Taking over Range Rover Sport lease question

[JBay]

I am contemplating taking over a 2012 Range Rover Sport HSE (Luxury) lease because a guy I know needs to cut costs with a new baby on the way. Dealership wouldnt take it back.

What is the market for doing this? Is the market fair for me to take over 100% of the lease payments, or do people tend to do this at .85 cents to the dollar? (for example)


Offer-

• Take over payments till the end of the 3 year lease is up. He is 3 months in and barely drives it (1,230 miles on it).
• Payments with Tax are $1,150/month
• I wouldnt owe him the taxes/licensing or money he put down (around $6,500 total)
• High mileage allowed per year on the lease

Interested to hear your guys thoughts? Should there be anything else I should be concerned about?

[JasonF]

You may want to check out sites like swaplease.com to see if there are any comps. It appears that he put a lot of money down that he will obviously never recover. Terrible deal for him, it may be a good deal for you.

[Fatal Flash]

Good deal for you.

There is a fee that one has to pay when you "transfer" over the lease name. For BMW, it's roughly $500. Make him cover that cost.

That's a high down payment, better for you = lower monthly payments.

I would go for it. You have the minimum requirements fulfilled for the lease transfer (no down, no paying fees, low miles on the car = more monthly miles for you) = great.


If he has money though, tell him you'd like an extra $1,000 or something when you show reluctance for wanting it, which will make him "bribe" you to take the car per se. Have him give you the "1st month's lease, plus the transfer fee paid for."

That's a PERFECT deal. Do it.

[streetfish]

dont know what kind of deal he made but the payments seem pretty high to me. my 3 year lease is only 738 with tax included, low milage (10K a year) and the HSE with the climate care package and sat but still seems like a big difference, to me anyways. I also put about 6k down

[JBay]

I was wondering that same thing, Im going to the Land Rover dealership to get a quote so I can compare apples to apples.

His is everything top of the line besides the new SuperCharge engine.

Streetfish-- $738 seems like a great deal, thats for a 2012 I imagine? I dont know how much they vary based on the area you live though.

dont know what kind of deal he made but the payments seem pretty high to me. my 3 year lease is only 738 with tax included, low milage (10K a year) and the HSE with the climate care package and sat but still seems like a big difference, to me anyways. I also put about 6k down

[JBay]

What have peoples experience been on swapalease.com?

Wanted to know if there is anything to watch out for?


Thanks for the info JasonF!

You may want to check out sites like swaplease.com to see if there are any comps. It appears that he put a lot of money down that he will obviously never recover. Terrible deal for him, it may be a good deal for you.

[CA-SPORT]

What have peoples experience been on swapalease.com?

Wanted to know if there is anything to watch out for?


Thanks for the info JasonF!

Feel free to ping me offline as I don't want to bore everyone. I've used swapalease 3 times to unload a car including a 2008 RRS - all 3 experiences were great, no issues. I do have one "caveat" about the buyers otherwise it was a painless experience!

$1,150/mo sounds high with such a large down. My loan payment with only $3K down was $1,200.00?

[SeanPLG]

My brother used swap a lease to get a car. Got a great deal. The deal you mention for the HSE Lux sounds pretty expensive, and almost like no money was put down. Not going to go into any particulars with my lease, but I'm paying 900per for a 2011 HSE Lux. If you get into that deal with your pal, you shouldn't have to pay him anything to get out the lease, as that would be his loss. Also keep in mid that fees are associated with taking over a lease so find out of it's Land Rover Financial or U.S. Bank. I know for a fact that U.S. Bank only lets the lease transfer once, and they are very very very picky. However this deal with $1150 is high. Check swapalease but RRS doesn't come up much on their site.

[Rubin]

Seems way high! I just leased a brand new (50 miles on odo) 2012 RRS HSE for $850/mo:

48-months
15k miles/year
ZERO Cap Cost Reduction = Nothing Down!
Includes Tax (9% in PA)
Includes Bank Fee ($895)
$1,083 was only out-of-pocket ("startups")= 1st Payment, Temp Tags, Doc.

MSRP: $63,495
Sale Price: $61,000
Resid. = 48%
MF = .00123 (2.95%)

[streetfish]

I was wondering that same thing, Im going to the Land Rover dealership to get a quote so I can compare apples to apples.

His is everything top of the line besides the new SuperCharge engine.

Streetfish-- $738 seems like a great deal, thats for a 2012 I imagine? I dont know how much they vary based on the area you live though.

2011 hse with climate care and sat/hd radio, got it last feb. i did negotiate pretty well, and now that i think about it i remember the residual value for the LUX was much lower than the HSE even though they are pretty similar. so that could be the difference - lower residual = higher payments

[AwfAxis]

Your assumption about the residual is correct. We are a two car family, and we always "own" one, and lease the other. Been doing this since the late 80's. When I negotiate a deal, I always find out the dealers "buy rate" and "residual" offered to the dealer. Then I bring my laptop and a handy little Excel sheet to keep them honest. Dealers can offer you any inflated lease rate, and lower residual, and sell the contract back with a little profit. Don't let that happen.

The two tools for payment deals is money factor (interest) and residual. The way it works is that the agreed selling price is kind of like this:

$63,495 Sticker
$61,000 Negotiated
50% Residual (based on 36 month, 15k per year)
.00123 Money Factor

* These numbers tell you almost everything you need to figure payment, before tax

Take Negotiated Price and subtract RESIDUAL (List Price x 50%):

61,000 - (63,495 x .50) = 29,252

Payments before money factor is: $29,252 / 36 = $812.00 / mo

Money factor (interest) is calculated to arrive at a money add-on to the payment. It is a odd calculation that sums the Selling Price and Residual times the Money Factor.

61,000 + 29,252 x .00123 = $111

Total Payment is: $812 + $111 = $923 / mo

TAX is different depending on where you live. Some states make you pay ALL the tax up front, which to me makes leasing un-attractive. This means you either pay CASH as drive-off of 8% of $61k (if 8% is the tax rate), or add it to the selling price, which up's the payment.

In California, only the monthy payment is taxed, so it adds about 9% of the $923 payment, to make it $1006 / mo.

If you pay a CAP-REDUCTION (like a down payment), it lowers the depreciation amount (here as $29,252) (and lowers the interest portion because CAP cost value (selling price) is reduced). The negative is that you now have to pay sales TAX on that amount if you are taxed the way California does it.

Any questions? Anyone?

The auto company's provide special lease deals by "pumping" up the residual and perhaps lowering the mileage allowance (10k). If you go to some third party lease provider, they can sometimes offer better factors, but use standardized residuals.

The dealers can break even on lease returns and sell them CPO. A third party has to dispose of the lease return via auction, so they won't pump up the residual.

[JBay]

So the $1,083 is per month including tax?

Or you paying lower than that per month?


Sounds like I should be under $1k a month.

Seems way high! I just leased a brand new (50 miles on odo) 2012 RRS HSE for $850/mo:

48-months
15k miles/year
ZERO Cap Cost Reduction = Nothing Down!
Includes Tax (9% in PA)
Includes Bank Fee ($895)
$1,083 was only out-of-pocket ("startups")= 1st Payment, Temp Tags, Doc.

MSRP: $63,495
Sale Price: $61,000
Resid. = 48%
MF = .00123 (2.95%)

[JBay]

How did you calculate the money factor of .00123? Is that the same everywhere.

Great post btw, very informative, never done a lease before.

Your assumption about the residual is correct. We are a two car family, and we always "own" one, and lease the other. Been doing this since the late 80's. When I negotiate a deal, I always find out the dealers "buy rate" and "residual" offered to the dealer. Then I bring my laptop and a handy little Excel sheet to keep them honest. Dealers can offer you any inflated lease rate, and lower residual, and sell the contract back with a little profit. Don't let that happen.

The two tools for payment deals is money factor (interest) and residual. The way it works is that the agreed selling price is kind of like this:

$63,495 Sticker
$61,000 Negotiated
50% Residual (based on 36 month, 15k per year)
.00123 Money Factor

* These numbers tell you almost everything you need to figure payment, before tax

Take Negotiated Price and subtract RESIDUAL (List Price x 50%):

61,000 - (63,495 x .50) = 29,252

Payments before money factor is: $29,252 / 36 = $812.00 / mo

Money factor (interest) is calculated to arrive at a money add-on to the payment. It is a odd calculation that sums the Selling Price and Residual times the Money Factor.

61,000 + 29,252 x .00123 = $111

Total Payment is: $812 + $111 = $923 / mo

TAX is different depending on where you live. Some states make you pay ALL the tax up front, which to me makes leasing un-attractive. This means you either pay CASH as drive-off of 8% of $61k (if 8% is the tax rate), or add it to the selling price, which up's the payment.

In California, only the monthy payment is taxed, so it adds about 9% of the $923 payment, to make it $1006 / mo.

If you pay a CAP-REDUCTION (like a down payment), it lowers the depreciation amount (here as $29,252) (and lowers the interest portion because CAP cost value (selling price) is reduced). The negative is that you now have to pay sales TAX on that amount if you are taxed the way California does it.

Any questions? Anyone?

The auto company's provide special lease deals by "pumping" up the residual and perhaps lowering the mileage allowance (10k). If you go to some third party lease provider, they can sometimes offer better factors, but use standardized residuals.

The dealers can break even on lease returns and sell them CPO. A third party has to dispose of the lease return via auction, so they won't pump up the residual.

[BLKZ06]

How did you calculate the money factor of .00123? Is that the same everywhere.

Great post btw, very informative, never done a lease before.

Interest rate/2400.

I'll also add that is an extremely high payment for putting 6500.00 down.

Lots of guys do that to "buy down" the payment esp. if its for business reasons.

I leased a car a few months ago where the dealer started out with some generic "numbers" typed up on their logo embossed paper which said my "lease payment" was 560/mo.

I finally got the actual numbers from the GM (after getting up to walk out)..ran the simple formula posted a few replies above, and walked out with the new car for 390.00/mo.

Always, always ALWAYS know your numbers before negotiating a lease.

BTW..heres the "easy button" for you guys who don't like remembering figures: http://www.leaseguide.com/calc.htm

[RRSS007]

Just as a thought as well, when your going to the dealer to 'spec' things out, see what kind of deals they make you. I know you want to help your buddy out, but at the end of the day, it's your hard earned money.