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      05-12-2013, 08:27 PM   #95
sarafil
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Drives: 20 X5 M50i
Join Date: Oct 2005
Location: Boston, MA

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Quote:
Originally Posted by DC Newbie View Post
On a lease you're only paying the depreciation over the term of your lease. Since the residual is 64%, your only paying 36% of the negotiated price over 36 months. Therefore an $800 increase in price actually represents an out-of-pocket expense of $288 (.36 X $800).

Yes, that's $288 that stays in your pocket. But it can be difficult for someone to get the dealer to sell at invoice; quite easy to get the dealer to sell at $600-$800 over invoice. All I'm saying is: if you don't like to haggle and want to just get the deal done, you might consider the additional $200-$300 acceptable.

I don't like to haggle. So what I did was send an email to 5 dealers in my area telling them what I wanted to pay for the car, and what I would accept in terms of MF and fees. I told them that if my price was acceptable, we could sign an agreement same day, nofurther discussion. Two said they couldn't do it. One made an offer that was a bit higher. And the other two accepted my price. I went with the first one to respond.
No, you're getting your math wrong here. Go back and double-check the lease formula. Residual is based on MSRP (not negotiated price) so your entire discount goes into your pocket.

In other words, if you get the dealer to drop the selling price by $800 extra, you save $800 over the term of the lease, not just 36% of that amount as you seem to think. The residual never changes since it is based on MSRP and not selling price, so as you drop the selling price, that comes directly out of the depreciation portion of your payment. And then in addition to that, you save a little more in interest and tax.

So if you haggle an extra $800, you save that amount. Up to you if you want to do it, but I know I am not interested in paying $800+ more than I have to.
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