I have a friend who wants to lease, but I have always bought my cars. I know how to do my homework and come up with the price I should pay when I am purchasing.
he went to check out a car, and says “the payment was too high”
I asked “What payment did you find out before going?”
“Oh, I never looked… how do I do that?”
so, here I am asking… how do you determine what a payment should be?
He is looking at leasing a 2007 Lexus IS350. 37000 MSRP. 5000 down. 48 months.
Anyone help me out?
They quoted him $630/month. That sounds really high for a lease.
well you dont get to choose what the buy out price is. a car with a higher buy out will cost less per month, and a car with a low buy out will cost more. if $630/month is too high, he needs to look at something else.
So a $37000 car is only worth $1760 after 4 years? I know I’m not adding in sales tax, but still, this sounds like a total ripoff. I mean hell, you might as well buy the fucking thing if you’re already paying for 95% of the original cost.
EDIT:
Just ran the numbers. 37000 + 8.75% sales tax - 5000 cash financed at 3.9% for 60 months = 647/month. So yeah, that lease officially sucks balls.
You need to determine the value of the vehicle at the end of the lease (some quoting websites will provide this) and subtract that from the retail price and then subtract the down payment.
Take that value and divide by the term of the lease.
630 * 48 = $30,240 + $5,000 = $35,240
So either it is worth nothing at the end of 48 or a high rate. How many miles a year?
tell your friend to look at a different car. i dont think there is anything he can do to get the payment under $600/mo unless he puts down 10k or only drives it 2k miles a year.
Ha… i really don’t know what I’m doing, I’m just a software engineer who writes banking software, so numbers really jump out at me. Your numbers in particular jumped out and said, “Holy shit, someone’s getting an ass raping by the Lexus dealer”.
im not an expert, but ive leased cars before. and yeah $630 is extremely insane. what baldy didnt mention was that the guy looking for this car is 21 years old. they gave him a jacked price.
EVERYTHING DEPENDS on the company/model… Some cars lease out great others dont, usually the high performance end of every model doesnt. He can probly lease an is250 with $3000 down for under $400/month. Just like neons, you could lease a base neon ($17,000 msrp) for about $160/month but and SRT-4 (msrp $20,000) would be about $420/month. The company doesnt want that car back in 3yrs because they figure it was beat on.
Also if his credit is shit that would cost the payment to jump up as well, or if he is trading in a vehicle that he is upside down on… they would have to roll the remainder of his present payment into the lexus raisin the payments. The other day i had a customer intrested in leasing a tiburon gt limited (msrp $22,000) for about $430/month, and we are also leasing sonata’s (msrp $20,000) for $199/month wtf??? All depends on Companies deals…
