Goldenhue22

Is the residual a universal number for Mazda or does it differ depending on your location/dealer? The 53% residaul as well as the money factor # (.0029?)- should those #'s be the same at any dealer. My dealer hasn't gotten any cars in yet, but I asked him what the residual was and he said they aren't sure yet. Anyone have info?

dwynne

Typically the residual % is the same for everyone and can't be changed by the dealer. It is POSSIBLE that it might vary with the region of the country.

The money factor is another story. The dealer gets a "buy rate" - the lowest number he can use. If the finance department gets someone to sign up for a higher number then that is extra profit for the dealer. So a lot of big (chain owned) dealers routinely mark up the money factor (or interest on loans) to make money for the finance department.

USUALLY the finance arm of the car company will offer a better rate (slightly lower money factor) and a higher residual percentage. These "captive" lease usually beat anything you can get elsewhere.

You didn't say if you were looking at a 3 or 4 year lease and if you are looking at 12k or 15k per year , but you can plug your numbers in at http://www.leasecompare.com and see how they compare. It is showing me a mf of 0.00213 and a residual of 55% on a 3 year, 36k lease - 0.00192 and 49% on a 48/48 lease. I have done business with LeaseCompare in the past and they are great folks.

Dennis

Goldenhue22

Thanks for the info. I won't know if I want to go through them until the time that I sit down and discuss the contract when my car gets here. If I do decide to go with LeaseCompare, how long will I wait until the contract gets finalized, Mazda gets their money and I can drive off with my car?

dwynne

You can apply right online - I think there is a $50 credit app fee which only applies if you are approved. When you take out the lease the fee is discounted from your first payment. If you don't follow through with the lease after being approved then they keep the fee.

You negotiate the lowest price on the car (if you can get anything off), then basically LeaseCompare buys the car from the dealer at that price and leases it to you. I would guess depending on how busy they are, it would take 2-4 days max. You apply, they get the info on the car (dealer name, VIN, etc), overnight you a contract, you overnight it back, then they overnight a check to the dealership. All the overnight stuff is why they charge a fee

Before you sit down to talk to the dealer, re-check the LeaseCompare numbers - using your info (car price, cap cost reduction - if any, credit score, etc). Have the LeaseComare numbers in hand when you sit down. If they can't beat the deal, then you can always do LeaseCompare.

Remeber the LC numbers do not include tax - each state is different. Here (TN) the tax is charged on each months base lease rate. So I would take the LC monthly payment and add taxc to it to see my payment. Other states make you pay the tax up front, etc. You have to keep that in mind when comparing a dealers number VS a casual quote at LC. There is a section on their forum where they have details for the tax situation for most states. Basically, if the money factor is lower and/or the residual % is higher then you pay less. If you are comparing the one lease with a higher MF but higher residual then you have to calculate the payment.

I have used this online calc for years:

http://www.mjhb.com/lease/

and I have one I downloaded and installed in my Palm Pilot - so I can re-calc on the spot if I need to.

Another idea is to call around a bunch of Mazda dealers and ask for the finance department. Tell them you are looking to lease an RX-8 and ask what the money factor and residual % is for a 36 or 48 month lease. Big chain dealers may insist you come in, but a lot of dealers will give this info out readily. Normally, these are the ones that will offer you the "buy rate" - this is the number you need to know. If your Mazda dealer does not offer you this rate, then bring that up. They should be able to - but they may not want to.

Dennis

dwynne

I forgot to add - please post the lease numbers you get - the MF and the % so others will know these and be able to compare with what their dealer tells them.

I am toying with the idea of replacing my 330i daily driver with an RX-8 (I have not had a chance to test drive one) and if I do I will more than likely lease.

Thanks!
Dennis

Goldenhue22

Thanks for all the info.

I called the dealer today and got a lease quote. I also called LeaseCompare and got the following. Here is how they match up. BTW I'm in Illinois, northwest suburbs.

I want to do a 48 mo lease, since it will still be under warranty so I didn't bother with 36 or 39 mo leases...

Dealer:

$0 Down, 48 mo, 15K miles= $473/mo
$0 Down, 48 mo, 12K miles= $461/mo

$5000 Down, 48 mo, 15K miles= $361/mo
$5000 Down, 48 mo, 12K miles= $349/mo

The dealer gave me Interest approx 4%, MF of 0.00155 and residual of 49%. Isn't the residual a little low? I've heard 53% somewhere on this forum.

LeaseCompare:

$0 Down, 48 mo, 15K miles= $465/mo

$5000 Down, 48mo, 15K miles= $351

I'm not sure what residual/MF they are using. I'm gonna ask the dealer to match them. Although I'll probably go through the dealer anyways just because it's less hassle, although not monetarily beneficial. I'm leaning towards the $5000 down/15K miles. I figure $5K down will save me about $300 bucks in the end in interest. Anyone else have details they have gotten on leases? For this type of car isn't the residual low at 49%? Is there a way to negotiate that or is it up to the dealers?

dwynne

Like I mentioned - the residual is set by the bank/financial institution and can't be negotiated. This is what they think the car will be worth at lease end - if they raise this price too much (and the car does not hold value) then they lose money when you turn the car end.

49% is OK for a 4 year, the > 50% number is probably for a 3yr lease.

Is the dealer giving you Mazda financial numbers or from some bank? I was surprised that the Mazda numbers were worse than LeaseCompare - but I suppose they are not too motivated to make great leases on a car that is a hot seller.

Most folks don't put any money down on a lease, but I have before. When I sold my SVT and leased the BMW, I had the extra money (profit from the sale) so I sunk it into the BMW as a cap cost reduction and got a cheap payment.

What is your cap cost (negotiated price) ? You having to pay more than MSRP and what options?

You might want to think about traditional financing. PeopleFIrst is doing 4.75% for 72 months. This would be $511.66/mo on $32k. If you paid down $5k and borrowed $27k it would be $431.71. You might be upside down for a while with this long a time - but getting out of a lease early would be a lot worse. At the end of 48 months the car would likely we worth more than what you owed on it.

If you do a lease, make sure you get enough miles - paying for them at lease end is a lot more expensive then paying for them as you go.

Dennis

eccles

Don't forget that the warranty expires after 4 years or 50,000 miles, whichever comes first. On a 15k/yr lease, you'll be at 45,000 miles after 3 years, and 60,000 after 4. That's why I opted for a 3-year term.

dwynne

Does Mazda offer an inexpensive factory backed extended warranty?

I think a 7 yr 70k $0 deductible for the S2K was $700 or so. I didn't need the 100k one since it is not a daily driver, but it is available for a little more.

It is amazing to me that more car makers don't offer these - they would rather all the money go to the aftermarket warranties (which most folks don't trust as much). Of course, maybe they figure you will just buy a new car when the warranty runs out.

I know for a fact having a transferable extended warranty can really increase the resale value and ease the sale - to a private party.

Dennis

grogiefrog

The first new car that I bought I leased. The sales manager did his fancy talking and I signed for it. I was dumb, and I didn't know anything about leasing. I got what I had coming. I ended up paying $345 a month for four years. Then I found out that I would have had to put new tires on it, and pay them a drop charge to return the car after the four years. Which, what that would cost, paid for the sales tax to buy the car. So, I took a three year loan to buy it...

If I had done it right, I should of bought the car, and I would have had it paid off in five years instead of seven.

Two years after I did this lease, I bought the same car for my wife. By getting below MSRP and looking for the best interest rate, I am paying almost $12,000 less for this second car.

I recall the sales manager telling me that this was the way that I could keep driving a new car all the time and keep the payments low. Like I said, I was the one that signed.

dwynne

Leasing is not for everyone - that is for sure. I hear "bad lease" stories all the time, but if you do your homework it CAN be a great way to drive a new car every few years for a lot less than other folks.

You have to negotiate the best price - just like buying.

You have to shop residual and money factors - just like buying (LeaseCompare is great for this - as is getting quotes from a lot of dealers). Get the MF and % residual - not just payment.

Big plus if you can write off your car for business - just write off the lease payment and get a new car every few years.

You have to know leasing is right for you.



Leasing is good for:

Folks who tend to trade cars fairly often - they take a beating on trade in. Lease removes this.

Folks who don't drive a lot of miles (12k-15k per year)

Folks who want to drive "more car than they can afford".


A nice side effect of leasing these days - the depressed used car market. I made my best deal on a 2000 'vette convertible - got a really nice deal, then got a great lease. When it was time to turn it in last year the used market was so down (GM is doing $5k off and 0% financing on new) that they bank discounted the car $2500 to try to get me to keep it. I ended up selling it and pocketing a little money (and no turn in charge). If they car has held value really well (like the S2000 did in its first few years) then you can buy/sell the car off lease and make money - or just keep it. Otherwise, you can just walk away and get something else.

So if you lease an RX-8 for full MSRP (since folks are not getting deals), then in 3 or 4 years the bank may offer you the car at a discount if they have not held value. You buy it off the lease for $1-2k or more off - this offsets the cost of the lease VS buying and they end up being about the same (lease then buy VS buy) or even cheaper. In the case of the 'vette, I had figured it would cost me $1-1.2k more to lease then buy VS buying, with the $2.5k discount at lease end then it would have been cheaper then buying outright. The difference (to me) was that the lease payment was $400 or more less than the purchase payment.

If Mazda financial is not aggressively doing good leases on the RX8, then it might be better (in most cases) to finance. The S2000 (for example) held value GREAT in its first few years, so the lease banks set the residual very high (at one time 59% or higher for 3 years) so this made it a GREAT lease car. The car makers will offer special lease deals if sales are slow with really cheap MF or really high residuals (too high, actually) - they want to move cars NOW. When the lease is up they will worry about trying to get the money out of the car - likely they can't.

Dennis

pelucidor

You need to compare the lease and finance costs (to be fair make them $0 down scenarios). Sometimes leases can be very attractive (e.g. subvented by manufacturer) and much cheaper than financing the car over 60 months. Nobody finances the full amount for an 'expensive' car such as an S-class MB etc - they pay cash or lease. A leasing consultant told me that one of his clients just finished a lease on an MB SL and the car was worth $30k less than the expected residual value from the bank at the end of the lease.

Remember if residuals are too optimistic on a lease the bank pays the difference when the car is sold at auction (almost all leases are like this). If residuals are too optimistic for a finance deal then you pay (the majority of people are 'upside down' on finance deals for their new cars, sometimes by $10k or more when they try to trade it in after 3 years). The easy solution to the financing/residual issue is to keep the car more than 3 years as the worst of the depreciation is over by year 3 and the car holds its value better whilst your debt on the vehicle is dropping as you pay it off.

In the case of the RX-8 the lease deals are not too good now, so for the first time ever I financed a car as it's easy to get a good (3.6%) finance rate for the full cost of the car over 60 months. For comparison my $40k '99 RX300 was leased at $495 per month (inc. taxes) for 15k miles per year, my $41k 2002 Acura MDX was leased at $535 per month (inc. taxes) for 15k miles per year and my $34k RX-8 would have cost me $660 per month (inc. taxes) for 15k miles per year - all with only $1000 down. I can lease a $36k loaded Infiniti G35 Sedan for $499 per month for 15k miles (inc taxes), so leasing the RX-8 doesn't look too good - partly because all the other vehicles mentioned could be found for $2k-$3k below MSRP, and also offer good deals on a 39month lease whereas the RX-8 is too new to have many lease programs yet.

My finance cost for the RX-8 is about $650 for $36k loan over 60 months ($34k car + taxes at $2k) - I went with this and have decided to keep this car for 5+ years. In the end I will probably put about $18k down in a few months time to reduce the monthly payments and interest - note you should never put much money down if you are leasing.