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Regular Contributor
BOSScredit
Posts: 141
Registered: ‎11-29-2013
0

I'm 22 and want some help estimating leases for a f150

Hey ya'll, the CC forums helped a lot so Im sure I will get some good advice here.

 

I'm graduating college in may with zero debt (bless my parents) and I want to lease a  2014 f150. I've driven a 1996 station wagon the last 6 years worth about $500 and I'm ready to reward myself. I have 760+ credit scores accross the three scores. 1% CC utilization, AAoA 1 year (with oldest being 5 years) perfect payment history, 6 credit cards, and I've always payed in full. 

 

I can't afford to BUY a new car, heck, if leasing is too expensive I won't do that either. But I want to get some numbers. Online I saw some nice F150 four doors for 30,000 msrp. How much does it cost to lease one of those for 3 years? Again, I'm new to auto credit and I just want a general estimate because I feel if I go to the dealer Im going to deal with about 1 hour of traffic and a bunch of pesky salesman! I couldn't find anywhere on the website about lease numbers so could anyone give me a general estimate? 

 

And how much does having a 760 credit score help with monthly payments? Does it end up with me paying $1000 less in the end, or does it only save me $100 when it's all said and done? 

 

Can anyone give an educated estimate of my monthly payments on a $30,000 car on a 36 month lease? I know there are a lot of factors, but just an estimate please!

 

Also if I waited until this August when 2015 Fords come out, would I save a substantial amount of money going for a lease on the 2014 model instead?

 

Thanks!

 

 

Valued Contributor
Luscher
Posts: 1,244
Registered: ‎03-24-2013
0

Re: I'm 22 and want some help estimating leases for a f150

probably looking at 350-400/month leasing.

if you decided to finance you will qualify for 0% with that score (assuming it is a rico score)
CHASE FREEDOM | CHASE RITZ | AMEX BCE | | BOFA REWARDS | CITI TYP | DISCOVER IT | CHASE CSP
--------$32,000-------------$25,000---------$22,700-----------$18,000------------$11,000--------$8,750----------$5,000----

FICO - TU: 780 EX: 785 EQ: 760
Regular Contributor
BOSScredit
Posts: 141
Registered: ‎11-29-2013
0

Re: I'm 22 and want some help estimating leases for a f150

Is their an option of a down payment for a car lease? For example, if I have $6000 saved up, will that help at all (besides making monthly payments)? And will paying my auto lease every month on time, will that help my credit?

New Contributor
14IS4
Posts: 71
Registered: ‎01-08-2014
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Re: I'm 22 and want some help estimating leases for a f150

[ Edited ]

Hi BOSScredit,

 

Leasing is a whole different game than purchasing and I suggest you make sure and do a lot a research before you try to lease a vehicle. There are a lot of factors that go into a lease and not knowing every aspect can cost you money.

 

First off don't talk about monthly payment whatsoever, they can hide a lot in monthly payments and you will 100% pay more than you should going in there and answering their question of how much can you spend per month. Treat everything as it's own seperate entity, if you are going to have a trade in negotiate the trade in on it's own. Negotiate the price of the vehicle starting at Invoice Price and not MSRP, you can find invoice pricing off of Truecar or Edmunds True Market Value. A good deal will usually be about $500 over invoice but I don't buy domestic vehicles so I would research on some F150 forums what good deals are. Also don't let anyone fool you, you need to negotiate the vehicle as if you were going to purchase it even if you are going to lease. At the end of the day you are paying for the depreciation of the vehicle, which is the residual value, so you want what they are basing their percentages off of to be the lowest they can. 

 

I noticed you didn't have anything posted about what if any type of income you have and saying that you can't afford a new car throws up some red flags. If you are expecting a job and you don't have one yet I would get yourself established before even thinking about purchasing/leasing a car that has a monthly payment. 

 

It is pretty much impossible to give you lease rates as they change monthly. You are going to want to send an email or call the dealership and ask them to give you Residuals and Money Factors for each specific mileage range.

 

For example, say you're looking for a 3 year/12,000 mile/year lease and they come back with a Residual of 63% and a Money Factor of 0.001875 then we can calculate an estimate based off of that. To find the interest rate based off of the Money Factor you take the number they give you and multiply that by 2400 so: 0.001875 x 2400 = 4.5%. For a Residual of 63% you would be paying  37% of the negotiated price say you bought it at $3000 you would take 30000 x .37 = $11,100.

 

Now you have your ways to calculate an estimated monthly payment

Capitalized Cost          = $30000 which is MSRP minus any discounts

Residual Value            = $18900 which is the car's value after the lease is up (in this case 63% of $30000)

Lease Usage                = $11100 which is the total amount owed for the lease 

Monthly Depreciation = $308.33 which is your lease usage divide by the lease term

Monthly Finance          = $91.69   the way that is calculated is adding the Capitalized Cost with the Residual Value and then multiplied by the Money Factor

 

That would bring you to $400/month for your payment, again the Residual and Money Factor are determined by the finance company and they change every month. That also does not include tax and I don't know because I don't know what state you live in. For example where I live in Texas the auto tax rate is 6.25% and it is calculated off of the total price of the vehicle and not the monthly payment like some states. In California you pay tax off of the monthly payment so it would be $400 x 1.0625 assuming that the rate was 6.25% and that comes out to $425/month. In Texas assuming the 6.25% interest rate you would do ((($30000 x 0.0625) / 36) + $400) which brings it to $452/month. That is what makes leasing a car in Texas (or a few other states) less appealing since you pay the same amount of tax as you would pay if you were buying the car.

 

A 760 score will help you but the score could be lower since most dealerships will use auto enhanced fico scores that take into account previous auto loan. Since you don't have any if could hurt you but that's not a guarentee. Generally you will get better deals right before new models come out and lease rates typically tend to be best at that time as well.

 

I really suggest you doing a lot more reading on sites like this http://www.fightingchance.com/auto_leasing.php before you go into the dealership or you will most certainly get taken advantage of. I work at an auto finance company and would be happy to go over any points you might not understand.

New Contributor
14IS4
Posts: 71
Registered: ‎01-08-2014
0

Re: I'm 22 and want some help estimating leases for a f150

[ Edited ]

There is an option for a down payment and it's usually called Cap Cost Reduction meaning your reducing the Capitalized Cost that the Residual Value gets calculated off of. Most people tend to say not to put down any money on a lease because if you totalled the vehicle after only having it for a month you will be out all of that money. The insurance pays the lease company directly and you 100% won't see any of it back. Some companies also offer multiple security deposits often called MSD's and those aren't as bad because each MSD usually around $800 will drop your interest rate by a little bit. It is basically just pre paying your monthly payments and they lower the interest because they already have that money and can turn around and invest your money and profit from it. You are better off saving the money and investing some of it or just sticking it in a savings account/CD to where you're earning money off of your own money.

 

An auto lease will show up on your credit report just like any other installment loan and will help as long as you continue what you've been doing with all of your other credit accounts.

Regular Contributor
BOSScredit
Posts: 141
Registered: ‎11-29-2013
0

Re: I'm 22 and want some help estimating leases for a f150

Wow thank you, what an informative post, I certainly appreciate your honesty and expertise. All that makes me hesitant on the car. $400 a month is WAY too expensive. I was hoping closer to $250-300. Well shucks, I think I learned that I can afford a lease, but it's too much of my income to be something I'm spending money on... Better off saving it for grad school or something.

 

2 years ago I went to a car dealership with my friend because she was going to buy a car. She had a 780 credit score and the dealer told me to try to get a high credit score too, because "with a 780 score you can get any deal you want." Hypothetically, if I walked into a dealership with an 800 credit score, would they bend over backwards for me? Is it really everything people talk it up to be? Am I saving thousands of dollars or just hundreds?.... I think I took his quote too seriously honestly. How many people walk into the dealership you work at with an 800+ score?

New Contributor
14IS4
Posts: 71
Registered: ‎01-08-2014
0

Re: I'm 22 and want some help estimating leases for a f150

I would consider leasing a cheaper car if you need reliable transportation right now. You can get into a new Civic now for under $200/month or something similar and save your money for when you get out of school. The other option is to look for a 2-3 year old F150, credit unions are offering good rates on used cars right now.

Your score is a determining factor but it isn't THE determining factor for what interest rate you will get. My good friends wife went to buy a car right after they got married and she had a 790 credit score but got rejected for a $30000 car because she had no previous installment loans.

As for how much you would save depends solely on your interest rate and the price of the vehicle. To do a quick comparison take a 5% and a 10% loan on a $30000 vehicle. Multiply 30000 x .1 and then 30000 x .05. You can see that at 10% you'd be paying $3000 in interest and at 5% you'd only be at $1500 in interest.

To be honest unless you walk into a dealership and you know exactly what is going on and how they calculate every different aspect of your loan you're going to get taken advantage of. I don't work at a dealership but I do work at a company that actually finances the loans. I am a database programmer and can see every loan we've ever serviced and there are plenty of people with high credit and lousy interest rates. Some even to the tune of 820 credit score with a 25% interest rate.

I will guarantee you no dealership is going to bend over backwards for you no matter if you walk in with an 850 credit score. The dealership and the finance company are there to make as much money off you as possible, end of story. Finance companies will offer dealerships bonus for holding points of rate. What that means is when you go in to the dealership and they run your credit the banks that come back will offer a certain rate. Say Company A says that they approve you for 1.99% the dealership might come back and say you only qualify for 5%. What you don't know is that you actually qualified for a much lower rate and they are going to pocket a nice bonus from the finance company.
Senior Contributor
B335is
Posts: 4,620
Registered: ‎09-22-2012
0

Re: I'm 22 and want some help estimating leases for a f150

14IS4, that is excellent advice. I just got home from the VW dealership and they definitely gravitate towards the monthly payment language. Even when I asked for numerous scenarios about a down payment it was turned into monthly payments. Only after I pushed hard would they lay it all out as you suggest. They should create a sticky with the info you posted.
New Contributor
14IS4
Posts: 71
Registered: ‎01-08-2014
0

Re: I'm 22 and want some help estimating leases for a f150

B335is,

 

I'm glad to hear that my post was informative for you. What VW are you looking at if you don't mind me asking? I've had 3 now in my past 4 cars and have a 2014 S4 on order that will be here at the end of next month. I don't know what the procedure for getting things added as a sticky (only on my 3rd post here) but I was thinking a could make a less specific post that included some examples and go more in depth on the whole range of leasing since it seems many are confused by it. Once I post that then the mods can decide whether or not they sticky the information.

Senior Contributor
B335is
Posts: 4,620
Registered: ‎09-22-2012
0

Re: I'm 22 and want some help estimating leases for a f150


14IS4 wrote:

B335is,

 

I'm glad to hear that my post was informative for you. What VW are you looking at if you don't mind me asking? I've had 3 now in my past 4 cars and have a 2014 S4 on order that will be here at the end of next month. I don't know what the procedure for getting things added as a sticky (only on my 3rd post here) but I was thinking a could make a less specific post that included some examples and go more in depth on the whole range of leasing since it seems many are confused by it. Once I post that then the mods can decide whether or not they sticky the information.


I ended up getting a Touareg V6 Lux.  I really liked my 335is, but it was either buy an old pickup truck (I live in Michigan) or get something more practical.  S4 meaning Audi S4?  If so, that's a great car, congrats!  I looked at one of those 2 years back - very nice.

 


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