purchase amount during the term of your lease (hence, the money factor). Since you're not paying the entire purchase price of the vehicle down over the term of the lease, you cannot use a typical amortization table to calculate the interest -- rather, you'd need to use a constant-yield annuity formula to get the exact amount.

Instead of doing that, you can get a within-the-ballpark figure of the monthly interest by applying the following formula: ( net cap cost + residual ) × money factor.

While it looks like you're double counting money by adding the cap cost + the residual, the math works out. Let's use your figures:

$37151.00 + $23787.20 = $60938.20

(tier 1) $60938.20 x .00245 = $149.30 per month
(tier 2) $60938.20 X .00255 = $155.39 per month


So, you're RENT payment should be a total of either $523.29 or $529.38. these figures do not include sales tax (if you're in NY I believe will be somewhere between 8% and 9%), and any GAP insurance, if applicable. $70+ per month seems a little rich for these amounts though -- but I could be wrong...

<< edit >> Also, IMHO, a ~5.8% interest rate these days seems a little high, but I'm not totally up on the going rates. There may be some room here to lean on them to lower the money factor...

Hope this helps...

Achilles11

wow . . . i never really looked at it that way . . . i appreciate all your help

*Batman*

Yes the money factor is too high. The highest I have seen es350 lease factor is .00095 last January. Last August it was .00039.

For sales price, you should get 88% of MSRP. My car had a sticker of 41.700 and I paid 37.100. And my money factor was around .00070

Elex

All -

I have a few questions that some of you may be able to help with -

I have an '07 and have been thinking about upgrading to the '10. I purchased the '07, thinking I would keep it longer - 5-6 years, but I'm at a point in my life where I'd rather just have something new every couple years.

Here's the advertised lease from a Chicago dealer (Non-Nav model)

MSRP $37,225
Cap Cost $37,225
Residual $22,335 (60%)
Down payment $3,599
12k miles per year/ 3 year lease
$399 per month

When I run this through the calculator below - I get an implicit interest rate of 3.6%

http://www.bankrate.com/calculators/...alculator.aspx

Obviously they have some play in the cap cost being set at sticker, but the interest rate isn't too bad (was hoping for 0-2% though). I'm looking for a UL/ML model, so I'd have to play around with the calc, based upon the implicit interest rate to come up with a deal on that build.


1. Summarizing residuals from above
60% residual for 12k mile per year leases
58% residual for 15k mile per year leases

Does anyone know if they do a 17k or 18k mile per year lease? If so, what is the residual they use?

2. Is gap insurance required? If so, how much does it run per month, i.e. how is it calculated?

3. The lease above is with the cap cost at sticker. Obviously you need to work them down to invoice - as the folks above have. When I bought the '07, I paid $1,250 over "true invoice" - the $1,250 was the advertising fee of $500 and $750 dealer profit (obviously in addition to holdback).

Here's my question - when leasing - do you paid the advertising - i.e. build it into the cap cost of the car? I used to be successful in getting out of this (like in the '90's) but recently have ended up paying it - curious about others experience.

4. Anyone's experience of trading in an owned vehicle to a leased - do you get hosed on your equity in the trade in because your going to a leased from owned?

Thanks for anyone's help on this - hope the bankrate calculator above may be of help. I also have an excel schedule if some one would like that, PM me and I'll email it to you.

Thanks,

Jerry