Good / Bad Lease Deal

[electricAZ]

Great questions, electricAZ.
Line 7(b) would be $11K if you were getting a "$0 down" lease instead of a "$0 out-of-pocket" or "$0 drive-off" lease.

This is supposed to be a "$0 down" lease. Am I missing something?

So 47% is reasonable for a 10,500mi lease, what is ideal residual for a 12k mi lease? On the fence as I currently drive about 9500 mi/year.

 

[michael]

Looking at your lease papers, the 9500 + all the other items below (prox 1500) come out of the 11K.

This should be a zero driveaway as I read it. You should not need to pay a penny until a month from now when you make your first of 35 payments. Is this the arrangement?

In other words, you should need to write a check of zero dollars and drive away!

the only comment I would offer is to make sure you buy enough miles for your use. I got my lease for 19.5K mile/year and have gone 14K miles in my first 8 months. These babies save money while on the road...once you have one, you'll use it whenever possible instead of your regular car.

Don't you hate having to deal with dealers?

 

[michael]

V-trav....

You're right about the Volt residual making buyout unthinkable, but the advantage is they apply the 7500 toward the residual when computing the lease. This avoids paying upfront sales tax on that... roughly $700, which in turn reduces the monthlies about $20. So it's a different approach...in effect lower payments at the expense of killing the option of a buyout.

 

[electricAZ]

Looking at your lease papers, the 9500 + all the other items below (prox 1500) come out of the 11K.

This should be a zero driveaway as I read it. You should not need to pay a penny until a month from now when you make your first of 35 payments. Is this the arrangement?

In other words, you should need to write a check of zero dollars and drive away!

the only comment I would offer is to make sure you buy enough miles for your use. I got my lease for 19.5K mile/year and have gone 14K miles in my first 8 months. These babies save money while on the road...once you have one, you'll use it whenever possible instead of your regular car.

Don't you hate having to deal with dealers?

YES. Hate dealing with dealers because even when you have the "wow I got one of the GOOD sales guys, honest, trying to get me the best deal" etc there's always that thing in the back of your head telling you there's a catch and it's just waiting to show its ugly head.

In any case yes that is the exact arrangement we have, 0 down 0 drive away. Calling them up now to solidify the deal and move forward. HUGE THANKS to all on this board!

 

[hybridbear]

Awesome deal Max! When you can get it for that a purchase does make sense. Congrats!

Sorry to beat this horse but I have few more questions that I'd really appreciate some feedback on. Firs time leasing, anyone see anything in the attached worth questioning? Once I give the green light they will overnight the docs to me to sign. Again the agreed upon deal was 36 mo, 10,500mi, 0 down, Costco program pricing, $267/mo including taxes.

Things I'm questioning:

- Why is the rebate (7b) 9505 instead of 11k which is what is being offered via Ford right now on leases?
- Is the residual too high for a 10,500mi lease? (at $15,931)

$11,000 is the rebate & non-cash credit shown in the right column. The capitalized cost reduction is the $11,000 minus the initial costs listed in the left hand column. That's correct as far as I can see.

Edit: I hadn't flipped over to the next page when typing my reply so I didn't know that others had already stated the same thing. Glad we're all on the same page.

AZ - what dealer is this? We're looking at taking over the lease on the blue FFE from Forum Member Susan. But, if someone else should take that car from her before we're able to I would like to have a backup plan. I began contacting dealers over the weekend to request quotes similar to your deal. None of the dealers I've contacted have been close. All are quoting over $300/month not including any MN taxes for a $0 down lease. I would need to find a deal like yours to be able to get a Focus Electric if we can't get hers. If the payment is any higher than $265 then we wouldn't be able to get a Focus Electric.

 

[electricAZ]

Hybridbear,

It's North County Ford in Vista, CA. I will tell you this, I was dealing with a salesperson that was helpful, honest and quick to respond - William. We started talking on a Thursday and by Saturday he informed me that he would be leaving the dealership to go to another (He went back to Chrysler so if you want a deal on that make let me know and I'll send you his info). He made the introduction to the guy that would take over, Richard, and then things went downhill. Very short, it was obvious I was bothering him when asking questions, downright rude towards the end.

To their credit, I can understand how frustrating it must be to be getting calls and emails throughout the day with questions on the deal. BUT, that's how it goes when you're doing an out of state deal and regardless, you're running a business and customer service is EVERYTHING. At one point Richard got his supervisor on the phone and this guy was a real jerk. "Do you want the car or not??" was the question he aggressively posed, to which I answered of course but I've been getting contradicting info and was simply trying to clear it up before making a major purchase.

So, take that with a grain of salt. A deal is a deal and I'm willing to put up with some BS to get a good deal. (Of course, there will be no return business)
I'm trying not to focus on the fact that I was charged tax on the cap cost reduction amount (CA state law, wouldn't have happened in AZ) which cost me $800 and focus on the good deal I'm getting instead. Should receive the overnighted docs tomorrow and we'll see if there are any hidden surprises. If not, I'my buying it. Last I checked they had 9 FFE's on the lot.

My suggestion would be to let them know that you know someone that got the car from them with MSRP 37055 for 33450 and go from there with negotiating. I don't doubt that a better deal could be made but they made it clear that they were 'eating alot of money' on this. Know that they will NOT ship to you, you have to arrange transport on your own.

Good luck!

 

[hybridbear]

Hybridbear,

It's North County Ford in Vista, CA. I will tell you this, I was dealing with a salesperson that was helpful, honest and quick to respond - William. We started talking on a Thursday and by Saturday he informed me that he would be leaving the dealership to go to another (He went back to Chrysler so if you want a deal on that make let me know and I'll send you his info). He made the introduction to the guy that would take over, Richard, and then things went downhill. Very short, it was obvious I was bothering him when asking questions, downright rude towards the end.

To their credit, I can understand how frustrating it must be to be getting calls and emails throughout the day with questions on the deal. BUT, that's how it goes when you're doing an out of state deal and regardless, you're running a business and customer service is EVERYTHING. At one point Richard got his supervisor on the phone and this guy was a real jerk. "Do you want the car or not??" was the question he aggressively posed, to which I answered of course but I've been getting contradicting info and was simply trying to clear it up before making a major purchase.

So, take that with a grain of salt. A deal is a deal and I'm willing to put up with some BS to get a good deal. (Of course, there will be no return business)
I'm trying not to focus on the fact that I was charged tax on the cap cost reduction amount (CA state law, wouldn't have happened in AZ) which cost me $800 and focus on the good deal I'm getting instead. Should receive the overnighted docs tomorrow and we'll see if there are any hidden surprises. If not, I'my buying it. Last I checked they had 9 FFE's on the lot.

My suggestion would be to let them know that you know someone that got the car from them with MSRP 37055 for 33450 and go from there with negotiating. I don't doubt that a better deal could be made but they made it clear that they were 'eating alot of money' on this. Know that they will NOT ship to you, you have to arrange transport on your own.

Good luck!

Ok thanks. One question that comes up from looking at your paperwork, are you paying California tax and registration? Don't you need to pay Arizona tax & registration once you get the car to AZ?

 

[electricAZ]

I know I'm not paying registration (that line items read N/A). As for CA taxes, they said they used my Zip to calc taxes.

Question for you all - what about title fees which are $296 on this contract. Would I also be responsible for that in AZ, or do they need those fees because they are titling with the lease company (but not in CA) ?

 

[hybridbear]

I know I'm not paying registration (that line items read N/A). As for CA taxes, they said they used my Zip to calc taxes.

Question for you all - what about title fees which are $296 on this contract. Would I also be responsible for that in AZ, or do they need those fees because they are titling with the lease company (but not in CA) ?

Ok, I'm glad that the taxes are for AZ and not CA. I know that CA has different rules than the rest of the country for many things so I wasn't sure.

 

[Kakkerlak]

I want a sanity check to see if I'm laboring under significant misunderstandings, or if my dealer is doing their best to not sell me the car.

My local Ford dealer has a 2014 Focus Electric with the basic cloth seats for sale. They sent me the "Window Sticker", showing:

MSRP 35,170
+ 245 for "Exterior Guard" package
+ 825 Destination and Transportation fee
= $36,240

So that's the price I expect them to start with, before subtracting factory incentives.

Instead, they have an "Internet price" of $41,235 posted on their website, which is MSRP + $4995.

I asked for a price quote and they gave me straight MSRP off the sticker (the $36,240) with no $6000 retail sale incentive. They don't even mention the Federal tax credit. New EVs are exempt from sales or use taxes in Washington State.

I asked for a lease quote and they gave me $3500 down, $299.56 per month for 36 months.

Ford's website right now is estimating $184/month for 36 months with 3390 down.

Are these guys just hoping I can't do math ?

 

[michael]

Bad deal

If you are buying it, they are correct to not mention the 7500. That's between you and the IRS. If you lease it, it's built into the lease.

Your expectations that they should start with the MSRP and deduct incentives is correct.

RUN RUN RUN AWAY !!!!

The deal posted on the Ford website is the worst deal you should ever consider...that assumes dealer making full markup. In reality you should do better than that.

Come to LA, make a deal, drive, trailer, or ship the thing home. Save $$$$$$$$

 

[Kakkerlak]

One more round of e-mail later, and the salesman specified the lowest mileage lease (he didn't say, the first time), and he's claiming to have a "lease quote in his hand" saying:

10,500 miles
$3500 down
36 months, $326.49 per month

The Ford website says:
10,500 miles
$4210 due at signing
36 months, $175 per month


Now I'm no financial wizard, and I realize that not all customers are going to qualify for the best lease rates. But I haven't given the dealership any information except my (common) name; there's no chance they can run a credit check on me.

I've heard of very popular cars selling for above MSRP in the past, but even in Washington State where EV adoption is high, I cannot imagine that there's that much competition for FFE's.

I happen to be flying through Palm Springs this weekend and checked a dealership there: they are at least advertising MSRP minus the $6000 incentive, instead of +$4995.

Thanks for the sanity check.

Similar topic: The current "RCL Customer Cash #50256" lease incentive of $11,000 expires July 6, 2014. Does anyone have conjecture on whether it will go up or down ?

 

[twscrap]

I had the same thing happen to me with the first dealership I started working with. They had 5 FFEs sitting on the lot, so I expected they would have better deals than the Ford Website indicated. Their quote was significantly higher. So I plugged the numbers into the Ford website, took a screenshot and emailed it to them. They then indicated they made an 'error' calculating the payments and quoted me exactly what the website indicated. Needless to say, I took my business elsewhere.

You might want to do the same as with nothing down you should be able to get the car for ~$269/month (not including the exterior protection package) plus appropriate taxes.

 

[Lithium]

I want a sanity check to see if I'm laboring under significant misunderstandings, or if my dealer is doing their best to not sell me the car.

My local Ford dealer has a 2014 Focus Electric with the basic cloth seats for sale. They sent me the "Window Sticker", showing:

MSRP 35,170
+ 245 for "Exterior Guard" package
+ 825 Destination and Transportation fee
= $36,240

So that's the price I expect them to start with, before subtracting factory incentives.

Instead, they have an "Internet price" of $41,235 posted on their website, which is MSRP + $4995.

I asked for a price quote and they gave me straight MSRP off the sticker (the $36,240) with no $6000 retail sale incentive. They don't even mention the Federal tax credit. New EVs are exempt from sales or use taxes in Washington State.

I asked for a lease quote and they gave me $3500 down, $299.56 per month for 36 months.

Ford's website right now is estimating $184/month for 36 months with 3390 down.

Are these guys just hoping I can't do math ?

Here is how you negotiate a lease.
The purchase price of the car should be invoice plus a couple hundred dollars $300-600 over invoice, maybe you can get an invoice purchase price if the dealer is motivated. There is about $2000 between invoice and MSRP. Never negotiate from MSRP down, losing proposition.

Go and find the dealer incentives, IE: $6000 cash rebate on purchase and 0% financing for 60months, or you run the car through Ford Red Carpet lease at a rate of 0.25% ( my rate with ford on 720+ credit).
Sales tax according to your state, none in WA, Acquisition fee from ford was approx. ~$500, and that's it.
I put down $483 and drove away, Rolled tax, 8.625% NYS, into payment and pay $321.87/month for 35 months with 12K miles.
H

 

[Kakkerlak]

Thanks very much for that advice.

With some more information about Ford factory incentives and some of the sample leases described by this Forum's members, I think I'm in better shape to negotiate once I find a dealer interested in selling the car.

 

[Lithium]

The important thing to realize about a lease is not the payment. It's the actual purchase price or capitalized cost, not MSRP. That's the raw starting point. Negotiate like you're gonna buy it then flip it into a lease. If more banks finance leases on Focus Electric other than ford you might be able to find higher residuals and / or lower interest rate... I got 43% at 36 months with 12K / Yr at 0.25% interest rate. Residual is calculated off MSRP to level the playing field(oranges vs oranges). You usually have little to negotiate there because it depends on the lender. Dealer have been known to give less favorable residuals than available to them (money in their pocket). It's important to know what Ford offers there. I call an out of town dealer and ask the question. That way he's helping you get realistic numbers, without hurting his local market.

In a lease, you pay for the difference between Capitalized cost, (Invoice + mark up and options at invoice plus mark up), and residual. Also, you pay sales tax on the rebates in most states but no all. Mass has no tax on rebates, so I hear.

my focus was MSRP $36990, Paid $35400, ~$400-500 over invoice. Residual 43% on 36 months, $10750 in rebates ($7500 Fed and ford rebate of $3250) which you pay sales tax on in most states. $2400 was my total tax. So I had a payment the went up by $66/month. so without tax, my lease payment was $255/mth for 36 months and 12k a year 20cents an additional mile. First Payment was ~$480 which was first payment of$321 + title and registration inspection etc...

Dealer makes money on Actual Sale price, Residual %, interest rate on lease or purchase, potential damage coverage, service contracts, add-on features not from manufacturer....

Lots of variables that you can investigate. If you are playing several dealers against each other then one will give you some here and not there and you piece it together to get the best values on all the variables. Don't be to eager to bite and enjoy the process. It's a fun game really.
H

 

[Lithium]

Thanks very much for that advice.

With some more information about Ford factory incentives and some of the sample leases described by this Forum's members, I think I'm in better shape to negotiate once I find a dealer interested in selling the car.

Ford.com shows inventory. If you pull up the window sticker from each car listed in the local inventory, for a brief moment it will show the actual dealer name in the sticker and then it disappears, why I don't know, but it did so for me. I know which dealer had what car and was able to call them directly to negotiate. The Reason this is valuable is dealer hold back of 2%. If a dealer trades cars they don't trade the 2% margin and are tougher to deal with to get down into the lowest margins. If your local dealer doesn't have a car in stock, they need to trade for it and the 2% hold back comes into play. If they own the car, they see that as money in their pocket.
H

 

[michael]

Another way (if Lithium's idea doesn't work for you) to see which dealer holds the car is to get the VIN number from the window sticker and do a google search on that VIN number. This will often take you to that dealers inventory list on the internet.

 

[Kakkerlak]

To figure out where the Focus Electrics are actually in stock, I started with Ford's inventory locator:

http://www.inventory.ford.com/model/2014-Focus-Electric?

It shows 11 FFE's in my "area", based on my ZIP code, and selects the nearest Ford dealer. It's about two miles away, but they have none of the FFEs in their stock, so the website display tab switches to "Extended Inventory".

If I click "Change Dealer", then check "Electric Certified Dealers Only", I get a list of just five dealers in "my area". When I select a dealer, I can see how many FFE's fall under the Dealer Inventory or the Extended Inventory.

This can be cumbersome because I have to keep moving the ZIP code around to capture more Ford dealers in the list.

I've figure out where all 11 of the FFE's in my "area" are; one each in the North End of Seattle, one in the wealthy Eastside, one way out in the boonies (where another MyFocusElectric member bought his) and not less than eight way down in Tacoma.

Thanks again to our colleague Lithium/H for the helpful industry information. I've never bought a new car before (yeah, I'm in my 40's) and was bewildered about why the prices I was being offered were so dramatically different than what Ford seemed to be advertising.

Once you have good numbers about residual value, MSRP and Capitalized Cost, and know your FICO score and can estimate an interest rate, you're in a better position to negotiate.

Yesterday I found out I'm going to have to go overseas for a month so it looks like any purchase will be after the July 6, 2014 expiration date on the current incentives. I guess we'll see what happens with those !

 

[hybridbear]

To figure out where the Focus Electrics are actually in stock, I started with Ford's inventory locator:

http://www.inventory.ford.com/model/2014-Focus-Electric?

It shows 11 FFE's in my "area", based on my ZIP code, and selects the nearest Ford dealer. It's about two miles away, but they have none of the FFEs in their stock, so the website display tab switches to "Extended Inventory".

If I click "Change Dealer", then check "Electric Certified Dealers Only", I get a list of just five dealers in "my area". When I select a dealer, I can see how many FFE's fall under the Dealer Inventory or the Extended Inventory.

This can be cumbersome because I have to keep moving the ZIP code around to capture more Ford dealers in the list.

I've figure out where all 11 of the FFE's in my "area" are; one each in the North End of Seattle, one in the wealthy Eastside, one way out in the boonies (where another MyFocusElectric member bought his) and not less than eight way down in Tacoma.

Thanks again to our colleague Lithium/H for the helpful industry information. I've never bought a new car before (yeah, I'm in my 40's) and was bewildered about why the prices I was being offered were so dramatically different than what Ford seemed to be advertising.

Once you have good numbers about residual value, MSRP and Capitalized Cost, and know your FICO score and can estimate an interest rate, you're in a better position to negotiate.

Yesterday I found out I'm going to have to go overseas for a month so it looks like any purchase will be after the July 6, 2014 expiration date on the current incentives. I guess we'll see what happens with those !

Cars.com can be much less cumbersome than Ford.com for inventory searching. You can sort the cars by dealer, price, location, etc.