i just did some calcs...they must have used a money factor of .0035 which is about 8.4% interest. Paying MSRP of 33600 with a residual of 41% and 5% sales tax that comes to $752/month.

It truly is shocking that they could expect someone to pay that, but at least now i figured out the calculations.

-Steve

 

I dont think that they are out of line (or at least not by much).

Since you did not give us your credit score, MSRP, buy price, etc. I cannot say for certain...

However if you were to try LeaseCompare (boardsponsor) their system works up a 2004 lancer Evo, (I guesed MSRP $35K and buy at $35K), 730 FICO, 39 mo, 12K yr, $12.8 residual, 0.0018 MF; at $742 (for my zip code).

Keep in mind that what you are paying for is the "value" of the car that you USE andf that is why ofter leasing cheaper cars is just as expensive as a more expensive car... Basically you are paying for $22K of car use no matter what car it is.

 

... an example is an '04 MB E320 (48.8 K MSRP) buy at $48K, 12K miles / year, 39 months, residual at $25.4K, MF = 0.0018, payment is around $750 mo...
Used about $23K of the car value... compared to my example of an EVO using about $22K of the car value.
Want to be really shocked? Try looking at mo. lease payments for really fast depreciating american cars.... simple (cheap) $30K car worth $8K at 39 mo. lease end... guess what same mid $700 mo payments

the moral of this story???

Lease a nicer car

 

thanks, i am very familiar with how leases work. My credit score is higher than that btw. The MSRP is about 33,600. I was going to pay about 29000.

They are not that off in that the individual numbers are somewhat reasonable. A 41% residual is heard of, it's just pretty low. Likewise a .0035 money factor isn't unheard of, it's just also not good. All these factors create a monthly payment that is completely unheard of. Consider that a $70,000 BMW 745i BMW can be leased for basically the same amount with just $2500 down. Or how about 36 month financing at 2.9% APR works out to just a bit more than they want to lease the car. The bottom line is it is just WAY WAY too much and they will never lease a single one for anywhere near that price.

-Steve

 

Ha... I got my car on a 36 month lease for 1500 a month...

 

That's why you walk in w/ an internet quote from a dealer or you make one up


The internet has become an unbelievable tool for car buyers

 

41% residual is terrible. That's why your payments suck.

On cars like the 7 series, there are many lease incentives, which is why the payments are competitive.

A friend of mine pays $3000 month to least his Turbo Cab, so proportionally the number sounds about right.

Even a BMW M3 costs just under 1000/mo. on a 36 month lease!

 

Hamann - your friend is getting ripped off. It's asinine to pay that much in a lease. He's the type the dealers are drooling to find. Walks in, says 'I want this car, how much are payments? $3000/month, okay, where do I sign?'

My E500 with a sticker of 62k for 36 months, 12000 miles/year, no money down, just over $600/month. My '01 Boxster S, same terms, $465/month. It's all in the deal you strike up, but I have to say I've looked at my cars lately and I wouldn't be able to touch those terms anymore - leases are terrible now! Hopefully that will change when mine are up and I'm moving into a TT or GT2 lease.

 

I'm sure if you put down a few grand? Dunno 3k or so? Then you'd pay like $480 per month or something.... Just try again, obviously something isn't quite right...

 

Absolutely do NOT put any money down! Doing that makes no financial sense other than to benefit the dealer or lease company. You pay down the cost without adding value to the residual, just to keep payments down, but you end up paying far more in the end because you just add what you put down to what your payments were and figure in interest spent over the time of the lease.

Do NOT PUT MONEY DOWN ON A LEASE!

 

on top of what teutonictrio just said above, putting down money makes hardly a dent. for example, for every $1000 you put down on an average 36 month lease, it only lowers the payment by $20-$25/per thousand put down....waste of money.

 

exactly - it's just a way for the dealers/lease companies to win. They ask you what you want your payment to be (total fricking bull****) and then give you the terms, which require you to put down a big chunk and you don't have a chance to bargain money factor. Getting a lease payment in your head and telling them what it is might as well be the same as giving them access to your bank account and letting them write themselves a check every month.

 

i have been a math and numbers guy my whole life so a dealer is not gonna be able to pull a fast one on me. Before i went to the dealership i decided on the number i wanted...at that point it was up to them to get there. I expected them to come back at around 500/month which i was going to negotiate down to around 450 by hammering the price down to invoice and making them make up some on the money factor and residual. When they were 70% over i knew it was a no-go.

The bottom line really is that you can't lease a car from a ****ty manufacturer like Mitsubishi no matter how good the car is. They just don't keep their value and Mitsu can't afford to offer good incentives. Like i told the salesman, they make his job way too hard.

Oh yeah, money down on a lease really is one of the bigger rip-offs on the planet.

-Steve

 

NEVER negotiate a deal around the payment you are looking for.....that is a sure way to get ripped off! negotiate the selling price of the car and then work on the money factor. YES, money factor! everything is negotiable and there is a "buy rate" that the dealership buys it for and then the marked up rate that they make their money on. of course, no one is in business NOT to make money, but the question is "how much"! the "buy rate" also goes for APR rates when financing a car.....there is a buy rate the dealer pays and then the marked up rate they charge you. FYI!!!

 

that is not good advice. if you understand all the numbers then often negotiating the payment is your best tool. Often the Sales Managers that are dealing with these things are not the smartest people on earth. It's much easier to get them to take $50 off your payment than to take a couple grand off the selling price.

The bottom line is that assuming you have already decided on your term and not putting any money down, there are 3 variables: selling price, residual, and money factor. They are all equally effective measures for reducing your costs as long as you know exactly what you're talking about.