General lease question

Ask the Hackrs
1

Hi all,

I am just trying to make sure I understand this.

I keep hearing about negotiating out the door price not mattering whether it’s a sale or a lease.

Once I get the out the door price is that the number that I take off the residual from? And also the lease specials?

Was looking at a 2025 Grand Cherokee 4XE.

Let’s just say the purchase price that was negotiated to $50,000.

So then I would do the price minus the residual value of 45% ($27,500) to see how much I am financing.

If there is $15K in lease bonus cash, wouldn’t I take the amount of financing minus the 15k bonus cash to figure out the real amount I am financing?

So $12,500?

2

Stop watching CarEdge videos. This is advice that doesn’t make sense.

“Out the door price” is a number specific to a purchase.

Asking a dealer for an OTD price on a lease simply communicates to the dealer you have no idea what you’re doing and you’re trying to waste their time by playing games.

2 Likes
3

I would recommend doing some reading to understand how a lease works. Lots of good info here.

3 Likes
4

You are forgetting something pretty important

OTD Price
Minus Residual Value
Divide by months of lease
Add Money factor (MF)
Add MF Markup (Dealer Profit hidden in the MF)
Add Misc things hidden in the paperwork.

So even if you negotiate a good OTD price, they can mark up the MF or Hide Other charges in the paperwork.

A slightly better way here is look at the Marketplace, if a Broker in your area is offering the car at $250 /month with 5000 down/due. You can see if you can get a better deal. BUT what dealers count on is you are tired and they tell you 5000 down doesn’t include TTL and now it’s $250 with $8000 due, and you got a terrible deal.

Even a deal I got was slightly screwed because the dealer wrote it as a 1 Pay on (Payments and TTL), instead of 1 Pay on Payments + TTL. Which would’ve been cheaper for me (1 Pay in Payments and TTL puts interest on the TTL which should’ve been avoidable)

5

Great. Thank you!

So even if a dealer has a certain listed purchase price on their website I can’t go by that amount for a lease?

6

Most prices listed on Websites usually

  • Are including Every rebate even though you can’t combine them
  • Are including Lease Rebates but telling you it’s for purchase
  • Are included Rebates that expired 6 months ago.
7

That’s NOT how a lease is calculated.

Links have already been posted for correct information by @Bluemkn57cars

8

Dealer advertised prices are completely irrelevant.

9

Read watch and put together your own calc or spreadsheet for a target payment/DAS.

You will leave $1000’s on table. Or just hire a broker.