lavo

Ok guys I'm helping my girl get a lease.

And most of the cars leasing deal was, in the end after TTT you spend about 60% of the cars value, and at best you'll pay 55%. My parents leased a G35 for 387/mo with 4k down and that comes out to be 45%.

How come the difference? and this has been consistent with every car, some you pay up to 70%, like the suzuki sx4 was like 0 down 356/mo that's a total of 12,800 when the cars msrp is only 17000. What's the deal with this. I'm so aggravated, I look at all these cheap cars and they're so frigen much!!!

Best yet a saturn Astra leased out to be (don't laugh too hard) no lie 418/mo 0 down. That's for a 15k dollar car. What's up with these??

Thanks guys

doopstr

It's based on how much they expect the car to depreciate over the time of the lease. Some cars hold value better than others. Also what is the interest? Credit score?

oneilc

Seriously, you need to look at the interest rate when you are dealing with monthly payments.

Wisc Badger

yep, saw this too when I looked at leasing...

my bmw was 3k more than the volvo i was considering yet because it held its value better, the lease on the bmw ended up being a little less per month with the same money down.

its also easy to over look that the 4k down your parents paid is probably 2k down on the cost of the car and 2k for tax, title, tags, sec deposit, ect.

Depending on what you want to lease, look at companies who have high residual values, low msrp's. Just don't forget a $40,000 car might have a 60% residual but 60% of $40k is still more than a $25k car with a 50% residual.

Leases are great on Accords, Civics and most any other import under $25k.

Also, as long as your credit is good, always ask what the interest is on the lease and try negotiate it, because the dealership makes money on that, sometimes they'll even make % points on YOUR interest rate (they'll tell you that you qualify for 8.5% from this bank but thats because you actually got 8.25% and they get the other .25%.

Oh and NEVER pay sticker for a leased car, nobody does, but dealerships bank on the fact that you don't know enough about leasing to not ask. Everything on a lease is negotiable and any dealer who says its not (unless its some kind of a specific lease offer through the manufacturer) doesn't want to sell you a car.

Bearcat94

Lavo, no offense, but before you lease you need to look into what makes up a lease payment, what you can and can't negotiate and what the pitfalls are. Otherwise, you'll get screwed and won't know why.

Lease Payments are derived from 3 basic factors:

1. The selling price of the car (negotiable); negotiate just like you were buying the car.

2. The residual value of the car (not negotiable in almost all cases)

3. Charges in addition to depreciation (i.e. interest based on a "money factor"; usually not negotiable at a particular credit tier).

Other secondary factors:

- Down payment (as low as possible, negotiable)
- Annual Mileage, usually 10,000; 12,000 or 15,000 (negotiable; effects Residual value)
- Lease Term, usually 24, 30, 36, 39, 42, 48 or 60 months. Anything over 39 months is usually stupid (negotiable; effects residual value)
- Credit score/Credit Tier (negotiable to some extent; effects Charges in addition to depreciation).

Hope that helps a little.

Also over mileage is the NUMBER ONE way to screw yourself on a lease. At $0.20 per mile penalty it adds up in a hurry and you'll have to pay it or buy the car at lease end.

Trojanman750

thats why you should buy cars cash or finance through a bank or something...

and try to anticipate resale down the road. if your buying a 15K chevy, its going to be 7k in a few years....however i know that if i buy a Lexus ls400 today for 15k, it will probably still be worth 12k after the same time.

cars are such a bad investment...i always buy used and end up selling them down the road a couple months/years later for not less than what i pay for, if not the same, sometimes more . i just end up paying gas and insurance.....bada bing bada boom!!!

Tripp11

www.leaseguide.com

Educate yourself before you get taken by a car salesman...

lavo

I know research research. I have been reading all those guides and I know what makes up a lease. My problem is Mazda (holds value better than ford) but mazda (for the same car value) is like 50 dollars more a month. The mazda 6 (4k more) is less than the mazda 3.

My problem was I spent like 2 hours with a mazda salesman and he couldn't get a deal close to what I wanted. So he basically said, "Walk", so my guess was that he honestly couldn't do anything. We tried like 3 other cars and all were too much, so he "tried" I read some car guides so I'm going back in to a new place to try to get it down.

charliemike

Mazda is likely subsidizing the leases on the 6 and not on the 3 because of overall sales. Ford is probably doing the same thing.

Bearcat94

Yes, but when they are subsidized, it shows up in one or more of the items I listed.

It's not "magically" $50 different per month. You do the math and it comes out to be $50 per month. Now which numbers changed to make that happen? IOW, you should be able to "see" the subsidy.

You should find one or more of the following:

- Reduction in selling price (i.e. $2000 cash back) or "unusually good" discounts from MSRP.

- Change in residual value as a % of MSRP. Factory subsizes a higher residual.

- Reduced Money factor. Factory subsizes part of the interest.


For example if the money factor on the Mazda 3 is Higher than the Mazda 6, the 6 is likely subsidized. Your credit risk didn't change; the cost of money didn't change; so, all else equal, the money factor *should* be the same if there is no subsidy.

Any factory cash is on top of the negotiated selling price. So if the Gross Cap Cost suddenly drops by $2k, that's dealer cash and it's probably subsidized.

The deal on a car (purchase or lease) is complicated enough. Dealers make it worse by throwing unncessary terms, figures and paperwork at you. The idea is to confuse you. This is why deals via email are better for you - you have time to sort out the numbers and figure out if the deal really makes sense.

simplyscion

being in car sales for the past 4 years, I gotta agree with almost everything bearcat said
And to add my own you should definitely not be looking into leasing a sub $17k car...money factors and residuals will play a big part in how the lease will work out on an inexpensive vehicle. Try to put down as little money as possible. If you need any help with anything feel free to shoot me a pm and I will do my best to answer any questions you may have

charliemike

I'm not disagreeing with you. I was trying to simplify the most likely answer.