Jump to content

The RennTech.org community is Member supported!  Please consider an ANNUAL donation to help keep this site operating.
Click here to Donate

Welcome to RennTech.org Community, Guest

There are many great features available to you once you register at RennTech.org
You are free to view posts here, but you must log in to reply to existing posts, or to start your own new topic. Like most online communities, there are costs involved to maintain a site like this - so we encourage our members to donate. All donations go to the costs operating and maintaining this site. We prefer that guests take part in our community and we offer a lot in return to those willing to join our corner of the Porsche world. This site is 99 percent member supported (less than 1 percent comes from advertising) - so please consider an annual donation to keep this site running.

Here are some of the features available - once you register at RennTech.org

  • View Classified Ads
  • DIY Tutorials
  • Porsche TSB Listings (limited)
  • VIN Decoder
  • Special Offers
  • OBD II P-Codes
  • Paint Codes
  • Registry
  • Videos System
  • View Reviews
  • and get rid of this welcome message

It takes just a few minutes to register, and it's FREE

Contributing Members also get these additional benefits:
(you become a Contributing Member by donating money to the operation of this site)

  • No ads - advertisements are removed
  • Access the Contributors Only Forum
  • Contributing Members Only Downloads
  • Send attachments with PMs
  • All image/file storage limits are substantially increased for all Contributing Members
  • Option Codes Lookup
  • VIN Option Lookups (limited)

Recommended Posts

Can anyone tell me why a dealer is figuring a lease residual rate on something called MRM price rather than the actual selling price in figuring a lease? The MRM price being used is 10% lower than the actual sale price thus giving me a much lower residual and a higher lease payment. Thanks

Share this post


Link to post
Share on other sites
    You can remove these ads by becoming a Contributing Member.

MRM is the Maximum Residualized MSRP that a vehicle can have that is used to calculate depreciation. All dealers do it that way because that's the way the banks that loan the money for the lease do it.

Edited by dphatch

Share this post


Link to post
Share on other sites

so the last time I leased, I did not pay much attention - it was a different life then… So basically if the sales price is 77k and the max MRM they figure the residual on is 71K - it's basically options that are not being taken into account when I turn the car back in? The dealer will not adjust the MRM, the money factor or price as he says they are all dictated by Porsche and I feel like they should be a little more flexible - I do understand if they will not due to supply and demand, but i do not see why I should have to take a hit on the options. Make sense? Tks

Share this post


Link to post
Share on other sites

so the last time I leased, I did not pay much attention - it was a different life then…  So basically if the sales price is 77k and the max MRM they figure the residual on is 71K - it's basically options that are not being taken into account when I turn the car back in?  The dealer will not adjust the MRM, the money factor or price as he says they are all dictated by Porsche and I feel like they should be a little more flexible - I do understand if they will not due to supply and demand, but i do not see why I should have to take a hit on the options.  Make sense?  Tks

If your guess on options not being counted is true, then I can sort of see that. One person's preferences on options may not translate into another person's, when the car hits the used market upon lease return.

I have no idea though, just thinking out loud.

Share this post


Link to post
Share on other sites

The residual is what the bank estmates the car will be worth to a wholesale buyer at the end of the lease. As the bank is not in the used car business all they want to do is cover the back end of the tansaction to insure they get the desired return on the money they are lending on the lease. Now there are two people who have an option to buy the car from the bank at lease end, the lessee and the dealer, with the lessee having the right of first refusal. Banks don't care who pays the residual value, they just need to get the pre-established used value at the end of the lease to insure the transaction has been profitable. As options have limited value when a wholesaler looks at a used car, they are discounted accordingly when residual values are calculated. Lease a car or buy it, you take the full hit for any depreciation, not the bank.

Edited by dphatch

Share this post


Link to post
Share on other sites

So I guess what you're saying, is that I pay full price for the options, but they do not get included in the figuring out of the residual price? The way the sales guy explained it to me is that Porsche uses a MRM price in figuring out the residuals. I have the list he gave me and the MRM for a 2014 diesel is $71,000. He said for the lease to work in my favor I had to build a car that is actually priced as close as possible to the MRM price as possible without going over the published MRM. If the actual sales price is lower, then he said the sales price would be used. In the 2 work ups he gave me, he used the MRM price in each, which when compared to what he told me does not make sense. Am I missing something here?

Lease examples.pdf

Share this post


Link to post
Share on other sites

Go to leasecompare.com and fill in the compare payments form to gt an idea what the payments should look like. Lots of info there about how leases are calculated and what the key factors are ie.. Residual, depreciation and the money factor. If you want to know what interest rate you're actually paying multiply the money factor by 2400. The result is the interest rate. You can compare that number to your local bank or bigger banks who advertise lease deals on the internet.

Edited by dphatch

Share this post


Link to post
Share on other sites

I dont know if you drive a lot but you need to also know how many miles per year are in the deal. The price he gave you is that a 10,000 or 12,000 per year deal?

Share this post


Link to post
Share on other sites

I dont know if you drive a lot but you need to also know how many miles per year are in the deal. The price he gave you is that a 10,000 or 12,000 per year deal?

15k. I understand all the stuff dphatch said, but if what the sales guy told me is accurate, the residual should not be the same on both of my examples. also, i went and talked to an audi sales mgr. and he told me that audi does factor into the residual the fact that the car does have options. that does not make sense to me and the fact that i take all the number the porsche guy gave me and plug them into the formula and my final payment comes up lower than what he is showing me. i can take numbers from the audi guy and plug them into the forluma and get a payment that is within pennies of the quoted monthly payment.

Share this post


Link to post
Share on other sites

Go to leasecompare.com and fill in the compare payments form to gt an idea what the payments should look like. Lots of info there about how leases are calculated and what the key factors are ie.. Residual, depreciation and the money factor. If you want to know what interest rate you're actually paying multiply the money factor by 2400. The result is the interest rate. You can compare that number to your local bank or bigger banks who advertise lease deals on the internet.

tks. understand the 2400 thing and the other stuff, but cannot figure out why the residual is the same in both of he examples i posted considering what the sales guy told. i guess it's just a porsche thing that he will not take into consideration the value of the options and audi does. maybe the cayanne is TOO in demand. bottom line is that i am not going to take that big of a hit, pay 5.75% and have a maintenance of every 5k miles - great mileage or not.

i tried the site you mentioned and could not find info on a 2014 diesel cayanne. still looking on the site though. tks

Share this post


Link to post
Share on other sites

I had a lease deal go bad with a MZB dealer that made the deal and then backed out because the salesman screwed up. I started to fight them but I decided it was not worth the BS that was going on. It turned out the be the best thing that could have happened. I went to Kelly blue book .com and used there tool to shop three dealers of my choice. One guy got back to me with a better deal then I was fighting for. No sitting in the sales mangers office being pressured with car sales tactics. All done with your keyboard and once you make your deal its done. You walk in see the internet sales manager and 20 minutes you are out the door with all the paperwork and your car. Once I had this experience I would never walk in to a dealer showroom again. If I were you I would try the KBB tool in the link below to at least see what other options you have. Hope this helps.

http://www.kbb.com/free-dealer-price-quote/

PS: Once I met this internet sales manager, I call him direct now and have done 3 more deals with him over the years.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.