[Wiggy827]

I've found the Convertible S I wanted, paying MSRP - not bad since the dealer is marking up on hand inventory. This car comes in 4 weeks.

BUT - I was surprised at the monthly lease cost. I told the dealer to assume $2,500 down, a price of $34,000 and to do a 48 month regular lease. He came back with a monthly cost of $595-$610 a month. Now, when you use the mini website, it says the lease cost should be about low $500's. Why such a huge difference? Are they trying to screw me? My $40,000 Volvo S60R with $2000 down was $580 a month for 36 months. My Nissan Titan truck with $1,500 down ($38,000 truck) is only $525 a month. Why would the mini be so much? Seems like they are trying to screw me on the residual value at the end (i have excellent credit).

Hell, I priced out a nicely equipped BMW 330i convertible ($53,000) and that was $700 a month with $2,000 down!

Just doesn't make sense. Anybody have any thoughts? HELP!

[Wiggy827]

Oh...., not that I would ever do this, but VW is offering a $22,000 beetle convertible, with $2,200 down, 36 months for only $229 a month....

[wantminenow]

I'm in NY and I was told a 36 month lease with no money down priced at $31,300 would be $550 per month with a $500 deposit (i think the deposit will be used for fees like registration, installation, and whatever). I have been researching for hours why it is so high. I also know people with leases on $40k vehicles paying high $400 per month. I am still not sure why. It seems that the residual is low when they factor the lease but I keep reading how great the residual is on the minis....

[stephenjc]

Quote: Originally Posted by Wiggy827

I've found the Convertible S I wanted, paying MSRP - not bad since the dealer is marking up on hand inventory. This car comes in 4 weeks.

BUT - I was surprised at the monthly lease cost. I told the dealer to assume $2,500 down, a price of $34,000 and to do a 48 month regular lease. He came back with a monthly cost of $595-$610 a month. Now, when you use the mini website, it says the lease cost should be about low $500's. Why such a huge difference? Are they trying to screw me? My $40,000 Volvo S60R with $2000 down was $580 a month for 36 months. My Nissan Titan truck with $1,500 down ($38,000 truck) is only $525 a month. Why would the mini be so much? Seems like they are trying to screw me on the residual value at the end (i have excellent credit).

Hell, I priced out a nicely equipped BMW 330i convertible ($53,000) and that was $700 a month with $2,000 down!

Just doesn't make sense. Anybody have any thoughts? HELP!

I didn't lease but I did owner's choice (the hybrid type - purchase with balloon) and the payment I ended up with was right on with the web site. For me one of the problems with leasing is that it is so much more difficult to tell if you are getting a decent deal. With a purchase or owner's choice you will know the purchase price, the interest rate and can pretty much do the math yourself. I also prefer owner's choice to leasing because you can get out at any time and only pay the interest up to the time you sell the car whereas with a lease if you decide to get out early, you are essentially paying the entire gross payments including what is the equivalent of unearned interest. The payments on owner's choice are usually the same or very close to the payment on a lease. I would ask your dealer what the payment would be on owner's choice. I understand however that owner's choice is not available in every State.

[stephenjc]

Quote: Originally Posted by Wiggy827

I've found the Convertible S I wanted, paying MSRP - not bad since the dealer is marking up on hand inventory. This car comes in 4 weeks.

BUT - I was surprised at the monthly lease cost. I told the dealer to assume $2,500 down, a price of $34,000 and to do a 48 month regular lease. He came back with a monthly cost of $595-$610 a month. Now, when you use the mini website, it says the lease cost should be about low $500's. Why such a huge difference? Are they trying to screw me? My $40,000 Volvo S60R with $2000 down was $580 a month for 36 months. My Nissan Titan truck with $1,500 down ($38,000 truck) is only $525 a month. Why would the mini be so much? Seems like they are trying to screw me on the residual value at the end (i have excellent credit).

Hell, I priced out a nicely equipped BMW 330i convertible ($53,000) and that was $700 a month with $2,000 down!

Just doesn't make sense. Anybody have any thoughts? HELP!

I just thought of this. One of the problems with the web site is that it does not figure in sales tax and title and document prep fees, etc. . In order to make a better calculation, figure what the sales tax and other fees would be. then build a MINI that is that much more than what you are buying. For example if you figure that taxes and fees are approximately $2,400, then on your $34,000 MINI build one with additional options that gets the price to $36,400 then do the finacing/leasing calculation and you will be closer to reality. Another option would be reduce the down payment by the amount of taxes and fees. So on your $34,000 MINI again presuming taxes and fees of $2,400 you would reduce the down payment to $100 ($2,500 minus $2,400) and that will get you a lease calculation that is pretty close with $2,500 down. Of course with all of this I am presuming that you are planning on paying $2,500 down only and not $2,500 plus taxes and fees.

Also are you sure you have the price right? On the web site say you build a $34,000 MINI which includes $1,600 in dealer options, this does not include the dealer charges for installation of those options. So depending on what dealer options you are getting the install can add as much as $1,000 or more. Other factors that may affect the calculations are the deposit and first payment which is due on the day of purchase.

All in all, when I did this calculation on the web site figuring in sales tax at 7% on a $34,000 MINI at 48 months 12,000 miles per year, and $2,500 down I came up with $519 per month. If they are quoting $600 per month, then there is something wrong. Even if you add more for dealer installation costs, it shouldn't be anywhere close to $600. I think you are being ripped. Either that or the math they are doing is substantially different from what you are doing. You need to ask exactly how they are doing the math. What is the total price with taxes, fees, install charges, deposit, first payment, etc and compare that to how you are doing the matth.

[Cooper76]

OK, this is my specialty, buying and leasing of autos.

First off, you need to negotiate a sales price. Do not start with a round-about monthly payment. If the sales advisor pesters you with, "what are you looking to spend each month?" answer with, "well, we'll find that out once we nail down a selling price of the vehicle." This will more than likely be MSRP on a MINI.

Secondly, do NOT put any money down on a lease unless you are wealthy and do not care if you lose that down payment. If you are in an accident and the car is totaled, you lose ALL of your down payment. It is non-recoverable.

Third, you need to find out what the dealer's money factor is. Take the money factor he gives you and multiply that by 2400. Yes, 2400. That will give you the APR %. A good money factor should not go past 6.5%.

Fourth, ask what the residual is that they will put down on your lease. The MINI is averaging 63% for three years. Make sure it is appropriate.

Fifth, do not lease for more than three years. With the high residuals of the MINI, you might as well buy as it will be cheaper in the long run, believe it or not.

Good luck. Any more questions, PM me.

[stephenjc]

Quote: Originally Posted by Cooper76

Third, you need to find out what the dealer's money factor is. Take the money factor he gives you and multiply that by 2400. Yes, 2400. That will give you the APR %. A good money factor should not go past 6.5%.

This is the part that I think no one understands including the dealers. Whenever I have inquired about leasing, this figure is nearly impossible to get the dealer to tell you. I think mostly because this is where the dealer makes money. This is also why I generally don't like leasing.

Whenever you see a manufacturer's ad for a special lease program, they always quote a low payment. The problem is that payment is based on a base stripped model and the special lease program usually involves either a low money factor or high residual factor or both. When you inquire at the dealer about leasing something that is not base it is impossible to compare apples to apples and I suspect most of the time as soon as you are interested in something other than the advertised base version, they switch you over to a higher money factor. In addition, these special lease programs with the great low payment are always based on capitalized cost reduction and the ad will say something like total up front cost of $2,500. but of course on a lease, even though you don't own the car you still have to pay the sales tax which on a $30,00 car, here in Illinois is almost $3,000. So that up front cost is now more like $5,500 if you want that low payment quoted in the ad.

I agree with you and all experts agree with you that you never negotiate a car purchase based on the payment, you negotiate based on the price then you factor in the financing costs. Again with leasing the problem is that they generally make the sales price to the lessor , the MSRP.

Your accident analysis is a good reason not to lease. Although you will have a loss even with a traditionally financed purchase with leasing the loss is greater. Again because upon an accident the payoff to the lender is the gross amount of all payments including the money factor which as i said in my recent post, essentially includes all unearned interest. To cover this the dealers sell you on gap insurance at several hundred dollars which is to cover the difference between what you owe and what your insurance pays in the event of an accident where the car is totaled.

By the way the accident analysis is also another good reason not to get an extended warranty. You don't get that back after an accident either. Theoretically you can cancel the extended warranty and get a refund but the refund is prorated and if you have a total accident during the original warranty period you have paid for part of an extended warranty that you have never used.

Again I like owners choice on a car like the MINI if you are not planning on keeping the car beyond the finance term. you get the advantages of leasing with a low payment and he option of turning the car in at the end of the term with no costs to you, or if the actual value exceeds the residual value you can sell it and have some equity (which technically is true of leasing too) and you can buy it out at any point without paying unearned interest. And you can prepay at any point either in full or in part and reduce your interest costs and it makes getting out of it so much easier if you end up not keeping it for the full term. The downside to owner's choice is that you are paying interest on the whole balance including the balloon amount and with little essentially going toward principal in your monthly payment, in the long run you pay more interest. For someone like me who rarely keeps a car for more than 3 or 4 years this factor is minor. For those who intend to keep a car beyond 5 years, traditional financing is the lowest overall cost and the best option in my opinion.

I did the owner's choice. I made sure the payment and amortization was structured so that the balance I owe is pretty much the predicted value of my MINI at almost any point after one year. My original thought was to buy my MCS and maybe after two years trade in for a convertible. I decided against buying the convertible originally because my son was turning 16 and the insurance costs for a convertible with a 16 year old is substantially higher. After 2 years presuming he has a good driving record this will be less of a factor. Now after having my MINI for 8 months and after being involved in MINI2 and having read a lot of negatives about the convertible, I am thinking I may not buy one unless the problems are all worked out with the convertible. So now maybe it will be an 07 depending on how that looks once it actually comes out.