What did you pay for your Genesis G80?

[TurtleBoy]

For one thing, the money factor on the lease will be less than the 1.9% you'll pay to finance a purchase through Genesis.

Just checked for the 2018s, not important since there are so many other factors but the MF is .00113 (2.712%) for leasing but there is the lease cash which lowers that. Obviously RV depends on lease terms but seems to be about 48%.

 

[Prospective G80 Owner]

Just checked for the 2018s, not important since there are so many other factors but the MF is .00113 (2.712%) for leasing but there is the lease cash which lowers that. Obviously RV depends on lease terms but seems to be about 48%.

I thought you were interested in 2019s? The MF is significantly lower and the RV is higher.

 

[TurtleBoy]

I thought you were interested in 2019s? The MF is significantly lower and the RV is higher.

Yes I am but I was not working on my deal. I was talking about mgg's situation and then we got into discussions about ending a lease early in regards to lease cash. He is trying to buy a 2018 but the dealer won't come off MSRP.

 

[TurtleBoy]

I thought you were interested in 2019s? The MF is significantly lower and the RV is higher.

As an exercise, and that may be all it is, I used the 2019 numbers for a G80 Sport and the MSRP and price from your deal to compare from an APR point of view, leasing and then buying versus just buying. Not sure the value of this really since you probably wouldn't consider leasing and then buying unless there is lease cash available but I'm I like numbers and have time.

The current MF is .00032 (.768%) and the RV is 52% and using an MSRP of 56,560 and a sales price of 52,362. For simplicity I used the same number for the cap cost. From those I calculate the monthly rent charge (interest) to be 26.17 or 942.12 for the term of the lease. If you add to that the 750 acq fee and 400 disp fee the total "interest" would be 2092.12. The amount you are financing with the lease to be 22,950.80. In order to pay 2,092.12 in interest on a three year loan for 22,950.80 the interest rate would need to be 5.75% and the current financing from Genesis is 1.9% up to 60 months.

Another thing to keep in mind is that the rent charge is not only based on the depreciation value so the total "interest" paid with the lease will be, or usually be, higher than a loan with a higher APR within reason. In this example, the monthly charge is 26.17 which is calculated as (cap cost + residual) * MF or (52,362 + 29,411) * .00032. This would be a total of 942.12 and the total interest on a 1.9% three year loan for 22,950.80 would be 678.47. So even though the interest rate for the lease is .768% you pay more interest than you would with a 1.9% loan.

I think my calculations and thought process is correct but obviously any corrections would be welcome. Not sure what it shows in general except just comparing the interest rates of purchasing and leasing and taking the lower is not always the better deal. Then again, as I said earlier, everything is theory unless talking about a specific deal.

 

[mgg]

When I was negotiating the price to buy the car the dealer came down a substantial amount. (They acted like they were coming down 5.5K but that was from full list price where they were offering me 2.5K less than Kelly Blue Book trade for my car. (I took my car to CarMax after words and they offered to purchase my car for 2.5K more than Genesis offered for trade.) Still the dealer came down 3K. If I could have rolled this into the lease and got the 5.5K lease money ( Its 6K as of Nov 1.) I would have purchased the car but they decided that they could be greedy and start from list if you leased. Because Genesis is already giving you the 5.5K discount so why should they give you anything. (Kinda make sense if you can get it.) You know I get it. Dealers have a business to run and they want to make as much money as they can. But my motto is pigs get fat and hogs get slaughtered.

I'm going to a different dealer next week who also has more cars. They have about 8 new 2018 G80s. But only three of them are Sport AWD. If they low ball me on my trade. I will show them the deal from CarMax who by the way says they really want my car as they can turn it quickly. (2016 Honda Accord Touring V6) The shitty part about that is that you pay the difference in tax from your trade. So I will have to pay an extra $1000 in tax if the dealer low balls me on my trade and I decide to sell it to CarMax. (This might also be enough for me to walk away.)

You have to be willing to walk away from anything and wait until the deal is right for you. The good thing is sometimes when you walk out of a dealership with nothing you feel like you won.

Interesting about the extra money you have to pay in interest by using a lease. (I did not know this.) Also I have the cash to pay for the car I was trying to negotiate a trade plus cash deal. But the dealer really wanted me to lease as that was the best deal they made me and really they get full list price for a car they have not been able to sell. That is a sweet deal for them.

MGG

 

[BrainDoc]

I just got a quote from a dealer today for a cash price of 4k off msrp lol on a 18 g80 sport awd with 5k+ miles that's "new". I told him he can keep his car lol

 

[BrainDoc]

Sure. I bet if you waited 12 months or more you could get a much better price on today’s model.

True, except I'm looking at MY 2018,so I'll look now.

 

[TurtleBoy]

I just got a quote from a dealer today for a cash price of 4k off msrp lol on a 18 g80 sport awd with 5k+ miles that's "new". I told him he can keep his car lol

Not sure what is going on with some of the dealers but that just seems ridiculous to me. I guess with all of the uncertainty with the dealer network they are not following what would be considered normal pricing strategies.

 

[Prospective G80 Owner]

Another thing to keep in mind is that the rent charge is not only based on the depreciation value so the total "interest" paid with the lease will be, or usually be, higher than a loan with a higher APR within reason. In this example, the monthly charge is 26.17 which is calculated as (cap cost + residual) * MF or (52,362 + 29,411) * .00032. This would be a total of 942.12 and the total interest on a 1.9% three year loan for 22,950.80 would be 678.47. So even though the interest rate for the lease is .768% you pay more interest than you would with a 1.9% loan.

I think my calculations and thought process is correct but obviously any corrections would be welcome. Not sure what it shows in general except just comparing the interest rates of purchasing and leasing and taking the lower is not always the better deal. Then again, as I said earlier, everything is theory unless talking about a specific deal.

I think that the problem with your comparison is that if you purchase the car, you wouldn't just be paying interest on the $22,950 depreciation that occurs during the three-year period; you'd be paying interest on the entire cost of the car (minus any down payment, of course). So figuring a sales price of $52,362 and an interest rate of 1.9% over the same 36-month period, the total amount of interest you would pay would be $1,548. And if you took out a 5-year loan, the amount of interest you'd pay during that first 36-month period would be even higher because you wouldn't have paid down as much of the principal. Or to state it more simply, if the purchase price is the same, then it is mathematically impossible to pay more interest on a lease as opposed to a purchase if the lease APR is lower than the purchase loan APR.

In your example above, you computed the monthly interest charge on a lease to be $26.17. Well, on a purchase with a 1.9% loan, you're going to start out with a monthly interest charge almost triple that amount ($83). Even after two years, you're still paying more in monthly interest charges than you would be on a lease ($28->$26.17).

As noted previously, not only is the interest rate APR lower on the lease, but you're only paying interest on the amount of the car that you actually use rather than the whole car. Moreover, in many states, you'd only be paying sales taxes on that lesser amount as well. (Although if you were to ultimately purchase the car at the end of the lease, then this would be a wash.)

Now, I'm not saying that leasing is always the better choice, but if you don't have a car to trade in, and you're going to finance a purchase anyway, then leasing definitely has some advantages. And one of the big one's is that it puts the onus on Genesis to value the car correctly three years in advance. Because if they don't, and the car is not worth $29k in three years time, then you just hand over the keys to them and they have to eat all that added depreciation and then try to sell the car for $25k or whatever lesser amount it is worth at that point in time.

 

[TurtleBoy]

I think that the problem with your comparison is that if you purchase the car, you wouldn't just be paying interest on the $22,950 depreciation that occurs during the three-year period; you'd be paying interest on the entire cost of the car (minus any down payment, of course). So figuring a sales price of $52,362 and an interest rate of 1.9% over the same 36-month period, the total amount of interest you would pay would be $1,548. And if you took out a 5-year loan, the amount of interest you'd pay during that first 36-month period would be even higher because you wouldn't have paid down as much of the principal. Or to state it more simply, if the purchase price is the same, then it is mathematically impossible to pay more interest on a lease as opposed to a purchase if the lease APR is lower than the purchase loan APR.

In your example above, you computed the monthly interest charge on a lease to be $26.17. Well, on a purchase with a 1.9% loan, you're going to start out with a monthly interest charge almost triple that amount ($83). Even after two years, you're still paying more in monthly interest charges than you would be on a lease ($28->$26.17).

As noted previously, not only is the interest rate APR lower on the lease, but you're only paying interest on the amount of the car that you actually use rather than the whole car. Moreover, in many states, you'd only be paying sales taxes on that lesser amount as well. (Although if you were to ultimately purchase the car at the end of the lease, then this would be a wash.)

Now, I'm not saying that leasing is always the better choice, but if you don't have a car to trade in, and you're going to finance a purchase anyway, then leasing definitely has some advantages. And one of the big one's is that it puts the onus on Genesis to value the car correctly three years in advance. Because if they don't, and the car is not worth $29k in three years time, then you just hand over the keys to them and they have to eat all that added depreciation and then try to sell the car for $25k or whatever lesser amount it is worth at that point in time.

No, you are to comparing apples to oranges. You are trying to compare the cost of purchasing a car with the cost of leasing over the same time period which isn't what we are doing. you can't compare the interest on 52K to the interest on 22K.

You need to compare like values. The depreciation is what you are paying interest on since if you were buying at the end of the lease that is the amount you would not be financing,.

I think you are trying to compare and calculate things that don't make sense. Just look at the numbers for the three years since you are doing interest calculations. You are paying the depreciation 26.17 a month. Take that for 36 months and that amount is greater than the interest you would pay on that same amount what a higher apr in this example. We are not comparing leasing to purchasing over the same timeframe. We are comparing interest charges and effective interest rates.

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[Beefer]

^^ This is correct. You have to be careful with analysis. Lease = glorified rental = paying for what you are using. Purchase = entire cost.

 

[Prospective G80 Owner]

No, you are to comparing apples to oranges. You are trying to compare the cost of purchasing a car with the cost of leasing over the same time period which isn't what we are doing. you can't compare the interest on 52K to the interest on 22K.

Of course you can't. But that is exactly what you are trying to do.

You need to compare like values. The depreciation is what you are paying interest on since if you were buying at the end of the lease that is the amount you would not be financing,.

That's exactly what I've done. You're the one trying to come up with some esoteric extrapolation to show that $1,548 in interest charges over a three-year period is somehow less than $942.

I think you are trying to compare and calculate things that don't make sense. Just look at the numbers for the three years since you are doing interest calculations. You are paying the depreciation 26.17 a month. Take that for 36 months and that amount is greater than the interest you would pay on that same amount what a higher apr in this example. We are not comparing leasing to purchasing over the same timeframe. We are comparing interest charges and effective interest rates.

But that's the point you still seem to be missing. You can't just pay interest charges on that $22,950 depreciation when you purchase the car, you have to pay it on the whole amount.

Let me try to simplify this for you: Assume you're going to keep the car for exactly three years. In one example, you lease it and turn it back in. In the second example, you purchase it and finance it with your 1.9% loan, and then sell it for the RV of $29k after three years. How much have you paid in interest charges over the three-year period that you "owned" the car in both cases?

Hint: It's the exact same amounts that we've been discussing all along: $942 & $1,548.

 

[TurtleBoy]

Of course you can't. But that is exactly what you are trying to do.



That's exactly what I've done. You're the one trying to come up with some esoteric extrapolation to show that $1,548 in interest charges over a three-year period is somehow less than $942.



But that's the point you still seem to be missing. You can't just pay interest charges on that $22,950 depreciation when you purchase the car, you have to pay it on the whole amount.

Let me try to simplify this for you: Assume you're going to keep the car for exactly three years. In one example, you lease it and turn it back in. In the second example, you purchase it and finance it with your 1.9% loan, and then sell it for the RV of $29k after three years. How much have you paid in interest charges over the three-year period that you "owned" the car in both cases?

Hint: It's the exact same amounts that we've been discussing all along: $942 & $1,548.

It is not esoteric it is basic finance and interest calculations. I'm not going to waste my time or the space here trying to explain it to you if you don't want to understand how to compare them. If you are happy that is fine, if you want to learn a little do some research on leasing, effective interest calculations and like comparisons.

 

[Prospective G80 Owner]

^^ This is correct. You have to be careful with analysis. Lease = glorified rental = paying for what you are using. Purchase = entire cost.

That's true if you're one to buy and keep a car for long periods of time. However, if you buy and sell (or trade-in) your cars every three years or so, then there is virtually no difference between purchasing a car and your so-called "virtual rental". With the exception that if you're financing the purchase of your cars, then leasing will invariably be cheaper for a number of reasons.

 

[Prospective G80 Owner]

It is not esoteric it is basic finance and interest calculations. I'm not going to waste my time or the space here trying to explain it to you if you don't want to understand how to compare them. If you are happy that is fine, if you want to learn a little do some research on leasing, effective interest calculations and like comparisons.

You seem to be getting irritated and angry. If you don't want to debate the issue further, that's fine, but there is no reason to get personal about it and accuse me of not wanting to understand how to do a simple math problem, especially considering you have no idea what my mathematical and financial background is.

Perhaps someone else would care to weigh in on the straightforward question I posed at the end of my last post:

Assume you're going to keep a car for exactly three years. In one example, you lease it at a finance rate of .768% and turn it back in. In the second example, you purchase it and finance it with a 1.9% loan, and then sell it for the RV of $29k after three years. How much have you paid in interest charges over the three-year period that you "owned" the car in both cases?

 

[BrainDoc]

Received this quote" on a "new" car with 2,600+ miles on the odo.

 

[Beefer]

You seem to be getting irritated and angry. If you don't want to debate the issue further, that's fine, but there is no reason to get personal about it and accuse me of not wanting to understand how to do a simple math problem, especially considering you have no idea what my mathematical and financial background is.

Perhaps someone else would care to weigh in on the straightforward question I posed at the end of my last post:

Assume you're going to keep a car for exactly three years. In one example, you lease it at a finance rate of .768% and turn it back in. In the second example, you purchase it and finance it with a 1.9% loan, and then sell it for the RV of $29k after three years. How much have you paid in interest charges over the three-year period that you "owned" the car in both cases?

If ALL you are looking at is interest amounts over 3 years in both scenarios...then you have $1,540 on the purchase and ~$945 on the lease.

But...there are other numbers to consider if you truly want to compare leasing to finance. You cannot just look at interest paid...and be done with the conversation.

Quick numbers...

Sales price $52,362​

3-year term​

Car value after 3 years $29,000​

​

Finance...​

1.9% APR​

Total Interest paid $1,548​

Total Loss $24,910 ($23,362 Depreciation + Interest)​

​

Lease...​

0.00032 MF (0.768% APR)​

55.384% RV​

Total Interest paid $945.80​

Fees $1,015 ($420 (Registration and doc fee) + $595 (Acquisition fee))​

Total Loss $26,609 ($25,594 Lease Cost + Fees)​

​

So...leasing costs a bit more...but...
- you can write-off a lease
- if you get in an accident...does not affect lease (CarFax will destroy you if owning)
- don't have to worry about selling if owning...for some it is a nightmare and pita
- lease you can drive the piss out of it...not yours.
- there are other benefits to leasing...but don't feel like thinking anymore

 

[TurtleBoy]

I'm not getting angry, frustrated I guess you could say, it is just that you are trying to make comparisons that have absolutely nothing to do with my original post but yet trying to make it seem that it does. It appeared that you were not interested in seeing the difference so I wasn't going to spend any of our time on it.

I am not, and have never tried, to compare leasing to purchasing. I was comparing the effective interest rate of a lease to the interest rate of a loan.

We will try this again one more time another way. Using the numbers from before the sales price was 52,362 and the residual value was 52% which means that the depreciation is 22,950.80.

This 22,950.80 is the amount you are financing over the term of the lease. In order to get that amount you are paying a 942.12 (26.17 * 36) in rental charges and $750 as an acquisition fee. We will even ignore the $400 disposition fee that could be charged. So in total you will pay 1,692.12 for opportunity to finance the 22,950.80 over 3 years. That would equate to an effective APR of 4.677%, screenshot below.

Not that it is really relevant since they charge the acquisition fee but lets looks at the effective interest rate just on the MF that equates to .768%. That would be a total of 942.12 over three years for the use of 22,950.80. That would be an interest rate of 2.629%, screenshot below.

If for some reason I was buying the car and had all the money except for 22,950.80 and I decided to finance that for three years with Genesis at 1.9% then the interest I would pay on the loan would be 678.47, screenshot below.

 

[TurtleBoy]

View attachment 16403

Received this quote" on a "new" car with 2,600+ miles on the odo.

They should probably increase the Savings a bit but I would ask for a breakdown of the figures going into that lease payment. I'm using a MF of .00113 and RV of 48% and am not coming up with the payment amount they are showing. What state are you in? Do you have to pay sales tax up front on the entire lease and if so are you rolling that into the lease or paying it?

 

[BrainDoc]

They should probably increase the Savings a bit but I would ask for a breakdown of the figures going into that lease payment. I'm using a MF of .00113 and RV of 48% and am not coming up with the payment amount they are showing. What state are you in? Do you have to pay sales tax up front on the entire lease and if so are you rolling that into the lease or paying it?

Thanks for the reply TurtleBoy.

I am in Ohio and the option to roll up the tax into the payment is possible I believe.

Unfortunately, I am hesitant on getting a "new" car with that many miles on it. Call me old fashioned , but when I buy my cars new, I always like taking delivery with less than 30 miles on the odo. I know, weird.

So I am considering either purchasing the car outright with cash, or if it saves me more, then leasing and then buying after 1-3 months to take advantage of "lease cash". I will see if I can get more details. Any other suggestions are appreciated.