Genuine Lease Questions

Ask the Hackrs
1

I’ve read through these forums… I’ve read the articles… the information is confusing. One says this then someone else says something else. I want to get it straight and get the right information.

What does one primarily start with when negotiating a lease? MSRP, Selling Price, Residual Value, MF, Cap Cost aka downpayment?

Is the 1% rule outdated?

Is the leasehacker calculator still a thing. If so what years is ideal?

What should an ideal residual value be?

What is considered a good MF?

When people say put no money down and pay 0 does this apply to the cap cost/downpayment or to the sales tax, acquisition fees, doc fees and dmv fees as well?

What is an ideal selling price percentage off the MSRP?

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If you need that much info…I recommend the Payment Model.
Set up a price and down…such as $500 with 2k down. Then look at other deals here (and in your state) to see if that is met.

Otherwise, you have a lot of reading on Leasing 101 (Main Page) to understand all the mechanics of a lease

3

Your questions don’t seem genuine at all. If you really read the forums like you mentioned, you wouldn’t ask any of these. All of them has been answered multiple times.

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4

Wrong. One says one thing and another says another thing. No consistency.

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Care to give examples?

6

When you say you’ve read through these forums your including the “Older” and “Newer” tabs here? These should get you started if you haven’t. However it’s quite a bit to unpack regarding your questions and I’ll try to address them:

EDITORIAL | LEASEHACKR

What does one primarily start with when negotiating a lease? MSRP, Selling Price, Residual Value, MF, Cap Cost aka downpayment?

The MSRP is set by the manufacturer and is not negotiable. The Selling price is negotiable and should be negotiated as low as possible in most cases. The Residual Value is set by the lessor or captive ( not negotiable ) and is tied to a certain term, 24 months / 10,000 miles per year or 36 months / 12,000 miles per year. The Base money factor is set by the lessor / captive and many dealers will mark it up as one of the ways they generate additional profit. It doesn’t matter if you have an 800 credit score.

Is the 1% rule outdated? Yes

Is the leasehacker calculator still a thing. If so what years is ideal? The calculator identifies the various ways each variable plays into the deal and is more suited for that purpose.

What should an ideal residual value be? It is set by the lessor / captive. Ideally a high rv however a low one can be offset by a low mf or a good amount of incentives.

What is considered a good MF? It is set by the lessor / captive. However the lower it is, typically the better. We have seen some brands have a sky high mf but also a very high residual offsetting it. It’s kind of like a college algebra problem with all the variables.

Traditionally you need a combination of low mf, high rv, a good dealer discount, and some amount of incentives to translate into a “good deal”. Not all vehicles lease well and you haven’t stated what vehicle your looking for so were not really able to help.

When people say put no money down and pay 0 does this apply to the cap cost/downpayment or to the sales tax, acquisition fees, doc fees and dmv fees as well?

Several answers exist to this question though we generally all frown upon cap cost reductions. Many cases it depends what the mf is, as the more you “roll into the deal” the more you are paying on interest. In most of those cases you would also be paying more in tax because the monthly payment is higher. Many of us on here pay inceptions up fronts such as acq fee, dealer fee, doc fee, tax, etc… A difference exists between down and due at signing - the differences are covered in the LH 101 page.

What is an ideal selling price percentage off the MSRP?

This is going to be dependent on what manufacturer and vehicle you are targeting. Many vehicles start at 10% off MSRP and many rarely go above 5% off MSRP.

Hopefully this is enough to get you started!

1 Like
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I wouldn’t say it’s outdated, in that it’s never made sense. The advice from people to follow it definitely is outdated though, as people have focused more on actually working out what a good deal is rather than arbitrary misleading rules of thumb. Different incentive structures, particularly with all the strong EV leases, have really highlighted how poorly it works to inform anything.

The calculator is simply a tool. It’s made more powerful now if you sign up as a super supporter so that you can easily pull rv/mf/incentives directly into it, but in the end, it’s just a tool that does some of the math for you.

8

Ill try to keep this as simple as possible, which is a little difficult because the answer does get nuanced and complicated. In a vacuum, Sales Price is the most important factor to consider. All “good” lease deals flow downstream from a negotiated dealer discount off of MSRP. Everything else falls into place after that. Where things get complicated is that regardless of dealer discount, not all cars lease well. I feel that the best strategy is to identify several cars that suit your needs, determine which one has the best lease programs (Some combination of Low money factor, high residual and high rebates) and determine what kinds of dealer discounts are possible on that car.

9

Step 1 _ if you live in Maryland, Virginia or Texas, move to another state that doesnt tax you upfront on the selling price.

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Texas is a great place to lease from a tax standpoint if you do your shopping right.

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Some information can be confusing, but you need to provide specific examples with links to that information. There is tons of information online about car leasing on other sites, and some of it is incorrect.

The bigger question for you is as follows: What is your budget? Other questions you can answer so that we can help you include:

  • What is your credit score? (You can provide a range)
  • What car(s) are you looking at?
  • How many miles do you drive a week, month or year? If you drive more that 15k miles a year, leasing might not be the best option for you.
  • Have ever had an auto loan?
  • How soon do you need a new car?
  • What part of the country are you located?
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what is the trick for texas then? im curious if it can be replicated in maryland

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There are sales tax credits available from time to time that remove/reduce any sales tax due. Generally on specific makes/models at any given time.

It’s a TX only thing.

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