What are the current residual value %'s on new RAM leases?

[User_3336]

Advice…

Long story short, looking at buying a used truck, settled on Ram, but can’t really afford the market for what I am looking at (looking to find something in its powertrain window that I can extend…buying a truck and then having to invest 3-4 grand more due to mechanical issues scares the **** out of me), anyways, I opened my research to leasing and here I am reading this thread and just want to bounce my logic off some of you.

I went through a broker for an estimate and with the 51% residual on 36 months gets me 1. A more comfortable payment (monthly) and 2. At the end of the lease the residual ~30K is something that I could then finance and stay in comfort zone.

The 51% residual seems ridiculous by my estimates. Finding 2021s with ~36K miles they are selling on the market for like 70% of their original window sticker.

Things I also was hoping I could confirm…
-I am not going to be close to under 12K annually by my estimates. This is a non-issue if I plan on buying out the lease at the end (which I do). Or am I missing something?
-As I said, 51% seems artificially low… seems to me this would only really affect those who stay leasing as they are taking hits to their trade in? Or what am I missing?

Lease deal: here

Are you sure that money factor is right? 0.41% APR???? (You didn't add an extra zero)? (0.00017)

you should also try the leasehakr.com lease calculator, and see if you get the same results.

 

[millerbjm]

Thanks man. It just seems almost too good to be true. Like I said I am looking at what Rams (theoretically ending a 36/12K lease) are selling for used and it seems like they are maintaining about 70% of their value. So in my mind if the lease terms are predicting that the residual value is going to be 51%, it seems that it is very likely to create equity. Down side being maybe you will have paid more to account for higher depreciation than would have actually happened, but with the offers (13% discount) from RAM, I still think that this ends up being a pretty sweet deal.

Question from your experience though… if you are ending the lease at 2.5 are they ‘breaking’ the lease to get yourself into a new lease… i.e. do they care about if the miles are over or how do they compute mileage at that point? I think I will be well over the mileage but like I said I plan on buying out so I am not worried; however, if they ignore the miles and give me equity, at the point I might just turn it into a down payment, upgrade, and finance to buy.


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What I have done each time is starting 2 years I to the lease I look at the kbb value compared to my payoff quote from the leasing company. If the value is significantly more than the payoff (payoff is residual plus remains payments and some fees depending on the lease) I start negotiating with several dealers on a selling price for a new truck and get all the details on incentives and rates for leasing or buying etc. If all the nu bets work out then we make a deal, the dealer se ds the leasing company a check to payoff the lease and cuts me a check for the difference between that payoff and the agreed trade-in value. I am always under my lease mileage so that helps the value being higher than the residual. If you're significantly over on miles it will likely effect value so you're less likely to have equity when you look at the residual vs market value so less likely to be able to use the equity but that doesn't matter if you're buying out the lease to keep the truck, only if you're trying to cash out equity to upgrade.

 

[Brutal_HO]

A bit of a threadjack here because I'm strongly considering leasing a new car as I put on SO few miles it's ridiculous.

I haven't leased a vehicle in 20 years so I'm a bit unfamiliar with current (typical) terms. Does the lessor have any option to deny a buyout if there's significant equity in the vehicle at lease end?

IOW, does the lessee have first right of refusal on the vehicle at lease end?

 

[millerbjm]

A bit of a threadjack here because I'm strongly considering leasing a new car as I put on SO few miles it's ridiculous.

I haven't leased a vehicle in 20 years so I'm a bit unfamiliar with current (typical) terms. Does the lessor have any option to deny a buyout if there's significant equity in the vehicle at lease end?

IOW, does the lessee have first right of refusal on the vehicle at lease end?

Yes - at least every lease I have had from Chrysler, Ally and Subaru included Lessee 1st option, dealer 2nd and lessor last. If ther2 is any equity as you approach lease end it makes sense to buy the lease and then sell/trade. I've done this 7 times and if you are working with a dealer using the lease as a trade it makes it very easy as they handle all the paperwork and just cut you a check.

Just remember when you lease you are still going to want to start by negotiating the sales price and only after that talk lease vs buy to figure out the best deal. You want to compare different dealers and lenders to get the best money factor, residual value and fees based on your situation. Also make sure the lease doesn't have any early termination fees.

 

[Jasquick]

Are you sure that money factor is right? 0.41% APR???? (You didn't add an extra zero)? (0.00017)

you should also try the leasehakr.com lease calculator, and see if you get the same results.

Yeah, I didn’t put that number in I just provided the link that the broker gave me so that is what they are quoting me.


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[User_3336]

Yeah, I didn’t put that number in I just provided the link that the broker gave me so that is what they are quoting me.


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I'd be double checking those #'s ! ! !

 

[n8zcc]

Just remember when you lease you are still going to want to start by negotiating the sales price and only after that talk lease vs buy to figure out the best deal. You want to compare different dealers and lenders to get the best money factor, residual value and fees based on your situation. Also make sure the lease doesn't have any early termination fees.

I wish more people would realize what you said. When you lease, it is the leasing company that buys the vehicle for the price you negotiate. The lease part is you paying for the depreciation (purchase price less the calculated residual) over the term of the lease plus interest which is the money factor.

Take the lease's money factor and multiply it by 2400 to get the APR interest rate but I strongly suggest you do this before entering into a lease. Since few understand leasing and the money factor, they take great advantage of this.

 

[Jasquick]

Yeah I get that the price is still negotiated and with the broker finding the deal and having negotiated terms that he is bringing to me, he has already negotiated 13% off MSRP.

In terms of the MF, I meant that I didn’t touch the number as in I didn’t mess it up… it is what is being quoted to me. I was looking at it today and it is what Chrysler Capital is offering for rates.

Overall I think right now the only thing that has me not pulling the trigger is that I would have to fly out to DC to review the contract before signing and if they change the terms drastically then yeah I would be refunded the 500 dollar broker fee but I would also have to start looking for a vehicle to drive and already be behind the curve as who knows when the new truck would even arrive (being quoted 4-8 weeks).


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[User_3336]

Yeah I get that the price is still negotiated and with the broker finding the deal and having negotiated terms that he is bringing to me, he has already negotiated 13% off MSRP.

In terms of the MF, I meant that I didn’t touch the number as in I didn’t mess it up… it is what is being quoted to me. I was looking at it today and it is what Chrysler Capital is offering for rates.

Overall I think right now the only thing that has me not pulling the trigger is that I would have to fly out to DC to review the contract before signing and if they change the terms drastically then yeah I would be refunded the 500 dollar broker fee but I would also have to start looking for a vehicle to drive and already be behind the curve as who knows when the new truck would even arrive (being quoted 4-8 weeks).


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Using a broker just sounds like a bad idea. Reason you have chosen not to work with a dealer instead?

 

[Jasquick]

Using a broker just sounds like a bad idea. Reason you have chosen not to work with a dealer instead?

Mainly just because I am in Poland and limited on my ability to call and be anywhere in person. Figured it would be worth reaching out to a broker and finding out what their terms look like considering they market themselves as having these connections that allows for great deals. It is only a 500$ fee so using a broker overall doesn’t seem super high risk and there are a lot of reviews. I do think that I may not use them just because I don’t want to go to DC to get the truck and I don’t want to sign the lease without inspecting the truck before they ship it to me. But it has helped a lot to narrow the deal that I expect to get in a lease situation.


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