Lease 2013 LS offer from dealer...
10-19-12, 08:59 PM
#1
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Lease 2013 LS offer from dealer...
Forgive me if I posted this in the wrong place but can someone tell me if this is a good deal or not? I have a 2009 LS that I am ending lease on this month. Here is the quote I got today for a 3 year lease including turning in the 09 LS, which apparently is worth $8000 more than my residual according to this deal.
2013 LS with optional package
MSRP: $77,950
Selling price: $74,700 ($75,400 with tax)
Residual $45,991 (0.59%)
Trade in $35,000 ($27,900 is current residual on 09 LS lease)
36mo lease
MF 0.0019
$959/mo ($890+tax)
Located in PHX, AZ.
Thanks! KIT
2013 LS with optional package
MSRP: $77,950
Selling price: $74,700 ($75,400 with tax)
Residual $45,991 (0.59%)
Trade in $35,000 ($27,900 is current residual on 09 LS lease)
36mo lease
MF 0.0019
$959/mo ($890+tax)
Located in PHX, AZ.
Thanks! KIT
10-20-12, 07:09 AM
#3
Lexus Fanatic
What I find helpful is to put all of the figures into a lease calculator and see if it spits out the same payment. Often I find that it doesn't, and there is money hidden somewhere in the deal.
This is the calculator I use:
http://www.leaseguide.com/calc.htm
When I put all your figures into the lease calculator I get a payment of $836.85 before tax, so something somewhere is off, according to my calculations between $1,500-$2,000 is hiding somewhere in your deal.
You need to see every dollar that goes into it, the drive off costs, tags, etc.
Another peice of advice for you is not to put that $7,100 into the lease. When you put money down on a lease, you risk loosing all of it if your vehicle were to be totaled, etc. I would either take that $7,100 and put it into a savings account and make some payments out of it, or use it for other reasons, or see if you can do multiple security deposits. Your money factor equates to an interest rate above 4%, so it would be worth buying it down and then you would have that money come back to you after the lease is over and you can do it again...
This is the calculator I use:
http://www.leaseguide.com/calc.htm
When I put all your figures into the lease calculator I get a payment of $836.85 before tax, so something somewhere is off, according to my calculations between $1,500-$2,000 is hiding somewhere in your deal.
You need to see every dollar that goes into it, the drive off costs, tags, etc.
Another peice of advice for you is not to put that $7,100 into the lease. When you put money down on a lease, you risk loosing all of it if your vehicle were to be totaled, etc. I would either take that $7,100 and put it into a savings account and make some payments out of it, or use it for other reasons, or see if you can do multiple security deposits. Your money factor equates to an interest rate above 4%, so it would be worth buying it down and then you would have that money come back to you after the lease is over and you can do it again...
10-20-12, 10:11 AM
#4
When I negotiate a lease I don't ask "how much a month" I ask for the 4 factors below and run it through a lease calculator. I used to use an excel spread sheet on a laptop to calculate lease payments. Today with smart phones and Internet connections it's easier to use an online calculator.
The online lease calculator link that Steve posted is a good one.
http://www.leaseguide.com/calc.htm
Remember every $1,000 lower that you can negotiate CAP cost saves you over $36/month on a 3 year lease.
MSRP (Manufacture's sticker price)
CAP COST (negotiated price you really paid)
RESIDUAL (% of MSRP you can buy the car for at end of lease)
MONEY FACTOR (cost of money, multiply by 24 to get effective interest rate)
Watch out for fees like acquisition fee, disposition fee etc.
Money factor can be closely converted to interest rate by multiplying it by 24. Money factor of 0.0019 is around 4.5% interest.
The online lease calculator link that Steve posted is a good one.
http://www.leaseguide.com/calc.htm
Remember every $1,000 lower that you can negotiate CAP cost saves you over $36/month on a 3 year lease.
MSRP (Manufacture's sticker price)
CAP COST (negotiated price you really paid)
RESIDUAL (% of MSRP you can buy the car for at end of lease)
MONEY FACTOR (cost of money, multiply by 24 to get effective interest rate)
Watch out for fees like acquisition fee, disposition fee etc.
Money factor can be closely converted to interest rate by multiplying it by 24. Money factor of 0.0019 is around 4.5% interest.
Last edited by FLYCT; 10-21-12 at 09:23 AM.
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10-21-12, 09:34 AM
#8
another peice of advice for you is not to put that $7,100 into the lease. When you put money down on a lease, you risk loosing all of it if your vehicle were to be totaled, etc. I would either take that $7,100 and put it into a savings account and make some payments out of it, or use it for other reasons, or see if you can do multiple security deposits. Your money factor equates to an interest rate above 4%, so it would be worth buying it down and then you would have that money come back to you after the lease is over and you can do it again...
+1
great advice...
10-21-12, 10:41 AM
#9
Lexus Fanatic
You're welcome for whatever I may have brought to it...
Thats the thing about leasing, you have got to know how it all works and be able to calculate the payments yourself...or you will get hosed. I have leased a lot of cars because I lease for business, and I have helped a lot of friends lease cars and I have never had a dealer quote a lease payment that jibed when I ran the numbers the first time, its that bad. Once they realize I know what I'm doing...then the real numbers start going back and forth.
The latest and worst story is a month or so ago I was looking at a new 2013 ES350 and I was quoted a residual of 60%. Payments weren't making sense so I asked the salesman to please send me the residual, money factor, a breakdown of all the taxes and tags, etc. He sent me a printout from his online calculator and I discovered that although the residual was showing as "60%", the dollar figure next to that field was only 55% of the MSRP. He may have not even known it, or I would assume he would not have sent me the printout, might have even been the finance people.
Those are the sorts of ways they hide profit.
This is another great site for finding out the LFS money factors and residuals each month: http://www.ridewithg.com/index.php/c...e-rates/lexus/
The dealer is free to reduce the residuals and inflate the money factors, so these are the base rates. Any reduction of residuals or inflation of money factors is increased profit. Common tactic is to wow you with a low purchase price offer, and/or a high trade value such as in the OP's quote, and then make it up on the back end with inflated MF's, reduced residuals, and/or hidden fees buried into the lease. Like FLYCT posted above, the monthly payment moves a LOT with just a small difference in cap cost, so a couple thousand bucks here or there can really throw your payment out of whack.
Thats the thing about leasing, you have got to know how it all works and be able to calculate the payments yourself...or you will get hosed. I have leased a lot of cars because I lease for business, and I have helped a lot of friends lease cars and I have never had a dealer quote a lease payment that jibed when I ran the numbers the first time, its that bad. Once they realize I know what I'm doing...then the real numbers start going back and forth.
The latest and worst story is a month or so ago I was looking at a new 2013 ES350 and I was quoted a residual of 60%. Payments weren't making sense so I asked the salesman to please send me the residual, money factor, a breakdown of all the taxes and tags, etc. He sent me a printout from his online calculator and I discovered that although the residual was showing as "60%", the dollar figure next to that field was only 55% of the MSRP. He may have not even known it, or I would assume he would not have sent me the printout, might have even been the finance people.
Those are the sorts of ways they hide profit.
This is another great site for finding out the LFS money factors and residuals each month: http://www.ridewithg.com/index.php/c...e-rates/lexus/
The dealer is free to reduce the residuals and inflate the money factors, so these are the base rates. Any reduction of residuals or inflation of money factors is increased profit. Common tactic is to wow you with a low purchase price offer, and/or a high trade value such as in the OP's quote, and then make it up on the back end with inflated MF's, reduced residuals, and/or hidden fees buried into the lease. Like FLYCT posted above, the monthly payment moves a LOT with just a small difference in cap cost, so a couple thousand bucks here or there can really throw your payment out of whack.
Last edited by SW17LS; 10-21-12 at 10:48 AM.
10-21-12, 11:09 AM
#10
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Thank you for this great info. Fab thread! Going to see another dealer today. The money in is actually the equity in my 2009 LS that is ending its lease in 2 months. So I actually don't have any money down in the whole thing. I don't have time to sell the car myself but I understand used car prices are quite high right now so I am happy to see that unexpected cash "windfall." I was just planning on turning my car in and going with a new one...
K
K
10-21-12, 11:46 AM
#11
Yes, some excellent info here. A few years ago I read a guy on an Infiniti forum who really knew his way around leases. I always buy since it is cheaper, but I'm thinking of getting a Maserati Quattroporte and based on their reliability, I rather be able to walk away from the car in a couple years. 
10-21-12, 01:41 PM
#12
Lexus Fanatic
The money in is actually the equity in my 2009 LS that is ending its lease in 2 months. So I actually don't have any money down in the whole thing. I don't have time to sell the car myself but I understand used car prices are quite high right now so I am happy to see that unexpected cash "windfall." I was just planning on turning my car in and going with a new one...
Ask them about the multiple security deposits, but I would absolutely not put $7,100 down on a lease, whether its found money from your trade or not...
The dealer may not want to refund you the money back, thats a sign that its somehow tied into how they're making the dollars work. It should make no difference to their profit whether you put the $7,100 down or not if the deal is as it appears.
10-21-12, 08:06 PM
#13
Ask them about the multiple security deposits, but I would absolutely not put $7,100 down on a lease, whether its found money from your trade or not...
The dealer may not want to refund you the money back, thats a sign that its somehow tied into how they're making the dollars work. It should make no difference to their profit whether you put the $7,100 down or not if the deal is as it appears.
One factor to understand is that the $7,100 money back will increase lease payment by about $200/month on a 3 year lease.
The advantage is that if the car is totaled or stolen, and your upside down, you got to keep the $7,100. Most leases today include Gap insurance so if you upside down with a total loss it's not your problem.
JR
10-21-12, 08:14 PM
#14
Short equity story.
Back in 2004, I traded in a Ford Expedition on a new Ford Expedition. I had $15,000 in equity on my trade. Ford was offering Zero Percent financing on new cars. I financed 100% of new car and received a $15,000 check for my trade. I used this to pay off the remaining balance of my home mortgage.
The dealer had no problem with this deal as they made the same profit either way.
JR
Back in 2004, I traded in a Ford Expedition on a new Ford Expedition. I had $15,000 in equity on my trade. Ford was offering Zero Percent financing on new cars. I financed 100% of new car and received a $15,000 check for my trade. I used this to pay off the remaining balance of my home mortgage.
The dealer had no problem with this deal as they made the same profit either way.
JR
