fast1

Also question all the fees on the contract. My GL450 has a $595 lease turn in fee and a $150 purchase fee if I choose to buy it! That's all negotiable if you pick up something else from the dealer but it's still a crack up.

And that's the biggest problem that I have with leases. There are so many hidden fees that can substantially add to the cost of leasing. I remember going to a BMW Dealer that adverised a zero down lease, but they still had various fees that required over $3K down when including taxes. Bottom line is that the bank and Dealer have a minimum profit number that they will not go below, and they will play with the various fees, money rates, and depreciation rates to ensure that they achieve that number.

Of course the last item to be concerned about is how much will you be charged when returning the car at the end of the lease. Most people that I know who leased had few problems with the fees at the end of the lease, but there was one guy who negotiated a "killer" lease deal on an 04 M3 who got hit hard when he returned the car. They charged him for two small dings in the door, very small scratches in the windshield, and four new tires. The tires were relatively new and only had about 10K miles on them, but they claimed that there was uneven tire wear and they had to be replaced. After lots of negotiation he was able to get many of the chaarges reduced, but the experience really soured him on leasing.

So before leasing it's best to ask around and find out how others feel about their leasing experience from a particular Dealer or bank.

Likemystoppie?

All leases have a Acquisition Fee and Disposition Fee; they're bank processing fee's; just like when you get a mortgage.

They are always disclosed on the contract; but sometimes the dealer will say they'll pay XX or YY- nonetheless those fees must be paid.

MB will waive your $595 dispo fee if you go into another MB Lease. FYI.

And what ever the money factor is, just multiply it by 2400 and it'll reveal the interest rate.

cgfen

[QUOTE=WAC;5141648]Edmunds has a good explanation of leasing.

There is one financially justifiable reason to lease and that is if the after tax costs of leasing are less than the after tax costs of owning. There are calculators on the web that can help you figure that out. Unfortunately, many people lease to lower their monthly payment which is not wise from a financial point of view because it doesn't make the vehicle more "affordable" it justs masks the true cost of driving the car over time.

The variables that matter in leasing are the 1. Money factor 2. Residual and 3. Cap cost.
<snip>

QUOTE]

Thank you
This is exaclty the type of info iwas looking for.
i'll do some research now.

cheers

Craig

NYNick

Here's my take; lease American, buy German/Japanese. They simply have better resale, and you make out better financially in the long run.

Red alert! My first (and only) Porsche lease, a 996, had a speedo/odometer that ran high which I discovered just before I turned it back in. The odometer was off 10%, meaning it recorded 10% higher mileage than actual. Bottom line, I got screwed out of about 4200 miles on my lease.

daddyscar

One more thing to keep in mind with the fees is that you avoid some if you trade-in or sell the car yourself. I've leased four cars and haven't had the experience of turning one in. The first lease I traded in for another lease at the same dealer. That second lease I got out of by selling the car to a private party. I'm leasing two cars now one of which is for my business. With a leased car I try to pick a car that holds their value a little better so that, without paying down cap cost significantly, I'm able to sell or trade the vehicle close to it's payoff amount two years into the lease. This is why for me, I'd never lease a 997. In the third year of the lease I can start looking for attractive deals instead of being forced into a decision at the end of the lease. My current two leased cars are the GL450 and civic hybrid. Even when you sell the car yourself, you can't avoid the wear and tear fees. The buyer will bargain down for things like door dings, high mileage, and worn tires.

surfer

Another important element to keep in mind is how much mileage you plan on putting on your car per year. If there's a chance you'll be exceeding the maximum mileage limit on your lease that's reason for concern. Speaking from my experience, I was offered a lease on a 08 c2s which stickered at 90 k for 5 k out the door (3 k cap cost and various other fees), 1440/month, 36 month lease, 10 K mile limit per year. Of interest was that the c2s has a lower residual after 36 months than the base carrera (63% vs 65%). This is with a money factor of .0036.

I instead chose to go with a 5 month old 2007 carrera s with 3 k miles on it. Original sticker was 93 K, I negotiated a price down to 76.8 k. I decided to finance this automobile over 60 months, put 3 K down, and am paying 1400/month fixed interest rate of 5% with tier 1 credit rating. I intend to keep this car after the loan is payed out. However, I am certain that if I decided to sell the car over 36 months, I could more than recoup my outstanding balance on the loan.

I take greater pleasure in "owning" vs "renting" my c2s and certainly am "babying" it more than I would a leased automobile.

For comparison, I was offered a new 2007 bmw m6 which stickered at 106 k for 3 k out the door, 1300/month, 24 month lease. that money factor was in the low .002s.

ds2k1

I would advise exactly the opposite of what NYNick says - do NOT lease an American car unless the lease is highly subsidized. The horrible residual values will equate to unreasonably high monthly payments. By way of example, some number of years ago we were looking to lease a car for my wife. We had just turned in a Jeep Grand Cherokee and were looking at either another one or a BMW X5. When we leased her prior Jeep, they were very optimistic about the car's residual value...it was the first year of a new body style and they estimated it would retain 60% of its value after 3 years, 36K miles. Well, they were waaaaay off and Jeep took a huge bath on all of their early leases...the cars weren't worth anything near what they estimated they would be. Consequently, when we looked to lease another, the residuals on a 3/36 were now down to 36%!!! Obviously, this led to a ridiculously high lease payment, since you're paying for estimated depreciation, plus interest. We ended up getting the X5 which, despite costing a good deal more than the Jeep, was almost $200 less per month to lease because of the high residual values of BMWs.

I have also leased a BMW 330i, and it was as painless as it gets. Again, because of sky-high residual values, the monthly payments were extremely reasonable. At the time, I think I put down $3K on a 3 year/45K lease on a $39K+ car and had monthly payments of about $420. When I turned it in, I was out of there in less than 5 mins without having to pay a dime. Also didn't have to pay anything on the Jeep when we returned that either, for what it's worth. I'm currently leasing my C2 and intend to keep leasing German cars going forward, unless their residuals take a nose-dive for some reason. German cars, and certain Japanese cars (Lexus, Toyota, Honda) are PERFECT for leases.

NYNick

Well, not to offend, but, for example, a 2005 330i with 45,000 miles on it is worth between $23-25,000 private party; plus the $18,000 you paid for the lease, and you're at $41-$43,000. $2-4,000 more than the price of the car, and you were restricted to 15k per year. Not much, but still financially better. It's exactly because the residual(or resale) is so high, that I prefer to buy German. Hold the car for another year or two, and the deal becomes even sweeter.
If you're going to track the car, I know plenty of guys who beat the living hell out of their LEASED Porsches. Maybe that's the best reason to lease right there!

daddyscar

I think this is the type of confusion that leads people to think leasing is bad. A high residual is a good thing. Regarding the feeling of owning the car, to me, I don't feel like I own the car unless I have a title with no loans or leases against it.

fast1

I don't feel like I own the car unless I have a title with no loans or leases against it.

Not to get into another finance versus cash debate, but that's why I like paying cash.

Likemystoppie?

SomeBODY- grab the "SEARCH" BUTTON!! F


Good Gawd this is gonna turn into a Lease Vs. Own Vs. what ever my opinion verses yours sorta thread...

LOL

Likemystoppie?

Craig-

What you need to know with leasing is: Sales Price/Money Factor/Term/ and resdiual value.

Sale price- the price you negotiated.
Money Factor- what's the interest rate?
Term? How this affects the residual value
Residual value- how this affects the overall payment.

Most dealers have a fully automated system where you can see multiple banks at the same time side by side.

Go with the payment/terms/rate/cashdown/ ect you feel most comfortable.

That's how you figure out if you gotta good deal.

Putt-Putt

Correct, high residual equals lower lease payments. Regarding the other point, leasing really brings out the sporty driver in you. No more panzy foot. That may be better than a baby'd car that's never stretched her legs.

mikestash

If you do go the lease route, the porsche sponsored finance rates and residual factors used to calculate leases are pretty bad. Not to mention additional fees. No affiliation, but I Know several folks who have used leasefax.com to lease a car and the rates were the best on the market.

dD/dt

You're both right, in a way. Getting a car with a higher residual value is good whether you're buying OR leasing. A lower residual value makes it worse either way. Part of the reason American car residual values are so low is that the leases and purchases are often heavily subsidized. I looked at a new F250 diesel a couple years ago. The sticker was $43k, invoice was about $36k, and I had gotten the salesman down to $33k without even really trying because (I discovered) there was an $8k cash-to-dealer incentive going on.