Lease rates
Melting Slicks
Joined: Jun 2004
Posts: 2,648
Likes: 2,933
From: NW Indiana
St. Jude Donor '05 thru '24
On a lease you are paying the depreciation between the MSRP and the projected residual value when the lease ends. Then you essentially deduct cap cost reductions like discounts, incentives and cash at signing to make the payment even lower. This is simplified of course and the actually formula is complex, but this is simplified way to look at it..
Chevy's tend to have a smaller markup and GM rarely provides incentives so they don't tend to lease as well as something like BMW who will sell you $2K under invoice, with $7K in markup and $5K in incentives. The reason why the C7 leases are so low right now is a result of the huge $10K-$15K discounts dealers are providing to get rid of the inventory. You won't get that kind of payment with a C8 unless you put a lot of money down which is a really bad idea. If you total the car in an accident your down payment is gone and you don't get it back.
To put Corvette leases into perspective consider the following:
The lease on my M4 with an MSRP of $85K, no money down is about $880 a month.
The same M4 on a traditional finance, no money down would have been $1,261 a month for 72 months. This is an example of a GREAT lease.
An $85K 2LT C8, no money down, sold at MSRP, would be $1,454 a month.
An $85K C8, no money down, traditional finance for 72 months is $1,392 a month. You are better off buying and then you get to sell the car for $25-$30K when it is paid off.
Hope that helps bud.
Chevy's tend to have a smaller markup and GM rarely provides incentives so they don't tend to lease as well as something like BMW who will sell you $2K under invoice, with $7K in markup and $5K in incentives. The reason why the C7 leases are so low right now is a result of the huge $10K-$15K discounts dealers are providing to get rid of the inventory. You won't get that kind of payment with a C8 unless you put a lot of money down which is a really bad idea. If you total the car in an accident your down payment is gone and you don't get it back.
To put Corvette leases into perspective consider the following:
The lease on my M4 with an MSRP of $85K, no money down is about $880 a month.
The same M4 on a traditional finance, no money down would have been $1,261 a month for 72 months. This is an example of a GREAT lease.
An $85K 2LT C8, no money down, sold at MSRP, would be $1,454 a month.
An $85K C8, no money down, traditional finance for 72 months is $1,392 a month. You are better off buying and then you get to sell the car for $25-$30K when it is paid off.
Hope that helps bud.
Last edited by golddog; Sep 5, 2019 at 10:17 AM.
Instructor
Joined: Aug 2019
Posts: 132
Likes: 72
From: Chicago< IL
Very good point. This is considering top tier credit. Not all applicants will qualify for the best rates, so monthly payment can vary.
Pro
Joined: Apr 2017
Posts: 527
Likes: 127
From: NJ
10,000 per year If you are going to exceed mileage lease for the mileage you will use always cheaper than paying at close
Usually cheaper to buy but you have to sell the car to get your money back and you will be with out the funds for 3 years
It always depends on your personal finances and how long you keep the car you are gambling on the residual value
Usually cheaper to buy but you have to sell the car to get your money back and you will be with out the funds for 3 years
It always depends on your personal finances and how long you keep the car you are gambling on the residual value
Advanced
Joined: Aug 2019
Posts: 71
Likes: 46
12k?
Unlike BMW for example who have a residual value based on the model, GM has different residual values for different packages. The lease program for a 1LT is comparable to a decent lease by other MFG's like BMW (who have the best lease programs in the industry). However, as you go into the 2LT and 3LT the residual value goes down so much it isn't worth leasing anymore. I figure this is the case to either persuade people to buy instead of lease and/or to help entry level customers to get into a new car in the first place. Not to mention the larger spread in discount makes leasing even more lucrative. Paying MSRP, like we will for a C8 really closes the gap from leasing to buying.
The current lease program on a 2019 C7 is:
1LT - 57% residual 36 month/10K miles - .00126 MF (3.02%)
2LT - 53% residual 36 month/10K miles - .00126 MF (3.02%)
3LT - 51% residual 36 month/10K miles - .00126 MF (3.02%)
The rates were slightly better at the beginning of the year, but they will fluctuate with the market just like mortgage rates. I expect the residual values to remain comparable when the C8 programs come out. Rates may vary slightly, but not too much.
The current lease program on a 2019 C7 is:
1LT - 57% residual 36 month/10K miles - .00126 MF (3.02%)
2LT - 53% residual 36 month/10K miles - .00126 MF (3.02%)
3LT - 51% residual 36 month/10K miles - .00126 MF (3.02%)
The rates were slightly better at the beginning of the year, but they will fluctuate with the market just like mortgage rates. I expect the residual values to remain comparable when the C8 programs come out. Rates may vary slightly, but not too much.
Race Director
Joined: Aug 2019
Posts: 12,351
Likes: 14,180
From: Central Illinois
One thing that is nice about a lease is when they are closed end (like they all are now) you know the day you leave what you can buy it for at the end. To make the math simple, say a $60k car has a 50% residual after 3 years of the lease. So you can buy it at the end for $30k guaranteed. Now if the market was kind to that model, and you could sell it yourself and retail out of it for $40k. Then you buy it for the residual $30k, sell it for $40k, and put the $10k in your pocket. The other thing when it comes to miles beyond what's paid up front is you always have the option to buy it for the residual (regardless of the miles) and try to retail out of it without paying for the mileage penalty. You do have to be careful with this because you will pay full sales tax on the residual, so that needs to go into your calculation as to if it's worth it or not.
Advanced
Joined: Aug 2019
Posts: 71
Likes: 46
Excel Lease Calc
Hi everyone. Wasn't sure if it is helpful, but since I'm one of those people looking to lease a C8 I thought I'd share an Excel spreadsheet I've been using to configure and estimate potential monthly payments. I'll be the first to admit I am certainly no auto financing expert (there could be some errors), but, generally-speaking, the calculator works pretty good for me to just get a sense of what I'd be looking at payment-wise. I've used previous versions of this document for other leases I've had and it wasn't too far off (maybe within $20-$60 once I have accurate/current dealer values). Also, for now, I only did this for leasing and not financing.
I tried to put some basic directions at the top (Steps 1-4). It is a busy document, but hopefully it's self-explanatory.
I spent the time transferring the entire C8 cost sheet for all three trims into the spreadsheet.
Other than building your trim and updating the tables, of course you would normally want to get the latest MF (money factor), Residual % values from someone at a dealer (perhaps on this forum who has access would be easiest) for the specific trim and annual mileage (similar to what the poster in this string listed: "1LT - 57% residual 36 month/10K miles - .00126 MF", as an example). For now, we only have C7 rates as reference, so I've input those as examples into the spreadsheet. As people have mentioned, I'm sure the MF could be higher and/or the Residual lower (meaning higher loan = higher payments) when the C8 comes out. We will see.
Hope this is useful.
I tried to put some basic directions at the top (Steps 1-4). It is a busy document, but hopefully it's self-explanatory.
I spent the time transferring the entire C8 cost sheet for all three trims into the spreadsheet.
Other than building your trim and updating the tables, of course you would normally want to get the latest MF (money factor), Residual % values from someone at a dealer (perhaps on this forum who has access would be easiest) for the specific trim and annual mileage (similar to what the poster in this string listed: "1LT - 57% residual 36 month/10K miles - .00126 MF", as an example). For now, we only have C7 rates as reference, so I've input those as examples into the spreadsheet. As people have mentioned, I'm sure the MF could be higher and/or the Residual lower (meaning higher loan = higher payments) when the C8 comes out. We will see.
Hope this is useful.
Thread Starter
Cruising
Joined: Sep 2019
Posts: 12
Likes: 3
From: Bergen County
For your tax purposes, if you want to lease, you can try Putnam Leasing. They have traditionally offered lease options on exotics. They can set up a 3 year lease with a balloon at the end. The benefit here is, in many states, NY included, you only pay sales tax on the portion of the car you pay for (half).
With this option however, you are forfeiting any trade in tax credit you would be due on the back end. Donyou might save a few bucks on the monthly payments vs a straight finance.
Rates are very competitive with Putnam, and if you plan on righting off the car as your landscaping business' promotional vehicle, leasing could make sense for you.
Keep in mind, you can "invest" in the Vette, if you believe you will keep the residual value higher than what the lease company sets. You will make more $$ payments financing, but you can sell the car after 3 years. And if your milage is low and the car is well maintained, then the payoff would be trading it in for more than you owe, plus getting a sales tax credit towards the next car.
With this option however, you are forfeiting any trade in tax credit you would be due on the back end. Donyou might save a few bucks on the monthly payments vs a straight finance.
Rates are very competitive with Putnam, and if you plan on righting off the car as your landscaping business' promotional vehicle, leasing could make sense for you.
Keep in mind, you can "invest" in the Vette, if you believe you will keep the residual value higher than what the lease company sets. You will make more $$ payments financing, but you can sell the car after 3 years. And if your milage is low and the car is well maintained, then the payoff would be trading it in for more than you owe, plus getting a sales tax credit towards the next car.
This how I would Order it. I don’t get the higher the package the lower the residual. There is a big difference in equipment that a car of similar value would have in it as well, so why the 4% lower residual. I know with my 991 S my residual went up because I got the premium plus pkg. Not a big bump but 2%. I do get to write off a lot in my business. So I don’t mind putting more down as a cap. I usually get most of my cap back as write offs. I get if it gets totaled I am out of luck.
Last edited by Vetteguy48; Sep 5, 2019 at 05:35 PM.
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Thread Starter
Cruising
Joined: Sep 2019
Posts: 12
Likes: 3
From: Bergen County
One thing that is nice about a lease is when they are closed end (like they all are now) you know the day you leave what you can buy it for at the end. To make the math simple, say a $60k car has a 50% residual after 3 years of the lease. So you can buy it at the end for $30k guaranteed. Now if the market was kind to that model, and you could sell it yourself and retail out of it for $40k. Then you buy it for the residual $30k, sell it for $40k, and put the $10k in your pocket. The other thing when it comes to miles beyond what's paid up front is you always have the option to buy it for the residual (regardless of the miles) and try to retail out of it without paying for the mileage penalty. You do have to be careful with this because you will pay full sales tax on the residual, so that needs to go into your calculation as to if it's worth it or not.
Team Owner
Joined: Feb 2013
Posts: 22,598
Likes: 14,555
Sub'd... with modern era wholesalers like Vroom, Carvana, and KBB instant cash offer, is there really any downside to a lease? If the car depreciates more than expected you "win" because you turn it in and it's not your problem, right? If it depreciates less, you just buy it for the residual and sell it to Carvana/Vroom/KBB and pocket the money right?
It can't be this easy... what's the catch?
It can't be this easy... what's the catch?