Cylo

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

Cylo

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?

Cylo

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

RXhusker

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.

pelucidor

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%).

justinm2

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.

justinm2

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.

pelucidor

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).

Cylo

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!

Cylo

Thanks for the info!

MattZ

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)

justinm2

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)

Cylo

Oi! Ok, recalculating...

MattZ

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.

justinm2

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

Cylo

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

jonalan

$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.

gusmahler

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.

justinm2

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.

Cylo

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)

jonalan

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?

Cylo

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.

MattZ

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

Cylo

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

MattZ

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