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Discussion Starter #1
Has anyone heard from their local dealers on the residuals on a lease? Standard 3 yr 12K miles per year. Thanks.

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stein
 

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Lexus usually ha a residual value of approximately 60% at the end of 3-year lease...If that helps at all
 

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Residuals will be announced just prior to vehicle arrival...I will post a "typical" lease scanario when I get the residuals...that way everyone can see how the car leases out. ( my guess is around 425.00 per month) We'll see..
 

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$425 a month sounds quite low but if that's the case then I'm sure the IS300 buyers (on lease) will be VERY HAPPY...
Eric...
 

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Is that w/ no $ down?
Originally posted by ISBlain:
Residuals will be announced just prior to vehicle arrival...I will post a "typical" lease scanario when I get the residuals...that way everyone can see how the car leases out. ( my guess is around 425.00 per month) We'll see..
 

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425 does seem low but oh well i am not in finance, i was told by finance that either the residuals are going to be really high because it is a 2001 sold in 2000 and lower money factors combining for lower payments, or since it is an all new model that l.f.s. will be conservative on the residual and the money factor will be higher meaning higher payments. should know by wednesday
 

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I talked to a friend here in Cincinnati who is a leasing broker. The price he can get is $33K loaded, 15K mi, $0 down, $20,800 residual and $625 a month for 3 years. Kind of steep!
 

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Todd, RUN from that broker. His numbers DO NOT ADD UP. There are hidden fees in those numbers and probably an interest rate well over 10%. Perhaps, though, your friend made a mistake in his calculations. BTW, how is he so sure that he can shave $2K off the sticker price before the car has debuted?
 

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Lease calculations:

35K start, 5,000 down, 10% interest, 3 years equals about 465 a month.

35k, 0 down, 10% interest, 3 years equals about 625 monthly.

Above numbers are straight from my HP and do not include fees.
 

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Well, 10% interest and I forgot to add in sales tax. That's why I came out at $563 a month. But I have a feeling a 36 month lease will not typically run at $625/month for the IS. If it does what's the point? Just finance it for 5 years at 7.5% with no money down for $675 a month. Just two more years of payments reduces your cashflow by $50 a month yet you own the car.
 

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The finance guy that i talked to said that for a three year lease it will be about 7k down and 459 month. It is a large down payment because lexus financial service will only allow me that much a month (debt to eqity ratio). Does this sound right? 23,524 total for three years. comes out to 653 month with nothing down!
 

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Damm I think we all got it wrong.

well let's see this now.

monthly Lease fee ={( Purchase price- [MSRP x Residual %] then plus 1.5% cap costs)* Money factor> / months}

so example
MSRP = $34.5K
Purchase price = $33.5K
Residual is based on average cars in this price range of
1 Year = 67% 2Years = 62% 3 Years = 60% ect
The your money factor is an average about 7~9% ( most people that want this car have good credit ratings )

so in a 3 year situation ={( $33.5- [ $34.5 x .60]+517 )* 7.5%(*3)> / 36}= $432

Now that is if you pay for the Reg and other upfront costs and add ons.

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'00 Civic Si
'99 BMW M3

[This message has been edited by BatuKing (edited June 12, 2000).]
 

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Just a note:

Lease payment is calculated as follows:

Base Depreciation Payment + Monthly Interest Payment = Total Monthly Payment (NO Tax Included, it will vary by state)

Example with a 60% residual and 8.04% interest ( 0.0804)

Base Depreciation Payment formula is:

(Sale Price - Residual Value)
---------------------------- = Deprec. Pay
Term

Monthly Interest Formula is:

(Sale Price + Residual)
----------------------- x APR (ex 0.0804)
2
------------------------------------------
12

Depreciation is simply the difference between what the car is worth now and at the end, divide by the term and that is your base monthly depreciation payment.

Basically, the interest formula is as follows, you add the selling price to residual and divide by two to arrive at the average daily balance, then multiply that by your yearly percentage rate (in decimal, NOT percentage form), that will give you your yearly interest, then divide by 12 to arrive at monthly interest payment. For a car that lists and sells for $34,253 with a residual of $20,551.80 (i.e. 60%)with an interest rate of 8.04% (0.0804), your payment would come to:
$380.61 Base Depreciation
+$183.59 Monthly Interest Payment
=$564.20 Total Monthly Payment
(NO TAXES INCLUDED)

The shorthand formula for the interest calculation is:

(Sale Price + Residual) x money factor

The money factor is the apr in decimal form divided by 24 (using your 9th grade algebraic formula's to get the fractions out of the equation) 8.04% translates to a money factor of .00335 (0.0804/24), if you do the formula either way, the payment comes out the same, the money factor is just a whole lot shorter. The thing to remember is that you are being charged interest on the whole value of the vehicle being leased ($34,253) not just the depreciation ($13702), because the bank must write the dealer a check for the full amount of the car, the bank is then out $34k and are going to charge interest on the lost opportunity, so if you lease or finance a car for 3 years at the same interest rate, you will pay more interest on the lease because the average daily balance on the lease is higher than on the loan because you are amortizing the lease to only $20,551 and the loan to $0. However, you will be paying about 2x the payment on the loan. On a lease you are trading higher interest (in actual $$ value) for greater cash flow (lower payments)....

Just my $0.02

dave
 

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also, always get quotes with no money down, if you want to put money down to lower your payment, that's great, but if you figure a lease with a big chunk of money down, you are defeating one of the major benefits of a lease (Low cash out of pocket) Cash is king and is served better in your bank or investment account than in a car, and if anyone ever trys to talk you into a 60 month lease, just walk away, No one, (that is NO ONE) is ever happy in a 60 month lease, let alone a 60 month lease with a large cap cost reduction, even a 4 year is sketchy, in that the additional maintenance costs in that 4th year may eat into the difference in payment with the 3 year lease and may end up costing you more in the long run. My calculations put the IS at low to mid $500's with $0 down for a 36-39 month lease, for every $1000 you put down on a 36-39 month lease, you will lower your payment approx $30....also, hopefully, any lease you sign has GAP insurance, and if you roll your IS down a hill taking that exit ramp a little to sharp for your 17" wheels and total the vehicle, GAP insurance guarantees you will not owe any money to walk away from that vehicle (i.e. you owe the bank $34,000 but the insurance check is for $31,000, GAP insurance pays the difference) however, if you put a large down payment, there is no guarantee you will get any money back, you will only get money back if you have put down enough money to obtain 'equity' in the car, and then you will still be out a bit of cash...

regards,

dave
 

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nahanchi - that is exactly what my dealer told me when I leased my RX300 (39months/50K miles). Put as little down as possible and invest any additional money you could have put down. Glad to have the explanation of what they meant.
 

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well I talked to my bank and they quoted me the following figures with $1000 down (which pays for cap cost and reg.)

24 Months = $545
36 Months = $460
48 Months = $425

these figures inc Monthly Sales Tax.
and at 10K Miles per year. (I never trade in a car at the end of a lease so who cares about miles)
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'00 Civic Si
'99 BMW M3

[This message has been edited by BatuKing (edited June 13, 2000).]
 

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Yup You can get Lease figures from banks well credit unions.

Mine is Navy Federal Credit Union, they give out the highest residual values (since residuals are determined my credit results)
they are the same rate even if you have a BK.


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'00 Civic Si
'99 BMW M3
 

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Ok, I'm sorry but I'm new to this. So if you were going to put yourself into a new IS....would you go straight to your credit union? Or is it all done from the dealership? I'm guess I'm just asking how the process works.

Thank you.

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