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Discussion Starter · #1 ·
Hey All,

Just for the heck of it, I thought I'd post a copy (with parts cropped or redacted) of the lease on my 2015.5 Volvo S60. Silver., heated seats, Sports Package, 19" wheels, BLIS, Platinum and Convenience packages and I think a few other goodies (I'll dig up the window sticker if that would be of interest). Not long before leasing the car about 6 months ago, I read an article in the NY Times by their CFO who scanned his lease in when he bought a Lexus to show what he paid (he essentially said he overpaid). It's a business lease, which made sense for us. Maybe some will find it of use for what to do (or not to do!). I had researched via Edmunds and Consumer Reports before starting the process. I think it made the process a little clearer.

So far so good with the car (I've made a few posts on the forum and found everyone very helpful and welcoming).

I'm not sure what the demand is like for these in Los Angeles, but I've since noticed a lot on the roads. Maybe just because I'm more aware of it.

The only "surprise" when I got to the dealership (I tried to negotiate most of the particulars over e-mail) was the "maintenance contract" for $895 -- I don't think I have the text of that -- or at least if I read something, I don't think I have a copy of the fine print. Not sure if was a dealer contact or a Volvo North America thing. I'd be curious what others have experienced if they "chose" this option. (It was presented to me as something "included" -- but obviously it's broken down as separate line item and presumably (?) negotiable). IIRC, I was told it covered "everything" not under warranty -- like brakes (can't recall if tires were part of it -- but I'd think not). Anyway, I've since found it doesn't cover tire rotation (at $24) for every service. Which is kind of petty, I'd think. But perhaps others have a different perspective. I'd be curious what it covers and what it doesn't. I've been meaning to get a copy of any related text. I contact Volvo Financial (to whom I was referred) but haven't heard back.

 

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Agree, silly about the tire rotation. Volvo says that you shouldn't do it but the dealer recommends it and most will charge for it.
 

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I wonder who knows more about whether the car needs tire rotation? The car manufacturer or the company that sells services for it (also called a "dealer")?


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Thanks for sharing. I was wondering about the fees on a lease. Put together a spreadsheet last night to compare different buy vs lease scenarios.

By my math, a 2016 or 2015.5 lease would cost me roughly $4100/yr over three years, adding in sale of current vehicle and increased insurance. This number is strictly for the vehicle not fuel or maintenance, and also leaving aside any clean/prep/maintenance before turning back in.

vs

Buying a low-mileage used 2015.5 wholesale and selling after 3 years would cost roughly $2000/yr all inclusive of taxes, fees for acquisition of the vehicle, but again not fuel or maintenance. Year 4 would be free, if I decided to keep it and depreciation was working in my favor. (MSRP of $44325 and calculated private party resale in 2019 for $20,000)

I'm surprised at the difference.

Almost as surprised as I am by the first-year depreciation on a Volvo. In the real market seems to often exceed 25% even on low mileage vehicles ... though perhaps less on R-series. The finance company believes that car will only depreciate 33% in 3 years? I could point you to vehicles on Autotrader today that have depreciated that much in a year, with low mileage. Granted these are ex-rental and so on the leading edge of the decline curve.

EDIT+
Did the math on what local dealer wanted on a 2015.5 purchase, and it's within $100 of the lease per year and that's on a demo with 5000 miles on it.
 

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If depreciation is $12,164.20 over 36 months, wouldn't the monthly depreciation charge alone be $337.89? With a rent charge of $21.08, wouldn't the base monthly payment (before tax) be $358.97?

Also what is the money factor for this lease?
 

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Interesting info Salter. Thanks for sharing with those who might be in the market. I struggle with lease vs buy every time I trade up. I've gone both ways, having leased my first new car but have bought 3 others since. I'm a year and a half into my S60 and I think I'll be keeping this one a while. The depreciation mentioned previously has never worked out well for me when I trade up in the first two or three years.

My current line of thinking- if you trade up frequently a lease might be the way to go. If equity is your thing then plan on making it a fixture until you get beyond the curve.

TJ
 

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Its not a horrible lease, but I got pretty much the same car, minus the sports package for $460 a month, 0 due at signing, which if you calculate it out, is a slightly better down. I personally don't believe in putting money down for leased cars.
 

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I personally don't believe in putting money down for leased cars.
Same here. The money down is actually the sales taxes that the lease co passes to you. Now, if in 3 years for whatever reason you decided to keep the car by purchasing it, you will have to pay taxes AGAIN. My personal preference is to buy with extended warranty and keep it till it starts costing me too much: I'd be keeping track of all and any out of pocket expenses I had since the warranty ended, and if it gets to so percentage of the current value of the car, that I'm not comfortable with, I'll punt.

There's something else too - the low prices of new Volvos now, and the record sales of new cars in general this summer will result in lower used car prices; basically you're looking at a higher depreciation figure above.

n
 

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Hmm, I leased a V60 Premium with Sports package, back in March, 0 down, actually $800 back to pay off the last two months of previous Volvo lease, and I am paying $399 per month including taxes..
 

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Discussion Starter · #11 ·
If depreciation is $12,164.20 over 36 months, wouldn't the monthly depreciation charge alone be $337.89? With a rent charge of $21.08, wouldn't the base monthly payment (before tax) be $358.97?

Also what is the money factor for this lease?
Hi there,

MF was .00001

I'll have to calculate the figures again.

Also: anyone know what exactly the "maintenance" for $895 entails and if it's a dealership thing or a Volvo NA thing? I thought I had the text to the maintenance "contract" (if it is indeed a "contract") but I can't find it. (I'm getting a lot of hits for lease Volvo trucks but not cars).

tjs60 said:
Interesting info Salter. Thanks for sharing with those who might be in the market. I struggle with lease vs buy every time I trade up. I've gone both ways, having leased my first new car but have bought 3 others since. I'm a year and a half into my S60 and I think I'll be keeping this one a while. The depreciation mentioned previously has never worked out well for me when I trade up in the first two or three years.

My current line of thinking- if you trade up frequently a lease might be the way to go. If equity is your thing then plan on making it a fixture until you get beyond the curve.
Thanks for your reply TJS60. This was my first lease. I don't see myself buying a daily driver. Not having to worry or think about it made sense for us -- it's a business lease and I knew I'd trade it in in 3 years for another. I'd actually considered something a lot more expensive, but the Volvo really appealed to me (I guess if I wanted to be practical, I could have purchased a Toyota or Honda). I also didn't want to really think about anything about getting from Point A to Point B. And when the 3 years was up, getting another that would do the same for me. Having said that, this is the reason I posted the lease contract (besides perhaps helping others here), because maybe I'd learn something from it.
 

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Discussion Starter · #12 ·
Same here. The money down is actually the sales taxes that the lease co passes to you. Now, if in 3 years for whatever reason you decided to keep the car by purchasing it, you will have to pay taxes AGAIN. My personal preference is to buy with extended warranty and keep it till it starts costing me too much: I'd be keeping track of all and any out of pocket expenses I had since the warranty ended, and if it gets to so percentage of the current value of the car, that I'm not comfortable with, I'll punt.

There's something else too - the low prices of new Volvos now, and the record sales of new cars in general this summer will result in lower used car prices; basically you're looking at a higher depreciation figure above.

n
Thanks. There's no chance I'd be keeping the car. But I appreciate the info!
 

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Discussion Starter · #13 ·
Its not a horrible lease, but I got pretty much the same car, minus the sports package for $460 a month, 0 due at signing, which if you calculate it out, is a slightly better down. I personally don't believe in putting money down for leased cars.
Thanks for your reply. I'd heard when I started researching through Edmunds and Consumer Reports that no money down was ideal. But they didn't want to seem to do this (of course!). Maybe I'm just not that good of a negotiator. I don't know if the tendency to offer no money down varies state by state depending upon the car or what. Or if others in Southern California were able to swing nothing down. At the time it wasn't hugely important to me.
 

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Discussion Starter · #14 ·
Okay my question is why would you put that much down on a lease unless you plan on buying it after it is up
How so? Can you explain further? It's the same amount of money whether you pay it in the beginning or end, no? Or do you mean because of the taxes? If so, how much difference is it really?
 

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Hi there,

MF was .00001

I'll have to calculate the figures again.

Also: anyone know what exactly the "maintenance" for $895 entails and if it's a dealership thing or a Volvo NA thing? I thought I had the text to the maintenance "contract" (if it is indeed a "contract") but I can't find it. (I'm getting a lot of hits for lease Volvo trucks but not cars).



Thanks for your reply TJS60. This was my first lease. I don't see myself buying a daily driver. Not having to worry or think about it made sense for us -- it's a business lease and I knew I'd trade it in in 3 years for another. I'd actually considered something a lot more expensive, but the Volvo really appealed to me (I guess if I wanted to be practical, I could have purchased a Toyota or Honda). I also didn't want to really think about anything about getting from Point A to Point B. And when the 3 years was up, getting another that would do the same for me. Having said that, this is the reason I posted the lease contract (besides perhaps helping others here), because maybe I'd learn something from it.
Think you might have one too many zeros in the MF, but that looks like a base rate from Volvo so great work.

Agree that leasing is the way to go for care free experience.

Would think the $895 is for some kind of maintenance or warranty. I bought a wheel and tire warranty for a bit shy of this figure. It is likely to have been something offered to you by the finance person when you signed. I would check the documents because it would need to be something they had you signed for and likely was something they gave you a contract of what it entails.

Thanks again for the discussion.

TJ
 

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Discussion Starter · #17 · (Edited)
Money factor of .00001 equates to an interest rate of 0.024%.
That would be an interest rate of 0.24% I think.

TJS60 said:
Think you might have one too many zeros in the MF, but that looks like a base rate from Volvo so great work.
You're right. I meant 0.001 -- though funnily enough the sales guy quoted that figure originally, i.e. ".0001" [sic] and I attributed it to a misplaced decimal point.

TJS60 said:
Agree that leasing is the way to go for care free experience.
So far, it seems that way. I guess time will tell. I certainly found the part of the "leasing" experience where one acquires the car to be relatively hassle-free. Most of it was conducted via e-mail. A colleague that leased an Audi did almost the whole thing over e-mail, including having the lease messengered over to be signed. I thought that was great. Almost avoided having to visit the dealership at all.

TJS60 said:
Would think the $895 is for some kind of maintenance or warranty. I bought a wheel and tire warranty for a bit shy of this figure. It is likely to have been something offered to you by the finance person when you signed. I would check the documents because it would need to be something they had you signed for and likely was something they gave you a contract of what it entails.
I declined all finance things. I was told that this "maintenance" line item was part of the lease -- "thrown in" for all the cars -- it sounded a little dubious -- and I didn't get a "contract" but I'll certainly draft a letter to VolVo NA and a the Volvo dealership to ask them. I was told it covered "brakes" and things like that. And that the brakes would "definitely go" before 3 years -- that in that sense like "BMW" brakes. I didn't put much stock in it since I don't know that I haven't had a car that I haven't had to change brakes at least every two years.

Also -- when I checked Edmunds: I couldn't find any dealerships (or any one reporting for that matter) that they were able to skirt the "Acquisition fee" of $995.00 -- though I *think* I recall one person saying they negotiated this fee.
 

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You're right. I meant 0.001 -- though funnily enough the sales guy quoted that figure originally, i.e. ".0001" [sic] and I attributed it to a misplaced decimal point.
If money factor is 0.001 (2.4%), monthly rent charge should be $59.

The $21.08 rent charge on your lease equates to a money factor of .00036 (0.85%).

The figures on your lease are confusing.
 

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I declined all finance things. I was told that this "maintenance" line item was part of the lease -- "thrown in" for all the cars -- it sounded a little dubious -- and I didn't get a "contract" but I'll certainly draft a letter to VolVo NA and a the Volvo dealership to ask them. I was told it covered "brakes" and things like that. And that the brakes would "definitely go" before 3 years -- that in that sense like "BMW" brakes. I didn't put much stock in it since I don't know that I haven't had a car that I haven't had to change brakes at least every two years.

Also -- when I checked Edmunds: I couldn't find any dealerships (or any one reporting for that matter) that they were able to skirt the "Acquisition fee" of $995.00 -- though I *think* I recall one person saying they negotiated this fee.
Now I think I understand. Normally things like brakes would not be covered under warranty, unless you leased during the wonder of summer which included 5 years of scheduled maintenance, etc. that is included in Safe and Secure that Volvo offered in prior years. In this case it seems like you were outside of that time period, as was I when I bought in 2014. The dealer might have attached a maintenance contract to your lease that will add in coverage for those types of items (brakes, maybe wiper blades).

Before I bought the Volvo I visited a VW dealer who told me upfront that they order a glass etching with all their cars that will put a number on the glass in the event it was stolen. I had to inform him that I wasn't interested and if that was a problem I would not be back, even if I had decided to buy a VW. The tone changed quite quickly.

I could be completely off base on this, but based on what you have said, it seems like it could be the case. Might seek clarification from your sales associate about this to understand more of the details. If you don't get a satisfactory answer then you can turn to Volvo. The issue you might find is that since a dealer is a franchise, the manufacturing tends to stand arms length on the buying process details. This is often why people have such varied experiences from dealer to dealer.

Hope this helps.

TJ
 

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The main reason to put no money down on a lease is if the car is totaled you lose that money. It has to do with the way insurance works.


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