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You are in the Prices Paid - Buying & Leasing Experiences
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Lexus RX 350, Car Buying, SUV
#889 of 5870 Lexus of Ann Arbor, MI
Aug 23, 2007 (11:50 pm)
I bought a new (demo) 2007 RX 350 FWD from the above dealer today for $39950 out of the door. It has the navigation and premium plus package (no Mark Levinson) and xenon lights. The demo had 5000 miles on it and showroom condition. The price included 6% MI sales tax and $100 doc. fees (couldn't talk out of it). Overall it was a pleasant experience - I had a haggle a bit (went back and forth a couple of times). Thanks for this forum.
I would recommend Lexus of Ann Arbor, MI for anyone buying a Lexus in MI. Ask for Joan Glass sales person, she was very helpful and not your ordinary sales person.
#890 of 5870 Lexus of Rockville, Md
Aug 24, 2007 (6:36 am)
First of all, I'd like to thank everyone on this forum for all the helpful information. Here's my contribution.
-'08 rx350, AWD, premium pkg w/ nav.
- 40900 + 100 doc fee, taxes, registration & tags.
Email me for salesmen's name, he was very pleasant to work with.
#891 of 5870 Lease calculation
Aug 24, 2007 (5:33 pm)
I am looking at a 2008 FWD.
money factor of .00195
15000 miles 36 month
3.O Sales tax
$549 doc fee and transfers. (I know it is nuts but that is standard in Raleigh and non-negotiable with any of the dealers.)
How can I calculate the lease?
The dealer wants $553.00 tax included.
#892 of 5870 Re: Lexus of Rockville, Md [brgerflipr]
Aug 24, 2007 (6:57 pm)
Please tell me at the e-mail address below your salesman's name and phone number. My e-mail address is lgrandismcguirewoods.com
#893 of 5870 Re: Lease calculation [newmbfan]
Aug 25, 2007 (1:41 pm)
There are two cardinal rules in leasing (1) ALWAYS establish sell price first and (2) Know how to compute the lease payment. That said, let me give you some methodology or a general framework in which to work. I'm a big believer in educating people and have a very strong academic orientation. I subscribe to the belief that if you take a man fishing, he'll eat for a day; but, if you show a man how to fish, he'll eat for a lifetime.
Check edmunds or kbb for MSRP/Invoice pricing as well as customer/dealer incentives so that you can arrive at a reasonable selling price. In leasing lingo, this is called the agreed upon value. Here are all the piece parts that you'll need in order to compute the payment...
(V) Agreed Upon Value (Sell Price)
(S) Security Deposit Requirement (e.g., Payment w/tax rounded to the next $25 or $50)
(Q) Acquisition Fee/Doc. Fee
(T) Sales Tax Rate and the method your state uses to compute sales tax
(K) Capitalized Cost Reductions (Cash/Trade Credit)
(F) Amounts Financed (capitalized) or rolled into the lease
(M) Cost of Money (i.e., money factor/interest rate)
(R) Residual Value = Residual Factor (%) x MSRP but see 3(b) below
(N) Term (months)
Next, we'll need the following identity...
A = V + F - K
A = Adjusted Capitalized Cost
Now, you're well positioned to compute the payment...
Base Payment (P) = M x (A + R) + (A - R)/N
Most states compute sales tax on the payment streams...
Payment w/tax = P x (1 + T)
Other states, like Ohio, compute sales tax on the total payments. Others, compute payment on the depreciation and, of course, there are those that compute sales tax on the agreed upon value. I used to know what North Carolina did but have forgotten. So, I'll leave that to you to figure out.
Some important things to know...
(1) Money Factor/Interest Rates...
(a) The interest rate can be estimated by multiplying the money factor (0.00XXX) by 2400.
(b) ALWAYS ask for the base rate or what is sometimes called the buy rate. Both mean the same thing. A fund provider's rates have a tiered structure. For example...
0.00150 + 0% reserves (buy rate)
0.00160 + 1% reserves
0.00170 + 2% reserves
Reserves are similar to points paid for a mortgage loan. For instance, 1% reserves means that the dealer receives compensation from the fund provider in the amount of 1% of the adjusted cap cost (excluding acquisition fee) as a reward for writing the lease at a higher rate. And so, reserves are a potential profit center for dealers. The customer never sees it because the reserves are embedded in the cost of money whether it be in the form of a money factor or an interest rate. If the dealer insists on reserves, I always deduct the dollar equivalent from the sell price.
(c) Most fund providers use a money factor. However, a few (e.g., Ford Credit, GMAC) use an interest rate.
(2) Acq Fees/Doc Fees
(a) Acquisition fees are charged by the fund provider for preparing documents and booking the lease. Doc fees are charged by dealers and are another potental profit center. Be careful, though, some dealers will add a profit margin to the acquisition fee. It's best to call a few dealers and inquire about a given fund provider's acquisition fee. Doc fees should run between $50 and $250. A $549 doc fee seems ridiculous. I would want to know what that fee includes (e.g., title/registration fees?). Otherwise, I would look for another dealer unless they're willing to lower the price.
(a) Residuals are fixed by the fund provider and can't be changed or manipulated by the dealer. The industry bench mark is the Automotive Lease Guide's (ALG) residual factors. They are the standard by which all others are judged. And so, I would want to know the ALG residual for comparison purposes. Most banks use ALG residuals. However, the finance captives often self insure their residuals and are free to set them as they deem fit.
(b) Dealer add-ons are often not fully residualized because fund providers know that dealers inflate the costs of adds. And so, they'll limit the cost of adds. For example, a dealer installed moon roof retailing for $1800 might be limited to only $1000. And so, a car with an MSRP of $30,000 before the add would have an adjusted MSRP of $31,000 after the add. It is the adjusted MSRP that the residual calculation is based.
(4) Capitalized Cost Reductions
(a) If you can avoid making a down payment, you would be well advised to do so. A car is a depreciating asset. Furthermore, if you total the vehicle, it's not likely that you'll recover all or even a portion of your down payment.
(5) Security Deposits
(a) Some fund providers will waive the security deposit in exchange for a slightly higher money factor. This is usually a bad idea. Others (e.g., BMW), will lower the money factor in exchange for multiple security deposits (MSD's). This can be a very good deal. See the BMW Series 3 forums.
Based on the data that you provided, I'll assume that $37,122 is the sell price and that $34,422 ($37,122 - $2,700) is the adjusted cap. Therefore, I'm assuming that there are no capitalized items. The base payment is calculated as follows...
P = M x (A + R) + (A - R)/N
= 0.00195 x (34,422 + 20,175) + (34,422 - 20,175)/36
If your sales tax rate is 3.0%, then your payment w/tax is $517.28. Apparently, something is missing if the dealer claims that the payment w/tax amounts to $553.
At lease origination, you'll pay...
1st payment + tax
Doc Fee (does it include title/registration/tags?)
Tax on down payment
License, title, fees unless this fee is already included in the doc fee. In consideration of $549, it had better!
Create a one page lease proposal similar to mine found in the Infiniti, Acura TSX, and Mercedes Benz S Class forums. It will save you lots of money, time, and aggravation.
Hope this helps.
#894 of 5870 Re: Please Help ASAP- Houston [aujoe1]
Aug 26, 2007 (5:24 am)
Did you buy or lease. Did you get anything special or you just insisted on this price.
#895 of 5870 decisions! decisions!
Aug 26, 2007 (5:44 am)
I am in the market for a new car. I just started a job where I will make 160.000 plus bonuses. However, I have a 3500.00 mortgage plus bills. My 1995 mustang is on its last leg. Imagine me in a shirt and tie in Fl. With no A/C. Anyway, I want to buy a new car. Since I have 2 kids, 4 and 1, I was thinking about a small SUV. Now, here is my dilemma.
1- Do I lease or buy. Lease would make sense, since I may have a greater income in 3-5 yrs and may want a bigger car. I would save more money, buying may be best.
2- Do I go for the luxury car now or later. I could go for a non luxury car (murano, highlander, explore) and get a premium package. Maybe lease it and then buy the lux in 3 yrs. Or go for it now and get the lux. if payments are not that much different.
3- I really want the lux. I think I can afford it, but I am very careful not to live above my means. That is how I maintain an 800 credit score. What model should I go with? Lexus, BMW, Acura, MB etc. I heard that lexus gives you more for your buck, so I am looking mostly at them.
I am in Orlando florida, but I am willing to go anywhere in Florida to pick up a good deal.
I know it is a lot, but I am very confuse and would love anyone's input
#896 of 5870 Re: Please Help ASAP- Houston [aujoe1]
Aug 26, 2007 (5:05 pm)
please let where you brought your rx350 in Birmingham, al. At tom Williams lexus. what was the name of the sales person and what was mrsp.
#897 of 5870 Re: I got $42500 OTD in Fortworth [sam112233]
Aug 27, 2007 (8:50 pm)
Hi, Could you please kindly tell me which dealership did you get the deal of $42500 OTD and who is the contact person? Is this an 08 or 07 model? Does it have Premium Plus and Navigation package? Thanks!!
#898 of 5870 Re: Lease calculation [delta737h]
Aug 28, 2007 (2:47 am)
you and I were discussing tactics about car prices, and we had our differences, however, I believe that you are knowledable in the field of leasing, and I would be interested in knowing your thought process.