one of he popular leasing sites/apps, print out and bring to dealer. I have no patience for the negotiating game or going to multiple dealers to get them down $10 a month. Have at it though if you can stomach it.
one of he popular leasing sites/apps, print out and bring to dealer. I have no patience for the negotiating game or going to multiple dealers to get them down $10 a month. Have at it though if you can stomach it.
The higher the resale value of the car you re leasing, the better lease you will get
I m currently leasing an 2017 Audi A6. I previously had leased the Cadillac CTS 4. I was interested in upgrading to the CT6. But the Audi was a significantly better deal.
The reason, the Audi has a better resale value. In essence I got a better car for a lower price.
Maybe you already knew this, Inwas a novice at leasing. But next time I lease it going to be locked into any particular vehicle. Shop around
The higher the resale value of the car you re leasing, the better lease you will get
I m currently leasing an 2017 Audi A6. I previously had leased the Cadillac CTS 4. I was interested in upgrading to the CT6. But the Audi was a significantly better deal.
The reason, the Audi has a better resale value. In essence I got a better car for a lower price.
Maybe you already knew this, Inwas a novice at leasing. But next time I lease it going to be locked into any particular vehicle. Shop around
So they were able to drop the price of the lease more because of the resale value? Interesting
The best advice I have is to stick to your guns on your budget/price. If they want the sale, they can lower the price. Also, try to go to a big dealership. They have far more flexibility than smaller ones.
If you by chance live in the Rochester area, let me know. I work at the biggest chevy dealership in the country. Guarantee I can get you an Equinox cheaper than your Pathfinder. Probably with more options too. :)
The higher the resale value of the car you re leasing, the better lease you will get
I m currently leasing an 2017 Audi A6. I previously had leased the Cadillac CTS 4. I was interested in upgrading to the CT6. But the Audi was a significantly better deal.
The reason, the Audi has a better resale value. In essence I got a better car for a lower price.
Maybe you already knew this, Inwas a novice at leasing. But next time I lease it going to be locked into any particular vehicle. Shop around
So they were able to drop the price of the lease more because of the resale value? Interesting
When you lease a car, what you’re paying for is the value of the car that will be lost during the lease term. If you lease a $30000 car that is expected to be worth $17000 at end of lease, your payments are based on borrowing $13000 over the term. If the car is expected to be worth $20000, then the payments are based on borrowing $10000.
I have a lot of rules when leasing, but my #1 rule.... Â
1. Always pin dealers against each other. Once you have negotiated a deal with Nissan dealer A, call Nissan dealer B and say.....I was just offered this deal(I usually tell them a little lower than I was quoted at dealer A) from this dealer, if you can beat that by "x" dollars, I will come in and sign the papers today.
Make sure you can find a similar car on their lot.
For example...I was in the market for a Maxima. I went into dealer A and was offered $450 per month with no money down(after a negotiation) on a car that was in their lot. I searched for another local dealer with the same car in their lot and said...Dealer A offered me 0 down(0 out of pocket) and 439 per month. If you can beat that significantly, I will come in tnt to sign papers. They came back with $425. I then called dealer A back and said another dealer offered me $425, if you can do $420, I'm yours. They did.
The reality is that car dealerships and salesman will screw you any chance they can. Therefore, I don't feel bad giving it back to them.
RE: I have a lot of rules when leasing, but my #1 rule.... Â
1. Always pin dealers against each other. Once you have negotiated a deal with Nissan dealer A, call Nissan dealer B and say.....I was just offered this deal(I usually tell them a little lower than I was quoted at dealer A) from this dealer, if you can beat that by "x" dollars, I will come in and sign the papers today.
Make sure you can find a similar car on their lot.
For example...I was in the market for a Maxima. I went into dealer A and was offered $450 per month with no money down(after a negotiation) on a car that was in their lot. I searched for another local dealer with the same car in their lot and said...Dealer A offered me 0 down(0 out of pocket) and 439 per month. If you can beat that significantly, I will come in tnt to sign papers. They came back with $425. I then called dealer A back and said another dealer offered me $425, if you can do $420, I'm yours. They did.
The reality is that car dealerships and salesman will screw you any chance they can. Therefore, I don't feel bad giving it back to them.
Agree you should shop around. However, I sell cars and what you said about trying to screw customers is wrong, at least at my dealership. We have to make money and there is only so much a dealership can give. We're not trying to screw anyone. We're just trying to make money. Whatever company you work for does the same thing. Gives profitable product pricing first and tries to sell it. Use wiggle room until you make sale. Do you feel like you got screwed by Target or your grocery store when they mark up product? It's basic sales, not trying to screw a customer.
My dealership legit LOSES money on over half our deals. We sell on volume so we make it back on GM volume bonuses.
RE: RE: I have a lot of rules when leasing, but my #1 rule.... Â
Agree you should shop around. However, I sell cars and what you said about trying to screw customers is wrong, at least at my dealership. We have to make money and there is only so much a dealership can give. We're not trying to screw anyone. We're just trying to make money. Whatever company you work for does the same thing. Gives profitable product pricing first and tries to sell it. Use wiggle room until you make sale. Do you feel like you got screwed by Target or your grocery store when they mark up product? It's basic sales, not trying to screw a customer.
My dealership legit LOSES money on over half our deals. We sell on volume so we make it back on GM volume bonuses.
There are good dealers out there, but there are quite a few bad apples who absolutely are trying to screw the customer.
But even amongst the better dealers, the system is set up to their advantage. Target and the grocery store don’t charge customers different prices based on their negotiating skills. When buying what for most people is the most expensive item they’ll ever buy (after a home), consumers are expected to square off against professional negotiators to get themselves a fair deal. And do so when the dealer has a significant informational advantage to boot. The internet has helped reduce that, but it’s still there. It’s a very opaque process that frustrates most consumers.
A few things to know before you lease as these will impact your payment:
First, the value of the vehicle after your lease is complete (assuming 36 mon.) is commonly referred to as residual.
The dealer should provide what the expected residual is at lease term, though it will often be in the for of a decimal. This is to further muddle and conflate what's a confusing situation for most customers.
Essentially, if you are leasing Vehicle A at an agreed upon sale price of 25,000 and the residual is 12,000, then you are paying 13,000/36. The residual values change from dealer to dealer, as depreciation on a BMW is generally less than on a Nissan (for instance). The projected miles you will drive (7,500 vs. 10k vs. 12k) will obviously affect expect residual as well.
So in the interest of keeping your payments low, you want the vehicle to have a high residual so as to keep your prorated depreciation low (which is then divided up into monthly payments. However, a high residual results in the car being more expensive to buy outright at lease term. A high residual can also result in you being upside down. No bueno. A low residual value can be advantageous if you think you may wish to buy the vehicle later. Different dealerships will higher or lower residual to make leasing more or less attractive based upon how in need they are to move vehicles. BMW generally has a higher residual. Audi leading is not as attrative by comparison.
The other thing that impacts your payment is money factor, or MF. This is essentially your money down or trade in value. You should have an idea of what you're budgeted or can put down, but never tell the dealer. My suggestion is always go in telling them that you aren't putting anything down. The reason for this is two-fold;
a) Once you offer to put money down, they work it into their quote and it becomes more complicated to determine what kind of deal you're getting;
b) Once you offer money down, they will be less inclined to drop price and will instead push you towards putting more money down to reach a desirable monthly payment. You lose most of your leverage.
The last thing that really impacts your payment is credit as you will be financing or borrowing.
Lastly, a base model (without frills) vehicle generally has a better residual as they're easier to sell later.
My advice: know what your budget is and do not tell the dealer. Know what you're willing to put down and do not tell the dealer. Negotiate sale price first (in thousands). There are many sites that will give you an idea of what a true price is, which is basically what other people in your area have purchased the vehicle for. Determine what your 3 year depreciation is and divide by 36. That's your base payment. For every $1000 you put down, the price will drop about $20 per month. Don't let them talk you into crap like tech packages and such unless you really want them. They will push for it since it increases price and margin.
Finally, do not put down more than you can afford to lose as a down payment. If you put down 4k and total the vehicle in year one, that money is lost.
Aim for a monthly payment roughly equivalent to 1% of the total sale price. That's a good landing spot.
A job is a job and his is to make money for the boss.
But don't for a minute think that any dealership actually loses money on cars. Leases are much more profitable for dealers as opposed to selling the car outright and there are often several manufacturer incentives involved (that the customer knows nothing about) that gives dealers more wiggle room to make a profit. If dealerships regularly lost money on leasing vehicles, they would stop doing it.
Full stop.
I have a hard time seeing how a lease is a good deal... Â
I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
RE: I have a hard time seeing how a lease is a good deal... Â
I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
RE: RE: I have a hard time seeing how a lease is a good deal... Â
I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
I get that a car is not n investment, but I have zero percent financing and when my warranty expires I have the choice to pick up maintenance or trade it in. It must be that by leasing you can somehow get lower monthly payments, if not, I don’t see an advantage to leasing. I don’t know, I am just asking
My loan is zero percent for 60 months and I got it through the dealer. Toyota for example almost always has a 0% 60 month option.
There's a lot of good advice on this thread. But the best advice is to leave. Leave the dealership and call other dealers to beat the price. Never walk in and buy or lease the first time you visit. 12 Best 0 APR Car Deals This February - ( New Window )
RE: RE: I have a hard time seeing how a lease is a good deal... Â
I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
Huh? Dealerships are running 0% financing deals all the time. Generally its for 48, 60, or sometimes even 72 months. I've never financed a car at more than 2% interest
RE: RE: RE: I have a hard time seeing how a lease is a good deal... Â
I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
I get that a car is not n investment, but I have zero percent financing and when my warranty expires I have the choice to pick up maintenance or trade it in. It must be that by leasing you can somehow get lower monthly payments, if not, I don’t see an advantage to leasing. I don’t know, I am just asking
My loan is zero percent for 60 months and I got it through the dealer. Toyota for example almost always has a 0% 60 month option.
The reason why people lease is that the monthly payment is lower (most of the time) then financing the whole amount of the car. Leasing is usually short term 1-3 years. Also there are a lot of people out there that like the idea of buying a new car every 1-3 years.
Like many have also said a car is a "money pit". It's a depreciable asset.
I just financed my last vehicle. Instead of the 0% financing I opted for the $3500.00 rebate and they processed my loan as a indirect auto loan with a large bank. I got a rate of 4.49% (Which is high in my opinion).
My wife and I are thinking about leasing her car since her trade in is a 2011 with over 150,000 miles. I love the tips in this thread. Keep them coming.
RE: RE: RE: I have a hard time seeing how a lease is a good deal... Â
Huh? Dealerships are running 0% financing deals all the time. Generally its for 48, 60, or sometimes even 72 months. I've never financed a car at more than 2% interest
A job is a job and his is to make money for the boss.
But don't for a minute think that any dealership actually loses money on cars. Leases are much more profitable for dealers as opposed to selling the car outright and there are often several manufacturer incentives involved (that the customer knows nothing about) that gives dealers more wiggle room to make a profit. If dealerships regularly lost money on leasing vehicles, they would stop doing it.
Full stop.
We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
I get that a car is not n investment, but I have zero percent financing and when my warranty expires I have the choice to pick up maintenance or trade it in. It must be that by leasing you can somehow get lower monthly payments, if not, I don’t see an advantage to leasing. I don’t know, I am just asking
My loan is zero percent for 60 months and I got it through the dealer. Toyota for example almost always has a 0% 60 month option.
If the objective is to get a better car (relatively speaking) then you could otherwise afford if financing, then yes, it is cheaper.
You're only paying a portion of the sale cost. The reason being is that you're only using it for 36 months and then the dealer flips it as a used car. I get the arguement against leasing. But leasing makes a lot of sense if you can write it off as a business expense, if you want a new car every three years, or just want a nice car without having to drop 40k+.
It also makes a lot of sense if you're buying an import. German, for instance. I financed my current car- a 2012 Passat. Just paid it off last summer. Warranty ran out after 3 years.
This month, the windshield wipers started going every time I start the ignition and run for about 5 min until they turn off. Maybe a fuse. Easy fix, right? Except...they overengineered the car and so the mechanism that needs to be replaced is part of the steering column. The entire steering column needs to be replaced for faulty wipers! $750. Out of pocket.
If the objective is to get a better car (relatively speaking) then you could otherwise afford if financing, then yes, it is cheaper.
You're only paying a portion of the sale cost. The reason being is that you're only using it for 36 months and then the dealer flips it as a used car. I get the arguement against leasing. But leasing makes a lot of sense if you can write it off as a business expense, if you want a new car every three years, or just want a nice car without having to drop 40k+.
It also makes a lot of sense if you're buying an import. German, for instance. I financed my current car- a 2012 Passat. Just paid it off last summer. Warranty ran out after 3 years.
This month, the windshield wipers started going every time I start the ignition and run for about 5 min until they turn off. Maybe a fuse. Easy fix, right? Except...they overengineered the car and so the mechanism that needs to be replaced is part of the steering column. The entire steering column needs to be replaced for faulty wipers! $750. Out of pocket.
All perfectly valid reasons to lease. If you want to be in a new car every 2-3 years, if you want to own a slick car without regard to its long term reliability leasing is a smarter way to go,
But people should have their eyes open about the long term costs of leasing. The monthly payments are lower, but because they never end, you pay more over time. Choose a reliable model with reasonable repair costs and buy it outright and you will be better off financially.
Leasing is good if you are like me and want out of a car every 3 years Â
or 4. If you hold cars for longer you should buy. You can get 0% financing, if your credit is good, but its basically a trade-off. If you read the print it will say something like 0% financing or $1,500 off, and if you do the math it comes out basically the same. On a lease you are taking the final price of the car minus the residual, so you are only paying for what you use. Add in the money factor (MF) which is basically the interest rate, sales tax, etc., and there you have it.
I have done both, but usually lease just because I rarely want to keep a car. I even leased a slightly used car through D&M leasing.
We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
If GM is refunding millions to you then you’re not losing money on those deals. You’re making money.
This the exact dealer-speak that pisses people off.
But you're wrong. We lose money on the deal itself so the customer gets the best deal possible. We then get a commission on the vehicle. Of course we make money, but the customer is making out as best as possible. I've done deals where we lost $3000 on the car. It's an odd business model, but it benefits all involved.
from GM cover the "losses" then the dealership isn't really losing money it sounds like.
We lose money on the deal to the customer in order to give them the lowest price possible. We get it back via bonuses, but the business model has a positive affect on all parties.
We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
If GM is refunding millions to you then you’re not losing money on those deals. You’re making money.
This the exact dealer-speak that pisses people off.
But you're wrong. We lose money on the deal itself so the customer gets the best deal possible. We then get a commission on the vehicle. Of course we make money, but the customer is making out as best as possible. I've done deals where we lost $3000 on the car. It's an odd business model, but it benefits all involved.
But GM pays you $3000 or more for selling that vehicle so you at least break even. It would be different if GM only paid you $300 on the vehicle, but you sold it for $3000 less than what your dealership actually invested in that vehicle
which are good ones?
He past few months I have done research and listening to Dave Ramsey on car leasing has really changed my attitude.
I was pissed off and mad - but the more I listened, the more sense it made.
He past few months I have done research and listening to Dave Ramsey on car leasing has really changed my attitude.
I was pissed off and mad - but the more I listened, the more sense it made.
What did he say?
I m currently leasing an 2017 Audi A6. I previously had leased the Cadillac CTS 4. I was interested in upgrading to the CT6. But the Audi was a significantly better deal.
The reason, the Audi has a better resale value. In essence I got a better car for a lower price.
Maybe you already knew this, Inwas a novice at leasing. But next time I lease it going to be locked into any particular vehicle. Shop around
I m currently leasing an 2017 Audi A6. I previously had leased the Cadillac CTS 4. I was interested in upgrading to the CT6. But the Audi was a significantly better deal.
The reason, the Audi has a better resale value. In essence I got a better car for a lower price.
Maybe you already knew this, Inwas a novice at leasing. But next time I lease it going to be locked into any particular vehicle. Shop around
So they were able to drop the price of the lease more because of the resale value? Interesting
If you by chance live in the Rochester area, let me know. I work at the biggest chevy dealership in the country. Guarantee I can get you an Equinox cheaper than your Pathfinder. Probably with more options too. :)
He past few months I have done research and listening to Dave Ramsey on car leasing has really changed my attitude.
I was pissed off and mad - but the more I listened, the more sense it made.
ok details please... dont leave me hanging
Quote:
The higher the resale value of the car you re leasing, the better lease you will get
I m currently leasing an 2017 Audi A6. I previously had leased the Cadillac CTS 4. I was interested in upgrading to the CT6. But the Audi was a significantly better deal.
The reason, the Audi has a better resale value. In essence I got a better car for a lower price.
Maybe you already knew this, Inwas a novice at leasing. But next time I lease it going to be locked into any particular vehicle. Shop around
So they were able to drop the price of the lease more because of the resale value? Interesting
When you lease a car, what you’re paying for is the value of the car that will be lost during the lease term. If you lease a $30000 car that is expected to be worth $17000 at end of lease, your payments are based on borrowing $13000 over the term. If the car is expected to be worth $20000, then the payments are based on borrowing $10000.
Make sure you can find a similar car on their lot.
For example...I was in the market for a Maxima. I went into dealer A and was offered $450 per month with no money down(after a negotiation) on a car that was in their lot. I searched for another local dealer with the same car in their lot and said...Dealer A offered me 0 down(0 out of pocket) and 439 per month. If you can beat that significantly, I will come in tnt to sign papers. They came back with $425. I then called dealer A back and said another dealer offered me $425, if you can do $420, I'm yours. They did.
The reality is that car dealerships and salesman will screw you any chance they can. Therefore, I don't feel bad giving it back to them.
Make sure you can find a similar car on their lot.
For example...I was in the market for a Maxima. I went into dealer A and was offered $450 per month with no money down(after a negotiation) on a car that was in their lot. I searched for another local dealer with the same car in their lot and said...Dealer A offered me 0 down(0 out of pocket) and 439 per month. If you can beat that significantly, I will come in tnt to sign papers. They came back with $425. I then called dealer A back and said another dealer offered me $425, if you can do $420, I'm yours. They did.
The reality is that car dealerships and salesman will screw you any chance they can. Therefore, I don't feel bad giving it back to them.
Agree you should shop around. However, I sell cars and what you said about trying to screw customers is wrong, at least at my dealership. We have to make money and there is only so much a dealership can give. We're not trying to screw anyone. We're just trying to make money. Whatever company you work for does the same thing. Gives profitable product pricing first and tries to sell it. Use wiggle room until you make sale. Do you feel like you got screwed by Target or your grocery store when they mark up product? It's basic sales, not trying to screw a customer.
My dealership legit LOSES money on over half our deals. We sell on volume so we make it back on GM volume bonuses.
Agree you should shop around. However, I sell cars and what you said about trying to screw customers is wrong, at least at my dealership. We have to make money and there is only so much a dealership can give. We're not trying to screw anyone. We're just trying to make money. Whatever company you work for does the same thing. Gives profitable product pricing first and tries to sell it. Use wiggle room until you make sale. Do you feel like you got screwed by Target or your grocery store when they mark up product? It's basic sales, not trying to screw a customer.
My dealership legit LOSES money on over half our deals. We sell on volume so we make it back on GM volume bonuses.
There are good dealers out there, but there are quite a few bad apples who absolutely are trying to screw the customer.
But even amongst the better dealers, the system is set up to their advantage. Target and the grocery store don’t charge customers different prices based on their negotiating skills. When buying what for most people is the most expensive item they’ll ever buy (after a home), consumers are expected to square off against professional negotiators to get themselves a fair deal. And do so when the dealer has a significant informational advantage to boot. The internet has helped reduce that, but it’s still there. It’s a very opaque process that frustrates most consumers.
First, the value of the vehicle after your lease is complete (assuming 36 mon.) is commonly referred to as residual.
The dealer should provide what the expected residual is at lease term, though it will often be in the for of a decimal. This is to further muddle and conflate what's a confusing situation for most customers.
Essentially, if you are leasing Vehicle A at an agreed upon sale price of 25,000 and the residual is 12,000, then you are paying 13,000/36. The residual values change from dealer to dealer, as depreciation on a BMW is generally less than on a Nissan (for instance). The projected miles you will drive (7,500 vs. 10k vs. 12k) will obviously affect expect residual as well.
So in the interest of keeping your payments low, you want the vehicle to have a high residual so as to keep your prorated depreciation low (which is then divided up into monthly payments. However, a high residual results in the car being more expensive to buy outright at lease term. A high residual can also result in you being upside down. No bueno. A low residual value can be advantageous if you think you may wish to buy the vehicle later. Different dealerships will higher or lower residual to make leasing more or less attractive based upon how in need they are to move vehicles. BMW generally has a higher residual. Audi leading is not as attrative by comparison.
The other thing that impacts your payment is money factor, or MF. This is essentially your money down or trade in value. You should have an idea of what you're budgeted or can put down, but never tell the dealer. My suggestion is always go in telling them that you aren't putting anything down. The reason for this is two-fold;
a) Once you offer to put money down, they work it into their quote and it becomes more complicated to determine what kind of deal you're getting;
b) Once you offer money down, they will be less inclined to drop price and will instead push you towards putting more money down to reach a desirable monthly payment. You lose most of your leverage.
The last thing that really impacts your payment is credit as you will be financing or borrowing.
Lastly, a base model (without frills) vehicle generally has a better residual as they're easier to sell later.
My advice: know what your budget is and do not tell the dealer. Know what you're willing to put down and do not tell the dealer. Negotiate sale price first (in thousands). There are many sites that will give you an idea of what a true price is, which is basically what other people in your area have purchased the vehicle for. Determine what your 3 year depreciation is and divide by 36. That's your base payment. For every $1000 you put down, the price will drop about $20 per month. Don't let them talk you into crap like tech packages and such unless you really want them. They will push for it since it increases price and margin.
Finally, do not put down more than you can afford to lose as a down payment. If you put down 4k and total the vehicle in year one, that money is lost.
Aim for a monthly payment roughly equivalent to 1% of the total sale price. That's a good landing spot.
Good luck.
But don't for a minute think that any dealership actually loses money on cars. Leases are much more profitable for dealers as opposed to selling the car outright and there are often several manufacturer incentives involved (that the customer knows nothing about) that gives dealers more wiggle room to make a profit. If dealerships regularly lost money on leasing vehicles, they would stop doing it.
Full stop.
Someone tell me how a lease is a better deal.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
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I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
I get that a car is not n investment, but I have zero percent financing and when my warranty expires I have the choice to pick up maintenance or trade it in. It must be that by leasing you can somehow get lower monthly payments, if not, I don’t see an advantage to leasing. I don’t know, I am just asking
My loan is zero percent for 60 months and I got it through the dealer. Toyota for example almost always has a 0% 60 month option.
12 Best 0 APR Car Deals This February - ( New Window )
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I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
Huh? Dealerships are running 0% financing deals all the time. Generally its for 48, 60, or sometimes even 72 months. I've never financed a car at more than 2% interest
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In comment 13833543 DonQuixote said:
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I bought my car with zero down and 0% interest. Three years later the dealership wants me to trade in for a newer version, with a lower payment. I'll just keep making the payments, I like the car and it is zero percent financing, I can drive the car all I want.
Someone tell me how a lease is a better deal.
I don't know how you managed 0% financing. Maybe for the six months or first year? I know banks borrowing for free, but lending at no interest through the length of the loan? Never heard of it.
There are obviously pros and cons.
The biggest downside to leasing is that you're renting the vehicle and hand the vehicle back to the dealer without having built any equity or value. Then again, millions of people choose to rent a roof over their head rather than buying a home and having to put down a significant chunk of capital as a down payment.
The upside is that you're giving the car back to the dealer just as the warranty is about to expire and they eat maintenance costs. If you bought the vehicle, guess who's paying to have those expensive pieces replaced after 5 years? You are.
The main difference between my example above, renting vs. Buying and leasing a vehicle vs. buying is that a home is an investment. In most cases. A car isnt an investment. It becomes a money pit from the moment you drive it off the lot.
I get that a car is not n investment, but I have zero percent financing and when my warranty expires I have the choice to pick up maintenance or trade it in. It must be that by leasing you can somehow get lower monthly payments, if not, I don’t see an advantage to leasing. I don’t know, I am just asking
My loan is zero percent for 60 months and I got it through the dealer. Toyota for example almost always has a 0% 60 month option.
The reason why people lease is that the monthly payment is lower (most of the time) then financing the whole amount of the car. Leasing is usually short term 1-3 years. Also there are a lot of people out there that like the idea of buying a new car every 1-3 years.
Like many have also said a car is a "money pit". It's a depreciable asset.
I just financed my last vehicle. Instead of the 0% financing I opted for the $3500.00 rebate and they processed my loan as a indirect auto loan with a large bank. I got a rate of 4.49% (Which is high in my opinion).
My wife and I are thinking about leasing her car since her trade in is a 2011 with over 150,000 miles. I love the tips in this thread. Keep them coming.
Well..shit.
Had no idea.
But don't for a minute think that any dealership actually loses money on cars. Leases are much more profitable for dealers as opposed to selling the car outright and there are often several manufacturer incentives involved (that the customer knows nothing about) that gives dealers more wiggle room to make a profit. If dealerships regularly lost money on leasing vehicles, they would stop doing it.
Full stop.
We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
If GM is refunding millions to you then you’re not losing money on those deals. You’re making money.
This the exact dealer-speak that pisses people off.
I get that a car is not n investment, but I have zero percent financing and when my warranty expires I have the choice to pick up maintenance or trade it in. It must be that by leasing you can somehow get lower monthly payments, if not, I don’t see an advantage to leasing. I don’t know, I am just asking
My loan is zero percent for 60 months and I got it through the dealer. Toyota for example almost always has a 0% 60 month option.
If the objective is to get a better car (relatively speaking) then you could otherwise afford if financing, then yes, it is cheaper.
You're only paying a portion of the sale cost. The reason being is that you're only using it for 36 months and then the dealer flips it as a used car. I get the arguement against leasing. But leasing makes a lot of sense if you can write it off as a business expense, if you want a new car every three years, or just want a nice car without having to drop 40k+.
It also makes a lot of sense if you're buying an import. German, for instance. I financed my current car- a 2012 Passat. Just paid it off last summer. Warranty ran out after 3 years.
This month, the windshield wipers started going every time I start the ignition and run for about 5 min until they turn off. Maybe a fuse. Easy fix, right? Except...they overengineered the car and so the mechanism that needs to be replaced is part of the steering column. The entire steering column needs to be replaced for faulty wipers! $750. Out of pocket.
If the objective is to get a better car (relatively speaking) then you could otherwise afford if financing, then yes, it is cheaper.
You're only paying a portion of the sale cost. The reason being is that you're only using it for 36 months and then the dealer flips it as a used car. I get the arguement against leasing. But leasing makes a lot of sense if you can write it off as a business expense, if you want a new car every three years, or just want a nice car without having to drop 40k+.
It also makes a lot of sense if you're buying an import. German, for instance. I financed my current car- a 2012 Passat. Just paid it off last summer. Warranty ran out after 3 years.
This month, the windshield wipers started going every time I start the ignition and run for about 5 min until they turn off. Maybe a fuse. Easy fix, right? Except...they overengineered the car and so the mechanism that needs to be replaced is part of the steering column. The entire steering column needs to be replaced for faulty wipers! $750. Out of pocket.
All perfectly valid reasons to lease. If you want to be in a new car every 2-3 years, if you want to own a slick car without regard to its long term reliability leasing is a smarter way to go,
But people should have their eyes open about the long term costs of leasing. The monthly payments are lower, but because they never end, you pay more over time. Choose a reliable model with reasonable repair costs and buy it outright and you will be better off financially.
I have done both, but usually lease just because I rarely want to keep a car. I even leased a slightly used car through D&M leasing.
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We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
If GM is refunding millions to you then you’re not losing money on those deals. You’re making money.
This the exact dealer-speak that pisses people off.
But you're wrong. We lose money on the deal itself so the customer gets the best deal possible. We then get a commission on the vehicle. Of course we make money, but the customer is making out as best as possible. I've done deals where we lost $3000 on the car. It's an odd business model, but it benefits all involved.
We lose money on the deal to the customer in order to give them the lowest price possible. We get it back via bonuses, but the business model has a positive affect on all parties.
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In comment 13833643 Steve L said:
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We flat out LOSE money on half our deals. I’m not lying. We can because we sell 600 cars a month and get millions from GM on bonuses.
If GM is refunding millions to you then you’re not losing money on those deals. You’re making money.
This the exact dealer-speak that pisses people off.
But you're wrong. We lose money on the deal itself so the customer gets the best deal possible. We then get a commission on the vehicle. Of course we make money, but the customer is making out as best as possible. I've done deals where we lost $3000 on the car. It's an odd business model, but it benefits all involved.
But GM pays you $3000 or more for selling that vehicle so you at least break even. It would be different if GM only paid you $300 on the vehicle, but you sold it for $3000 less than what your dealership actually invested in that vehicle
And visit forums and see what kind of deals other people get in your area, then try to have them match the best one.
Oh, and Audi leases terribly. Especially compared to BMW.