Hi there,

I've been looking at F-Types and frankly have fallen a bit in love. Here's what the local dealer offered me on a F-Type R today. I think there's a fair bit of room to negotiate further here, but want to hear your opinions as to what I can realistically expect.

Lease:

MSRP: $108,883
Initial cap cost: $105,883
Term: 36 months
Miles: 15k/year
Residual: 59%.
Money factor: .00130
Tax: 7% (in my state you get taxed on full price of the car even if you lease)
Adjusted cap cost with tax and fees $114959.02
Payments: $1883/mo.

This seems really high to me. I'd like to get it under $1600/mo. Thoughts?

I've also been looking at the PenFed auto saver loans, but they seem too good to be true and that worries me. Dramatically lower monthly payments followed by a balloon payment that tends to be roughly the residual price of the car? How can this be? Seems so much cheaper than leasing that I have to be missing something.

Thanks!

 

I never lease cars, so won't give you advice on that.

However, there's no "catch" per se on the PenFed auto saver loans. It's not a lease, and you own the car. The "catch" is you will be responsible for handling the balloon payment at the end, and you can't just give it back. You'd have to trade it, sell it, or pay off the balloon pymt at the end.

 

Jaguar has the lease rates on there website for all the F types, and that looks way high compared the theirs.

 

How is it so much cheaper than a lease then? If what you are doing is paying depreciation plus interest that seems similar in concept to a lease. Is the balloon payment normally higher than the residual value? Do the payments get higher in the auto saver loans? It seems cheaper, but I feel like I have to be missing something.

 

I'm relatively new to leasing myself but this seems very irregular.

I'm in LA so the local inventory may have an effect on I was able to negotiate my lease. (7% off MSRP on a 2016 R, with residual of 60%.) The residual part I thought would be universal, though.

 

Yeah, it's very irregular. Georgia is absolutely punishing for leases. Our system now is that instead of Ad Valorem tax every year they charge 7% of the total vehicle cost when you get the car, whether it's a lease or purchase.

 

Is your lease 15k miles a year? If you don't mind, I'd love to hear details about what your overall deal was like (monthly payment, MF, etc.). If you don't want to post publicly you could also IM me. Understand if you don't want to talk details though.

 

Yikes. Have you considered lowering your lease term and possibly annual miles? I originally looked into 15K then looked back on to my service records of my old car and realized I only put on 9K each year for the past 3 years. Also, my sales rep advised that the 30 mon lease had the best money factor when I entered into contract. Hope that you're able to find a solution that works for you.

 

Yeah, sadly I struggle to only put on 15k. My office is in a part of town that no one would want to live in, so I have a 21 mile commute each way 4-5 days a week.

I did look at the 30 month, but the MF was very close. The monthly difference was somewhere around $35.

 

I just looked at PenFed's current rates. Note that they only allow a loan up to 100k. Not sure if you can go higher by calling and talking with a rep. So assuming you can get the loan amount down to $100k after negotiating and maybe a small downpayment....

Make JAGUAR
Year 2016
Model F-TYPE
Body 2dr Cpe R AWD AT
MSRP Value $106,695
Loan Amount: $100,000
Residual Value $51,475
APR 1.74%
Monthly Payment $1,459 (36 month)
Final Payment $52,934

At the end of the loan, sell it, trade it, or refinance it as a used car.

 

It is cheaper because it is a loan and not a lease. Lease rates are more expensive because they have interest rates that are roughly double (or sometimes triple) that of a traditional credit union car loan. Part of the reason this happens is because the underwriters are weighing the risk of the projected depreciation not matching the residual at lease end. If the car ends up underwater, they have to eat that cost. It also sometimes includes things like gap insurance.

With the PenFed loan, that risk is borne by the buyer as they have no responsibility to buy back the car at lease end. As LynxFX mentioned above there is also a limit to the size of a Payment Saver loan PenFed will accept with normal underwriting, which helps to limit their risk as well. You can always apply a down payment to the loan that will take it down to $100K, if you have the means. I believe you can also talk to the PenFed loan agents to discuss rates on larger amounts. Alternatively you can also reach out to other credit unions about balloon payment loans for whatever value you need.

Also note that PenFed tends to be less aggressive on the residual to insure that the car isn't underwater at the end. So rather than 59% it will probably be closer to 50% on the FTR.

 

Thanks! This makes a lot of sense. Applying a down payment to the loan is no problem, though I always prefer to keep as much cash as possible where it can actually earn money.

I'm going to look into the PenFed loan more seriously. Also, going to contact a few other dealerships and see where I can find the best price. Figure if I have to travel a bit to save a few grand it's probably worth it.

 

Has anyone that's done the penfed loan had problems with approval? They just came back to me with a counteroffer of a 30k loan (LOL) after showing them pay statements and a W2 indicating an X00k (where x is greater than 1) annual income.

I've now sent them some documents on my stock holding as well hoping to appeal, but it seems a bit crazy. I have perfect credit and a pretty high income... and they offer 30k?

 

I got a >40k loan from PenFed for my current car and I didn't have an income like yours :P This was a few years back, though.

 

Yeah that seems a bit odd based on your income. I've had 30k, 50k and now a 75k loan from them. All approved instantly through their online form. It's quite possible that my history with them is what made the higher loan get approved.

 

Is it possible you have a higher than average Debt to Income ratio?

 

Could be a number of issues causing the low number. Flawed payment history, larger loan plus existing debt service exceeds their ratios, low credit rating, etc.

You should check your credit report to ensure it is accurate and someone hasn't pirated your identity.

 

Yeah, that's why I'm so confused. I pulled my credit report and everything looks fine. I've no existing debt at all (not even a mortgage) other than my current lease, which expires next month. All credit cards get paid off at the end of the month and aren't highly utilized, etc...

My payment history on everything is just about perfect, with one old credit card having a single 30 day late over 6 1/2 years ago. I think I may need to call back and try to speak with someone in the actual loan department. I should be basically a perfect candidate for any loan.

 

Ironically, having too little debt could actually be your problem. A long history of taking on debt, always paying on time, successfully paying off loans, etc., gets you a much higher credit score, as well as preferential treatment.

 

+1. Even if the credit score is high, a bank will look to previous payment history to make a determination. If there is none, they are wary. I don't carry any debt either and had similar issues trying to borrow against the F-Type. At the end of the day, it was just easier to pay in cash.