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You are in the Prices Paid - Buying & Leasing Experiences
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Ford Edge, Car Leasing, Car Buying, SUV
#288 of 792 Help with lease payment?
Aug 28, 2007 (10:03 am)
Hi. Could you please work these numbers and tell me what my payment should be?
2007 Ford Edge SEL Plus AWD
Neg. Price: $35272
Cash Back: $3000 (several offers combined)
Adjusted Price: $32272
.75% lease rate
63% residual value
(All taxes, tags, doc fee etc. to be paid at inception)
I'm located in New Jersey. I have researched the invoice price and worked the numbers on several lease calculators and have come up $100/mo LESS than the dealer! So, I would really like to see what you come up with. Car dealers make me
#289 of 792 Re: Help with lease payment? [tellis3]
Aug 28, 2007 (10:13 am)
I came up with $394 not including sales or property taxes.
#290 of 792 Re: Help with lease payment? [tellis3]
Aug 29, 2007 (1:58 am)
Proper terminology is extremely important. In order to determine the correct payment, you need to confirm the following...
Adjusted Capitalized Cost: Is this the same as $32,272???
Residual Value: 63% x MSRP = 63% x $36,860 = $23,221.80
Lease Rate: 0.75%
Term: 24 months
I'll assume you're paying Ford's acquisition fee at lease inception which I believe is $595. Are you paying your first payment and security deposit (if required) at lease inception as well or; are they being capitalized? It's very unclear as to what you're paying up front. And so, I need an itemization of exactly what is being paid up front.
However, assuming the above is true, then the base monthly payment (without tax) amounts to $394.31 and so there is absolutely no way possible for the dealership to be $100 higher unless you have neglected to factor in capitalized amounts.
As you are aware, Ford Credit uses an interest rate; not a money factor. And please, don't let them tell you that 0.75% is not an interest rate because it most certainly is. An interest rate is simply the rate paid for the rental of capital. The payment can be easily calculated using annuity formulas or a TI83/84 calculator.
#291 of 792 Re: Help with lease payment? [delta737h]
Aug 29, 2007 (5:45 am)
Thanks for your help. To answer your questions, yes, the $32272 is the Adjusted Cap Cost. The residual number you posted is correct. At time of sale I will pay 7% sales tax...first months payment...$119 Doc fee and NJ Tags and Registration(not sure of the amount, roughly $250, I believe).The aquisiton fee was never mentioned by the dealer. I did ask what, if any, other fees were associated with this lease, and I was told "none". I also got $394 as a payment, last dealer came in at $460/mo and assured me that their numbers were on the up and up. And perhaps it was MY calculations that were wrong. I'm confused.
#292 of 792 Re: Help with lease payment? [tellis3]
Aug 29, 2007 (8:16 am)
You had better inquire about the acquisition fee. All fund providers charge this fee. If the adj cap and residual are what you say, then the payment must be $394.31 assuming a 0.75% lease rate for 24 months. Trust me. If you like, send me an email and I will be happy to intercede of your behalf because something is seriously wrong.
#293 of 792 ..Little slow on leases...
Aug 29, 2007 (11:23 am)
After coming to these forums and listening to all the knowledge dispensed here, I have to appologize,but help get the facts straight on the lease options. I do get x-plan pricing on an EDGE and I want to lease,first is the residual,acquisition fee and the percentage set by Ford, correct?, if so then what kind of money games can a dealer play on the buyers if evrything is set upfront, of course not the selling price vs MSRP but in my case with the x-plan am I correct in assuming that the lease pricing should not change from dealer to dealer?..or is there anything else that can and should be negotiated?...
Thanks for your help and patience..
#294 of 792 Re: ..Little slow on leases... [svofan2]
Aug 29, 2007 (1:22 pm)
Yes; the residual, acquisition fee, and cost of money are set by Ford. DO NOT allow the dealer to be in control... EVER! The three main ingredients are KNOWLEDGE, RESEARCH, and PREPAREDNESS. Otherwise, you're dead in the water.
ALWAYS establish selling price (agreed upon value) first just as you would if you were buying. Research MSRP/Invoice pricing as well as all incentives and factor in market supply and demand to arrive at a realistic sell price. DO NOT be concerned about dealer advertising costs. That is on their cost side of the ledger and, accordingly, is a cost of doing business. In a competitive market structure, costs DO NOT dictate revenue. The market establishes pricing and the dealer is a price taker; not a price setter. I couldn't care less about their costs. That's their problem, not mine.
Because you're eligible for the X-Plan, you should be okay. However, make sure that you completely understand how it works, its limitations, etc. Do the necessary research.
Find out the residual factor as well as the lease rate with 0% reserves. This is called the buy rate or base rate. Dealers have some flexibility. And so, reserves are a potential profit center for the dealer. Fund providers use a tiered rate structure. For example...
0.00140 + 0% reserves
0.00150 + 1% reserves
or, in the case of interest rates (like Ford)
3.00% + 0% reserves
3.25% + 1% reserves
The dealer is free to select from this tier. The consumer would never know it because reserves are embedded in the money factor or interest rate. Hence, "hidden profit". Reserves are similar to points paid for a mortgage loan. For instance, if the reserve level is 1%, the fund provider compensates the dealer 1% of the adj. cap cost (less applicable banks fees) as a reward for writing the lease at a higher rate. If the dealer insists on say 2% reserves, simply deduct the dollar equivalent from the sell price. Does the X-Plan automatically entitle you to the base rate?
Another thing you should be aware of is security deposit waivers often mean a slightly higher lease rate. Some fund providers will even lower the lease rate if you make multiple security deposits. The BMW finance captive does this and it's a fabulous deal.
You may want to examine my posts in other forums (Infiniti G35, Acura TSX) and examine my lease proposal samples. It's a good idea to FAX/email a one page lease proposal to the dealer because it will save lots of money, time, and aggravation.
My numbers are always spot on and so there is no negotiating. If the dealer agrees, I've made it very simple for them. All they need to do is transfer the numbers on the proposal to the lease agreement. There are no ball park figures, estimates, abouts or guesses. It's dead accurate and, if the dealer wants my business, they better sharpen their calculation tools so that their numbers mathematically agree with mine to the penny.
Hope this helps.
#295 of 792 Re: ..Little slow on leases... [svofan2]
Aug 29, 2007 (4:45 pm)
I have to admit, I learned alot from this forum. I just picked up my '07 Edge today. After learning what I did, I realized how badly I was taken on my last lease.
I set up a spreadsheet to run the calculations. They are pretty simple. I would be happy to share it with you, if you would like.
The main variables are MSRP, Selling Price, Residual % and money factor/APR.
With X-plan, you can look on Fords website to see what the X-plan price is.
You will only be charged the 595 acquisition fee plus DMV cost.
That is all they are allowed to charge you. The cannot charge you any documentation fee (my dealer tried to make me pay it and I got it removed). They also tried to sell me VIN etching and Wear Care. You can and should decline these.
You are correct that the price should not change from Dealer to Dealer with X-plan. Assuming you are looking at identical vehicles, the lease price would be exactly the same.
I hope this helps.
#296 of 792 Re: ..Little slow on leases... [elliemaej]
Aug 30, 2007 (5:03 am)
Everyday that I come here I get really amazed at the knowledge that is provided. The previous person that gave that long and well thought explanation was terrific,but he or she is aware of figures and facts that most of us are far..very far away from fully understanding. On the other hand your explanation was simple enough for me to understand. yes the beauty of the X-Plan pricing is that the dealer is controlled by Ford on what they can charge and I fully aware of that.So based on your expiriences x-plan is the way to go since the selling price is already established by FORD. Sometimes I wonder if it is really that much better to lease than to buy based on all the pitfalls,granted leasing is the only way to get more car for less money but then one could be paying more (because of dealers tactics) than if you could buy..just my thoughts.
Thanks for all your help guys..
#297 of 792 Re: ..Little slow on leases... [svofan2]
Aug 30, 2007 (9:30 am)
I used X-plan and it quite simple. However, you still need to know what is the current money factor or percentage in Fords's case for leasing. The are bound to sell you the vehicle at x-plan price but they can mark up the money factor/percentage whether it be x-plan or not. I knew the money factor going into the negotiations and one dealer tried to mark it up on me. Needless to say they lost the deal.