Create a Lease Proposal - Always Control the Deal

Signed Deals & Tips
1

For whatever it’s worth, to begin the leasing process, I do my due diligence by choosing a vehicle and researching residual factors, base money factor with 0% reserves (aka buy rate), dealer doc fee, acquisition fee, OEM allowances and OEM lease bonuses as well as any available customer cash. I’ll use sources such as the finance captive’s website, Edmunds, TrueCar, and now, Leaehackr. Once I’ve gotten all the pertinent data, I’ll select a dealership and check the dealer’s inventory. If I find one I like, I’ll take a screen capture using Snagit highlighting the stock# and VIN#.
Next, I’ll contact the dealership via phone explaining that I will be emailing them all the pertinent information as well as a request for the dealer’s lease worksheet that provides all lease data including MSRP, sell price, discounts, acq and doc fees, cap reductions, gross cap, adj. cap, residual and residual factor, base money factor, sales tax rate, dmv fees, monthly payment, cash due at signing.
Once I receive the lease worksheet and, have vetted all the input data and confirmed all the calculations using a detailed lease program I’ve created in Excel and in Mathematica that calculates all output data including taxes and payments for any one of all 50 states, I’ll create a LEASE PROPOSAL… I sometimes joke with the F&I folks that they can take all the data in the lease proposal and transfer them onto the lease agreement for the lessor to sign. Before signing, though, I’ll always request a copy of the completed lease agreement for review.
Here’s an example of a final lease proposal that I created in June…

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June 21, 2018
2018 Volvo V90 XC T5 AWD Wagon

Retail Pricing Information
Base MSRP 2018 V90 XC T5 AWD Stock # 18V758 ……… ………………………………. …. 52,300.00
Exterior: Onyx Black, Interior: Charcoal…………………………………………………… 595.00
Plus Package……………….…………………………………………………………………… 1,000.00
Convenience Package………………………………………………………………………… 1,950.00
Heated Front Seats, Heated Steering Wheel………………………………………………… 750.00
Protection Package…………………………………………………………………………… 535.00
19 “ Wheel- 5 double spoke glossy black alloy……………………………………………… 800.00
Mud Flaps…………………………………………………………………………………… 195.00
Destination……………………………………………………………………………………. 995.00
Total MSRP………………………………………………………………………………… 59,120.00

Selling Price
Agreed Upon Value……………………………………………………………………………… 50,052.40

Amounts Financed (Capitalized)
VCFS Acquisition Fee………………………………………………………………….….…… 995.00
NY Sales Tax @ 8.875%…………………………………………………….…… 2,017.24

Capitalized Costs
Gross Capitalized Cost………………………………………………………………….……… 53,064.64
Capitalized Cost Reduction - Customer Loyalty………………………………………………. 500.00
Adjusted Capitalized Cost……………………………………………………………………… 52,564.64

Residual Data
Residual Factor……………………………………………………………………….…………. 0.52
Residual Value (Residual Factor × MSRP)………………………………………….…….….… 30,742.40

Cost of Money/Term
Money Factor…………………………………………….……………………….……….…… 0.00031
Term (months)……………………………………………………………………….………… 36

Lease Payment Itemization
Monthly Lease Payment…………………….…………………………….…………….…….… 632.00

Charges Payable at Lease Signing
First Month’s Payment…………………….……………….……….…………………………… 632.00
DMV/Inspection Fees…………………………………………………………………………… 82.50
Documentation Fee…………………………………………………………………… 75.00
Loyalty Tax @8.875%… 44.38
Cash Due at Lease Signing………………………………………………………………………… 833.88

Miscellaneous
Fund Provider: VCFS
GAP Coverage: Included
Annual Mileage Allowance: 12K
Disposition Fee: 350
Purchase Option Fee: 350
Excess Mileage Charge: $0.25 per mile
Complimentary Maintenance - free oil changes

==============================================================================

Note the following discounts for June 2018:
OEM: Volvo Allowance 1,500
Lease Bonus 750
Customer: Lease Loyalty Cash 500

Volvo’s ACQ FEE is 695. Dealer customarily marks-up to 995 (300 is the max mark-up that Volvo allows). So, I insisted that the dealer lower the sell price by 300 to compensate. So, the actual sell price would have been 50,352.40 had the ACQ FEE remained at 695… Effectively, I got 11% off the MSRP before applying the above discounts…

In most cases, I end up negotiating with the sales manager which is exactly what I want… Getting to the guy that has access to all the information and makes the decision (e.g., sales manager) is extremely important. It now becomes a matter of negotiating via email/phone which can take a day or two. As such, proposals often need to be revised. :weary:

Hope this helps!

15 Likes
2

are you saying you’re requesting a blank sheet so that you can input the fields yourself with whatever deal you’d be happy with?

3

I think he’s asking for the dealer’s worksheet with their numbers, so he can compute it himself.

4

Depends on what you mean by numbers. I’m actually checking their calculations to ensure that they’re correct. And, yes, they do make mistakes… read on… In addition, I want to make darn sure that the dealer and I are on the same page with respect to the acq fee, doc fee, residual factor, and the base money factor as well as the sales tax rate. It makes no sense to create a lease proposal unless we agree on these numbers which are used as inputs to perform the calculations. I do my own calculations and determine the sell price. Under no circumstances do I use the dealer worksheet to do my calculations. I’ve created a program to do all of that.
In fact, in Ohio, Honda uses ADP to create lease worksheets and complete lease agreements. I have found mistakes in the calculation of payments when the first payment is capped in the lease. Honda Finance isn’t inclined to do anything about it. So, I simply adjust the sell price downward to compensate for the error. It’s the dealer that loses in such instances. After explaining the problem to a Honda dealer F&I guy, he seemed to have a grasp of the problem but didn’t seem motivated to do anything about it. I guess the potential dollars lost just wasn’t worth the effort.

5

It has been my experience that getting a full breakdown lease sheet with a proposal from a sales guy on first contact is usually difficult. They tend to send you half the info in an email without full breakdown.
How do you go about getting all the info the first time around? Half these guys know less than you do.

4 Likes
6

I’ve ran into the same issue as well, with them quoting “the only number that matters in a lease is the monthly payment”

7

Why do you call first rather than just emailing? Is it to get the name/email of the Sales Manager?

8

I used to do what @delta737h does, but I’ve instead found it easier to work through each piece of the puzzle step-by-step, because it is less likely to scare a sales person off the deal because I’m too knowledgeable. Also because while I’m ultimately interested in all of the moving parts, I’m more than happy to manipulate things as long as they end up where I want (e.g. higher MF, lower sales price etc.).

Plus, the response when they realize where the deal has landed when we’re done is pretty priceless.

7 Likes
9

I had success using a similar concept, but without incorporating as many details. After speaking/emailing with the internet rep at several different BMW dealers about what I was looking for in terms of options, I emailed them this example:

BMW 3 Series Loaner w/ 5K miles
Location: NJ
Term: 36/10
MSRP: ~$50K
Selling Price: ~$40K (20% of MSRP)
BMW Lease Credit: $3K
Residual: 59% (Adjusted for loaner miles)
MF: 0.00166
Drive Off: ~$1850 (First month, NJ tax, reg & doc)
Monthly: ~$350

This lets them know that I knew the in’s and out’s of leasing and also established a baseline of what I considered a good deal. These numbers work out to a Leasehackr Score of 11.7. In a couple of weeks, I was able to find a dealer willing to work with my terms.

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10

agree with this. Not only scaring them off, but you also give off a scent that you either a) going to be difficult or b) are just shopping numbers and aren’t actually going to buy

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11

That’s exactly why it’s so important to speak with the sales manager. Unfortunately, most sales managers prefer that you deal with the floor sales associates. However, the sales associate quickly discovers that what I’m asking for is beyond his control or understanding (e.g., base money factor with 0% reserves) and that many of my questions should be appropriately addressed by the sales manager. So, he/she refers me to the sales manager; otherwise, I politely ask to speak with the sales manager and… away we go!

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12

why not just go straight to sales mgr ?

13

In my experience, sometimes that’s easier said than done. Many sites don’t list the sales mgr name/email address. Some make you go through a secretary…AKA BDC (Business development center) where they try to schedule you to step foot into the dealership first.

14

That’s never been my experience. They know I’m dead serious based on what I’m asking and they certainly know I’m not “shopping” numbers. I’ve negotiated leases in 28 states so far and have never experienced sales people being intimidated. I’m a very friendly guy on the phone and that seems to be all the edge I need. It’s all in how you approach things. If you come across as genuine, very knowledgeable and friendly, that will take you a long way toward successfully negotiating a lease. At least that’s been my experience.

1 Like
15

If it works for you, then that is what matters - my experience is that to get a hackr deal (e.g. a number that is far lower than most Sales Managers and Sales People ever expect to see for a particular car) you need to walk them to the conclusion, not simply give it to them.

2 Likes
16

you must have a “magic touch” on the phone because that’s not the experience i’ve had. As soon as you start asking too many questions about every little number, they don’t want to bother. The sales guys also really have no real say and have to go back and forth to sales mgr so I’ve found it easier just to go to the sales mgr directly. Might take a few calls but eventually you get him on the phone.

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17

Just another maguzma, IMO.

18

define “walking them to the conclusion” ?

19

Sometimes I’ll go to the sales manager first if I can get access to him or her. If I do gain access, they will often refer me to a sales associate. So, I play the game until they finally figure out, and it doesn’t take very long, that the best way to deal with me is for the sales manager to work with me one on one.

20

basically you just do a roundabout way to get the sales mgr that seems to work for you. I just rather call 3 times and talk to them directly. But whatever works for you do it.