Yep, this was my amateur mistake (expecting 23% discount to go with a base MF, and calculating my deal based off of that).
Yeah, that makes sense.
My “rant” is that it’s so hard to get these numbers. I even got 2 “offers” from local dealers in WA, and they don’t really share the MF/RV on the offer too so I need to ask couple of times to get them, hence calculating needs to be done real time as the deal is negotiated. As it is my first time, I was quite naive.
I need to target a less optioned car with a lower discount and maybe base MF to get closer to my deal.
Could you clarify that? I calculated based on the base MF
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Base mf = buy rate.
I think the first thing you have to determine is what is a worthwhile pre-incentive discount for a loaner (ignore the 23% for now). Search what brokers are offering and what other LHs have signed recently. Is a good deal on this car 15%, 20%, 40%, etc.
Take your target selling price and then use edmund’s numbers and put it all into the LH calculator. If that payment comes to $500/mo that is your target.
If this dealer is offering a better pre-incentive discount and a marked up mf, but still falls in at your target payment, then it is all good. Otherwise, negotiate a deal that works based on your pre-determined target.
Here’s something I couldn’t understand though: they advertise on their website $379 a month on 36/7.5k and $0 down. That doesn’t add up with a 0.0013 MF in the calculator in any way I tried.
Can anyone explain this to me? I get $422 (with just first month DAS) in the calculator based off of their numbers (with 0.2% tax for OR, 23% discount, 0.0013 MF and 58% RV). I know I should not rely on ads but is that kind of thing that common? I am sure this is the car I am looking at (checked the VIN and stock #) that’s why I thought it’s going to be a breeze…
What does the fine print say (literally, b/c I can’t read most of it)? Looks like it excludes TTL and mentions something about $10K being actually due at signing?
TBH, I feel like you’re totally overthinking this, as strange as that may sound…
they advertise dealer contribution of $10,445 off the $51,190 MSRP.
It’s my first time reaching to a dealer and the way they walked at me just because I said “the mf is kind of high” makes me think about what I did wrong and how I should negotiate without getting them to not even counter my “offer”. It’s clear I made a mistake and I want to avoid that next time. But I get the feedback.
From the ad: “Cash due at singing includes $10,445 capitalized cost reduction ($795 acquisition fee included in payments), and first month’s lease payment of $379”.
Now, the $10,445 is mentioned earlier to be paid by the dealer.
But to your point, it seems like they advertised one thing, and if I was reaching out to them saying “this is what I want” they would basically just use the fine print to get me to something close to what they offered to me. Is that kind of what’s going on with this ad?
In all seriousness: I applied flawed logic to my calcs because I am a beginner. I thought that the car with the highest discount will yield the best lease deals because of the RV (I didn’t expect the MF to be that different), so a 23% discount on a $50k car will be cheaper than say $44k with 13% discount. I am going to be focused on base C300 4matic from now on, that’s one thing I got out of this thread. Thanks for affirming this
If you take away anything from this thread, let it be this:
Talking to a dealer is for finding someone to do your deal, not for figuring out what something should cost. You need to figure out what your target price for the vehicle should be before you talk to them.
You also need to realize that the less competitive your locale, the less likely they are to accept what is considered a good deal on LH.
By all accounts from PNW hackers, WA is not very competitive. If you have the time to pick up a car further away, branch out your search into OR and northern CA.
Not that I don’t add value, just that I am exploring the optionallty of staying around the ~$400 effective monthly. I am more interested in the fun engine, AWD, and basic luxury features.
Okay, I get it. But I am not quite sure what else there is to do to get to the point where I know what is the target price before reaching to the dealership (besides knowing what I am willing to pay monthly).
I’ve just searched some BMWs in the area and I found a 330i xDrive 24% off MSRP (see screenshot below from their website[1]) in my area, just below 7500 miles. I’ve got MF & RV from Edmunds and looked at other deals in the forum, the MF & RV seem to be the same.
I put everything in the calculator (plus $2k fleet incentive) and that’s what I got:
On the face of it, this is what I am willing to pay. How should I reach the dealership now? if I look at what happened today, they will put a marked up MF and that’ll bump up from $437 monthly to $500+.
Stop looking at dealer advertised prices. You should care about real values that vehicles are actually selling for rather than misleading advertisements.
We always recommend the following method before you ever contact a dealership. If you do all of the work up front, you’ll have a stress free dealer experience and set yourself for success.
Read Leasing 101 (EDITORIAL | Leasehackr) to understand how to calculate a lease payment and the variables. Monthly payment is an output, not an input!!
Pick a specific vehicle that you want to target
Gather the current MF, RV and incentives from Edmunds forums for your zip code
Research the LH marketplace and other deals that have been made recently on your vehicle - what was their pre-incentive discount? How did their lease terms differ? Here is where your focus needs to be right now.
Plug your numbers into the LH calculator, and use a pre-incentive discount similar to what you have seen
Create a target deal, this is what you’re trying to negotiate to. You can try different terms, selling price discount, etc. and see how your monthly payment is affected. It is also possible that different trims of your vehicle may have different MF and RV (i.e. this is very common with GM), so make sure that you look into that. Come up with a set of inputs that give you the output that you want - your desired monthly payment.
With a target price determined, you now have a deal to pursue and compare dealer offers against. More importantly, you have a solid foundation to work from.
