US Lease Expectations
 

The intent of this thread is to supply a quick reference to lease rates based on common variables to enable buyers to get an idea of how much they will need to pay per month.
Here is the range of what you might pay per month on your RX-8 lease. Preliminary monthly lease amounts based on GT Model @ MSRP ($31,100 US) with no down payment. All figures do not include sales tax.

justinm2's 15,000 mi/yr estimates
Mo. Best Worst
24 $590.98 $801.34
36 $494.80 $679.36
39 $479.48 $657.65
42 $459.43 $632.74
48 $438.18 $596.60
51 $429.19 $583.58
54 $415.97 $567.46
60 $402.29 $546.84
The figures above are calculated based on a 0.0022 - 0.005 MF and the following residual est.:
24 36 39 42 48 51 54 60 Months
63 55 53 52 48 46 45 41 Best-case Residual %
57 48 46 45 42 40 39 35 Worst-case Residual %

pelucidor's 10,000 mi/yr estimates
Mo. Best Worst
36 $450.00 $550.00 (including taxes)

Calculate you own lease here:
http://www.leaseguide.com/calc.htm

According to edmunds.com, this is the way to calculate a lease:

1. Sticker Price of the car + options $31,000
2. Times the residual value percentage X .57%
3. Equals the residual value = $17,670
4. Invoice price of car minus incentives (net capitalized cost) $28,534 (from kbb.com)
5. Minus the residual (From line 3) - $17,670
6. Equals the depreciation over 24 months = $ 10,864
7. Depreciation (Line 6) divided by term in months ÷ 24
8. Equals the monthly depreciation payment = $ 452.67
9. Net capitalized cost (From line 4) $28,534
10. Plus the residual (From line 3) + $17,670
11. Equals = $46,204
12. Times the money factor X .0037
13. Equals money factor payment portion = $ 170.95
14. Monthly depreciation payment (from line 8) $ 452.67
15. Plus money factor payment portion (from line 13) + $ 170.95
16. Equals bottom-line monthly lease payment = $623.62

Is this right?!?!?! $623.62 for a 24 month lease?

According to leaseguide.com:

Residual percentages decrease as the length of a lease, called the lease term, increases. This is because the older a vehicle gets, the less it's worth. For example, the 24-month residual on a particular car might be 57%, decreasing to 50% for 36 months, then to 44% for 48 months, and 39% for 60 months.


Does anybody know anything more accurate than this for the RX-8 or something similar?:
24 = .57
36 = .50
48 = .44
60 = .39

The key to negotiating lower lease payments is to get the residual value as high as possible (assuming you don't want to keep the car at lease end). Should be able to get higher than 57% residual depending on term and mileage. Getting mid 60%'s is not unheard of.

The two unknowns at this time are Residual and Money Factor. These will probably not be known until the first cars are available in May/June.

In your example a 57% residual after 24 months sounds very low - for example a G35 or BMW 330 after 36 months is around 60%-62%. Also the money factor (interest rate) is very high (over 8%).

The 24 month lease you calculated is probably pretty accurate. Residuals are going to vary from bank to bank. None of the banks have released their programs for the car yet, as the car is not here. just to give you an idea of what they may look like here are the residuals from one bank for a touring model 350z. they will probably be similair.

36mo = 53% (this bank didn't offer a 24 month lease)
42 = 50
48 = 46
54 = 43
60 = 40

Of course the Rx8 could be more or less, but that should be fairly close. Also the money factor you used in your calculation was a little on the high side. With good credit you would probably be fairly safe assuming a .0025 money factor of course this also changes from bank to bank and month to month. as far as the formula you used to calculate it, that seemed right, I haven't had to calculate a lease by hand in a long time, we just plug the values into the computer, and let is calculate it.

oh yeah, those residuals are based on 15k per year, you can typically add 1-2% to the residual for a 12k per year lease.

I almost leased an Infiniti G35 Sedan last August (ended up getting a new SUV instead a few months later when we found out we were having a baby). Here is a link to how my leasing numbers were calculated and the bargaining/thought process. There is interesting information for leases on other cars too - and how different variables effect the end monthly payment. You have to read the whole thread for it to make sense...

http://forums.freshalloy.com/ubbthre...=&fpart=1&vc=1

I will probably be financing the RX-8 - I believe leases on non-prestige cars are on their way out (i.e. not as good as they used to be).

Here is what I calculated after reading justinm2's posts:

at Money Factor of .0025 15K mi leases:

36 months 53% Residual: $16,483 -Inv: 12051 Monthly: 334.75Dep 112.54Mon 36 mo TOTAL: $447.29
42 months 50% Residual: $15,550 -inv: 12984 Monthly: 309.14Dep 110.21Mon 42 mo TOTAL: $419.35
48 months 46% Residual: $14,306 -Inv: 14228 Monthly: 296.41Dep 107.10Mon 48 mo TOTAL: $403.51
60 months 40% Residual: $12,440 -Inv: 16094 Monthly: 268.23Dep 102.43Mon 60 mo TOTAL: $370.46

PLUS TAX!

Thanks for the info!

Unless we know the residual and money factor, its all guesses.

To compare, I leased my Audi A4 3.0. MSRP was almost $38,000, purchase price was $34,800.

Money factor was .00130, which is about 3%

Residual was decent at 54%

Total out of pocket was $1000 which included first month payment, acquisition fee (which all leases require), and DMV fees.

12,000 mile/42 months

$435 per month

The RX-8 should lease out pretty well. At first the money factors will be a little high and the residuals will probably be average. When the money factors come down, the lease will probably be decent, I will expect around what I pay for the A4 or less. Remember, NEVER put money down on a lease except for upfront out of pocket expenses that are required (1st month payment, Acquisition fee, DMV fees)

I just ran the lease through ADP ( the system we use for finance here) your calculations are correct, except that your using the invoice price as your cap cost, and not what your acutally paying for the car (i'm assuming you didn't find a dealer willing to sell it at invoice) and you're also forgetting most banks require a security deposit and or set up fee ( security deposit can be waived sometimes depending on bank regulations) Also, somthing else I just thought of you could probably take into consideration, the Rx8 will be a 2004 model, arriving in 2003 which means residual values when it first gets here will probably be higher than those of the 350z which is a 2003 model. Also you'll have to add tax to what ever payment you come up with. (monthly payment X tax rate in your area)

Oi! Ok, recalculating...

The cap cost for the car was very close to invoice, I got a great deal on the car. My numbers may not be 100% accurate, they were off the top of my head. Also, the security deposit was waived for me through Audi Financial Services because I'm a repeat customer ( I also got $600 off the sale price).

The point is that I think the RX-8 will lease pretty well. I'm expecting the residuals to be very good. After a little while the money factor should come down, it should be around 4 or 5 % considering most people can get a car loan at a very good rate these days. When I was looking at the G35, there were people getting leases for over $600 a month for 39 months!!!! If you don't know about leasing, you can get screwed. Fortunately, I have leased my last 4 cars, so I have become somewhat of an expert. Leasing can be a very good idea if the numbers are in your favor.

When I was talking about the cap cost, I was refering to the calculations cylo was doing. He was doing the calculations based on paying invoice for the rx8. I wasn't disputing anything you said. sorry about the confusion

ok, I REALLY meant:
36 months 53% Residual: $16,483 -MSRP: $14,617 Monthly: 406.03 dep 118.96Mon 36 mo TOTAL: $524.99

$525.00 for a 36 month lease on a $30,000 car? That can't be right. You could finance the full amount ($30,000 for 60 months @ 4.49%) and only have monthly payments of $559.15/month.

I saw a commercial yesterday from a local Infiniti dealer: $399/month for a 36 month lease. I didn't get a chance to read the fine print on the commercial, however. I assume it is 12,000 miles/year, which is what most newspaper ads quote.

12,000 miles/year is not enough for me and I don't even think 15,000/year is enough for me. I've averaged 17,000 per year for my last 2 cars.

typically, the advertised leases you are going to see are figured with between $1,995-3,995 out of pocket, plus your taxes and fees paid up front, which amounts to roughly $4,000-$6,000 out of pocket. Of course this isn't true with all of them, but it's a pretty same assumption that that is pretty close.

I double checked that rate. Based on the two variables (money factor and Depreciation) the monthly payment can vary GREATLY. You get a better money factor by a better credit ranking and finding a good leassor, and I don't know HOW you would get a better Depreciation percentage unless you shopped around as well.

If I run that same calculation with a money factor of .00125 and Residual of 60%, we come back with 407.76+tax for 36 months. (From what I have been reading, that is optimistic)

Please forgive my lease ignorance here, I have never leased a vehicle before. What is the reasoning for not putting any money down on a lease?

Could you give us an Optimistic and Pessimistic version of those depreciation rates, and an Optimistic / Pessimistic money factor rate based on your experience? I want to create a possible monthly payment range for each term.

You should put as little down as possible when you lease because you are not gaining any equity in the car by putting more down, all you are doing is reducing the cap cost. Let's say you put down $5,000 excluding out of pocket fees, and you total the car, you are out that $5,000 unless you have some sort of insurance or something to recover it, I'm not even sure if you can. The basic rule is to pay up front only the bare minimum required (1st month payment, security deposit, acquisition fee, DMV fees) to get the car. Basically, you are just renting the car an there is no equity involved, so why put down cash up front. At least thats how I do it. :D

MattZ,
If you put more money down, you save financing expenses (the amount multiplied by the money factor gets decreased based on how much you put down). Financing expenses are about 25% of your monthy payment minus taxes... my guess. Down payment is less benificial in a lease than a loan, but it actually does save you a bit of money by putting cash down... brb calculating. ok back.

No Down Payment:
36 Months: 53% Residual $524.99 +tax
total finance charge: $4282.00


$5000 Down Payment:
36 Months: 53% Residual $373.60+tax
total finance charge: $3832.00

So, with $5000 down, you save $450 or 9%! That's better than leaving it in a savings account or putting in the current market :D

Cylo,

I totally understand what you mean, but my thinking is the major benefit of leasing is that you can get a new car with a lower monthly payment, and less down. If a person has plenty of money, then they can put money down whether it is a lease or a loan. It will save you money on interest either way, because either way you are financing the car. If I had a lot of money, I would put a chunk down and finance the car. If I could easily afford the car, but didn't have a big chunk of cash to put down at the moment, considering the lease numbers were good, I would lease. My own strange logic. :D

One of the biggest reasons to lease, and also the same reason you don't want to put any more money down than you have to, is that cars are a depreciating asset. Why would you take money out of the bank that is working for you by earning you interest, to sink into a somthing garunteed to lose you money? by leasing, you lock in what the car will be worth at the end of the term, and only pay for the depreciation you are responsible for. Of course there are some downsides to leasing as well. If when you first lease the car, you are driving x amount of miles on average, and then a year later you get a new job that is further from where you live, you might end up going over your miles and paying a penalty. Also, perhaps you lease a car for 36 months, and a year later, someone introduces the "perfect car" for you. you are stuck with your leased car for another 2 years. Of course you can get out of a lease, but it is more difficult than getting out of a purchase. basicaly what i'm saying, don't go for a lease just to give you lower monthly payments. Do all your research, and figure out if a lease will work for you. For some people it's great, but I have also seen a lot of people get burned by them as well.

Some interesting info from interest.com: http://www.interest.com/car_loans/au...ng_costs.shtml
They explain some of the scarier pitfalls leasing a vehicle here.

Ok, i had a chance to figure out some residuals, and money factors. Keep in mind these are just educated guesses (I don't want anybody motherf*ck*ng me if they turn out to be different)

24 36 39 42 48 51 54 60 months optimistic 63 55 53 52 48 46 45 41
pessimistic 57 48 46 45 42 40 39 35

Right now money factors are ranging from .00220-.00500
of course they depend on credit, and what the economy is doing when the cars get here.

I noticed somebody listed a money factor of somthing like .00139 Rates that low are only going to be offered by manufactueres banks, as special leases (where they buy the rate down from prime). I'm going out on a limb, but i'm going to assume that Mazda won't be offering any incentives on the Rx8 any time in the near future.

Here's the lease rate ranges I get with those numbers:
24 $590.98 - $801.34
36 $494.80 - $679.36
39 $479.48 - $657.65
42 $459.43 - $632.74
48 $438.18 - $596.60
51 $429.19 - $583.58
54 $415.97 - $567.46
60 $402.29 - $546.84

The numbers will probably end up a little closer to the optimistic side than the pessimistic, but like I said earlier, right now it's just speculation.

I guess you are an optimistic person. Well thanks for speculating with me! :D

anytime

From experience I would guess that a 36 month, 36k mile lease on a $31k vehicle ($0 down except the usual security + first month + TTL) would be between $450 - $550 including taxes.

I will go further and say most people will get the RX-8 at MSRP, the money factor will be high (5% - 8% - no incentives needed) and the residual will be poor.

I think the residual will be poor to start with because for a brand new car the banks will look at other vehicles' residuals from the same manufacturer to estimate the residual value (e.g. 626, Millenia, Protege, 6 may still be too new) - this is what happened for the G35 when it first came out (residuals were compared with I35). As demand for the car stays high the banks will up the residual values (i.e. used prices) over the first year or so (again what happened to the G35 - residuals increased 3 times in first year as consumers obviously wanted the G35 more than an I35).

Personally I do a large number of miles a year (18k or so) and I don't believe Mazda even has a lease option above 15k per year (its 15c per mile beyond that). So for the first time ever on a new car I will be financing (I also intend to keep this car for 4+ years) - my credit score of 788 will hopefully get me a good rate, maybe around 4.5%.

Have any banks release lease yates yet?

(bump)

I just checked the may-june books for all the banks we use. No residuals yet.

From my experience in an Audi dealership you won't see money factors or residuals in non-mazda dealerships for about 3 weeks after the car is released. Following that line, chances are Ford Credit is going to be the best deal you can get on the 8 for awhile since they are known for low money factors and the like.

One thing that everyone forget with leasing is the tax rightoff if you can claim the car as a business expense. It is a pain but if you are anal about documentation you can right off the vast majority of the car as a business expense (if you own your own business).

After working in a dealership my "best guess" on payment for a 36/36 in PA (9% use tax) on a loaded car is going to be around $530 - $560 a month including taxes.

That's obscenely too high.

I have looked at a G35 Coupe and the payments came to be $509 a month with $1000 down. The car was worth $35,000.

Being that the RX-8 is 4 grand cheaper, and that the average lease price drops $20 per thousand, you're looking in the neighborhood of around $420 a month.

It should be in that range, of around $400-450 a month.

Totally agree Herc!

I'm leasing my 2002 Audi A4 with a $37,500 MSRP for $440/month.

Granted I got a great deal on it, but I expect the 8 to lease for around $400-$425 for 36 months.

We will see. I looked at the 350Z when it came out (probably the closest comparison to the 8 from a price and lease standpoint, comparing Audi to Mazda is not right since Audi is a prestige brand, has higher residuals, and uses subvented rates) and to lease a touring model fully loaded was in the neighborhood of $520 a month including the 9% PA tax.

Since I am talking about a loaded 8 here (33,000 not 31,000) I would expect them to be comparable for awhile. I have no doubts in my mind that the lease payments will drop within 4 months of the cars introduction but the first few are going to pay for the car. Once there is a supply on the market they will lower the money factors and likely raise residuals based on sales and popularity.

I work at a mazda dealership, so we should be getting the rates before anybody. Ford Motor credit has nothing to do with Mazda cars. Mazda American credit is a branch of FMC, but with entirely different programs, and run seperatly. I wish we could use FMC, they will buy anybody, Mazda is very picky. Usually unless MAC is running a special lease on a particular vehicle, I can beat their rates with almost any other bank. Being as the vehicle is brand new there is no danger of them having a special lease on the car for some time.

Wow I would have figured that Mazdas stuff would run through FMC. Obviously being a Mazda dealership you will have rates first, I meant that in terms of other brand dealerships getting rates for the 8 (like when the 350Z came out it took about 3 weeks for us to rates for it at the Audi dealership).

I think that some people are expecting way too much on the initial release of this car as far as leasing goes because they are used to being able to lease cars like Audis or VWs or BMWs pretty cheaply, but what they don't see behind the scenes is that sales are not great on most of these cars and they are buying down the rates substatially to make attractive lease programs to move more cars. The other thing they don't factor is Audi dealerships at least will all but give the car away if you come in at the end of the month since sales have been down for the last year.

I am going to go get this car today, and I have a huge complex trade-in scenario. Wish me luck!

Boy, there's something fishy here or I'm too obtuse to follow the math. With $5000 down you save $450, right? But when you give up the lease, you don't get the $450 back nor the $4550 delta. You walk away from the deal and the lessor keeps everything. So, in essence you are paying $5000 to save $450, a net loss of $4550. Am I missing something? This would make sense in a purchase, when you sell the car you get back the difference between what you sell it for and what you still owe. In a lease, you get nothing back no matter how much you paid into the deal. The only way this can work to your advantage is if, after the lease, you decide to buy. But if you knew you were gonna buy you wouldn't lease in the first place. It's a very expensive way to get into a car. Where am I wrong on this?

By the way, earning $450 on a $5000 investment is 9% but it takes 3 years to earn it, meaning something like a 3% annual return. Better than a savings account but not enough to make me jump on the lease bandwagon. I'd rather be accumulating equity in the car! That's where your real return on investment will come. For anything over about a 2-yr period, purchase financially makes more sense than a lease. On the off chance that all 8's start going way above MSRP for new buyers, we will have instant equity in our cars that a lessee wouldn't have. There is a good leave-vs-purchase calculator on the Money section of usatoday.com. It'll do graphs to show you the breakeven point of lease vs buy; on the 8 it was around 24 months.

As I'm told... don't put money into a depreciating asset. :)

Originally posted by Cylo
No Down Payment:
36 Months: 53% Residual $524.99 +tax
total finance charge: $4282.00

$5000 Down Payment:
36 Months: 53% Residual $373.60+tax
total finance charge: $3832.00

So, with $5000 down, you save $450 or 9%! That's better than leaving it in a savings account or putting in the current market

Actually the total cost to you in the first example is $4282.
The total cost to you in the second example is $3832+$5000=$8832

You are losing $4550 more - just as 8_wannabe said.

oops! Thanks for clearing that up you two.

math is hard
 

unfortunately, i haven't followed all of the math in the thread, but let me try to understand the numbers you are presenting.

scenario #1
36 payments @ 524.99/pmt = 18899.64
of which 4282.00 is the finance charge

scenario #2
36 payments @ 373.60/pmt = 13449.60
of which 3832.00 is the finance charge

however in scenario #2 you pay 5000 up front so your total cash outlay is 13449.60 + 5000 = 18449.60

so scenario #2 saves you 18899.64 - 18449.60 = 450.04

leaving 5k in a savings account over 3 years @ 3% (optimistic here), compounded monthly, would get you 5152.21

so assuming you left that 5k in the bank for the duration of the lease term, option #2 would save you 450.04 - (5152.21 - 5000) = 297.83 over a 3 year period.

personally, i'd go with option #1. 300 bucks over 3 years isn't much to shout about and i'd rather have the liquidity of 5k in my bank account.

My lease numbers:
Price: 31,100 (msrp)
Term: 48 mos
Miles: 12k
Residual: 52%
Money Factor: .00340
My credit score: 685

Ouch! You should be able to do better than that - that's the same lousy money factor that Mazda Credit was offering, but with a worse residual! Have you tried contacting Jas?