New user here. I’m searching for a decent lease an a new 2019 Ram 3500 diesel dually. I had one deal on the table with a 10/36 where they’re offering a 0.00185 MF and 55% rez through Chrysler credit. I chose to sleep on it, and the truck supposedly sold when I returned.
I have excellent credit (>750), and thought the MF way too high. In addition, I felt the 55% rez to be too low for a 36 month deal. 3 year old Cummins tend to resell quite high, especially with 36k miles or less.
Am I setting my expectations too high?
What is a reasonable MF and residual for the big Ram trucks for a 36 month lease? 48 month?
The bank sets the residual and the base MF. The residual cannot be changed.
Dealerships can mark up the money factor by a set number of points for profit.
You don’t get to negotiate residual. You aren’t wrong that a 55% residual on a 36k diesel is ridiculous. Buy and finance the truck.
Thanks for the replies. I should have been more clear. Rookie mistake.
Anyway, the lease numbers presented to me were from "The Desk ". I had a “green pea” sales guy that had to keep running back and forth, and I never got into finance to talk with them. The sell price for the truck was reasonable, but the lease payment was too high. I could have done better if I’d traveled 100 miles to dealers in Phoenix. The guy at the desk claimed the numbers he showed me were from Chrysler Credit.
Did I make a mistake by believing him and not taking the deal to finance to verify?
So, a 55% rz is ridiculous for a 36k diesel dually. I thought so. What might be considered reasonable these days? I was thinking 60-65.
I’ve not leased since 2008, so am a little rusty. Do I not even mention lease until I get into finance?
Thanks for your reply.
My reason for leasing is simple: I’ll be 67 this June and retire in July, and we plan to tow a 5th wheel for a few years. When I hit 70 in 3 years, will we still be able to do it?
That’s a big question. If yes, I can either buy the truck then, or try to extend for a year. If we can’t continue the RV life, then I give the truck back and we walk away.
It’s fine that you think the residual value is low for the truck, but unfortunately you can’t do anything about that. The bank decides what the residual value is and that’s that.
I understand that the bank sets it. What I’m quoting here are pro forma numbers from the sales desk computer runoff. I haven’t been in to see Finance yet, and don’t want to waste my time or theirs if I can’t make the deal I need. I don’t even know if what sales is showing me is accurate.
That’s why I asked “what are the experts seeing out there?”
I want to go back better prepared.
First things first. You should not be going into a dealer at this point. You should be emailing dealers around you only. Only go in to sign and pick up once deal is set. Start with reading Leasing 101 on here.
They aren’t going to show you a made up residual value. They might show you a marked up MF. As one of the posters below mentioned, don’t bother going into the dealership yet. Do negotiations via email and brush up on the components of a lease via Leasing 101.
Your reasons are logical, but not good. With that residual and normal lease fees and money factor, you will end up paying more to lease the truck than you would to own it for the same time period. Extending for 12 months is also not likely, although I haven’t researched FCA extensions myself.
With that residual, and your uncertain term of ownership, and your intended usage (you will vastly exceed 10 or even 15k a year touring the US with an RV) the most advantageous thing for you is to finance the truck.
For reference, my last truck was a 2011 Silverado 2500 diesel. It’s private party value a year ago, with 105k miles, was approximately 50% of MSRP. For a 3yr old truck, I think 70% is an entirely reasonable residual for a truck with mid-level options.
One more thing: look into PenFed’s Saver loan structure. It might be exactly what you are looking for in this case.
That is exactly the kind of structure that will work for us.
Your biggest mistake here was talking numbers before knowing what they should be/what your target price is.
Your second biggest mistake here was stepping in the door of the dealership to talk numbers.
I had all the numbers except two: MF and Rez. Can’t get those without talking to someone at the dealer or a bank. I asked here what “typicals” might be expected, what might be fair, and have only received one response even close to what I actually asked.
I have one dealer within 50 miles of me, and they won’t be getting the deal. I haven’t sent out a barrage of emails yet, because I don’t have enough information… yet.
Edmunds has a forum where residual and MF can be obtained for specific models and trim levels in specific areas. We don’t have access to that info here.
Unfortunately typicals of what might be expected do you no good. The Edmunds lease forum will tell you exactly what they are.
I appreciate your response, and it begs another question:
Let’s say a truck at Dealer A checks all my boxes at a reasonable price, and none of the trucks at other dealers have all the features I need, or have expensive features (and cost) I don’t want or need.
How do I go about emailing all the other dealers about the truck that’s in Dealer A’s inventory? Are they going to do a dealer transfer, and perhaps offer me a better deal?
Would it be worth going to the Ram web site and “Build my own”, and then spam all the dealers with what I’m looking for?
Unfortunately the heavier duty trucks do not lease well. Yes resale on them is very strong (particularly the diesels) but a lot of them are used as work trucks and captive’s don’t want the hassle of trying to resell a work truck. The PenFed payment saver is probably the best bet on one of these.
I generally prefer to target specific vehicles at dealers when I contact them, however, if you find that one dealer is offering a better price that most, you can always tell them what you’re looking for and ask about a dealer transfer, understanding that you’re generally able to get a better deal on any in stock inventory over one they have to go get.