leasing FAQ?

[dvdmon]

So, I saw the very long leasing info thread (http://www.mynissanleaf.com/viewtopic.php?f=23&t=11245&start=1100" onclick="window.open(this.href);return false and I thought of instead of posting there - it seems mainly a list of what people are getting their Leaf's for (or quotes), I thought I'd ask this here.

Mainly, I'm looking for some basic info about leasing. I've looked here but can't find anything that just runs through the basics of how a lease works, the terminology, etc.

Also, some people mention getting quotes via email, and I'm just wondering how people generally do this. I know that with a lot of cars, you can do a lot of this stuff electronically these days (last time we bought was over 8 years ago and there wasn't quite as much online back then). So I'm wondering if there's a quick way to get quotes from a number of dealers (some site or service that handles this for you), or if you have to go to each dealer's site and request a quote?

Thanks for any help!

 

[braineo]

It is just like renting for a limited time period and miles. When you return it, the car still have some value called the residual and that value could be above or below the market price when the contract is up. There is interest being charged and you have three options when the time is up.

1. Buy it for the pre-determined price (if the residual is low, or you love the car due to little or low maintenance and the cost of a newer lease is too high)
2. return it (might have a return fee) and pay the difference if you damaged it or went over the agreed upon miles.
3. or sell it and pocket the difference. This option makes sense when the market price is higher than estimated and you don't want to keep the car.

You have to agree and negotiate,
a) the price (and subsequent sales tax) ,
b) mileage,
c) down payment (try to make it 0) and
d) the monthly payment to cover the time period.

Easiest way to compare if you negotiated a good deal is to add all costs and negotiate based on trying to match or improve what others have done.

That is the beauty of the thread, gives you many examples but it all boils down to how much out of your pocket.

 

[dvdmon]

Thanks! Ok, but I'm still confused, so it's better that the residual cost would be higher, right? Or lower? I'm a little unclear. Is the residual the amount I would have to pay Nissan in order to take ownership of the car after 24 or 36 months? If not, how would I calculate that? Also, what is the "cap cost"?

Finally, you say to try to make the downpayment $0, but I'm wondering why, other than simply not having to pay anything up front (although it seems you do have to shell out at least a few hundred to pay for taxes and the first month of the lease according to that thread)? I'm wondering because the monthly costs go down quite a bit if you put $2,000 down. A payment of $200/month would be great since I currently spend $125-175 on gas, so having a new car for an additional $25-75/month would be amazing, but we also don't have $2,000 just lying around and so we might have to resort to the $0 down plan...

 

[cwerdna]

Perhaps what would be good would be a glossary of terms or a pointer to one for the buzzwords at http://www.mynissanleaf.com/viewtopic.php?p=32335#p32335" onclick="window.open(this.href);return false;.

Some of the definitions at http://www.mynissanleaf.com/viewtopic.php?f=27&t=2192" onclick="window.open(this.href);return false; are helpful. I read http://www.mynissanleaf.com/viewtopic.php?f=23&t=3823" onclick="window.open(this.href);return false; long ago and it helped, a bit.

Well, yeah, monthly costs go down if you make a substantial down payment as you've paid off a significant amount of the lease doing that. AFAIK, the reason for making it $0 or close to it is because if you accidentally total the leased car, everyone here says, you don't get any of the down payment payment back.

I'm not positive of the reason, but my guess is that you're upside down with respect to the value of the car for the beginning (much of ?) the lease.

I want to lease a '13 SV w/QC package. I've never leased in my life before, only bought new cars and sold used cars to others.

 

[dvdmon]

Perhaps what would be good would be a glossary of terms or a pointer to one for the buzzwords at http://www.mynissanleaf.com/viewtopic.php?p=32335#p32335" onclick="window.open(this.href);return false;.

Some of the definitions at http://www.mynissanleaf.com/viewtopic.php?f=27&t=2192" onclick="window.open(this.href);return false; are helpful. I read http://www.mynissanleaf.com/viewtopic.php?f=23&t=3823" onclick="window.open(this.href);return false; long ago and it helped, a bit.

Well, yeah, monthly costs go down if you make a substantial down payment as you've paid off a significant amount of the lease doing that. AFAIK, the reason for making it $0 or close to it is because if you accidentally total the leased car, everyone here says, you don't get any of the down payment payment back.

I'm not positive of the reason, but my guess is that you're upside down with respect to the value of the car for the beginning (much of ?) the lease.

I want to lease a '13 SV w/QC package. I've never leased in my life before, only bought new cars and sold used cars to others.

Thanks. The first link was definitely helpful. The second mainly gave me a headache! Interesting about not getting the downpayment back. I guess that's in relation to what your insurance company will do for you? I guess it makes sense that they won't give you money for the car because you don't own it, but they do have to give money to Nissan. I think it's a pretty small risk, but I guess it is possible. Not sure I'd base my decision on that, but having $0 down might be a necessity for us given our finances currently...

 

[cwerdna]

For me, I have no problem w/a down payment being a few thousand $. However, if people are right about not getting any of it it back, if the car gets totaled, esp. early on, then I'd want to reduce it too.

Hopefully someone can chime in as to why they say that.

 

[LeftieBiker]

Also, some people mention getting quotes via email, and I'm just wondering how people generally do this. I know that with a lot of cars, you can do a lot of this stuff electronically these days (last time we bought was over 8 years ago and there wasn't quite as much online back then). So I'm wondering if there's a quick way to get quotes from a number of dealers (some site or service that handles this for you), or if you have to go to each dealer's site and request a quote?

I got quotes over email, and it really saved me money (but not time!) because they gave me quotes on optionless cars they didn't actually have. There was a way to get quotes from multiple dealers, and I did use it, but keep in mind that once they get your email and/or phone number, you'll be getting multpile calls and emails from multiple dealers until you carefully cancel with each one. I think it's better to browse the online inventory of your local dealers. They should also have some info on terms on theor websites. Then email the internet sales managers of the one or two best prospects, and *save all the emails*. Those specific rates I was offered for cars they turned out not to have got me a free Premium Package on my 2013 SV, and about $500 off the down payment. Plus a dollar a month less on my payment. ;-)

 

[dvdmon]

I got quotes over email, and it really saved me money (but not time!) because they gave me quotes on optionless cars they didn't actually have. There was a way to get quotes from multiple dealers, and I did use it, but keep in mind that once they get your email and/or phone number, you'll be getting multpile calls and emails from multiple dealers until you carefully cancel with each one. I think it's better to browse the online inventory of your local dealers. They should also have some info on terms on theor websites. Then email the internet sales managers of the one or two best prospects, and *save all the emails*. Those specific rates I was offered for cars they turned out not to have got me a free Premium Package on my 2013 SV, and about $500 off the down payment. Plus a dollar a month less on my payment. ;-)

Interesting! Mind if you explain that a bit more? I mean, what was the car that you wanted that they didn't have? An S? Or just an SV in a different color? And you were able to negotiate for those things as "compensation"? Did you suggest them or did they? What would be great is if the massive lease thread were in a searchable spreadsheet somewhere so I could see if any of the local dealerships were mentioned. It looks like when I do a search on "Virginia" I get a hit, but there's no way to zero in on the specific post within that thread, plus I wonder if some people are just putting the state abbreviation, in which case searching for "VA" won't really work...

 

[LeftieBiker]

I was told (over email and live chat) that they had two SV models without the extra options, and I could have one for $2k down (plus, alas, state sales tax) and $150 a month, for 24 months (23 payments, really, since the first month's payment was included in the down payment). I hauled ass to the dealership the next day, and the cars had either never existed or had been traded to another dealer before the last email exchange. I had been slightly interested in an S model as well, but not very - no heatpump and no Cruise control, which my legs need. Mostly I liked the Super Back color. I spent about 4 hours there, while they offered me various cars that I didn't want, or couldn't afford. None of them matched what I was offered over email. So after logging into Gmail and showing the sales manager the exchange (I had dealt with his assistant, who was out that day), I was *finally* offered a 2013 Silver SV with no QC (I hadn't wanted it, but it seems everyone else did, even though we don't have QC chargers widely available), but with the Premium Package (all around view camera system and the energy efficient Bose sound system). The final deal was essentially for that car with the options not included (IOW, Free) and a lower total down payment and monthly payment. I hadn't wanted silver, but the color has grown on me, as has the car!

I make it sound like a Breeze, but it was hours of Hell in 90+ heat. I'm in poor health, and I think seeing me wilting in their sales office didn't hurt! Well, actually, it DID hurt, but it helped the deal.

 

[cgaydos]

Also, some people mention getting quotes via email, and I'm just wondering how people generally do this. I know that with a lot of cars, you can do a lot of this stuff electronically these days (last time we bought was over 8 years ago and there wasn't quite as much online back then). So I'm wondering if there's a quick way to get quotes from a number of dealers (some site or service that handles this for you), or if you have to go to each dealer's site and request a quote?

It's best if the quote request is very specific and that you mention you are ready to buy/lease now. For example: "Would like a 2013 SV with premium package, color blue or red, 15k mile/year lease, 36 months. If you don't have this available then please let me know what you have that is close to this."

Now, responses will vary in style, level of detail, accuracy, and disclosure of hidden costs. When purchasing I sometimes get answers like "$1000 below list" or "$500 above invoice" depending on the car - this allows for some variation in the exact options. Sometimes if my request is specific enough I might even get a response like: "$200/month+sales tax, $2k down (includes sales tax)". Round one of the emails doesn't get to the final price, it gives you contact info at each dealer and also helps narrow down those who have the best prices.

For round two you'll need to verify that the car exists and nail down the cost details. Sometimes after a few iterations I will go to the phone with two or three dealers to finalize their offer details. Here is Colorado your home location is essential to determining the exact sales tax so I'll provide that and ask them to calculate sales tax for me. Shockingly, several dealers are known to exaggerate the sales tax - I suppose when you come in they'd have story for why they had to do this. This is why it is best to keep a few dealers in the negotiation loop until the end - in case one of them suddenly changes deal terms at the end.

When you think you have the final deal send them an email with the exact terms you think were agreed to and ask them to email you a scan of the purchase contract. This will show the terms and the VIN - to verify the car exists. Google the VIN as additional verification. Set up a time to come in (usually they want you there right away to close the deal - and I'm okay with that if they honor the terms).

Be prepared to walk immediately, no additional negotiating, if the terms change when you get there. If you are driving there with others let them know this is a possibility in advance. I've never had this happen to me but I've heard it happening to others.

 

[cwerdna]

I was told (over email and live chat) that they had two SV models without the extra options, and I could have one for $2k down (plus, alas, state sales tax) and $150 a month, for 24 months (23 payments, really, since the first month's payment was included in the down payment). I hauled ass to the dealership the next day, and the cars had either never existed or had been traded to another dealer before the last email exchange. I had been slightly interested in an S model as well, but not very - no heatpump and no Cruise control, which my legs need. Mostly I liked the Super Back color. I spent about 4 hours there, while they offered me various cars that I didn't want, or couldn't afford. None of them matched what I was offered over email.

Sounds like a classic case of bait and switch.

Years ago, my friend needed a new car and I suggested to him the Altima Hybrid (Nissan was putting on some pretty big incentives). Basically, it kept sounding like the dealer had the car on the way (trade from another dealer?). When he got there, the lesser optioned car he wanted seemingly didn't exist and they were trying to sell him in a much more expensive (has more options) car. He then found out another nearby dealer was part of the same "family" and IIRC, were just as bad. He ended up buying a Honda Accord.

 

[RonDawg]

For me, I have no problem w/a down payment being a few thousand $. However, if people are right about not getting any of it it back, if the car gets totaled, esp. early on, then I'd want to reduce it too.

Hopefully someone can chime in as to why they say that.

I don't have my NMAC paperwork in front of me, but there is wording in that contract to the effect that says that if the car is a write-off, NMAC will only accept a payoff of the lease. They will not accept the insurance company giving you an equivalent or better used replacement, which is an option if you own the car. Nor will NMAC refund you if the vehicle's fair market value ends up greater than the payoff.

 

[LEAFer]

Nor will NMAC refund you if the vehicle's fair market value ends up greater than the payoff.

But in that case ... shouldn't the insurance company send you a check for the excess over payoff up to the market value ?

 

[RonDawg]

I was told (over email and live chat) that they had two SV models without the extra options, and I could have one for $2k down (plus, alas, state sales tax) and $150 a month, for 24 months (23 payments, really, since the first month's payment was included in the down payment). I hauled ass to the dealership the next day, and the cars had either never existed or had been traded to another dealer before the last email exchange.

If you think that's bad, at least the dealership didn't promise that they had a brand new car in stock, then when you show up they try to sell you a used one. I knew right away the car was used as it already had license plates, which in CA can take up to 90 days to receive.

 

[RonDawg]

Nor will NMAC refund you if the vehicle's fair market value ends up greater than the payoff.

But in that case ... shouldn't the insurance company send you a check for the excess over payoff up to the market value ?

According to what I remember from the NMAC paperwork, no. However, with the residuals turning out to be rather optimistic, the scenario is unlikely with the Leaf.

 

[planet4ever]

Nor will NMAC refund you if the vehicle's fair market value ends up greater than the payoff.

But in that case ... shouldn't the insurance company send you a check for the excess over payoff up to the market value ?

According to what I remember from the NMAC paperwork, no. However, with the residuals turning out to be rather optimistic, the scenario is unlikely with the Leaf.

It looks like Ron has pretty much nailed it. However, the number NMAC uses is not the fair market value, but its Early Termination payoff. That can be more than the market value if you have a high Adjusted Lease Balance. Here is what the contract says about proceeds:

If the insurance loss proceeds exceed your early termination obligation then the excess will not be refunded to you. Any capitalized cost reduction made by you will not be refunded in the event of a total loss. If the vehicle is a total loss, there is no Purchase Option, and you have no right to retain the vehicle for salvage.

What they don't seem to spell out specifically, but imply by omission, is that if the insurance proceeds are less than the early termination payoff, there are cases where you will be obligated to make up part or all the difference. Here is what they do say:

If this Vehicle is stolen (and not recovered) or destroyed, we will accept insurance loss proceeds in full satisfaction of your early termination liability if you are in compliance with the following: 1) your insurance obligations under this lease are satisfied; 2) your policy covers the casualty and you have paid the deductible required by the policy; and 3) your lease is not in default.

Note that you may well have to pay any deductible the insurance company charges. Note also that "stolen or destroyed" doesn't cover all loss cases: "If this Vehicle is damaged or destroyed in an accident or other occurrence or confiscated by any government authority or is stolen, abandoned or subjected to potential loss ..."

So if you get caught taking drugs across the border, you may lose more than the value of the drugs. [understatement]

Ray

 

[dvdmon]

So as I'm trying to formulate what I want for my Leaf (I think I want the SV and probably not any options on top of that), I'm also trying to guage how much I should have as a target for my monthly payments with and without a downpayment. My guestimate is somewhere around $250/month with a $2K downpayment and maybe $300 without? I'm not positive about this of course, and will need to read more from the long lease thread, but it is difficult due to the different locations people are in, different options, etc.

The one thing that I haven't seen mentioned here is the LENGTH of the lease though. It seems to me that some people are getting quoted a 24-month lease and some a 36-month one. My question is, is this something for you to specify when you contact dealers, or is it something they come up with based on what their preference is? Do they really have a preference, or does it not matter much to them? But most importantly, how does this effect the monthly payment? My preference would be to make those monthly payments as low as possible, so I'd rather go in requesting the lease length that gives me that, if that is something that potential leasers can request...

 

[RonDawg]

Some folks in California lean towards a 36 month lease because it qualifies for a $2500 state rebate whereas any shorter leases do not. However, some Californians have gotten very good 24 month deals even when you factor in the lack of a rebate. I don't know what incentives if any are available in your locality.

Yes you can ask the dealer to quote 24 month vs. 36 month leases, and even 12k/year vs. 15k/year mileage allotments.

 

[LEAFer]

What they don't seem to spell out specifically, but imply by omission, is that if the insurance proceeds are less than the early termination payoff, there are cases where you will be obligated to make up part or all the difference. Here is what they do say:

If this Vehicle is stolen (and not recovered) or destroyed, we will accept insurance loss proceeds in full satisfaction of your early termination liability if you are in compliance with the following: 1) your insurance obligations under this lease are satisfied; 2) your policy covers the casualty and you have paid the deductible required by the policy; and 3) your lease is not in default.

Note that you may well have to pay any deductible the insurance company charges. Note also that "stolen or destroyed" doesn't cover all loss cases: "If this Vehicle is damaged or destroyed in an accident or other occurrence or confiscated by any government authority or is stolen, abandoned or subjected to potential loss ..."

So if you get caught taking drugs across the border, you may lose more than the value of the drugs. [understatement]

Ray

Interesting. Thanks for the additional details. But I am wondering about "gap insurance" ... it's been oft claimed that gap insurance (to make up any shortfall) is already part of the lease. I guess, indirectly, the statement "... we will accept insurance loss proceeds in full satisfaction of your early termination liability if you are in compliance ..." confirms that.

Do you see it the same way ?

 

[braineo]

Gap insurance covers only Nissan.

Thus it is for your OWN best interest to not put any down payment.