Last post on Nov 11, 2013 at 11:47 AM
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Car Leasing, Car Buying
#381 of 499 Re: Contract question [dhammer]
Aug 31, 2012 (4:52 am)
I guess I'd want to know exactly what is meant by "wrong lease" but you accepted the car so you're going to get stuck with something. "not all that crazy about the vehicle" doesn't give you a right to back out of the deal. You might be able to negotiate something different if you ask nicely.
#382 of 499 Re: Contract question [sebring95]
Aug 31, 2012 (7:19 am)
Thanks for the quick response...my husband took the call and didn't ask any questions. I'm curious myself to find out what was meant by "wrong lease". I looked over the one we have and it looks okay. We're heading over soon, so we'll see.
#383 of 499 Re: Contract question [dhammer]
by kyfdx@Edmunds HOST
Aug 31, 2012 (7:20 am)
Buyer's remorse? Why do you want to return the vehicle?
#385 of 499 Why not care only about monthly price
Oct 27, 2012 (9:17 pm)
I know that most experts say not to negotiate montly lease price but why should I care what the other factors of the deal are if I'm planning to give the car back (and not purchase) at end of lease.
#386 of 499 Re: Why not care only about monthly price [mpl82]
Oct 28, 2012 (1:16 am)
Think of it this way...
You would never buy a car based on payments only as that would be very foolish. The same holds true for a lease. Every leased car is a sold car. When you lease, you are actually buying that car on behalf of the fund provider or lessor. However, you're responsible for the payments and so it's in your best interest to negotiate selling price; not payment. The lease payment is dependent upon the selling price. The higher the sell price, the higher your lease payment. As such, you should know how to calculate the lease payment as welll as how to determine the gross cap, adjusted cap, and residual value. Remember the following...
Gross Cap = Selling Price + Amounts Financed (capitalized) in the lease
Adj. Cap = Gross Cap - Cap Reduction
Payment = MF x (AC + RV) + (AC - RV)/N
MF = Money Factor
AC = Adjusted Cap
RV = Residual Value = Residual Factor x MSRP
N = Term
As you can see, the sell price is a necessary ingredient in determining payment. When negotiating a lease, always ask for a quote. The best way to obtain a quote is to check the dealers inventory and select the vehicle you want (assuming it's in stock). Next, relay this information to the dealer and request a quote in the form of a Lease Worksheet which should include all of the following information...
Selling Price (i.e., Agreed Upon Value)
All government fees including license/reg/title fees
Sales Tax and Sales Tax ate
Money Factor (buy rate preferred)
Residual Factor & Annual Mileage Allowance
Now you have all the necessary data to craft your own one-page lease proposal. If you think the seling price is too high, you can change it and re-compute the lease payment. Two of the most costly mistakes people make when negotiating a lease are...
1. Negotiating payments instead of selling price
2. Allowing the dealer to control the deal
Hope this helps.
#387 of 499 Re: Why not care only about monthly price [mpl82]
Oct 28, 2012 (9:44 am)
thanks John - I appreciate your response but it didn't address the core of what I'm asking which is: if i'm giving the car back to the leasing company in a few years...why should I care about anything BUT monthly price...as long as i perceive it to be a low monthly payment...what else matters.
Purchasing a car I can see as being different because the total financing has to be in my favor...but, again with leasing, I'm having trouble seeing beyond mohthly payments.
#388 of 499 Re: Why not care only about monthly price [mpl82]
Oct 28, 2012 (1:49 pm)
How do you know if you're getting the lowest monthly payment possible? How do you know if the payment reflects a fabulous deal or just a very mediocre deal? Calling five different dealers and selecting the dealer with the lowest payment and, then, hammering that dealer until they drop the payment by $5 or so does not, in any way, guarantee that you've gotten a good deal let alone an outstanding deal. I've seen cases where people thought they got a great lease deal only to discover that the sell price was very closed to MSRP when it could have been gotten for many thousands of dollars less. Those that are payment buyers are at risk for getting very bad deals. Dealers LOVE payment shoppers. It's like bringing a canary to the cat. The only way to guage whether or not you're getting a good deal is to look at the selling price which, in turn, drives the lease payment. It is the metric by which deals are judged.
The point is that what you perceive to be a low monthly payment may not even remotely mirror a good deal. Perceptions can be very misleading. Consequently, a lot of money is left on the dealer's table.
#389 of 499 Re: Why not care only about monthly price [mpl82]
Oct 28, 2012 (2:50 pm)
Couple other points...even if you're happy with the payment. An inflated residual could haunt you if for some unknown reason you need to exit the lease early (or total the vehicle without GAP). Also, early payoff fees, end-of-lease fees, termination fees, mileage fees, options to trade/sell/return at the taie...all things that should still be considered even if the payment is right where you want it.
#390 of 499 Re: Why not care only about monthly price [sebring95]
Nov 02, 2012 (3:43 pm)
Absolutely agree! Higher residuals trigger higher lease balances which, in turn, inflate early termination charges IF one must terminate early.
There are several factors that must be considered in addition to those described not the least of which is the money factor. Inflated money factors mean higher payments. Those with excellent credit should always insist on the buy rate when negotiating a lease.