Author: G

Breaking a Lease and Other Options

Published by G

There may come a time when the lease you signed last month has suddenly become a financial burden and you need to unload your vehicle. Whatever your reasons may be, know one thing, IT WILL COST YOU. Before you enter a lease agreement, make sure you have a solid understanding of your “termination” options and costs. You may never need it; then again, you never know. There are generally three options available to you when choosing to terminate your lease.

Pay the termination fee

The quickest way is to look in the back of your contract and look for the “termination” section to see what fees you will be assessed if you elect to terminate your contract with your lessor. Not all banks handle the situation the same, so I cannot generalize. One thing is for certain, you will be paying thousands of dollars to get off your lease.

Trade-in the vehicle

I have actually used this option a few times (on my ’01 325i and ’04 Mazda3). Essentially, you are trading in your car as if you purchased it. The dealer will appraise your car and make an offer. You will then be responsible for the difference between your vehicle’s “buyout” price and the dealer’s “trade-in” offer. This method is best when you have a popular vehicle with low miles and in excellent (no accidents) condition. In some cases, a dealer may even offer you more than your “buyout”, thus giving you some equity on your trade-in. It is important that the dealer does not know what your “buyout” is. Otherwise, they may just get an offer for the “buyout” price or less. Say nothing until they give you a figure and try to talk them up a bit.

There is a catch, though. Not all dealers are willing to buy out your car without having you purchase another from them. In my experience, only CarMax will buy your car from you without requiring you to buy from them. They will even offer you a quote that is good for 7-days. Contrary to popular belief, they will not always offer you the best trade-in value, so you may need to shop your car from dealer-to-dealer to get the best offer.

Use online lease swapping services

There are websites out there (such as LeaseTrader) that offer lessee’s the ability to trade your lease to someone else. They put your car on their online marketplace to see if there are other people willing to assume the remainder of your lease payments. Once there is a match, they will help you process the paperwork and do the transfer. I have not done this personally, but most folks seem to have a good experience with it and I haven’t heard of any horror stories, yet. Just remember that if you got yourself into a bad lease, you may not have much luck getting someone to assume it unless you throw in some cash incentives. Plus, it may also take you some time before you find someone willing to assume your lease. We’re talking weeks, maybe months.

An alternate solution

Another option that most people do not consider is reworking their lease into more affordable payments. This would be the preferred option if you really want to keep your car, but need to make the payments lower. Sites such as LowerMyLease should offer a good solution for those seeking to lower their lease payments.

Unfortunately, making a bad decision has it’s consequences. That is why I stress that you stay away from negotiating monthly payments and follow the steps outlined in my Auto Leasing Guide. Do your homework before entering any type of negotiation and don’t fall in love with a particular car because not all cars lease well from month-to-month. Have a few other options available just in case the car you want isn’t offering attractive lease rates.

Honda OSM Concept, the Next S2000?

Published by G

Honda OSM Concept

image courtesy of autoblog.com

Looks like Honda is conducting a design study on their next roadster. About time I say! The S2000 has become rather outdated compared to the rest of the Honda lineup.  I really hope they decide to make this one, or at the very least, something resembling the concept.  The latest entries from Honda have left much to be desired. They are up to par with technology, unfortunately, they lack much from a design standpoint.  I’m going to keep my thoughts short on this one because I know pictures speak a thousand words.

Honda OSM Concept Gallery, brought to you by autoblog.com

PRESS RELEASE

LOW EMISSION HONDA ROADSTER BREAKS COVER
Two-seat design study unveiled at British International Motor Show

Honda’s low-emission sportscar study model has been revealed at the British International Motor Show, at ExCeL, London.

The lightweight roadster design study displays one of Honda’s core engineering principles – to design stylish and exciting cars that are also environmentally responsible.

Named the OSM (for Open Study Model), the two-seater joins the confirmed-for-production CR-Z sports hybrid and FCX Clarity hydrogen fuel cell car on the Honda stand at the show.

“We’re trying to show that low emission cars can be attractive,” says Andreas Sittel, Project Leader for OSM. “There is no reason why a car that’s more environmentally friendly can’t look great too – and be sporty and fun to drive.”

The concept for the project was ‘Clean and Dynamic’ – and this direction was followed for both the exterior and interior design, ensuring a joined-up, consistent ‘language’ between the two. One example of this can be seen at the rear of the car, where the body actually extends into the cabin between the seats.

The exterior design is a balance of smooth, rounded curves and sharp lines to provide definition in key areas. The headlights are cleverly integrated into the front end, stretching from the nose to the top of the wheel arches to look more like a part of the original body.

Inside, this uninterrupted, fluid approach is continued, with long sweeping curves extending from both door panels to form a frame for the instrument display. The concept for the dashboard was to avoid creating the traditional block of ‘heavy’ colour and material in front of the driver; in keeping with the clean and lightweight theme. For that reason, the dash is broken into sections, with the most important instruments in direct line-of-sight of the driver.

Key information is displayed in a rounded, enclosed central binnacle, with levels and figures in bright blue on a black background. This matches the trim inside the car, with the seats and door furniture trimmed in a new, gloss-effect blue leather, accompanied by white leather sections, in line with the exterior body colour, a one-off paint called Mystic Pearl.

The driver’s main controls and functions are distributed in an intuitive layout, close at hand on a panel that curves downwards to the right of the driver. A centrally-mounted semi-sequential gear-shift points towards a fun-to-drive transmission, along with paddle shifts either side of the steering wheel. Integrated into the gearshifter itself is a red ignition ‘start’ button, which reinforces the sporty direction of the car.

The Honda OSM was designed by Honda’s R&D facility in Offenbach, Germany. It’s the latest example of the young talent being developed within Honda’s design studios in Europe – following the Honda Small Hybrid Sports Concept (Geneva 2007) and the Accord Tourer Concept (Frankfurt 2007).

At present, the Honda OSM is a design study model, and there are no plans for it to enter production.

July 2008 Lease Rate for 08 Toyota Tundra

Published by G

My Take: Looks like Toyota is trying to push their Tundra trucks on leases. The 24mo and 36mo rates seem to be the winners here. I’ve never been a big fan of trucks. Is not that I don’t find them useful, they are very practical after all. The main issue is that when you become a truck owner, and everyone you know knows this, you become the designated “mover” or “truck lender” among your friends and family. Eh, no thanks. So lets take a look at the numbers shall we?

  • Limited 4dr CrewMax Cab SB (5.7L) with moonroof, running boards, tow mirrows and TRD offroad pkg.
  • MSRP $40,140
  • Invoice $36,367
  • Using rates in BOLD
  • Standard inception fees apply, taxes not included.

24 Month Payments: $585 at invoice, $744 at MSRP
36 Month Payments: $479 at invoice, $586 at MSRP

Wow, never knew trucks could cost so much. In any case, the 36-month lease seems to look significantly better than the 24-month lease. You can probably opt for a “cheaper” model and the payments should drop further.

2008 Toyota Tundra CrewMax 5.7L 2WD
24 Month – Residual 58% of MSRP – .00066 Base Rate
36 Month – Residual 51% of MSRP – .00066 Base Rate
48 Month – Residual 40% of MSRP – .00255 Base Rate

* Residuals posted are for 15K miles/year. Add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms
** Rates provided by Tarry Shebesta from Leasecompare.com

July 2008 Lease Rate for 08 Infiniti FX35

Published by G

My Take: Just when we thought the Lexus’ residuals were low, Infiniti’s FX seems to take it one step lower. Unexpectedly, it doesn’t seem like there is any lease support for these vehicles. Lets see what the numbers look like on a FX35 AWD with Tech, Sport and Towing hitch.

  • MSRP $48,045
  • Invoice $43,769
  • Terms in BOLD, below
  • Standard inception fees apply, taxes not included.

24 Month Payments: $835 at invoice, $1004 at MSRP
36 Month Payments: $723 at invoice, $852 at MSRP

WOW! this hurts just typing it. The slightly better news is that you can probably get this car for under invoice…how much? Not sure, but Edmunds’ TMV shows around $3200 under invoice (in So Cal). Keep in mind that Edmunds’ TMV varies from zip code to zip code and also takes in consideration purchases, not just leases. Assuming TMV, the payment range is around: $675 for 24 months and $627 for 36 months. That’s much  better, but not quite a “deal” since taxes are not included.

2008 Infiniti FX35 2WD
24 Month – Residual 58% of MSRP – .00240 Base Rate
36 Month – Residual 47% of MSRP – .00240 Base Rate

2008 Infiniti FX35 AWD
24 Month – Residual 59% of MSRP – .00240 Base Rate
36 Month – Residual 49% of MSRP – .00240 Base Rate

* Residuals posted are for 15K miles/year. Add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms
** Rates provided by Tarry Shebesta from Leasecompare.com

Chrysler Leaving Auto Leasing Business

Published by G

It’s official! Chrysler is no longer leasing cars to the general public. Am I surprised? Not really, their lease rates have been notoriously horrendous because they offer the worse  MF/RV combination you could possibly hope for. Chrysler has relied heavily on cash rebates to move their cars, which explains why they don’t finance leases too well.  I suspect the main reason for this move is due to Chrysler’s inability to resale their lease returns since they make such poor cars. For those who still want to lease Chryslers, you can lease them through private lenders such as Leasecompare.com. At times, they even have better rates than the manufacturer’s captive bank.

Here is a brief insert of the article from Yahoo News.

“DETROIT – Chrysler LLC said Friday its financial arm will get out of the auto leasing business by the end of the month because economic conditions have made leasing more expensive than buying, for both consumers and the company.

The move comes as Chrysler Financial is in the process of renewing a $30 billion credit line with banks amid a startling drop in values for leased trucks and sport utility vehicles that are coming back to automakers as leases end.”

Leasing isn’t supposed to be more expensive than buying. Unfortunately, that is the case with in Chrysler and their horrible rates. What really worries me about the entire thing is that due to the economy, automakers will probably make leasing more expensive, forcing us to buy their vehicles. I hope this is not a trend-setting move by Chrysler because it would spell bad news for those of us that enjoy leasing cars.

July 2008 Lease Rate for 08 Lexus ES350

Published by G

My Take: The ES350 has some low MF’s for July. The Residual is fairly low though, so any savings you may have gotten from the low MF is pretty much offset by depreciation. Lets take a ES350 (with Premium Plus & Navi) and see how the numbers look:

  • MSRP $40,075
  • Invoice $35,366
  • Standard Inception Fees
  • Using terms in bold for ES350 sedan, see below.

24 month payments: $574 at invoice, $775 at MSRP
36 month payments: $476 at invoice, $611 at MSRP

The more expensive the car, the bigger the range. Clearly, the 36mo terms are better on the ES350. Just be careful if you decide to go with the ES350, there many options on this car and fairly expensive ones, so payments can get out of control very quickly.

2008 Lexus ES350 Sedan
24 Month – Residual 57% of MSRP – .00090 Base Rate
36 Month – Residual 50% of MSRP – .00090 Base Rate
48 Month – Residual 41% of MSRP – .00190 Base Rate
60 Month – Residual 32% of MSRP – .00245 Base Rate

2008 Lexus ES350 Ultra-Luxury Sedan
24 Month – Residual 55% of MSRP – .00090 Base Rate
36 Month – Residual 48% of MSRP – .00090 Base Rate
48 Month – Residual 39% of MSRP – .00090 Base Rate
60 Month – Residual 30% of MSRP – .00245 Base Rate

Announcement Regarding “My Take”

Published by G

Hello dear readers!

I want to thank all of you who visit the site. I hope you find the site informative and useful in your negotiations.  Three months after starting this website, I find that there are a lot more folks leasing (or looking to lease for the first time) than I initially expected. Very cool! In any case, I have had a great time answering leasing questions, posting rates and throwing in my two cents into each post. Which leads me to the following announcement:

I am currently experimenting with a new style of “My Take” which I normally post under each lease rate. Basically, I will be taking a particular trim of each car and posting a range of payments. This “estimate” is meant to be a range and is not “set-in-stone”. I wanted to put a lot more focus and emphasis on how much a monthly payment changes when the sale price fluctuates. At times, the range between invoice and MSRP is over $100 per month!!! So look for my comments at the top of each lease rate post from now, as I give you a little preview of what kind of payments you can expect for certain models/trims. Please note that all “estimates” require you to pay the traditional inception fees of your 1st month payment, bank fee, doc fee, license/registration, tire fees and in some cases, local taxes.

I love feedback from readers and this site can only get better if you pitch in, so I encounrage you to let your comments be seen!

July 2008 Lease Rate for 08 Toyota RAV4

Published by G

My Take: Looks like the RAV4 is looking like a good lease this month. Specially the 4WD V6 model. Here’s a estimation of payments using a fully loaded Limited 4WD V6 model.

  • MSRP: $33829 ($32829 with $1000 customer rebate)
  • Invoice: $30123 ($29123 with $1000 customer rebate)
  • Term: 36mo/12k

Monthly Payments Range: $245 (plus tax) at invoice + rebate, $352 (plus tax) at MSRP + rebate. (Plus inception fees).

Not too bad. Good $100 range depending on your negotiation skills.

2008 Toyota RAV4 4WD Limited V6
24 Month – Residual 68% of MSRP – .00093 Base Rate
36 Month – Residual 61% of MSRP – .00093 Base Rate
48 Month – Residual 53% of MSRP – .00255 Base Rate
60 Month – Residual 45% of MSRP – .00255 Base Rate

2008 Toyota RAV4 4WD Sport V6
24 Month – Residual 68% of MSRP – .00093 Base Rate
36 Month – Residual 61% of MSRP – .00093 Base Rate
48 Month – Residual 53% of MSRP – .00255 Base Rate
60 Month – Residual 45% of MSRP – .00255 Base Rate

2008 Toyota RAV4 4WD V6
24 Month – Residual 70% of MSRP – .00093 Base Rate
36 Month – Residual 63% of MSRP – .00093 Base Rate
48 Month – Residual 55% of MSRP – .00255 Base Rate
60 Month – Residual 47% of MSRP – .00255 Base Rate

* Residuals posted are for 15K miles/year. Add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms

** Rates provided by Tarry Shebesta from Leasecompare.com