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  #13  
Old 02-26-2016, 03:06 PM
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Re: Curious: What numbers to use on lease trade-ins?

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Originally Posted by Blkfenders View Post
If you trade, the purchase price quoted has nothing to do with the actual trade value of your car.
No doubt about that. It still has a significant impact to any future deal.

Quote:
Originally Posted by Blkfenders View Post
Your $41K purchase price is your number from Chrysler Capital. The dealer doesn't care at all about that, he is only looking at what he could sell your car for, and how much profit he wants for his trouble.
This is also true - but when you exchange vehicles, what you GET for it from the dealer is only half of the story. It also matters what you OWE, right?

It might not matter to the dealer, but it certainly matters to me..

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Originally Posted by Blkfenders View Post
I don't mean to come off as a jack wagon, but you are not coming out ahead with "equity" on a lease. Ever.
Well, other members on this forum made a different experience.

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Originally Posted by Blkfenders View Post
The dealer may spin it that you have equity, but he's just moving numbers around to make you feel better. He might show you more for your trade, but he's giving you less discount on the new vehicle.
The discount on my next vehicle - just like on my current one - is not negotiable. I'll be getting (at least) 1% below invoice through Thread Lightly. probably 2% since that's what I got before. There is absolutely zero room for the dealer to play games on that end. Through that program, they aren't even allowed to add artificial fees etc.

Quote:
Originally Posted by Blkfenders View Post
Leases are rarely a good financial move for the consumer, if you're speaking strictly in terms of actual cost. Leases are usually an instrument to get you into a car that is nicer than you can afford, or want to pay for on a monthly basis. You'd be further ahead in your equity dilemma if you would have purchased the car in the beginning and financed it for 5 years. If you were to sell / trade at 36 mos. and subtract your gain from your original expense, you would most likely see an amortized cost of less than the $782/mo. that you've been paying.
Most people who lease are looking for the "nicer car / less $$ per month" magic bullet....but cannot tolerate the higher monthly payment if they did a straight finance purchase of the same vehicle.
Once again, I have to disagree. I don't keep my vehicles for more than 3 years and leasing is just perfect for that. Has absolutely nothing to do with affordability. In fact, I'm currently only paying 1.35% interest which isn't bad...

Quote:
Originally Posted by Blkfenders View Post
In the end, trying to figure out what trade in number to use is a waste of energy. The only way to know is to start shopping it around to a few dealers and see what they are willing to offer.
I don't understand what you're trying to say. The number on my print-out (and in fact, what this thread is all about) has absolutely NOTHING to do with 'what the dealer is willing to offer'. The number on the printout is coming from Chrysler Capital and represents what needs to be payed to them to obtain ownership - either by me (incl. tax) or by the dealer through a trade-in (no tax).

If you are walking into a dealership to purchase or lease a new vehicle, you have to have your ducks in a row (or in other words, know the numbers).

Stating that it wouldn't matter to know what your pay-off is is a somewhat strange approach to get a good deal.

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  #14  
Old 02-26-2016, 03:08 PM
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Re: Curious: What numbers to use on lease trade-ins?

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So your lease is for 36 months? What's your mileage allowance?

My Overland out the door was $50,xxx. That includes tax and max care. My payment is $790. So your payment is not bad at all.
12k miles/year, 39 months. No max care.
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Old 02-26-2016, 03:12 PM
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Re: Curious: What numbers to use on lease trade-ins?

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Originally Posted by petey2133 View Post
Your lease numbers are offensive lol

Did you say you have 16 payments remaining or paid 16 payments ? I can't go back now to look on phone.
I've made 16 payments now - so 23 left.

A few months after I leased, you could basically get a 24-month lease on my vehicle for the same rate as my 39-month lease.

I only put $500 down.
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Old 02-26-2016, 03:25 PM
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Re: Curious: What numbers to use on lease trade-ins?

Run a spreadsheet...

I'll use my car as an example, I just bought '16 Overland Hemi. MSRP $54920. I buy at EP price, $49900 - 1000 rebate so 48900


Now if I finance for 72 mos with $0 down, sales tax 7%, interest rate 1.4%. OTD price is $52323.00 the monthly payment is $756/mo.

At 36 mos. the payoff is $25168. If the car is worth 50% of msrp at 3 years (??? who knows) the residual value is $27485.

The equity at 36 mos is $27485 - $25168 = $2317

The amortized cost would be $52323 - $27485 = $24838/36 or $690/mo.

Much cheaper than a lease per month. Obviously there is some fluidity to my figures, especially the residual value. But you can see the illustration.... No? The residual value is the crap shoot. If it's better than 50% you stand to do much better, if it's worse then.... but the dealer is always going to be conservative when giving residual values on a lease, so chances are great that you're going to be much better with financing than leasing in the long run.
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Old 02-26-2016, 04:48 PM
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Re: Curious: What numbers to use on lease trade-ins?

Quote:
Originally Posted by Blkfenders View Post
Run a spreadsheet...

I'll use my car as an example, I just bought '16 Overland Hemi. MSRP $54920. I buy at EP price, $49900 - 1000 rebate so 48900


Now if I finance for 72 mos with $0 down, sales tax 7%, interest rate 1.4%. OTD price is $52323.00 the monthly payment is $756/mo.

At 36 mos. the payoff is $25168. If the car is worth 50% of msrp at 3 years (??? who knows) the residual value is $27485.

The equity at 36 mos is $27485 - $25168 = $2317

The amortized cost would be $52323 - $27485 = $24838/36 or $690/mo.

Much cheaper than a lease per month. Obviously there is some fluidity to my figures, especially the residual value. But you can see the illustration.... No? The residual value is the crap shoot. If it's better than 50% you stand to do much better, if it's worse then.... but the dealer is always going to be conservative when giving residual values on a lease, so chances are great that you're going to be much better with financing than leasing in the long run.



Nice detailed write up.

In a scenario like mine, the truck was almost $51,000. I would not have gotten close to $8500 off if I did it on a standard 72 month loan. The lease incentives minus my 1% under cost generated an option for me to keep it for a little longer than others if I planned to buy it out but at the same time have a lesser payment. I will never be without a car payment on at least 1 car in my stable at a time.

So for me my best option was to lease it and for the amount after the lease buy it if I like it.




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Old 02-26-2016, 04:56 PM
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Re: Curious: What numbers to use on lease trade-ins?

Quote:
Originally Posted by Blkfenders View Post
Run a spreadsheet...

I'll use my car as an example, I just bought '16 Overland Hemi. MSRP $54920. I buy at EP price, $49900 - 1000 rebate so 48900


Now if I finance for 72 mos with $0 down, sales tax 7%, interest rate 1.4%. OTD price is $52323.00 the monthly payment is $756/mo.

At 36 mos. the payoff is $25168. If the car is worth 50% of msrp at 3 years (??? who knows) the residual value is $27485.

The equity at 36 mos is $27485 - $25168 = $2317

The amortized cost would be $52323 - $27485 = $24838/36 or $690/mo.

Much cheaper than a lease per month. Obviously there is some fluidity to my figures, especially the residual value. But you can see the illustration.... No? The residual value is the crap shoot. If it's better than 50% you stand to do much better, if it's worse then.... but the dealer is always going to be conservative when giving residual values on a lease, so chances are great that you're going to be much better with financing than leasing in the long run.

Just to add some thoughts on leasing vs buying the Grand Cherokee...

I posted this in the other thread so I've just copied it here to explain another way, financially to look at leasing. I've always leased. And had equity when I wanted out of 3/5 leases. I recently leased a 2015 Altitude.

Well, at my credit union (assuming the rates don't drastically change in the next 3 years) a "new car loan" is considered any loan on a vehicle less than 3 years old. The current rates are 1.79% all the way to 72 months. So if I would have financed up front, my payment would have been approximately $606.21 per month with zero down. This is with a negotiated sale price of $500 below invoice, plus incentives ($2000). And assuming roughly 10% for drive off (taxes, initial registration, etc.). MSRP $41,625. Negotiated sale of $39,194.



Total out of pocket payment for the car in that scenario is $606.21 x 72 = $43,647.12



With the route that I took, same negotiated sale price. Same MSRP. The interest on the lease was essentially 0% at a MF of 0.00002. The residual is 49%, so a little more than half of the sticker price will be paid for through the lease.



Negotiated sale price less incentives ($3500 for the lease), plus fees (first month, sales tax, doc fee, registration, etc.) comes out to an adjusted cap cost of $36,922.46 with zero out of pocket. Monthly payment is $460.21 plus tax of 8.225% in Fresno CA, so $498.06 total payment including tax. I will have to make 35 monthly payments because the first was taken care of with the rebates. 35 x 498.06 = $17,432.10



Residual is $20,396.25. Assuming the rates don't change, and the same 10% for taxes and fees on that loan with zero down, plus the $350 purchase option fee, the new 3 year loan in 2018 will be for $22,785.88. That's a monthly payment of $650.53. For a total cost of 650.53 x 36 = $23,419.08



$17,432.10 + $23,419.08 = $40,851.18 for the Lease for 3, finance for 3.





$43,647.12 - $40,851.18 = $2,795.94 better. So, unless there's something that I did WAYYYY wrong, I think this was the better move. Sorry for the long explanation but hopefully it helps others. And if I'm wrong about something, let me know so I can edit the numbers on here
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Old 02-26-2016, 05:01 PM
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Re: Curious: What numbers to use on lease trade-ins?

Also, the dealers have absolutely zero control on the residual values for leases. That is something that the banks control. The banks also set the baseline money factor. Dealerships are legally allowed to bump up the money factor a limited amount to pad their profit. However, that's never an issue if you know what you're doing.
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Old 02-26-2016, 11:35 PM
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Re: Curious: What numbers to use on lease trade-ins?

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So, unless there's something that I did WAYYYY wrong, I think this was the better move.
Thanks for your numbers - They look good to me and basically confirm my theory that there is no 'it's always better to....'-scenario.

Leasing itself is not better or worse than financing - it's just different. What's better for you depends on what your plans are and what's currently offered.

Although I'm a huge fan of leasing, I still wouldn't claim it's always the best way to go. Look at the Audi Q7: The lease is at about $1,300/month right now on a fully loaded one - so if you want one right now, there's basically no point in leasing (unless you need it for tax purposes).

I just wanted to make sure that I knew what I'm dealing with when trading in my vehicle. This tax-question on my lease-sheet is just a great example where you can be ripped off by a dealer if you haven't made your homework and don't know the facts.

Let's say I would take this print-out to a dealer to trade in today and I wouldn't have a clue when the tax applies and when not. What would keep the dealer from using the $45K as pay-off instead of the correct $42K? probably nothing if I didn't knew in advance that the tax doesn't apply.


Quote:
Originally Posted by adthebadstud View Post
And had equity when I wanted out of 3/5 leases. I recently leased a 2015 Altitude.
Well, there we go. So there can be equity in a lease...
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Old 02-27-2016, 06:49 AM
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Re: Curious: What numbers to use on lease trade-ins?

"Let's say I would take this print-out to a dealer to trade in today and I wouldn't have a clue when the tax applies and when not. What would keep the dealer from using the $45K as pay-off instead of the correct $42K? probably nothing if I didn't knew in advance that the tax doesn't apply."

Excellent post, however I believe in this specific scenario it's more of a legal issue when state tax is involved but then again some states charge full tax some charge residual tax and some no tax on a lease so it gets even more complicated.



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Old 02-27-2016, 09:43 AM
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Whats "verizon" pricing?
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Old 02-27-2016, 01:05 PM
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Re: Curious: What numbers to use on lease trade-ins?

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Whats "verizon" pricing?

Chrysler preferred pricing. Under invoice. Similar to what people get with X plan through ford.

I get a discount on Ford, GM, Nissan, Chrysler and a $500 on BMW lol


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Old 03-07-2016, 11:18 AM
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Re: Curious: What numbers to use on lease trade-ins?

In regards to lease buyout numbers - trading in or buying out the lease a few months early- my dealer told me that their buyout number would be higher than my buyout number. This is a lease via Chrysler Capitol (CC).


I've got my buyout number from CC, however the dealer says that theirs will be higher and that CC bases the dealer buyout number on "current market value". They say that it will certainly be higher than my predetermined and locked in buyout price, especially considering that I only have 12K miles on my '14.


CC did confirm that the dealer buyout will be different, but I would have assumed it would be close to if not lower than mine. Can anyone confirm if what the dealer claims is in fact true?
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