Tommygun45

So I had been shopping around for a while for a 2010 G and just settled on a deal. I had a 2008 under lease that was coming to an end in January, and Infiniti sent me a letter informing me they'd waive my last 3 payments. They also have a $1000 owner loyalty for lease programs going on. I found a black on black G37XS with Premium, Nav, and Sport, along with splash guards and a few other options stickered at 43,390. I talked Herb Chambers of Boston down to 36,965 and from there told them I was leasing. I used the multiple security deposit method outlined in other posts on here and made 9 of them at 450 a piece. I gave them a check for 4450, 4050 of which I will receive back at the end of the lease, and the numbers came out to 344 per month plus tax here in MA which comes to 363/month. All taxes and fees were rolled into the monthly lease payments. Currently with a 10k per year lease the residual is 59% and the money factor was .109, lowered to .0019, or virtually interest free. Really tough to beat this deal and I am pretty happy with it. What do you guys think?

newg37

If your car gets totaled, do you get your security deposits back? what would the lease have been without the deposits? why does giving 9 deposits make the money factor go down?

ohsogood

iTrader: (5)

Tried the search button for this question but no luck.
How does the 9 deposits allow you to get almost all of it back after the lease ends?

***Scratch that*** found the thread regarding this question

carz

OP, thats a sick deal...congrats on the car...i guess they are really pushing the car out the door at any price at this point.

I believe you do get ur deposit back....Insurance and GAP Insurance cover the cost of the car.

i believe the deposits make the money factor go down because you are basically giving them extra money that they can invest or accumulate interest on. you're basically giving them money to play with and return to you at the end.

rlb

I just got the exact car except in Graph Shadow. I leased in NJ and did a 36 mo. lease with 15K mi/yr. Also put down 9 MSD's. I paid about $100 over invoice and also got the $1,000 Conquest Cash. My mo. payment came out to $388 + tax. The MSD's are a fantastic investment. Basically you are buying down the MF. It works out to about a 15% per year return on your money.

baksdak

.0019 MF? Do you know what the base MF is?

newg37

That would mean that you are saving $600 a year on payments or $50 a month less on payments to get 15% on your $4 grand per year. Is that the case??

i still don't understand it but I gather it works something like this

you pay $4000 in advance for the year and you pay the depreciation + fees to rent the car (~15k over ~3 yrs) so you pay normally i believe around 2.99% interest (what my finance mgr told me) per year on the depreciating portion of the car (not the whole car since the leasing company own the car outright and are using leasing as a way to defer a sale for 3 years as well as sell more new cars and only charge you the accumulated depreciation and the interest on that amount.)

By paying the $4 grand in advance you cover all the interest that is owed and you make your monthly payments. the portion you save on interest was covered by the $4000 up front security deposit they keep until the end of the lease.

the whole thing is obviously very complicated

if you did a $4000 cap cost reduction, then your payments would be reduced about $100 a month so maybe that would have worked out even better in the end.

rlb

newg37,
By paying MSD's you reduce the interest rate(MF) of the lease. Each MSD reduces the MF by 0.0001. So 9 MSD's will reduce the MF by 0.0009. You are buying down the interest rate(MF). It is a one time payment up front and you will get back the entire amount at the end of the lease. In the OP's case lowering the interest rate(MF) portion of the lease saves about $55 a month. That is about $2000 over the length of the lease. So by "investing" the $4050 you save(or make) a 50% return. Over the length of the lease that averages out to about 16% per year return on your investment.
A cap cost reduction or down payment is very different and not advised. Doing that only reduces your monthly payment by pre paying it. You are still paying the same amount in the end. MSD's actually reduce the amount you pay over the lease term. Also, if you total your car and have to get a new one, you loose your down payment. MSD's you will get back.
MSD's may seem a little complicated, but if you get a dealer that knows what they are doing it will be very easy. It is one of the smartest investments you can make. I don't know of anything that can guarantee a 16% annual return with absolutely no risk.

MikeySed

you get your msds back 100%

gooddeal

4000 deposit saves $55/month. So, why don't all people try to put as much deposit as possible? Heck...I'll put a 30k deposit and drive the car for free if they let me do that.

rlb

Infiniti only allows a maximum of 9 MSD's. Each one lowers the interest rate(MF) by 0.0001, so there is a limit to the savings. Most people don't take advantage of this because they either don't know about it or may not have the extra $4,000+ to pay up front.

newg37

does every leasing company let you put down extra security deposits or only infiniti?

does infiniti feel they can make that 15% interest back by holding your money? My question is, why do they do it?

also if i wanted to put $4 grand right now is it too late (leased back in Jul)

rlb

Alot of car companies allow MSD's. BMW allows a max of 8 MSD's, I did them on my last lease. It varies by company.

I don't think they are trying to make anything back. They get to make interest off the $ for the term of the lease and the customer saves $. It is like paying points on a mortgage to lower the interest rate.

Nope. Must be done at the time of the lease signing.

Beer Magazine

FYI the MF isn't the interest rate. you have to multiply that number by 2400 to get the actual interest rate.

So the numbers you listed don't even make sense. .109 would be a 260% and the .0019, which is more realistic at 4.5%. Which honestly I think you can get without MSDs and good credit.

gooddeal

IMO, it's sad for those who cannot afford 4k MSD and they still want to drive this expensive car.