Volvo XC40 T5 Momentum Loaner Help

Hi guys!

Hope everyone is ready for the weekend!

I just got my first quote for a XC40 T5 Momentum loaner here in the SoCal. Hope everyone can provide me some insights to see if I can tweak this deal even better.

2020 Volvo XC40 Momentum T5 Loaner

MSRP: $44,080
Selling Price: $36,700
Monthly Payment: $451.55 (Taxes included)
Drive-Off Amount: $1,500
Months: 36
Annual Mileage: 10,000
MF: .0.00120
Residual: 56% $24,684.80
Location: SoCal

I tried my best to plug in the number from the lease sheet. The numbers seemed to be matching pretty closely. I don’t know what is the T-1pay/Annual Fees though.

Couple things that I am concerning:

  1. Loaner Mileages: 6400 miles already - how does this affect the residuals?
  2. M/F: According the Edmond forum, my buy rate M/F for my zipcode 91748 is .00070, but the dealer give me 0.00120.
  3. Lease incentives - I know I’ve missed the Costco incentives last month :(, do we have any additional incentives I can apply to this, I don’t have loyalty, no penfed, but maybe Conquest? (My girlfriend have a C300).

Thanks everyone for checking out this post!

Don’t know how married you are to an xc40, but I’ve been putting everyone into v60cc instead this month. Better cars for less money.

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Haha, yeah! It’s nice! Especially the plug in Polestar one. I just think it’s a bad month for Volvo now, since I’ve missed the Costco deal.

In the future, you’ll be far better off answering these questions before talking to a dealer.

What did edmunds tell you for incentives? If you go to volvo’s website and build the car, then do the payment estimator, what does it tell you for lease cash/volvo allowance?

All in all, this looks like a pretty terrible deal for a loaner. Save yourself a good chunk of money and get a v60CC.

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Hi mmlcb42,

Thanks for the advice. I am truly a newbie here lol. Gotta start from somewhere. I’ve tried the Volvo car builder, it showed me that I am only eligible for $1,500. I guess V60cc is a much better deal then.

Good to see a newbie diving into a demo deal. You already got some help from two of the Volvo heavy hitters here so you are off to a good start. Did you negotiate the $36,700 selling price or was the the first quote from the dealer?

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Hi 824,

Thanks for checking as well!

Haha, I’ve been browsing through the forum for a while but haven’t done any real negotiation yet. So I decided to give a shot.

The first quote that the dealer gave me is as below.

$2,995 out of pocket
10k miles
36 months
$399 plus tax.

Lovely, your dealer cut the cost of your lease by $968 from his initial offer. He needs to do better.

1st Pencil:
$399+9.5% tax over 36 months plus $2,995 DAS = $18,723.58

Latest Offer:
$451.55 x 36 + $1,500 DAS= $17,755.80

It was suggested you consider the v60CC. If you want to continue working on the XC40 deal, it can get better.

Step 1. How did your dealer build his $36,700 selling price. It probably has a. the dealer discount, and b. Volvo-to-Dealer bonus lease cash. Take a whack at breaking down your SP if you want to move forward with the XC40 deal.

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Thanks a lot for the advice! I will need to find out with the dealer for the actual breakdown. I think V60CC will be better value, but I will go ahead and take a shot at this one for a little more. The only thing I am worried about is that it does have quite a bit of miles on it.

Part 1:

I have seen you on here doing your homework so let see if we can’t help you with your upcoming dealer conversation.

When talking to a dealer it is suggested you go into the conversation with a good deal mapped out in your head. Beyond the basics of how to work a lease calculator, here is what you need to keep top-of-mind:

  1. Most folks here target a 15-20% pre-incentive discount (at buy rate MF, in normal market) on a Volvo demo. Limited inventory in today’s market favors the dealer so most people have been getting discounts on the low end of the demo range. Settle on 15%-ish if you love it, push for 16%, 17% or more if you can get it. Dealer motivation and local market forces will determine what is possible. Go get a big number.
  2. Volvo gives its dealers an incentive directly to lower your selling price. No need to ask your dealer, it is in there. As you noted your Bonus Lease Cash is $1,500.

So based on points 1 & 2, be prepared to negotiate a Selling Price at the buy rate MF as follows (illustration, you determine what #s you want to target):

$44,080 MSRP
minus $7,950 Pre-Incentive DEMO Discount (assume 18%, pick your #)
minus $1,500 Volvo-to-Dealer Bonus Lease Cash
$34,630 Your Selling Price Offer

Your dealer is marking up the MF, negotiate for the buy rate.

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TLDR: How to account for Volvo Demo Miles Penalty

Part 2 (adjusted for @Ursus feedback)

With a demo there is a key adjustment. You need to adjust the new lease RV down to account for the demo miles.

I believe the penalty for demo miles is 20¢ per mile. So, you will be hit with a $1,280 adjustment.

Expect to see an adjusted RV as follows:

$44,080 MSRP
56% RV verified Per Edmunds
minus $1,280 Demo Mile Adjustment
$23,404.80 Adjusted RV 53.10%

Good luck.

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RV amount is always adjusted down by dealers. Think about it: it is not a “new” car and should have a lower RV at the end of lease. If you decide to sell a loaner to Carvana then your payoff could be $1,000 lower on a 5k miles loaner.
We talk about adding mileage penalty to the selling price for ease of using LH calculator, which does not have $ RV amount. But you can recalculate RV % if you want to.

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Life just got easier. @rhymess when you run your LH calculator you can load in an “adjusted” RV value to 2 decimal places to load in the mileage penalty adjusted RV. I prefer to keep Selling Price in the calculator clean so as to avoid introducing any more noise than needed.

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Hi 824,

Wow! Thanks so much for sharing the tips and tactics! I am going to take a shot later today. :smiley:

  1. Pre-incentives discount - The dealer is offering $36,700, that’s 16.7% off MSRP. So I should figure out if this sell price is pre-incentive? Then ask the sales if he can do better? Also, how should I ask the dealer to give me the buy rate MF. How should negotiate with them to get them to do that for me?

  2. Bonus Lease Cash - Should I don’t need to ask the dealer if the bonus lease cash is included. If they won’t budge with lowering the selling price, can I mention this lease cash to see if they can do better.


  1. Demo Mile adjustment - So can I ask the dealer about reducing the selling price by $1,280 because the RV should be adjusted to 53.10%? Does the warranty for Volvo for demo starts after the demo miles? Or includes the demo miles? For example, the new unit gets 3 year/36,000 mile free oil change for the xc40. Does this service starts after the demo miles? Or do I gets only 29,600 miles for the free service?

Hi Ursus,

Thanks a lot for your input too!

So I can insist on the fact that this is not a “new” car anymore. So I can asks for lowering the selling price even further to adjust for the RV right?

Got it. It will be better to keep the selling price in the calculator clean. Thanks!

I do have a question on the actually listing on this unit. There’s a “dealer allowance offer” of “-$750”, this doesn’t include the bonus lease cash amount right?Capture lease

They’re definitely including it. It is included in your discount amount, so you’ll need to separate it out from the sales price to see what the pre-incentive discount actually is.

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No, you can’t really. The car will be listed as new on the contract and qualifies for new car incentives. Dealer will insist it is new. But you should get lower price because it’s a loaner and you get hit with mileage penalty, so in the end it should be cheaper than a non-demo/loaner car.

unless you ask one of the other “brokers” here, who will tell you that loaners aren’t better deals than new cars.