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Prices Paid: Buying & Leasing Experiences Infiniti G35 G37 Lease Questions
3302 messages, Last post on Jul 06, 2008 at 8:04 PM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: sonofjay (May 14, 2008 9:53 pm) In order to understand how this option effects your situation, you have to focus on the total cost of the lease.....and forget monthly payments. Most folks just want a low payment which is why you see all the ads with $3000 down and such...they are just playing with numbers. This applies to anyone who is thinking of making any capital cost reduction up front....or can afford to loan $2000 or so in security deposits to Infiniti for the life of your lease. It is a way to lower the total cost...and that's what you want. Few dealers even understand how this works....I am the only one in the past two years who took this option at my local infiniti dealer...because it's hard to explain and everyone is focused on the monthly payment which is financially wrong.(note: my dealer agrees with me, but it's too hard to explain so they don't push it). Here's how to understand this: Get a lease quote from your dealer with no money down at signing...just first month lease payment and taxes/title/registration....roll all other fees (dealer fees/bank fees/anything else) into the lease. Now add up your first payment plus all of the other payments to find out how much the total lease costs. Now ask the dealer to figure out the lease with multiple security deposits...(you can do up to 7 as long as the MF doesn't drop below 0). The payments will be lower as will your first payment...but of course you have to give them the MSD dollars. Add everything up...The initial payment, the rest of the monthly payments and add in the extra security deposits.....but then you get the security deposit back at the end, so subtract out that security deposit...and now you have the total cost of the lease. The total will always be less than the first case. Now take one more step because you say, I could have had that money in a bank (or somewhere) earning interest...but I gave it to Infiniti where they don't pay me interest. OK....let's assume you put the money in the bank at today's 3% (or pick your rate)....figure out how much you will earn in the bank...that's the amount you lose in this deal....so ADD it to the total cost of the lease. Are you with me? Your total cost is what you pay nissan..plus the loss of being able to get interest in the bank on those multiple security deposits. Finally, do the case that most dealers push.....now that you know the amount you would loan infiniti for Multiple security deposits which you get back, look at the case where you use those same $'s as a downpayment/capital cost reduction. Ah...the monthly price is much less, but now add up all the costs...this time you are adding your first payment which includes those extra capital cost reduction dollars, and then adding in the rest of the payments...you don't get any of it back. If you did all the above right, you will see that the no money down case is the most expensive, putting some cash in up front does lower the total cost of the lease a little, but the Multiple Security Case lowers it the most. Try it the next time you lease an Infiniti.....
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Replying to: ghstudio (May 15, 2008 7:15 am) One of the questions I read about in a Lexus forum was what happens if your car is stolen and not recovered? Will the insurance company payoff the remaining lease LESS the security deposit(s)? Or will Infiniti send the pay off amount due to the insurance company not including the security deposit and after Infiniti is paid, will they refund me back the security deposit(s)? One other question, is the amount of each security deposit = to your monthly payment? Another bonus is save in sales tax... 
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Replying to: montydee (May 15, 2008 8:25 am) Reason being the security deposit is there to make repairs at lease-end. Since the car is totalled or stolen, there are no repairs to make. The leasing company is made whole by the insurance company. They have no cause to keep the security deposit. You don't save any sales tax because tax is based on the purchase price or depreciation amount (depending where you live) and is therefore calculated before the cost of the money (money factor) is added in.
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Replying to: qbrozen (May 15, 2008 8:36 am) Lease car for $40K... making $4K in MSDs One month later, car is totaled. Insurance company values car at $35K. IFS says payoff is $35,500... ($39,500 - $4000 security deposit) Shortage of $500 covered by GAP insurance. $4000 in MSDs gone. Call your insurance agent: "We paid fair market value for the car, what you owe on it is not our concern". (no diffferent than if you had a loan) Call GAP insurance carrier: "We cover the difference between what the insurance company pays and what IFS says you owe." Call IFS: "Your security deposits are security to make sure we get paid. That's what we used them for." Of course, the last statement from IFS is the sticky one... You know and I know that isn't how it is supposed to be structured, but when there are three other parties involved, the buck can be passed, indefinitely.. Now... IFS or your dealer aren't going to look for ways to keep your deposit when you turn your lease in, at end of term.. You'll owe what you owe, regardless. But, in the event of totaling your car, I wouldn't bet on getting them back. That doesn't make it right.. and this might not ever happen, but I don't think you'll find anyone at IFS that will guarantee that for you. regards, kyfdx |
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Replying to: qbrozen (May 15, 2008 8:36 am) If you live in a state that just taxes the monthly payment each month, then you'd definitely save money, if the payment is lower... regards, kyfdx |
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Replying to: kyfdx (May 15, 2008 9:00 am) He called IFS and his insurance company and reported: Only small warning to include (I spent several hours on the phone with IFS and my insurance company to get a definitive answer) -- just as in the case with a cap reduction, if the car is totaled, the deposits are not refunded. You mention in the post "in the event of a total loss your insurance satisfies the lease bank" -- which is what I thought when I decided to investigate this option before signing my lease in 05. I know this does not make sense (the bank is satisfied), I know it's counterintuitive, but unless you can get something in writing from IFS, I would stay away from this option or at least consider the extra risk. So unless I had something in writing from IFS to explain how and when the MSDs would be used and not refunded *I* would not want to risk that much money. Dennis
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Replying to: sonofjay (May 14, 2008 9:51 pm) In answer to my own posted question above regarding the differences in edmunds.com and carsdirect.com, now that I see it I recall reading on here about it, the reason for the difference in price is a price increase. MSRP (base) from $34,350 to $34,750 ($400) Destination from $715 to $765 ($50) Splash guards from $150 to $155 ($5) 400+50+5 = 455 (which equals the difference in MSRP prices I was given by 2 dealers). Which was $40,180(dealer 1) - $39,725 (dealer2) = $455 Bottom-line edmunds.com has old price and carsdirect.com has new. One of the dealers is quoting new price price, the other the old price. Thanks -S |
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Replying to: sonofjay (May 14, 2008 9:51 pm)
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Replying to: dwynne (May 14, 2008 10:57 am) Another issue I was wrestling with was about how well the G35 held up over a longer time horizon. It is nearly bullet-proof over a three or four-year term. I was not so sure about how it fares over 7 or 8 years. If it held-up really well, it would make sense to buy my car at the end of the lease -- there is no way I can get this combination of power, handling, and comfort for 21k! On the other hand, I will eventually have to downsize and economize as I approach retirement -- so enjoy while I still can!  In any case, like you said, waiting and watching is prudent. Thanks, again. Raj |
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Ok, so one last time - a good deal right now is to negotiate the dealer to $500 above invoice price. Is this $500 above invoice including the cost of the car, destination charge, bank fee, dealer acquistion and other costs all rolled into one? Or is this just for the cost of the car plus destination charge? If someone could explain what exactly I should expect to negotiate into the cost of $500 above invoice it would be greatly appreciated. Also if you can tell me what other fees I can expect to pay(ie... license, tax, etc). thanks.
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