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  #13  
Old 03-08-2015, 09:38 AM
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Re: Help me understand lease prices

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Originally Posted by perpster View Post
Very helpful explanation -- thanks. One question: where did the number 2400 come from here: "if they give you the money factor like .00035 multiply it by 2400 to get the actual rate"?
It's part of a mathematical formula developed to determine what the interest rate is based on the lease money factor.

https://www.alphaleasing.com/resourc...oneyFactor.asp

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  #14  
Old 03-08-2015, 11:15 AM
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Re: Help me understand lease prices

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Originally Posted by MDBones View Post
It's part of a mathematical formula developed to determine what the interest rate is based on the lease money factor.

https://www.alphaleasing.com/resourc...oneyFactor.asp
Please pardon my ignorance, but is 2400 a constant, no matter the # of months or any other variable?
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  #15  
Old 03-08-2015, 12:40 PM
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Re: Help me understand lease prices

Quote:
Originally Posted by perpster View Post
Please pardon my ignorance, but is 2400 a constant, no matter the # of months or any other variable?
Yes it converts the money factor decimal into an interest rate we can all understand. When you hear .000213 (made up money factor number) you think wow that's low but it actually factors out to .511% (still low) as an example.
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Old 03-08-2015, 06:25 PM
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Re: Help me understand lease prices

Do leases even make sense?


I bought my 2014 Limited for $37,600.00 (not including Taxes or Doc Fees).
Used it for 18 months and 27,500 miles.


I got $32K Back.


And I got a better price than you show for the same Overland w/ Adv Tech $44,500.00 (not including Tax or Doc Fees).


It cost be $311.00/month to own it for 18 months. And no penalty for going over Mile limit (18K miles /year).


And I only had to pay taxes on the difference.


Am I missing something or was I just exceptionally lucky this time.


I might just keep trading at 18 months if I can keep getting deals like this
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  #17  
Old 03-08-2015, 06:26 PM
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Re: Help me understand lease prices

Is it customary to buy the vehicle at its residual value once the lease is up? I'm not certain that's the idea behind leasing anyway but does one get a good deal at buying at residual value? Because my thought is if you turn it in once lease is up the dealer would sell it used and jack up the price on their used lot anyway, correct? So in that instance, would one be getting a good deal buying at residual value if one is so inclined?

Personally, I don't think I'd go this route because I could just lease another brand new one probably at the same monthly payment anyway. Just asking because I also leased a 2015 GC Overland for only two years and pretty certain I will be ready for the 2017 by that time and will most definitely lease that as well.
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  #18  
Old 03-08-2015, 07:36 PM
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Re: Help me understand lease prices

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Originally Posted by Sleestak View Post
Is it customary to buy the vehicle at its residual value once the lease is up? I'm not certain that's the idea behind leasing anyway but does one get a good deal at buying at residual value? Because my thought is if you turn it in once lease is up the dealer would sell it used and jack up the price on their used lot anyway, correct? So in that instance, would one be getting a good deal buying at residual value if one is so inclined?
That totally depends on the individual deal and the residual used (and of course the actual value of your vehicle at lease end).

The current numbers on the Grand Cherokee seem to be quite conservative in regards to its residual - at least on my deal. This actually favors either buying at the end of the term OR trading it in early without being upside down.

And right now, leasing certainly makes sense because the interest-rate you will be paying on the lease is better than any rate you could get when you would finance it.

Now, to answer your question: Usually, the idea behind leasing is NOT to buy at lease-end. Leasing is suited for folks who want a new ride every 2-3 years and don't drive that much. If you drive 18k miles/year, don't even think about leasing..

And yes, dealers do jack up the sales-price on leas vehicles after they are turned in and make another profit - AND probably try to sell the potential buyer an additional extended warranty and new tires.

So all in all, it depends...there is simply no rule of thumb. If you like your vehicle, check what it's worth at the end of the lease and make a decision then. If you want a new one earlier, compare your early termination option by asking your dealer what he would pay for your ride and compare that to what you would have to pay to get out of the lease early.
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  #19  
Old 03-08-2015, 07:44 PM
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Re: Help me understand lease prices

Quote:
Originally Posted by mswlogo View Post
Do leases even make sense?


I bought my 2014 Limited for $37,600.00 (not including Taxes or Doc Fees).
Used it for 18 months and 27,500 miles.


I got $32K Back.


And I got a better price than you show for the same Overland w/ Adv Tech $44,500.00 (not including Tax or Doc Fees).


It cost be $311.00/month to own it for 18 months. And no penalty for going over Mile limit (18K miles /year).


And I only had to pay taxes on the difference.


Am I missing something or was I just exceptionally lucky this time.


I might just keep trading at 18 months if I can keep getting deals like this
Looking at when and how you traded, I'd say there wouldn't have been any significant difference between leasing and buying.

After all, how much you paid and what you got when you traded had nothing to do with your decision to either buy or lease. And if you would have leased for either 36 or 39 months, there wouldn't have been a mileage-penalty, either because at 27K miles, you would have been within the allowed mileage.

Now, if you would have kept the car longer at 18k miles/year, leasing - as I said before - wouldn't be your best option. You're simply driving too much...
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  #20  
Old 03-08-2015, 09:25 PM
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Re: Help me understand lease prices

Quote:
Originally Posted by GCOverland View Post
That totally depends on the individual deal and the residual used (and of course the actual value of your vehicle at lease end).

The current numbers on the Grand Cherokee seem to be quite conservative in regards to its residual - at least on my deal. This actually favors either buying at the end of the term OR trading it in early without being upside down.

And right now, leasing certainly makes sense because the interest-rate you will be paying on the lease is better than any rate you could get when you would finance it.

Now, to answer your question: Usually, the idea behind leasing is NOT to buy at lease-end. Leasing is suited for folks who want a new ride every 2-3 years and don't drive that much. If you drive 18k miles/year, don't even think about leasing..

And yes, dealers do jack up the sales-price on leas vehicles after they are turned in and make another profit - AND probably try to sell the potential buyer an additional extended warranty and new tires.

So all in all, it depends...there is simply no rule of thumb. If you like your vehicle, check what it's worth at the end of the lease and make a decision then. If you want a new one earlier, compare your early termination option by asking your dealer what he would pay for your ride and compare that to what you would have to pay to get out of the lease early.
What he said...

Leasing is always going to get you a lower monthly payment because again you're monthly payment is based on the depreciated value usually 1/3 to 1/2 the selling price of the car. So financing 13K (in my case for 3 years) is far less then $38k for 5. Granted I don't own the car in the end but I do get to roll in to the next car and get that brand new car smell every 3 years with no maintenance or out of warranty head aches. Leasing IS NOT for everyone. Buying a car that doesn't hold it's value could mean you will be upside down and not able to get out of it until it's almost paid off and by then your return could be nominal. New cars are never a good investment. If you're able to buy a car, drive it for 18 months with no money down, and get out of it with money in your pocket, then you my friend got a great deal. Rarely happens but if you bought it for a good price and it held it's value beyond it's buy back amount you can not complain.
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  #21  
Old 03-08-2015, 09:35 PM
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Re: Help me understand lease prices

Quote:
Originally Posted by mswlogo View Post
Do leases even make sense?


I bought my 2014 Limited for $37,600.00 (not including Taxes or Doc Fees).
Used it for 18 months and 27,500 miles.


I got $32K Back.


And I got a better price than you show for the same Overland w/ Adv Tech $44,500.00 (not including Tax or Doc Fees).


It cost be $311.00/month to own it for 18 months. And no penalty for going over Mile limit (18K miles /year).


And I only had to pay taxes on the difference.


Am I missing something or was I just exceptionally lucky this time.


I might just keep trading at 18 months if I can keep getting deals like this
Here is an example of equity in a lease similar to your situation with a loan.

I leased a 2007 Toyota 4 Runner Sport. At the end of my 36 month lease my buy out was 18K. Since it was a Toyota in great shape and in my local car market a good moving used car the dealer gave me 22K for it at trade in. So I drive the car for 3 years, turned it in and walked away with a check for 4k. The car held it's value beyond what Toyota thought it would be worth in 3 years. I kept it super clean and at the time those were hot trade ins. Doesn't happen all the time but out of 6-7 leases I've had only 2 ever had any real equity 2k+. Most of them I just turn in and use what little equity there is to get me in the next car. If I played my cards right each car has cost me nothing to get in to.

Doing the math if our current market holds true for the Jeeps and how popular the Altitudes are in my area I should be able to get out of this lease with a few bucks or at least move on to something else with 0.00 out of pocket in 30-36 months. (fingers crossed)
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  #22  
Old 03-09-2015, 12:40 PM
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Re: Help me understand lease prices

I'm curious what I should expect when I return my 2012 Focus.
I have driven just under 22,000 miles (35,300 km) where I'm allowed 40,000 miles (64,000 km) and 15 months left on a 48 month lease.
That's the good news.

The bad:
Two insurance claims for impact damage; $7,000 + $14,500.
These repairs appear on a Carproof report (think of it as a more detailed Carfax report).

Residual value on the lease paperwork indicates around $16,000, but when I had my car evaluated by a Jeep dealer, they said they evaluated it at $6,200.

Should I expect to be responsible for the reduced market value of the vehicle upon lease termination?
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  #23  
Old 03-09-2015, 03:25 PM
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Re: Help me understand lease prices

Quote:
Originally Posted by tiri View Post
I'm curious what I should expect when I return my 2012 Focus.
I have driven just under 22,000 miles (35,300 km) where I'm allowed 40,000 miles (64,000 km) and 15 months left on a 48 month lease.
That's the good news.

The bad:
Two insurance claims for impact damage; $7,000 + $14,500.
These repairs appear on a Carproof report (think of it as a more detailed Carfax report).

Residual value on the lease paperwork indicates around $16,000, but when I had my car evaluated by a Jeep dealer, they said they evaluated it at $6,200.

Should I expect to be responsible for the reduced market value of the vehicle upon lease termination?

Accidents happen and usually the lease company's only expectation is you return the car in acceptable good condition minus wear and tear, tires, dings, scratches, etc... In your case as long as the repairs put the car back to "stock" and it looks and drives normally it shouldn't matter that you had to have repairs done. Where it hurts you is when you're trying to trade it in. Some dealers do not want to touch a car that has been repaired or use that to low ball you. I've turned in repaired cars and they never said a thing. For example the bumper was repainted due to a collision, etc. If no one is willing to take it in trade you may just want to turn it in when your lease is done and walk away. There shouldn't be any monetary penalties as long as everything is in order.
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