Hi everyone, First time poster and first time lease negotiator.
I received a quote from my local dealer in Philadelphia on a Gravity Grey SX AWD due in next month. They are quoting me $1500 for trading in my 2005 BMW X5 with 150k miles... which was lower than I expected... but okay.
Ideally I want to keep the Monthly payment close to $400 and that would require me to put 5k+ down to get close to that number.
Below is a screen shot of all the numbers broken down between 36mo.|12k, 36mo.|15k and two purchase quotes.
View attachment 2736
My question to the community is if this is a good deal or are there ways to negotiate the MSRP to bring the mo. payment down?
Love the Telluride but for that price I would be creeping up into the luxury brands in terms of monthly car payment.
I appreciate the help here and I can expand on any info you think would be relevant.
Thanks!!
The lease deal looks pretty standard.
First, check the MSRP on the Window Sticker. An SX AWD should sticker at less than $45,000 unless you have the tow package - in which case the MSRP you have is reasonable. You can try to negotiate on this price, but it's probably not possible right now.
The $1564.14 "add'l cap cost" likely includes the acquisition fee and the dealer fees - but these only add up to $944. It looks like they added another payment - which is coincidentally $620.14- and would add to $1564.14. That first payment shouldn't be added in an add'l cap cost - you'll make the first month's payment at signing usually.
They are including a $2400 rebate from KMF - this is lease cash from Kia Motor Finance. That plus your $1500 trade is reducing the cap cost by $3900. Any other negotiated reductions would enter here.
The 61% residual is applied to the top line MSRP - so that's the 27,715.35 (61% * 45,435). The difference between the net cap cost and MSRP is your depreciation - that's 15,383 - or $427 / month. The rent charge total is the interest charged due to the money factor (which is .002 - equivalent to a 4.8% interest rate - quite high). That's why the rent charge is so high at $5,096 for 36 months - $142 / month - very high interest rate. (Total charge is calculated as: (Net Cap Cost + Residual) * Money Factor * Number of Payments).
The sales tax (working backwards for me) appears to be 9% * (15383 + 5096) or 1,843.20 - equivalently $51 / month. Does PA charge 9% on sales tax on depreciation and finance charge (rent) for auto leases? State is 6%, right - then municipalities may add to that 6. So that's what you're working with. This is why KMF gives the $2400 rebate up front for leasing - they get it back in rent charge times two.
Your strategy could be to try to reduce the money factor / interest rate (money factor * 2400 = interest rate) or the net cap cost further. For example, a 2.9% interest rate (.0012 money factor) will reduce the estimated payment to around $540 / month. You can try to make security deposits to bring down money factor... just ask. Putting the money down on the lease isn't always the worst option - but there are considerations if you are involved in an accident. You're effectively paying the rent charge up front if you hand them $5k.
You can always lease an S trim model for a lower payment - leasing the top end model without specials is quite expensive. Versus leasing, it may be better to purchase the SX trim (at a term 72 months or less) if you want to pay a lower rent charge - but then you would need to put more money down to lower the payment significantly. Or, if you believe that the actual value of the car in 3 years will be much less than $27,715 then leasing may not be too bad.
If you want luxury - the reason that they offer lease deals on luxury models is because they often set the residual values quite high and will offer $$$ off the MSRP to get you in. Plus, those advertised specials are on their base models. So, if you don't mind leasing, that may be a better option right now if you can get a lease deal from another manufacturer. Kia's lease "deals" really aren't that great. Now you know how to calculate a lease... so you can be empowered to verify their figures.
For example, the Acura MDX is offering a $10k reduction on Cap Cost for lease deals... compared to Kia's $2400. According to their website.
For what it's worth - I calculated that with the corrected cap additions - $944 vs 1564 - and your down payment of $5000 (should increase cap cost reduction to $8900 vs $3900) your payment should be $437.75 - total interest of $~4700, and depreciation of $9764 now. Not $467. With 0 down - cap reduction remains at $3900, then it should be $600.
