frankt19

I have a lease question that I'm hoping someone can help with. When I go to the dealer and I get a negotiated price, the money factor and residual and then they provide me with a lease payment how do I know if the numbers they use are correct in determining the lease payment. In other words, how do I come up with a correct lease payment when the dealer gives me the price, money factor and residual? Thanks for the help.

Also, if the dealer does provide me with lets say the money factor and I somehow negotiate it down again how do I figure myself if the lease payment is actually including this new money factor?

FinanceGuy

The only negotiable factors in a lease are the money factor (if they even mark it up) and the capitalized cost (selling price). The residual is a set percentage from the leasing company (usually LFS). The residual WILL fluctuate depending upon allowable miles. Negotiate the best price you can and try to get them to tell you the money factor. In the midwest, there is a special money factor for IS250s, not 350s. Not sure if they are running the same money factors in NY.

frankt19

Thanks. So if I get a money factor and a selling price how do I calculate into a lease deal (monthly payments).

sirkfc

I don't know if Lexus dealers also potentially mark up the lease acquisition fee. That's a couple hundred there if they do.

Here's what you need to know. The exact MSRP of your car, the negotiated price, the # of years of the lease, the residual value (years and miles based), the money factor, the acquisition fee, your down payment, and how much of a security deposit you're willing to pay. You also need to know your local sales tax rate, and different states have different laws regarding the application of taxes to the lease.

From there, it's a straightforward excel model you can use to calculate to the cent your lease payment... For now, let's say a 3 year 12K lease, 50% on the residual for easier math. (real # will be higher).

Find the residual value = 50% * MSRP, note that this is the MSRP, not your price. Let's say, 40K car. so 20K residual.

Find your cap cost, which is YOUR PRICE, plus the acquisition fee, minus a down payment and trade-in if any. (I recommend no down payment). So let's say, 34,375 price negotiated, + 625 acquisition fee, no down payment, $35K total cap cost.

35K minus 20K means you will use up 15K worth of car in the 3 years. Divide that by 36 months, and that's 416.67 of depreciation per month.

You have to pay that depreciation of 416.67 + interest for them letting you take a 35K car off for a few bucks. the interest per month is calculated as such... (cap cost + residual) * money factor. Let's assume .002 for the money factor, which is equal to 4.8% (multiply MF by 2400 to get the %)

So, (35000 + 20000) * .002 = $110 per month. This calculation looks weird, but it is basically the average of the cap cost and the residual value. The divide by 2 part is in the money factor.

So your lease payment before tax is 416.67 + 110 = 526.67.

My tax rate in CA is 8.25%, so that becomes $570.12 per month.

So when you pick up the car, you'll make this first payment. You might have to make a security deposit which is your payment rounded up to the 50, so $600 in this case, in order to secure a lower money factor. They might let you make additional deposits which lower the MF even further. And you'll pay around $250 in document and license fees... varies. So you'll pay around $1400 to leave the dealership in this example.

Substitute the numbers I gave you and do it with your calculations and you'll get your monthly payment.

Hope this helps.

tx_is300

i leased my IS350 with list of $41k, 36 mos, 15k miles per year and zero down except for first month payment.

no discount off list price.

my monthly payment is $625.

i maxed out the multiple security deposit to get it to this price otherwise it would have been over $750 per month.

ckaught78

In Nor Cal, my list was $43k, 36mos w/ 15k miles nothing down and no security deposits, $602 mos after tax.

sirkfc

As he said, he got no discount off list, which probably implies he got it at introduction or it's his company paying for the lease so it doesn't matter.

That's what it mostly comes down to. The discount you get off MSRP is no different than a down payment being applied.

frankt19

Thanks for the reponses. Does anybody know what the acquistion fee is in NY? And Finance Guy I got a quote for a NY money factor of .0025. They then quoted me for 399 month for 3500 down plus tax/tags. Can I negotiate that and how do I do it at the dealer and then calculate my new monthly payment?

sirkfc

It will not be easy to calculate on the fly in the dealership unless you bring your laptop in. However, I'd trust whatever the lease computer spits out once you see all the inputs.

A quick thing you can prepare for yourself is a matrix that shows what the payment would be at a given figure...

for example, on the x-axis, plot the various possible money factors. On the y-axis, plot your down payment (which could just be a combination of discount + down payment - acquisition fee).

You should then get some values which to see if their numbers match. Or just trust the computer they have once you're clear of the time/mileage, MF, Acq, MSRP, your price, and down payment.

BounceNY

iTrader: (9)

check out leaseguide.com. There are calculators there which can help u figure out the numbers. Also, lots of useful info. Good luck!

jasonviper

what dealership did you get your car from??

frankt19

Thanks for the help everyone. Does anybody thinking leasing from an independent leasing company is better than leasing from Lexus?