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Leasing a vehicle
Posted on 2/15/10 at 6:47 pm
Posted on 2/15/10 at 6:47 pm
Need information: can u nego. the overall price u pay, pros, cons
Posted on 2/15/10 at 8:29 pm to cecelia
Don't you watch Suze Orman... NEVER lease a car!!!
Posted on 2/15/10 at 9:20 pm to cecelia
One good thing about leasing cars, or so I observed while watching the Real Housewives of Orange County..
When the bank forecloses and takes all your assets, they won't take away your two late model high-end Mercedes Benzes... because they're leased and you have no equity in them.
When the bank forecloses and takes all your assets, they won't take away your two late model high-end Mercedes Benzes... because they're leased and you have no equity in them.
Posted on 2/15/10 at 10:09 pm to cecelia
quote:
Need information: can u nego. the overall price u pay, pros, cons
The selling price to the leasing company is called the Capitalized Value or Gross Cap Cost.
You can reduce the monthly payments by reducing the cap cost or putting cash down. This is called cap cost reduction.
The selling price is the gross cap cost, and the higher the gross cap cost, the higher your monthly payment.
You must negotiate a lower selling price on a lease, just like you would if you are buying the car.
A large cap cost reduction (down payment) hides a bad lease. For example, a BMW ad lists fees and down payments totaling $5289.00. On the BMW ad, they divert your attention to the low monthly payment of $275.00, but let’s add up how much the entire lease is costing us. You must amortize the $5289.00 down into the 30 months of the lease. This means your effective average monthly payments during the 30 month lease will be $275.00 + $5289.00 / 30 = $451.00. They mislead you into thinking your monthly payments are only $275.00, which is right, but it’s actually costing you $451.00 a month because you are only focused on the low monthly payment, ignoring what they did to you up front.
Money factor – A leasing term that expresses the cost of borrowing. To convert the money factor to a recognizable interest rate, multiply it by 24. For example, a money factor of .00345 x 24 = 8.28 % interest. The money factor is negotiable and consumers who lease a new car should look for a money factor close to the current interest rate charged for new car loans.
Residual value – The amount agreed upon to represent the value of the car at the end of a lease. The residual value affects the amount of your monthly payment. The higher the residual value, the less you will pay each month to lease your vehicle. Always know the residual value of the vehicle by looking it up so you can verify they are not quoting too low an amount.
Goals When Leasing a Vehicle
1. Get as low a capitalized value as possible.
2. Get as high a residual value (the value leasing companies estimated the car will be worth at lease end, expressed as % MSRP). The residual value affects the amount of your monthly payment. The higher the residual value, the less you will pay each month to lease your car.
3. Get as low a money factor (a number used to calculate finance charges (interest) for your monthly payment). To get the APR, multiply the money factor by 2,400. When converting money factor to APR, it should be at least be comparable to or lower than new car loan rates.
4. Pay $0 down, $0 security deposit, $0 bank fees, and $0 dealer fees!
This post was edited on 2/15/10 at 10:11 pm
Posted on 2/16/10 at 9:38 am to cecelia
If you own a business, maybe. If not.........NEVER LEASE....
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