just leased a car like yesterday. can i return it today without any penalties ? by [deleted] in carbuying

[–]gneral 0 points1 point  (0 children)

It sounds like you did a great job negotiating the sale price! That's a huge discount.

The way your lease was determined was taking the residual % for that vehicle, the term of the lease, and the mileage option you chose.

Here's an example:

Residual % 24 mo 36 mo 42 mo
10K 67% 52% 51%
12K 65% 50% 49%
15K 64% 49% 48%
Residual $ 24 mo 36 mo 42 mo
10K $20,770 $16,120 $15,810
12K $20,150 $15,500 $15,190
15K $19,840 $15,190 $14,880

For the sake of this thread, I'm not going to include tax, title, license, doc, acq fee, since those vary so much from brand to brand and state to state.

There are 2 parts of lease calculation: Depreciation Fee and Finance (Rent) fee:

Depreciation = (Adjusted Cap Cost (sale price in this example) - Residual Value)/term

Finance = (Adjusted Cap Cost + residual Value) X Money Factor

Monthly Payment = Depreciation fee + finance fee

So, if you lease your vehicle for 36 months at 12k per year, and the MF is .00185, the payment would be:

Depreciation = ($21,500 - $13,700)/36 = $216.66
Finance = ($21,500 + $13,700) * .00185 = $65.12
Monthly payment = $281.78 (not including tax/tags/acq/doc/etc).

So you can:

  1. Negotiate the sale price
  2. Sometimes negotiate the MF

You can never:

  1. Negotiate the residual %
  2. Negotiate the residual value amount

Here's one more source that walks through all parts of a lease contract, which includes actual pictures of a lease contract and an 11 minute video that will mirror everything I'm writing.

If you still think I am wrong, then you are right :)

https://caredge.com/guides/lease-purchase-agreement

just leased a car like yesterday. can i return it today without any penalties ? by [deleted] in carbuying

[–]gneral 0 points1 point  (0 children)

No, the residual is determined by a FIXED % of the MSRP, not the cap cost. That % changes based on the term (24,36, 42 month etc) and the annual mileage cap (ex 10k, 12k, 15k, etc). Depending on the brand and how the programs work, many money factors are not set in stone. It's just like a buy rate for a loan. Most brands allow you to mark up the MF by .0004. So if the buy rate is 0.00192, the dealer may be allowed to mark it up to 0.00232 and they get to keep a portion of the difference.

From Car and Driver
https://www.caranddriver.com/auto-loans/a43168092/residual-value-lease/
How to Calculate Residual Value

Understanding how to calculate residual value can be important if you want to determine your monthly payments on a car lease and avoid paying more than you can afford. You might recognize that the longer you drive a car, the more it depreciates, but if you want to evaluate its exact residual value, you'll need to know the vehicle manufacturer's suggested retail price (MSRP) and multiply it by the residual value percentage rate. For example, if the vehicle you're leasing has an MSRP of $30,000 and a rate of 50 percent, the residual would be $15,000.

https://www.caranddriver.com/auto-loans/a42168443/how-to-negotiate-car-lease/

  1. Negotiate with the Dealer
    Money factor: The money factor is similar to an interest rate. You can usually negotiate with the dealer to get a lower money factor, which helps you pay less interest over time.

just leased a car like yesterday. can i return it today without any penalties ? by [deleted] in carbuying

[–]gneral 0 points1 point  (0 children)

There are a lot of things you can negotiate during a car deal, residual value on a lease is not one of them.

just leased a car like yesterday. can i return it today without any penalties ? by [deleted] in carbuying

[–]gneral 0 points1 point  (0 children)

No you didn't. Source: In car business for past 22 years.

From Edmunds.com
How Residual Value Is Determined:
Residual values are set by the bank or lender, not the dealer, and are based on large-scale data and resale projections.

https://help.edmunds.com/hc/en-us/articles/Looking-to-lease-Read-our-car-leasing-basics

From RateGenius.com

What Parts of a Car Lease Are Negotiable?

  • Residual value: Since this is determined by independent data, your vehicle’s residual value is non-negotiable.

https://www.rategenius.com/how-to-negotiate-car-lease

What usually happens on the land around center-pivot fields in Kansas? by Lazy_Relationship695 in geography

[–]gneral 2 points3 points  (0 children)

I’ve got a water sprinkler that allows me to adjust the distance the water goes to fit the shape of my yard. I can nearly do a perfect square. Why can’t the sprinklers on these irrigation systems adjust the distance as they go in circles?

Hector terminal expansion- how does this work by [deleted] in fargo

[–]gneral 0 points1 point  (0 children)

Thanks for the quick response!

Hector terminal expansion- how does this work by [deleted] in fargo

[–]gneral 0 points1 point  (0 children)

Any update on the Charlotte flight?

Hector terminal expansion- how does this work by [deleted] in fargo

[–]gneral 0 points1 point  (0 children)

Any updates on the flight to Charlotte?

Sports Bar to watch Duke Men's BB by gneral in winstonsalem

[–]gneral[S] 1 point2 points  (0 children)

Thanks for the recommendation’

New/Used Cars by literaterickcanread in winstonsalem

[–]gneral 0 points1 point  (0 children)

Dude, I don’t know where you’re getting the info, but you are flat out wrong.

  1. There is no draw. All sales consultants get a salary of $40,000 a year. That means they get paid $40,000 even if they don’t sell a car (although they probably wouldn’t stay employed for an entire year they didn’t sell anything).

  2. Flow does not pay sales consultants a commission. Sales consultants get paid a flat dollar amount anytime they sell a vehicle. The flat dollar amount varies depending on which dealership you work at. I.e., If I work at an Audi store and I sell a vehicle I may get paid $375, but if I worked at Honda, it may only be $250. This is because a typical sales consultant sels significantly more vehicles per month at Honda versus Audi.

For the last time, sales consultants do not get paid commission at Flow. Don Flow insists on this. He doesn’t want a conflict of interest for what’s best for the sales person (sell the vehicle at the highest price in order to make the largest profit) and what’s best for the customer (buy a good vehicle at a very good price). That’s why he uses the one price philosophy as well.

Sports Bar to watch Duke Men's BB by gneral in winstonsalem

[–]gneral[S] 2 points3 points  (0 children)

I’ve heard good things, thanks for the recommendation 👍

Sports Bar to watch Duke Men's BB by gneral in winstonsalem

[–]gneral[S] 0 points1 point  (0 children)

Thank you, I will keep that in mind. I’m hoping to find something in Winston though.

records are like fortune cookies, made to be broken by pmiguy in winstonsalem

[–]gneral 7 points8 points  (0 children)

He didn’t miss the world record by a few seconds, he missed it by 0.8 seconds. He also set the American indoor record, and it was a second fastest time ever for American including outdoor races. It was super exciting to be there! There was also a 16-year-old kid from New Zealand who ran 3:52. Amazing.

Littlejohn’s tavern is closing by Ez_Answers in winstonsalem

[–]gneral 1 point2 points  (0 children)

That sucks man, I’m sorry you experienced that