So I am new to the leasing space and am trying to understand how these numbers I’ve been getting from dealers makes sense.
I’m looking to get a 2025 Volvo XC60 T8 Plus (36 months; 10k/annually). I believe the residual is 56% and the money factor is .00254.
With an adjusted cap cost of $52,735, I don’t understand how I’m getting to a $947.80/month payment like in this offer (I was expecting around ~$750 max).
I’ve been soliciting several offers from dealers in my area, and two were in the $900s, three were in the mid $800s and one was $799/month. This all with 0 down. Why are all of these payments all over the place when the cap costs are all generally around $52k/53k? What am I missing about how lease payments are calculated?
Rather than asking dealers how much they want you to pay, you should put together a target deal so you know what this actually should cost and then make them an offer.
Yeah, this was actually essentially what my question was. I thought I had a good target price of ~$50k-$53k (which I’d calculated to be ~$620-$720/month), but no one is offering anything near that for monthly payment—even with the target price. As such, I was wondering if I’m somehow misunderstanding what goes into a car lease payment.
Mathematically, I don’t understand how you could get a $947.80/monthly payment with a $52,735 cap cost, $37091.60 residual, and $8,213.69 rent charge.
I was using calculator.net until just now and didn’t realize the monthly payment could be different based on how incentives/rebates/cash allowances etc are applied. Was originally just working on getting to a specific final price.
I’ll ask the dealer to clarify how exactly this “total savings” category is broken down, but on first blush, it seems like perhaps they are charging full MSRP and giving me the “savings” as rebates (in addition to any potential issues with the money factor)?
When I put in the monthly payment of $947.8 in calculator.net, it estimates that the vehicle price should be $59,296.76, (despite the dealer quoting the sale price as $52,735)
Separately, both Leasehackr & Calculator.net said $50k should be ~$640/month, which is what I was aiming for
One should work out all the details before ever speaking to a dealer and be very clear to differentiate between incentives and discounts. If you go in negotiating discount independent of an incentive discussion, there is a very high likelihood the dealer will include incentives in the discount discussion, especially when we are talking about volvos where many of the incentives are direct to dealer rather than consumer facing.
I am looking for opinions on a similar lease deal for a 2025 T8 Ultra. Here are the specifics. Please share your thoughts.
MSRP = $70,735.
Total of Rebates = $10,100
Cap Cost reduction (dealer discount) $8,400, which includes dealer cash back
Acquisition Fee= $1,000
Dealer Fee = $1150
License Fee = $400 (DMV)
Total Due at signing = $3,000.
Tax = 7% (Florida)
Monthly Payment including tax = $655 (35 total payments; Volvo makes first payment)
Residual Value = $38,196
On a related note, If I were to buy out the lease shortly after I sign, am I correct that the amount due would be the total of all unpaid lease payments plus the residual (which would mean I am effectively buying the car for $10K below MSRP), or would the lease payments be discounted to net present value for early payment?
You would not owe the rent charge on the remaining 35 payments. Your buyout would be approximately the adjusted cap cost, plus the full 7% tax on the total buyout cost.
Hi Dave, I am in Delray also. When you say MSRP 70,735 for a T8 Ultra is that after rebates and discount? I have only ever seen Ultras over 81k , I am possibly looking for the same vehicle . Just leased a T8 Plus for wife a few months ago.
Thank you! Yes I called the dealer and they clarified that for me. So if I were to pay off the lease a month after I sign (to get the lease incentives) I am effectively paying about $57K for the car with an approx. $71K MSRP (in both cases plus tax and license, etc.) so it seems like a pretty decent deal.
The $7500 is just a lease incentive from Volvo (not to be confused with e $7500 tax credit for EVs). And there is an additional $1000 lease incentive as well. And I believe there is also $2000 dealer cash available from Volvo to the dealer (which has been applied toward the cap cost reduction). The rest is discount negotiated with the dealer. Hope this helps.
Once you get your account number you will know your buyout. The lease might be 50k, but your buyout will include taxes and fees. Ive leased a few volvos from gunther. Id just do a 24 month lease and call it a day. The 25s will tank once the 25.5 comes out… pending you meant xc90 and not xc60
If looks like a decent deal, but I would be worried about residual risk. Since this is a hybrid it might hold its value better than most pure EVs, but I would rather let the bank hold that risk than me. I would not buy it out immediately.
This deal isn’t attractive as either a traditional lease or a lease followed by immediate buyout.
Check out Signed Deals & Tips for Volvo XC90 and Mazda CX70 PHEV for traditional leases that are much better. Or check Marketplace for Mercedes GLC350e PHEV
For an immediate buyout look at RAV4 Prime and other cars that hold value better.
