[shirleyujest]

I just took possession of a brand new 2005 LE 4 x 4, and other than some minor issues, I absolutely love the truck.

Now, having had it for a couple of days, I actually sat down and read the lease agreement. Unfortunately, the numbers do not make sense.

Can anyone make heads or tails out of how the lease payment is calculated?

I have used the lease calculator on leaseguide.com to no avail.

 

[92TripleBlack]

Without specifics, no. You should have a monthly payment, followed by extra if you go over in miles, and then a buyout option at the end.

I financed mine. Was $48k sticker (EVERY OPTION). I got $46k out the door. That's $10K down, $650 a month for 5 years.

 

[andy]

I just took possession of a brand new 2005 LE 4 x 4, and other than some minor issues, I absolutely love the truck.

Now, having had it for a couple of days, I actually sat down and read the lease agreement. Unfortunately, the numbers do not make sense.

Can anyone make heads or tails out of how the lease payment is calculated?

I have used the lease calculator on leaseguide.com to no avail.

A lease works this way. Your Armada will depreciate a certain percentage over the 4 years(or 3 or 5) that you signed up for. Say it cost $45k and the residual at after the 4 years is $22,500. the depreciation is 50%.
So over the 4 years of 48 payments, you are covering the $22,500 of depreciation plus a money factor. Money factor is nothing more than interest for carrying you the 4 years.

So add up all the 48 payment(for a 4yr lease) add in and capital reduction or down, and add all that to your residual value at end of lease term. The residual is how much you pay to keep car at end of lease. The residual is usually what determines market values of used car prices. Sometimes they are way off. My 2000 Mercedes ML320 has a residual of $26k and street price was $19k. Since this SUV is such a piece of do do, Mercedes offered to lower the residual to $19k because they know they couldn't get anywhere near the $26k at auction.

 

[shaft2k]

Lease

Leases are either for those who have a business and can write the vehicle off or for those who are trying to drive something they cant really afford. Because you are only paying for what you "use" of the vehicle the payments are cheaper. What they fail to tell you is that at the back end when the lease is due and you have too many miles (most people, esp in Ca, drive more than 12-15k a year), you get stuck for mileage charges at .15/mi. Also, you must keep the car immaculate or get charged for excessive wear and tear. If you like to mod a vehicle, leasing isnt the way to go either because you have to take the mods off at the end of the lease. I have a couple of cousins who work at dealerships, they have told me horror stories about how people have gotten hosed w/a lease. I would stay away from a lease at all costs. If the vehicle is for buisness use then go for it but if the only way you can afford a vehicle is to lease it, then you really cant afford it. Hopefully this helps someone.............

 

[armoody]

I just took possession of a brand new 2005 LE 4 x 4, and other than some minor issues, I absolutely love the truck.

Now, having had it for a couple of days, I actually sat down and read the lease agreement. Unfortunately, the numbers do not make sense.

Can anyone make heads or tails out of how the lease payment is calculated?

I have used the lease calculator on leaseguide.com to no avail.

Quite honestly, if you didn't read it before you signed it why bother. Just make sure you know how many miles you get, how much extra per mile, and any end of lease conditions (damage deduction, etc.) Lets face it, if you didn't read it before you signed it and understand what you were doing, I wouldn't be going there now. Just make payments, and drive like you stole it!
Next time you lease a car, do the research first, and read the lease before you sign it.

 

[inf3rno]

ummm i was (am) trying to get an armada, and i was (am) considering the leasing option too, but im doing my homework to see how it really works. like you guys said in your posts if i lease the mada for say 39 months, then at the end of the lease i get a buy out option right?? well lets say that the truck was 35,000 and at the end the residual is 17,500 but the market value is something about 15,000... wouldn't it be better to go this way since the dealer would try to match that price in order for you to take it anyways? you make lower payments, drive the car you want, but the only disav. is the miles and keeping the truck like new... plus on those 39 months period you can save some extra money in case you want to buy the truck at then of the lease... how you guys think about that?? since i got a commuter already on the mada i wont be putting more than 12k miles a year.

 

[92TripleBlack]

You could buy in cash. This costs the least but also ties up your money immediately for the duration and you loose the ability to have your money work for you.
You could finance, which costs more in interest, but your money isn't tied up and if you have a good rate, the return on your money should offset the interest.
Or you could lease, which costs the most over the long haul, but is the least needed to get into the car. Its renting, not buying. If you decide to turn it in at the end of the lease, you have paid all your payments and have nothing. If you buy at the end of the lease, it will cost more than if you just financed. If you sell after finanicing is complete, you will usually spend less in total than leasing. And if you plan to keep the vehicle for a long period, buying it definitiely is the cheapest way to go.

Another way to think about it is leasing a car is almost like renting a house or apartment. Cheaper up front, more expensive long-term.

 

[AAMC]

I really like the idea of leasing, mainly because I like to drive new cars. I bought my last car in '03, and will drive the car into the ground until I finish my training. I started leasing the Armada this year, and will go into a three year rotation leasing some sort of sports car, sedan, and SUV to keep in the stable for my wife and I to drive. I agree that leasing is not the cheapest option in the long term, but I just don't see myself staying with a car/SUV for longer than three years, when there are so many out there to drive.

 

[shaft2k]

Other reason

AAMC, you reminded me of the other reason to lease, driving a new car every 2 or 3 years. This is dangerous unless you understand the concept as you have described. If you plan on keeping a car for more than 3 years, buying (financing, cash) is the cheapest way to go.......

 

[shirleyujest]

Thanks for all the input. I agree with the comment that I should have read the lease before hand. But, I also know that I can muster up enough leverage to renegotiate the payment if it is based on fraud and/or misrepresentation. However, this is a reputable dealer and I think in the end the payment will be what it is supposed to be.

And, to answer the questions re: lease v. buy, I try to write off almost half of the payments and maintenance on my taxes. So, an approx. $600 car payment turns into a $300 car payment. There are not many cars I would care to drive for $300 a month!! Additionally, I would prefer to use the money I do not spend on financing for other uses.

Lastly, to adderss inf3ro's post: be careful regarding equity in a lease. Although my wife and I were able to make money on the lease and eventual sale of her Infiniti G35, my BMW X5 would have put us about $9,000 in the hole!!

 

[shaft2k]

You should be ok

You seem to have an understanding of leases and what your plan is so you should be ok. Trust me there are many, many people who dont. Good luck and enjoy the mada!!!!

 

[AAMC]

You seem to have an understanding of leases and what your plan is so you should be ok. Trust me there are many, many people who dont. Good luck and enjoy the mada!!!!

I agree, you definitely need to have a good understanding of leases before you go in. Every aspect of the lease is negotiable, including ALL those stupid hidden fees they try to sneak in to inflate your lease payments. It's very necessary to know how to calculate your payments while at the dealer, so you have the security of knowing exactly what you are paying.

 

[shirleyujest]

You seem to have an understanding of leases and what your plan is so you should be ok. Trust me there are many, many people who dont. Good luck and enjoy the mada!!!!

Thanks. So far, (despite the lease issue) I love the truck!

 

[fiddlyD]

well i pay $750 a month with 15K miles year 39 mths for my LEASE....i put down $2500 cash for taxes,reg,etc.... and i do ride off the payments and gas.
this is my second leased car...i love the lease option.....and if i want to buy the car at lease end i could...it will cost me $2-3k more than it would if i was to finance it, including the interest and all.
the other reason i like the lease option is that i dont care what happens to the car, it could blow engines all day....its not mine!! and if i dont like the car i dont have to deal with trying to sell it after 39 months. just give it back and choose the next one....also the lease payments are cheaper than fianance payments.
i have a 2002 Acura TLS lease is up in Jan 06...i have no idea what to get next....car or suv.... i go hunting and fishing alot...the FX is to much $$$ and the Pathfinder is a V6..i want a V8 suv.


fiddlyD

 

[inf3rno]

maybe i didnt understand your post but we all agree that leasing is cheaper on the 1st years how come your making payments of $750 a month?!? i dont get it... when i went to dealer to get a quote on leasing i got something like 350-400 dollars a month... but $750?!? damn...

 

[shirleyujest]

well i pay $750 a month with 15K miles year 39 mths for my LEASE....i put down $2500 cash for taxes,reg,etc.... and i do ride off the payments and gas.
this is my second leased car...i love the lease option.....and if i want to buy the car at lease end i could...it will cost me $2-3k more than it would if i was to finance it, including the interest and all.
the other reason i like the lease option is that i dont care what happens to the car, it could blow engines all day....its not mine!! and if i dont like the car i dont have to deal with trying to sell it after 39 months. just give it back and choose the next one....also the lease payments are cheaper than fianance payments.
i have a 2002 Acura TLS lease is up in Jan 06...i have no idea what to get next....car or suv.... i go hunting and fishing alot...the FX is to much $$$ and the Pathfinder is a V6..i want a V8 suv.


fiddlyD

Our other car is a Volvo V70 R. It is a station wagon, so it does the chore of an SUV and it has 300 hp, turbo, all-wheel drive, active suspension, Brembo brakes and duel intercoolers. Try one of those!

 

[andy]

maybe i didnt understand your post but we all agree that leasing is cheaper on the 1st years how come your making payments of $750 a month?!? i dont get it... when i went to dealer to get a quote on leasing i got something like 350-400 dollars a month... but $750?!? damn...

I believe this is for the Infiniti QX56

 

[fiddlyD]

yes $750 is for a QX56...and belive me i got it cheap and that includes wood trim kit, sunroof deflector,15k miles year. i got prices from other dealers for $800+ without the extras.

fiddlyD

 

[casinojames]

Good points by all!!

Know the difference before you buy or lease or you'll feel it where really hurts in couple of years. Bottom line, if you are leasing because you can't make a larger monthly then the Armada is not for you, try the pathfinder instead its a very nice alternative.

 

[inf3rno]

ohhh!! the QX. man i was gonna say... 750 for a mada?? in that case sound good deal, im hoping to get mine soon (not QX)