Last post on Nov 14, 2013 at 11:30 AM
You are in the Prices Paid - Buying & Leasing Experiences
What is this discussion about?
Dissecting the Deal - How To Spot a Good Lease
10 Steps to Leasing a New Car
The "Residual Value" of Leasing
Calculate Your Own Lease Payment
#35 of 194 Re: If you drive a lot of miles per year you probably shouldn't lease. Over 15k [wtalbot]
by kyfdx@Edmunds HOST
Jun 20, 2010 (6:26 pm)
Well... technically, it's true.... but, you'll still be paying for the over-mileage charges.. If they are turning your car back into Honda Finance, you'll either have to pay the charges, or they'll just roll them into your new lease payment (making it higher than it would be otherwise)...
If they are buying your car from Honda Finance, then that extra mileage will certainly make your car worth less to them, and that difference will be rolled into your new lease payment..
So, yeah.... you bring it in, and drive out with a new lease, no matter your mileage.... but, it will be reflected in your new lease payment.
No free lunch, I'm afraid...
Now, I don't necessarily agree that high-mileage drivers shouldn't lease... Properly constructed, a high-mileage lease can be the cheapest way to go, especially if you would trade every three years, anyway..
#36 of 194 Re: If you drive a lot of miles per year you probably shouldn't lease. Over 15k [wtalbot]
Jun 21, 2010 (8:56 am)
You can avoid any over mileage charges and damage by purchasing the car instead of turning it in.
#37 of 194 Re: If you drive a lot of miles per year you probably shouldn't lease. Over 15k [kyfdx]
Jun 22, 2010 (7:53 pm)
Oh wow, they mislead me I do believe. Amazing I am going on my 4th lease and did not fully understand this. Out of those leases I have never traded one lease in with the same auto maker for another. I haven't worried about mileage because I was under the impression that if I got another Honda it didn't matter.
I am pretty sure the dealer will buy it for resale, so now it is a matter of negotiating the trade in value? I don't believe Honda will let me sell the vehicle to a 3rd party either? I guess if they don't give me the payoff amount I can just go turn it in myself, pay the mileage and go lease another vehicle. A little incentive if they really want the car.
This changes things a bit.
#38 of 194 Kia lease factors?
Jun 26, 2010 (5:01 am)
Does anyone have an idea what the current residual and money factors are for a 2011 Sorento in NJ?
#39 of 194 Re: Kia lease factors? [dpb67]
Jun 26, 2010 (9:30 am)
You may want to try the Sorento message board...
I'm sure that one of the moderators or, a knowledgeable poster, will be happy to help you. This message board is reserved for questions concerning lease payment calculations for which you're not likely to get a timely response to your question.
#40 of 194 Re: Kia lease factors? [dpb67]
by kyfdx@Edmunds HOST
Jun 27, 2010 (7:11 am)
I created a new discussion for Sorento leasing for you (Kia leasing used to be non-existent, but it seems to have revived)..
You can find it HERE
#41 of 194 What should the difference in mo payment be re 10k mi vs 12k mi a year?
Jul 09, 2010 (8:52 pm)
Iím planning to lease a 2010 Toyota Prius II, & have done a lot of researchóall of it on 12k miles a year. However, as I currently drive under 10,000 miles a year, I realize I should get a lease for 10,000 miles a year. duh. (Both my lease & insurance would be cheaper, & itís highly unlikely Iíll be driving 12k miles a year.) Toyota is currently offering specials, including .00020 money factor. Hereís my dealerís offer: 0 down, & $200 a month for 36 months re a 12,000 miles a year lease. (This includes taxes, bank fee, destination fee, & DMV fee--& is way lower than what other dealers have been offering.) My question is: If I lower my mileage down to 10k instead of 12k a year, what should my monthly payment be? (How much less should I pay a month?) Thank you so much! I appreciate your response. Best, Artwheels
#42 of 194 Re: What should the difference in mo payment be re 10k mi vs 12k mi a year? [artwheels]
Jul 10, 2010 (5:16 am)
It's rare times like this that I wish that the edmunds website supported mathematical fonts.
Using differential analysis, the formula for the change in payment, given a percentage change in the residual, with all other variables held constant is...
%P = (f - 1/N)S(%r) **
%P = monetary change in payment
f = money factor
N = term
S = Adj MSRP upon which the residual value is calculated
%r = percentage points change in the residual factor
Consider the following hypothetical data...
Adj. MSRP = 25,000 (some options may only be partially residualized or not
residualized at all which lowers the MSRP hence "Adj"
Money Factor = 0.00200
Term = 36 months
Net Cap = 20,000
Res. Factor = 60%
Res. Value = Res. Factor x Adj. MSRP = 0.60 x 25,000 = 15,000 for 12K miles
Using the money factor formula, the above data yields a payment of...
P = 0.00200 x (20,000 + 15,000) + (20,000 - 15,000) / 36
But, if we lower the mileage to 10K, the residual factor may increase from 60% to 62%... a 2 percentage points increase (+2% or +0.02)... the residual value increases to 15,500 (0.62 x 25,000) and so, the new lower payment is...
*P = 0.00200 x (20,000 + 15,500) + (20,000 - 15,500) / 36
Observe that the payment dropped by 12.89 (i.e., -12.89).
We can easily calculate this payment change (-12.89) by using one formula instead of two and circumnavigate a lot of work just by using the above forrmula...
%P = (f - 1/N)S(%r) **
= (0.00200 - 1/36)(25,000)(+0.02) (the positive sign indicates an increase)
= -12.89 (the negative sign indicates a decrease)
This formula has the advantage of quickly determining how your payment will change (up (+) of down (-)) and, by how much.
** Toyota is notorious for not residualizing the destination charge and floor
mats. I'm not sure if they deploy residual factors or not. If not, then they use flat dollar amounts instead. In this case, S(%r) is simply the change (up (+), down (-)) in the residual dollar amounts.
Questions? Please let me know.
All the best...
#43 of 194 Re: What should the difference in mo payment be re 10k mi vs 12k mi a year? [artwheels]
Jul 10, 2010 (6:08 am)
Probably about $12 per month less. What did the dealer offer?
#44 of 194 Re: What should the difference in mo payment be re 10k mi vs 12k mi a year? [delta737h]
Jul 10, 2010 (9:01 am)
Thank you so much, John. That is most helpful! Alas, I have just discovered the question is moot, as the Toyota special doesn't include 10k miles leases, only 12k miles. It's such a great offer, I'll go w it & have a large margin re mileage. I appreciate your prompt and thorough explanation--most interesting!!