dungdori

my initial condition is

36 months
less than 10000 miles per year
5000 down payment
8.25% sales tax in CA

I don't know much about lease.So I have some questions.
1. Does my down payment include an acquisition cost?
2. If I don't want to buy 8 at the end of lease, what residual value is possible?
3. Money factor is totally depending on my credit?
4. What should I deal for good deal besides these?

Thanks.

zoom_gator

Take a look at this thread for leasing information ...

To answer your other questions:
1. An acquisition cost is negotiable. If you pay an acquisition cost, it simply increases the price of the car by that amount (in other words, it increases your negotiated price).
2. The dealer will tell you the residual, either as a percentage of MSRP (e.g., 58%), or an actual dollar figure.
3. Yes.
4. Negotiate the "purchase price" on your lease. Don't negotiate a payment. Use the formula in the other thread mentioned above to calculate the lease payment BEFORE you go to the dealer.

Another recent thread mentioned a $2,500 (?) lease incentive that Mazda is offering. Regardless of the amount, negotiate a purchase price first, then deduct the lease incentive that Mazda is offering.

Good luck!

ZG

dungdori

Thanks for good information.

I hope to know how much residual value you guys have negotiated for lease in these days.
And can I negotiate with less than 10k mile/year? (e.g 8k)

Thanks.

mycroft007

I leased an '04 RX last weekend so I can tell you a couple of things.

Residual value is 42%. That's what Mazda uses to calculate it.

Acquisition cost was $475.

There was a $2500 dealer incentive.

I got 15,000 miles a year. 12,000 was just way too low for a car I commute in. I can't imagine 8000. You only going to drive it to church on Sunday? Remember you have to pay 15 cents a mile over your limit when you turn it in. (You get 10 cents a mile back on unused miles BTW)

My lease is for 48 months.

Any down payment you make goes to reduce your capital cost, ie the amount you are paying during the lease. Its kind of like making payments early. I was going to make a big down payment and reduce my monthly payment, but didn't in the end. Remember when you turn it back in that equity is gone.

I'm no expert, but I did just go through it. If you want to know actual numbers drop me an email and I'll talk to you. I don't want to post my car payment online.

Edmund's guide to leasing

zoom_gator

Good information mycroft007!

Remeber that the residual is dependent on a couple of things:
1. Lease term
2. Mileage allowance
3. Leasing company

The longer the lease and/or the greater the mileage allowance, the lower the residual will be. Think of it this way: the longer you own a car and/or the more miles you put on it, the less it is worth.

Send me a message and I'll send you a simple Excel spreadsheet where you can plug in the numbers and see how it affects your payment.

ZG

Air Force RX8

I will never lease again simply because of the restrictions and the fact that most companies try to screw you at every turn. My parents had to park their car for 7 months due to mileage concerns. Thus, they never lease anymore. I had the dealer take my car at the end of a lease and was told you are done, then 4 months later I received a bill for tires, interior wear, and really bogus crap to the tune of $2600. I told them where they could stick their bill and had a lawyer call and threaten legal action. Needless to say a letter came saying sorry we had the wrong VIN. Right! The benefits do not outweigh the costs for me anymore. Initially I leased because the payments were lower than financing, but the cost at termination are just way too steep for me to justify these days.

zoom_gator

IMHO, that's why most people lease in the first place -- because the "payments" are low. (Either that, or you're wealthy enough to be able to get a new car every couple of years, so there's no point to owning.) Needless to say, we quickly forget that these "payments" are actually a long-term rental, sometimes with an option to buy.

I leased two cars, and I don't see myself leasing in the near term, mostly because of my long commute to work. It all depends on your situation, of course.

My goal in responding to the points in this thread are to make sure that if you are indeed interested in leasing, you get the best possible deal because you know how it works (and you won't fall for the "how much do you want to pay a month?" line).

Good luck to all ...

ZG

Mario

Here are some additional benefits to leasing not mentioned:
- you can write off part of the lease payment as business expense
- you only pay tax on the depreciating costs (not a big amount in this case)

Downside is you can't trick out your car. As far as the mileage thing, you can always try to sell the car yourself before the lease runs out. But that's IF the residual is at or lower than market value AND the leasing company allows this.

RUmble

What's the bad thing to look out for about that line?

I've been considering the lease over the buy for the rx8 even though I really want the rx8 for life, just because the payments are over $100 lower a month (according to Edmunds estimates, and the lease payment estimate I got from a dealer).

Maybe I should just really save up and just buy the car.

zoom_gator

IMHO, you need to be aware of two things: how to negotiate a "good" deal, and what you can afford. I think that dealers always throw out the "how much do you want to pay per month" line to determine how much they can take you for. If you understand how a loan and a lease work, you can do the math at home, determine if it fits in to your budget, and if so, go to the dealer armed with that knowledge and make your purchase/lease. Understanding how interest rates, down payments, incentives, etc., affect your loan/lease payment is critical (in my opinion).

I am in no way against leasing (I drive too many miles per year), and I have leased in the past.

Leasing or purchasing a car is quite a large investment of time and money -- I just want to help out my fellow enthusiasts!

ZG