Has anyone leased an FFE since the price plunge that can tell me what they called the residual value for? You can buy a brand new car now for a cash price (after 10K US and CA tax credits) less than the residuals on some recent leases. I'm considering leasing one and can't do the math without at least a ballpark residual.
Current Residual Values
- Thread starter brogult
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Stretch2727
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If you use the Ford website I am getting approximately $13K for a base car (no special paint or leather) after 3 years @10.5K miles.
Car Price = 30,900 This seems to vary on the Ford site. Have not quite figured out the logic but it my area in is close to $29,995 but not quite.
Capitalized cost = $20,740 (This is low on the lease as the leasing company takes the $7500 Federal take credit and there is additional $2750 rebate that may vary by location.)
Payments 36 @ $244 = $8784
Interest estimate 2% = $1000 on capital cost.
$20740-$8740+$1000 = $13,000.
Basically I am using the payment to back into the residual. The residual is either really bad or good depending on how you look at it. Against the price it is poor, but the federal tax credit essentially lowers the price of the car. $13k on a $20K car after 3 years is not too bad. No one is going to pay over the "cost" of what it takes to get a new car, so this is the starting point for the depreciation.
Car Price = 30,900 This seems to vary on the Ford site. Have not quite figured out the logic but it my area in is close to $29,995 but not quite.
Capitalized cost = $20,740 (This is low on the lease as the leasing company takes the $7500 Federal take credit and there is additional $2750 rebate that may vary by location.)
Payments 36 @ $244 = $8784
Interest estimate 2% = $1000 on capital cost.
$20740-$8740+$1000 = $13,000.
Basically I am using the payment to back into the residual. The residual is either really bad or good depending on how you look at it. Against the price it is poor, but the federal tax credit essentially lowers the price of the car. $13k on a $20K car after 3 years is not too bad. No one is going to pay over the "cost" of what it takes to get a new car, so this is the starting point for the depreciation.
$30,990 is for a base model with the leather/power seats and nothing else. I've tried going backwards too, but the problem is there are all those little items, like the acquisition fee, that prevent any real accuracy. I did find one website that gave $12,950 for a residual, you've come up with 13K, but there is a problem--the cost of a new purchase!
I can buy a base model ($29,995 MSRP) here in L.A. for $23,513, which is $1000 below invoice. Then I get $10K in credits and rebates. How can a residual on a three year lease be only $500 less than the net cost of a new purchase?
I can buy a base model ($29,995 MSRP) here in L.A. for $23,513, which is $1000 below invoice. Then I get $10K in credits and rebates. How can a residual on a three year lease be only $500 less than the net cost of a new purchase?
Lithium
Well-known member
The Dealers should tell you what the residual is. 43% for 3 yrs 12K/yr in 2014.
$30,000 car at MSRP, that's what they calculate residuals from, at 43% is $12,900.
You don't buy the car for MSRP. Forget the rebates fed and state when you negotiate the purchase/lease. There's about $2000 between MSRP and invoice price in this car. Websites can give you the figures. If you get the car at invoice + couple hundred then you're competitive.
The Money factor is the interest rate. Usually multiply it by 2400 to get an Annual interest rate. Today that should be in the 0%-2% range. I had a lease at 0.25% on a 2014.
Dealers will play games with residual rates, upping it a point or 2, and play with the interest rate. Ford red carpet lease will have it's rates but the dealer can bend the numbers for more profit. Shop around.
Some Dealers will show a lower rate and higher residual or visa versa. competitive offers will give you insight into what wiggle room there is.
Invoice + $200-$500, lower interest rate/ money factor and highest residual gets you the best deal.
Once you're happy with these numbers, add in the fed and state rebates.
Know that in most states, you pay sales tax on the rebate, so the actual purchase price of the car.
If you get a $30,000 model for invoice ~$28000 you'll pay tax on the $28,000.
The capitalization of the car will include the Federal rebate and may or may not include the state rebate. NY doesn't have one so I don't know how the money transfers from state to ford etc in CA, GA etc... someone else can add to that. Maybe the leasing company gets the state money direct and you don't have to worry about it, like the fed rebate.
So, $28000 purchase price - $7500 rebate= $20500, Residual at 43% of MSRP is $12,900 so you lease effectively before taxes is capitalized at $7600 for what ever the term is, 24/36 etc with miles/yr.
The 43% residual was 2014 number for 36 mths at 12K miles per year. This will vary with the term and miles bought. $211/month plus taxes ~$2400 total / $67/month tax so you'd be at ~$278/mth for 36 months as an example.
My example uses last years residual and that may be completely wrong!!!!
There could be a big difference in residual % with the $6000 price drop to $30,000 msrp. you have to shop around to find out what it is.
Happy Trails
H
$30,000 car at MSRP, that's what they calculate residuals from, at 43% is $12,900.
You don't buy the car for MSRP. Forget the rebates fed and state when you negotiate the purchase/lease. There's about $2000 between MSRP and invoice price in this car. Websites can give you the figures. If you get the car at invoice + couple hundred then you're competitive.
The Money factor is the interest rate. Usually multiply it by 2400 to get an Annual interest rate. Today that should be in the 0%-2% range. I had a lease at 0.25% on a 2014.
Dealers will play games with residual rates, upping it a point or 2, and play with the interest rate. Ford red carpet lease will have it's rates but the dealer can bend the numbers for more profit. Shop around.
Some Dealers will show a lower rate and higher residual or visa versa. competitive offers will give you insight into what wiggle room there is.
Invoice + $200-$500, lower interest rate/ money factor and highest residual gets you the best deal.
Once you're happy with these numbers, add in the fed and state rebates.
Know that in most states, you pay sales tax on the rebate, so the actual purchase price of the car.
If you get a $30,000 model for invoice ~$28000 you'll pay tax on the $28,000.
The capitalization of the car will include the Federal rebate and may or may not include the state rebate. NY doesn't have one so I don't know how the money transfers from state to ford etc in CA, GA etc... someone else can add to that. Maybe the leasing company gets the state money direct and you don't have to worry about it, like the fed rebate.
So, $28000 purchase price - $7500 rebate= $20500, Residual at 43% of MSRP is $12,900 so you lease effectively before taxes is capitalized at $7600 for what ever the term is, 24/36 etc with miles/yr.
The 43% residual was 2014 number for 36 mths at 12K miles per year. This will vary with the term and miles bought. $211/month plus taxes ~$2400 total / $67/month tax so you'd be at ~$278/mth for 36 months as an example.
My example uses last years residual and that may be completely wrong!!!!
There could be a big difference in residual % with the $6000 price drop to $30,000 msrp. you have to shop around to find out what it is.
Happy Trails
H
***Invoice + $200-$500, lower interest rate/ money factor and highest residual gets you the best deal. :shock:
There is where the deals get interesting. Actual best pricing here in the Inland Empire is Invoice minus $1000, money factor approximately zero (very, very low) and $4000 purchase rebate or $2500 lease cash. If you figure a $12,900 residual (which I think is too high), you get a very, very low lease payment, even after taxes, etc. So I'm assuming every dealer is going to offer what looks like a very reasonable lease payment, then tweak (pad) the variables that they can control (money factor?? residual?? acquisition fee?? disposition fee??) to get UP to that payment. I can't work the deal properly unless I know the actual residual they are using.
On a related note, does anyone know for sure which variables are negotiable? I know the the promo materlal for the Red Carpet lease states that the residual value, or perhaps the end-of-lease purchase option, is negotiable with the dealer. I would think that the residual is determined by Ford Credit and that the dealer has the opportunity to add a disposition fee. So what is fair game for negotiation in a lease?
NEGOTIABLE? (meaning dealer can mark-up over the rate/price they are quoted from Ford)
Acquisition cost (price of car)
Money Factor
Disposition Fee (buyout price)
Document Fee (limited to $80 by law in CA, not required but they all charge it--anyone get a deal without it?)
NON-NEGOTIABLE?
Rebates
Lease Cash
Taxes
Registration Fees
QUESTIONABLE?
Acquisition Fee (I always see $645, is that just straight from FMC?)
Other?
Anyone know for sure on these?
There is where the deals get interesting. Actual best pricing here in the Inland Empire is Invoice minus $1000, money factor approximately zero (very, very low) and $4000 purchase rebate or $2500 lease cash. If you figure a $12,900 residual (which I think is too high), you get a very, very low lease payment, even after taxes, etc. So I'm assuming every dealer is going to offer what looks like a very reasonable lease payment, then tweak (pad) the variables that they can control (money factor?? residual?? acquisition fee?? disposition fee??) to get UP to that payment. I can't work the deal properly unless I know the actual residual they are using.
On a related note, does anyone know for sure which variables are negotiable? I know the the promo materlal for the Red Carpet lease states that the residual value, or perhaps the end-of-lease purchase option, is negotiable with the dealer. I would think that the residual is determined by Ford Credit and that the dealer has the opportunity to add a disposition fee. So what is fair game for negotiation in a lease?
NEGOTIABLE? (meaning dealer can mark-up over the rate/price they are quoted from Ford)
Acquisition cost (price of car)
Money Factor
Disposition Fee (buyout price)
Document Fee (limited to $80 by law in CA, not required but they all charge it--anyone get a deal without it?)
NON-NEGOTIABLE?
Rebates
Lease Cash
Taxes
Registration Fees
QUESTIONABLE?
Acquisition Fee (I always see $645, is that just straight from FMC?)
Other?
Anyone know for sure on these?
michael
Well-known member
What is the current factory cash incentive on a lease? A year back when they reduced the price by $6K they simultaneously reduced the factory cash by the same amount, negating the advantage.
Because even if there is no real contribution, should be $7500 to reflect the federal money pocketed by Ford Credit.
Anyone know the current deal?
Because even if there is no real contribution, should be $7500 to reflect the federal money pocketed by Ford Credit.
Anyone know the current deal?
NightHawk
Well-known member
michael said:
At the Ford website on the FFE right now it shows $10,000 for the Red Carpet Lease Cash along with the new $6K lower MSRP.
In contrast last month the RCL cash deal was $11 ,750 except for labor day weekend when they increased it an extra $500.
With last month (Sep 2014) Ford lease deal and an extra dealer discount I got a 36month lease with true zero down and monthly payments of about $250+tax. I literally paid nothing at the dealer and the salesman even personally drove and delivered the car to my house (a 25mile drive from the dealership) for free. The lease cash even covered all the tax and license fees and even the first monthly payment. I even got a $20 check refund from the dealer in the mail a couple weeks ago due to their license fee estimate was high, so I haven't paid a penny yet in fact I'm ahead $20 and my application for the California state $2500 rebate has already been approved that will cover most of the first year of monthly payments. The residual value (purchase option amount) at end of lease was a little under $15K and the dealer told me Ford doesn't charge any other extra fees if you exercise the purchase option unlike some other manufacturers.
michael
Well-known member
Ok, so it would seem $7500 tax money plus $2500 factory money, plus whatever discount you can work out with the dealer.
They should be flying out the door!!!! Wish I could find some use for another!
They should be flying out the door!!!! Wish I could find some use for another!
With the lease, you don't get to claim the Federal Credit. But the purchase price and lease deals are quite reasonable. A friend at work is putting in $500/mo on Rav4 EV. At $250/mo, you could get two FFEs. Although I paid more for mine, I have no regrets. In the time I've had the car I've saved $2250 in fuel ($gas - $electricity). I likely saved more than that because I charge free at work. But the real value is the car-pool access.
WattsUp
Well-known member
That is true, however, lessees still usually benefit from the federal rebate indirectly. This is because most lease prices usually reflect a discount commensurate with the tax credit (since the dealership or its leasing agency claim the credit and pass the savings on to the lessee).davideos said:
Even though the federal tax credit is unavailable (directly), lessees still may be able to claim their state's tax credit or rebate, if offered. For example, in California, lessees can claim the state EV rebate of up to $2500 (just like buyers). However, the lease duration must be at least three years.
Check with your state for credits or rebates available to lessees of qualifying EVs.
Lithium
Well-known member
brogult said:
The Invoice minus a $1000 is giving all the money, Hold back 2% and advertising money etc... to customer. You're in a place where the dealer just wants out of the car. that's not the case for most dealer and locales. Internal Empire is what Midwest, Kansas? Wyoming?
H
blownb310
Well-known member
This is all very informative but completely exhausting with so much math involved and haggling with dealers. It just brings to light the beauty of the Tesla way of selling cars, and side stepping dealers altogether.
Lithium
Well-known member
blownb310 said:
That's why Warren Buffet bought a dealer group. Hugely profitable because of the black box aspect. It's a unique business where you know the approximate cost of the item you buy. try that at Walmart on a flat screen. you have no idea what they paid for it.
I look at it as a game and I enjoy playing.
H
Lithium
Well-known member
For how many months and miles? 38% for 12K is the going rate here. so If you're quoted 39% that could be for 10,500 miles.
H
H
@ Lithium
The Invoice minus a $1000 is giving all the money, Hold back 2% and advertising money etc... to customer. You're in a place where the dealer just wants out of the car. that's not the case for most dealer and locales. Internal Empire is what Midwest, Kansas? Wyoming?
H
Just did deal--$24,114 purchase price (30,990 MSRP), $2876 dealer discount, $1573 below the invoice that I saw (on a different car, same MSRP).
Inland Empire is Southern California, east of LA. Can't imagine a better place to own an EV. Dealers here still have plenty of 2014 FFEs and I don't see them moving all that fast--not one was sold out from under me during my 7-day stint talking to about a dozen dealers.
The Invoice minus a $1000 is giving all the money, Hold back 2% and advertising money etc... to customer. You're in a place where the dealer just wants out of the car. that's not the case for most dealer and locales. Internal Empire is what Midwest, Kansas? Wyoming?
H
Just did deal--$24,114 purchase price (30,990 MSRP), $2876 dealer discount, $1573 below the invoice that I saw (on a different car, same MSRP).
Inland Empire is Southern California, east of LA. Can't imagine a better place to own an EV. Dealers here still have plenty of 2014 FFEs and I don't see them moving all that fast--not one was sold out from under me during my 7-day stint talking to about a dozen dealers.
jachady
Well-known member
blownb310 said:
Whats funny about this statement is that the dealers don't put the MSRP on the cars, the manufacturers do. But no one wants to pay the window sticker price at a "dealership". Yet they walk into Tesla and happily pay what their MSRP says. And I get part of it, Teslas customers are super happy with the customer service, newness of their stores, knowledge of the salespeople. However, if everyone paid MSRP at a dealership, we could also afford to update, train, provide things like free loaner dropoffs and keep qualified salespeople that know how to take care of customers.
On deals like brogult's, the dealership gave everything away. As far as I can tell they made absolutely $0 on the car. And thats before they pay the salesperson, manager, office people, taxes, utility bill, etc. If he would have paid msrp, the gross profit would have been $2378.
My friend just bought a Tesla and they told him at delivery that it was 28% profit at the window sticker price, $25200 gross profit at $90000 msrp. And yet their customers are the most satisfied in the USA.
As I've said many times, find a dealer you like with a salesperson that will work with you, pay a fair price and ask that you will be taken care of through your vehicle ownership lifetime.
On deals like brogult's, the dealership gave everything away. As far as I can tell they made absolutely $0 on the car.
Yep. I started out thinking there was a $1K factory-to-dealer (behind money) incentive, just based on some prices that I got. I don't think that is the case. By my estimation, they lost between $270 and $487 in absolute cash, never mind ANY expenses. Perhaps they had some floorplan assistance or other "motivation" to stock the car in the first place, since Ford needs to sell these in CA.
My friend just bought a Tesla and they told him at delivery that it was 28% profit at the window sticker price, $25200 gross profit at $90000 msrp.
Since there is no separate "dealer" entity, how do they figure gross profit? Cost is just that - what the seller paid for the car. If Tesla the manufacturer doesn't sell it to a separate selling entity, how can there be "profit" per se?
As I've said many times, find a dealer you like with a salesperson that will work with you, pay a fair price and ask that you will be taken care of through your vehicle ownership lifetime.
I don't disagree. I would have been willing to pay invoice or even a bit more at my local dealer if they had any knowledge whatsoever about the car and I had any confidence they could "take care of" me. It doesn't matter if it is a car, a television or a sofa--if you are buying the dusty, old inventory from someone who has no clue what it is and just "needs it gone", well then one at least wants a deal. No? The sad part (not for me) is that I wanted to buy this car. I was probably a potential buyer at the original MSRP, given the $10K in CA and Federal money -- if I had been really sold on the whole program and had an enthusiastic and competent local dealer. Instead, I now own one for a net cost of less than half that, literally for the price of a stripped Kia Rio.
I think Ford is completely dropping the ball on what could be a perfectly good little car. I live in a place where I see not only Teslas, but Fiskers, Spark EVs, various NEVs, etc. Haven't seen a single FFE out in the wild yet.
Yep. I started out thinking there was a $1K factory-to-dealer (behind money) incentive, just based on some prices that I got. I don't think that is the case. By my estimation, they lost between $270 and $487 in absolute cash, never mind ANY expenses. Perhaps they had some floorplan assistance or other "motivation" to stock the car in the first place, since Ford needs to sell these in CA.
My friend just bought a Tesla and they told him at delivery that it was 28% profit at the window sticker price, $25200 gross profit at $90000 msrp.
Since there is no separate "dealer" entity, how do they figure gross profit? Cost is just that - what the seller paid for the car. If Tesla the manufacturer doesn't sell it to a separate selling entity, how can there be "profit" per se?
As I've said many times, find a dealer you like with a salesperson that will work with you, pay a fair price and ask that you will be taken care of through your vehicle ownership lifetime.
I don't disagree. I would have been willing to pay invoice or even a bit more at my local dealer if they had any knowledge whatsoever about the car and I had any confidence they could "take care of" me. It doesn't matter if it is a car, a television or a sofa--if you are buying the dusty, old inventory from someone who has no clue what it is and just "needs it gone", well then one at least wants a deal. No? The sad part (not for me) is that I wanted to buy this car. I was probably a potential buyer at the original MSRP, given the $10K in CA and Federal money -- if I had been really sold on the whole program and had an enthusiastic and competent local dealer. Instead, I now own one for a net cost of less than half that, literally for the price of a stripped Kia Rio.
I think Ford is completely dropping the ball on what could be a perfectly good little car. I live in a place where I see not only Teslas, but Fiskers, Spark EVs, various NEVs, etc. Haven't seen a single FFE out in the wild yet.
jachady
Well-known member
Sorry if I came off as upset at you, I now understand your side of the purchase. I just get upset when people give "internet" advice on how to buy a car, "start at $1000 under invoice" etc. etc. I get equally upset at the dealers that add to the MSRP, especially on a car like the Focus Electric. There aren't many available but it's not like we have customers breaking down the doors to buy them. As such I change my pricing accordingly, when we got our first ones, I figured all deals at MSRP and only lowered my pricing to beat dealers that were giving them away because they were afraid of them. For awahile I went to straight invoice on order outs to be able to maintain my position as the number 1 seller in the midwest. Recently I have gone to $800 over invoice because they are fairly scarce and customers see and recognize the knowledge and customer service we provide.
As to Tesla, the I assume the 28% is the total profit on the car. The example would be equivelant to Fords profit on the car PLUS the dealers profit that I listed. I don't know what Fords profit is on the car, rumor is there are still losing money, although I really doubt that. However my comment there was just what the bias is out there towards a "dealership".
I agree that Ford is missing the boat by not pumping these things out. Hopefully that will change in the near future. Although I'd love to sell them all, I don't have the time or capability, so I am still happy when anyone buys one. It helps promote the cause and pushes technology forward. Congratulations, and enjoy your Focus.
As to Tesla, the I assume the 28% is the total profit on the car. The example would be equivelant to Fords profit on the car PLUS the dealers profit that I listed. I don't know what Fords profit is on the car, rumor is there are still losing money, although I really doubt that. However my comment there was just what the bias is out there towards a "dealership".
I agree that Ford is missing the boat by not pumping these things out. Hopefully that will change in the near future. Although I'd love to sell them all, I don't have the time or capability, so I am still happy when anyone buys one. It helps promote the cause and pushes technology forward. Congratulations, and enjoy your Focus.
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