Lease Price

[Directedby]

I am going to lease a MM and I am getting the typical 'car salesman' asking for top dollar.

One dealer told me $1,000 drive off and $550/MO.

Another dealer quoted me $2,500 drive off and $600/MO.

I just leased a Land Rover for my wife. $3,000 drive off and $499/MO. That was for a $37,000 car.

How do these guys figure a $32,000 MM to be more.

Anyway, do any of you lease and if so, do you mind telling me what you are paying.

Thanks,

Paul

[bozobill]

Mr. Director:

DO NOT tell a car salesman that you want to lease a car. Not smart. Tell him you are looking to purchase, that you have no interest in leasing. Do your homework at edmunds. com first and know going in what the "dealer invoice" is and the holdback percentage. Then YOU tell the salesman what you will pay for the car. Remember, MM's are stacking up at many dealerships and you can bargain for a unit they've been paying interest on for the past 3-5 months. Once he agrees, tell him you want to lease at that base price and use the leasing cost formulas you'll find at edmunds.com to establish a fair final downpayment and monthly cost. Don't give anyone carte blanche to screw you over if you can avoid it.

[JohnnyB]

For what you have to lay out for a down payment and the monthly amount of your payments, why don't you just buy it.. After the lease is up, you own nothing.....

[Directedby]

Johnny -

I can deduct 100% of the lease payment. It just works out better for my corporation.

[JohnnyB]

Gotcha!

[JamesHecker]

If you lease your car through Ford, any dealer should be able to tell you the lease factor they are offering. The factor is like an interest rate on the portion you are paying for (the capitalized cost of the car less the residual). The higher the residual (what it is supposed to be worth at the end of the lease), the lower the payments will be. I suspect that the Marauder will not have a high residual, as it's resale prospects appear to be bleak.

First, work your best price on the car, without regard to method of finance, trade value, or monthly payment. When the salesperson trys to steer you in those directions, politely and firmly redirect the conversation back to the "cost" of the car.

Second, after the cost of the car is established, introduce your trade. Be careful. This is where a lot of people get screwed. Check the value of your trade ahead of time on edmunds.com or kelly and stick to what you determined before you got to the dealer. Be honest about the condition of your car, and realize they just might not want to take your trade without lowballing you. Be prepared to dispose of it another way if you have to.

Third, have the salesperson show you the capitalized cost, the lease factor and the residual. If you are dealing with a referred dealership, you are much more likely to get this info without a lot of hype and subterfuge. If you have any doubt that your being treated fairly, walk out and visit another dealer.

These cars are not at all difficult to find right now, regardless of what the salesperson might say.

If your inclined, you can also find the dealers invoice on the car and options and negotiate from the stance of an "invoice plus".

If you follow these steps and stay emotionally detached during the process, you just may find that buying a car is fun!

Oh ya, and don't drop your gaurd when you think the deal is done and they send you to the "finance" person. There is a lot of opportunity for add ons and mark ups here. Extended warranties and service plans (both of which I feel are good things, just don't over pay for them), Paint and interior seals and protection (skip these as you can do a better job for less money yourself), and security systems (save money here too by buying aftermarket).

If your interested, I know several dealers in the suburban Los Angeles area ( North Hollywood, Van Nuys, and Valencia). I would be happy to give you referrals. Feel free to email me for them.

I actually enjoy buying cars and have had several friends, family and associates take me with them to keep from getting taken advantage of.

I love it. I get to buy cars and don't have to pay for them!

[Brett]

I used to sell cars not that long ago, so here is my $.02 from the inside.
1. Befriend your salesman. Dealings will be alot easier if you two get along. This is most important!
2. Do not, I repeat, do not, negotiate a cash price based on a cash sale, then swittch to a lease. This will piss him off, and piss off his manager, and you will get a less than perfect deal and alot of tension in the process. Can you say "missing jacket"
3. Instead, state your intentions to keep your financing options open, but that you want to iron out a purchase price first. This accomplishes your objectives, and eliminates all that tension.
4. Offer $250 over invoice, NOT INCLUDING Incentives. Go to $500 over if you have too. If you can't make this deal, someone else can, and state that. This deal will be available at the end of december, THE BEST TIME TO BUY A CAR. In fact, you might want to consider hanging in there if you can wait a few weeks. Working at a dealership, employees even got better deals at the end of the year!
5. Know the incentives. I think there is $2500 cash from Merc. This goes away if you lease or finance with Ford, but this part is beautiful. If you use another bank, YOU KEEP THE CASH. It is like a down payment in your back pocket.
6. Explore on your own alternative banks to lease. ACS is great, so is Bank of the West. Not all are available in all states. However, your dealer, if friendly can assist you in using an alternative bank. Keep in mind that this might not be lower than skipping the cash and going with ford, but not necessarily. You will need to find out.
7. If you use the dealers financing, ask for the "buy rate". There cost of funds. That is, no interest rate markup. Tell him your friend who used to sell cars (me ) said so.
8. Go back to # 1, and be nice. You just took away all the profit. Leave him a good csi report. A bad report will cost him more $$ than his minimum comission.

[SergntMac]

You heard some of the best advice out there, DirectedBy, Brett and James are both on the money, excuse the pun. Even if you can charge off the costs, leasing is still up against discounts and 0% money.

Just refreshing one important point. Don't expect as good a lease deal on any GM or MM, as you would see on more upscale models because the resale (residuals) on GMs/MMs just isn't in their numbers.

There is a slim chance that the MM resale value may hold better, or, even improve in time, but only after LM cuts production and dealers sell out. Slim...Not enough to consider.

Now, you can rent my MM for 800. a month, if you put her in a movie...

[Brett]

two more things.
1
Just noticed you live in LA. I am still plugged in there if you need any help. Looks like James Hecker is too.

2
Bank of the West services so cal. I leased a Jeep for my wife through BKWST right before we went to school. got all the incentives, and a great rate too.

You might want to try calling Bank of the West on your own to line things up.
Here are 3 branches and #'s
3347 Wilshire 213-386-7460
10929 Wilshire 310-208-4111
601 S fig 213-896-7865

[JamesHecker]

Brett is right about befriending the salesperson. Relationships are important in sales and a good dealer will want to develop a good relationship. After all, it is not about one sale, it is also about the referrals. That's why going in referred is always better. You are expanding on the existing relationship of the person that referred you.

Brett is also absolutely right about not misleading anyone or making them think you intend to pay cash. You can politely indicate that the cost of the car and the financing are separate transactions, better yet, what Brett said about being open to options is even better.

And with the other things Brett mentions, this thread is becoming a quite useful "how to". I think I'm going to adapt it to an article for my Financial Services client newsletter. Maybe I'll post it here first and you guys can pick it apart or add to it for me

I love this board. Great people and tons of information.

[KSMM03]

As far as befriending a salesman goes, that is a smart move. I've bought quite a few pick ups while working in upstate NY, and kept going back to the same salesman. He was friendly and we built a rapport, thats important in the car sales business, because if I enjoyed working with him, I'm going to tell someone else who's looking to buy a car that he's a good guy or gal to work with. I also went in smart knowing what my trade in was worth.

[Brett]

I called Bank of the West and they will not deal directly with customers. You will need to work with the dealer on this.

Keep in mind that not all leases are created equal. If two leases have the same payment, the one with the lower residual amount is the better deal. Also, try to avoid lease inception fees. Despite popular beleif, they are not a "ripoff", but some banks have them and some do not- it just depends on the bank.

You also might want to check your credit before you start your dealings. I am pretty sure that Equifax, transunion, and ?? all have websites. If is worth the $8/report to know where you stand. Also, pay and get the credit scores too. I would bring these printouts with you to the dealer, so you can show you are cooperating, without running your credit. Don't be insulted by this; if you sold your house, wouldn't you want to know that the buyer was qualified for financing? If all goes well, you can buy from one dealer, and you should aim for this, but sometimes things fall through, and it is best to avoid running your credit multiple times. Running it yourself does not count against you.

Good luck! I am hoping for a smooth and good deal for you!


a score of over 700 is very good, over 730 is fantastic, high 7's are overkill, and over 800 is very rare but possible. Bank of the west has programs for over 700 and over 730. I thought I was over 730, and should have been, except some bastard at a bank made a mistake!! I eventually got it straigtened out, but i am paying another $2/month because of it. Not a big deal, but I hate it on principle. If you have any problems, try to straigten them out fast. You can possibly fix them by deal time december 31st. We don't make the rules, but we can play them well.

[bozobill]

Who's in charge when you're buying a car? You or the salesman? Give me a BREAK!

[Brett]

The customer is in charge bozobill! The customer signs the check and the contract, we all know that. But even Tony Soprano knows that strong rapport benefits all.

If you like the fun of beating up the dealer, great. They like it too. They will not feel bad about making every last penny off of you that they can. Just remember that they sell cars day in and day out. How often do you buy cars? They also won't feel bad not providing you with all the extra perks that are not "required" in your service contract. I am not saying to not go for the best deal, I am presenting an approach to get you the best deal AND service without any headache. If you want the headache, any dealer will be happy to give it to you. It is just not necessary to get the best deal and it compromises your leverage to get perks down the road.

[Macon Marauder]

I'll wade in with my .02 here:

Relationships are great, but they don't always last. We bought our 87 TBird new from a guy and started a long run where we dealt with him over the years almost exclusively. Worked great until he was recently promoted to sales mgr. Now he'll barely speak.

Also, when going to the local L/M dealer looking at Marauders, the guy I used to know there was gone. The dealership didn't know me at all - or seem to care.

As the customer my job is to get the best deal I can. The salesman's job is to sell cars at a good profit. We have to meet somewhere in the middle. I won't pay sticker for a car no matter how popular or rare and I certainly won't pay "additional dealer markup."

I'm not gonna beat the dealer up. He's not gonna sell the car at a loss - though he may try to make me think he is.

My approach is to be fair and professional. I negotiate for a price on the car first. There is no need to talk about financing at the start of the deal. So many dealers these days want to negotiate a monthly payment instead of a price. They want you to think that if you can't get together it's not the asking price of the car that's an issue: it's the terms, or the trade, or your credit. "What if we go to 72 months?" they might say. "What if you come off that price a little more?" is my answer.

Hey, it works for me. I've been able to build relationships if the guys will stick around. (Remember: there can be a lot of turn-over in the car business). And it's based on more than 25 years of car buying. And information from my Dad who's been buying for more than 50 years. Oh, and he used to sell L/Ms too.