I have a quote for a mazda cx-5 turbo signature that I believe is good but would like a second opinion. Deal is only taxes, fees and 1st month down, for 36 months and 12k miles. See below:
Thanks for any input!
Did you verify in the calculator? ie MF etc
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I did, gave a score of 6.7 years
One thought experiment worth conducting these days is to assume this is the new normal. Banks are fully aware of just how much consumers are willing to pay to lease cars. Now that that cat is out of the bag, it’s not going back any time soon.
So compare the total cost of:
(A) doing 2 of these leases over the next 6 years.
Versus
(B) buying the car and extending the warranty to 6 years. You’d own all the equity. Your depreciation would be (purchase price + TTL - the value of the vehicle).
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Yeah I get it, I’ve been doing numbers and those scenarios are worth considering. I dont know if I want to finance a car and have a big debt for 6 years but I get that leasing within the same period might be the price of a new car and no equity
Off the top of my head, that seems like a decent enough deal. Have you seen what brokers are offering?
@max_g: I would normally agree w/ you, but the MF is quite low (w/ a realistic RV), so it might not actually be a bad idea to lease this, if OP very much wants this model and trim. JMHO.
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Thank you, @paranoidgarliclover, for the advice. I successfully negotiated the deal based on the quotes I received from a broker. However, since the broker was not local, I’ll need to travel to another state to pick up the car. I shared the numbers with a dealership and secured the deal. Now, I’m concerned about possible additional charges that the dealership might impose to compensate for the discounts. Could you please advise me on the common things I should be mindful of in this situation?
By most measures, a LH score of 6.7 is pretty bad. A 3-year-old CX-5 Signature is still worth over $30K, so given this RV, you will have ALOT of positive equity in this lease at the end of your term. The deal already has high fees - a $500 processing fee on top of a $785 non-tax fees. I suggest you get these broken out.
Although the MF is low, I would finance this vehicle. My threshold to lease is usually closer to LH 8 and higher.
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Thanks @z0lt3c thats a good rule of thumb. Seems like it would be better to lease a volvo c40 ultimate (my other option) which have a LH score of 10.8 but my only concerns is the personal property tax in VA on that car which is 62k.
You may want to finance the CX-5, since the discount is good. The lease program for Mazda is not that great now.
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But the acq fee is just another name for more rent charge. And low MF is less attractive in a market where OEMs are offering 0 and 0.9 APR again.
And regardless of the individual inputs, the total matters too. I just don’t see any reason to spend $18,000+ to lease a $37k car.
I also don’t see a reason to blow $20-30,000 (the extra cost) to cycle through 4 brand new cars in 12 years instead of 2 or 3.
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So leasing doesnt make sense with this car as the residual is too high at the end. But can you use that to sell it to third party and get equity of the sold price? Sorry kind of new to leasing
A residual being too high means the car is underwater at the end (negative equity).
Residual being too low means you’re overpaying over the course of the lease and any equity captured at the end is a clawback of what you overpaid.
But equity cannot always be monetized (Volvo for example). And since it’s not in the contract, the lessor can change those policies in the middle of a lease.
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Thanks for the explanation @max_g. Could you please explain more about that last part that the lessor can change those policies in the middle of a lease? I thought that once the contract is signed, both parties agree on the monthly rent and purchase price at the end if available.
Yes but that purchase price is only available to you, and to no one else. Plus there is TTL owed to your DMV.
Monetizing a lease means selling it directly, without buying it and paying TTL. That’s not a right enshrined in your contract.
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Lease calculator also indicates that VA taxes the selling price for a lease? If that is actually the case, then it makes more sense to finance, if you can get a decent rate.
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Ok makes sense that way. Thanks for the clarification
what is a decent rate in this market, under 5%apr?
Other manufacturers are bringing back 0.9 and 0% APR.
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Mazda used to have a 0.9% APR for 36 mos, but it looks like their offer now is 2.9% for 36 mos.
Not sure if the credit union thread has more recent info on interest rates (I myself have not been keeping), but, depending on the length, yeah, under 5% is probably pretty decent.
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