Check My Math

[Via Chicago]

Evening All,

I'm hoping someone can help me see where I'm going wrong with my math. Today I received a quote on a GT2 AWD. Below are the details.

36mo/12k lease
MSRP = 52,300
Offered Purchase Price = 50,750
Money Factor = .00198
Residual = 51%
Lease Cash = 7,200
Taxes = 8.375%
Title/Lic/Fees = 1,200

With nothing down, I'm getting a payment of about $698. The dealer is saying the payment will be $736. Before I even start to negotiate on their offered purchase price, I want to understand why our numbers are so far off. Am I missing something? Happy to share my calcs if it helps.

Thanks in advance, everyone.

 

[Via Chicago]

In looking at my quote again, I'm a bit more clear on what they're doing. They listed a purchase price of 50,750 and then they did a cap cost reduction of only 5,650 (instead of 7,200). The difference between 7,200 and 5,650 is 1,550. If I add 1,550 back onto 50,750, I'm right back at the MSRP of 52,300. So they've basically quoted a lease payment on MSRP but switched a few numbers around to try to make it look otherwise. I will give the sales guy a chance to respond, but this is the type of stuff that makes me dread car shopping.

 

[mldavis2]

That's why I shop like I do. Walk in with a spec sheet. Never buy one off the floor which may include floor plan interest included in the dealer's net cost or may have been test driven aggressively without proper break-in. Give your spec sheet and terms directly to the sales manager if possible because if you give it to a salesman, the only thing they can do is walk it into the sales manager's office. Give them notice that you will be shopping the car at other dealers. One bid, one chance, no dealing, no playing "let's make a deal." Cash FOB dealer's front door. Factory order.

Not many people can buy cars like that, but it works wonders IF the dealership takes you seriously and knows you're not joking about the "one chance" bid. How much profit does a dealer need for 15 minutes of their time to enter an order into a computer? A couple thousand pays the overhead for them and that's fair. But also winning the bid gives them intangible advertising (from me) while the loser also not only doesn't sell the car, but is also advertised for being overpriced. The dealer invoice cost of a Stinger GT is about $3,000 below MSRP (Kelly Blue book source). Add to that all the things customers don't see such as dealer incentives, quota allowances, etc. and a thousand or so under MSRP is a nice profit and fair to the customer as well.

 

[MurlinatoR]

In looking at my quote again, I'm a bit more clear on what they're doing. They listed a purchase price of 50,750 and then they did a cap cost reduction of only 5,650 (instead of 7,200). The difference between 7,200 and 5,650 is 1,550. If I add 1,550 back onto 50,750, I'm right back at the MSRP of 52,300. So they've basically quoted a lease payment on MSRP but switched a few numbers around to try to make it look otherwise. I will give the sales guy a chance to respond, but this is the type of stuff that makes me dread car shopping.

[MENTION=382]Via Chicago[/MENTION], PM me. I'm a dealer in the Quad Cities and I'll take care of you. LOL Are you in Cali or Chicago?

 

[Stingin' Away]

Residual = 51%

I think that is what's killing you. Leasing is "supposed" to be cheaper than buying the car. I did some math:

Purchase Price: $50,000, (2k under MSRP)

Finance: 72 mos @ 4.0 APR = $783/mo

Lease: What you calculated = $736/mo

A difference of $47 dollars. So instead of paying for a car you won't have any equity in, with these numbers, I'd advise you to buy. If your credit is higher than average, it can be lower. 2.9% @ 72 months makes it $758/mo... $22 dollars more than leasing. If you are contemplating a $50k car, $22-$47 dollars is probably not something you are concerned about.

Now, if you like buying cars and want a new one in three years without having to worry about selling it, leasing is the way to go. Just my .02