Lease deal on Hot Wheels 2SS please advise

[Tretch]

hi guys.

I am new to the forumand was hoping someone could give me some advice on a lease deal that I am looking at. I am looking at a 2013 2 SS Hot Wheels Camaro.I have been negotiating with a local dealer. The car I am looking at has the Hot Wheels option as well as my link navigationand the dual mode exhaust.


the best price I got the dealer down to is 3500 out of pocket at lease signing and $400 for a 36 month lease. the MSRP is $45720.

hopefully if you guys can tell me that this is a good deal I will be a Camaro owner by the end of the week or leasee anyway.

thanks in advance

Tretch

[CamaroBody]

Does the down payment include the first months payment? The $400 payment I assume is before taxes. What is the negotiated price $40,000? Around $19,000 in payments seems about right. A deal is almost impossible by lease standards but there are some benefits for those who are prepared to pay more.

[Tretch]

Yes 3500 is actual check amount at signing. Includes 1st mo. And the 400$ is even taxes included. Wasnt really negotiating sticker price. Just going by what I was willing to pay per month. I qualify for conquest $500. But I had no $1000 coupon or anything.

[Egon]

Never ever ever negotiate on monthly payment. The dealer will hide so many things in a low monthly its not even funny. Settle on a price first then payments can be discussed after.

[Chevrolet Customer Svc]

Originally Posted by Tretch

hi guys.

I am new to the forumand was hoping someone could give me some advice on a lease deal that I am looking at. I am looking at a 2013 2 SS Hot Wheels Camaro.I have been negotiating with a local dealer. The car I am looking at has the Hot Wheels option as well as my link navigationand the dual mode exhaust.


the best price I got the dealer down to is 3500 out of pocket at lease signing and $400 for a 36 month lease. the MSRP is $45720.

hopefully if you guys can tell me that this is a good deal I will be a Camaro owner by the end of the week or leasee anyway.

thanks in advance

Tretch

Tretch,

Welcome! It's great to have you here! Please keep us updated on your Camaro purchase!

William R.
Chevrolet Customer Care

[Tretch]

Originally Posted by Egon

Never ever ever negotiate on monthly payment. The dealer will hide so many things in a low monthly its not even funny. Settle on a price first then payments can be discussed after.

Never knew that. But if I don't intend on buying it in the end does it still matter? I figured all that mattered in a lease was total out of pocket.

[Egon]

Originally Posted by Tretch

Never knew that. But if I don't intend on buying it in the end does it still matter? I figured all that mattered in a lease was total out of pocket.

Your monthly lease payment is calculated by several factors one of the biggest is the cost of the vehicle you negotiate or the Capitalized Cost. You might be surprised to find out that many times when leasing the dealer will use the full MSRP when calculating your monthly lease payments. (and sometimes even over MSRP!) Another thing to be concerned about is the interest rate, or when leasing it’s called the Money Factor. And the final very important value you need to negotiate is the Residual Value. (the value of the vehicle at the end of the lease period)

Here is how this affects your payments. The first thing we need to calculate is the residual value after the term of your lease us up. Most leases are 36 months and the residual value is usually somewhere between 50-58% at the end of that term. So for our example we will use something in the middle or 54%. The MSRP for a 2SS Hot Wheels Special Edition with no other options is $44,030 before any rebates. (MSRP is the value that most dealers will use to calculate depreciation or residual value, be careful some dealers will inflate this so that your depreciation charges will be higher) Take the MSRP $44,030 x .54 = $23,776 is our residual value at the end of the lease. Since this is the agreed upon value of the vehicle at the end of the lease your lease payments are going to be based upon paying off the difference between the starting value of the car and that ending value. The lower the starting price you negotiate the lower your monthly payment will be.

The next value we need is the Net Capitalized Cost, it is the value of the vehicle you negotiate with the dealer. However to illustrate our example we will assume that you did not negotiate and were only focused on monthly payments so we leave that as $44,030 and we will also assume you did not put any money down. The first part of your lease payment we will calculate is your Monthly Depreciation Cost. Take the Net Capitalized Cost – Residual Value = Depreciation, or $44,030 – 23,776 = $20,254 this is the amount of value the vehicle will lose over the course of the lease and what you are paying for. We take that value $20,254 and divide it by 36 = $563 this is your Monthly Depreciation Cost, it does not include the Monthly Finance Charge or Tax. (we can add those later in this example)

Lets recalculate this example using a Net Capitalized Cost where you negotiate the price down from MSRP. We will assume you get Invoice price which is $42,608 with the same residual value. (invoice taken directly from Truecar.com) This time we take $42,608 – 23,776 = $18,832 / 36 = $523.00. That’s a pretty big difference between the 2 values $563 vs $523 by just negotiating the price down from MSRP. Every dollar you negotiate the price down is just like paying 1 dollar in a down payment!

Lets continue this example adding in Monthly Finance Charge and Tax. (I believe NJ where you are located is 7% sales tax) Lease agreements use a value called a Money Factor when calculating your Finance Charge, but it is just like a loan finance rate for our example. You can figure out what your interest rate is by multiplying your Money Factor by 2400. Just so that we can keep this in English I am going to work backwards and assume an interest rate of 4%. To calculate the money factor we take 4% / 2400 = 0.0017. Your Monthly Finance Charge is = (Net Capitalized Cost + Residual Value) x Money Factor. To calculate Tax we add the Monthly Depreciation Fee (already calculated earlier on) + Monthly Finance Charge) x 1.07. Here are our two different values where the price is not negotiated and where it is negotiated.

No Negotiation on Price Finance FEE: ($44,030 + 23,776) x 0.0017 = $115.30

With TAX: ($115.30 + $563) x 1.07 = $725.80

Negotiated Invoice Price Finance FEE: ($42,030 + 23,776) x 0.0017 = $ 111.90

With TAX: ($111.90 + $523) x 1.07 = $679.30

That’s about $50 difference between the two values per month by negotiating about 2k off the MSRP, or about $1800 over the length of the lease.

Leases are pretty complicated and not for everyone, if it were easier this example would be 1/3 the size it is and I still don’t think I did a really great job of explaining the entire process. Needless to say Leases are not for everyone and there is much more opportunity for you to get ripped off if you do not know the entire process rather well. Please do yourself a gigantic favor and visit these websites and read up on Leasing. http://www.carbuyingtips.com/lease.htm and http://www.edmunds.com/car-leasing/ you will have to click on some of the links on Edmunds but they have some more detailed examples. If you like please bring the details of the lease offer back here and I can help you decipher what is going on and if it’s a good deal or not. Hope this helps and let us know what happens.

[Tretch]

Thanks Egon. I have leased a couple cars in the past and had no idea how in depth this was.

So final price is 42,439.88
1900 for rebates / credits + 3500 down $400/mo

Need anything else? Oh and 7% sales tax.

[Egon]

Originally Posted by Tretch

Thanks Egon. I have leased a couple cars in the past and had no idea how in depth this was.

So final price is 42,439.88
1900 for rebates / credits + 3500 down $400/mo

Need anything else? Oh and 7% sales tax.

$45720 is MSRP so this is a manual transmission? (we will assume they are using MSRP for Gross Capitalized Cost) Is $42,439.88 your negotiated price? (or Net Capitalized Cost?) We will need to know what they set as the residual, to tell us how much Depreciation they are charging you over the length of the lease, I assume this is a 36 month lease? Also we need to know what the Money Factor is, this will tell us what interest rate they are charging you. (we can fudge this if you don’t know it but it will be a much better evaluation if we know the real figure hopefully they gave you some documentation to take home and look over that has some of this information)

Remember that the $3500 down is reducing the Depreciation by that amount, if you negotiate carefully we might be able to accomplish almost the same thing with little or no money down. (lots of dealers disguise bad leases with high upfront costs) I can make up an example and show you where the money is going if we can fill in at least a few things and make some assumptions about the missing information. (like money factor or we can do several interest rates to come close)

Upon further consideration I believe they might be keeping the residual artificially high in order to get your payments as low as they seem to be or extending the lease to 39 months. This can be good if you do not intend to keep the car at the end of the lease and will not exceed the max mileage of your lease. Let me know if you can get the rest of that information so we can be sure.

[Tretch]

Not sure the money factor. Sticker is 45,720. And options are Hot Wheels, My Link Navigation and dual mode exhaust. Negotiated price is 42,439.88. With the buy out being 29,718.

1900 in rebates & credits + $3500 at lease signing this includes first payment.
And payment is $400 which also includes tax.
Bank fee 595
Doc fee 199
Title/Reg 314.50
Tax 1276.64

Lease is 36mo./12k year.

Thanks again for your time.

Also I am considering a tire coverage package that covers tires and wheels against road hazard, curb rash, cosmetics, basically everything. If wheel can't be repaired it is replaced. 0 deductible. If car stays over they give 35$/day for rental. They want 540$ or 15/mo. I live and work in a major city and potholes are bad so I figure if I use it once it will pay for itself. Especially with the 21" wheels doesn't seem like muck rubber.

What do you think?

[Tretch]

No one else out there with a lease that can tell me if this sounds good or bad?

[PGZL1]

Make sure that you aren't paying an additional markup on the Hot Wheels Edition. I know when I was looking at different dealers for my ZL1 I wouldn't pay over sticker. Like others have said, negotiate the final price and then talk monthly payments, otherwise the dealer can take advantage of you.

[Tretch]

Well my impatience got the best of me..... as usual. It may not be the best deal in the world but I'm now a Camaro owner none the less.

Thanks for the input guys!