Lease charges

[stuz88]

Anyone leased a 3.8 tech? I'm wondering how much, if any I got screwed.MSRP was $41,800, plus a previous dealer they got it from had added the usual BS of 1298 for appearance package, but none of these documents were stuck on the car and I don't believe the salesman saw the add on.THERE WAS A 1500 REBATE FOR A OWNING ANOTHER CAR, PLUS I GUESS THEY TOOK 1000+ OFF THE STICKER,so the price was set at 39060- OK so far I guess.THen I was charged 595 title and registration fees although I was transferring a tag, 599 documentation fee, and a 516 mechanical breakdown function. When I ranted about this I was told what this was really for was if the car was brought back with problems other than normal wear and tear it would cover me for 5000 dollars worth of bodywork, etc. I said"this is what I carry insurance for".They would not back down and since they had only one car and it was my color, three other dealers had no cars, I leased it,3000 down, 474 a month,36 months.Told the bean counter I would make sure there was 5000 worth of damage when I turned it in!Plus 400 when i turn it in. Florida does have high fees, but I feel screwed. Would be interested to hear other owners deals.Unfortunately the day this was going on, my SIL died and I had to drive straight to the Airport to fly to CAnada or I would have argued a lot more.

 

[XBOHDPuKC]

so technically you are paying for a car with GCC of around 40770, if my assumption of 52-55% residual value and 0.00124 money factor are correct of course. According to Edmunds V6 + tech MSRP is 39,300.

Assuming that your payment of 477 something is before taxes, then you quite overpaid for a car that can be had for much less through Costco or Hyundai circle. If 477 includes the sales tax (and I don't know what rate they pay in FL), then the story might be somewhat different. Still 599 and 516 charges look quite excessive.

 

[Disaster]

Here are some rules of buying and leasing a car.

1. When negotiating a car, you should never be in a hurry. You will save more money renting a car for a week or so, than being forced to take a deal because your car is broken down.

2. Ignore the salesman that tells you this deal is only good for the day, or the next hour and if you leave the showroom you won't be able to get it again.

3. Research prices. Most cars can be bought for under the MSRP. Some for much less.

4. Be a little flexible. If you are only willing to take a car that is harder to find, you will be competing with other people who want that same car. Also, the salesman will know he can push your buttons.

5. When negotiating a lease, treat it first like a sale. That is, get a good price first, then worry about financing, and the like.

6. Refuse the add-ons, up-sells, or negotiate them for way less or have them throw them in. The dealer makes a fortune on these...some have 90% markups. Some common ripoffs are, carpet and paint protection, rustproofing, tinted glass, additional warranties, GAP insurance, and death/illness insurance. Then there are some plain steal your money ones that add no value whatsoever, like preparation fees.

7. Always be prepared to walk out, no matter how much you want the car. Let them know that you will.

8. Watch out for high down payments, used to lower the monthly payment. This shouldn't be an issue if you negotiate the real price going in, and make sure nothing else gets added in.

To answer your question, Yes, you paid too much.

FYI. You made a lot of mistakes.

1. You didn't research prices before going to the dealership. People are getting anywhere from $1000 to $3000 under MSRP, on 2010's, not including rebates. Considerably more savings on 2009's.
2. You didn't negotiate the up front price, separate from the lease.
3. You bought add-ons and other crap that added little or no value to you.
4. You were in a hurry, and weren't willing to walk away without a car.
5. You paid a huge $3000 dollar down payment which brought your lease payment down to $474. In reality, it is $557 (what you would pay with 0 down.)
6. You were fixated on a particular car, instead of being a bit flexible, either with the options or your time.

so technically you are paying for a car with GCC of around 40770, if my assumption of 52-55% residual value and 0.00124 money factor are correct of course. According to Edmunds V6 + tech MSRP is 39,300.

Actually, according to Hyundai's website, $41,800, is the correct MSRP for a 2010, 3.8L with tech. I just used their "build it" function to check.

 

[GripperDon]

Seems like you were a bit mean to Stuz88. I would tell him all that in a PM so he would know but not be publicly humiliated. No matter what he replies he is hurt. I could have sent this in a PM also and that would have been nicer.

 

[Disaster]

Seems like you were a bit mean to Stuz88. I would tell him all that in a PM so he would know but not be publicly humiliated. No matter what he replies he is hurt. I could have sent this in a PM also and that would have been nicer.

I suppose it might be embarrassing for him, but it wasn't meant to be. Besides, he already exposed himself. The horse is out of the stable. By posting that advice in the forum perhaps it will help someone else not to make the same mistakes as him, and it gives others the opportunity to add their own tips, for negotiating.

 

[Genny46PM]

I think it's premature to say one's screwed. Is the $474 monthly inclusive of the sales tax or is the monthly $474+sales tax? What is the annual mileage allowance, 12k or 15k?

 

[Mark_888]

Seems like you were a bit mean to Stuz88. I would tell him all that in a PM so he would know but not be publicly humiliated. No matter what he replies he is hurt. I could have sent this in a PM also and that would have been nicer.

Maybe he didn't know he was humiliated until you pointed that out? Since 1986 I have always paid cash for my cars (all purchased new) and only discuss out-the-door-prices with dealers. Otherwise, it just seems too complicated and they will figure out a way to screw you with last minute fees, etc.

 

[Disaster]

Since 1986 I have always paid cash for my cars (all purchased new) and only discuss out-the-door-prices with dealers. Otherwise, it just seems too complicated and they will figure out a way to screw you with last minute fees, etc.

That is a smart way to do it, if you can afford it. Some people never seem to get ahead enough to pay in cash for something as expensive as a $30,000 car. A good way to do that is to buy the minimum car you can afford, maybe used, or hang onto that old car and put payments into the bank like you bought a new car. In a few years you will have the money, and the interest...as opposed to paying someone else interest. Once you get ahead it is much easier to stay that way. While you are driving that car, and not making payments, start putting money away for the next one. Plan it right and by the time the car wears out you will have the money saved for the next one. You may even find you prefer to have the money cushion vs. the new car. In the long run you will be in much better financial shape.

It can be very confusing with all the figures on the paperwork. One needs to check every number on the paper. I negotiated an "out the door" price on our Genesis, but when they handed us the paperwork the price was off by $1500. At this point, we were sitting down with their finance person, not the salesman who promised the price. The finance person went over every figure and showed why they were legitimate. We held our ground and sent her back to the sales manager. Turns out she didn't include a rebate in the price. If we hadn't pushed it, we'd have been out that money.

I find that negotiating an "out the door" price is the easiest way to compare prices from car to car and dealer to dealer. I work backwards from there, to determine the things that went into it, vehicle, delivery charge, tax, license, title...etc, and compare them to figures I find through research.

Comparing monthly lease rates can be harder...but you can still do it if you equalize them out by amortizing ALL up front costs into the monthly payment. In other words, take everything you pay when you pick up the car, down payment, title, etc., and divide by the lease term (24 or 36 months) and add that to the payment. Then you can compare straight payment to payment from one deal to the next. Don't forget to include lease turn in fees that happen at the end of the lease. Many leases include these fees which vary from $250 to $650 dollars. That can be another $25 bucks a month on your payment for a two year lease. Be sure not to include, first and last months payments if those are required.

I think it's premature to say one's screwed. Is the $474 monthly inclusive of the sales tax or is the monthly $474+sales tax? What is the annual mileage allowance, 12k or 15k?

Good point on the sales tax, it can add another 4-8% depending on where you live. I was basing my assessment purely on the purchase price, which one should always negotiate first, before negotiating the lease terms. Using the an online lease calculator, .00124 money factor, 45% residual, $3000 down, and $500 in up front costs (title etc), and about $36K price ($3000 under invoice) yielded a monthly payment of $472 (without tax...not far from the number he quoted.) But, some of these numbers I'm not sure about. The 45% residual came from Edmunds...captive leases (leases from the manufacturer will often be calculated with higher residuals.) In another post, someone quoted a residual of 52%, that alone would lower the payment $70 a month. The .00124 money factor from an above posting, but I read that Hyundai is offering special lease terms on the Genny right now so it should quite possibly be lower, and I don't have a good idea if $500 is a good number for up front costs, which are partly based on title and license fees in the state.

Leases can sometimes be very good deals...especially "captive" leases, when manufacturers offer very low money factors and high residuals. Also, for some businesses, they make more sense because it is easier to charge them as an expense vs. a car purchase which needs to be amortized as a capital expense. However, there are lots of "gotchas" in lease deals you have to aware off. Turn in fees, as mentioned is one. Another is tire wear requirements. Often, tires will need to be replaced on a three year lease. You are effectively buying two sets of tires but only getting the full use out of the first one (the second one being given to the new owner.) This can easily add another $600-$1000 to the lease cost ($17-$28 per month.) Another thing to watch for is lease companies that allow almost no wear and tear on the car. They charge for every little scratch or dent. This can add at least the cost of your insurance deductible. Finally, lease car companies it seems lease car companies have been reducing the mileage allowances. Years ago, I recall 15K being common. That dropped to 12K. Now most lease terms quote 10K and you have to pay more, up front, to go higher.

http://www.leaseguide.com/calc.htm

Here is an article with car buying tips from Edmunds.

http://www.edmunds.com/advice/strategies/articles/45993/article.html

I recommend Cohen's book on negotiating. And I highly recommend using TMV pricing. But to get a good deal on your next car, you don't have to be an ace negotiator. You just have to follow a few simple rules.

-Don't buy a car in a hurry.
-Eat before you go to the dealership — you might be there for four hours or more, and you want to be able to think clearly.
-Check all the numbers and get as much information as you can before you begin negotiating.
-Don't enter negotiations with someone who intimidates you. It should be a win-win proposition, not a matter of one person controlling another.
-Take risks. Treat negotiating as a game — and know that the car salespeople are doing the same.
-Always, always remember to walk out if you don't reach a deal you like.

 

[stuz88]

well, I guess I asked for it and got it! I have always bought cars about a year old in the past with two exceptions, but this was my first lease.
Re some of the comments:
The payment does include 7% state tax
The "useless add ons" were not included in the vehicle price.they had been put on by another dealer.
I was mainly interested to know if this "lease maintenance" deal that pays for any damage when you hand the car back is normal, but didn't get an answer, would still like to know.
I am not humiliated, I appreciate straight talk .At 72 I have been humiliated much worse than these comments in my life. Not to whine, but the death of my son in law ocurring the day I was going to get the car was somewhat distracting to say the least (lease?) and I was booking plane tickets while the acountant was typing up the papers, not smart on my part.
Overall, considering I have every available option on the car, including trunk liner, wheel locks, pinstriping etc. and my payment includes sales tax, sounds like I am probably only paying about $20/month more than my best deal. Here in Central Florida outy of 4 dealers there were a total of 4 cars available, so I don't think I would have had too much negotisting room?
Main thing is I love the car, still finding things to do with the electronics.

 

[Matt Z]

Considering the mistakes I've made (ex-wife, career choices etc.) I wouldn't cry over this one! Unfortunately, 95% of the people out there will take advantage of anyone if their guard is down. Sorry for your other loss!

______________________________

Help support this site so it can continue supporting you!

 

[sandy]

Stutz88

What you refer to as lease maintenance is an "insurance policy" to cover any damage to your car over and above the leasors standards for excessive wear and tear at lease end.

Different companies handle this in different ways. When we leased my wife's Acura RDX, the coverage was included at no extra cost (even tho we most likely paid for it somewhere). Interestingly, the coverage was never even mentioned during the sales process...I only knew about it from previous Acura leases with Honda Finance.

In the case of my Genesis,the dealer offered the coverage at an extra up-front cost, but I was free to accept or decline. In fact I had to sign a statement saying I declined.

You may not have wanted the coverage, but you didn't get totally screwed because you are getting something for your money.

Also, with $3k down and $474/month including 7% sales tax, plus the extras (you may not have wanted them but you did get them) sounds like a fair deal.....based on my own experience and reading thru the prices paid threads on this forum.

Enjoy the extras and the comfort of the wear and tear coverage and your great new car.

 

[Disaster]

Re some of the comments:
The payment does include 7% state tax
The "useless add ons" were not included in the vehicle price.they had been put on by another dealer.
I was mainly interested to know if this "lease maintenance" deal that pays for any damage when you hand the car back is normal, but didn't get an answer, would still like to know.

Overall, considering I have every available option on the car, including trunk liner, wheel locks, pinstriping etc. and my payment includes sales tax, sounds like I am probably only paying about $20/month more than my best deal. Here in Central Florida outy of 4 dealers there were a total of 4 cars available, so I don't think I would have had too much negotisting room?
Main thing is I love the car, still finding things to do with the electronics.

First, let me send my condolences on the loss of your son in law, to you and your daughter. I recently lost a close friend and know how devastating a loss it can be to friends and family.

I'm glad to here that you didn't have to pay for the dealer add-ons. In my experience, the vehicle insurance/lease maintenance that they added, is not typical, at least not in the Michigan area. I've never even had a dealer attempt to add anything like that, though I do admit to signing a lot of decline forms (like GAP coverage) so perhaps it has been offered but I was too busy saying no thank you to notice.

On the other hand, all the leases I've seen recently have included a "disposition fee," "to compensate the leasing company for the expenses of selling or otherwise disposing of a vehicle." This fee is waived if you decide to buy the vehicle and often dealerships, or manufacturers, will cover it, if you decide to buy another new vehicle from the same dealership or manufacturer.

http://www.leaseguide.com/lease09.htm

Glad also to hear you are happy with the car. The Genesis is a great value compared to anything in it's class.

 

[sandy]

Disaster -

Thanks for a great overview of the leasing process.

I've been leasing for the past 20 years because of the convenience of getting into a new car every few years without the double hassle of negotiating both the trade-in and new car purchase at the same time.

As you point out, when you consider how much the up-front Acquisition (or Bank) fee of $595 plus the end of lease disposition fee of $400 ads to your monthly payment (in my case $995 / 27 months is almost $40) I may reconsider from now on.

I know leasing costs more than buying (but I think the differential may be marginal) but I'd like to know how big a "penalty" you would pay if you leased every 3 years vs. buying and trading every 3 years. I guess the problem with trying to do these calculation is the number of future unknowns like real world trade-in numbers

Also, when you refer to Sutz88's huge $3000 down payment, I doubt all of that was to reduce the cap cost; at least half of it was probably to cover the Bank Fee, 1st month payment, dealer doc fees and registration fees. That's why I don't think he did that badly.

 

[Disaster]

I've been leasing for the past 20 years because of the convenience of getting into a new car every few years without the double hassle of negotiating both the trade-in and new car purchase at the same time.

As you point out, when you consider how much the up-front Acquisition (or Bank) fee of $595 plus the end of lease disposition fee of $400 ads to your monthly payment (in my case $995 / 27 months is almost $40) I may reconsider from now on.

I know leasing costs more than buying (but I think the differential may be marginal) but I'd like to know how big a "penalty" you would pay if you leased every 3 years vs. buying and trading every 3 years. I guess the problem with trying to do these calculation is the number of future unknowns like real world trade-in numbers

I think, if you trade a car in every few years, leasing often is cheaper than buying. It certainly is less hassle.

There are a few factors that can make leasing cheaper than buying and trading in for shorter cycles (2-3 years.)

First, manufacturers will often overestimate the residuals (something that is less likely to happen with a bank.) This can make a huge difference in lease rates. I've benefited from this, turned in many cars that were worth much less than their residual.

Second, manufacturers will often have special finance rates on leases (though this can happen with loans too.)

Third, if you release from the same company, or manufacturer, they will often wave the disposition fees and sometimes the acquisition fees as well.

Finally, with a lease, you only pay tax on the part of the car you use, as opposed to the entire MSRP.

Add all four together and you can save thousands of dollars, divided by the lease term this can be over $100 a month.

The real savings, with purchasing comes in the later years with a car, when the residual value rate starts to flatten out. I car might lose 30% of it's value the first year, 20% the second and only 10% the year after...soon dropping into the 2-5% and then car condition and miles become bigger factors. It is those years, that really bring the cost of car ownership down. Of course, the trade off is you don't drive a new car every couple, few years.

Lets take my car for example, a 2009 3.8L Premium Plus. I think the MSRP was something like $37,000. KBB has a residual of 55% (2years), 45% (3), 35% (4), 30% (5). Lets assume a residual of 70% for the first year. I paid $33,500 with tax and all other fees. If get rid of the car in one year it would cost 33,500-25,900(70% of MSRP) or $633/month (for a straight purchase, loan interest would add more to the price.) In two years that becomes $548/month. In three years, $468. In four years, $428. In five years, $373.

As you can see, the break even point, isn't till about 3 years. But it really takes off after that. By keeping the car just 5 years, I'm saving $100 a month vs. leasing or $6000 over the car ownership. In 8 years, twice that. Buying two new cars in 20 years would have saved $30,000.

P.S. I was like you and over the last 20 years have been leasing cars. I did the math, and wished I had saved the money and bought used cars and kept them longer. Heck, there is even a little more connection with a car when you own it and know you have to take care of it. I missed that from my younger, poorer days. It also helps that cars are much more reliable now and that Hyundai has a 100,000 mile powertrain warranty.

 

[sandy]

Again, thanks for the insight. I will stick with leasing. I'm not interested in economies I may realize 8 to 10 years down the road. In fact, I think twice now before buying green bananas.

 

[Disaster]

Again, thanks for the insight. I will stick with leasing. I'm not interested in economies I may realize 8 to 10 years down the road. In fact, I think twice now before buying green bananas.

Good thing for the car companies. They need more guys like you and less like me.

But seriously, money is a finite resource and we all have different things we care to spend it on. For some people it is a new car, for others it might be a vacation to the tropics.

 

[Disaster]

Just thought of one other thing, related to leases. Don't assume the dealer is getting you the best lease. They tend to focus on monthly cost and not overall cost. All things being equal...or even close, you should always choose the manufacturer's financing over an independent bank. Their charges are usually lower (acquisition and disposition) and they will often waive them if you lease buy another car from them. Also, they tend to not want to add charges at the end of the lease, because they want to keep you as a car buying customer. Many banks will nickel and dime you for every little scratch on the car. I recall a few years ago receiving a letter from the federal gov't with regard to U.S. Bank and their unfair charges. Apparently, they were not returning any security deposits, no matter what the condition of the car. Wow!!! Just found this link and apparently U.S. Bank is still up to their unethical business practices.

http://www.complaintsboard.com/complaints/us-bank-car-leasing-c9117.html

Here is the most recent posting, 4/27/2010.

As mentioned here over and over again, I just turned in my 2006 Acura TL. I have leased several vehicles in the past which were thru American Honda. My most recent TL was leased thru US Bank - I had no idea there was a difference, it was just another company to me that my dealer signed me up with! We never had a problem with American Honda - no phantom fees, etc.

Well now US Bank - that's another story!

Here's my story. I turned in my Acura TL a couple of months early. I purchased a new Honda Civic. Negotiating the new car, my dealer agreed to make my last two payments to US Bank. Prior to ending my lease - US Bank was pressing me to buy out the TL - I declined as I wanted a new vehicle. I turned the car in, contacted US Bank and they explained that the turn in process would involve an inspector evaluating the car. Of course, being the trustworthy soul that I am, I figured they would be honest. In the review process the inspector found that 3 of the 4 tires were worn, some minor scratches to the bumpers and a chip in the windshield. Actually, I agreed with those findings. However, in my past leases with American Honda they would allow for this since the rest of the car was in PERFECT condition. I maintained the cars extremely well abiding by the manufacturers suggested maintenance guide - plus maintaining the appearance. US Bank had no such allowance, citing these issues as EXCESSIVE WEAR.

So now, I receive my bill for the excessive wear, excessive milage, end of lease fee ($395.00) plus my last two months lease plus sales tax for these items. I contacted US Bank and told them that my new car dealer said they mailed in a check a few weeks ago to pay the last two months of the lease. The rep acknowledged that there was indeed that payment received.

Okay, now I wait a few weeks for the final bill to come in as I was told it was and of course, it is the same bill as I received before with the payment that my dealer made still marked as unpaid. There was also the sales tax which I had questioned. I never new there was sales tax on excessive milage, wear and tear, lease ending fees, etc. The tax alone was almost $300.00 making my total $3, 496.09

Here's the breakdown...

Termination Fee: $395.00
Excess wear and tear: $1124.80
Excess milage: $643.32
Outstanding rent: $1044.30
Sales Tax: $288.67

I was unaware of the sales tax and once I calculated this I found it to be 9%. The rep told me that was the sales tax for my state (Pennsylvania). I told him that it was 6%.

I spent a lot of time on the phone and explained that I have learned a lesson to never lease a car again and most definitely wnever do business with US Bank. She told me that leasing is not for everyone. I then went over the two months of payment that they claimed was due and she told me that it must be a clerical error and was not marked as received.

Now we are down to $2, 357.80. I was not happy and said I need to work out a payment plan. She said that if I pay by the end of the month they could knock 20% off the bill.

The bottom line here is that I feel like I was scammed by a company that is either unorganized or they just figure to send the bill and maybe the customer will pay!

I will be forwarding this link and my message to my local major news station. They are pro-active when it comes to issues like these. Since I am not the only complaint, perhaps they may consider this as newsworthy.

Mike

Here is another page with tips on leasing.

http://fso.cpasitesolutions.com/premium/LE/12_le_bc/fg/fg-Leasing.html

From this link, beware of "open ended leases." This is where you bear the risk of the car not meeting the residual value. They could offer a very good rate, based on an unrealistic residual and then hit you up with the difference at the end of the lease.

 

[stuz88]

As an update, I read on the lease care policy "(sic) THE PURCHASE OF THIS SERVICE CONTRACT IS NOT REQUIRED TO OBTAIN THE FINANCING OR LEASE OF THIS VEHICLE". I spoke again to my salesman, and he said the manager had agreed to take it off since I had signed I didn't want it, and the bean counter would call me. He did, to tell me if he took it off my payments would stay the same because he would tack the $516 onto the price of the car. The salesman (if to be believed) did not know this had happened and is looking into it. I also called Hyundai in CA and complained, citing the 136 miles already on the car, the fact I was only told the MRSP but never saw the sticker until after the deal etc.etc.
However ,after reading the post where worn tires are not considered normal wear and tear, maybe I should have put up and shut up.
What then is considered "normal" after 36,000 miles ?

 

[Disaster]

As an update, I read on the lease care policy "(sic) THE PURCHASE OF THIS SERVICE CONTRACT IS NOT REQUIRED TO OBTAIN THE FINANCING OR LEASE OF THIS VEHICLE". I spoke again to my salesman, and he said the manager had agreed to take it off since I had signed I didn't want it, and the bean counter would call me. He did, to tell me if he took it off my payments would stay the same because he would tack the $516 onto the price of the car. The salesman (if to be believed) did not know this had happened and is looking into it. I also called Hyundai in CA and complained, citing the 136 miles already on the car, the fact I was only told the MRSP but never saw the sticker until after the deal etc.etc.
However ,after reading the post where worn tires are not considered normal wear and tear, maybe I should have put up and shut up.
What then is considered "normal" after 36,000 miles ?

Requiring a minimum tire thread depth is pretty common in leases. It is really something to consider when you stretch from a two year lease to a three year as many cars tires will not have the mandatory tread depth after three years/36,000 miles. It is really unlikely the original Dunlops will come close to that so you can just assume the cost of replacement tires as part of your lease. The requirement is usually between 3 and 4mm, but often that is the minimum allowed anywhere, so they can require a tire change despite the tire not being down the the wear indicator, in the middle, if the shoulder is below the minimum.

Most of my leases have been two years, but on my one three year lease, a Volvo XC90, I had to replace the tires. Fortunately, they weren't picky on what I replaced them with so I bought the absolutely cheapest, clearance tire I could find (which, oddly enough, turned out to be better tires than the OEM crap they put on...wish I had changed them sooner so I could have enjoyed them more.)

Windshield cracks or chips are never considered "normal," but small stone chips are usually not a problem. When it was time to return my Volvo I received a card in the mail that came with a helpful guide to what was allowed and what wasn't. It had a little ruler on it to measure scratches and dings (over a certain size they must be fixed or they would be charges.) It came with a depth gauge to measure tire tread. I would ask for this up front if I was to lease again.

It sounds like the financial guy is giving you a bit of a run around. I bet he makes a commision from upselling. Keep after him, and the sales manager. The sale manager usually doesn't want to upset their customers, because they'd like to sell them their next car, and they will often go to bat for you with the finance and service people.

By the way, 136 miles isn't a great deal. A few dozen test drives from customers like yourself, perhaps a ride or two to a different location for an alignment or to a detailing shop and you can be there.