G’s Guide To Auto Leasing

This guide is meant to show you through the auto leasing process. I put this together based on my past experiences with leasing. Some experiences were good, others were less than perfect. Overall, I learned a lot about the leasing process and I think these recommendations will have a positive impact on your leasing experience. If I missed anything or if you disagree with some of my steps, please feel free to leave a comment.

Finding the Car
I usually start my research by visiting Edmunds.com and CarsDirect.com to get model/trim/options/pricing information about the car I intend to lease. You need to know exactly what you want because each option can change the price dramatically. CarsDirect.com does a better job letting you pick the correct combination of options for a specific trim.

Get Your Credit Score. Knowing your credit score is important because it qualifies you for the lowest money factors. Typically, I let my dealer know that my credit score is “XYZ” and I am looking for car “ABC”. Telling the dealer your credit score informs the dealer in advance that you are prepared to make a deal and you aren’t wasting their time negotiating. Since you don’t want your credit run multiple times from dealer-to-dealer, finding out ahead of time will keep your credit score from getting hit with too many inquiries (personal inquiries do not hurt your credit). Typically, I don’t even deal with dealers that request to run your credit before working with you or to get a test drive. You let them run your credit ONLY when the negotiation is complete and you are ready to begin paperwork. If you credit is less than perfect, leasing is not for you because you cannnot qualify for the lowest rates. In some cases, you won’t even qualify at all. Lease loans usually have stricter approval guidelines than purchasing loans. 

You can use the following credit services to check your credit scores:

In my experience, most dealers I have worked with have used Experian or TransUnion credit scores. However, I recommend checking all three if you haven’t done so in a few years.

Locating a Dealer. Once you are set on the car, you have a couple of options. You can go to the manufacturer’s web site to search for all local dealers or use third-party quote systems like TrueCar.com or Edmunds.com to find local dealers. I personally prefer using TrueCar.com because it provides excellent data which is crucial when negotiating your lease.

Email or  Call Dealers, Do Not Visit Dealerships unless you are just doing a test drive. Ideally, you want to email (since the process will then be in writing) your dealer to locate the car with the colors/options you want, let them know the term you want (months and miles per year), then ask for the following:

  1. MRSP (to make sure it doesn’t have ‘extras’ on it).
  2. Sale Price (start with invoice, or $500 below invoice and go from there)
  3. Money Factor
  4. Residual Value
  5. Acquisition/Bank Fee
  6. Dealer Doc Fee
  7. Other Fees (such as DMV, tire, etc…)
  8. Is there a disposition? Gap coverage? (these are important things to know!)
  9. Taxes (depending on which state you live in, find out if you have to pay those up front and/or if you need to pay for the entire car or just the depreciation)

Once you have those numbers, you can calculate your own payments to see if there are any discrepancies between your numbers and theirs.  If you have never used my RWG Lease Calculator, you may want to read up on my “How To” post.

If the payments are still higher than you like, ask for the option to make “multiple security deposits” or MSDs. You basically pay security deposits to lower the Money Factor. This will lower the interest paid on your lease but increase your up-front costs. The good news is that you will get that money back at lease-end. If the numbers are still not to your satisfaction, try having the dealer thrown in some free oil changes to help you offset the costs. Now remember, if you trade-in or sell your car before your lease is up, you will LOSE your MSDs! If you put MSDs down, you better make sure you wait until your lease term ends.

Only work with dealers that are up front with you. A pleasant leasing experience is worth something, believe me. It will make you feel better bringing the car in for service and you won’t feel angry driving around in your car because you feel you got ripped off.

Avoid “All-In-One” Quotes. By those I mean “$1999 down, $399/month” type of quotes…the ones the dealers love to quote you. You want to avoid those because it’s easy to start losing track of what you’re actually paying for since everything is bundled and nothing is itemized. If this seems like nit-picking, it is, but you must realize that for every $100 paid in bogus charges, you are doing so with interest (and maybe even tax) if you roll it into your lease payments. Experienced lessees can take the “All-In-One” approach if they have already pre-calculated their payments and know what to expect.

The Numbers look Good, Now What? If you haven’t gone in for a test drive, go ahead and schedule a visit to your dealer. You will probably want to visit the person you’ve been dealing with via email, that way, he or she will already know you and won’t go into the “sales-mode”, thus making your test drive more enjoyable.

Got a Trade-In? If you do, negotiate it after the new car and keep it separately. I usually use this as a “deal-breaker” if the offer isn’t good enough (to see if they will bump out the trade value to make a sale). If you don’t like the offer, remember you can always get it appraised elsewhere or sell it on your own. You can get a good idea as to how much your trade is worth to a dealer by going to Edmunds.com and appraising your car at “GOOD/AVERAGE” condition to get a more “realistic” idea of the value of your car. If you are still financing your car and the offer is lower than the balance of your loan, you will have to pay the difference. If its more than your loan, the dealer will either give you the option to apply it to your new car or cut you a check (I generally prefer the check). If you are trading in a lease, the process is similar.  The only difference is that you need to find out what your “PAYOFF” is from your bank and see how close the dealer’s offer comes to it. If your leased vehicle is a popular model, has low miles and is in great condition, you could get some money back.

What Should I Pay Up Front/At Signing? I normally advise people to pay the 1st Month Payment, Acquisition/Bank fee, DMV fee, Doc fee and Tire Tax (Some states will ask for the sales tax to be paid upfront instead of monthly). Sometimes you may be assessed other fees, so double check and make sure they aren’t bogus. Try not to put any money towards cap cost reduction, after all, this is a lease. In the event of an total loss accident or theft, you could lose a significant part of all the money you have put down (or all of it).

Beware of the Finance Guy/Gal. The Finance Guy/Gal is the dealer’s last ditch effort to sell you stuff you may or may not need. Seriously, do you really need anything more than the standard bumper-to-bumper warranty on a lease? You don’t need Lo-Jack on a lease, specially since most leases have GAP coverage.

Make sure you READ the papers BEFORE you sign. You got time, after all you negotiated online before you showed up to the dealership, so READ, make sure the numbers are correct and ask questions. Once you sign, the deal is binding by those terms.

111 thoughts on “G’s Guide To Auto Leasing

  1. G, I think you hit a homerun with this one. Getting over that hump of leasing your first car can be tough. But once you do and you understand the system it’s a piece of cake.

  2. Thanks B. I spent a good week writing this and cross-checking with other sites to make sure I didn’t miss too many major points. There some minor issues like what happens to MSDs if you trade-in your car before the lease ends…another topic, another time.
    I wanted to start off the month with this because the fun summer of leasing has begun!
    Like you said, I do hope this guide helps first time lesses so they don’t feel intimidated.

  3. Crazy spammer. That’s what it is. Looks like I’m going to have to moderate comments from now on…getting rather tired of these creeps trying to get free ads space by dropping links in comments.

  4. Dear G!
    To say the least, this is the website I have been looking for for years!!! I am currently leasing 2 cars and I am sure I would have saved $100’s if I had read all the good information you are sharing with us.
    I looked over many sites and I never found one that was explaining clearly the lease process. I do now!
    During my last leases (3 in total), I could feel that I was getting “screwed” badly (sorry for my vocabulary) but couldn’t do much about it because I did not have the tools and complete understanding to challenge the dealer’s proposal.
    Just last WE, I went to see an Audi dealearship for the new 09 A4 2.0T premium quattro tiptronic with few options (I am located in Houston, TX, btw). The price tag is ~$35.5K, and the sales rep came up with a $650/month (with 1st month as deposit), 36months, 15K, and I could not tell if it was a bad deal or not!!! Well, I again had the feeling that he thought I was Donald Trump… But now, thanks to your site, knowing that he did not even ask about my credit score and discuss all other factors that come into play, I know he try to rip me off.
    Anyway, I got similar experience with a Mercedes dealer for the C300 (it was 6K down and $399/month for a $33K car, the same deal as their TV commercial) but I still found it quite pricy.
    I think that your site will help me fight back with confidence.

    2 Questions for you G (I may have more in the future):
    – In the information we should get from the dealer, you are talking about a “disposition” and “gap coverage”, what are these?
    – If one’s lease should be interrupted in case of force majeure, e.g. relocation overseas for work, etc., are early termination fees still applying? Can they be negociated?

    Thank you so much for your help!

  5. X: I’m very happy to hear you find this site very useful. You’re questions are always welcomed!
    The disposition is the fee the dealer charges when you return the car. It is generally meant to be the fee to recondition the car to sale as a pre-owned. Of course, leases are supposed to be turned-in in perfect shape, so I consider that just profit.
    The GAP covers you in case of theft or total-loss accident. You simply move on to the next car and the remaining lease payments you have on that car are essentially, waived. Many manufacturer banks offer that as part of the “Bank Fee” you pay. So when you pay the bank fee, you are essentially getting GAP coverage. You do need to double check though, don’t assume all bank fees include it. If it’s not included, you may have to purchase it through your auto insurance, if they offer.
    Thanks again for stopping by and your comments. Very happy to hear that I am making a difference.

  6. We have leased a 2005 G35 & now it’s time to turn it in. We are 10,000 miles UNDER what we paid for, we were told at the Acura & Nissan dealership that we MAY have equity in the car & should have it appraised so we could use it for trade on another lease. Infiniti said this is not true! Pleas HELP! Which is correct??
    Thanks, Kathy

  7. Hi Kathy, your car DOES have equity. Infiniti tells you otherwise because they want you to return it so they can sell it for more than they anticipated. That’s really dishonest! Wow. Anyway, what I would do is call IFS and ask for the buyout price. Then go to a few dealerships and get an appraisal so see how it compares to the buyout price. You will basically pocket the different between the appraisal value and the buyout quote from IFS. Also pay a visit to a Carmax if you have one nearby because their appraisals are good for 7 days. Try going to Edmunds or KBB and do an online appraisal of your car as a trade-in and average and good condition to get an idea as to what the range will be. You should have a lot of equity in your lease so I would definitely sell it as a trade-in instead of returning it because you can use that money to get into another car or just pocket it.

  8. I just found your site while trying to find MF and residual numbers for this month. Great site. I have a lease now and plan to negotiate another later this year. I never thought about the possibility of equity in a lease. You may have saved me a bunch of $$$ since my current lease (12K mi./yr for 36 months) is over this year and the odometer is only at 19K miles right now. The car is in excellent shape too.

    I know if the actual value of my car at the end of the lease term is higher than the residual, I can buy it from the dealer and then sell it to CarMax or whoever for a profit and pocket the difference.

    Question: In your article “G’s Guide To Auto Leasing” you mentioned getting the “Buyout amount” from the lender. I thought that amount was set in stone as the residual value the day I signed the lease agreement (and printed on the lease agreement). Is the buyout a different number than the residual? Are you saying the residual amount can be re-negotiated when I turn in the car?

    Great site G – I will be back.

  9. Hey P! Thanks for dropping by! Wow, 19k miles on your lease? Take it to Carmax and get an appraisal quick! You just might have some equity on those wheels! You don’t actually have to buyout the car from the bank if you plan to use it as a trade-in. You may have to if you plan to sell it privately.
    Now regarding your question, the buyout price is basically what you would need to pay if you chose to buy the car at that moment during your lease. That number starts at your sale price and gradually drops as you make a lease payment every month. At lease-end, your buyout will equal your residual value. The buyout is non-negotiable during your lease. However, when you reach the end of your lease and want to buy the car (for the residual value in your contract), you MAY be able to negotiate it even if the bank says you can’t. My recommendation (since you have less miles than expected on your lease) is to take your car to Carmax and get an appraisal for it. You may also want to take it to other dealers of your choice and see who’s willing to give you more to gain your business. You paid for miles you didn’t use, so you might as well get some money back, right? 🙂
    Best of luck to you! Feel free to post more questions if you have any. Thanks again for dropping by!


  10. G

    Great site. The one question I have is about the money factors that you are publishing. Where are you getting them from? This seems to be the one sticking factor I see in negotiations with dealers. I would like to be able to say to them “well I saw a money factor of .00103 for a FX 35” but how do I back this up?

  11. Hey Greg, thanks for stopping by! Glad you like the site. Well the rates come from the manufacturer’s captive banks, so they are fairly accurate. Telling them you saw it on the web probably won’t get you very far because the dealers will more than likely try to discredit the source, despite the fact that the rates posted online come from reliable sources. Instead of telling them, “I saw it online”. I would probably say something like “I’ve checked around I know your base rate is .00103 for the FX35, I want that rate”. Good honest dealers, will not jerk you around. However, please note that the base rate is the lowest rate available for that month. Dealers can bump the money factor, it is well within their rights to do so. So you simply have to insist on the base rate (assuming your credit is excellent) or you move on to the next dealer.

  12. G – I’m back. I have another question. Does the residual value change if the annual mileage is less than your 15k examples? I thought I read somewhere on this site that you could add 2% (to the 15k rate) for a 12k lease and add 3% for a 10k lease. Is that manufacturer/vehicle specific? Does that apply across the board all the time with pretty much all leases? Thanks.

  13. Hi P, welcome back! To answer your question, yes, the annual mileage will affect the residual value. For most manufacturers, the 2% for 12k and 3% for 10k works. So far, Infiniti is the only manufacturer that uses a 1% for 12k and 2% for 10k increase in residual value. You don’t really need to worry too dealers trying to lower that number on purpose because that number one is set by the bank. Just make sure you know who the bank is.

  14. Hi G!
    I should have checked out your site before leasing my first Audi, but alas here I am. I have a 2009 Audi A4 Sline Convertible with convenience package, so pretty fully loaded. My cap cost was at 41.9 and 519 monthly. Im 6 months and 2,500miles into my lease and have to trade it for a AWD to relocate to colder climate. Not the best time I realize, but I can’t do much to change this.
    I went recently to see what the quotes would be for a trade in to an a4 sedan quattro with premium plus and heated seats. My quote was $600 per month (about $6/$7k upside down on my current car). 36 months, 12k. This is no money down, just walk off fees. The quote seems pretty decent, though I want to make sure, since Audi dropped their prices and is having rebates, etc, that I’m not really getting hosed. I figure that is about $195/month for my upside down and then $405/month for the a4 lease.

    Thanks so much for all of your helpful comments, really appreciate it.

  15. yickes! 6-7k upside down…sorry to hear that. that’s rough. Depending on how much time you have before your relocation, you may want to see if you can transfer the lease to someone else or maybe even sell it for the buyout price (maybe throw in some cash to entice a buyer) Seems like trading it in will cost too much. 6-7k upside down is a lot of cash. If you like I can put your car up for sale/lease swap on my site and see if there are any takers.

    So you are saying that getting a new A4 sedan quattro premium plus is only costing you $405 with inception fees? No way! really? I find that hard to believe without seeing the numbers. I guess with the assumption that payments increase $30 per month per $1000 financed, you could be looking at $195 for the extra negative equity you are rolling in…but then I again, i’m a bit skeptical as to how cheap the A4 sedan is. I mean you’d be saving yourself thousands if you try to sell/swap the lease out. Heck, even if you get the A4 sedan at inception + $405 a month and pay for the convertible for 6 months then sell it, you’d be saving more than rolling in the negative equity. Mathematically it would make more sense to get the A4 sedan and keep the A4 convertible until you find someone to assume the lease or buy the car from you. You could literally wait 6 months for someone to assume/buy the car and you would break even. Of course, this is with the assumption that you are getting the A4 sedan for $405 a month.

    Of course, in the real world, having to pay $1100 a month for two cars is gonna hurt in this economy. Still, I would have the A4 sedan priced without the trade-in to see how much the sedan is going for.

  16. G –
    Yup the situation isn’t grand. I tried selling the car, but no takers (2 months on Cars.com and craigslist). I sadly have to resolve this in a week (not much time that is for sure). In a perfect world I wouldn’t let go of the convertible. I definitely can’t afford two cars, that is for sure.
    I’m going to ask about the cost of the sedan sans trade-in to see what the numbers are like there.
    The problem with lease trade is that I’m still liable for the car, aka Audi doesn’t acknowledge the trade, so if the payments stop, its my credit score on the line. Not too safe.
    Thanks again!!

  17. G-
    Very glad I found this site. I want to run this lease offer by you and see if I’m getting a good deal. BTW the dealer has not asked me about my credit score, and I am awaiting to hear back the MF and residual value. I’m in CA.

    Audi A3 2009, FWD 2.0 with some options (premium, cold weather, open sky). MSRP at 32,800. Their price to me is 28,400. This is their lease offer:
    With $2500 out of pocket your remaining 35 payments are $361.98 + tax (9.25% Foster City) = $395.46 @ 10K mi/yr.
    If you get the Audi Care it’s $375.09 + tax = $409.79

    What do you think? What info should I ask them when I go in to talk to AFS (still trying to remember everything you said; i’ve printed things out!).

    Pls advise and MUCH appreciated!!!

  18. V, without the inception fees (which i estimate to be around $1300-$1500 at most), I’m getting $373 after taxes (w/o AudiCare). I think you can do better, specially with the out of pocket costs. Remember that for every $25-$30 per month you pay, that’s about $1000 extra you are paying.
    I am assuming the following residual/money factor…52% (at 10k per year) and 0.00059 money factor. Request a list of all inception fees and make sure to find out what the lease rates are. Do not to go into the dealership to do this. Make it clear to the dealer that you aren’t going into the dealership unless the lease rates and fees are disclosed. Then go from there.

  19. Thanks G. so I got these from another dealer:
    -MF=either .00059 with some security deposit(unknown to me) OR .00074 with no security which i like.
    – Audi Care included
    – residual 51%
    – 36 months, 10K miles
    – down payment 2500 (also has audi rebate 1500 which makes 4000)
    – monthly is 355. first drive off is 2500
    – again this is 28,400 gross cap (the price of the car, with the 1500 audi rebate/ down pyment assistance factored IN)

    i used your SUPER useful spreadsheet, and got something rather similar.

    you think it’s ok with this lease offer?

  20. v, the new deal looks much better. I’d like to recommend that instead of paying $2500 at drive off, maybe you pay inception fees and use the remainder of the $2500 as MSDs (multiple security deposits). These deposits essentially “buys” down your money factor, saving you on interest and the nice thing is that you will get those deposits back at lease-end.

  21. G, I was wondering if you could help me out. I want to lease a 2009 BMW 328xi. Here is the info I am currently working with:
    Residual value is: 24,618.00 that is 58% of the MSRP
    Money Factor is: 00150 plus .00015 for waiver of security deposit, for a total of: .00165. If you want to pay the security deposit of approximately 500.00, your money factor would be .00150.

    So if you were going to get this car, what is the most you would pay or expect to pay? I want to go into the dealer and tell them I want this car and be able to negotiate a decent monthly payment. Also, how much should I put down?


  22. Tim,
    Your payments really depend on the sale price of the car. If you got it at MSRP, your payments would be $605+tax. Of course, you aren’t going to do that, right? There is a $1000 customer cash rebate that is going on until 5/31, so be sure to take advantage of that. Negotiate a low sale price from the dealer, then tack on the $1000 rebate. If it were me, I’d shoot for invoice ($39k) then apply the $1000 rebate, putting me at around $38k. With that sale price, I’d be looking at $475 plus tax. I would then take it a step further by apply 4 security deposits ($500 per, for a total of $2000). That should drop the payments to $437 + tax. Your drive-off would then be around $2000 (multiple security deposits) PLUS inception fees, which I estimate to be around $1500 or so. So you are looking at maybe $3500-$4000 at signing, with about $2000 of it going back into your pocket at lease-end. This is a rough estimate of course, so make sure you double check with your local dealer to see if they will do this. Remember, putting your money towards MDS (multiple security deposits) makes more sense than putting the cash towards the cap cost. You can’t get any of that money back when you turn the car, so its better to put it towards money factor reduction. It saves you money on the interest. Dang, I should be a financial adviser or something. HAHA.

  23. G, I appreciate your advice, now I have some knowledge to go in and fight with. The dealer gave me a quote between 550-570!! lol

  24. FYI: I just got off the phone with the dealer about MDS and in NYS the max amount can only be $750.

  25. that makes no sense. If each MSD is $500, that means you only get one…and a half? LOL. Maybe shoot some emails off to other dealers and maybe check NJ dealers too, maybe PA?

  26. Hey I want to know what happens to the Down Payment you put Down. If i happen to break the lease in say 2 years and i had made a down payment of 2500 since it was just required. Do i get the Down Payment Back. I am asking about Down Payment and not any security Deposit.


  27. down payments are considered cap cost reduction. that reduces the size of your lease loan. Should you total the car or trade in the car at lease end, you will not get a dime back. Its more like paying some of your lease loan in advance in order to keep your payments lower.

  28. G — audi has a summer deal thru july 6 that has a number of models offered for zero down no costs at all –kind of a sign and drive. What is your take on this deal specifically the A4 premium quattro. Thanks D.

  29. G: very helpful web site

    Any input on the following deal?

    2009 Lexus ES350 w/ Prem. Plus package and navigation (no Mark Levinson stereo)
    MSRP: $40,500
    Negotiated price: $35,500
    $3500 “drive-off” down payment, includes first lease payment
    Monthly payment w/ 9.5% sales tax: $460
    12k miles/ yr. for 3 yrs.
    Residual: $19,600
    Money factor: .001 (= approx 2% interest)
    Dealer is picking up last $460 payment on my 2007 ES350

    The residual on the ’09 is $4800 lower ($19,600 vs. $25,400) than on the ’07. I see this as huge plus since I could buy the ’09 car in June 2012 for almost $5k less than I would have to pay for the ’07 if I buy it next month at the end of its 3-year lease.

    I have shopped this deal extensively at many dealers for many months and it is the best available. Includes $1000 “loyalty” payment toward the drive-off amount, i.e., that amount is actually $4500, but they are reducing to $3500.

  30. G: one other thing. The finance lady pushes a plan that will pay off minor damage at the end of the lease. I think it’s called Safe-T-Lease or something. The idea is to pay off in advance the end-of-lease charges for the inevitable dings & scratches, upholstery nicks, etc. Negotiated cost is $775. I am normally skeptical of such things but this sounds worth it.

    Any advice?

  31. It’s actually called “Safe-Lease” and here are the basic terms:


    Pays up to $5K in excess wear and tear on leased vehicles

    * Coverage includes (but is not limited to)

    * Paint damage and dents
    * Windshield, glass chips, breakage
    * Convertible and vinyl tops
    * Alloy and steel wheels
    * Excess tire wear
    * Plus much, much more (please see contract)

    * Allows vehicle turn-in anytime prior or within one year after the original scheduled termination date

    * Standard Coverage

    * Allows vehicle turn-in up to 90 days prior or 90 days after the original
    scheduled termination date

    Customer may be reimbursed or lease company paid directly

    Underwritten by National Specialty Insurance Company: Rated “A Excellent” by A.M. Best

  32. Alright! Sorry, I’ve been busy this weekend so I wasn’t able to find the time to get to your answers. Here we go:

    @DZ – I don’t really buy into the whole “sign and drive” business because you can pretty much do that on any car by rolling all your fees into the lease loan. Sounds more like a gimmick to get you in to the dealership. With that said, I am not saying the deals are bad. They may very well be giving you real nice rebates and discounts to offset those drive-off costs.

    @AK – The sale price looks good, however, I would prefer that you didn’t drop so much money on cap reduction. Ask the dealer if you can do multiple security deposits to bring down the money factor. Another you can do is take the extra money you don’t put into cap reduction, put it in a interest baring account and pull a few hundred every month to help pay for those payments. Any money you put into car reduction will be lost in the event of a total loss accident or theft.

    As for the Safe-Lease, I’ve leased cars since 2003 and have never had any problems with my turn ins. However, I’ve been lucky in the sense that I haven’t had any major problems with dings and scratches. When I did, I simply traded the car in instead of returned at lease end. The way I see it is this. If something does happen, you will end up having to pay for it anyway. Now if $775 or so pays for up to $5k worth of wear and tear that INCLUDES 2 sets of tires, I would say go for it because 4 tires will cost you a heck more than just $775 after 36 months if you wear them out.

  33. G,
    I wanted to follow up with my previous post about the 328xi. I went into the dealer for negotiations and signed up for a 36m/15k yr lease with a 499.95 payment with 3160.00 down and a $500.00 MSD which is apart of that money down. That 1,000 rebate off is only good for returning BMW customers. So i negotiated from a sale price of 39k. What do you think of the deal? I worked that payment down from $530, i think i did pretty good but for some reason i think i could have did better based on what you told me.

  34. If you cannot have access to the 1000 rebate, i think you did quite well. If you payments are $499 after taxes and you didn’t qualify for the $1000, then its not bad at all. It’s actually in line with what I posted. My only difference is that I didn’t calculate taxes and I also assumed you would be allowed to more than one security deposit. Not bad. A little persistance saved you 30 bucks more per month, which is about $1000. That’s your loyalty rebate right there!

  35. It was funny because we kept going down figures but only a few dollars, so when we finally got to like 523/month I was like ‘You know what, ill stop back in at the end of the month when you have to meet quota’. LOL, it was then that the sales rep got serious and started working with me. Thanks again G, I appreciate your advice.

  36. G, if these lease inceptions fees are due upfront, is it correct to say they have no impact on the monthly lease payment? Thanks!

    Dealer Doc Fee
    Registration Fees
    Title Fees
    Security Deposit
    Acquisition Fee

  37. ^^^^^^^
    The reason I ask is when I plug in the #s into the upfront fees in the G lease calculator, the monthly payment changes with those fees. So I’m wondering…

  38. if you pay them upfront, you will avoid having to pay interested on those fees. if you roll them in, then you will have to pay both taxes and interested. Now, some of the inception fees are not taxed, some are. I don’t think dmv registration, tire fee and your 1st payment is taxed (not sure why, but they didn’t tax my 1st payment). Dealer doc and acquisition fee is taxed from what I understand.
    When you plug numbers into the calculator, you are basically rolling all your fees into the lease loan. when you do that, you will get charged interest and tax.

  39. @tim. haahaa. good story there! sometimes, i wish they would just get down to it. but i can’t fault them for trying. thing is, the auto biz is rough now. i recently contacted the guy that sold me my g37 and he’s out of the car biz completely. such is life.

  40. G, another question on your calculator. Is the security deposit usually due 100% upfront or can you roll it into the monthly payment and pay interest? My monthly payment changes when I plug a number into the SD. Also, how should I calculate my payment if I go for MSD? Should I just leave the SD blank and lower the MF accordingly? Thanks!

  41. There are two fields in which you will see your payments. The first set, “1st payment + cap reduction” assumes that you will roll in your inception fees into the loan. the other set “1st pay + incep + cap reduction” assumes you will pay inceptions at signing. So if you put $500 in the SD box, then you will be looking at the “1st pay + incep + cap reduct” set of numbers. I don’t think u can roll in a security deposit. otherwise, it would defeat the purpose of calling it that. As for MSDs, you could essentially put it in the SD field, but you’ll need to adjust your money factor since MSDs will lower it. Couple of things you should know. The Calculator is not perfect. I haven’t quite figured out all of the variables. Not to mention the fact that some states do things somewhat differently. Still, it should give you a very good ballpark figure. The simpler you keep deal (not rolling a bunch of fees into the lease loan) the more accurate your payments will be.

  42. G>> I’m confused…does the “destination charge” go in the MSRP or is it considered a dealer fee and should be paid in the inception fees?

    • @Paul. The destination charge is part of the MSRP. It is a manufacturer imposed fee for transporting your vehicle to the dealership. You do not have to pay it as part of the inception fees.

  43. Great Site G. I’m in the market for a new vehicle and will definately be leasing. I was looking into the G37, May I ask for the info on your lease? Packages, options, model year, and payment?

    Thank You,

  44. New 2009 G37 Journey Coupe, Lease payment based on 39 month lease, $369/month incl $1,000 owner loyalty cash*, ($399/month without owner loyalty bonus cash) , only $1999 out of pocket plus 1st pmt, tax, lic, and aq. fee. 10k mi/yr or $.20 per mile over 39,000 total miles. (*Customer or household member must be current owner/ lessee of an Infiniti to qualify for owner loyalty bonus $1000 rebate),

  45. Okay. I ended up getting the M35. $3,500 cash due at signing ($2,000 of it is cap reduction), $409/month (tax included). 12,000 miles a year. I didnt really get it yet. They are looking for a black/black. I got $1,000 in loyalty cash, $1,000 delaer cash, and almost $10,000 off the MSRP by the manufacturer. The final cap cost was $36,000 on a $48,000 car. Pretty good eh?

    • @wp. Ick! cap reduction 😉 LOL. Regardless, I think you managed to knock off so much cash off the MSRP that cap reduction is rather inconsequential. The deal itself is pretty darn good. My guess the payments would be around $460 with tax if you only payed inception fees. Darn good WP!!! Congrats! So when do I get to see pics of the car? Haahaa.

  46. Great site, extremely informative. I’m looking to buy a BMW 328xi and they are quoting me a .0026 money factor. As a general rule of thumb, for every $500 in MSD, how much money factor can I expect to peel off? I’d like to go in with $2K in MDS’s, but not sure how much MF that will buy me. Thanks!

    • Hi maggie. welcome to the site. Based on recent feedback each MSD should buy down the MF by about 0.00007 (this may vary from bank to bank). So with $2000, you are looking at 0.00028 or 0.672%. The deposit is fully refundable at lease end and in the event of theft or total-loss accident, it will also be refunded.

  47. @Maggie
    my brother was going to put cash down to lower his payments on his SUV $3k more than just up front fees. He did the MSD route instead, (((THANKS G))) long story short a few months later his ride got creamed (he’s ok) INS./gap etc. took care of it all + he got his $3k sec dep back.

  48. G – Love this site and wish I found it sooner. I used to consider myself a pretty good lease negotiator and thought that I’ve put together some pretty good deals for me and my family, until I saw this site!
    I have two questions for you:
    I’m working on a lease right now for a 2009 Acura TL SH-AWD w/ Tech. Worked out a price of $36,320 (MSRP was $42,995 and every site is telling me that their invoice is $38,812). Taxes are $1346 (7% in NJ and he told me they are due on the entire cost of the car, not just the depreciation portion), doc fee of $398, bank fee of $595, MV fee of $299 (and a “GOVT FEE” of $316, but I’m not sure if the MV costs are part of this). For 36 month, 15K miles/year, I got the residual at 51% (which I’m not happy about). My total out of pocket is $3,000, but they’re going to cut me a check for $1050 to cover the last 3 payments on my current Maxima lease) – so essentially, my OP cost is $1950. With that, my monthly payments are $544/month… What are your thoughts on that deal?
    The second question is: Acura told me that, because it is not an Acura/Honda, they cannot take the car, and can only give me money towards the outstanding payments – is this true? Or, can they actually fully take the car off my hands? As a side not to that (and I learned this from reading through previous blog posts), I’m paying for 45,000 miles on my Maxima lease (15K/year x3) but with only 3 months left, I’m at 35,000 miles on the car. What can I now do with that equity? (I guess I actually had three questions – LOL!)
    I really appreciate your advice and your overall effort in putting such a site together… thanks.

    Additionally, this guy told me that the residual percentage is applied to the MSRP and not the cap cost – is that true? (fourth and last question).

    • @s1nj. awesome, glad you like the site. Lets see if I can address all your questions here:
      1) Looks to me the taxes are being paid just on the depreciation portion of the car, despite the fact that the dealer is telling you otherwise. Not many states do this and I’m pretty sure NJ isn’t one of them. They do however, require that you pay the taxes upfront from what I hear, just like NY. Still, $1346 in taxes is not 100% of the car’s cost since that’s only about half. Sale price is solid since its very close to what my dealer here in So Cal is offering. Unfortunately, I can’t quite comment on how much how much the monthly should be since I don’t know the money factor the dealer is using for this deal. I will say this, assuming the MF is .00184 (which was last month’s MF), your payments should be 493 per month, this excludes your taxes and inception fees. If you add up your inceptions and taxes, your “due at signing” cost is around $3447. This includes all fees, taxes and your 1st month payment. If you start “peeling the layers” so to speak, you will start to realized that there’s some money being rolled into your lease since your payments are over $50 more than expect. That’s about $2000 extra since every $25-$30 per month is about $1000 added into your loan. I will say this, your deal has a lot of funny math in it, making it confusing as to who is paying what because everything is being rolled in and there isn’t much explanation as to what is what and who’s paying it. They may be cutting you a $1050 check, but that’s essentially being “loaned” to you with interest + tax. 😀
      2)It is true that Acura cannot accept a Nissan as a turn-in. They can offer to buy it. Just ask them to appraise it and see how much they are offering. Then call your Maxima’s lender to see how much your payoff amount is. Since you’re over $10k under, check around to see if you can another dealer to offer you enough to either break even or lose less than the “three payments” you have left.
      3)If you get any equity, you can have the dealer cut you a check for it and they can payoff the car for you so they can resale later.
      4)Yup residual IS applied to MSRP not the cap cost. The key is to make sure the cap cost is as low as possible. Trust me, it is actually better to have it applied on the MSRP, it makes ur lease cheaper. LOL.

      Thank you for swinging by and sharing your questions with everyone. 🙂 how my advice helps

  49. G,

    I just want to tell you how valuable your website is and how it fills a much needed niche related to the often confused world of leasing.

    I am interested in the luxury compact suv market (X3/Q5/GLK350/Tiguan)in NJ and can either begin a lease in August or Sept.

    What are your thoughts on this landscape? Do you think I can walk away with any of these for less than $500 a month with no cap cost reduction?

    • @Russ. I noticed you saw my GLK post earlier today. Yeah right now, the Q5 and the Tiguan may be your best bets. I haven’t seen the lease rates yet, but I suspected they won’t be too different from last months. The Tiguan has generally been lease friendly, I don’t have those numbers yet, but I’ll look around for them. The X3 and GLK350 (which I like a lot as well) are pretty bad right now. The X3 and the GLK350 both qualify for the C4C gov’t program, but if you don’t have a clunker, it won’t really matter. Audi lease rates should be popping up any day now.

    • I am looking for lease rates for March for Toyota Land Cruiser.
      Money factor and residual for 15k miles and 36 months. Do you have this info or can you tell me where to get it.
      Also, GL450, money factor is .00160 per your info. Should I expect to get this rate for a MB dealer?

      • Alvin, I don’t deal with Toyota numbers because they are regional. As for the GL450, that is what I was given, however, another reader is stay that dealers are quoting .00205. If you can’t find a dealer that will honor that rate, maybe you can try a broker to see if you can get that rate.

  50. I don’t see Mercedes August 2009 C class numbers posted for residuals and mF’s… do you have those?

  51. G,

    Great site. The information has been very informative as I look at leasing a vehicle. I have been trying to determine if the following is a good deal on a 2011 M37x with the Premium package. Specifically, if I should negotiate some of the leasing numbers:

    39 months for 15k per year + 10k per year (25k total per year)
    $3530 out of pocket
    $1467 min drive off
    $1000 loyalty rebate

    Net Cap cost is $44,105.00. The residual for 39 months is 59% (26029.25). The money factor is .001180.

    Thanks in advance for your assistance.

    • @Nice
      I need to know what the MSRP is in order to calculate deal.
      Also, this doesn’t seem like an IFS financed deal. Who are you using for the loan?
      The current rate for the M37 is:

      36month | 15k miles | residual 55% | .00054 base money factor

      You are getting a higher MF and a higher residual. If you aren’t using IFS, you should check if you lender provides GAP coverage. That’s a must.

      Also, you will be out of warranty within the first 2 years. I normally do not advice people to lease cars and drive more than 75000 miles within 3 years unless they can write off the payments through their own business.

      Anyway, whats the quote you got from your dealer? I don’t a monthly payment listed. Are you paying $3530 + $1467? Then applying the 1000 rebate? Please let me know how your dealer is planning to apply your down payment and rebate.

  52. G,

    Thanks for the reply. I appreciate you taking the time to look over these figures. I understand what you mean about the warranty although I think it is 60,000 miles, so I will change my mileage to 20,000/year. What do you mean by IFS financed deal?

    I have contacted multiple dealers and I am awaiting their responses regarding the 2011 M37x. I have listed the initial responses with all of the factors in a spreadsheet that I can email you directly. This spreadsheet includes the information you have requested.

    • An IFS financed deal means it that the loan is given by Infiniti’s financing arm. Your lease rates do not look like they are coming from IFS, which means the dealer is selling the car to an outside bank and they will be financing your deal. This isn’t exactly a bad thing, but you need to check the fine print because each bank’s terms and conditions vary and things such as GAP insurance may not be available. I recommend finding out all the details of the lease before you sign on the dotted line. Not all leases are created equal.

      As for the warranty, you are correct, it’s 4yr/60k. But even at 20k per year, you will still be out of warranty on the last 3 months if you do a 39-month deal. Probably not a big deal if the car has been meticulously taken cared of though.

      Feel free to email me the info. I’ll look it over. g(at)ridewithg.com

  53. Hi G!

    I was wondering if you could help me out with a lease I’m trying to get within the next week. I’m looking to lease a 2011 Infiniti G25 Journey sedan. So far, the best quote I’ve gotten by email is:

    MSRP: $34,420.00
    Sale Price: $31,485.47
    Money Factor: 0.00128
    Residual Value: 64% FOR 10,000 MILES PER YEAR
    Acq/Bank Fee: $595.00
    Dealer doc fee? $599.00
    Other fees: TAG $349.00

    Monthly payment comes out to $327.10 + 7% tax = $350/month.

    I used your lease calculator and the numbers were not adding up, but then I added the Acq/Bank fee to the sale price and I got the monthly payment they were quoting me. So I’m thinking if I pay the bank fee up front, the monthly payments should be $310 + tax. Do you think this is a good deal?

    I’m actually trying to pay less that $300/month including taxes. Using the calculator, I would need to knock off $1,000 from the sale price. I can put that much down to lower the payments but obviously I would rather the dealer discount it from the sale price. Do you think this is reasonable? If so, do you have any recommendations for how to go about requesting this? Thanks in advance!

    • @veronica
      The best discount I see in my area (Southern Cal) is 11% off the MSRP. Right now, you are at around 8%. Assuming you could get that extra 3%, it would only be another $500 off your sale price, which is still short of the $1000 you are looking for. Nevertheless, that’s still a good discount. I recommend going to TrueCar.com to double check what your “lowest local price” is, and see if it’s lower than the 8% you are getting. If it’s lower, try to get your dealer to match it.

      One thing I noticed is that your dealer doc fee is pretty high ($599). Dealer doc fee is pure profit for the dealers. In the past, it was much easier to have them reduce it or waive it out right. Nowadays, I find that a lot of folks have difficulty getting the dealer to knock that off. Doesn’t mean you shouldn’t try, though.

      I think you are going about this the right way. I always recommend paying the bank acquisition, dealer doc and tags upfront, instead of rolling it into your lease loan. The MF isn’t all that low (but lower than most), so it doesn’t make sense to pay interest on that. By the way, double check on the MF. I was told the G25’s MF this month is 0.00123 not 0.00128. It’s a difference of about $3 per month. You may also want to inquire about Multiple Security Deposits (MSD) instead of putting $1000 down towads cap reduction. MSDs can be used to “buy down” the money factor, thus reducing your monthly payment. You also get that money back at the end your lease.

      Let me know how it goes.

  54. G-
    I’m looking at leasing a 2011 G37 with Premium and Navigation Packages (Phoenix, AZ). The lease terms are as follows:

    39 months | 15K | $1,505 due at signing

    MSPR: $41,570
    Sale Price: $38,109
    Money Factor .00111
    Residual Value 59%
    Acquisition/Bank Fee $595
    Dealer Doc Fee $449
    Licensing/DMV fees $605
    Disposition fee $350
    Gap Coverage is included
    Local/State Taxes (paid monthly) 9.3%

    I’ve not done a lease before…does this look reasonable or should I keep shopping.


    • Doug, based on the numbers you provided, I am getting about $474 with tax, assuming you pay your fees and 1st month payment upfront (around 1500). This is also assuming you roll in the 595 acquisition fee in. The disposition is usually due at the end of the lease, so you don’t need to pay that up front. This is actually not a bad deal, but it can be better. Based on TrueCar’s Phoenix area data, G37 sedans (i’m assuming you are looking at a sedan) are getting approximately 12% off MSRP. You are getting about 8%, so there’s definitely some room to go down (right now you’re paying slightly over invoice). A selling price of around $36,500 would be ideal. If you manage to do that, you will see your payments drop nearly $50 a month.
      I think $400 a month (tax included) may be unrealistic since there isn’t any customer rebate/cash available. Dealers do have marketing cash available, but it is generally not available for leases. You could inquire about that however. Here’s a link to Edmund’s incentives page regarding the marketing support. If you find your dealer unwilling to negotiate, wait until end of the month and see if they are more willing then.

  55. G-
    With the previous lease terms in mind what do you suggest I do to get my payments down to $400/month?

    Thanks again,

  56. G
    You are correct I am looking at a Sedan. What I have been able to track down and see on the website is that I am paying slightly “under” invoice, or at least that’s what I saw on TrueCar based on options and from Dealership information.

    Here is what I have gotten from the Dealership:

    Invoice MSRP
    BASE $32,385 $35,050

    IKP $295 $350

    INT $519 $600

    MNF $137 $195

    NAV $1,603 $1,850

    PRM $1,862 $2,150

    TIR $433 $500

    50S $0 $0

    Freight Charge $875 $875

    Total $38,109 $41,570

    Do your comments still apply and do you think I can likely get another 4% off the Sale price?

  57. Doug, the base price of the G37 Journey on TrueCar is higher than what you dealer stated ($36275). As a matter of fact, it also varies from Edmunds’ numbers too which is $35400. Either way, I’m thinking this car was probably produced last year, before a price increase. Even so, I still think you should be able to knock more off the price. The estimated dealer cost on this model is about 13.5% less than MSRP, so at 12% discount, the dealer still makes a little money. In addition, Infinitis have a 1% holdback if the car has been on the lot less than a month, so if the dealer feels generous, they could share some of that with you.

  58. G,
    I’m putting together a list that shows that acquisition fee for each auto manufacturer’s lease program… Is this something you already have? I know leasecompare’s facebook site does a good job of mentioning that in each of their lease program posts.. maybe you could do the same?? Just a thought… Keep up the awesome work! I’m looking forward to leasing a new car for my wife soon…

    • @Jon, sorry for the late reply. I don’t currently have a list of acquisition fees. I will look into it though. That information is fairly easy to find on the manufacturer’s websites. I will get on that once things die down a bit.

  59. I think you need to know, as you have this website- CreditReport.com- as a direct recommended link from your webpage, that this website is VERY misleading and very difficult to get cancelled without VERY aggressive sales tactics and a very sneaky attempt to charge $1 even if it was cancelled. We signed up based on you having it up as a link and were very much under the impression it was going to give all three scores/reports as everyone knows you need, but as soon as signup was complete, you get one report- Experian and a link to “get all 3” directly within the report and when clicked it’s a page to sell you all three for like $33!! When we called immediately to cancel our account, (have to within 7 days anyway to avoid $19.95 membership fee which is probably recurring- didn’t look as I didn’t plan to keep it) the representative started right in with hard selling tactics with my husband offering him the 3 reports at half price…she was talking so fast and so pushy that even he had trouble getting her to stop and just cancel it. She then told him that we would have a $1 charge on our account, after trying repeatedly to get us to tell us what webpage we got the link from for their website and so on…very bizarre. We had to ask for her supervisor and after quite a wait, had to go through it all again and ONLY after we insisted that it be cancelled immediately did she do so…she even tried to tell us that our account would be cancelled effective May 1 even though today is April 23rd… again, bizarre! When we tried to directly ask her about the salesgirl’s behavior and the $1 charge (which according to the websites’ FAQ’s is NOT a charge, only a “test” charge to make sure your credit card is “real” and will not remain if cancelled- NOT what she told us!) she would only repeat that “your account has been cancelled effective immediately sir.” Just a warning….

    • Thanks for the feedback Holly. I have suspend the CreditReport.com link off the site. It is definitely not worth recommending to readers if your experience is this bad. It’s tough enough to negotiate a deal for a car, the last thing people need is people trying to up sell you on credit scores. Again, I thank you for your feedback, I greatly appreciate it.

  60. Hi G,

    Long time lurker here. Can you elaborate on incentives for leasing such as “$1000 towards capital reduction”? What’s the formula to calculate the net effect on monthly fee? Much appreciated.

    • The way I treat cap reduction is by subtracting it from the sale price. If this is cash from the dealer, the rating should still be valid. If its money coming from your own pocket, then the rating won’t accurately reflect how good the deal is. Looks like the calculator is due for another revision.

  61. Hey G, congratulations on this amazing site. What’s your recommendation on getting extra insurance from the dealer. I am looking into leasing an Audi A7 and the dealer is offering two options:
    * Wear and Tear insurance (for end of lease) – coverage up to $5000 – Cost $800
    * Tires, dents and Windshield insurance (during the lease) – $1200 for 4 years ($30/mo on the lease)- No deductible.

    What’s your experience with wear and tear when returning leases?

    • Thanks S.! Of all my leases, I have only returned two cars (Audi A4 and Acura TSX), the rest I sold as trade-in. Of those two, my A4 had a quarter-sized scuff on the rear bumper, I didn’t get charged for it. I did spend a nice $600 bucks replacing two sport tires though, which bring me to this point. Four year leases pretty much guarantee tire replacement. Three year leases sometimes do too, specially if you have run-flats or low profiles. In this car, I HIGHLY recommend the $1200 insurance that covers the tires. Four tires will pretty much cost you $1200. So if you get that plan, you may want to opt for 15k miles per year and drive the heck out of the car. The wear/tear for end of lease I’m not as concerned about unless you drive on dirt roads. My Acura got lots of chips on the hood (my wife used to drive a truck route so flying debris was a norm), it didn’t cost me a dime because Acura has $1500 damage waiver included in their lease.

  62. Hi G-
    I am in the market for a 2012 Honda Pilot EX-L w/RES. Truecar.com states that the lowest anyone in my area paid for it is $33126. (I am going to use this number for the sale price when doing calculations)

    I have 2 dealerships that I am trying to pit against each other. Here is what they gave me:

    Dealer #1:
    1…MSRP $37150
    2…Sale price $34278
    3…Money factor .00070
    4…Residual Value 57%
    5…Aquisition fee $595
    6…Doc fee $395
    7…Plates $675
    8…Gap included
    9…9.3% tax payed with each payment

    Dealer # 2:
    MSRP 37,130
    Sale price 34500
    Money factor ( with approved credit) .00029
    Acquisition fee $595
    Doc Fee $395
    Plates $677.93
    Gap insurance included
    Disposition fee zero
    Taxes 9.3%
    (This dealer did not give me a residual fee. I will default it to 57% because of the fact that the other dealership is offering that)

    My situation:
    I have a trade roughly worth about $15k on the low end and $19K if I can sucker them to buy it. I owe about $9500 on it.

    How would i use this to my advantage? I am trying to get to a target mothly payment of $250 (what im paying for right now for the vehicle i am trading in) to $300 after taxes.
    Thanks in advance!

    • The numbers look wrong….2012 Pilot 2WD EXL with RES is 51% for 15k and 53% for 12k. MF is also wrong…it should be 0.00039. It may be possible that Honda has different MFs for certain states (Acura bumps up the MF in states near the Great Lakes), but the residual is off. I know some dealers have a tendency to be lazy and not quote residuals. Worse yet, some quote you stupid numbers and then say “oh i made a mistake, it was supposed to be this…”. Anyway, without getting into “rant” mode, you need to get a sale price that’s $1000 lower than what you are getting. That would be more in line with what the SUV should be going for. Ideally, I’d say another $1500 since there’s some dealer cash on it. What I recommend is negotiate the dealer WITHOUT taking your trade-in into consideration. Try to get your sale price to be the lowest they can go. Then see how much your payments end up being. Assuming 36m/12k per year and a $33k sale price, you’d be looking at a monthly payment of about $427 per month with 9.3% tax. Fees do up front (about $2k). Once you have determined that, then talk about how much you can get for your trade-in. If you can get back about $6k to $7k for it, you can then decide how you want to spend it. Do you want to use all of it to cut your payments down (I normally don’t recommend it…read up on my posts about cap reduction in Leasing 101)? Or you can use about $2k of it to pay for inception fees and pocket the rest. Then pull $100 a month from that extra money to pay for your $427 a month lease. Its basically the same thing as rolling it into your loan.

  63. Great website, G. I am glad you pointed out the need to be careful with the finance guy/gal. My past two leases, I’ve run into issues with the finance person because they tried to increase the money factor or add in other fees. They will also pressure you to purchase other options or refuse to explain the numbers. My best advice is to ignore the pressure (they are the ones in a hurry and you can always walk out or ask to speak with the manager) and don’t sign the contract until you receive a satisfactory explanation. I had a lease calculator on my iPhone so I could check the numbers quickly. Stick to your guns regarding your research on money factors, particularly. Both finance people were in disbelief that I could quote them the exact values. Remember that the deal isn’t done until you get out of that finance office and there is no substitute for good research.

  64. G,

    you’re the man. love your forum full of great information. here are my numbers:

    2013 328I sport line

    MSRP – 49,695.00

    selling price – 46,350.00

    Residual – 29,320.05

    Term – 36 months

    Mileage – 15,000 per year

    Payment with 0.00 down – 687.00 per month

    Payment with 3000.00 down – 596.00 per month

    Payment with 5000.00 down – 536.00 per month

    *Payments include KY sales tax*

    Payment with 9510.00 down – 400.00 per month

    with all this information, I used your calculator with the MF of .00145 I saw about 2200.00 in hidden fees. I will re engage the dealer and see what we can do to bring this fees down and I will pay then up front. also I’ve asked if they participate on the MSD program. what is a reasonable MF mark up? what else do I need to get this deal done. I don’t want to pay a crazy monthly payment like 700. more like 450. is it dueable?

    • You should be getting the base rate if you have a 700+ credit score (in most cases). I think the lease is overpriced as of now. I’m not liking the 3-series this month personally. I think you need to have the dealer itemize what you are paying. You also need to confirm the MF. Dealers don’t always like to give out the MF because that’s one way to make profit. Confirm the MF and residual. Have the dealer itemize the fees. Then we will know for sure. $700 for a 328 is just plain silly.

  65. Hi love your website!

    I’m thinking about leasing a 2012 or 2013 Volvo xc60 what do you think of the leasing program right now.

    • Thanks Theresa! Glad you love the site! Volvo’s program is excellent. I think they are still doing the “pay nothing for 4 months” program. If you want a Volvo, now is the time.

  66. Hi G, I think you are making the dealerships look like thieves with terms like hidden fees and what not. Remember that it it not illegal for car dealerships to make PROFIT. But when all the costs are given away, then it makes dealerships seek for other ways to make a profit, like marking up the money factor or selling other products. Remember we need them in order to buy cars, and these people have to make a living. I dare you to keep this comment up and post it. Find a real job.

    • Hey Ali. which dealership do you work for? Busted! Haahaa.
      No, I will not be writing a post about this because your opinions are not important enough for me to bother. However, I will leave your comment on because you do have a point. Truth is, everyone has to make a living. I’m just making it a little harder for dealerships to get the hard earned money I make on my REAL JOB. Haahaa. But there is such a thing called fairness and it is up to the salesperson and the customer to determine that. Anyway, there are different types of sales people (I would know :D), which one are you going to give your business to? The one that doesn’t disclose all the terms and fees? or the one that does?

  67. Please advise if this is good deal on a 2012 Cadillac CTS for 36-Month Lease with 12KMiles/Yr.

    MRSP: $53,130

    Sale Price: $49,826 not including ($5625 in incentives)

    Money Factor .00050

    Residual Value: $29,221.50

    Acquisition/Bank Fee: $695

    Dealer Doc Fee: $87

    Other Fee’s: $519 ($432 DMV Fee’s, Doc Fee $87)

    Disposition Fee: $395

    $2000 Down is being placed, bringing the payments to $459.77 before taxes. Please advise, thank you.

    • Mike, VERY GOOD deal on the CTS. The numbers are pretty close. The only thing I’m wondering is why on earth does GM ask you to pay for the disposition fee upfront? That’s usually paid at lease end. Other than that, it checks out. I get $453 + tax per month (pre-tax), but that’s not including sales tax on the incentives and come of the fees. Definitely within the ballpark. It gets a 104.8 RWG rating on my calculator.

      • Thank you, so much for your input. I guess I just listed the disposition fee, but yes you are right I am not actually paying for this now. Once again thank you, it makes me feel more confident in obtaining this deal.

  68. I want to get your thoughts on the following offer:

    2013 Mercedes ML 350, 10K miles per year, 36 month lease

    MSRP: $55,625.00
    Sale Price: $51,495.00
    Acquisition Fee (Rolled In): $895
    Residual: 57%
    MF: 0.00200
    Doc Fee: $399.95
    Other Fees: $69.00 Tag Fee & $14.07 Hwy Use Tax

    $765.02/month (74.2 rating on your calculator)

    Any suggestions as to how to improve this deal?

    • Sam, MF is a bit high in my opinion. Looks like the dealer padded it for profit. I recommend checking around to see if someone else can give you a lower rate. The base rate on the AWD model is 0.0016. I suspect it should be the same for the FWD model.

  69. Hi G….I would like to get your input on the following offer:

    2013 BMW X3 28i, 10K/yr and 36-month lease

    MSRP: $48925
    Sale price: $45914
    Doc fee: $80 (rolled in)
    Acquisition fee: $925
    Title, Reg, Lic fee: $368
    Other fees: $50.75
    Residual: 59%
    MF: 0.00135

    Drive-off: $2,062.70
    Sales tax: 8.75%
    $638.01/ month

    Any suggestions where I can improve the deal?

    • Here is where I would target:

      > lower sale price – you are at about $400-500 over invoice. I’d try to bring it down to invoice or maybe a couple hundred below. Shop that sale price around to see if other dealers will bite.
      > bank fee is padded by $200. BMWUSA website shows $725 for the acquisition. This is a BMWFS imposed fee, so why pay extra?
      > MF can be lowered via MSDs. Please consult with your dealer about multiple security deposits to lower the MF. This money will be refunded at lease end. The downside is that you cannot terminate the lease until it fully matures. Otherwise you lose your deposits.

      • Thanks G…I am almost there… One more question, Is the first month payment part of the MSDs? In other words, say my monthly payment is $555, do I have to pay extra $600 (550 rounded up) x 7 (if I do 7 MSDs)? Or the extra will be $600 x 6 = $3,600.

        Appreciate all your help!!!

  70. Completely under anyone’s radar: 2013 mitsubishi lancer evolution x. Lack of refinement but it is the ultimate boy racer’s dream. Currently mf is 0.00008. Res for gsr is 0.73, for mr is 0.71 applied to 24 mo 12k/year. I got this offer without even haggle yet: msrp 38690, 1000 down 367/mo including oc tax. The problem with this car: those who want it cant afford it while those who want and can afford it get vetoed by their wives ( including yours trully).

    • LOL LT, thats funny how your wife vetoed the Lancer. Definitely not a very refined vehicle, but fun to drive. From a financial perspective, I would have to say that despite the extremely attractive lease numbers, I have to say that I would also take a pass. The hidden cost here is insurance. My friend has an EVO IX and he was paying insurance through the roof! It was actually cheaper to get himself a beater as a daily driver and keep the Evo as a “weekend car” than to drive his Evo full-time. I’m guessing now its probably not that big of a deal since his car is 6 yrs old…but we lease so insurance is typically much higher than on an used car.

  71. Interested in a 2013 GLI Autobahn no nav. I’m military would would move at least once over the life of the lease. Anyone shopped any deals as of late? Would my payments be effected due to sales tax in a different state? My apologies for sounding green but I’m new to this lease thing.


    • Hi DaveF. First off, I want to thank you for your service in keeping us safe and maintaining our freedom. Its people such as yourself that enable folks, like me ,to have the type of life we have. I THANK YOU! To answer your question, yes, your payments will get affected due to sales taxes when you move from state to state. Some banks may also take issue with you moving. Different states handle taxes differently. Some make you pay your taxes upfront, others charge taxes on 100% of the vehicles value even though you are only leasing a fraction of it’s cost. Then you have states like mine where taxes are treated as “use tax”, where you are charged monthly and will fluctuate if taxes increase/decrease in your city). If you really want to lease for a few years, I would consult with your local dealer to explore the option to lease and move. Some banks don’t like leasing to folks who move a lot so you may need to check if VW Credit is one of those type of banks. Personally, I recommend buying a 2012 since there is 0% financing right now. Of course, finding one could be challenging. Not sure what inventory levels look like in your neck of the woods. Let me know if you have further questions.

  72. Hey G,

    Love all of the info on your website. I’m currently looking at getting into my first lease, and leasing a 2013 X6 50i. The one I’m looking at is the GM’s demo with 5k miles on it. It comes loaded with nearly everything, even stuff like rear seat entertainment which I don’t really want or need. My question is what do you think a fair sale price would be on it? The MSRP is $87,845 but they are asking $83,452 because of the miles. With the $1,500 holiday credit and $750 loyalty cash and the extra $1,000 the salesman said he would take off that brings the price down to $80,202. Does that sound like a good deal to you? Thanks so much for your help and wisdom.

    Cheers and Merry Christmas 🙂


  73. question MSD
    can you explain how this changes the payment , Looking at 2013
    with somewhere around 5 grand down.
    wondering how much security deposit do I put down and how much it lowers the payment

  74. G,

    I just wanted to update you on something. You said you will LOSE your MSDs if you trade or sell your leased car. I just did this with a Mercedes Benz lease when I traded it in for a BMW and got ALL of my MSD back. The MBF rep explained to me that they never keep MSDs if some one trades or sells the leased car. All they care about is the account having a zero balance and you will receive your full MSD back. Dont know how this is with other banks but MBF you get them back.

  75. Hey i have a lease question, i got a price for honda accord sport 2013 from consumer report.com . They gave me a price for a dealer at my area for about 2k less than their msrp price. Now when i sent it to dealer he said it is all good and dandy, but once we started looking at te numbers and all the fees , he called me back and said that he noticed that the price guarantee from cr is for finance offers and it cannot be used for leasing. He is teeling me that we can work out the deal from the msrp price and that is it

    Am i getting hussled here?

    • Yes.

      Just use edmunds and truecar.com and work with a dealer who is willing to negotiate. Sale prices are sale prices, whether they are financed or leased the dealer gets paid.

    • I agree with Adam. Honda doesn’t generally give you purchase-only incentives. That’s more of a Nissan thing.

  76. G,

    What are your recommendations for first time lease/car buyers. Current lease is under my fathers name but building my credit to purchase my car under my name. What are your recommendations to look out for when first time leasing under my credit and not get taken advantage off? thanks G for this site really learning alot

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