Does the 1% of msrp price rule apply to all makes when leasing?

Ask the Hackrs
61

You can think all you want. It is what is it is.

Your current car is only worth X amount, no matter what your current payoff is. If you want out of this Mazda that bad, you’re going to have to pay for all of that negative equity. PERIOD

I’m not trying to be a jerk…really, I’m not. But you have no idea how a lease works. You’ve got to pay that negative equity from the Mazda somehow. Whether it be writing a check at signing on the new car or it being rolled into the new loan. Either way…YOU WILL PAY. This Mazda must be really horrible.

62

Yes I understand paying more for the negative equity. So according to the quote I posted, the negative equity is accounted for at 72k. $1461/month is astronomical.

So you’re saying, not only do I have to pay extra for the negative equity but in addition to that- pay another $300 a month?

The dealer is already making a profit at including my negative equity into the final amount which is 72k.

63

This is why you should always work out a target deal on just the new car first, no trade, no negative equity.

Looking at RateFindr on a new $65k GLC300 Coupe, your baseline numbers without any negative would still be in the $1100/mo. range at base MF. Whether from MB or BMW, these ‘coupe’ SUV’s have always leased horribly.

So add $7k of negative equity and a marked up MF and it’s not surprising at all that you’re $1400+ on this thing.

64

I don’t think it should be either, so I’m not going to pay that, and neither should you.

You seem to be taking this personally when it’s just math. You got a bad deal on the Mazda and you’re expecting the universe to somehow make it up to you, but it doesn’t work like that.

65

That isn’t remotely how this works.

On a lease, the msrp is residualized, meaning you only pay a portion of the cost. When negative equity is added, not only is it not residualized, you are choosing to pay tax and interest on the amount you are rolling in, so rather than paying a small portion of the extra cost, youre paying more than 100% of that cost. A $72k msrp vehicle and a $64.5k vehicle with $7500 in negative equity rolled in are no where near the same thing cost wise for a lease.

There is only one viable path forward right now if you don’t want to light tens of thousands of dollars on fire:

  1. Take this quote you have and every other quote you have and throw them in the trash. Never look at them again.
  2. Take a giant step back and take the time to work learn to put together a well-researched target deal, without your trade involved, for your particular situation.

Until you know what the lease you’re looking at should cost, why it costs that, and can explain it to someone else, DO NOT speak to another dealer.

66

How long have you had the Mazda for?

Have you driven the GLC coupe yet?

67

I think it still holds up as a guideline. But it was meant to be used with other rules like no money down, shop the deal, not the car. If someone uses this guideline on a vehicle and puts zero down past first months payment then they can feel pretty confident they didn’t get fleeced.

It also doesn’t discern what is a good deal for a particular make/model because it only focuses lowest theoretical payment for a given MSRP regardless of whether it is achievable. Often hitting this target is not possible.

68

It doesn’t hold up to even basic scrutiny

On many vehicles, it would mean you bought the dealer a new boat

69

I’d like to see some scenarios on where it breaks down and yields a bad deal. Or deals where you’re seeing significantly better than 1%. I typically target 0.5%, but I’m curious if I could change my metrics and find better opportunities.

70

I’m currently paying 0.18% of MSRP for an Equinox EV, 0.32% of MSRP for a Blazer EV, and 0.33% of MSRP for a Silverado EV. So yes, 1% of MSRP could very much be considered a bad deal.

EDIT: There is no way in hell I’d pay over $400 bucks per month for an Equinox EV

71

Yeah that’s what I tell myself as I drive my $1,450 EQS.