Anything higher, can mean less of a good deal. ![]() A lease deal with a money factor of less than. Currently, new-car interest rates, according to, are about 5.5% which translates to a lease money factor of. The lower the money factor, the lower the lease payment, and the better the deal. Money factor is an expression of the finance rate, similar to interest rate in a loan. The third factor that is important in a lease deal is MONEY FACTOR. An excellent residual would be 55%-65% of MSRP. If the lease-end residual value for a vehicle is less than 50% of MSRP (for a 36 month lease), then it’s probably not a good lease deal. American brands tend to have lower residual values.įor a complete list of high-residual vehicle makes and models, see Vehicle Lease Ratingsin our Lease Kit. Vehicle brands that typically have high residuals are those from Honda, Toyota, BMW, Mercedes, and others. Leasing customers can’t negotiate or change residual values but they can choose to lease vehicle makes/models that typically have high residuals. Lease finance companies set residual values at the beginning of a lease. The higher the residual value, the lower the lease payment. Residual value is the estimated resale value of a vehicle at the end of a lease of a specified term (lease months). The second important factor in a lease deal is RESIDUAL VALUE. It’s not scamming, but it is taking advantage of the customer’s lack of knowledge about how car leasing works. This allows a dealer to base the lease on full MSRP sticker price - or higher - without disclosing it to the customer. Many leasing customers don’t understand this fundamental fact and never discuss the price of the vehicle they intend to lease. The lower the price on which a lease is based, the lower the monthly payment. ![]() What are the factors that make a car lease deal? ONEįirst of the three factors, and most important, is PRICE. Of course, the combination of the three factors is what determines the value of the final deal. Any one of these factors can make the difference between a good deal and a bad deal. If you’ve read our Lease Guideyou know that car lease deals are made of three important factors that affect monthly payment. In fact, simply comparing lease payments to loan payments can be deceiving and can lure unknowing consumers into accepting a poor lease deal. But that is not the best way to evaluate a lease. Leases nearly always seem be great deals - because monthly payments are so much lower than loan payments for the same car. How do you tell a good car lease deal from a bad one?
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