2002 Corvette: $500/month lease?!

[digThisXL]

I'm still having a hard time believing this, especially since my employee "discounted" lease price is over $1,200 / month. Anyway, the details:

Go to http://www.leasecompare.com/ and click the "Go!" button to quote a lease price on a 2002 'vette coupe in Michigan. Use their default MSRP and input a cap cost of $36,349. Cap cost = what you pay. I got that from Edmunds.com's invoice price. You should always be able to negotiate to at *least* invoice price (likely even lower).

Leave the rest as defaults and submit. $500/mo for 39 months. You can even apply right there.

Direct cut/paste from the site:

Year: 2002 Bank: Lender S (39 Month Special)
Make: Chevrolet Lease Term: 39
Model: Corvette Lease Mileage: 12000
Trim Level: Coupe Payment: $500
Current Retail: $41450.00 Residual: $24041
Purchase Price: $36349 Residual Percentage: 58%
Down Payment: $0 Money Factor: 0.00272

Seems too good to be true. Wild. Has anyone done this?

Verify the calculations here: http://www.mjhb.com/lease/

-dig

[attgig]

I just did the same thing for MD...

Year: 2002 Bank: Lender S (39 Month Special)
Make: Chevrolet Lease Term: 39
Model: Corvette Lease Mileage: 12000
Trim Level: Coupe Payment: $500
Current Retail: $41450.00 Residual: $24041
Purchase Price: $36349 Residual Percentage: 58%
Down Payment: $0 Money Factor: 0.00272

changing it to 15000 miles: $509

I went ot gmbuypower....with gm's smartlease:
GMAC SmartLease® (Deal ID # SL01 : Standard GMAC SmartLease Lease Plan)
2002 CHEVROLET Corvette Coupe, MSRP $46,605.00
As Low As $1525.32/month. 36 month lease.
$3,075.32 due at lease signing. Includes security deposit. (Tax, title, license, and registration are extra.)
Manufacturer's rebates not available with this Standard-Non-Incentivised finance program



ha!
$1525.32 a month..

[digThisXL]

Not sure what gives. BMW 325: $359/mo.

Anyone in the market and willing to give this a try?

[Bo]

DAMN! For only $500 I should be in the market!!! That would be a SWEET deal!

[Jihforce]

I think the payments are far too low. I wonder if there's a catch.

[mahalo]

$500 would be insane!

Anyone know what the insurance would be?

[Loki]

Umm...not to burst anyone's bubble here but I've leased $40K cars for less. That seems about right and you would be crazy to pay $1500/month on a LEASE for a car unless it was a Ferrari or something. I remember leasing a Porsche and that was about $1000 a month or close to it. So I'm not sure what kind of dealers are there on the east coast but here in CA that's not so uncommon. Though you have to do some haggling. However, I will say this. I do put down a lot at the time of leasing the car. $5K to $8K.

[dallas4u]

Interesting... a 2001 Audi TT Turbo Coupe (225hp) for $486/mo. Hmm...

[digThisXL]

Mind you these terms are with zero down. Nothing. Thus the incredible price. I mean, the lease math works out w/ the residual, interest rate, money factor and all, but I've never heard of a Corvette for $500/mo, nothing down, 12,000 miles/year for a 3 year lease. Very normal, doesn't seem like there's a catch or anything gimmicky.

And what's the point of a lease if you're putting $5-$8k down?!

-dig

[jason_j_a]

Yeah... a Corvette for $500 is nice, until you realize that it's going to cost you about that much for insurance too. Insurance on a Vette is high, insurance on a lease is significantly higher then on a car you own, insurance on a Vette that you lease.. pretty soon that $500 lease turns into $750+. But that's still alot less then leasing anywhere else, if you can afford it, give me a ride sometime :)

Interestingly enough a lease on a 2001 Camry (wanted to see something a little more down to earth) was about $415... so they seem to have bargains in the really nice cars but the average ones don't seem like such a steal.

[Loki]

Originally posted by digThisXL
Mind you these terms are with zero down. Nothing. Thus the incredible price. I mean, the lease math works out w/ the residual, interest rate, money factor and all, but I've never heard of a Corvette for $500/mo, nothing down, 12,000 miles/year for a 3 year lease. Very normal, doesn't seem like there's a catch or anything gimmicky.

And what's the point of a lease if you're putting $5-$8k down?!

-dig

Ok first off, the POINT of putting money down is to lower the lease payment. Otherwise the payment would be more. And it is quite possible to lease a car for that price with no money down. Go to www.carsdirect.com and look at the lease payments. They are a bit higher than they should be because you're not haggling but you get the general idea. I'm not sure how many $40,000.00 cars you have leased but I have leased plenty that I payed under $500 a month with $5K down. If I didnt put anything down the payment may go up another $100 or $200. And that's for a 3 year lease. Actually here's a small lesson in leasing. When you lease a car for less months the payment is lower. Why? Because the residual value of the car is greater and the dealer can turn around and sell the car for a better profit than he would if you leased it longer thus putting more miles on the car.

So what's my point? I'm saying that for nothing down that is a pretty good price but not incredible and worthy for everyone to get worked up about. You could probably get that price or better if you went down to the dealer and haggled a little. In fact, you could use that price you found online and tell them to match it. It's amazing how much a dealer will come down. You might be there for a while but it's well worth it for a 3 to 5 year commitment.

[drobins9]

Clearly their system is just limiting payment output to 3 digits and is leaving off the "1" in front of all of those payments.

[dag16]

Originally posted by dallas4u
Interesting... a 2001 Audi TT Turbo Coupe (225hp) for $486/mo. Hmm...
if you go to Audi's web site, you can come up with pretty much the same deal

[digThisXL]

Originally posted by Loki

Ok first off, the POINT of putting money down is to lower the lease payment. Otherwise the payment would be more.
Well duh. If you put $5k down then I would hope it lowers your payment. Do you understand the value of money in today's dollars? It's a basic financial principle. The longer you can keep money in your pocket, the better off you are. Why would you pay them $5k up front when you can spread that $5k over the next 36 mos. Sure your payment will be higher, but month #2 you'll have $4860 left of your $5k, month 3 you'll have $4720, etc.




And it is quite possible to lease a car for that price with no money down. Go to www.carsdirect.com and look at the lease payments.


That's the whole idea. The site I mentioned in the original post almost *suggests* you put 0 down by defaulting that field for you. And BTW, carsdirect.com's price is horrendous.



Actually here's a small lesson in leasing. When you lease a car for less months the payment is lower. Why? Because the residual value of the car is greater and the dealer can turn around and sell the car for a better profit than he would if you leased it longer thus putting more miles on the car.

Not true 95% of the time. You lose most of your value in the first year. You lose a lot less value in year two, then in turn even less in year three. So by spreading that cost out over time your payment will decrease. Try this experiment: test a 0-down, 2 vs. 3 vs. 4 vs. even a 5 year lease. Unless you're dealing with a car that holds tremendous value in the first year or two, a 2-year lease will cost more than a 3-year. The only example of a cheaper 2-year payment I can think of is when the new design of Jeep Wranglers came out in 97 and they were actually worth *more* money after you drove them off the lot.

Here's a small lesson in leasing for you. Learn some basic principles of finance & time value of money, then learn a few basic leasing formulas. It will really help you and probably save you some of those huge down payments you've been making.

-dig

[fourthrail]

C'mon, I've priced out a vette at a number of dealers, and nobody is coming down to anything close $36,000 from a $42,000 sticker price on a 2002. You'd be lucky to get a 1999 model with 15K for $36,000.

[jason_j_a]

Perhaps the best reason not to put any money down is an accident. If you total your car the insurance will very often pay off your loan in full, leaving you with nothing. Now, say you slapped down $5k, then drive the car for 3 weeks before you total it. The insurance pays off what you owed and you're out $5k. This happened to a guy I worked with.

Of course we can also take the financial argument. If you're lucky enough to get a 0.9% (or something like that) finance deal, does it make any sense to put down money? Hell no! Borrow their money at 0.9% and stick your money that you would have put down into a money market savings for 4.0-5%

This technique also works great at Rooms To Go.... take one of their no interest deals for 18 months, earn interest on the money you were going to use to buy the furniture and then when the 18 months is up, write them a check for the balance.

I bought my house, cars, and furniture no money down. Not because I didn't have it, but because it always made more sense to put my money to work for me elsewhere.

[digThisXL]

Originally posted by jason_j_a
Perhaps the best reason not to put any money down is an accident. If you total your car the insurance will very often pay off your loan in full, leaving you with nothing. Now, say you slapped down $5k, then drive the car for 3 weeks before you total it. The insurance pays off what you owed and you're out $5k. This happened to a guy I worked with.

Good point. Gap insurance covers the remaining balance and any loss, but does not cover your down payment.

-dig

[Loki]

Originally posted by digThisXL

Well duh. If you put $5k down then I would hope it lowers your payment. Do you understand the value of money in today's dollars? It's a basic financial principle. The longer you can keep money in your pocket, the better off you are. Why would you pay them $5k up front when you can spread that $5k over the next 36 mos. Sure your payment will be higher, but month #2 you'll have $4860 left of your $5k, month 3 you'll have $4720, etc.


Yes but then you have to pay interest on those higher payments. All in all you would be paying more than $5000. You're thinking of it wrong. Any money you put up front you forgo paying the interest on. Oh yes, I am en econ major and that is not a basic financial priciple. The only time you would keep money in your pocket is if interest rates were very low, more risk in the economy (i.e. recession) and/or your faith in the economy has gone to sh**. Otherwise there's no reason to keep money in your pocket. It's called the theory of the demand for money. You can read about it in text books.



That's the whole idea. The site I mentioned in the original post almost *suggests* you put 0 down by defaulting that field for you. And BTW, carsdirect.com's price is horrendous.

That why I said their prices were a bit high but it's something I was giving you as a general idea. I said you could get a better price if you went to the dealer yourself.



Not true 95% of the time. You lose most of your value in the first year. You lose a lot less value in year two, then in turn even less in year three. So by spreading that cost out over time your payment will decrease. Try this experiment: test a 0-down, 2 vs. 3 vs. 4 vs. even a 5 year lease. Unless you're dealing with a car that holds tremendous value in the first year or two, a 2-year lease will cost more than a 3-year. The only example of a cheaper 2-year payment I can think of is when the new design of Jeep Wranglers came out in 97 and they were actually worth *more* money after you drove them off the lot.

From my experience the payments for a 2 year lease will usually be less than a 3 or 4 year. And that's because of what you said about the value of the car dropping rapidly especially as more miles are put on the car. Though, you are right about the value of the car. A car that holds it's value better will have a better lease for less months. I think generally the best value is a 3 year lease.


Here's a small lesson in leasing for you. Learn some basic principles of finance & time value of money, then learn a few basic leasing formulas. It will really help you and probably save you some of those huge down payments you've been making.

-dig

Like I said I make the down payments so that the lease payments are less and thus I don't have to pay as much interest on a larger payment. There is a method to my madness. I could very well not put down the that much money but then you will be stuck with higher payments and thus paying more money for interest.

[digThisXL]

Well I wanted to get some discussion going on car lease/buy deals. Looks like I succeeded. =) Let's keep it going....post your best and worst deals.

-dig

[Loki]

BTW...What kind of XL do you have?

[hapoo]

For 2001 M5:



Lender Payment Money Factor Mileage Penalty Disposition Fee Purchase Option Security Deposit
Lender S $-47 0.00272 0.18 $395 $39533 No
Lender S (39 Month Special) $-28 0.00272 0.18 $395 $39533 No
Lender W $11 0.00330 0.17 $350 $38983 No


you can set the "purchase price" to anything you want and it still gives you numbers.

[harit]

play with APR and residual cost. Or plug in some real numbers.

http://www.autosite.com/new/loanlse/calc.asp