Hey Cool Car Fans,
Recently, I had a former client contact me about getting out of her 2013 Nissan Rogue lease and into a “luxury” vehicle this time around, but she wanted a low lease payment without having to put a great deal of money down. I know that many people see the low lease payment offers on television and they believe the dealerships that they can lease an $35,000 to $50,000 vehicle for under $400 a month with nothing down.
However, what most people discover is that in the fine print of the advertisement the manufacturer wants more money down or have an annual mileage restriction of 10,000 miles or even 8,000 miles. If you drive 15,000 miles a year for three years and you purchased an 8,000 mile lease than your vehicle will have a vehicle that is three years old with 45,000 miles and you told the leasing company that you were only going to drive 24,000 miles a year. This happens all the time!
The salesperson tells the person not to worry about the miles because at the end of the lease they can buy it out, but what if the leasing company bet wrong on the residual and the residual is $26,500 and the vehicle is selling at auction for $24,000? You get to buy it for $26,500 or $2,500 more than what the vehicle would actually trade for. This is still better than being over your miles by 21,000 miles at $.25 a mile, if you give it back to the leasing company where they will cream you for $5,250 in additional depreciation, plus any additional damage the vehicle might have as well. Which is why it’s important to purchase the right miles to begin with or get as close to where you think you’re going to drive as possible.
The Used Vehicle Lease Option
Why do people buy used vehicles? Because they want someone else to take all the initial depreciation on the vehicle when it drives off the showroom floor. When you lease vehicle you are paying for the depreciation and the leasing company is setting a number on what they believe the vehicle is going to be worth, two, three, four or five years from now. They are taking an educated guess and rolling the dice that the vehicle is going to be worth X if you put on X number of miles during the term of your lease. As I just mentioned, many times the leasing company will be wrong and that’s a benefit for you!
What if my client had purchased the Nissan Rogue and after three years she wanted to get out of it? In her case, she had backed into her husbands vehicle with her car and did about $500 in damage. On top of that though, Nissan had bet wrong so the vehicle was worth about $2,000 less for trade value than the residual value was, so if she had financed it for five years and wanted out she would probably owe about the same as what her residual value was. Now she could just give it back to the leasing company, cover the
A used vehicle lease transfers some of the risk of ownership of a used vehicle back onto the leasing company again and this is an awesome concept that you are probably not going to hear about from a franchise car dealership. They are in business to do new vehicle leases because the manufacturer wants them leasing new cars and not leasing used cars.
You can now see the benefit of how a used vehicle lease is similar to purchasing a used vehicle. Much of the depreciation has already taken place, so you are able to transfer some of the risk of driving that used vehicle onto a leasing company. If the vehicle gets hit with hail or in an accident, while you are driving it and you own it than you get stuck with the bad CARFAX report and I get those calls all the time from people trying to figure out what to do with their vehicle with the bad CARFAX.
A Lower Payment & A Lower Residual Value
When you lease a used vehicle, like the pictures of this 2015 Mercedes Benz GLK350 AWD, that I ran lease numbers on for my client, a great amount of depreciation has already taken place. For example, I ran a scenario with 12,000 miles a year instead of the 8,000 or 10,000 on a similar manufacturer’s lease with only $1,000 down, plus the first payment and 12,000 miles a year. The numbers below are based on approved credit and you need a minimum of a 680 FICO to qualify for a used vehicle lease with most leasing companies.
This is a vehicle that I could purchase at the Dealer Auction for her with about 30,000 miles on a 2015, so it still has the remainder of the four year factory warranty from Mercedes Benz. If she was to lease this vehicle using the estimate that I ran, which could be less depending on what I can purchase this vehicle for or one like it for through the auction it would be a very affordable lease. It could be slightly more, but I’ve been doing this for 12 years and I’m pretty good at estimating, but I will drill down a specific vehicle for her if she decides to go in this direction. I’m not sure why someone wouldn’t want to do this? There is very little downside and it can be great for people in business. Not everyone knows how to structure these leases properly though, so if someone tells you they know how to do used vehicle leases it doesn’t mean they will have the same results.
You can see the Base Payment, which is what dealers normally quote before sales tax is added to the lease payment. Also be sure and look at the residual. So if she were to decide to lease this really cool vehicle for 48 months she can buy it out at the end of the lease for $15,400, which is below wholesale based on sales at the Dealer Auction of 2011’s with about 78,000 miles like this should have at 12K a year. Which is a case where if she were to put more miles on the vehicle than what she purchased she could find herself in a safe position based on the depreciation that already took place. This is also a simple interest lease, which is another discussion all together.
| Term | Adjusted Cap Cost | Residual | Base Payment | Sales Tax % | Sales Tax Amount | Total Payment |
|---|---|---|---|---|---|---|
| 24 | $30,445.00 | $20,583.00 | $467.05 | 7.85 | $36.66 | $503.71 |
| 30 | $30,445.00 | $19,521.00 | $419.09 | 7.85 | $32.90 | $451.99 |
| 36 | $30,445.00 | $18,459.00 | $386.73 | 7.85 | $30.36 | $417.09 |
| 42 | $30,445.00 | $16,929.00 | $373.92 | 7.85 | $29.35 | $403.27 |
| 48 | $30,445.00 | $15,400.00 | $363.87 | 7.85 | $28.56 | $392.43 |
| 54 | $30,445.00 | $14,132.00 | $351.12 | 7.85 | $27.56 | $378.68 |
| 60 | $30,445.00 | $12,863.00 | $340.67 | 7.85 | $26.74 | $367.41 |
This is a payment that many people can afford and put more money into their savings or an investment vehicle, a business venture, use for their household expenses, while still driving a late model Mercedes Benz. How cool is that! A person could be driving a 2015 Mercedes Benz AWD SUV for less than what they would pay to drive an American or Japanese Import. Which is why I’m The Cool Car Guy.
If you want to have me run some scenarios for your situation and have me assist you in finding a different vehicle just send me an email at the address below.
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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant with his license at a car dealership in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy
As The Cool Car Guy, I consult with people from all walks of life about buying, selling, trading and leasing vehicles. I have been doing this full-time for about 12 years now and I have bought and sold millions of dollars worth of vehicles.
First of all, let me explain that I have clients who are using this strategy and have their own Network Marketing businesses where the company sends them checks each month. I have multiple clients who are earning an income in Network Marketing and they are using their part-time and full-time businesses to make their car payments for them. I subsidize driving my vehicles using this concept as well because it is simple to do.
I know of a Network Marketing company that you can join for as little as $25 to become a Distributor, along with a small one-time purchase of about $100. After that you can get on auto-ship for some of their products each month that they will automatically send to you and they include free shipping if your order is over $50. Each time you have a monthly order and other people who have ordered, they will send you a check.
The purpose of this article is to show you how to drive a better vehicle and let the sideline business make your car payments for you. You are not trying to build this Network Marketing business as a “get rich quick” scheme, which is another turn-off about Network Marketing for many people. You could use it though to buy a really cool car!
The biggest benefit of a Network Marketing business is that you not only get paid on people that you tell to use the products, but you can get paid on the people your Distributors tell as well. That’s the whole concept and real benefit of networking.
If you are happy with making your own car payments than just ignore this article and this concept. Don’t change anything in your life, but if you know somebody struggling to make ends meet than send them this article. I’m not making any income guarantees or claims here, but simply sharing a concept on how this can work for you or anyone else for that matter. Take it or leave it as information you can use or discard.
Hey Cool Car Fans,
Hey Cool Car Fans,
It can be more difficult with classic or custom cars because there are fewer lenders that loan money on these vehicles. Most of the people who have me track them down these type of vehicles, like a 1967 Corvette pictured to the right, have arranged financing most of the time or are paying cash.
Which is why I decided to write an article about this topic here at CoolCarGuy.com, for clients who may be looking for business financing or for people surfing the web that are looking for creative financing options for their existing business.
Most of the time business loans can be difficult to get, even if you’ve been in business for a number of years. I’ve teamed up with a company called David Allen Capital to be able to offer small businesses with the capital they need to grow their businesses. By offering this service, I can build a relationship with a business owner and assist them with all of their automotive needs, whether it is fleet vehicles or their own personal vehicles.
These are daily fixed micro-payments, so no worry about large monthly payments and an approval decision is typically in ONE BUSINESS DAY, with FUNDING in as FAST AS 3 BUSINESS DAYS. Again, this is something that is not for everyone reading this article, but I wanted to write an article about it because I’m a broker for this company as well.
Hey Cool Car Fans,
Porsche is a fantastic brand of automobile, one of my favorites since I love the German engineering, but many times people will overlook them because they are concerned about the cost of repairs and not being familiar with the brand compared to other sports cars. There are many repair shops in most parts of the country that specialize in german vehicles, like BMW, Audi, Mercedes Benz and Porsche, so you don’t have to go to the dealership to get work done on the vehicle.
I also suggest to Porsche owners that they consider joining a local car club, like the 
Here’s some additional information about the custom features of this 2001 Porsche 911 Turbo that the owner sent to me that I’m putting in this article:
wheels black. Kenwood DNX690HD Info-Nav unit with Bluetooth, DVD. Steaming, Digital radio for Android & Apple. J. L Audio Slash v2 Series 300/4v2.4-channel car amplifier 75 watts RMS x 4.