Yeah, I'm thinking I might want a newer model after four years and hopefully will be in a position to buy rather than lease. Time will tell.

Thanks for making me feel a bit better. I've never fully agreed with the lease option but I just had to have this car and this was the only way I could afford it right now. My buyout will be around 19k after four years and I put about 2,500 down. There's got to be another way around paying extra for it. Thanks again for the input.

 

The money factor I used is a bit high and its possible the residual could be better and that you negotiated a better price as well, all these things influence the payment. I wouldn't pay more than 450 but yes you could probably do better.

 

Grannyrod, if you use it as a daily driver it is not a bad idea to lease.

Here are just a few things I wouldn't want to have to deal with out of warranty, an issue not had when leasing in the warranty period.

1. Top replacement = $2000
2. Seat replacement or refurbishment (leather) = $500-$2000
3. Motor issue
4. Transmission problems
5. Replacing the clutch

Unless you can keep the car in the garge through foul weather and use it as a weekend car, then leasing isn't a bad idea and you get a new car every few years. Feel better...you got an S

 

Unfortunately, it is a weekend car and I'm struggling to put miles on it, that's why I thought I'd keep it. On the other hand, I'd hate to be making full payments with it sitting in the garage all the time too. Ummm.... I hear you on the warranty point, though. Sounds like I'm going to have to rethink this thing. Thanks for helping me think. You're right, getting my S has given me a new lease on life so I'm happy no matter what.

 

sorry but i got few questions! what does money factor mean? and what difference does it make when your residue value is high rather than low? which is better for the buyers at the end?
btw i suppose the lease price has been pre-set by the dealers? but people always told me to settle the buy with cash price before you go futher into monthly payments? thats say if i lower the price from 33k to 30k? whats the advantage toward my lease payments? thx guys u guys r very helpful!!

 

bump

 

wutafob, i'm gonna try to make this clear for you

This is how lease payments are calculated, terms that you need to know are CAPITALIZED: (These numbers are fabricated for simplicity of understanding)

NEGOTIATED PRICE OF CAR = 30,000
(negotiate the price of the car first, this will lower your lease payments.)
RESIDUAL VALUE = 20,000
(this is the estimated value of the car after the lease term. This residual value cannot be negotiated, it is predetermined and will change depending on the length of the lease, 3 or 4 years, and it will change depending on the number of miles driven per year, 12,000 or 15,000. The longer the lease term, the lower the residual value, the higher the miles driven per year, the lower the residual value.)

DEPRECIATION = 10,000
(This is the decline in value of the car during the lease term. It is the negotiated price minus the residual value. 30,000 minus 20,000)

 

continued...

 

take the 10,000 depreciation and divide it by the number of months of the lease term, in a 3 year lease, divide 10,000 by 36 months and you get 277.78.

MONEY FACTOR = .0022
(Money factor is the same thing as APR, but it is shown in a different format and computed differently. To convert Money Factor to APR, take the money factor and multiply it by 2400. This will give you the equivalent APR. A money factor of .0022 is an equivalent of an APR of 5.28%. Make sure the dealer does not charge you a money factor that is too high)

Multiply the money factor by (NET CAPITALIZED COST + Residual Value) Example: (.0022 x 40,000) = 88

NET CAPITALIZED COST = Negotiated price of car minus any down payment you make. In the example, we assumed a 0 down payment, so we get 30,000 + 10,000 to get 40,000 multiplied against the money factor.
Add 88 to 277.78 and you get your MONTHLY LEASE PAYMENT of 365.78

Multiply 365.78 with your state's tax rate or tax policy. In California I multipliy 365.78 x 1.0825 to get my final lease payment.

 

jyeung528, thanks man..now i understand!