Would you do this deal?

J

jayrandall

Member
A buddy of mine got offered the following lease deal:

He has 4 payments remaining on his current 2006 FX35 lease (about $2,350 total). The dealership has offered to off-set his remaining payments and will cut him a check for $700 when he signs his new lease deal (see below). His current car would be 'grounded' at the dealership and then he would receive a final invoice from Infiniti Financial Services the following month and conclude the final payment.

His new lease deal is for an '09 FX35 AWD, with the Premium package, Nav and Deluxe Touring. MSRP about $51,480 and he got the car down to invoice (about 47k) and he is getting the customer loyalty of 2k. 10k miles a year, $1,500 down and his monthly payment inclusive of taxes is $600.00, 39 month term.

He can't decide if taking on the new lease is smart, even though the dealership is helping him payoff the previous lease.

Thoughts?
 
10K miles isnt much - id go way over that......and you'd have huge overage.
 
If you ignore his new lease deal specifcs, do you guys think that turning in the current vehicle makes sense? He is debating the $700 off-set the most. I guess he comes out ahead, since he would have to make those remaining payments if he just waits until his lease is over. In this deal, at least he doesn't have to pay the entire remaining amount of due. Right?
 
I bet the reason they want to do this deal is because, either a new program is coming out, or they want to get rid of the 09 since the '10 models will be arriving soon.

Lease is a tricky thing. Even if you get the car at invoice, and get cash back, the dealer can make money by adding certain percentages in the monthly payments.
Also, a 39 month lease would be mean that he would have to pay for the registration of the car at the 36th month and give the car back 3 months later. This makes the value of the car more for the dealer since the next buyer does not have to pay for registration for another 9 months.

I personally would not get a car between April and Jully. I'd wait until the next year models are out. He will either be able to get a better deal, or at least get a newer car.

Also, check to see how many of this particular model is available elsewhere. This would tell you if they are trying to get rid of the car or not. Most dealers no have their inventory online. When I bought my FX, they found the one I wanted in San Francisco and where willing to bring it to So Cal.
 
for the FX model, the dealership bring them in around late Feb and early March no?

So that 10 model will not be in until next year. I sort of know the cycle since I bought mine when the 06 just came in. It's been following this cycle for several years now.
 
To be honest I don't know. But I'm pretty sure that it has to do with dealer inventory. Dealers usually have a quota that they have to meet. Meaning that the more cars they sell, the more cars they get. Also, for as long as they have too many of certain models in stock, they wont get any newer models until they get rid of some of the old ones.

Best deals are usually made by fleet managers. They are usually not on commission and their job is to move cars as soon as possible. Best deals can be made by finding a volume dealer who has the most of your model. Also Look for dealers that have the most Service Bays. These dealers are not there to make money from selling cars alone. They are mostly interested in repairing your car. The more cars they sell, the more they will repair. And trust me they make a lot more money doing Warranty work and a few hundred or thousand they make selling it.

Dealer usually get 3% or more Hold Back money from the manufacturer. This means that whey they sell the car, think of it as an internal incentive for the dealer to sell the car. So even if the dealer sells it as cost, they still make about 3%.

Mongolian said:
for the FX model, the dealership bring them in around late Feb and early March no?

So that 10 model will not be in until next year. I sort of know the cycle since I bought mine when the 06 just came in. It's been following this cycle for several years now.
Click to expand...
 
Just my two cents - $1500 down, $600x39 = $23400. So he'll pay $24900 to drive the car for 3.25 years. Then he has to give it back or pay the balance of the account to keep the car. If you add in the balloon/balance payment, you should see the "cost" of the car would be greater than $51K. Leasing is always better than buying for the dealership, which is why they have no problem helping out with the previous lease.

My experience has been that leasing is never the way to go UNLESS you plan to buy the car at the end of your term (or you are positive you will not go over mileage) and just need a lower monthly payment for the next couple years. It can be a means to an end. That is - lower payments than buying/financing the car would be.

If he does want to keep the car at the end of the lease for sure, then he should lower the mileage to the minimum per year on the lease agreement. He might go over, but the idea is to NOT pay the overage because you plan to buy the car at the end. If you plan to buy, then you don't have to pay mile overages. You can buy the car outright for the balloon payment (plus an extra fee here or there), or finance the remaining balance. Either way, the point is to get the lowest possible lease payments.

If that lease deal stands by itself, then whatever he gets for his current car is gravy. Again, the dealership has not lost any money on either of these cars. They will take them back and re-sell over the balloon payment value.
 
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