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Mazda CX-5 Lease Questions

117 messages,  Last post on Jun 18, 2013 at 3:47 PM

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What is this discussion about? Mazda CX-5, Car Buying, Car Leasing, SUV

    

Messages Page 2 of 13

#4 of 117 Cap Cost / Residual / Money Factor ??? by poor_subi

Mar 28, 2012 (9:02 pm)

Greetings all. Let's crunch some numbers!! Finding myself with a totaled subaru, I stumbled across the CX-5. Drove it the next day and fell in love. Dealer in Manchester, CT priced a lease on an AWD Touring with auto dimming mirror for me. They used 12,000 miles / 39 months (said residual better than 36)/ cap cost was the MSRP of 26,235 (25,145 + 795 destination + 295 mirror) / residual value of 54% (14,215.50) / and money factor of .0019. for a final monthly payment of $450.13. Other numbers on the worksheet from the finance manager are: 6.35% sales tax, Accessory total of $179, Fee total of $530, Total Tax 1048.71, Amount Financed 27,629.
 
My question to all: Are the Cap Cost, Residual Value and Money Factor reasonable? I would expect to get something less than the MSRP, even on something so new and hot. I absolutely qualify for their best interest rate. Is .0019 the best they can offer (dealer printout says "Chase Lease" on it)? And I have no clue on the residual value. And what about them telling me I should do 39 months because the residual is better than 36. Help!!!!
 
Curiously though, the salesman handed me a quote of $444.60 before I asked the finance manager for the supporting #s. Manager said he was just giving me a break. Obviously he didn't pull that number out of thin air, but the printout we went through together has all of the above #s and a 450.33 payment. I don't know what's going on with this.
 
Lastly, mazdausaoffers.com has the following lease offer for the Hartford CT region through April 3. Is this any good? If so, can my dealer apply this deal to the care I want?:
 
2013 MAZDA CX-5
 
$239/Month, 36-Month Lease, $2,999 due at Lease Signing. Includes 1st Month's Payment and Acquisition Fee. Excludes taxes, title and fees.
 
MSRP $22,095 plus $795 destination charge. Payment based on capitalized cost of $20,175. Total payments of $8,604. No security deposit required. Dealer participation required. Not all lessees will qualify for lowest payment through participating lender. Some payments higher, some lower based on residency and other factors. Lessee responsible for excess wear and mileage over 36,000 at $0.15/mile. Purchase option at lease end for $13,276 plus tax or price negotiated at signing. Take new retail delivery from dealer stock by 4/3/2012. See participating dealer for qualifications.
 
Thanks all.

#5 of 117 Re: Cap Cost / Residual / Money Factor ??? [poor_subi] by tinycadon

Mar 29, 2012 (5:34 am)

Replying to: poor_subi (Mar 28, 2012 9:02 pm)
(imo) Don't lease, EVER!!! All that upfront money you shell out is gone if you ever get in an accident, the insurance only covers what's left on the balance, not what the car is worth.

#6 of 117 Re: Cap Cost / Residual / Money Factor ??? [poor_subi] by captainrod

Apr 02, 2012 (5:15 pm)

Replying to: poor_subi (Mar 28, 2012 9:02 pm)
The residual value is so significant in the lease payment that it dwarfs the money factor and sales price + other capitalized costs. So from a market value standpoint, you want to compare it to other vehicles in the same market segment that you may like. You will be astonished when you see how much a small differential in resid affects the monthly bottom line. The CX-5 is the bomb if you are buying but if your are leasing, the 54% resid is bordering on horrible in my opinion. If the CX-5 is your favorite, compare the lease against your 2nd and 3rd choice and make sure you are sitting down. I did this myself and fortunately was sitting at the time!
 
As for your .0019, multiply it by 2400 to normalize this interest rate to an APR and you will get 4.56%. If the lease is 3 years, you should compare it to equivalent 3 year financing for buyers on new cars. You may then see that leasing from a finance perspective is more costly. If your FICO is worthly of something better than 4.56% which it sounds like is the case, then you decide. My credit union is offering 1.49% right now for new car 3 year loans so 4.56% sounds unfair.
 
It appears to me as though there is not a wide band between invoice and MSRP on the CX-5, especially with options above the base. Looks like the difference is only $600 - $900 so I would not expect us to be in a strong haggling position on sales price for something so new, hot, and possibly even hard to locate in some areas.
 
The 39 month residual being better is totally untrue. I think this is more of a ploy to get folks back into the showroom in the summer time of the year that your lease ends as car shopping spring fever is over by then.
 
Those advertised lease deals like you posted are often on low-end models or models that are not moving as quickly and almost never map to the exact car you want. They do a good job getting you there as they are typically attractively sounding lease payments.

#7 of 117 Mazda FRUSTRATION by captainrod

Apr 02, 2012 (6:40 pm)

We looked at everything in the small/mid CUV/SUV segment with city MPG rated above 22. My wife likes to sit high but our CX-9 is simply not fuel-efficient enough for the coming threats of $5/gallon. Hence, 2 simple requirements, fuel efficient and high ride. Since I won't buy new, I am considering leasing for the first time since the most fuel-efficient cars are usually the newest. Also, I would like to get out of the viscious maintenance costs cycle. With leasing, one has a tendency to consciously lean toward fully-loaded vehicles, which we did. Narrowed in on the CR-V after 1.5 months of shopping. Then the bomb was unleashed and quickly became my number one choice. Yes, talking about the CX-5.
 
The most valuable lesson I learned by re-educating myself on leasing and doing lease deal comparions is that leasing actually exposes true variances in market value that are hidden when buying. The 2 lease deals below illustrate my point and show the math behind my pain and frustraton with Mazda, as they are forcing me into my 2nd choice.
 
The sticker price on these 2 vehicles is separated by less than $200. So for folks like us who have paired their list to Honda and Mazda, but unlike us are buying and probably financing, it is a no-brainer to just go with the one you like better, since the financing will be the same, given the similar sale prices.
 
The BIG PROBLEM for the CX-5 is exposed in the leasing market due to an 8% differential in residual value as compared to Honda. I looked at lease deals from a couple of Honda and Mazda dealers. The best lease factor I saw from Honda is .0016 (3.84%), while the Mazda was slightly better .00142 (3.41%). The sales prices are different in the real lease offers I show, favoring the Honda. However, you can reduce the Mazda sale price in the calculation and you will still see that the difference in residual is the dominating metric. Notice that the financing cost portion of the lease payment is lower on the Mazda by about $10, even with the higher sale price, due to the lease factor. But the depreciation portion is a whopping $91.30 in the red. This of course results in more sales tax as well. These are Pennsyvania leases which are taxed at 9%.
    
The CX-5 lease will cost $89.37/month more than the CR-V. If you are fortunate enough to get and equal sale price on the CX-5, the best you be able to do is get within $45.61/month of the CR-V. This was the adjusted calculation that I eluded to.
 
Keep in mind that it is Mazda who is saying the resale value of the CX-5 after 3 years/36k miles is 56% as you generally won't find a bank or leasing company who would invest in a more optimal residual than the manufacturer. You can argue that 56% may be a realistic number and that perhaps the Honda resid of 64% is artifically inflated. Though it doesn't matter if your plan is to turn the car over for another at the end of the lease. This low residual hurts you every month along the way. For buyers, it may not be obvious that the resale values between the 2 vehicles is so different. Even so, if Honda can inflate resids to lease more cars, why can't Mazda do the same in order to compete?
 
So my question to Mazda is: How can you build such an awesome car that will compete feverishly head to head against the likes of the Honda CR-V in the buyer market, yet allow the same car to be torched by Honda in the leasing market? Why not raise your resids to at least 58% to allow leasees to drive a CX-5 too? Aren't you short-changing this highly regarded newcomer? As a current Mazda owner I am shocked by these numbers and I am very frustrated that I cannot lease a CX-5 with sound mind. The better MPG and the customer loyalty free maintenance I will recieve for the lease term do not offset the $90/month difference in payment. This totally sucks.
 
Mazda CX-5 AWD GT w/TECH
Sale Price $29,875.00
MSRP $30,470.00
Residual % of MSRP for 36/12k 56.00%
Residual Value $ $17,063.20
Total Capitalized Fees $0.00
Gross Capitalized Cost $29,875.00
Cap Reduction $0.00
Net Cap Cost $29,875.00
Money Factor 0.00142
MF as APR % 3.41%
Monthly Dep $355.88
Monthly Fin $66.65
Monthly Pre-Tax $422.54
Monthly Sales Tax 9% $38.03
Montly Payment $460.56
 
Honda CR-V AWD EXL w/Nav
Sale Price $28,500.00
MSRP $30,605.00
Residual % of MSRP for 36/12k 62.00%
Residual Value $ $18,975.10
Total Capitalized Fees $0.00
Gross Capitalized Cost $28,500.00
Cap Reduction $0.00
Net Cap Cost $28,500.00
Money Factor 0.0016
MF as APR % 3.84%
Monthly Dep $264.58
Monthly Fin $75.96
Monthly Pre-Tax $340.54
Monthly Sales Tax 9% $30.65
Montly Payment $371.19

#8 of 117 Re: Cap Cost / Residual / Money Factor ??? [tinycadon] by captainrod

Apr 06, 2012 (12:00 pm)

Replying to: tinycadon (Mar 29, 2012 5:34 am)
Actually, all good leases come with gap insurance built-in so this is not a reason one should not lease.

#9 of 117 Re: Mazda FRUSTRATION [captainrod] by captainrod

Apr 06, 2012 (12:06 pm)

Replying to: captainrod (Apr 02, 2012 6:40 pm)
Oops, typo. The resid on GT AWD w/TECH is 56% not 54% but the good news is that the calculations did not have the same error

#10 of 117 Re: Cap Cost / Residual / Money Factor ??? [captainrod] by tinycadon

Apr 06, 2012 (12:27 pm)

Replying to: captainrod (Apr 06, 2012 12:00 pm)
Cap Insurance only protects the bank captainrod, if you put down $5k you lose $5k, if you put down $2k you lose $2k, so no matter what you will never recoup any part of the $$$ you put down when you drive off the lot even if your car is totaled 1 minute after you drive away.

#11 of 117 Re: Cap Cost / Residual / Money Factor ??? [tinycadon] by gearjammer62

Apr 06, 2012 (1:34 pm)

Replying to: tinycadon (Apr 06, 2012 12:27 pm)
Never say never. Leasing is the perfect situation for my business, and the last lease I acquired was $0 down, $0 for all maintenance, and actually rebates me for the miles I don't use. Lots of those deals out there - maybe not on the CX-5, but they are around, if you have good credit, are not a high-mileage driver, and want to get into a new car with very little out of pocket.

#12 of 117 Re: Cap Cost / Residual / Money Factor ??? [gearjammer62] by fonefixer

Apr 07, 2012 (9:47 am)

Replying to: gearjammer62 (Apr 06, 2012 1:34 pm)
I would agree. For the self employed-Leasing with 0 down does make the most sense if you don't put on too many miles in 3 years. Having a vehicle always under warranty- driving the latest and greatest every 3 years- outweighs the purchase option considering most all vehicles lose in the neighborhood of 50% off MSRP in the same 3 years.
 
The only way to come out on buying new is to buy and "hold" w/ no major repairs needed (for a long time.) I bought a 1998 Camry and still driving today w/ 145,000 miles. It is ageing but running well. Nevertheless, there are always payments of some kind on an automobile. Either lease / purchase/maintenance / repair expenses to come up with on a virtual monthly basis.

#13 of 117 Re: Cap Cost / Residual / Money Factor ??? [tinycadon] by captainrod

Apr 07, 2012 (8:33 pm)

Replying to: tinycadon (Apr 06, 2012 12:27 pm)
Obviously the bank needs to be protected since they own the vehicle. You have 0 equity and will always have 0 equity as they purchased the car. So you have no asset to protect but the gap insurance does protect you, the lessee, in this situation from an insurance standpoint, as it fills the exact gap that you are referring to. When you do conventional financing you also lose some of all of your down payment in the event the car is totaled. This is why I say this is not a reason to conclude one should never lease. Also the insurance company certainly won't refund the sales tax that you paid so when you go to buy a replacement vehicle you will pay the sales tax again. In my state sales tax is paid on lease payments so it is never on the entire car value but it is taxed at a premium of 50% additional sales tax. On a loan, most of your payment early on is interest so your equity builds slowly. Depending on how much you put down, you could get upside/down relatively quickly. You can never get upside down in a lease since you never have any ownership in this negative equity investment. Most lease deals don't risk much up front to lose in the first place. Often times the junk fees are capitalized and the the car is driven away with nothing down except the first month's payment. Folks that lease tend not to use large capital cost reductions as a prepaid lease is somewhat self-defeating.

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