I'm considering a 2007 volvo lease and wish to negotiate each component of the deal to my best advantage. On setting the residual amount, is the dealer locked in to a figure that comes from the finance company or can they set a different, though reasonable, residual in order to get the deal done? I want to structure this lease with 6k miles more than standard and the dealer claims that that reduces the residual so much that buying the miles up front costs me only a few cents less per mile than buying them after the fact as an additional charge. Does the dealer have the discretion to che simply plug in a higher residual to cut this cost for me or is he truly locked in to some residual table and can't deviate from it? Thanks!
2007-05-30 03:15:56 · 4 answers · asked by Marco 2 in Cars & Transportation ➔ Buying & Selling
Residual values are set by the leasing companies. Back in the 1997 time frame leasing companies were very agressive in the effort to obtain more leases so they took a risk and set residuals way too high. As the lease ended & the cars came back to them they lost thousands on each vehicle at auction. As you probably know the payments you pay are based on the difference between the selling price and the residual value. It sounds like your dealer is being straight with you regarding the extra miles fee. Any negotiations for a lease are for less out of pocket money up front and for lower monthly payments. The payments can be lowered by the dealer by discounting the car but not by raising the residual value. Five year leases are not wise.
2007-05-30 03:38:48 · answer #1 · answered by Dogbettor 5 · 0⤊ 0⤋
The two things you can really negotiate on a lease are the purcahse price and interest rate. The residuals and money factors are released by banks on a monthly basis. He is right about one thing. It is generally much cheaper to purchase additional miles at the beginning of the lease. Do the math though, because the dealer can sometime charge too much for these additional miles. My difference was only $7 per month for an additional 3k miles per year. If you want to go far above the 12 or 15k mile leases, financing may be better for you.
2007-05-30 03:57:15 · answer #2 · answered by Jay P 7 · 0⤊ 0⤋
In the lease program provided by the dealer, the rates and residuals are usually set. The dealer can up the rate, but typically do not, i certainly do not believe volvo will. So no, you cannot negotiate residual, and usually not rate. Your best bet is to know the selling price, and which rebates are offered by volvo, and make sure they are applied.
In another spin on things, some dealers work with a few lenders even for leases. The mfg lease company is usually the best, but if they offer chase bank, that's a very good lease program as well. You may find some dealers using a company call Hann Financial, and they offer some good programs, but stay far away from them, as they make turn in, and damage, very difficult.
2007-05-30 04:10:17 · answer #3 · answered by jay 7 · 0⤊ 1⤋
They can not set or change the residual value it is fixed by the finance company
many years in the car business
2007-05-30 03:27:42 · answer #4 · answered by Bill in Kansas 6 · 1⤊ 0⤋