Looking at a 2016 Ultimate AWD - Lease Deals?

[SimpsonTide985]

Hey,

Are there any great current or upcoming lease deals on 2016 AWD models?

This might be a little out of my price range but I'm not sure. It depends on how well the lease rates are right now. This is the model I'm interested in:
http://www.iowacityhyundai.com/Vehi...s-4dr_Sdn_V6_3.8L_AWD-Iowa_City-IA/2813422843

What would you guys say would be a good offer?

As a ballpark, I'm probably going to do a 36 months @ 10k a year. I would probably put down up to $4k.

Any advice would be appreciated!

 

[Mark_888]

There is something wrong with the info on the website you provided. The specs and photos are not consistent, and it may not be an Ultimate trim level.

I would think that you should be able to get $8-10K off the MSRP price on a 2016, now that 2017's are arriving. There is probably a thread on 2015-5016 prices that is active. That will directly affect the cap cost, in addition to the money factor (interest rate) and other lease considerations.

 

[cleex024]

Well I was offered $400 a month lease payments with 0 down on an msrp car of $53k. You could go even lower obviously if you out down$4k.

 

[SimpsonTide985]

Yeah, I think the vehicle hasn't been updated on the site with any significant detail but I'm guessing it's just the Ultimate AWD with Ibiza.

 

[LantanaTXGenesis]

General rule of thumb for leasing....DO NOT put any money down. Other than lowering your monthly payment it is not a good way to lease. If you are trading a vehicle in that you have equity in, have them cut you a check for the equity.

If you drive the car off the lot and total it on the way home you are out your entire down payment. Put the $4k in a savings account and use it to help cover your monthly payment if you're going to lease a vehicle.

There are some good threads on Edmunds that discuss monthly lease numbers. Get familiar with money factor, residual percentage, and adjusted cap cost.

Dealers are notorious for marking up the money factor on leases.

Case in point, I just helped my wife's best friend drop payments on a 2017 Santa Fe Ultimate AWD from $490/mo to $393/mo by simply helping educate her on lease fundamentals. Do not work a lease and decide whether it is a good deal by simply looking at your monthly payment. Although that payment may be attractive, you may be losing thousands of dollars over the lease term by not understanding the variables and negotiating to base rates put out by the manufacturer.

 

[SimpsonTide985]

I currently have a lease to turn in that has no equity, so, that won't help. Also, I never usually put that much down on a lease. I just threw a number out since this vehicle is more expensive than I tend to go for.

I prefer to put down around $2k or so, just to help cover the first month's payment, security deposit..etc.

Also, when you're talking about what you did for "educating..on lease fundamentals", it would be nice if you could elaborate or summarize that information for me regarding MF, residuals, and adjusted cap cost. I'm not completely new to leasing--I already know a little bit about a little bit but I'm obviously far from an expert in terms of how much one affects the other over the lease term.

Any idea on where to start? There are just so many places scattered with lease tactics, not all of which are credible imo.

 

[LantanaTXGenesis]

I currently have a lease to turn in that has no equity, so, that won't help. Also, I never usually put that much down on a lease. I just threw a number out since this vehicle is more expensive than I tend to go for.

I prefer to put down around $2k or so, just to help cover the first month's payment, security deposit..etc.

Also, when you're talking about what you did for "educating..on lease fundamentals", it would be nice if you could elaborate or summarize that information for me regarding MF, residuals, and adjusted cap cost. I'm not completely new to leasing--I already know a little bit about a little bit but I'm obviously far from an expert in terms of how much one affects the other over the lease term.

Any idea on where to start? There are just so many places scattered with lease tactics, not all of which are credible imo.

Homework: download an app called "Lease Calculate" it is in the Apple App Store for free

The app gives you an extremely easy set of fields to populate:

Lease Amount: this is the adjusted capitalized cost (selling price of vehicle, plus dealers fees, plus titles/licensing, plus sales tax, plus aquisition fees, plus any other fees that are being added on)

Interest Rate/Money Factor: this is probably the greatest source of confusion for leasing. Let's say the money factor is .0010. A lot of car salesman with tell you you're getting a rate of 1% (APR), that is way off. Take the money factor and multiply by 2400. So a money factor of .0010 is actually an APR of 2.4%. This is one of the biggest money makers for dealers. Manufacturers will typically set a money factor each month for given lease terms. It is up to dealers to either use that money factor or mark it up for excess profit. I've personally seen a dealer mark this up by over 300% when negotiating a lease for my wife's vehicle.

Check various sites (Edmunds tends to be a great discussion board where they have staff members continuously fielding questions on current money factors for specific vehicles on a monthly basis, these are the base money factors set by the manufacturer). Knowing the base rate gives you a huge leg up on the guy in the finance department, as most buyers just focus on how much the monthly payment is, not how you actually arrive at that payment.

Lease Term: if you are signing a 36 month lease you would actually use 35 months, as you're either doing a zero down lease or putting some money down.

Residual: this number is also crucial to lease pricing. Let's say you're looking at a 2016 AWD Ulimate that stickered for $50k. The bank who is buying that vehicle and letting you rent it from them (aka lease) is taking a bet on what that car will be worth at the end of the lease. That's assume they say it's going to be worth 50%. Multiply the MSRP sticker price by 50% and that's your residual.

Putting It All Together: the difference between your adjusted capitalized cost and residual amount is what you're making payments on. The money factor is the interest you are paying on the vehicle to use it for those 3 years. An important note, you are paying interest on the total amount of the vehicle over those 3 years, not just the difference between adjusted cap cost and residual.

The bottom line of leasing is that you still need to negotiate the selling price of the vehicle. There will be different factory to dealer incentives for leasing and buying, but there is still a huge amount of negotiability on the selling price that will be used in the lease figures.

Negotiating the selling price and money factor can save you thousands over the life of the lease.

As I mentioned in my original reply, I saved a friend $2400 over her 24-mo lease by negotiating the selling price and money factor. They were shocked as they were already ready to sign because they liked the monthly payment they had been presented.

Using a lease calculator allows you to quickly make sure the dealer isn't messing with you. Ask for all the numbers: Adjusted Capitalized Cost, Money Factor, Residual, and Term. If they don't want to tell you the money factor they are using....find a new dealer to work with.

DO NOT get stuck on the monthly payment game!

 

[glennk]

Lantana:
What about leasing with a lower FICO score? By making the payments upfront, you not only pay no interest but also get approved.
Glenn

 

[SimpsonTide985]

Homework: download an app called "Lease Calculate" it is in the Apple App Store for free

The app gives you an extremely easy set of fields to populate:

Lease Amount: this is the adjusted capitalized cost (selling price of vehicle, plus dealers fees, plus titles/licensing, plus sales tax, plus aquisition fees, plus any other fees that are being added on)

Interest Rate/Money Factor: this is probably the greatest source of confusion for leasing. Let's say the money factor is .0010. A lot of car salesman with tell you you're getting a rate of 1% (APR), that is way off. Take the money factor and multiply by 2400. So a money factor of .0010 is actually an APR of 2.4%. This is one of the biggest money makers for dealers. Manufacturers will typically set a money factor each month for given lease terms. It is up to dealers to either use that money factor or mark it up for excess profit. I've personally seen a dealer mark this up by over 300% when negotiating a lease for my wife's vehicle.

Check various sites (Edmunds tends to be a great discussion board where they have staff members continuously fielding questions on current money factors for specific vehicles on a monthly basis, these are the base money factors set by the manufacturer). Knowing the base rate gives you a huge leg up on the guy in the finance department, as most buyers just focus on how much the monthly payment is, not how you actually arrive at that payment.

Lease Term: if you are signing a 36 month lease you would actually use 35 months, as you're either doing a zero down lease or putting some money down.

Residual: this number is also crucial to lease pricing. Let's say you're looking at a 2016 AWD Ulimate that stickered for $50k. The bank who is buying that vehicle and letting you rent it from them (aka lease) is taking a bet on what that car will be worth at the end of the lease. That's assume they say it's going to be worth 50%. Multiply the MSRP sticker price by 50% and that's your residual.

Putting It All Together: the difference between your adjusted capitalized cost and residual amount is what you're making payments on. The money factor is the interest you are paying on the vehicle to use it for those 3 years. An important note, you are paying interest on the total amount of the vehicle over those 3 years, not just the difference between adjusted cap cost and residual.

The bottom line of leasing is that you still need to negotiate the selling price of the vehicle. There will be different factory to dealer incentives for leasing and buying, but there is still a huge amount of negotiability on the selling price that will be used in the lease figures.

Negotiating the selling price and money factor can save you thousands over the life of the lease.

As I mentioned in my original reply, I saved a friend $2400 over her 24-mo lease by negotiating the selling price and money factor. They were shocked as they were already ready to sign because they liked the monthly payment they had been presented.

Using a lease calculator allows you to quickly make sure the dealer isn't messing with you. Ask for all the numbers: Adjusted Capitalized Cost, Money Factor, Residual, and Term. If they don't want to tell you the money factor they are using....find a new dealer to work with.

DO NOT get stuck on the monthly payment game!

Thanks! That's a huge help. I've never come across a more clear explanation of how that works. I think I know exactly what I need now moving forward.

Also, I'd love to use that Lease Calculate app but I don't use any Apple products.

 

[waz]

Just as a point of reference, I got a '15 Ultimate RWD (MSRP $50,300, $41,000 cap cost) on a 3 year lease, $3k down, 10k miles/yr, back in February (2 days before Hyundai Finance stopped leasing '15s) for $332/ month.

You could probably get a better deal on the '16 if you waited a little while, but then the inventory of available cars will be reduced, and the blue w/ ivory is a somewhat rare color combo.

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[LantanaTXGenesis]

Just as a point of reference, I got a '15 Ultimate RWD (MSRP $50,300, $41,000 cap cost) on a 3 year lease, $3k down, 10k miles/yr, back in February (2 days before Hyundai Finance stopped leasing '15s) for $332/ month.

You could probably get a better deal on the '16 if you waited a little while, but then the inventory of available cars will be reduced, and the blue w/ ivory is a somewhat rare color combo.

While this sounds like a good deal, you also need to add $83/mo to really do a fair comparison ($3k down divided by 36 months). So it comes out to $415/mo, which is still a pretty good value on a $50k car.

As I mentioned earlier, experts (people way above my pay grade) recommend NEVER putting money down on a lease if at all possible. That money is gone should the vehicle be totaled.

It seems like there are a lot of TX people on this forum, which brings me to any interesting TX factoid....although you're only leasing for 24-36 months and using $10-15k of the vehicles value, you will pay tax on the entire value of the vehicle in the state of TX. One of the stupidest things out there.....

If you want to buy the vehicle at the end of the lease.....pay tax on the entire purchase price again!

Texas may not be the best state for leasing if you don't have a sizable trade to give you an offset against the adjust cap cost.

 

[SimpsonTide985]

Two leases down, never been gotten into a totaled situation yet. At this point, I've spent WAAY more money on unused vehicle insurance at the same token, so, I'm not too worry about putting a few grand down on a lease. If it happens, it happens. I can't live thinking about "what if" all the time.

In any case, I am thinking about waiting another 45 days or so..

 

[LA Genesis]

Good info Lantana. You indicated tax is paid on the entire vehicle not cap cost minus residual. Is that unique to Texas or is that common in other states?

I get asked about leases but I know little about them. I do know it is critical to know how many miles you drive each year before selecting a lease. I've had two friends, both lease newbies, that signed 10000 annual mi leases and drove many more miles. They got hammered with extra fees.

 

[SimpsonTide985]

I've had my car for 33 months and I only have 24,400 miles on it lol. My last lease I was well under the allowed miles too.

 

[LantanaTXGenesis]

Good info Lantana. You indicated tax is paid on the entire vehicle not cap cost minus residual. Is that unique to Texas or is that common in other states?

I get asked about leases but I know little about them. I do know it is critical to know how many miles you drive each year before selecting a lease. I've had two friends, both lease newbies, that signed 10000 annual mi leases and drove many more miles. They got hammered with extra fees.

I believe there may be 1 or 2 other states that tax the entire vehicle (adj cap cost) in the lease. Leasing here in TX can be hard to justify.

At 6.25% vehicle sales tax a $40k adj cap = about $2500 in tax, so on a 24 mo lease it adds an extra $100 a month versus other states where you'd only pay tax on the actual rent (adj cap minus residual).

With interest rates as low as they are I find it hard to justify leasing here in TX, especially when dealers were discounting 2015 Genesis models $12-$16k.

To each their own.

 

[GenesisAWD]

I've had my car for 33 months and I only have 24,400 miles on it lol. My last lease I was well under the allowed miles too.

Have you been checking into the potential equity in those before lease turn in?

 

[SimpsonTide985]

Have you been checking into the potential equity in those before lease turn in?

Yeah I checked in on my current one. According to the calculation estimates, my car's market value will be less than its residual, so, doesn't appear that I'll have a ton of equity to work with. Don't think Hyundai will offer to pay more than I owe/what it's worth.

 

[chief1645]

Could not find Lease Calculate app in the Apple Store for free.

Lease Amount: this is the adjusted capitalized cost (selling price of vehicle, plus dealers fees, plus titles/licensing, plus sales tax, plus aquisition fees, plus any other fees that are being added on)

Interest Rate/Money Factor: this is probably the greatest source of confusion for leasing. Let's say the money factor is .0010. A lot of car salesman with tell you you're getting a rate of 1% (APR), that is way off. Take the money factor and multiply by 2400. So a money factor of .0010 is actually an APR of 2.4%. This is one of the biggest money makers for dealers. Manufacturers will typically set a money factor each month for given lease terms. It is up to dealers to either use that money factor or mark it up for excess profit. I've personally seen a dealer mark this up by over 300% when negotiating a lease for my wife's vehicle.

Check various sites (Edmunds tends to be a great discussion board where they have staff members continuously fielding questions on current money factors for specific vehicles on a monthly basis, these are the base money factors set by the manufacturer). Knowing the base rate gives you a huge leg up on the guy in the finance department, as most buyers just focus on how much the monthly payment is, not how you actually arrive at that payment.

Lease Term: if you are signing a 36 month lease you would actually use 35 months, as you're either doing a zero down lease or putting some money down.

Residual: this number is also crucial to lease pricing. Let's say you're looking at a 2016 AWD Ulimate that stickered for $50k. The bank who is buying that vehicle and letting you rent it from them (aka lease) is taking a bet on what that car will be worth at the end of the lease. That's assume they say it's going to be worth 50%. Multiply the MSRP sticker price by 50% and that's your residual.

Putting It All Together: the difference between your adjusted capitalized cost and residual amount is what you're making payments on. The money factor is the interest you are paying on the vehicle to use it for those 3 years. An important note, you are paying interest on the total amount of the vehicle over those 3 years, not just the difference between adjusted cap cost and residual.

The bottom line of leasing is that you still need to negotiate the selling price of the vehicle. There will be different factory to dealer incentives for leasing and buying, but there is still a huge amount of negotiability on the selling price that will be used in the lease figures.

Negotiating the selling price and money factor can save you thousands over the life of the lease.

As I mentioned in my original reply, I saved a friend $2400 over her 24-mo lease by negotiating the selling price and money factor. They were shocked as they were already ready to sign because they liked the monthly payment they had been presented.

Using a lease calculator allows you to quickly make sure the dealer isn't messing with you. Ask for all the numbers: Adjusted Capitalized Cost, Money Factor, Residual, and Term. If they don't want to tell you the money factor they are using....find a new dealer to work with.

DO NOT get stuck on the monthly payment game![/QUOTE]

 

[chief1645]

Could not find the app, Lease Calculate in the Apple Store for free.

 

[LantanaTXGenesis]

Could not find the app, Lease Calculate in the Apple Store for free.

When I type "Lease Calculate" in the search field it is the second option. Sponsor/company is PicsAlive.