OT: Car Leasing Thread
- Thread starter crusher7
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Good luck getting the advertised price on a lease. Usually at lease 3 qualifiers in there most people will never meet.
Not really...I forget some of the promotions but these are some of the ones I had seen in our ads over the few years I was doing this. Must have graduated college in the last 6 months. Must be going from a similar model but older year. VFW but usually with some sort of timeline qualifier. etc There are usually 5 or 6 legit qualifiers but they are also very limiting and the price they advertise is if you meet ALL of them. Then, it also may have to be a qualified car on the lot. Usually the Ad has a car of very barebones, once you add something it changes too. Of course you need the credit score...Nothing in the ads are false but very hard to just walk in and say I want that car at the price in the ad.
With that said. Do your research, you should have the "real" number a dealer will get to before you ever step on a lot. One of the tings I do since leaving the business. And only recently started to lease(which makes it a little harder to research and know if you are getting a great deal or not) but I will haggle down a price on a model I want but usually a model that may not have all the options I want. Once they get to my number, I do a bait and switch and pick the car with the options I really wanted and tell them if they can do the same deal on that car, I will do it right then. @ things to keep in mind with this. Be semi realistic, don't price a 3 series BMW and then ask if they can do the same with a 5 series. Keep the same model, pick a car on the lot and just add options or possibly get tire/wheel and a couple of other finance options thrown in. And be ready to keep your word if they make the offer and sign on the dotted line.
Best way to get a great deal.
Worse way is to walk in and say that you want to lease.
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I read this in Consumer Reports, yet I bet few customers go in and hide the fact they
want to lease
Only problem is that the mathematics behind the conversion to a lease varies on every damn *** car and can be very difficult to figure out. But agree, know the sale price you want to be at and not the payment you want to be at. Once they know you want to lease and you give them a monthly number, power falls to them. And number one myth that is in fact a fact...always go as close to the last day of the month and be ready to walk out with a car/deal. Try to look at their inventory online before going. Buying or leasing a car does not always have to be a nightmare, even the sales people hate it. Be prepared, be reasonable and try to do it as fast as possible. Most salesmen in this business end up on your side and spend more time selling their manager then selling you. But if you do the things above, they will love to move a car quickly and be able to move on to the next sale.
all included in the total lease payment. My last two cars I bought cash and negotiated the price before I even step foot on the lot. Bought both cars w/o even test driving them because they were for point A to B cars. I am looking for a fun car and I'm seeing some interesting deals like the one I stated. Guess I'll find out what the catch is after I call the dealership.
Purchase option is generally a set figure in the contract for the cost you can pay to purchase the car at the end of the lease. For new models early on, it is a guess. For established models, dealers can predict the future value pretty well. I have purchased vehicles at the end of the lease. One advantage is you know what shape the used car is in. The last time I did this the purchase price in the contract was $17,500 and if I bought the same vehicle in the same condition with the same mileage, it would have been $23,000. 20% discount to MSRP is too vague. MSRP on the new vehicle or a comparable vehicle at the time the lease expires, etc.?
as a GM of Ultra Luxury dealer in Orlando, I always find these questions and replies to be pretty funny. I can assure you that the sales guy or gal is on your side and just wants to sell you a car. If you could be a fly on the wall of the sales managers office these men and women are truly on your side and not trying to rip you off.
We are talking about people that are on 100% commission if they do not sell a car that day it is like they are unemployed. They work the "desk" 10x harder then they work you to get to your payment or offer.
It doens't matter if you say you are going to lease or pay cash we can sell you the car for what we can sell you the car for.
Obviously the sale price dictates the payment, i don't see the benefit in playing games.
I assure you the transaction will go smoother.
It usually isnt the sales man or woman that makes the transaction difficult. We have been conditioned to think car sales people are the boogey man. They are just normal people trying to make a living.
We are talking about people that are on 100% commission if they do not sell a car that day it is like they are unemployed. They work the "desk" 10x harder then they work you to get to your payment or offer.
It doens't matter if you say you are going to lease or pay cash we can sell you the car for what we can sell you the car for.
Obviously the sale price dictates the payment, i don't see the benefit in playing games.
I assure you the transaction will go smoother.
It usually isnt the sales man or woman that makes the transaction difficult. We have been conditioned to think car sales people are the boogey man. They are just normal people trying to make a living.
100% correct!!!!!!!!! The sales person works management much harder then a buyer every single time. Unless you have someone that comes in and just willing to buy at sticker price, the sales person would just as much rather have a quick 2 hr spot and move on to the next. Heck, if he can keep your price fairly reasonable where you will purchase additional services and warranties while in finance, they make out even better.
I remember a number of times at BMW when a buyer came in who did homework. Their offer was very reasonable and was a good deal for them and our dealership would always make that deal. I was upfront with the guy that I will have to be back and forth 2-3 times before getting this done. We laughed about it. I had to play the sales manager like crazy. Finally got the sales manager to agree to X dollars and he berated me for it and made the comment that if I was a better sales person or had balls, I would get more money. Little did the manager know that had a $1000 I was playing with...
Sales people do not hate leases they LOVE to do leases. If they do a good job and are professional and build a relationship they have an opportunity to sell you another car in 3 years, not 5+ years on a outright purchase or finance
Calculating lease is simple you need just 3 pieces of info.
1. The MSRP (the residual is calculated off MSRP
2. The residual %.
3.The money factor
With these 3 things you can fairly accurately calculate a lease by hand. Edmunds and other sites are good tools to show you the steps
Agree in all aspects...the problem is that 90% of buyers have no clue. They think if you can get an $x per month for car x at a certain purchase value then it applies to all purchase values. As a sales person, 100% correct, that is a repeat buyer in most cases.
Your last point is correct, Edmunds and many other sites make it easy. Not always the sales person's best friend unless the buyer realizes that this number is usually very much near the bottom line. Many people take their online research and then want to be much lower and blame the dealership.
Every time my wife goes shopping, she saves me money. She bought an $18,000 mattress for $3,500. She bought a $3,500 watch for $2,000. And a $4,500 washer and dryer for $3,200. (I asked if I could take some of the savings and go to A.C., no luck). The price of something is what someone is willing to pay for it.
I have been leasing cars for decades. What I do is take the best deal, add up the payments along with the residual and any fees such as security, turn in fee, etc. and compare it to the list price. In many cases, the the total cost is significantly lower than the MSRP. I will say that there are as many different leasing programs as dealers. In my experience, NISSAN has the best leases, by far.
Good luck.
I have been leasing cars for decades. What I do is take the best deal, add up the payments along with the residual and any fees such as security, turn in fee, etc. and compare it to the list price. In many cases, the the total cost is significantly lower than the MSRP. I will say that there are as many different leasing programs as dealers. In my experience, NISSAN has the best leases, by far.
Good luck.
A few years ago I was in the market and did the circuit; Honda, Toyota, Subaru, VW, Volvo. It was by and large a pleasant process with just the right salesmanship.
The two outliers were Volvo & Toyota.
The Volvo guy offered me a drink, asked about my family and small talk; when I told him my budget, very graciously ushered us over to the "pre-owned" section. Classy all the way through.
The Toyota dealership was everyone's stereotype headache, right down to the sales manager getting called down to try to "get you in that car today!" It was fascinating how out of touch it was with the discussion that had preceeded it by five minutes.
My brother in law used to sell used cars in NJ and he said you could tell who was ready to buy a car by the way they walked coming into the place. The amount of work he had to do to get a deal done was ridiculous given the compensation in many many cases.
Probably has something to do with a lease being 3 years vs most purchases via loan are 4+ yrs
Most of you are misunderstanding the question. The ad says my total lease payment (including all costs at signing) plus my purchase option at the end of the lease is 20% lower than the MSRP. It's the equivalent of negotiating 10% off and have a negative financing rate if I buy the car.
To the guys who have worked at dealerships:
My company participates in several auto manufacturer plans where you can buy a car at a fixed price without negotiations. The plan price is usually near the low end of what Edmunds or Consumer Reports identifies.
I thought the manufacturers offered incentives to dealer to keep them whole when selling cars on the plan price. But I had one dealer tell me they lose money selling cars on the plan price. They said the basically break even selling cars at MSRP, after counting their costs and overhead, and really only sell cars as a convenience to get people to bring the cars back for service.
Is there any truth to that? It seems that dealers put a hell of a lot of effort into selling cars if it is not a significant profit center for them.
My company participates in several auto manufacturer plans where you can buy a car at a fixed price without negotiations. The plan price is usually near the low end of what Edmunds or Consumer Reports identifies.
I thought the manufacturers offered incentives to dealer to keep them whole when selling cars on the plan price. But I had one dealer tell me they lose money selling cars on the plan price. They said the basically break even selling cars at MSRP, after counting their costs and overhead, and really only sell cars as a convenience to get people to bring the cars back for service.
Is there any truth to that? It seems that dealers put a hell of a lot of effort into selling cars if it is not a significant profit center for them.
It depends on the type of car. Ford pickup trucks and SUVs can have margins as much as $10K-$15K profit. Luxury cars also have good margins. Ford loses money on every Focus they sell, which is why they had been looking at moving the production of that vehicle to Mexico pre Trump. That car is treated as a loss leader, with the hope that buyers will ultimately trade up. Dealership margins are probably similar. Dealers do make the most profit on service.
The real money is made in service and the finance addons. As well as used cars.
Most dealerships would love fixed price. But the problem is, the consumer would be the biggest problem.
Most dealerships would love fixed price. But the problem is, the consumer would be the biggest problem.
Or you own a business and it's paid for by pretax dollars. Getting a new car every 3 years is fun too.
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A simple rule I live by.
If it appreciates "buy it"
If it depreciates "rent or lease it"
A good residual on a car is say 60%+/- a few points. At 60% that means I am only paying for 35% of a car after a modest discount of 5% (plus tax and fees). I can do two 3yr lease always be under warranty and only pay for 70% of 1 new car. If I buy I am out of warranty at some point I own the car with its bad carfax and any other issues that may arise.
Sign me up for a lease all day long.
Number one pointer is that you should not even tell them you're considering a lease until AFTER you've negotiated the sale price for the vehicle.
OK, this makes sense...wait to negotiate trade in until after so they don't build in the loss to pad their numbers. What I don't understand is what does negotiating the sale price before mentioning lease have to do with anything? How is one tied in to the other?
How come we can never find out the true cost of a car. The dealers give you the same line of BS that you are getting the car below invoice meanwhile they are getting kickbacks from the manufacturer. You think someone would have leaked this info out. Its loke a secret society.
Agree of a purchase price first, then talk about leasing at that purchase price. Know the residual value and money factor being used and be prepared to do the math yourself.
Don’t tell them how much you want to pay monthly.
Don’t tell them how much you want to pay monthly.
The lease is based off the capitalized cost of the vehicle. Which is the sale price of it. That price is ALWAYS negotiable.
https://www.leaseguide.com/glossary/capitalized-cost/
Dealers want you to focus on monthly payments, partly because that's often what people leasing are thinking about, but mostly because it allows dealers flexibility in how they derive other lease terms in order to reap larger profits. They don't want you to realize that the cap cost is negotiable.
Some dealers will also try to add in stuff to the cap cost that is also somewhat negotiable (delivery fees, prep fees, extended warranties) and so forth. To cut through all that crap, first negotiate like you're buying the car, which is more straightforward. Ensure that you have a quote for the price out the door. Then come back and say you want to lease it and when they show you a cap cost that's significantly higher than your negotiated sale price, call them on it.
If you have any suspicions that they're screwing with you, tell them you'll think about it and go talk with some other dealers to verify you're getting a fair deal. The dealer has the right to make a profit; but not the right to rape you.
This is actually a really good site to find out everything you need to know. I'd never heard of it before today.
https://www.leaseguide.com/
https://www.leaseguide.com/