Deal check/advice: Volvo XC90 - trying to learn the process

I’m looking to possibly get some assistance on how I can pick through this lease sheet I received. I’ve been researching on this forum to learn how to better equip myself to work through these lease deals.

From what I see here, they are using their entire incentive options to get to their selling price, with nothing extra after that to me. And from what I’ve gathered from Edmunds, the MF should be .0015, so they are marking up their MF to .00185.

I’m trying to fill in the Lease Calculator from this sheet, but I still can’t seem to get it to match.

Needless to say, I see that this is a bad lease deal, but I’m struggling to find out how to negotiate properly when I’m seeing these deals that look like they are structured for the max to the dealer.

Any direction would be great, I’m doing the research as much as I can but I’m wondering if I’m after a car that is just not getting good deals at the moment. I’ve seen 2 other lease sheets in No. Cal very similar to this.
BTW: 2020 Volvo T6 Momentum 7 Pass. Adv. pck.

Volvo XC90.PNG

Heads up. The first quote you get from a Dealer is ALWAYS a deal you can improve. It’s a starting point. I use it to breakdown the deal into its parts and map out a counter offer plan.

You know more than you give your self credit. I see a good deal in your future.

You have a good handle on what to do. Follow this roadmap on your Volvo deal.

Volvo’s go-to-market strategy is a little different than most car makers. Volvo’s lease program features direct-to-dealer incentives - the kind of incentives that give buyers the impression that the dealer is giving them a huge discount. The buyer is in fact getting a welcomed discount but it’s not all coming from the dealer. Confused? Good - confusion gives the car dealers the upper hand. Often, dealers are not forthcoming about how they come to the discount they offer you. If you want a great deal - you must break-down the dealer’s total discount into its parts and know how each component contributes to a great deal.

The challenge with direct-to-dealer incentives is it masks the discount you are getting from the dealer and the discount you are getting straight from Volvo. When you get an offer from an Volvo dealer you need to break down the discount your getting into two parts: i. how much is the dealer discounting the price and ii. how much is Volvo discounting the price.

i. Dealer Discount: the dealer should reach into his pocket and give you a discount - this comes from the dealer’s potential profit on your deal. Unfortunately, this is the win-lose part of the leasing game.

ii. Direct-to-Dealer Incentive. Each month Volvo gives dealers funds to discount the price of new cars. This varies by model and it varies by trims within a model. You can find this information on Edmunds (other trunk money is not made public). Dealers may consider withholding some of the incentive from you to improve their deal profit. Your goal is to know it’s there and reflect it ALL in your selling price offer - plus the discount you want from the dealer.

How to use the LH calculator:

  1. Selling Price input. You only input the dealer discount here. MSRP minus DEALER DISCOUNT. Do NOT input msrp minus dealer discount minus direct-to-dealer incentive here.
  2. Untaxed Incentive input: This where you reflect the direct-to-dealer discount.
  3. Taxed Incentives input: This is where you reflect your direct-to-consumer incentives: loyalty, conquest, college grad, etc.

Plug figures used to illustrate how to break down your price & incentives.

$40,000 MSRP
$ 3,000 Dealer Discount
$37,000 Pre-Incentive Selling Price ► Selling Price input into calculator

$ 6,000 Direct-to-Dealer Cash ► Untaxed Incentive input into calculator
$31,000 Dealer’s Selling Price Offer

$ 1,000 Loyalty Cash
$ 750 Healthcare Worker
$ 1,750 Total Direct-to-Consumer ► Taxed Incentive input into calculator

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Your first step should always be determining what a good deal is BEFORE you talk to a dealer. Put together your own deal so you know what you should be targeting. Then, when you look at a deal like this, you can easily see all the areas where there is room for improvement.

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Thanks for the responses, I’m going to run this through to see the details I need to pay more attention to.

I did send in counters to 3 dealers with reasonable numbers based on what I found here for similar T6 deals. I offered them to come down from MSRP pre-incentive (like 10-12%), and also asked about the MF to match what is being reported from Edmunds.

All of them went silent, so I wondered if I just went way too low. lol.

3 years ago, I pulled off a pretty good lease deal for an Acura MDX, got them down 13% with a bunch of freebies thrown in at deal time, based on this forum. But I also had another lease to turn in, so they were dealing with me. Now I’m getting back up to speed to do it again hopefully.

These Volvo dealers don’t seem to be coming back with anything when I’m countering. But I’ll keep trying.

Thanks!

You know more than you give yourself credit for. Dig in and fight the good fight.

With every post you demonstrate a solid command of a good Volvo offer.

12% pre-incentive is a legitimate offer; you didn’t go so low you made an unreasonable offer. The reason your dealers went silent is because they are holding out for a less knowledgeable buyer to come along.

A reasonable yet aggressive offer weeds out the dealer pack. You don’t want the guy to call you back if he only has 1 in stock and won’t go lower than 6% pre-incentive. Let him sell it to someone that doesn’t know as much as you do - why should you both waste your time. When you are working towards an aggressive discount you won’t get all your calls returned - not all dealers build their business model on volume.

If a dealer has the inventory to get close to your number, he will hit you up. How many dealers are in your area (you mentioned Nor Cal so I assume you have plenty)?

Keep an eye on inventory levels for the dealers in your area. Tight inventory is your biggest challenge. 12% is a worthy aggressive goal when dealers are chasing volume bogeys and have the inventory to do it. You may need to adjust your expectations below 10-12% - but you won’t get it unless you make the offer.

As an alternative approach (this is not better its just an alternative), just ask a new dealer for a quote and see what comes back. Some dealers will dismiss an offer made by a savvy customer(that’s you by the way) because they don’t want to get grinded. Once the dealer has invested some time in you they maybe more prone to close the deal - pot committed theory.

I believe you can negotiate a good deal. But in a market where dealers are holding out for buyers willing to pay up (not you or I), consider tapping into a broker. Brokers cut through the clutter and tell you the best deal out there from among a larger number of dealers than you can reach. Look at some broker offerings on this site, and see what you can get from a broker. If the best broker deal out there is 8% - well your 10-12% target maybe high.

What incentives will Volvo put into your deal? Volvo Lease Bonus Cash (in my region its $3,000)? Conditional incentives like loyalty, USAA, active military, heathcare, 1st responder, PenFed

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USdK60
Are you a motivational speaker by a chance?

No but I play one on TV.

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That is your most readable post, thanks!

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Hey, I’m motivated! :smiley:

Share your wisdom @Ursus - you know your stuff. Help us get better deals! The game is stacked in the dealers favor.

I have nothing to say after your essays

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I won’t be under house arrest for much longer. You will miss me when I am gone.

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Nah, but new users will miss you, especially your “Welcome!..”.

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So I get the difference now between dealer discounts vs direct-to-dealer incentives.

My question is how do I come to understand the difference when the dealer gives me this?

Quote: The MSRP is $64,080, and to avoid doing back and forth negotiating, we can lower that price down to $58,171 for you.

Is this where edmunds research comes in?

This is actually pretty fun to research…

Work backwards:

Plug figures used to illustrate how to break down your price & incentives.

40,000 MSRP
3,000 minus Direct-to-dealer incentive (edmunds or Volvo build a car tool)
= 37,000 Sub-total
minus 31,000 Selling Price offer from Dealer
= 6,000 Dealer Discount

My brain works better when I rearrange the numbers like this:

$40,000 MSRP
$ 3,000 Dealer Discount
$37,000 Pre-Incentive Selling Price ► Selling Price input into calculator

$ 6,000 Direct-to-Dealer Cash ► Untaxed Incentive input into calculator
$31,000 Dealer’s Selling Price Offer

@bigsacattack gonna be driving a XC90 to his next Kings game! And only pay $560 pre-tax a month.

I can beat this. Text me or Email me. I have a dealer in NorCal with 90s in stock.

Anyone can, even a cave man. Looks like he’s at 9.22% including incentives

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So vhooloo’s out then? I can beat 9.22%, will depend on unit, if he wants something not in inventory different story.