Jeff... I was wondering, when you do a lease, can you expect the same kind of pricing as purchasing one. In my area $500 over invoice is easily attainable, lower if you get into full haggle mode. Is leasing about the same over invoice. How easy is it to haggle the money factor and the residual?

I plan on going to my local dealer on Friday but wanted to hear your input first.

Anyone else have input?

BB

 

There should be no difference in the purchase price whether you buy or lease. Some lease companies have charges that they add (acquisition fees, etc...), but these should be shown separately and shouldn't affect the actual purchase price. This is why you negotiate the price with the dealer BEFORE you discuss any kind of financing, and I've always maintained that leasing is just an alternative method of financing. Ford Credit's rebates may vary betwen purchase and leasing, however. Right now, it's $2000 on a Focus if you buy it, and $1500 if you lease it. It's just about the opposite on the Freestar.

There is no haggling with Ford Credit on the rate or the residual. They set their numbers and that's it. The dealer can mark up the money factor a little, but since the rate never appears on any of the paperwork (not required by law), there's no way of knowing if it's marked up or not. I could tell you what FMCC's rates are on any particular vehilce, but you'd need to be looking over the finance guy's shoulder as he's entering the numbers into the computer to know if he's using that or an inflated rate.

 

If I have a calculator in hand then I can figure out what rate he is using pretty close. I'm gonna go check leasing a 2005 F150 Lariat SCAB that MSRP's for about $38,500. I'll try to get the price down to $34,000 or less. i already have a quote from an independent lease company with a money factor of .00205, monthly payments of $311 before tax which here in CA should be about $25 a month. The residual was given as $18,228. This was for a 39 month lease with 36,000 miles used.

money factor = final payment - (depreciation/months) - tax
divided by (residual + cap cost)


Thats how I see it at least.

BB

 

I don't mean to hijack the thread, but have a question that may be of interest.

Jeff,
If leasing with X Plan, should the dealer be able to change the money factor? I just leased an F150 XLT before Christmas and the first dealer I went to didn't tell me what the money factor was and gave me a price that seemed a bit high. I went to another dealer who ran all of the numbers right in front of me and told me the money factor up front (he said 2.5%, but I am guessing that means .0025?). Both of the dealers knew that it would be an X plan deal. I obviously went with the second, more honest dealer and got a better equipped truck for a lower monthly payment. Thanks.

 

Good question. I know the dealer has to use the base money factor on A and Z-plan, but X is a question mark. We always use the standard money factor and always have, so it 's not an issue for me.

 

X Plan: If the plan is from Ford, the dealer is not supposed to mark up the rate. Nothing can ever be done with lease end value unless you ask for higher milage factors as the lease end value is derived from

X Plan: The dealer can inflate the lease factor. Nothing can ever be done with lease end value unless you ask for higher mileage factors as the lease end value is derived from the MSRP. The amount of the lease end value can be different in each case (between lenders) Just like some lenders don’t charge an “Inception fee” and some do…usually the ones that DON’T…charge a higher interest charge. (The No Free Lunch approach)

Ford Motor Company uses a proprietary program to calculate leases and include coverage within those leases that other fiduciaries ADD to their leases…making the **** comparison of numbers almost impossible. Having said that…there is one way that this old farm boy has found that works…same truck…same terms…what’s the payment without tax…to me with just the first payment, any security deposit and license for one year in the state in which you reside…. then just take the lowest payment. Oh…and if someone wants the formula that Ford uses…I will be glad to give it to you, but be forewarned it will take a scientific calculator and the knowledge to run one. I think just comparing apples to apples accomplishes the same thing. Right now, for instance or pricing is $350 over invoice on SD 2005’s. Will that change with our market? I don’t know…not unless they issue me a crystal ball!

RJ Olson