Lease Number

[KyleH]

Thanks DonC.

I need to rethink the lease option for next time. By setting up a small company for taxes / IRS, it should allow me to lease out a "company car". I think I could have laundered $4k in it or saved another 10% (or more). Something to research for next time.

-KyleH

[awm]

The issue is that the numbers provided does not compute to what the monthly payment should be.

Also, some keep stating that ally dictates everything except for the purchase price but that's obviously not the case with the money factor as I was quoted 2% while the rate should be 1%.

I'm fine with the numbers if I can match them up with the dealer, but when I'm presented with just a monthly payment and I try to calculate how he arrived at the number with our presumed final numbers, then of course I will have questions when they don't match.

I appreciate the assistance and tips.

I have seen a number of posts on this board which mentioned that Ally sets the residual, acquisition fee as well as money factor and the dealer has no influence. When it comes to residual and acquisition fee, the statement is correct. In respect to the money factor, however, it is not uncommon for a dealer to mark up the rate to improve the overall profitability on the car sold.

I live in Texas and went with a lease because I did not want to take long-term risks with the Volt. I was quoted money factors from various dealers and they were all over the board with the same lessor (Ally). At the end, I went with a dealer that offered the best price before the $4,450 lease cash and also did not mark up Ally's money factor, i.e. for excellent credit, the implied interest rate was 1% (0.00042 money factor). As mentioned in other threads, Ally slaps $2,500 on top of the residual if you wanted to purchase the car at lease end which makes it a completely unattractive lease for people who have the slightest intention to purchase the car at lease end. As long as you treat the lease as what it is (a multi-year rental), the Ally deal with $4,450 lease cash on 1%/0.00042 is excellent.

[DonC]

In respect to the money factor, however, it is not uncommon for a dealer to mark up the rate to improve the overall profitability on the car sold.

I've seen cases where the dealer had to kick in some cash to buy down to a lower interest rate on a promotional lease deal. In this case the dealer has the option of offering the customer the standard rate and keeping the cash. But I'm not aware of instances where the lessor pays the dealer to increase the interest rate. How exactly would this work?

[awm]

I've seen cases where the dealer had to kick in some cash to buy down to a lower interest rate on a promotional lease deal. In this case the dealer has the option of offering the customer the standard rate and keeping the cash. But I'm not aware of instances where the lessor pays the dealer to increase the interest rate. How exactly would this work?

Two dealers I spoke with who quoted a higher rate acknowledged that they make a profit on the finance portion. I did not inquire how that profit is paid to the dealership but there are basically two possibilities: The lessor pays the interest difference monthly to the dealership or, probably more likely, pays a single flat amount when the lease is funded.

[dknn79]

Two dealers I spoke with who quoted a higher rate acknowledged that they make a profit on the finance portion. I did not inquire how that profit is paid to the dealership but there are basically two possibilities: The lessor pays the interest difference monthly to the dealership or, probably more likely, pays a single flat amount when the lease is funded.

I went to a local Chevy dealer to see what they had. When it came down to negotiating, the dealer was changing everything. The first money factor quote was 2.5%. After questioning the high rate, they came back at 1.5%. According to the Car_man over at Edmunds, the rate is 1%. Additionally, there was another forum member who received a 1% money factor.

But it is naive to believe that the dealer cannot mess with the money factor rate.

[DonC]

I think you're correct guys, they do play with the lease rate. I stand corrected. I'd be comfortable going with Car_man over at Edmunds. He's saying for HOV cars the residual is 58% for 15K miles without NAV, 1% interest, and $3370 lease cash. For other areas the terms are the same but the lease cash is $4445. That's completely consistent with what people have been reporting other than the interest rate.

Don't you love the internet? Don't you hate car dealers? LOL

[John_Hatchett]

I think you're correct guys, they do play with the lease rate. I stand corrected. I'd be comfortable going with Car_man over at Edmunds. He's saying for HOV cars the residual is 58% for 15K miles without NAV, 1% interest, and $3370 lease cash. For other areas the terms are the same but the lease cash is $4445. That's completely consistent with what people have been reporting other than the interest rate.

Don't you love the internet? Don't you hate car dealers? LOL

39,995 msrp

2,500 discount

4,445 gm rebate

300 misc fees



33,352 sales price. 36 months, 45000 miles.

23,197 residual



10,155 depreciation

1,725 rent


330 base payment, 350 with tax.

[DonC]

John, I think they're charging 2% rather than the standard 1% (that's the only way you get $1725 rent). Weirdly you also don't seem to be paying the $795 acquisition fee, which would bump your costs up $22/month. The 2% and the acquisition fee more or less balance out. The $300 misc fee may also be fine or questionable. Hard to say.

But overall this is a good deal. You might want to grind them on the interest rate and tell them you KNOW it should be 1%.

[sinnombre]

The money factor I paid two weeks ago on my lease is .00074 . (1.78 %)

[John_Hatchett]

The money factor I paid two weeks ago on my lease is .00074 . (1.78 %)

I am going to assume I got the 2% rate because I put my youngest kid on the lease to build his credit history while he is attending college.