Help with lease pricing...torn

[amm24dmb]

So I found a leftover 2020 Warlock crew cab short bed. Sticker is $48,505. He’s quoting me a 48 month lease, 10k miles a year for $399 out the door with all taxes and fees included and $1,379 due at signing. Seem like a good deal? He’s discounting the truck about 13K. Obviously this is for a lease and the discount would probably be less if I purchased the vehicle. I haven’t gotten the money factory yet. The residual at the end is just over 21K. A couple other dealers haven’t been able to get to under $400 a month. If I go to a 2021 model it’ll be about $80 to $100 more a month or so. Thanks for any input out there!

 

[HitchHiker]

So I found a leftover 2020 Warlock crew cab short bed. Sticker is $48,505. He’s quoting me a 48 month lease, 10k miles a year for $399 out the door with all taxes and fees included and $1,379 due at signing. Seem like a good deal? He’s discounting the truck about 13K. Obviously this is for a lease and the discount would probably be less if I purchased the vehicle. I haven’t gotten the money factory yet. The residual at the end is just over 21K. A couple other dealers haven’t been able to get to under $400 a month. If I go to a 2021 model it’ll be about $80 to $100 more a month or so. Thanks for any input out there!

Would need more data points to run the numbers:

Gross cap cost
Adjusted cap cost
Fees
Rebates
Money factor
Sales tax

1. Sticker price (MSRP) of the car
$48,505
2. Times the residual value percentage
x 0.44? (we really need the actual residual percentage value here)
3. Equals the residual value
= $21,342.00
4. Negotiated selling price of car
$35,505 (does not include rebates)
5. Add in fees
+ $1,379?
6. Add lines 4 and 5 to get gross capitalized cost
= $36,884?
7. Subtract your down payment and rebates
- $????
8. This is your adjusted capitalized cost
= $????
9. Subtract the residual value from adjusted capitalized cost. This is your depreciation amount.
$??,????-$?,???
= $?,???
10. Divide the depreciation amount by the number of months in your lease. This will be your base payment.
$?,???/48
= $???.??
11. Add the adjusted capitalized cost and the residual value. Take the sum and multiply it by money factor. This is your monthly rent charge.
($??,??? + ??,???) x 0.00???
= $??.??
12. Add the rent charge to your base payment to get your pretax lease payment
$???.?? + $??.??
= $???.??
13. Multiply your tax rate by the pretax lease payment to get the total lease payment
$???.?? x 1.????
= $???.??


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[amm24dmb]

Would need more data points to run the numbers:

Gross cap cost
Adjusted cap cost
Fees
Rebates
Money factor
Sales tax

1. Sticker price (MSRP) of the car
$48,505
2. Times the residual value percentage
x 0.44? (we really need the actual residual percentage value here)
3. Equals the residual value
= $21,342.00
4. Negotiated selling price of car
$35,505 (does not include rebates)
5. Add in fees
+ $1,379?
6. Add lines 4 and 5 to get gross capitalized cost
= $36,884?
7. Subtract your down payment and rebates
- $????
8. This is your adjusted capitalized cost
= $????
9. Subtract the residual value from adjusted capitalized cost. This is your depreciation amount.
$??,????-$?,???
= $?,???
10. Divide the depreciation amount by the number of months in your lease. This will be your base payment.
$?,???/48
= $???.??
11. Add the adjusted capitalized cost and the residual value. Take the sum and multiply it by money factor. This is your monthly rent charge.
($??,??? + ??,???) x 0.00???
= $??.??
12. Add the rent charge to your base payment to get your pretax lease payment
$???.?? + $??.??
= $???.??
13. Multiply your tax rate by the pretax lease payment to get the total lease payment
$???.?? x 1.????
= $???.??


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Wow. You know your stuff! Will the dealer willingly give me all this information upfront before I sign?

 

[rule18]

Wow. You know your stuff! Will the dealer willingly give me all this information upfront before I sign?

Yes, ask for it, they should have nothing to hide. If they won't show you, walk away.

Of course, if you put a little more down, your monthly goes down.

 

[RLJ10X]

1. Buy with cash.

See how simple and that is?

 

[sandawilliams]

So I found a leftover 2020 Warlock crew cab short bed. Sticker is $48,505. He’s quoting me a 48 month lease, 10k miles a year for $399 out the door with all taxes and fees included and $1,379 due at signing. Seem like a good deal? He’s discounting the truck about 13K. Obviously this is for a lease and the discount would probably be less if I purchased the vehicle. I haven’t gotten the money factory yet. The residual at the end is just over 21K. A couple other dealers haven’t been able to get to under $400 a month. If I go to a 2021 model it’ll be about $80 to $100 more a month or so. Thanks for any input out there!

I have leased in the past and was always able to negotiate the buyout price before signing the lease agreement. It's been a few years but worth a try.

 

[HitchHiker]

Wow. You know your stuff! Will the dealer willingly give me all this information upfront before I sign?

Google is your friend LOL. Those calculations are right off one of the initial search hits when searching for lease money factor calculator or some tog similar. [emoji3]

But yes everything listed should be clearly laid out in the proposed lease agreement. We can try to make certain assumptions now. Like what does the $1379 down account for? TTL? Sales taxes? What does the discounted vehicle price include? Let’s see the breakdown of the difference between MSRP and discounted price - how much is straight dealer discount vs rebates, etc? What state do you live in and what is the state sales tax applied to new vehicles?

Then we can at least calculate the gross cap cost and adjusted cap cost and then we can reverse engineer the current $399 lease price and determine what the money factor is. It’s probably around 0.0017 or under, which is the average money factor on leases at present. It might be a bit better since it’s a 2020 model.


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[HitchHiker]

One other thought - 10k miles per year - is that enough for you? Most of the RAM leases charge 25 cents per mile for overages - so if you currently drive more than that, you will want to up the mileage allowance on the lease agreement. It’s always cheaper to pay for the mileage as part of the lease agreement as opposed to paying for overages.


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[bruce219]

I agree with HitchHiker,10k is nothing'I just finished a lease on wifes honda accord and it was 12k,she nearly drove me insane "with lets take your truck as I don't want to go over my miles"all she talked about for 3 years,F@#king miles,I used to wake up screaming miles.Never ever ever will I lease another car because of this,Oh and lol

 

[amm24dmb]

One other thought - 10k miles per year - is that enough for you? Most of the RAM leases charge 25 cents per mile for overages - so if you currently drive more than that, you will want to up the mileage allowance on the lease agreement. It’s always cheaper to pay for the mileage as part of the lease agreement as opposed to paying for overages.


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Here’s what I could get until tomorrow. Residual percentage is 44 percent after the 4 years. Msrp is $48,505. The total discount is $14,550 with $10,000 of that being rebates. The residual is $21,342. He didn’t have the fees or gross cap or adj cap cost in front of him. He was at home. He said he’ll give it to me tomorrow. What do you think? Seems like a good deal. $399 a month for 48 months. 10K a year with 1,399 due at signing. Thanks!

 

[Treburkulosis]

Our Pacifica is a lease. 12k miles a year. We cut it close last year. I wouldn't do 10k miles if it were me.

 

[mjscharlotte]

Just my 2cents, if YOU think it's a good deal - then it's a good deal. If you ask 10 people their opinion on leasing you will probably get 10 different responses. I have leased a vehicle in the past and liked the idea of getting a new truck every 3-4 years and being covered under the factory warranty. It's a mindset - you basically have to tell yourself that if you continue to lease vehicles - you will always have a monthly payment and never have a paid-off truck. You can get a more expensive vehicle for a manageable payment because you aren't buying the entire truck. In this case you're spending $35k for a $48k truck. If you were to buy the vehicle and not lease it - you would have to finance about $20-$24k for 60 months to get to the $400 a month payment (thats a very rough estimate because it will depend on interest rate). Based on that - you would need to put down $24-$28k. Again, just my 2cents - either way your getting a nice truck. Good luck!!

 

[Grogu]

I've only leased a few times based on domestic vs. stateside deployments.

Never discuss anything with the dealership if they won't give you a written printout with (A) purchase price, (B) money factor / interest rate, (C) residual / buy-out amount, and (D) all fees assessed at the end of the lease. I also refuse to pay any "processing" or "document" fees. I walk out the door if they balk at that and tell them to call me when they're ready to talk. They have my phone number and I'll be en route to the next dealership.

That 10,000 mile per year cap works very well for some of us. When I am deployed stateside for 3-4 years I only put on 5k - 8k on per year. And I'm the guy who parks at the far end of the parking lot so some idiot won't give me a door dent, so the vehicles are in like new condition. I can usually flip them private sale or to relatives who need a clean, lightly used pickup, and end up with some cash beyond the residual. When you factor that equity cash back, the cost of leasing is pretty attractive.

Worst case scenario: it gets the crap hailed out of it, or I hit a deer at night on the highway. Then I lose all or most of that equity through depreciation and insurance deductible, but, oh well, it's not "my" truck that got wrecked.

 

[Grogu]

Incidentally, I'm not the only one who plays that game. A couple years ago I was looking for a Subaru Outback lease trade-in for my wife. (Insert "trade for your wife" joke here.)

Every time I'd see a nice 3-year-old, 30,000 mile Outback, I'd ask to see the Carfax report. You'd be shocked how many people wreck their cars in the first three years. It took a few weeks for the dealership to get a lease turn in with a 100% clean Carfax report.

 

[blackbetty14]

haha $399!? I walked into a dealer as my 18 laramie is up on the 16th... they said a new 2021 laramie was like 60k and with 0$ down I was looking at $800/month. My current lease is only $379/month on a $53k truck MSRP and I got roughly $8500 off with rebates. Residual is slightly under $27k which puts me in the $500/month range for finance payments which is probably the route I will go. BTW I put $0 down and rolled in taxes/fees which increased my lease from $369 to $379/month.

I would say your overpaying a bit especially putting $1,399 down. Your at $33,955 after discount, minus $1,399 = $32,556 total cost of vehicle at lease signing. Your Residual is $21,342 which is a $11,214 difference which at 48 months = $233/month without taxes and fees which should be under $2k. Your monthly lease payment should not exceed $300/month. Be careful as dealers add in other charges like $2k delivery/lease fee's which they don't tell you about. FWIW a good rough calculator is $10/month for ever $1,000 in total monies added/removed from the total cost as thats how its reflected in your lease payments. SO if you put down 1,399 your only reducing your monthly payments by $14... so I'm the type of person what sees that and would rather pay $14/month vs shelling our $1,400 at signing. Also if you get into an accident right off the dealer lot any money put down is basically lost as the value of the vehicle drops like a rock and you can't recoup costs/invested monies which is why I don't like to put anything down.

 

[amm24dmb]

haha $399!? I walked into a dealer as my 18 laramie is up on the 16th... they said a new 2021 laramie was like 60k and with 0$ down I was looking at $800/month. My current lease is only $379/month on a $53k truck MSRP and I got roughly $8500 off with rebates. Residual is slightly under $27k which puts me in the $500/month range for finance payments which is probably the route I will go. BTW I put $0 down and rolled in taxes/fees which increased my lease from $369 to $379/month.

I would say your overpaying a bit especially putting $1,399 down. Your at $33,955 after discount, minus $1,399 = $32,556 total cost of vehicle at lease signing. Your Residual is $21,342 which is a $11,214 difference which at 48 months = $233/month without taxes and fees which should be under $2k. Your monthly lease payment should not exceed $300/month. Be careful as dealers add in other charges like $2k delivery/lease fee's which they don't tell you about. FWIW a good rough calculator is $10/month for ever $1,000 in total monies added/removed from the total cost as thats how its reflected in your lease payments. SO if you put down 1,399 your only reducing your monthly payments by $14... so I'm the type of person what sees that and would rather pay $14/month vs shelling our $1,400 at signing. Also if you get into an accident right off the dealer lot any money put down is basically lost as the value of the vehicle drops like a rock and you can't recoup costs/invested monies which is why I don't like to put anything down.

Leases definitely aren’t what they used to be! Low inventory has driven prices up from what they were a couple years ago. I leased my first Ram for $299 a month with only $299 down and today that payment is $399 and up. It’s crazy.

 

[HitchHiker]

Leases definitely aren’t what they used to be! Low inventory has driven prices up from what they were a couple years ago. I leased my first Ram for $299 a month with only $299 down and today that payment is $399 and up. It’s crazy.

The lease incentives aren’t what they were a few years ago. Three years back when I leased my current 2018 RAM 1500 Tungsten edition with every listed option - it was 64,500 MSRP. The discount price was around 55k using EP. Then add lease incentives brought it down to around 47k, residual value is just over 28k. My current payment is $495 and my lease expires on 4/10/2021.

I’ve been looking at two 2021 RAM 1500 night edition limited models optioned out and the MSRP is up between 73-74k, and the best lease deal I can find is around $650/month. Lease rebates when I leased back in 2018 took 7k off of the discount price. Current lease incentives are only around 3k right now. Couple that with the higher MSRP and similar residual values and I cannot get close to my current payment. I will likely buy out my current lease as a result.


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[blackbetty14]

The lease incentives aren’t what they were a few years ago. Three years back when I leased my current 2018 RAM 1500 Tungsten edition with every listed option - it was 64,500 MSRP. The discount price was around 55k using EP. Then add lease incentives brought it down to around 47k, residual value is just over 28k. My current payment is $495 and my lease expires on 4/10/2021.

I’ve been looking at two 2021 RAM 1500 night edition limited models optioned out and the MSRP is up between 73-74k, and the best lease deal I can find is around $650/month. Lease rebates when I leased back in 2018 took 7k off of the discount price. Current lease incentives are only around 3k right now. Couple that with the higher MSRP and similar residual values and I cannot get close to my current payment. I will likely buy out my current lease as a result.


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Pretty crazy that the cost of the trucks is up 10K from the previous generation but the residual is about equal as the older generation if I read your response correctly. That means they are charging more for the truck but they are depreciating faster which means.... lower projected quality. Word is that they are trying to discourage people from leasing in the future and pushing financing.

 

[62Blazer]

My biggest concern would be the 10k miles per year as that is really low. Just see a lot of people getting enticed by the low monthly payment but then get in trouble at the end of the lease because they way under estimated how many miles they drive every year. Even if you plan on buying it out at the end of the lease so you don't care about miles, you will be paying more money than what the truck is worth because the miles are high.

 

[HitchHiker]

Pretty crazy that the cost of the trucks is up 10K from the previous generation but the residual is about equal as the older generation if I read your response correctly. That means they are charging more for the truck but they are depreciating faster which means.... lower projected quality. Word is that they are trying to discourage people from leasing in the future and pushing financing.

Since residuals are a percentage value they aren’t getting any better or worse per se. The larger numbers involved for gross and adjusted cap costs coupled with the same residual values and lower lease rebates just mean much higher payments right now. At least the money factors are still really low given the low interest rates out there.

With zero percent 84 month financing possible, if I were in the market to buy a new truck I would probably go this route - but you usually miss out on any purchase rebates when going with the zero percent financing.


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