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Discussion Starter · #1 ·
Hello All

I am a newbie here.... and looking to lease my first SAAB ever.
I am looking at a 93 2.0t.

The SAAB usa website shows there is a lease on the vehicle for $319 a month for 27 months with $2500 (after $500 rebate) total drive off.

It is basically a bare-bone 93 version with manual. Is this a good deal?
If anyone here lease a 07-08 93 recently, can you post your monthly figures, total drive off fees and etc?
Thanks!!
 

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You could probably get a better deal on an 07'.
 

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Discussion Starter · #4 ·
thanks, guys!!


i will just wait a few more months to see if there is any better lease deal coming
thanks again
 

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The way to do it is e-mail them, tell them what your specs are... Auto, Packages etc., and ask for there best offer.....when they write back and say come on down we will talk, say you would prefer the quote first. Do a couple of Dealers.
 

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I've only done a lease once and probably wasn't the best negotiator then, but I've heard (and others please jump in to correct me) that you want to negotiate as if a purchase price, and only then back that in to leasing figures.

Dunno if that's simply b/c lease #s are harder to understand (for us commoners), or if they build in profits, or are less flexible in negotiating leases.

Or I could be completely off base (but knowing this forum, I won't stand uncorrected for long :) )

Mike
 

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From a dealer's perspective...

The advertised leases are typically pretty close to invoice relatively speaking. In otherwords, don't expect too much discount from that ad. Sometimes dealers will go deeper into their pockets for a demo or the like. It's pretty early in 2008 to get a demo or loaner.

With respect to 2007 leasing. There is no GMAC promo support to lease.

To address the piece about negotiating a buy deal then slide in the lease option. It really doesn't matter except there are incentives applicable to buying vs. leasing that would complicate the overall net price calculation.

The elements of leasing are simple: Residual (set by bank, dealer can't use this for profit), interest rate (not a money factor so it's easy to measure), term (27 and 39 will be your best), and selling price. On top of this would be dealer fees for profit such as add-ons (rust protection, ext. warranty, etc.). Don't bite. Go with the base lease program and you'll be doing fine.

To close, you can wait for deals to get better but the interest rates and residual percentages carried over from the end of the 2007 lease program to the 2008. The only difference was base price was lower on 07 and there might have been some addt'l customer or dealer cash on the table.
 

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A lease is not that complicated to calculate. ( It consists of two components: A finance fee and a depreciation fee. You add them together to get the lease payment.

The finance fee is the Price of the car, plus the residual value, multiplied by the money factor.

The depreciation fee is the Price of the car, minus the residual value, divided by the months in the lease term.

So, first you calculate the residual amount, which is the MSRP of the car multiplied by the residual percentage. Say the car has an MSRP of $40,000 and a residual percentage of 70% for the lease you want (let's assume you want a 12,000 mile 36 month lease and that the residual percentage for that lease on this particular car is 70%). The residual value is: 40,000 X .7 = $28,000.

Finance Fee:
Now take the price you paid (or are going to pay) for the car. Say $38,000. Add that to the residual value of $28,000 and then multiply that sum by the money factor, say in this case it's .00225. You get a finance fee of: (38,000 + 28,000) X .00225 = $148.50.

Depreciation Fee:
Now take the price you paid ($38,000) and subtract the residual ($28,000) and then divide by the term of 36 months. You get $277.77.

Add the depreciation fee and the finance fee for your lease payment: $426.27

If you study the formulas a bit you learn several things:

1. If you want a low lease payment, you want to lease a car that has a high residual value AND a very small money factor. PLUS, you need to negotiate something off the MSRP.

2. You cannot possibly negotiate the best lease price unless you understand #1.

3. Your best deals will come from the finance company of the mark of the car. Only GMAC or Saab Scania Financial is going to be interested in giving you a very low money factor to lease one of their cars. Last month, for example, Mercedes Benz had a money factor of .00080 for an 2008 E-350 4Matic on a 33 month lease. That works out to an interest rate of 1.92%. (.0008 X 2400 = 1.92). From the finance arm for Infinity, you could get a 2008 Infinity FX35 for a money factor of .00014. That's a third of a percent!

4. Marks that hold their value will be cheaper to lease. A high residual value means you are going to pay for a smaller percentage of the car. If the car has a horrible residual, such as a Jaguar with a typical residual value of around 48% on a three year 12K mile lease, you will end up with a monster depreciation fee.

5. If you think you will buy the car at the end of the lease, then lease it at the lowest money factor you can for as long as you can. If you can chew up 52% of the car's cost at 1.92%... go for it. I guarantee that when the lease is up, and you seek to finance the remaining 48%, you are not going to get a rate even remotely close to the rate that was built into your lease.

I hope this helps.

Cameron
 

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Money Factor?

Does anyone have the MF rate and residual for the 9-3's Sedans/Convertible for the advertised 27mos. lease terms.
 

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how about that:

1.: buy a 200$ POS car.

2.: save up as much money as you can.

3.: carry money to bank, invest.

4.: earn 5% interest every year.

5.: when you can afford to buy the car, buy it.

this way it will be a lot cheaper than leasing it.

wanna bet?
:D
 

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Discussion Starter · #14 ·
Thanks, Cameron Reddy.

This has got to be the best explanation on lease EVER!
Thanks a bunch.



Cameron Reddy said:
A lease is not that complicated to calculate. ( It consists of two components: A finance fee and a depreciation fee. You add them together to get the lease payment.

The finance fee is the Price of the car, plus the residual value, multiplied by the money factor.

The depreciation fee is the Price of the car, minus the residual value, divided by the months in the lease term.

So, first you calculate the residual amount, which is the MSRP of the car multiplied by the residual percentage. Say the car has an MSRP of $40,000 and a residual percentage of 70% for the lease you want (let's assume you want a 12,000 mile 36 month lease and that the residual percentage for that lease on this particular car is 70%). The residual value is: 40,000 X .7 = $28,000.

Finance Fee:
Now take the price you paid (or are going to pay) for the car. Say $38,000. Add that to the residual value of $28,000 and then multiply that sum by the money factor, say in this case it's .00225. You get a finance fee of: (38,000 + 28,000) X .00225 = $148.50.

Depreciation Fee:
Now take the price you paid ($38,000) and subtract the residual ($28,000) and then divide by the term of 36 months. You get $277.77.

Add the depreciation fee and the finance fee for your lease payment: $426.27

If you study the formulas a bit you learn several things:

1. If you want a low lease payment, you want to lease a car that has a high residual value AND a very small money factor. PLUS, you need to negotiate something off the MSRP.

2. You cannot possibly negotiate the best lease price unless you understand #1.

3. Your best deals will come from the finance company of the mark of the car. Only GMAC or Saab Scania Financial is going to be interested in giving you a very low money factor to lease one of their cars. Last month, for example, Mercedes Benz had a money factor of .00080 for an 2008 E-350 4Matic on a 33 month lease. That works out to an interest rate of 1.92%. (.0008 X 2400 = 1.92). From the finance arm for Infinity, you could get a 2008 Infinity FX35 for a money factor of .00014. That's a third of a percent!

4. Marks that hold their value will be cheaper to lease. A high residual value means you are going to pay for a smaller percentage of the car. If the car has a horrible residual, such as a Jaguar with a typical residual value of around 48% on a three year 12K mile lease, you will end up with a monster depreciation fee.

5. If you think you will buy the car at the end of the lease, then lease it at the lowest money factor you can for as long as you can. If you can chew up 52% of the car's cost at 1.92%... go for it. I guarantee that when the lease is up, and you seek to finance the remaining 48%, you are not going to get a rate even remotely close to the rate that was built into your lease.

I hope this helps.

Cameron
 

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Discussion Starter · #15 ·
Yes, I totally agree with you...

The only reason I want to lease a SAAB is that usually a SAAB car gets a huge hit in depreciation. and it is usually hard to sell a car with that much low resale value..

I change my car almost every 2-3 years.. so lease would be ideal for me.
Thanks


bauklo said:
how about that:

1.: buy a 200$ POS car.

2.: save up as much money as you can.

3.: carry money to bank, invest.

4.: earn 5% interest every year.

5.: when you can afford to buy the car, buy it.

this way it will be a lot cheaper than leasing it.

wanna bet?
:D
 

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sphereman said:
Yes, I totally agree with you...

The only reason I want to lease a SAAB is that usually a SAAB car gets a huge hit in depreciation. and it is usually hard to sell a car with that much low resale value..

I change my car almost every 2-3 years.. so lease would be ideal for me.
Thanks
Sphereman,

Thanks for the kind words. You do realize that rapid depreciation makes for an unfavorable lease... the "depreciation fee" portion of the lease will be much higher than an identically priced car that holds its value. Many BMW's are well over 60% on a three year 12K mile lease. For example BMW Financial offered for November:

2008 BMW 335i Sedan
24 Month – Residual 71% of MSRP – .00200 Base Rate
36 Month – Residual 61% of MSRP – .00200 Base Rate
48 Month – Residual 42% of MSRP – .00305 Base Rate
60 Month – Residual 35% of MSRP – .00305 Base Rate

2008 BMW 335xi Sedan
24 Month – Residual 71% of MSRP – .00200 Base Rate
36 Month – Residual 61% of MSRP – .00200 Base Rate
48 Month – Residual 43% of MSRP – .00305 Base Rate
60 Month – Residual 36% of MSRP – .00305 Base Rate

Residuals posted are for 15K miles/year. Add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms. These numbers courtesy of Leasecompare.com

Leasing a car with a poor residual make economic sense only if, and to the extent that, the manufacturer offers a very low money factor. Here, we can see BMW providing very high residuals AND pretty decent money factors. .00200 X 2400 = 4.8%

I'd sure like to see Saab offer rates about half that. So far, I haven't been able to find the residuals and base rates for Saab cars.
 

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I also think that the manufacturer CPO program (like BMW) enforces the residual value. Buying an off lease BMW outside of the dealer network is really difficult.

Residual values at the outset (of a lease or purchase) are projected, only a guess. Dealers that have nearly complete access to the preowned inventory of a particular make (like BMW) have a lot of control over the price, and your negotiating leverage.
 

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new92xowner said:
I also think that the manufacturer CPO program (like BMW) enforces the residual value. Buying an off lease BMW outside of the dealer network is really difficult.

Residual values at the outset (of a lease or purchase) are projected, only a guess. Dealers that have nearly complete access to the preowned inventory of a particular make (like BMW) have a lot of control over the price, and your negotiating leverage.
I don't understand what you are saying. Are you talking about what you do at the END of your lease?

If so, you are correct that the residual value, at the onset, is a guess at what the value of the car will be at the end of the lease term. It happens that these figures are VERY close. And in any event, at the end of the lease you have two options.

If the value of the car is higher than the residual value, you can buy it and then keep it or sell it. This very rarely happens precisely because the pre-set residual values are so accurate.

If, on the other hand, the value of the car is less than the residual value, or if you simply don't want the car anymore, you turn the car in and walk away. It's a win-win for the lessee.

Cameron
 

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Cameron Reddy said:
Sphereman,

Thanks for the kind words. You do realize that rapid depreciation makes for an unfavorable lease... the "depreciation fee" portion of the lease will be much higher than an identically priced car that holds its value. Many BMW's are well over 60% on a three year 12K mile lease. For example BMW Financial offered for November:

2008 BMW 335i Sedan
24 Month – Residual 71% of MSRP – .00200 Base Rate
36 Month – Residual 61% of MSRP – .00200 Base Rate
48 Month – Residual 42% of MSRP – .00305 Base Rate
60 Month – Residual 35% of MSRP – .00305 Base Rate

2008 BMW 335xi Sedan
24 Month – Residual 71% of MSRP – .00200 Base Rate
36 Month – Residual 61% of MSRP – .00200 Base Rate
48 Month – Residual 43% of MSRP – .00305 Base Rate
60 Month – Residual 36% of MSRP – .00305 Base Rate

Residuals posted are for 15K miles/year. Add 2% to Residual for 12k mi/yr and 3% for 10k mi/yr on all terms. These numbers courtesy of Leasecompare.com

Leasing a car with a poor residual make economic sense only if, and to the extent that, the manufacturer offers a very low money factor. Here, we can see BMW providing very high residuals AND pretty decent money factors. .00200 X 2400 = 4.8%

I'd sure like to see Saab offer rates about half that. So far, I haven't been able to find the residuals and base rates for Saab cars.
A 9-3 Sedan Aero residual is 1% less than the 335i at the 24 mo. period. The 36 is about 3 percent less. The 48 residual is a few pts higher than the BMW. It's all marketing. Accurate depreciation rareley plays into the manufacturer supported lease. ALG on the other hand does rely heavily on true depreciation.

The interest rates are about the same.
 

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In many circumstances the residual is lower than other makes but you have to look at the incentives. You can buy a honda at x dollars and not get any money off the car, but have a higher residual at the end of term. But with saab they have very good incentives but lower residuals. Id rather have the money now and worry about resale later.
 
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