Last post on May 14, 2013 at 11:11 AM
You are in the Mazda CX-5
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Mazda CX-5, Car Buying, Car Leasing, SUV
#12 of 97 Re: Cap Cost / Residual / Money Factor ??? [gearjammer62]
Apr 07, 2012 (9:47 am)
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 97 Re: Cap Cost / Residual / Money Factor ??? [tinycadon]
Apr 07, 2012 (8:33 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.
#14 of 97 Re: Cap Cost / Residual / Money Factor ??? [captainrod]
Apr 28, 2012 (6:26 am)
I see a lot of misinformation here regarding leases, insurance, equity etc. so I thought I might try to clean it up for you. I'm an outside property damage appraiser for a major insurance company and typically settle 3+ total losses per week and also lease all of my family vehicles. Your insurance policy is a contract between you and your insurance company, whether you own, finance or lease it makes no difference in the policy language. 99% of personal auto policies are "ACV" or actual cash value policies. What this means is that in the event of a total loss we will pay the ACV of the vehicle. How the ACV is determined varies based on state regulations however in most states its either book value or from a local market survey. Whether you lease, finance or own the car outright it has no impact on what the car will be valued at or how much we will pay to settle the claim. The earlier post that said "the insurance only covers what's left on the balance, not what the car is worth" is entirely incorrect. An ACV policy will pay only ACV regardless of what is owed on the car. This is a conversation I have with customers all the time. I'm sorry but just because you paid $10,000 last week for your sweet '02 Malibu doesn't mean that's what it's worth, the settlement will be ACV regardless of wether you owe $10K or $500. Whether you paid too little or too much has no bearing on it's value or settlement amount. Now regarding leases that is also a contract between you and the leasing company. You agree to make a certain amount of payments with an option to buy for a fixed amount at the end of the lease term. Everything should clearly be spelled out in your lease contract. Also in error in previous posts is that you never have equity in a lease, that's just plain incorrect. The leasing company want's to cover themselves when the lease is over and they send the car to auction so they always set the residual low. Establishing the residual value at lease end requires some speculation so they aren't always right but they will do their best to keep it high enough to make the lease attractive while keeping it low enough that they won't loose on the back end. I've leased over 10 cars over the last 15 years and on every car I've been able to sell it at lease end for significantly more than my buyout. I actually have two leases ending soon, one next month and the other in July. The difference between my buyout option and NADA on them both is nearly $8,000. Even pricing them $3k under NADA would net me $5k each. I'd be foolish to turn them in at lease end a walk away leaving that much equity on the table. You can guarantee the dealer that I turn them in at would buy them and have them on the lot within a week. So in the event either one were to total my insurance would determine the ACV, call my leasing company to find out my payoff which is my lease end value, plus any remaining payments, plus any fee's stipulated in the contract and pay them off (assuming it's less than the ACV) any balance would be paid to me. This is handled the same regardless of a lease or loan. Payoff the bank and any balance is paid to the customer. In the beginning of the lease when you are most likely to be upside down is when the gap insurance would step in to take over any gap between what I pay for ACV and what is owed on the car. This protects you from owing it out of pocket and protects the bank from having to try and collect it from you. And lastly you may even be reimbursed for your taxes paid depending on the laws of your state. Overall leasing is great for many reasons, yes you are loosing money every month but hey, that's the cost of driving a new car all the time. The benefits are many, the most significant being that all of the risk is being assumed by the bank in determining the residual value. At your lease end if you have equity in the car you have the option of buying/selling it and recovering your equity, if something changes in the market and your residual value now exceeds the ACV you can turn in your keys at lease end and walk away. This happened a few years ago with trucks. In 2005 trucks were king and residuals on many models exceeded 55%. Then came the crash along with high gas prices and you couldn't give trucks away. New truck pricing dropped significantly with rebates as high as $8,000 on new models. That made the acv of those at lease end much lower than the 55% they had been set at. Perfect scenario to walk away where those who purchased those same vehicles now found themselves owing more on the truck they bought two years ago than they could buy a new one for now. Obviously buying used and keeping a car is the most cost effective however if you are getting a new car leasing often makes the most sense. Lease finance rates are so agressive it hard to ignore. I'm looking at an XC60 now that's lease rare is .6% The residual on only 44% which sucks but If I wanted to buy this car, cash or finance why would I when I can lease it for .6%? Invest my money elsewhere. Then at the end of the lease I will have decent equity due to the low residual.
#15 of 97 Re: Cap Cost / Residual / Money Factor ??? [supertoyz]
Apr 28, 2012 (9:03 am)
I have leased cars in the past and always found the dealer's residual price at the end of the lease to be on the high side. (if I was so inclined to purchase at the end of the lease.) Since most cars lose 50% of the MSRP after 3 years-my experience was that the residual buyout price was usually 3 ~ 4000 more than the 3 year 50% "off" so called "ACV" price would be set at. In the end- the price of merchandise is whatever the customer is willing to pay-and the dealer can set any price they want. The question is--can they receive that price?
#16 of 97 Re: Cap Cost / Residual / Money Factor ??? [fonefixer]
Apr 28, 2012 (12:24 pm)
That's the beauty of a lease, you have that option in the end. Put it up for sale a month before the lease end and see what happens. If it sells great, pocket the money and go get something else, if it doesn't sell turn it in a walk away. You don't have that luxury if you buy. If you can't sell it for what you still owe well then you still owe it. If the market value of your lease is less than you paid you can just walk away from it. Don't get me wrong, buying and leasing are both expensive, leasing just gives you a nice option to buy or walk away three years down the road. Like I said before I've got two leases that are up right now, ones on a CX-9, my dealer has called me several times on this one wondering what I'm going to do with it. Apparantly they have a list of people waiting for CX-9's to come in off from lease. My buyout is $19k and they are offering me $25k as a straight out buy. However I really like the CX-9 so I think for $19k I'll keep it. Our other car is an '09 Outback, kind of the same story here, dealer is offering $21K to buy it, they are popular around here so I'm pretty sure I could get $23k easilly, the buyout is just over $15k. On this one I think I'm going to sell it and get a CX-5. I've only had 1 lease that I didn't sell for a nice profit at lease end. It was a '97 F150 which was when the new style at the time had just come out. Ford had the residual at 70% for three years which made the payment insanely cheap. At the end the truck wasn't worth anywhere near what they had projected, I turned in my keys and got something else. I didn't even try to sell that one.
#17 of 97 May Residual/MF
May 03, 2012 (8:46 pm)
I've ordered a 2013 CX-5 GT AWD w/ tech package, which will arrive either at the very end of May or early June. Would you mind sharing MMC/Chase residual and money factor for 24 and 36 months at 12k and 15k miles per year? Are there any incentives besides $500 owner loyalty? I turned in a 2010 Mazda3 lease at the end of April.
#18 of 97 Re: Cap Cost / Residual / Money Factor ??? [tinycadon]
May 04, 2012 (6:28 am)
I believe a statement "don't lease, ever!!!' is overly simplistic. Leasing can be a great way to go for many people. Particularly people who enjoy driving a new vehicle.
Anyone with a decent credit score can lease virtually any vehicle with nothing down. I, for example, have leased five vehicles over the past few years and I have never put a single dollar down.
The better leases, Acura for example, have GAP insurance built into the lease. The better leases, Acura again for example, also have money built in for routine wear and tear type issues at the end of the lease. For my current Acura lease, it is $1,500.
The key to achieving a good lease is to (1) lease at a time when the manufacturer is providing support for the lease, often in the form of a low money factor, (2) lease a vehicle with a solid resale value to get a higher residual value, and (3) negotiate the selling price of the leased vehicle just as you would negotiate the selling price on a purchased vehicle.
As an illustration, I currently lease a vehicle for about $450 a month. I achieved this monthly price as described above. The finance monthly payment for that vehicle, at 1.9%, with the same discount for both the leased and purchased price is $686. Clearly a significant difference and I did make any sort of down payment. I simply signed on the dotted line and drove off.
When disposing of a leased vehicle a person can do about anything. The leased vehicle can be bought, sold, traded or (can't do this with a purchased vehicle) just given back when the lease is over.
The simple fact is, people who reject leasing outright do not fully understand the value of leasing. Leasing may not be for everyone but for some, like me, leasing is the only way to go.
#19 of 97 Re: May Residual/MF [jeisensc1]
May 18, 2012 (12:49 pm)
My CX-5 arrived yesterday, and I'm picking it up tomorrow. I would be helpful to get the buy rate residual and money factor if you could please.
#20 of 97 Latest Current MF and Residuals?
May 19, 2012 (6:55 am)
Looking for mf and residual for Grand Touring FWD and AWD (if they differ) 15k 36 months. Thanks in advance!!!
#21 of 97 Re: May Residual/MF [jeisensc1]
by Car_man HOST
May 20, 2012 (12:14 pm)
Hi John. Chase's May buy rate lease money factor and residual value for a 24-month lease of a 2013 CX-5 GT AWD with Tech and 15,000 miles per year are .00212 and 63%, respectively for consumers who qualify for its top credit tier.
The numbers for an otherwise identical 36-month lease are .00123 and 54%.
If you were to lease with only 12,000 miles per year, this vehicle's residual values would be I believe 1% higher.
The $500 loyalty cash that you mentioned is the only cash incentive on this vehicle right now.
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