Lease numbers not adding up

CBR2200

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Can someone verify the 4xe residual with CCAP please? And is that based on MSRP or the negotiated cap cost? My dealer is telling me it's 60% of the negotiated cost for a 3yr 15k mile 4Xe Rubicon.
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GtX

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FFS. A lease is too complicated for me.
 

amprice4

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Can someone verify the 4xe residual with CCAP please? And is that based on MSRP or the negotiated cap cost? My dealer is telling me it's 60% of the negotiated cost for a 3yr 15k mile 4Xe Rubicon.
Rubicon 36/15 is 61% rv buy rate mf is .00203 acquisition fee is also waived this month so make sure they don’t charge you that.

residual is not on the negotiated cost, it’s based on MSRP

sounds like you need to find a new dealer!

edit: it looks like you ordered your 4xe in April. Tell the dealer that you want sold order protection and you want to use the numbers from Apri. This will increase the residual up to 62% with the same money factor. Some dealers might balk at the idea but I know for a fact that it is possible.
 
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Snazzy4xe

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Does the acquisition fee have any synonyms the dealer might use such as disposition fee or service fee...can someone tell me what the acquisition fee would be if they hadn‘t waived it?
 

amprice4

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Does the acquisition fee have any synonyms the dealer might use such as disposition fee or service fee...can someone tell me what the acquisition fee would be if they hadn‘t waived it?
Disposition fee is what you will pay when you turn in the vehicle.
Service fee could be anything really. You would have to post up a picture of your lease contract to really see what is going on.

The normal CCAP acquisition fee is $595. Do you see that fee anywhere on your contract?
 

aug0211

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I think this could help. We are similar vehicles, terms, and everything. I’m in Ohio (7% tax).

Here is a written quote from my dealer. 61% RV, .00203 MF.

Curious what people think of this write up, and whether there’s anything fishy in here or if it’s a good deal. Also hoping it helps you since we are a similar deal.

6BEF5D42-DFCC-46B4-B41F-3A87EC167B8C.jpeg
 

CBR2200

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I went in yesterday to talk to the finance guy. Long story short, they have no 4xe Rubicons in stock and every dealer in the area is adding $10k market adjustments. They rethought their decision to sell me one for $4k under sticker. That's just me reading into the situation, they didn't actually say that. But they did say that by fudging the numbers on the deal we had when the vehicle just happened to be getting close to delivery. The GM was literally happy to refund my deposit. He practically skipped his way to the cashier personally to run the card.
 

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I think this could help. We are similar vehicles, terms, and everything. I’m in Ohio (7% tax).

Here is a written quote from my dealer. 61% RV, .00203 MF.

Curious what people think of this write up, and whether there’s anything fishy in here or if it’s a good deal. Also hoping it helps you since we are a similar deal.

6BEF5D42-DFCC-46B4-B41F-3A87EC167B8C.jpeg
You’re paying about $23k over the course of the lease.
$14.5k in depreciation, $1.4k in taxes, and $7k in finance charges (read, interest). That looks very lopsided to the lease company, but it may be competetive with what is available on these wranglers. Across all vehicles, this seems excessive.
This is why I don’t think the mf to apr conversion is a good indicator of a good deal.
 

Some Random Guy

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To help compare finance charges and interest, I pulled an estimate from my bank. A $50k loan clocks in at 1.89% for my bank. That is just under $2500 interest over the course of the 5 year loan. The payment is $875 though.
This is out of reach for some budgets, so the lease becomes tempting.

This is why I recommend comparing based off capitalization cost minus residual (aka, the depreciation). Think of it from the bank’s perspective. They hand you something worth $60k, receive payments every month, then are guaranteed to get back $40k (they’ll get there with mileage charges, termination fees, or wear-and-tear charges if the vehicle isn’t worth the residual). If those payments add up to a significantly higher amount than $20k, they’re making a lot of money. They should expect single digit rates of return in my opinion, and they make deals that do.

If you’re paying over 10%, you’re doing it for a scarce asset or being taken for a ride. The first might be ok if you really want/need it, you’re an adult and can decide if this applies to you; but the second is not acceptable.
 

aug0211

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To help compare finance charges and interest, I pulled an estimate from my bank. A $50k loan clocks in at 1.89% for my bank. That is just under $2500 interest over the course of the 5 year loan. The payment is $875 though.
This is out of reach for some budgets, so the lease becomes tempting.

This is why I recommend comparing based off capitalization cost minus residual (aka, the depreciation). Think of it from the bank’s perspective. They hand you something worth $60k, receive payments every month, then are guaranteed to get back $40k (they’ll get there with mileage charges, termination fees, or wear-and-tear charges if the vehicle isn’t worth the residual). If those payments add up to a significantly higher amount than $20k, they’re making a lot of money. They should expect single digit rates of return in my opinion, and they make deals that do.

If you’re paying over 10%, you’re doing it for a scarce asset or being taken for a ride. The first might be ok if you really want/need it, you’re an adult and can decide if this applies to you; but the second is not acceptable.
I get a new vehicle every 3 years. I put $0 down and drive ~$60k-$70k vehicles for $500-$600/month. At the end of the lease, sell the vehicle for a $10k profit.

I’ve historically agreed with your math and purchased all my vehicles. After leasing a Wrangler and seeing the profits at the end of the lease, this beats the heck out of buying 🤷‍♂️
 

LJ_3M121318

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I get a new vehicle every 3 years. I put $0 down and drive ~$60k-$70k vehicles for $500-$600/month. At the end of the lease, sell the vehicle for a $10k profit.

I’ve historically agreed with your math and purchased all my vehicles. After leasing a Wrangler and seeing the profits at the end of the lease, this beats the heck out of buying 🤷‍♂️
Question on that approach.

So you make all 36 payments then at the end you buy the vehicle at it's residual value as noted in the lease agreement? And after buying it you immediately sell it and are able to make profit? Or are you buying it less than the residual amount? If so how are you able to do that? Since it's already spelled out in the contract I don't see how or why the dealer would negotiate that.
 

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I get a new vehicle every 3 years. I put $0 down and drive ~$60k-$70k vehicles for $500-$600/month. At the end of the lease, sell the vehicle for a $10k profit.

I’ve historically agreed with your math and purchased all my vehicles. After leasing a Wrangler and seeing the profits at the end of the lease, this beats the heck out of buying 🤷‍♂️
You’ve struck on how to win with leases. If you can come out ahead of residual, it can work well. My BRZ actually appreciated in value, so I had roughly $15k in “equity” by exercising my purchase option (or trading it in before expired on a new purchase/lease where the dealership exercised my option).
If you are smart, it is kind of like flipping houses, but with vehicles. But you fall right back behind with a bad lease deal were you throw away money on charges. The market can also turn on you. These leases are written so they will likely come out in the bank’s favor.
Edit: profit needs to take into account what you’ve paid in monthly payments, not just your residual vs sale price. If you’re paying 20+% in finance charges on the depreciation amount, you’d have been better off buying, having a higher payment, and extracting extra equity at the 3 year mark when you sold.
 

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Question on that approach.

So you make all 36 payments then at the end you buy the vehicle at it's residual value as noted in the lease agreement? And after buying it you immediately sell it and are able to make profit? Or are you buying it less than the residual amount? If so how are you able to do that? Since it's already spelled out in the contract I don't see how or why the dealer would negotiate that.
You are either buying it out yourself (which requires cash on hand or a used car loan) or allowing a dealership to exercise the option for you, potentially as part of a trade-in. The residual will generally not be lowered after signing, unless you do an extension or something.
 

aug0211

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You are either buying it out yourself (which requires cash on hand or a used car loan) or allowing a dealership to exercise the option for you, potentially as part of a trade-in. The residual will generally not be lowered after signing, unless you do an extension or something.
I thought about paying with cash on hand and then flipping it, or possibly going to a dealer on trade.

Dealerprices were ok, but then I discovered the car buying services out there.

Sell to one of the many buying services. Vroom, GiveMeTheVIN, Carvana, ALGO, CarMax, etc.

Wranglers tend to hold their value very nicely.

Edit: typo corrected
 
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