Thanks LarryMG1. No I was not being facetious, sorry it came off that way, and your link helps buy it is not the answer. I think we may negotiate in different ways. When I buy I see all the numbers in front of me. In the contract is clearly the cost of the car and the interest rate if I am financing along with the monthly payments. . Everything is spelled out and if you know the invoice prices and incentives you can easily estimate the dealers profit. There isn’t an6 room to fool around with the numbers. However my point was even with leveraging the link you posted you rely on what the dealer tells you is the money factor. He “could” tell you anything he wants since it is never written in the contract. Do you always blindly believe what the dealer says? You only see your monthly payments. So I think it is harder to make sure you are getting a good deal. I have to bring a laptop with me in order to check what the dealer is telling me. To me that means leasing is harder than buying.
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secundinus said:
MCC — not sure if you’re being facetious,"
You are attributing the statement to the wrong person. I did not think anything of it.
When I negotiate the price of a car I do so without the dealer knowing if I am buying or leasing. That negotiated number is what you would pay for the car as a purchase. Thus, that same proffered price becomes the adjusted capitalized cost for a lease.
No, I am not relying on what the dealer is telling me the money factor is. Using the calculator and entering the known values of:
Adjusted Cap Cost:
Residual Amount:
Lease Term in Months:
Total Monthly Rent Charge:
the calculator provides you with the Money Factor and Equivalent Interest Rate.
One factor that is frequently overlooked is the residual value. If the dealer or lessor assigns a low residual value it will, of course, increase your payments. You may or may not have room to negotiate that residual.
"Obtain the highest possible Residual Value - In most leasing scenarios, the higher the residual value, the better off you will be. If you are comparing "apples to apples," in other words, you're looking at the same capitalization cost, money factor, and lease length, then the higher the residual value, the lower the monthly payments will be. Assuming you won't want to buy the vehicle at the end of the lease, that's good. A luxury vehicle will often lease for the same amount per month as a cheaper vehicle because it holds its value better. The lessor is willing to lease it to you for less because they can sell the vehicle for more money at the end of the lease than the one that depreciates more quickly."
