Some even impose these “electronic filing/whatever” fees too…$149…$199.
No legally imposed cap in FL that I am aware of, but I believe the limit of what the market seems willing to bear is the $999 you mentioned
100% this.
To me, the 1% rule is just about figuring out whether to purchase or lease a specific vehicle. If a vehicle leases at 2% of msrp, as say Porsches usually do, it’s best to just purchase/finance. If you can lease it at 1%, then a lease is the way to go.
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What if a car has a shitty resale value? Do you still want to buy it just because it leases over some arbitrary 1%? Or maybe it’s better to consider a different car?
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Can’t just go off msrp discount %. We’ve seen some cars (usually luxury) selling for 25-30% off msrp, yet they still don’t lease well due to an RV in the 40s, or some ridiculous mf. You have to evaluate the lease program as well.
Good point.
IMO…YES
It is brand/model specific, nothing else. It is what it is, but gives you good idea what a decent lease could be.
Shitty resale value often goes hand n hand with a good lease program. Ie. why would anybody buy a used one when it’s cheap to lease a new one. The cars that have a high resale value typically don’t lease well.
Also, you bring up looking at a different car. My point is that you use it when you’ve settled on one specific car.
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Yeah true…but why the heck do Tacomas have such high resale values? I honestly cant figure it out.
Edit…I have a Taco and love it, but not sure why it holds value so much better than competitors (and leases so wonderfully).
And my point - you don’t buy a Volvo (for example) even when it doesn’t lease well. Because you will end up losing more money than on an over 1% lease.
+1
Short and skinny on this. My 68K 440i is worth $45K to Vroom. Which is about 2K under my sale price after incentives. The market is fully aware of these things.
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But what if you’ve determined 100% that the Volvo XC90 is the car that you want; nothing else? At that point you have to evaluate the numbers. What does the lease look like, what does a purchase look like (and expected depreciation).
I’m not saying 1% is a hardline number- that’s ridiculous. But it’s a quick reference, and 1% or better would make a slam dunk for a lease.
IMO, in this example, unless you absolutely must have a Volvo, you go with a competitive car that (presumably) costs much less…while you bide your time for the Volvo deals to hit! Alternately…you find you really like your plan B car and are happy you broadened the search. This has happened to me a number of times.
Wed be fools if we thought otherwise!
Carvana, Vroom, CarMax, etc all know what they are doing on a broad scale (even if certain deals indicate otherwise).
I still won’t buy it 
If I’m dead set on it I will keep looking for a better deal, next month or next dealer or a loaner.
BTW, this is exactly what I did - was in no rush, but wanted to replace my wife’s Forester. Was trying to get 20%+ for a year on XC60 or 90. In the end I got it, but never thought about 1% or a LH score, just about acceptable monthly payments and what would get me there with then current programs.
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Although 1% is an arbitrary number, that’s what the rule and lh calculator serve to summarize- the overall lease program/acceptable monthly payment relative to msrp.
Arbitrary number summarizes individually acceptable monthly payment? Really? $600/mo may be acceptable to someone on a 62k XC90 loaner. It was not acceptable to me. So, I got 0.7% (or even 0.52% with 4k DAS). What does that mean? Only that I got good deal for myself.
You’re missing my point.
What does a finance payment look like on that same xc90? What’s the interest rate on the purchase? What’s the term?
That’s what you compare the lease payment to. You compare it to the purchase of the exact same vehicle. Someone else mentioned it, you’re looking to minimize your loss from depreciation.
It’s about determining the best way to get in a specific vehicle.
Financing would look ugly, with probably 2.9% for 72 months at best. And then enormous hit on resale. Even if someone can only manage $700/mo lease it will still be better that financing based on the same sale price long term on XC90.
Not missing your point, rather making mine that 1% means nothing in determining lease vs. purchase on the same car. Total cost does.