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. A good place to get a FREE 30-day trial of your FICO score is myFICO.com. You can sign up for it and cancel any time before the 30-day trial period ends without getting charged. I personally used it to monitor my credit score every month because I am pretty paranoid about my credit.
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 you can use sites like Yahoo’s Autos Quotes, or Edmunds.com to find local dealers.
Email Dealers, Don’t Call or Visit Dealerships. Try to email 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:
- MRSP (to make sure it doesn’t have ‘extras’ on it).
- Sale Price (start with invoice, or $500 below invoice and go from there)
- Money Factor
- Residual Value
- Acquisition/Bank Fee
- Dealer Doc Fee
- Other Fees (such as DMV, tire, etc…)
- Is there a disposition? Gap coverage? (these are important things to know!)
- 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 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 like 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.
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” and you can enjoy your test drive.
Got a Trade-In? If you do, negotiate 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 “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 (have them cut you a check). If you are trading in a lease, the process is generally the same. The only difference is that you need to find out what your “Buyout” is from your bank and see how close the dealer 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 if the lease will offer GAP coverage, so there isn’t a reason to get something like that.
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.
Have further questions? JOIN the RIDE AUTO FORUM TODAY!
Posted in *Leasing 101
July 1st, 2008 at 1:50 pm
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.
July 1st, 2008 at 4:59 pm
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.
July 2nd, 2008 at 5:38 am
and what does Limo rentals have to do with consumer car leasing?
July 2nd, 2008 at 8:22 am
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.
September 22nd, 2008 at 7:48 am
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!
X.
September 22nd, 2008 at 8:32 am
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.
October 28th, 2008 at 4:46 am
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
October 28th, 2008 at 8:41 am
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.
January 23rd, 2009 at 12:26 pm
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.
January 23rd, 2009 at 3:22 pm
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!
G
February 1st, 2009 at 8:44 am
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?
February 1st, 2009 at 1:02 pm
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.
February 17th, 2009 at 5:33 pm
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.
February 17th, 2009 at 10:21 pm
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.
March 25th, 2009 at 2:45 pm
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.
Thoughts?
Thanks so much for all of your helpful comments, really appreciate it.
March 25th, 2009 at 3:38 pm
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.
March 25th, 2009 at 4:23 pm
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!!
April 29th, 2009 at 8:13 pm
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!!!
April 30th, 2009 at 11:06 am
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.
April 30th, 2009 at 3:00 pm
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?
May 1st, 2009 at 8:27 am
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.
May 7th, 2009 at 8:34 am
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:
MSRP:42,445
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?
Thanks
May 7th, 2009 at 10:14 am
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.
May 7th, 2009 at 12:13 pm
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
May 7th, 2009 at 12:56 pm
FYI: I just got off the phone with the dealer about MDS and in NYS the max amount can only be $750.
May 7th, 2009 at 4:20 pm
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?
May 15th, 2009 at 6:56 pm
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.
Thanks
May 15th, 2009 at 11:46 pm
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.
May 16th, 2009 at 10:45 am
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.
May 17th, 2009 at 8:18 am
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.
May 17th, 2009 at 8:23 am
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?
May 17th, 2009 at 8:28 am
It’s actually called “Safe-Lease” and here are the basic terms:
http://innovativedealerservices.com/safelease.html
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
May 17th, 2009 at 10:05 pm
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.
May 19th, 2009 at 8:39 am
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.
May 19th, 2009 at 9:06 am
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!
May 19th, 2009 at 11:24 am
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.
May 19th, 2009 at 1:57 pm
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
May 19th, 2009 at 7:01 pm
^^^^^^^
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…
May 20th, 2009 at 8:31 am
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.
May 20th, 2009 at 8:33 am
@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.
May 20th, 2009 at 2:46 pm
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!
May 20th, 2009 at 3:52 pm
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.