DjBuddy

Since lots of dealerships and car makers are way down in sales, would that lower lease rates or increase them?I know lots of dealers are offering low interest rates for finacing cars, but me going back to school and only working part time i cant afford a $600 dollar car payment, so do you guys thing that we can see lease rates go down, or will they go up?

15951

Are you talking about bank finance rates, or residual values? Bank finance rates are up because banks are being picky about who they lend to, and they're charging more to lend money. Residual values are generally down because people aren't buying cars. Add the two, and it makes lease payments increase.

It depends on the make/model. You need to find out the residual and money factors for the car you're interested in. Generally speaking, though, if you're trying to save money I can't figure out why you're looking at leasing a new Lexus.

AZ06IS350

I will respectfully have to disagree with the previous post that lease rates will increase during bad economic times. I have a finance degree with an economic minor and everything I read in that previous post goes against basic fundamentals of finance and economics. If a person fits the loan guidelines of a bank, then it would not make sense to be picky about who they lend money to. As a matter of fact, during economic hardship, banks are more willing to lend money to whoever can qualify based on their credit history, employment, and net wealth. In addition, banks are more likely to lower their lending rates in order to get people to finance a loan. Recessions, like what we are currently in, cause people to spend less because they are saving for the difficult times that may lie ahead or they simply aren't making the money they once were. During these rough times, most people aren't thinking about buying a car, so the banks and dealers have to provide incentives to draw people in to the dealership. The basic fundamental of economics is supply and demand. When there is little demand for a product, and excess supply, all other factors remaining constant, the price will go down. To sum it all up, I have a hard time believing that lease rates would go up during these rough times because it would simply keep people away from dealerships when they are trying like everyone else to earn a buck because they are also feeling the effects of the bad economy!

EJC

In case you have not heard the credit market has dried up
Banks want no risk loans
You want no money down better have a credit score of 720.
Terms are getting shorter as well.

Ris250

Here is an example of my lease--

0 money down, 0 in taxes, total drive off 0 = dollars.
Lexus Is 250awd with navi- MSRP 41600. Monthly payments: 505 a month

SC300T

I just did something very close to their lease special. The special is $359/mo 36 months with $3900 down plus taxes title and acquision fee. The acquisition fee was $700. Ended up doing a 4yr at $359 including taxes. Deal was $400 over for referenced. I think they want a 750 Fico score or thereabouts for this rate.

Giggity

So perhaps you should look at something more affordable, or saving your many rather than throwing your money away doing a lease, which is just paying for the depreciation up front....
several automakers and banks have already done away with lease programs because they can't afford to have the inventory on their books when the car is returned.
the days of cheap and easy financing for people who can't afford it or aren't credit worthy enough to get it are over. period.
Leasing is a bad idea any way you break down the long term numbers, that is of course unless all you care about is driving an expensive car for as little money as possible each month without having to actually save your money to afford it the way most fiscally responsible people do, which as the current economic crissis painfully points out, are very very few.

johnch

I'd not consider the lease. It's better to set your limits at what you can afford and the best approach still is to pay cash and eliminate the financing fees. And, after all, it's the "buy more than you can afford" mentality that is largely responsible for this recession, credit and housing crisis.

John

kalvano

One of the guys I work with just had a deal turned down because the person was under a 700 score, and had defaulted on a department store charge card 4 years ago and had been late a few time with the electric company. Even though she was putting $15,000 down on a $36,000 car.

No loan.


Banks aren't loaning money, and interest and lease rates are going up because the banks are paying more for the money they are borrowing. We used to be able to get about a 5% buy rate for people, maybe 4.5% if they were bulletproof. Now, under 6% is tough.


And dealerships have no control over the rates the banks offer. That's entirely up to the bank. The dealership is merely a facilitator.

Fizzboy7

Lease rates are going up. Last years numbers were better at Lexus, Audi, BMW and many other brands. I've been watching closely since I leased last year and everything has climbed since the 4th quarter of 2008.

Jefe's IS

This is not true.

You cannot say either a lease is a good deal, or a bad deal. Each lease, like each loan, needs to be considered on it's own terms.

dstopsie

I have to completely disagree with your assessment. I first leased an 07 IS 250 navi, 15,000 miles per month, HID, etc in August 2006. Turned the car in early in December 08and leased a 2009 IS 250 with navi and saved $168 per month on my lease payment. And this is with having to roll 7 payments on my old lease into my new one. Down payment of $1500 which is what I put down last time. Same 15000 miles...plus I received 24 months or 24000 miles of free maintenance. The residual value of my new car was $3300 less than my 07 model. Leasing is dependent on the money factor and residual value. While I agree leasing is not the best idea cause you will never own the car, I just dont like sinking money into an asset that depreciates 50% +as soon as I drive it off the lot.

Shank2117

I got denied on a 58k loan even with a 22k down payment.

according to the financial specialist i was working with,

now a days banks arn't even looking at just your credit score. they are looking at your credit usage ratio too. i have a credit score of a 720 but i didn't get approved for a new car i wanted because i have 50% of my credit tied up. (I purchased an ATV on a credit card because i had a 0% for the first year credit card an i plan on paying off the ATV in the first year).

just because of my credit being tied up 50% they though i was a risky loan, regardless of my credit score and not having ever missed a payment or anyrthing.

cssnms

You can lease a $30k+ is250 for $399 per mo with $0 down, $0 aquis fee, $0 deposit, $0 first months payment. What else do you want?

SC300T

Leasing gets a bad rap because people get screwed on the shell game. If you don't know how to convert a money factor into an APR, and you don't know how to calculate depreciation and expected residual, you're essentially blind. Depreciated Cap Cost and other fancy terms just add to the pain. If you see their lease work sheet, lock them into a selling price, residual %, term, and money factor, there aren't many other areas for them to trick you. Once you have this nailed, don't change the term or the money factor will change, giving them another opportunity at profit. Just make sure the numbers add up each time they make a change because many times they'll try to add something that doesn't add up. If you work a deal, see the numbers, and then they make X change to the worksheet, make sure they haven't monkeyed with the money factor, and the other variables.