Are these lease prices legit?

[sethgood]

I looked up your TC in Manheim. 11k is about right, and maybe even on the side of slightly generous for the end of the model year. $12,000 is too high IMO.

Residuals are not negotiable in a close-ended lease, which is what dealers offer. As you can see, fiddling with mileage allowance only makes $300 difference in residual after three years. In order to get an appreciably different residual, you will need to change the length of the lease or find an aftermarket bank on your own. Frankly, you do not sound like you are up to the task of finding an aftermarket bank on your own, which is fine. I know what I am doing and honestly would not bother for myself.

Someone who works for VW will need to chime in here, but I highly doubt that there is $60-$90 per month in rate being held back in a .00017 MF, which is about a market bank rate. I think you're just looking at the wrong car at the wrong time based on your financial goals.

How much longer do you have until the TC expires? Do you have a buyout option? I honestly would give some consideration to buying out the TC, especially if you live in a tax credit state, and try shopping again during sign and drive season. Or is this a situation where your need for a couple grand in cash is forcing you to make a car transaction?

[Justin14]

I looked up your TC in Manheim. 11k is about right, and maybe even on the side of slightly generous for the end of the model year. $12,000 is too high IMO.

* not sure if I mentioned this but they would not come off the msrp for lease negotiation. Wtf?
19975 down from 20350 but that's it.

Residuals are not negotiable in a close-ended lease, which is what dealers offer. As you can see, fiddling with mileage allowance only makes $300 difference in residual after three years. In order to get an appreciably different residual, you will need to change the length of the lease or find an aftermarket bank on your own. Frankly, you do not sound like you are up to the task of finding an aftermarket bank on your own, which is fine. I know what I am doing and honestly would not bother for myself.

Someone who works for VW will need to chime in here, but I highly doubt that there is $60-$90 per month in rate being held back in a .00017 MF, which is about a market bank rate. I think you're just looking at the wrong car at the wrong time based on your financial goals.

How much longer do you have until the TC expires? Do you have a buyout option? I honestly would give some consideration to buying out the TC, especially if you live in a tax credit state, and try shopping again during sign and drive season. Or is this a situation where your need for a couple grand in cash is forcing you to make a car transaction?

Does that money factor sound fair?

As for the tc, I've made my last lease payment on it and I can go to Toyota and sign it over to my name any day now. Or just trade it. Same difference as far as I can gather.

I really want to find a '11 Golf but there simply aren't any. I could do 0% financing for 5 yrs and put 4k down but even that is a little more than I'd like to pay every month. I don't know what to do. Maybe I'll just drive the tc for a while and sell it on my own for more money. Then wait for a golf to come up for sale.

Thanks for the continued advice.

[sethgood]

Does that money factor sound fair?

As for the tc, I've made my last lease payment on it and I can go to Toyota and sign it over to my name any day now. Or just trade it. Same difference as far as I can gather.

I really want to find a '11 Golf but there simply aren't any. I could do 0% financing for 5 yrs and put 4k down but even that is a little more than I'd like to pay every month. I don't know what to do. Maybe I'll just drive the tc for a while and sell it on my own for more money. Then wait for a golf to come up for sale.

Thanks for the continued advice.

Again, I am speaking from the standpoint of non-VW experience, but here's my common-sense thought:

As to the written sales price, considering the small profit margin in a golf and the dealer throwing you a couple hundred dollars more than maybe they should for the TC, I don't really think you are getting taken; that being said everyone can beat everyone by a few hundred dollars, so there might be a little more room, but you should be thinking hundreds of dollars and maybe less than $10-15 in monthly payment shift.

To turn a money factor into an equivalent interest rate, multiply by 2400. In this case, 2400 X .00017 approximates to a 4% APR. That's about 1.5% higher than a high tier new car loan from a credit union. Fair? Maybe, but I don't think that's anything special. But...if you plug a really, really low MF into a lease calculator based on everything else, I think you'll find there is only about $5 per month at play here. A dealer would be very unlikely to let you walk over that amount, especially considering that the bank flat fee would pay more to the dealer than the entire interest reserve for the lease, so I conclude that you are not getting taken advantage of from the MF standpoint either, even if the dealer is not passing buy rate along to you, which it sounds like they in fact are.

So even if the dealer do a total blow-out in every aspect, I still don't think you'd be in the ballpark, and it would be lose-lose.

[haunted reality]

Seems like the lease deals on Passats and Jettas are better, I don't think the Golf leases necessarily great. That's just my uneducated opinion.

[Justin14]

Contacted dealer with my final and fair offer. We'll see.

Got kinda PISSED because they wouldnt negotiate the price on the car with a lease. Said it had to be MSRP. Logged on to their website today and the price on my car had dropped $500.

GolVIDRIVER, please pm me back. Cant pm you, your inbox is full.

Might owe a couple of you a beer after all the advice.

[GolfVIDriver]

Contacted dealer with my final and fair offer. We'll see.

Got kinda PISSED because they wouldnt negotiate the price on the car with a lease. Said it had to be MSRP. Logged on to their website today and the price on my car had dropped $500.

GolVIDRIVER, please pm me back. Cant pm you, your inbox is full.

Might owe a couple of you a beer after all the advice.

I have been staying out of this, because quite honestly, you got really bad advice early and I didn't want to start a pissing contest.

The price most definitely IS negotiatiable. If the car is on the lot, in my opinion, the selling price is invoice price minus any and all applicable incentives. So you should be looking to see if there is any VCI lease cash for lessees. I am betting there might be given that we're at the end of the model year. I believe there is approximately $1000 in profit margin between MSRP and Invoice, so them giving you $300-something for a discount is not that great.

Once you have an agreement on sales price, then negotiate the trade. The trade should be whatever you are comfortable with. Sounds like $11,000 is your trade price. Remember, dealers will leverage the price based on the agreed selling price of the car....if they don't feel like they are making enough money on one, they will jack the other. So make sure you get the most amount for your trade, and the least amount for the new car.

So good..you nailed down the sale price, the MSRP on the new car, and the trade in price.

Now......I am going to be crystal clear here, and I apologize if I missed it, but: WHAT IS THE MONEY FACTOR, AND WHAT IS THE RESIDUAL??????!!!!!!

http://www.ridewithg.com/index.php/2...tes-july-2012/

Read that.

When you are done, read this:

http://townhall-talk.edmunds.com/direct/view/.f20961d

Specifically:

Volkswagen is currently providing a $750 cash incentive on leases of this car through VW Credit.

That means there is $750 laying on the hood that the dealer isn't telling you about. The price of the Golf is now invoice price, minus the $750 VW Credit's incentive, MINUS any other incentives.

Current buy rate lease money factor and residual value for a 36-month lease of a 2012 Golf 4-Dr with 12,000 miles per year are .00007 and 50%, respectively for consumers who qualify for its top credit tier.

The MSRP of a fairly stripped 2012 Golf 4-Dr with an automatic transmission is $20,565 and its dealer invoice price is $19,773. Let's say that you were able to negotiate a selling price of around $19,500. Using these numbers, I estimate that this car would have a zero down, pre-tax monthly payment of around $259.

Car_man
Host
Prices Paid: Buying & Leasing Experiences Forum

If you still aren't getting straight answers, join that forum and ask what the MF and Residuals are for a 2 door. I imagine they would be pretty close, so you might be able to use those numbers in your calculations.

Once you have the MF and Residual, its a plug n chug equation. If you don't have those numbers, THERE IS NO WAY OF KNOWING IF YOU ARE GETTING A GOOD DEAL, since you cannot reverse engineer the numbers without them.

If you simply shopped on payment, as suggested above, any number of details or variables can be messed with to provide that payment...such as mileage allowance, term, etc.

Now, lets dissect the worksheet....



Okay, well, I can see $138 that they are getting back under Adjusted Price. Do not pay for those items. What is the MSRP? Or did he put that under selling price?

Additionally, he is not giving you $12,000, it looks like he is giving you $10,500.

Whatever they give you for your trade will be a capitalized cost reduction in the form of the difference between your trade payoff and the trade allowance. So if they give you $11,000, and the payoff is really $7400, then your capitalized cost reduction (effectively, a downpayment) will be $3600. Make sure you factor this in.

Doc fee is about right.

Tax should be (if you are like Illinois) total sales tax minus the difference in tax due to your trade. To get that, take VW's selling price, minus the trade allowance, and multiply the result by your local tax rate. That should give you the real number.

[Justin14]

Golfivdriver, I'm trying to respond as fast as I can because i don't know if you'll be back on anytime soon.

MF was on page 1 I think it was 0.0017 residual about $10,100

edit:

That worksheet was from early in the game. They later updated the trade to 11,000 then, as long as I leased, 12, 200 in lease credit.

Today the deal on the table is they give me $2800 check, I make the first payment myself, and the residual was 50% so around $10,100 I'm told. In that scenario I put down $2k and its around $250-260/mo.

$7400 tc payoff
$2k down
$2800 check written to me
$10,100 residual
3 yrs 36k miles
$249-260/mo
$19300 price ( I think thsts what he based it off of. Didnt tell me)

[GolfVIDriver]

You DO NOT PUT MONEY DOWN ON A LEASE!!!!

They should be refunding your equity, and all you should be putting down are taxes and fees. No cap cost reduction.

[GolfVIDriver]

You know what? Check your PM...I am sending you my phone number,

[GolfVIDriver]

Good talking to you today. Hopefully I gave you the info you needed (and proof that you got some bad advice in simply shopping payment, which that one idiot told you to do).

Don't hesitat to call me once you get all the numbers, and we will crunch them together.

To give you a good baseline, my 2010 Golf 2 door 5 speed had Bluetooth, CWP, and moonroof. I don't remember exact numbers, but my MSRP was mid $20,XXX, and selling price was $19,XXX. Final lease numbers were $296 a month, 3 years, 15 K a year. MF was something ridiculous like .00001 and MF was 50% for the 3 year 15K a year term, and I capped taxes and fees into the lease. Since IL taxes the full purchase price, and my taxes are nearly 8%, my payment is about $30 a month higher than the rest of the country.

Because I leased correctly, I had equity in the car at the 1.5 year point, and traded the car in on my GTI.

[Maxvla]

I haven't leased before, but I thought you never traded a car in on a lease.

[EVANGELIONHD]

You DO NOT PUT MONEY DOWN ON A LEASE!!!!



They should be refunding your equity, and all you should be putting down are taxes and fees. No cap cost reduction.

I'm thinking... no money down towards the %of the amount to pay?

Its ok to pay the dealer fees, docs, and registration charges?

Or just have everything put in the full amount to pay for the lease ?

Sent from my DROID2 using Tapatalk

[GolfVIDriver]

I'm thinking... no money down towards the %of the amount to pay?

Its ok to pay the dealer fees, docs, and registration charges?

Or just have everything put in the full amount to pay for the lease ?

Sent from my DROID2 using Tapatalk

You can pay your taxes and fees up front. Anything else (a downpayment, or "capitalized cost reduction") is a no no. Leases finance the depreciation ONLY, which is set by the manufacturer. Because of that, you have a defined amount of money to pay off, and putting a downpayment on that simply buys down your payment...it doesn't lower your payoff.

[gsprobe]

I appreciate your attempts at helping, but we will disagree forever. I see you complicting something that can be made simple. Step 1, configure the lease with nothing ( no taxes, no fees... Nothing ) out of your pocket. All dealerships can do this in aprox 5 minutes. THEN, and only then, proceed to step 2 which is where you negotiate a trade in value. EASY.

[bkn05]

I appreciate your attempts at helping, but we will disagree forever. I see you complicting something that can be made simple. Step 1, configure the lease with nothing ( no taxes, no fees... Nothing ) out of your pocket. All dealerships can do this in aprox 5 minutes. THEN, and only then, proceed to step 2 which is where you negotiate a trade in value. EASY.

I agree with golfivdriver 1000%. I worked for a dealer for some time and directly with leases and there was alot of incorrect information given unfortunately I was not a member at that time (I love the Noob title) but non the less you are on the right path. My random suggestion minus everything else is wait until the last day of the month. I have seen cars basically given away and GMs bench over so many times trying to catch up one monthly goal the last day that I almost bought new a few times while working there! Good luck and keep up posted.

[Justin14]

Good talking to you today. Hopefully I gave you the info you needed (and proof that you got some bad advice in simply shopping payment, which that one idiot told you to do).

Don't hesitat to call me once you get all the numbers, and we will crunch them together.

To give you a good baseline, my 2010 Golf 2 door 5 speed had Bluetooth, CWP, and moonroof. I don't remember exact numbers, but my MSRP was mid $20,XXX, and selling price was $19,XXX. Final lease numbers were $296 a month, 3 years, 15 K a year. MF was something ridiculous like .00001 and MF was 50% for the 3 year 15K a year term, and I capped taxes and fees into the lease. Since IL taxes the full purchase price, and my taxes are nearly 8%, my payment is about $30 a month higher than the rest of the country.

Because I leased correctly, I had equity in the car at the 1.5 year point, and traded the car in on my GTI.

I came in at $284/mo w/aggressive negotiations. Thanks man.

I will say this, coming into a dealership talking money factors and residuals, the dealer knows you know your stuff, especially when you negotiate MF's. I think, the more you seem to know, the less BS they throw at you.

ANyway, thanks.

[GolfVIDriver]

I came in at $284/mo w/aggressive negotiations. Thanks man.

I will say this, coming into a dealership talking money factors and residuals, the dealer knows you know your stuff, especially when you negotiate MF's. I think, the more you seem to know, the less BS they throw at you.

ANyway, thanks.

Gladly. Funny how knowing the right thing to say sets their ass straight. That sounds like a solid deal as long as you are getting a check back for your equity in the tC. Put the check in the bank and use it to draw against to lower your payments.

gsprobe:

So far I have educated someone on leasing practice, defined the variables that he needed to know, researched what his tC was worth, researched MFs and Residuals for him, and even have him a baseline monthly payment to shoot for.

The only thing you have done is say ignore all that, and it is EASY.

What, exactly, do you bring to this conversation that is of ANY substance whatsoever?

At this point, either quote him a monthly payment based on invoice price, taking into account all factors, and showing your obvious insider information, or STFU.

I think you're full of **** and you can't come up with real numbers. In fact, I would go so far as to say you might be working at a dealer.

[gsprobe]

wow- just wow.

I am not shocked by your wasted words and energy, but I am a bit puzzled at the aggression. You made an absolute mountain out of a molehill.

This buyer needs to know 1 thing. The final ultimate monthly payment. Its a rental payment.

If Dealer "X" quotes $290 per month taking and paying off his trade with nothing out of his pocket. Dealer "Y" quotes $300 for same deal, and Dealer "Z" quotes $280, which one ya gonna take?

Enlighten me please, who cares about the rest?

[gsprobe]

Still crickets huh? Let me make it easier for everybody who doesn't have hours to waste pondering the nuances of a rental payment.

Now remember we are only discussing leasing- not a purchase. NO MONEY DOWN.

Leasing is like simple math ( not like algebra where you must show your work ) and the final answer is the only goal.

Use the following equation with 3 variables and multiple answers: 2x + 3y + 4z = $290. If the answer (or payment...) is $290, why bother worrying about the variables. Shop the answer (THE PAYMENT).

Dealers may have varying doc fees, sales prices, trade in values, bank rates, add-ons...etc but the buyer's conern is not how they got to the payment. Seller X has a $500 doc fee, seller Y has $50, Seller Z is $800. Seller X lowballs trades, Seller Z lowballs them even worse Seller Y made a mistake and went too high.

When leasing (renting) Let the payment do ALL the talking.

[sethgood]

You're both right.

Golf has basically advocated a remedial approach to car leasing that you might take if you have invested a lot of time with a particular dealer, run credit, appraised trade, etc. - as here. The problem with Golf's approach generally is that it takes away the chance for a dealership to make the first offer. I would occasionally make massive profits off the Golf-types who assemble all information from assorted internet sources and come into my business essentially telling me how to run it by demanding X, Y and Z. As applied here, I also think Golf failed to grasp the big picture regarding what was in play - maybe $10-15/month. If $15 is a big deal to you, you have no business visiting a car dealership in the first place, and in any event making a personal issue over such a trivial amount should be avoided.

Probe's approach - true zero down and payment quote all inclusive - is a great "fresh" approach to obtaining lease quotations, and one that I use myself, despite availability of manheim login, knowing everyone at all the dealerships in town, access to factory employee pricing for virtually all makes and models, and having been party to literally thousands of car sales in my day.

[GolfVIDriver]

You're both right.

Golf has basically advocated a remedial approach to car leasing that you might take if you have invested a lot of time with a particular dealer, run credit, appraised trade, etc. - as here. The problem with Golf's approach generally is that it takes away the chance for a dealership to make the first offer. I would occasionally make massive profits off the Golf-types who assemble all information from assorted internet sources and come into my business essentially telling me how to run it by demanding X, Y and Z. As applied here, I also think Golf failed to grasp the big picture regarding what was in play - maybe $10-15/month. If $15 is a big deal to you, you have no business visiting a car dealership in the first place, and in any event making a personal issue over such a trivial amount should be avoided.

Probe's approach - true zero down and payment quote all inclusive - is a great "fresh" approach to obtaining lease quotations, and one that I use myself, despite availability of manheim login, knowing everyone at all the dealerships in town, access to factory employee pricing for virtually all makes and models, and having been party to literally thousands of car sales in my day.

Alright, so let me get this straight -

Both of you work at dealers, and are both advocating only shopping the payment, and not doing any research whatsoever.

I just tried that approach on a Chevy Cruze. Called the dealer, and told him what I wanted. First pencil was $450 a month for 3 years.

TOld him I wanted $210 a month. He said no problem. For 4 years. He didn't mention that part on the phone.

$15 a month on a lease is kind of a big deal when $100 a month is sometimes all it takes to make the difference between a Chevy and a BMW.

Bottom line: Car dealers lie. There is ZERO trust to be had when leasing, and the more info you know ahead of time, the better your deal will be.

I am not going to even bother with proby, but sethgood - I would love to hear how you would negotiate a lease, from start to finish. What research do you do, and how do you know you are getting a good deal?

[sethgood]

Alright, so let me get this straight -

Both of you work at dealers, and are both advocating only shopping the payment, and not doing any research whatsoever.

I just tried that approach on a Chevy Cruze. Called the dealer, and told him what I wanted. First pencil was $450 a month for 3 years.

TOld him I wanted $210 a month. He said no problem. For 4 years. He didn't mention that part on the phone.

$15 a month on a lease is kind of a big deal when $100 a month is sometimes all it takes to make the difference between a Chevy and a BMW.

Bottom line: Car dealers lie. There is ZERO trust to be had when leasing, and the more info you know ahead of time, the better your deal will be.

I am not going to even bother with proby, but sethgood - I would love to hear how you would negotiate a lease, from start to finish. What research do you do, and how do you know you are getting a good deal?

Well, first thing, I have been out of the car business for several years.

I have leased three cars that I did not "sell to myself."

One car was a national lease at 1% of MSRP without cap cost reduction. I did not negotiate.

Another time I called up a buddy who worked at a mega-chain of dealerships everyone has heard of, had him obtain an employee price quote from their Toyota outlet, and then went to my local Toyota store and made them match it.

I also once obtained a supplier price code from Nissan corporate, did the algebra to derive the MF from internet quotes, and had the selling dealership apply the supplier price dealer cash to invoice price, resulting in a lease at buy rate and $1400 below invoice on a G35.

[GolfVIDriver]

Well, first thing, I have been out of the car business for several years.

I have leased three cars that I did not "sell to myself."

One car was a national lease at 1% of MSRP without cap cost reduction. I did not negotiate.

Another time I called up a buddy who worked at a mega-chain of dealerships everyone has heard of, had him obtain an employee price quote from their Toyota outlet, and then went to my local Toyota store and made them match it.

I also once obtained a supplier price code from Nissan corporate, did the algebra to derive the MF from internet quotes, and had the selling dealership apply the supplier price dealer cash to invoice price, resulting in a lease at buy rate and $1400 below invoice on a G35.

In each of these cases, you used your career connections and intuition.

That won't work for a normal person who is trying to learn how to lease correctly. So I am not sure what you are advocating here.