How about if the 1% rule works in your favor, say a 2024 Ford F-150 $59,000 msrp $590 a month with zero down?
What about taxes and fees?
1st month only. feeâs and taxes rolled in to payment
Show me a real lease quote instead of a hypothetical.
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I have no clue if thats an amazing deal or a horrible deal. The fact that it is at 1% of the msrp doesnt inform that at all.
A broken clock is right twice a day. Doesnt make it any good for telling the time.
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I think itâs established that the 1% rule is bad. The problem is there doesnât seem to be a substitute method to help someone learn a new rule of thumb or approach to start framing a âgoodâ lease.
That net pricing approach I put above doesnât seem to have traction either. Not sure what would be a new rule of thumb other than âlook in the LH marketplace.â
As we know, rebates/incentives can vary by zip code. Everyoneâs tax rate is also different, so focussing on that rule is a waste of time.
Not preaching to you, but just commenting.
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Yah, because it doesnt exist.
One can either take the time to figure out what something should cost or they can use useless rules of thumb that offers no value. Canât have your cake and eat it too.
The most valuable thing someone can learn here is that there isnât a rule of thumb that is of any use.
I feel like my my proposed rule actually addresses your two concerns.
My approach was a pre-tax approach (see two paragraphs before the TLDR). I agree with you, removing taxes from a calculation is necessary to compare deals across geographies.
And the goal of looking at net pricing for used cars is to remove rebates/incentives from the equation. I want new buyer/lessee to target incentives to peg their capitalized cost near what used cars are transacting by taking advantage of whatever rebates/discounts are available. There arenât significant rebates/incentives on used cars since the income limit is so harsh on the IRA rebate for used⌠and the loophole canât be applied since used cars cannot be leased.
I agree, some super-easy rule of thumb using MSRP is too âcake and eat it too.â
But my outlined approach takes all of 2 minutes to research. And I think starts a possible benchmark for a new rule of thumb around net pricing. It is a way to have the cake and eat it too, because anybody with an internet connection could replicate this approach as a starting point.
Of course, âgo look at the LH marketplaceâ is a good rule of thumb too. But I wouldnât want any of you all to think I was a schill.
As a bank FMCC usually offers really mediocre to crap leases.
Youâre much better off looking at Marketplace instead of pushing this boulder uphill
Your outlined approach isnt a bad strategy for looking at used vehicles, but im not convinced it does anything to inform a good lease deal.
Yeah, Iâd need to support/prove my assertion that low mileage used list pricing is highly correlated to âLH worthyâ net-of-incentives pricing on new vehicles.
This is where we need @delta737h and his math powers.
I know OP used the F150 as an example, but I want to use another vehicle for my example. Right now, all the crazy deals are on EVs, especially the Hyundai Ioniq 5 and 6.
If you live in Colorado, you get an additional $5k rebate on top of the lease cash. If you live in MA, you get an additional $3500 rebate if your leased car is less than $55k and your lease is a least 36 months.
So that rule is useless, when looking at a new car, and especially an EV given all these rebates.
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We agree no rule of thumb could encompass 100% of all scenarios. Corner cases and edge cases will always break a rule of thumb.
For a rule of thumb to be useful, someone should be able to use it for a foundational understanding of a common event. That user will also need to know how to adapt the rule of thumb for their purchase. And of course, that same user would need to intelligently know examples where the rule of thumb would unequivocally be a bad tool to use.
Itâs easy to say something doesnât work. The challenge is coming up with a new approach that 3/4 of users could implement successfully and serve as a foundational beginning to a car purchase. Letâs think of a way to solve things for the 3/4. Then later, inform the 1/4 where the rule wonât work without modification.
Or we could just guide people towards getting the correct answer from the get go.
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Which is ⌠go look in the LH marketplace?
Establish target price for your own personal circumstance. Marketplace is useful for filling in one of the variables in that calculation.
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Sounds good to me - lots of good lease deals in the marketplace. Shout out to all our great brokers and dealers.