Re: Leasing Questions..
- Cap Cost (the agreed upon cost of vehicle)
- Money Factor (multiple this by 2,400 to find the equivalent APR to get an idea of if it's good/bad)
- Residual (what the car will be worth at lease-end)
The last three items are areas the dealer can get you. So be careful. After negotiating the price of the vehicle (3% below invoice is decent) ask what the money factor would be with top-tier credit (right now it's .00017 through Chrysler). Also ask what the residual is (not sure what it is with 24mo leases but should be in the 58-62% range I'd imagine).
The higher the residual, the lower your payment.
If the agreed upon sale price of a $50,000 Jeep is $47,000 and the residual is 62%, you're payment would be as follows on a 24 month lease:
Residual: 62% of MSRP 50,000 = $31,000
Cap Cost ($47,000) - Residual Value ($31,000) = $16,000
This means you'll pay $16,000 over those 24 months. $16,000 / 24 = $666 per month.
I didn't include the money factor on that payment, or sales tax. So that payment would be more like $700/mo.
They'll try to hide the money factor and residual value from you while negotiating the lease. Never tell them what you want your payment to be. Just ask for those 4 numbers above to be clearly outlined for you and go from there.
2015 JGC High Altitude / 5.7L V8 / HK Audio / Billet Silver // Took Delivery 11/13/15
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