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Prices Paid: Buying & Leasing Experiences Lexus IS 250 / IS 350 Lease Questions
1165 messages, Last post on Nov 17, 2009 at 6:18 AM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: greeneyespsu (May 06, 2009 3:09 pm) That's WAY better than what I'm getting quoted right now, which is .00125 (3%). Did the MF go up, or is there something else I can do to try to get it lower? My credit score is 720. |
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I would appreciate any feedback on the following lease I was quoted today for a 2009 IS250 RWD AT with premium plus package, HID, 18'' wheels with summer tires, iPod integration and wheel locks. MSRP: $36,506 Selling Price: $33,200 Residual: $18,253 (50% of MSRP) MF: .00090 (This is the best rate according to Lexus this month) Term: 36 months/15k miles Total monthly payment before tax: $461.50 Total out the door with only first months payment and start up fees: $1446.50 Dealer is also throwing in first two scheduled maintenance checkups and Lexus window tints
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Replying to: valuehunter07 (May 05, 2009 5:22 pm) Car_man Host Prices Paid: Buying & Leasing Experiences Forum |
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Replying to: bmhaven (May 08, 2009 5:04 pm)
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Replying to: kingpcgeek (May 07, 2009 12:28 pm) I don't think you know exactly how leasing works. The money factor (MF) on a lease is the interest rate (APR) that you pay per year on the TOTAL price of the vehicle. You pay MF on both the lease price (depreciation) AND the residual value of the vehicle. Feel free to Google this if you still don't believe me or understand it. In my case, I'm paying MF on $32,448 (selling price of my MSRP $37,656 IS250). So no, my return is not 1.5%. It is well over 10% per year. Let me break it down for you so you understand. My lease price for 3 years (depreciation) is $12866.88 because my residual is $19581.12 (together these equal my $32,448 selling price) -- ignoring tax/etc for simplicity. Which means per year of the lease I pay $4288.96 towards the depreciation. When the MF is applied to the lease it is MF x $32,448 for the first year. For the second year it is MF x ($32,448 - $4288.96). For the third year it is MF x ($32,448 - $4288.96 - $4288.96). You are only leasing for three years of depreciation, but you are RENTING the rest of the car's value and therefore you are paying interest on the WHOLE value of the car, NOT just the depreciation. Therefore, if you have the same MF on a lease as an APR on a purchase, you would pay more interest over the life of the lease than the purchase because you pay more per year towards the purchase than you do per lease (you decrease the principal by more -- i.e. higher payments). Let's put actual MF values in here and you can see what I'm saying. The ORIGINAL (pre-MSDs) MF was .0007 (1.68%). Tax aside, if I used the formulas above for calculating my interest I would pay the following (again, I would actually pay slightly more than this because this does not include tax, acquisition fee, etc): YEAR 1: .0168 x $32448 = $545.13 YEAR 2: .0168 x $28159.04 = $473.07 YEAR 3: .0168 x $23870.08 = $401.02 TOTAL INTEREST OVER LEASE: $1419.22 The MF I got by putting MSDs down was .00006 (.144%). Tax aside these are the formulas: YEAR 1: .00144 x $32448 = $46.73 YEAR 2: .00144 x $28159.04 = $40.55 YEAR 3: .00144 x $23870.08 = $34.37 TOTAL INTEREST OVER LEASE: $121.65 $1419.22 - $121.65 = $1297.57 $1297.57 (savings) divided by $3825 (MSD) = 33.9% return over the life of the lease. I think that's a pretty darn good investment, especially considering I pay no taxes on that return since it's really a savings. Why do you think every leasing forum you go into preaches about putting down MSDs?? If you'd rather keep $3825 in the bank now and spend $1297.57 more over the life of your lease, that's your perogative, but it seems pretty counter-productive to me. If you don't have an extra $3000 in your bank account, you really can't afford a Lexus. |
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Replying to: kyfdx (May 08, 2009 3:04 am)  I wish I had seen you replied supporting my answer before I took the time to write out all the details in that last post! haha Oh well, hopefully it'll help some new people coming into the forums who don't quite understand MSD. I know this forum (and a little googling about leasing 101) helped me tremendously when I got my IS and I understand leasing better now (from NOTHING before!) than I ever could have imagined! The sad thing is, I actually understand leasing a little better than some of the people that WORK at Lexus! 
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Replying to: newnmpr0ved (May 31, 2009 7:56 am) |
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Replying to: greeneyespsu (May 31, 2009 2:45 pm) Do you get all or part of the MSD? I know that any cap cost reduction is gone in this scenario. |
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Replying to: greeneyespsu (May 07, 2009 11:24 am)  greeneyespsu Actually you're not saving 1.5% on $37,656, you're saving 1.5% on 48% of 37,656, which is $18,074, or the amount you're financing over 3 years.
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Replying to: rohitg (Jun 21, 2009 9:12 am) The average amount financed over the lease term is: (CAP cost + Residual) / 2 regards, kyfdx |
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