$4000 vs $7000 ... ??
09-23-2006, 05:40 PM
#1
Burning Brakes
Thread Starter
$4000 vs $7000 ... ??
Sorry I'm so stupid, but my somewhat limited talents are in other areas ... not auto finance.
I have two dealers offering different discounts. One is $4000 off, the other is $7000 off. I know which is the better deal, but what is the REAL effective monthly payment difference in a 30 month lease?
I'd just use an arbitrary money factor (like .0025/.00315?), car stickers at $102K. I have no clue about the residual on a '07 C4S, or if that makes a difference.
I guess what I'd like to estimate is the difference in the monthly payments. Probably like .... ?? $70 ?? I dunno.
Reason I am asking is the dealers are 500 miles apart. The closer one is 4K the more distant is 7K. If it's only a few dollars, I'll stay closer to home.
Any help would be appreciated. And I don't want to get into a discussion about leasing vs buying. I have always leased my cars.
Thanx.
BAGGER
I have two dealers offering different discounts. One is $4000 off, the other is $7000 off. I know which is the better deal, but what is the REAL effective monthly payment difference in a 30 month lease?
I'd just use an arbitrary money factor (like .0025/.00315?), car stickers at $102K. I have no clue about the residual on a '07 C4S, or if that makes a difference.
I guess what I'd like to estimate is the difference in the monthly payments. Probably like .... ?? $70 ?? I dunno.
Reason I am asking is the dealers are 500 miles apart. The closer one is 4K the more distant is 7K. If it's only a few dollars, I'll stay closer to home.
Any help would be appreciated. And I don't want to get into a discussion about leasing vs buying. I have always leased my cars.
Thanx.
BAGGER
09-23-2006, 06:23 PM
#3
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All things being equal, I'd negotiate on the dealer closest to home to match the price and you'll buy the car today! If he doens't do it, say: I'll be heading to xxxxx town on Monday. If you change your mind let me know. Leave and see if they call if they don't, you probably don't want to buy from them anyway. Good luck. Swear, that's what I'd do.
09-23-2006, 11:33 PM
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You can use the following formula to calculate a lease payment:
(Capitalized Cost – Residual Value) / Term = Monthly Depreciation
(Capitalized Cost + Residual Value) X Money Factor = Monthly Interest
Monthly Depreciation + Monthly Interest = Base Monthly Payment
Here are recent Porsche MFs and resid for a 2007 C4S coupe (non-X51):
2007 911 Carrera 4 Coupe S
24 mo/15k mi – Residual Value 69% of MSRP – .00320 Base Money Factor Rate
36 mo/15k mi – Residual Value 60% of MSRP – .00320 Base Money Factor Rate
48 mo/15k mi – Residual Value 54% of MSRP – .00330 Base Money Factor Rate
60 mo/15k mi – Residual Value 47% of MSRP – .00330 Base Money Factor Rate
Add 2% to Residual Value for 12k mi/yr and 3% for 10k mi/yr on all terms
Good luck!
(Capitalized Cost – Residual Value) / Term = Monthly Depreciation
(Capitalized Cost + Residual Value) X Money Factor = Monthly Interest
Monthly Depreciation + Monthly Interest = Base Monthly Payment
Here are recent Porsche MFs and resid for a 2007 C4S coupe (non-X51):
2007 911 Carrera 4 Coupe S
24 mo/15k mi – Residual Value 69% of MSRP – .00320 Base Money Factor Rate
36 mo/15k mi – Residual Value 60% of MSRP – .00320 Base Money Factor Rate
48 mo/15k mi – Residual Value 54% of MSRP – .00330 Base Money Factor Rate
60 mo/15k mi – Residual Value 47% of MSRP – .00330 Base Money Factor Rate
Add 2% to Residual Value for 12k mi/yr and 3% for 10k mi/yr on all terms
Good luck!
09-24-2006, 01:19 AM
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No problem! Have to give props to Tarry Shebesta who tirelessly responds to similar inquiries on the RoadFly Financing/Leasing forum (I had recently asked for the MFs and residuals for 2007).
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09-24-2006, 04:58 AM
#8
Bagger- also keep in mind that even at same or similar cap. cost (=sale price of the car-- the amount upon which all terms of the lease are based), a lower lease payment by $100-$200 per month can often be realized based solely upon one dealer's greater willingness to go to bat for the lessee to find and offer the absolute best lease terms available at the time the car is delivered.
Same as with interest rates on a conventional car note, some dealers are more forthcoming than others about passing along the abs most favorable lease rates available to them. pm of a dealer I sent you who I'm certain would fall into the *forthcoming* category.
The dealers have affiliations with a half-dozen or more different leasing banks (in addition to Porsche Financial Serv). Each leasing bank sets their own terms, usually pretty similar for the same car, but sometimes there are 'specials' run by one bank or another that the dealer can offer if they do some checking.
For instance the last car I leased was my BMW M3 cab...two local dealers offered me the same discount, on a car with same specs in stock at both dealers.
Not remembering precise figures here, but after we agreed on out the door prices I requested #'s from both places for a 39-month lease; one dealer quoted me around 55% residual with money factor of .0025 through BMW Financial Services as their best available.
Dave Walter BMW was the dealer I ended up leasing from-- IIRC they found a Chase Bank lease offer on M3 with ridiculously high ~64% residual and a v. low .0017 money factor ( this was 3 yrs. ago... money factors won't be near that low now after 16 Fed Reserve interest hikes). I ended up with a $780 monthly with Chase instead of what would've been 900 or so through BMWFS, this on a $60K vehicle. Since I had no intent on purchasing the M3 at lease-end, the high residual with Chase was all in my favor by lowering my $ monthly nut.
It may be more hassle than it's worht but it is also possible to independently negotiate a lease with a bank of your choosing-- then they would buy at your price from the dealer directly....but usually the same banks offer better terms directly to the dealers. Sorry for the long post... a case of jet lag insomnia here after watching Notre Dame/Mich. State stunner.
Same as with interest rates on a conventional car note, some dealers are more forthcoming than others about passing along the abs most favorable lease rates available to them. pm of a dealer I sent you who I'm certain would fall into the *forthcoming* category.
The dealers have affiliations with a half-dozen or more different leasing banks (in addition to Porsche Financial Serv). Each leasing bank sets their own terms, usually pretty similar for the same car, but sometimes there are 'specials' run by one bank or another that the dealer can offer if they do some checking.
For instance the last car I leased was my BMW M3 cab...two local dealers offered me the same discount, on a car with same specs in stock at both dealers.
Not remembering precise figures here, but after we agreed on out the door prices I requested #'s from both places for a 39-month lease; one dealer quoted me around 55% residual with money factor of .0025 through BMW Financial Services as their best available.
Dave Walter BMW was the dealer I ended up leasing from-- IIRC they found a Chase Bank lease offer on M3 with ridiculously high ~64% residual and a v. low .0017 money factor ( this was 3 yrs. ago... money factors won't be near that low now after 16 Fed Reserve interest hikes). I ended up with a $780 monthly with Chase instead of what would've been 900 or so through BMWFS, this on a $60K vehicle. Since I had no intent on purchasing the M3 at lease-end, the high residual with Chase was all in my favor by lowering my $ monthly nut.
It may be more hassle than it's worht but it is also possible to independently negotiate a lease with a bank of your choosing-- then they would buy at your price from the dealer directly....but usually the same banks offer better terms directly to the dealers. Sorry for the long post... a case of jet lag insomnia here after watching Notre Dame/Mich. State stunner.
09-24-2006, 08:10 AM
#9
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Check out LeaseCompare.com. You enter your info and they give you 3 to 6 lease options from different lenders. You may see a big difference in residual values and the cost of money from lender to lender. I am leasing my '04 C2 and my wife's '05 CLK 320 Cab, each from a different Credit union, but did both of yhem though Lease Compare. I am not associated with Lease Compare in any way, just a satisfied customer.
09-24-2006, 10:29 AM
#11
Burning Brakes
Thread Starter
A BIG thanx again, folks. Wow ... !! I've been leasing cars for many years and did not know all of what is contained in this thread.
Yeah ... it's a lot to chew on. Fortunately, I do have some time before 'pen meets paper'. Things will change between now and then.
How often do the residual values and money factors change? Monthly? Quarterly? Reason I ask is ... making plans today may not be the same in March.
I suppose that the money factor/residual are not 'set' when you sign the papers, but when you pick up the car. Yes?
BAGGER
Yeah ... it's a lot to chew on. Fortunately, I do have some time before 'pen meets paper'. Things will change between now and then.
How often do the residual values and money factors change? Monthly? Quarterly? Reason I ask is ... making plans today may not be the same in March.
I suppose that the money factor/residual are not 'set' when you sign the papers, but when you pick up the car. Yes?
BAGGER
09-24-2006, 11:50 AM
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One dealer I spoke to said that he could "lock-in" rates etc. a month ahead of time -- but I don't know what other commitments this locks you into. Residuals go down over the course of each model year -- so the last residuals on the 2006 model year were 7% - 9% lower than the current ones.
You should also note that financing (lease and term) are profit centers for many dealerships. They often take the rates offered by the financial institutions (including Porsche Financial Services) and will mark-up the rate or money factor and take the spread as profit. So you can get two different rate quotes from two dealers using the same financial institution as one may be taking a spread (or more of a spread as the case may be) than the other. You should always ask the dealer (or the business manager guy who does the financing as the salespeople won't talk about it) if they are taking a spread, if so how much and try to negotiate ("dealer xyz across town was just going to pass along the base rate . . . .").
You should also note that financing (lease and term) are profit centers for many dealerships. They often take the rates offered by the financial institutions (including Porsche Financial Services) and will mark-up the rate or money factor and take the spread as profit. So you can get two different rate quotes from two dealers using the same financial institution as one may be taking a spread (or more of a spread as the case may be) than the other. You should always ask the dealer (or the business manager guy who does the financing as the salespeople won't talk about it) if they are taking a spread, if so how much and try to negotiate ("dealer xyz across town was just going to pass along the base rate . . . .").
