From all the comments, I have decided to lease a 2013 XK convertible. I have two offers. One is a $95,475 vehicle, sell price $90,000, less $3,000 rebate. There is no money down , 12,000 miles/yr and 36 months. The money factor is .00039. Monthly payment is $1148 plus tax. No drive off costs other than title and license.
The second offer is a $92,500 vehicle, , sell price of $87,700,less $3,000 rebate. There is no money down , 12,000 miles/yr and 36 months. The money factor is .00014. Monthly payment is $1083 plus tax. no drive off costs other than title and license.
Jaguar will also pay the first month's payment . I would appreciate any thoughts. Thank you.

 

Not sure that there are too many lease experts on this forum. I'm into my first ever lease on my 2012 XJL but, still do not consider myself knowledgeable for full recommendations.

Just from the figures, compared to my lease terms, the deals sound quite reasonable to me. Any time you can walk out with a near $1000 payment with nothing down for a new XK seems good to me.

Hope you succeed in getting the car. It is a wonderful machine and wish you good luck there,

Albert

 

Both sound like good lease rates actually.

 

Dealers love leases because they don't really have to disclose all the figures in the deal.

In order to really know what you are being charged, you need to know what they consider the value of the vehicle to be at the end of the lease or lease residual value.

Once you know that, you can calculate the payment backwards using a calculator like this Auto Lease Calculator at Edmunds.com.

Without all the figures, you really don't know what they are selling the car to the leasing company for. Or what you could buy it for at the end of the lease.
Vector

 

The money factors are excellent! Essentially you are financing these leases for < 1% APR. I'm actually surprised that you're getting different money factor quotes as most dealers are held to the same finance terms. The second one in particular is outstanding (you're sure you haven't picked up an extra 0 and it should be 0.0014?).

Reverse engineering these, and assuming (a) no 'hidden costs' included in the lease quote (see below) and (b) that the rebate of $3,000 is used to reduce the gross capital cost, I have figured that in both cases the residual is 50%. Not great, as you are paying for half of the cost of the car over 3 years, but largely academic if you intend to buy at the end of the lease.

In the first case, you are paying $39k of depreciation and $2k of interest. Take that $41k and divide by 36 months, that's your $1,148.

In the second case, you are paying $38.5k of depreciation and $0.7k of interest. Take that $39.2k and divide by 36 months, that's your $1,083.

I would take the money factor from the second case and see if the dealer can apply that to the first case. Best of both worlds as the depreciation difference is only $500 - it's the money factor that's making all the difference.

Couple of things to watch out for, even though I realize you say no drive off costs other than title or license. Make sure there's no refundable security deposit, no lease acquisition fee and no disposition fee.

Good luck!

 

As Vector said, you're missing an important piece of info, and that's the price they are willing to sell you the car for at the end of the lease. That's part of the contract and will reveal your true cost. Another way to look at that residual value, is that is the price that they are agreeing to buy the car back from you at the end of the lease.

 

If he has no intent on keeping the car, the buy out is only important if he has to get out of the car early. It is important to know what that number is either way. The way I see it is for 1k, no money down, that's a heck of car. Are you on the hook for sales tax as part of the Title? If so, that is not a small amount...

 

Lease numbers are a juggling act. Lower money factors mean lower interest rates (money factor x 2400 = APR; I think you have an extra "0" in your money factors). Higher residuals mean that you will not build up any equity in your lease that will be refunded to you at the end or enable you to get out early with no payoff. Back calculating your 2 options I come up with a 71% residual on your first option and a 57% residual on your second option (I assumed that in your state you are not paying sales tax in the lease since your monthly lease payments are taxed--here in Texas the total sales tax is rolled into the lease but the monthly payments are not taxed)--that's a big difference along with the money factors. The second option is a lot better because you are only paying 3.36% APR vs. 9.36% on the first option (highway robbery in the current market) and with the 57% residual you will have a lot lower payoff at the end of the lease which should put money in your pocket (although anything over 50% on a 3 year lease is questionable that the car will actually be worth that). So, even though the monthly payments are close, the second option is a lot better deal. This is the game the finance guys play to trick you into paying a higher interest rate. That's how they get the payments close--they are pumping up the residual along with the interest rate to keep the payments close. Of course, with a "closed end" lease you can walk away at the end and the dealer will have to eat the difference between their high residual and what they will get for the car--there is no way that any car is worth 71% after 3 years so that first option will be upside down at the end of the lease--no equity for you and probably a loss for the dealer. Not sure why they are offering that even with a high money factor. Make sure this is not an "open end" lease where you are responsible for the difference between the residual and what they dispose the car for at the end of the lease. That could be a big surprise.

 

This is exactly the kind of information I was talking about. Without all the numbers and a firm understanding of the terms you can get scr**ed on a lease deal too.
Vector

 

I hadn't heard of an "open end" lease that would make you responsible for the difference between the residual and the market value. That's pretty sneaky.

The only time I ever leased a car I got tired of it after two years. Luckily I was able to trade it in early with $200 equity.

 

No way would I enter into a lease like that unless the residual value is like nothing. I have heard about leases like that for business reasons; it's basically a "lease", but at the end the residual is near nothing so it is really a like a loan in sheep's clothing.

 

Most leases today are just financings that enable you to give the car back at the end of the lease without the hassle of selling or trading in the car. A while back the car companies were using favorable leases to move cars and were quoting really high residual values and low money factors to lower payments--then they all got burned big time when the cars came back at the end of the leases and were not worth anywhere near the high residual values. They have since wised up and the residuals now are not nearly as high and more realistic. The lowest monthly payment will be generated from the lowest money factor and highest residual, so if you expect to go to term and just want to walk away then go for this--just make sure it's a closed end lease. However, this will cost you if you want to get out early because there will be no equity built up.

The only exception to all of this is if you are leasing through a business and can write off the lease payment--then you get a big advantage on income tax savings that enters the equation significantly. IMHO that is the only advantage to leasing.

 

posted here in error - sorry