I’m completely new to leases and I’d like to ask you experts your opinion. I just received this lease deal for a new 2025 car:
Market value $73,225
Dealer discount $5075
Tint $574 (I’m going to remove this)
Rebates $8,500
DMV / Registration $1148.33
Doc Fees $589
Taxes (8.6%) $826.76
Monthly use tax (8.6%) $64.59
Residual (55%) $40,273.75
Customer cash $4,443.92
36 months at $815.62 (x 36 = $29,362.32)
Money factor 0.002 (x 2400 = 4.8%)
I’m in Arizona. This is a deal for a custom ordered car, since nobody seems to have what I want in stock.
Are these numbers reasonable? Any part of the deal I should question (except the tint, which I’ll take off)? Are the Doc Fees reasonable? Why are DMV / Registration fees this high? Why are both Taxes and Monthly Use Tax listed? Are they separate charges, or is one derived from the other? How about the Money Factor? Is that a good rate for the present day? Is this a good deal?
Get some competitive bids: 1. Contact some other nearby dealers with the specifications you want and see what their offers are. Check some of the car buying services (like Costco and AAA if you are a member): how much would they want for the vehicle if you purchased it from them–particularly the amounts of the dealer discount and rebates they have.
I splurged on an EV 6 years ago, and based on its current value, I paid $75k (in depreciation) for those 6 years of use. And I now “own” an asset that they say is worth about $25K, but might be difficult to sell. So with this lease, I’ll pay $34K for 3 years of use with no worries about selling it at the end.
The reality is that the car that I want doesn’t exist yet. I want a quiet, comfortable car with 400 - 500 miles of range, with a large network of charging stations, an excellent self-driving ability, and a large network of locations where I can get it serviced, if needed, in a timely manner.
But things are changing fast in the EV market, and hopefully in 3 years, the car I want WILL exist.
The other issue you didn’t mention is how many miles this lease is supposed to cover: my impression is that you have to pay a significant per mile charge when you exceed that limit: for example suppose they allow 12,000 miles a year–but you drive 20,000 miles a year.
As to the DMV/registration fees they vary tremendously by state. See for example:
I’ve never leased a car but my understanding is that you should negotiate as if you’re going to purchase it and then negotiate the lease terms separately.
Is the dealer willing to do any negotiating to begin with, on the car that no one has in stock? And, assuming not, do you have options after the ‘walk away’ satisfaction wears off?
I’ve always leased (it’s tax advantaged for a business owner up here) and you want to negotiate on the cap cost - the total amount to be financed. The residual is typically fixed as a % of MSRP, so every $1 you negotiate off the cap cost puts that % of the decrease in your pocket.
One of the challenges is that most companies have captive financing companies and they may have different deals for cash/finance/lease depending on what the corporate balance sheet needs.
There are 3rd party leasing companies that buy the cars wholesale from the manufacturer, but at least in Canada I haven’t seen particularly good deals from them since they don’t get access to the subvented rates that the dealers do. They make sense more from a fleet management standpoint.