Autograph Lease Made Easy

Autograph lease

- What's going on you guys? Welcome back to the channel. So, in this video today, we're gonna be talking about how to lease a car, and specifically, how to lease a car with zero dollars down, which most experts would agree is the best possible way to lease a car. But don't worry, I'm going to explain why that is. Changing it up today, I got my LaCroix. I'll go ahead and crack open myself, sir, and we'll get this video started. So the average price of a new vehicle, as of September, 2020, was $38,723. Not to mention, as we're all probably aware of, new prices on vehicles are getting higher and higher every single year. And so, this is ultimately leading to people considering other options out there aside from just going out there and financing a brand new vehicle. And so, one of the options that people may have heard of before is leasing a car. So, what exactly is the deal with leasing a car? You've probably heard of it before, but you may not be aware of how it works. Well, that's the point of this video here. You may have heard some people telling you that leasing is your best possible option. And I've also certainly heard other people saying that leasing a car is a great way to throw money away. So, I wanna shed some light on this and explain why both people may be right depending on the situation. By the end of this video, guys, I'm gonna show you everything you need to know about leasing a car. And you're going to be able to walk into a dealership with numbers in hand of exactly what you're looking to pay. It's gonna take all the guesswork out of the entire process, and ultimately put you in control of the entire process. I wanna make sure I'm not wasting your time here, guys, so I wanna quickly tell you what we're gonna cover in this video. First of all, we're gonna talk about what it means to lease a car versus buying a car. Then we're gonna cover how much you can afford as a monthly lease payment and some helpful calculations. We're gonna cover the crucial steps to follow before leasing your forced vehicle. We're also gonna show you how to calculate numbers for a lease before stepping foot in the dealership. And I'm actually gonna do a screen share and walk you through the process, step-by-step, live, of calculating the numbers on a deal. We're gonna discuss what happens when your lease is up, and also a number of things to watch out for. So, this video is geared towards first timers deciding between leasing versus buying; who are just considering the different options available to them. And it's also for those looking to get the best possible deal with a lease, willing to put in a small amount of effort. We're talking about one to two hours of work which is going to help you to ensure that you're getting the best deal possible with your lease, which is ultimately going to save your money. So, if you're interested in that guys, you are in the right place. That being said, I have a few quick favors to ask you in return, because I spent about 10 hours researching and outlining this video. First of all, if you are on your phone right now watching this video, that's totally fine, but if you're on your computer and your phone is next to you, please do me a favor and put your phone on silence or just put it away for the next hour or so, because I don't want you to be distracted halfway through and lose track. 'Cause I promise you guys, if you stick around for the entire video, I'm gonna teach you everything you need to know. You're not gonna have to watch like 10 different videos to learn about leasing a car. Also, pause the video and grab a beverage of you need one. I already got my seltzer hanging right here. But if you need a seltzer, pause the video, grab one. And I also recommend getting a pad of paper and a pen or pencil just to jot down some notes throughout the video. Also guys, if at any point in this video you find it to be valuable, all that you have to do is drop a thumbs up, and that's going to allow this video to be shared with more people. That being said, a few quick disclaimers before we get into the meat and potatoes here. I am not a financial advisor, this is not any kind of financial advice, and you should always do your own research above and beyond this video, before making any kind of financial commitment. I'm not going to sell you anything; I don't have a course on leasing, and I don't have anything to sell you, period. No affiliate links, no sponsors for this video, just straight, honest, valuable information. And I hope you guys appreciate that transparency. Lastly, I have been getting a lot of spam comments on my videos lately. And unfortunately, some people fall for these scams. I hate to waste your time here with this, but I have to make this disclaimer every video. If you see comments down below, make sure they're actually from me. So, this right here is a real comment from me, versus this comment which is a scammer. So, make sure you're not communicating with a scammer. I'm never gonna ask you to send me money or anything like that. So, until YouTube does something about this, I'm just gonna have to make this disclaimer in every single video. So, I do apologize about that, but I got to do what I can here to make sure people aren't getting scammed. That being said, let's jump into it. Starting off here with, what does it mean to lease a car? So, when you're leasing a car, you're basically just renting the car similar to leasing an apartment. You don't own it, you're just borrowing it. Technically speaking, what you're doing is financing a car's depreciation through the process of leasing, but we're gonna cover more on that later. What you're doing by leasing is borrowing or renting a vehicle, just like an apartment. Now, just like with an apartment, there are going to be some restrictions in place related to your lease. And that typically falls in two different categories. Number one is the number of miles that you're allowed to drive during the lease term. It's going to be on a per year basis. But it actually ends up just being a total throughout the entire term of the lease. The second thing is maintenance. Some of the maintenance is going to fall on your shoulders. Basically, anything within the manufacturer's warranty is going to be covered by them. But if your warranty expires during the lease, or if there's things like oil changes, brake pads, that may fall on your shoulders based on the terms of the lease. However, some lease packages will include that maintenance. So it all depends on the specific lease agreement. But for the most part, if you're leasing a car, you're most likely going to be responsible for paying for oil changes, tires, probably brake pads and gasoline, which is kind of a no-brainer. So be ready to have those expenses for maintenance associated above and beyond your monthly lease payment. Now, typically speaking, for most people out there who work a job and they don't have a business, leasing is going to be a more expensive way to drive a car if you're somebody who has a long commute. However, if you're somebody who drives a very low number of miles, or you're just worried about not maintaining a vehicle, there can be an effective way to drive a car without having to worry about that ongoing maintenance. And if you continue to lease cars over and over again, you can ensure that you always own a vehicle that's under some form of warranty, that way you're not surprised by some crazy high costs for replacing something like a transmission, or you have some major vehicle failure. You may also find that, if you're somebody who enjoys driving luxury vehicles, that is an area where leasing actually may make sense. Because oftentimes, leasing a car is the most cost-effective way to drive a luxury vehicle. Also, if you are a business owner, there's something special called a corporate lease which may make it cost-effective. That's actually why I made this video. For a while, I was considering doing a corporate lease just because I needed an extra vehicle because one of my cars was in need of repair and the parts were backordered. So I thought about just doing a corporate lease myself. As it turns out, the parts came in, I'm getting my other vehicle fixed, so I'm not gonna do this at this time. But it's very possible in the next few years that I will be taking out a corporate lease for my business. That may be a topic for another video, but it's just a unique scenario where if you do own a business, this may make leasing a vehicle far more cost-effective. So in a nutshell, the main people that should be considering leasing a car are those who do not want to worry about maintenance, and they wanna always drive a car that's under warranty. It's also those who drive an exceptionally low number of miles every single year. It's also for people who want to drive new luxury vehicles, and get a new one every couple of years. And it's also for business owners who may want to consider a corporate lease. Those are the main people who tend to be cost-effective when leasing a vehicle. The other category of people who drive higher miles and just work a regular job, leasing is probably going to be the most expensive way to have a vehicle. So now, let's go ahead and cover how much car you can afford to lease. And we're gonna start off by talking about the down payment. So, generally speaking, for every $1,000 that you put down, you're going to lower your monthly lease payment by around $28. That may sound like a great idea. And maybe you have five or 10 grand sitting around and you say, "Hey, let me just put a giant down payment on my lease." No, do not do that. That is a bad idea. And let me tell you why. There's not generally a good reason to put a down payment on a lease because there's no risk of negative equity. Negative equity comes into play when you purchase a vehicle, because vehicles depreciate or go down in value very quickly. And what often happens is, if you don't put in or put down a large down payment upfront, the vehicle is actually depreciating or going down in value faster than you're paying it off. So, maybe you have a vehicle that you bought for $30,000, and then you don't put anything down. And a year later, you have $27,000 of equity in the car, but the vehicle itself is only worth like 22,000. Now you have $5,000 of negative equity. Where this comes into play specifically is, if you're trying to sell that vehicle down the road and you have negative equity, it's extremely difficult to do that. Because pretty much your only option is to roll that into another vehicle and get a bigger loan. And it's a freaking mess. I'm gonna be honest with you guys. It happened to me when I was younger. So, with purchasing a vehicle, a down payment makes sense 'cause you want to avoid negative equity, or you wanna have something called gap insurance, but that's a topic for another video. Just understand in the case of leasing, very rarely does it ever make sense to do a large down payment. And so, what I want to encourage you to do instead is aim for a zero dollar down payment, or as little money as possible upfront out of pocket. There's no risk for negative equity because you don't own the vehicle, you're just borrowing it. The other thing is, if you lease a car and you total it, you're not going to get that down payment back. So you could do $5,000 down on a lease, drive out of the dealership and total that vehicle, you're just gonna walk away from that lease. They're not gonna give you $5,000 back. So, understand that if you're doing a down payment with a lease, you're basically putting money on the line for absolutely no reason. So, even though it's a lower monthly payment, you're better off to just put as little down as possible, and have that higher monthly payment. So, now, let's talk about how much should you spend on a monthly lease payment, should you decide to do it? Well, a general rule of thumb to follow is it should be a maximum of 15% of your after-tax income. So, let's say for example, you have a $60,000 salary, your post-tax income is 45,000, so your monthly post-tax income is $3,750. You're gonna wanna spend at most 15% of that on your vehicle, which would be 562.50 per month. Keep in mind, that's the maximum. That doesn't mean you should go out there and lease a car for 562 a month. Keep in mind as well, that's not factoring in your gas costs, your insurance costs, oil changes, tires, and things like that. So even though it's 562, when you factor in those things, you could be well into the 700 to 750 plus range depending on how much you drive. So, while that's the maximum, I would encourage you to shoot lower and have extra money to direct towards investments or different things like that. You can get near $200 a month with low mileage leases. So you can get that pretty low. Just because you can spend that much, doesn't mean that you should. Now let's cover what you should do before going in and leasing a car. Well, the first thing that you need to do is figure out if leasing actually makes sense for you. And based on what I covered earlier, you should have a general idea of, if you're somebody in this category where leasing may make sense. Generally speaking, the less miles you drive per year, the more cost effective leasing becomes, because you're not gonna load that thing up with miles, and the residual value is going to be higher at the end. We're gonna explain what that means in a little bit here. You also are able to avoid the negative equity from selling a new car within the first few years. So if you upgrade vehicles constantly, like every two or three years, leasing will help you avoid that scenario of negative equity, where you all more on that vehicle than the car is worth. A better solution is not to drive new cars, period, but some people insist on it. Like we said, luxury vehicle drivers may also find it's the most cost-effective way to drive brand new luxury cars, because they depreciate like a rock; they go down in value so quickly. And also, business owners may be in a unique category to lease based on the corporate lease being a potential write-off. So, let me give you a scenario here of somebody I know who leased a car. This was my former boss. Her son was going to college, and they were considering options there of him having a reliable vehicle. So, rather than going out there and spending five to $10,000 to purchase a used vehicle, which would then probably break down every three or four months, they decided instead to just do a low lease of a Honda Civic, which costs them somewhere around $200 per month. This meant he was able to drive a brand new, reliable vehicle, that wasn't likely to break down. And if something did break, it was very likely covered by the manufacturer's warranty. So, since he wasn't driving a lot and since reliability was very important, in this particular scenario, leasing a car made a lot of sense. Another thing you have to do before leasing a car is figuring out the numbers by doing the research. You're actually gonna spend like 80% of your time doing the research, and only about 20% of the time doing a negotiation. What you're gonna find here in a little bit when we go through the numbers is that, there's not a heck of a lot of room for negotiation with a lease because a lot of the numbers are fixed. There's really only two things that you have as numbers that you have ability to negotiate over. And I'm gonna teach you those here shortly. So, the majority of the time, you're gonna spend just doing research, and the leasing process and the negotiation is really going to be a very small piece of this equation. The truth of the matter here is guys, the salesman is going to know a lot about leasing, and they're probably gonna know more than you. And they want you to just walk into that dealership with nothing in hand. They want you to basically be putty in their hands where you're gonna tell them, "I don't know what I'm doing. Should I buy, should I lease? I have no idea. What do you think?" And in that scenario, a lot of the times, what they're gonna tell you is whatever's going to make them the biggest commission. Hopefully they're honest, but we live in this world together, we know that not everyone out there is honest. So, you should have your numbers in hand, and have a general idea if you're somebody who falls into the category of someone who may want to consider leasing a vehicle. Don't just blindly trust the dealer. Even if they are honest, it's good to double-check and just have your numbers going in. And also, when you show up at a dealership with numbers in hand, they're gonna know that you know what you're talking about, and they're gonna be very unlikely to pull the wool on you and try to mislead you in any way. So, do the research and have your numbers in hand. And that's what I'm gonna show you right now. We're gonna talk about what the numbers are, and then I'm gonna show you how to calculate them. So now, let's cover more information on how leasing a car works. Well, as mentioned earlier, when you're leasing a car, you're borrowing it, but what you're really doing is financing a cars depreciation over a set span of time. So, if a vehicle is going to depreciate by $10,000 in three years, that is what your payments are based on. It's not based on the sticker price of the car, it's actually based on essentially the depreciation plus a number of more complicated factors. This is where the bulk of the research went into for this video, guys. And I'm gonna be honest with you, there's certain things that even I have yet to wrap my head around. I'm gonna cover it, and some of the stuff is going to be well above and beyond most people's comprehension. And that's fine. You don't need to necessarily know where all these numbers come from, because I'm gonna show you how to get these numbers without doing any math or calculations yourself. You can literally use forums and get these numbers and hand them over to the dealer. But for those who really like to know what goes on under the hood, pun intended, we're gonna get into these numbers a little bit. So first of all, let's talk about your lease payment. This is going to come from both the depreciation of the vehicle, or how much it goes down in value over that term, plus the finance charge. And the finance charge is going to be very similar to the interest paid on the loan. This is basically what you're paying the bank to borrow that money, or what you're paying the leasing company to borrow that car. They're not gonna let you borrow it for free. You're gonna pay a set amount of interest, and that's going to be that finance charge. But how do they figure out depreciation? Because it's going to be different for every vehicle. We know that certain vehicles, like Toyota, hold their value very well. And we know that domestic vehicles, like a Dodge, for example, is going to depreciate a lot faster. Well, monthly depreciation is calculated by taking something called the cap cost, minus the residual value, divided by the number of months or the term of the lease. Don't worry guys, if you don't know what these terms mean, I'm gonna explain these now. Your cap cost is essentially the total amount of money you're borrowing from the bank or the leasing company. And that's calculated by taking the MSRP, or manufacturer's suggested retail price, plus any fees and taxes, minus any lease credits or rebates, minus your down payment. We're probably not gonna have much of a down payment here. You might prepay things like your taxes and registration fees, for example. But for the most part, you wanna avoid any other down payment that's unnecessary. Because like we said, you're putting money on the line for no reason. You're gonna wanna do your research on lease credits and rebates. This time of year being December, is actually a really good time because you have a lot of brand new inventory hitting dealers. And so, those 2020 vehicles, they're looking to cut deals on them and get them off their lot. The MSRP is where you do have some wiggle room, because rather than them offering you that vehicle at the suggested retail price, your goal is to figure out, how much did the dealership really pay for this vehicle? And let me get it slightly under MSRP and cut a deal with them. So that's the one area where you have wiggle room. And then we have residual value, which is also used to figure out that monthly depreciation, or how much that vehicle goes down over time in value. The residual value is essentially the amount the dealership projects the car to be worth after the term of the lease. You really can't negotiate this residual value because the dealers are looking at the numbers. They know what a leased vehicle sells for when it comes back in. And so, this is going to be a percentage. This isn't really something you can negotiate on, but what you can do is make sure you're leasing a car that holds value well to get a higher residual value. So, what I mean by that is, sticking with maybe a Toyota or a Honda, or something known to hold value, and avoiding domestic vehicles or luxury vehicles that go down in value much quicker. The main thing that affects the residual value of a car is how many miles are on that vehicle. So for example, if you had two identical vehicles, one had 30,000 miles, one had 100,000, the residual value of the 30,000 mile vehicle is gonna be a lot higher because it has less miles, and it's worth more money to somebody because it's gonna likely last a lot longer. And it may still even be under some kind of factory warranty. The residual value is something set by the dealer. But I'm gonna show you how you can get a good estimate of it online using a site called Leasehackr. They didn't sponsor this video or anything like that, guys. So, I'm showing you this because it's a really good resource, not because they paid me or anything like that. I'm gonna show you that in a little bit. One of the thing you may wanna understand, the finance charge which is very similar to the interest, is essentially going to be taking your cap costs or your total costs, plus the residual value, multiplied by the money factor. This gets pretty deep in the weeds here. So, I'm not really gonna get into a deeper explanation mostly because I don't fully understand that myself. So, if somebody has a better understanding of banking and they wanna go ahead and do that justice in the comments, feel free to. And then as far as that money factor goes, you calculate that by taking your APR, which is something that you would view in terms of a loan where you're actually buying the vehicle, and dividing it by 2,400. So conversely, you can multiply your money factor by 2,400 to figure out the equivalent APR. If you're trying to compare apples to apples, looking at money factor versus APR, if you're looking at leasing numbers versus buying numbers. That's about it for the complicated stuff, you guys. If I totally lost you, don't worry, I'm gonna show you how to get these numbers without doing any complicated calculations. But if you wanna know where they come from, that is where they come from. The good news is, as mentioned, you can generally figure out these terms for your make and model if it's a popular vehicle by Googling it and sifting through forums and posts, because a lot of dealers share this information, they're very open about it. And they also oftentimes will be cutting deals on these forums. I'm also gonna show you on Leasehackr how to get these numbers, if you can't find them. So what is the goal to have in mind here, looking at these numbers? Number one, the first goal is to have high residual value at the end of the day, which means the vehicle hasn't gone down in value that much. That's gonna mainly come from choosing a high quality vehicle, and also having a lower mileage lease. That way, you're not loading that thing up with miles and getting a lower residual value. Another goal you wanna have here is having lower overall cap costs or total costs. And that's mainly going to come from negotiating them down from that MSRP to a lower price. So, you can't negotiate on the residual value for the most part, that's just set by the manufacturer. What you can do is figure out the residual value before you walk into the dealership, just to make sure those numbers match up, which I'm gonna show you how. You do have some wiggle room on the vehicle price or your total cap costs, and that is by getting them down off that MSRP, often around seven to 8%. So your goal is to figure out how much the dealership paid for that car, and get as close to that number as possible to take out that margin. That's where they're making some of their money. Another area you sometimes have wiggle room on is with the money factor, or essentially kind of like the interest. Some dealers are actually putting in a markup to make some money there, some dealers are not. So, if you go in there with a money factor in mind, again, just make sure those numbers match up, or ask questions and say, "Hey, are you marking this up and making a commission here?" They should be honest with you about that. That's pretty much the area where you have wiggle room with a lease. Also, if you expect to have an overage and go over your set miles, negotiate for extra miles upfront and not at the end, because you're gonna likely get a better deal on those miles upfront versus at the end. Because at the end, you've already used those miles and gone over, so, pretty much whatever they say, goes. You're better to negotiate that at the beginning if you expect to go over. So let's say you're doing a 12,000 per year lease for three years or 36,000 miles. And let's say you wanna negotiate 4,000 extra miles at this price per mile, do that at the beginning, not at the end. Keep in mind what the dealership wants you to do is walk in there with nothing in hand and no prior knowledge of leasing, that way they can take full advantage of you. Hopefully, most dealerships don't do that. I've had very positive experience with car dealers, but the truth is some people are just looking to scam you. Or not necessarily scam you, but they're looking to get as much money out of you as possible. So what you wanna do is walk in there with numbers in hand, or better yet, I actually recommend emailing them a few days prior with the numbers. And I'm gonna show you how to get those numbers right now. So, let's jump into my computer. All right, guys, so now I'm gonna show you exactly how to calculate the numbers for your lease using a couple of different websites. The first one is edmunds.com, and the second one is a website called leasehackr.com. As mentioned, I have not been sponsored or paid or compensated in any way by either of these resources. This is the best resources to use for this process. So, the very first thing that you wanna do is figuring out the MSRP for your vehicle, and then figuring out ideally how much that dealer paid for that vehicle. So the first thing you're gonna do is use edmunds.com to figure out the true value of the car. And if you don't know what vehicle that you want to lease yet, you should poke around on some different online forums because a lot of them will talk about, what are some of the most cost-effective cars to lease. So you should have a general idea of, do you want a car, an SUV, a luxury vehicle. So kind of have a general idea of what you're looking for. Is it a front wheel drive car, or do you want an SUV or a truck, and then begin the process of figuring out the vehicle. Or if you have a very specific vehicle in mind, that's when you start this process. So in my case, I was thinking about leasing a 2020 Honda CR-V EX. I didn't end up leasing it 'cause I actually fixed my other Honda CR-V, but that's what I was gonna lease, so let me walk you through that process. What I'm gonna do is type in a 2020 Honda CR-V. And we're looking at new pricing to get an idea of the MSRP and the true value. So in particular, we were looking at the EX for pricing. And this shows you the MSRP, it's not gonna show you the true value or invoice prices. What you have to do for that is click on this and then they're gonna, of course, have you drop your name and email to get that number. I already have that number from a forum. So I'm not gonna do this step. But I just wanna show you guys what you would do. I don't wanna get bombarded with emails, which is going to happen if you do this. But you can unsubscribe to them as soon as you get that number. But this is one of those ways to figure out the true value of the car, or get an idea of what the dealer paid. But you can also generally figure this out with different forums. And I'm gonna show you Leasehackr right now. So, Leasehackr does a couple of different things. But the main thing we're interested in is the forum. Now, I will say this guys, this was kind of a pain in the butt. They make you like go around and click on the website for a couple of minutes or so. I think it was like 10 or 15 minutes. You have to spend time using the site before you're allowed to post. And the purpose behind that is they wanna make sure that you're an avid user, you read a couple of articles, and you're not wasting people's time. So, I had to do that. For a good afternoon, I was just kind of reading about leasing and doing research for the video. So, just understand that you have to use the website for a while before you're allowed to post. But then what you do is, you can search the forum to see if somebody already looked for numbers in your area, or you can make your own post. Also, guys, the numbers are gonna vary based on your region. That's why this is up here. Very important. So for example, you could do New York, and then you can do price range of whatever you're looking to pay per month. Let's say I'm looking to pay two to 300. And I want it to be a Honda. So, you can just do that and you can do a search to find a deal that already exists in the forum, or you can post your own deal. So in my case, I already made a post. So we're gonna go ahead over to that now and look at what I said. So, this is essentially what I said in this forum. I said, I'm new to leasing, I'm looking for what? Money factor, residual value, and lease or loyalty credits, if any. Should I be looking for on a 2020 Honda CR-V EX, four door, 36 month, 10,000 per month mile lease, zip code of 12020. This is the kind of thing you're going to look to post. You might get some people who give you a kind of a snarky response. Like this guy was like, "Oh, so you want us to do the legwork for you," but wait a little bit and you should be able to get a legitimate response from somebody, which I ended up getting, and I think it was sent to me as a message. So, let me open that up now. So I actually got a response from a broker for a Honda dealer, which is literally like the perfect person to hear from. And this is what he said. He said, "My name is Rubin and I am a broker for Honda and an Acura dealer. I saw you were asking about a 2020 CR-V EX, 10,000 mile per year, 36 month lease. Based on your zip code, my dealership is around two and a half hours away in Westchester, New York. I will give you a quote, and even if you don't get the car from me, at least you will know what to aim for." So this guy is trying to get a sale, that's why he's helping me out. But nonetheless, he gave me the numbers on it which was super helpful. He said, the MSRP on this CR-V EX was 30,280, and his sales price on it is 27,850, or 8% off MSRP. So when you go in there, this is the number you wanna shoot for. You're gonna tell the dealer, "Hey, I know your MSRP is here, can we get to this number when calculating those cap costs?" He also told me the residual value for that car is 63%. So you're gonna wanna write down this number two which is gonna be used in the calculator. He gave me the money factor of 0.00119 and the corresponding APR, which you can figure out that calculation as shown earlier on. He also gave me a ballpark for monthly payments if I was transferring or getting a new plate, and the different amounts of money due at signing based on taxes and DMV fees and registration. So, these are the exact numbers that you're looking for in what you want to go in with. This is one way to get those numbers. Another way, if it's a popular vehicle, if you just type in the year, make, model, and then followed by lease terms Edmunds, you might be able to find an existing forum where they're sharing those numbers. So for example, if we go over to Edmunds website, we can see here that people have already been looking for these numbers. And if you just scroll through here, you might be able to find these exact same numbers. So, for example, this person showed similar residual here of 61%. And I think I was quoted at 63, which was pretty close. Let me take a look here. So yes, I was quoted at 63%, and you can also get an idea of the money factor, but keep in mind, that's going to vary based on location. So ideally, you wanna get somebody who lives nearby you in a very close zip code to get the best possible numbers. That being said, once you have those numbers, you're gonna go back to Leasehackr, and you're going to utilize the calculator to figure out exactly what you should be going in with looking for numbers. So, first of all, you select the make of your vehicle, and then you're gonna put in the MSRP, which we figured out over on Edmunds. This guy also was generous enough to tell me what the MSRP was in his information here; which was 30,280, which I'll type in now. Next, you wanna type in your selling price, which is what you're trying to get the dealer to sell you that car for, or essentially the numbers for the lease, which is 8% off MSRP or 27,850, so we type that in here. Next, the term of the lease, let's say you're doing 36 months and you're shooting for a 10,000 mile per year. And then the residual is already set here to 61%. That's pretty typical. And this guy said, I should shoot for a 63% residual. Since it's a Honda, maybe it's slightly more valuable. So, we're gonna punch in 63%. And then as far as the money factor, the default here is 0.001. We got the money factor from this guy here. He said 0.00119. So we'll go ahead and punch that in for more accurate information. And then you have your different cap cost adjustment based on whether or not you're doing a down payment. I would not do a down payment for the reasons we discussed. And then if you have any tax incentives here like your cash back offers, loyalty cash, bonus cash, any offers from the dealer, you can put that in here. Like let's say they're gonna give you a $500 loyalty credit if you have a Honda driver in your family. That's very possible. You could put that in there and see how it changes your payment. And any untaxed incentives, which these are going to be different based on what incentives are available. So that might require you to do a little bit of research. Down here, you can fill out fees, taxes, and rebates. You can get a general idea of these in different forums, or just by talking to your dealership, or you can go with these basic numbers. I know in my area, my sales tax is 7%. So I would drop that down to seven. And then once you have this, you basically will print this out and you're gonna show up at your dealer. And you're either going to show up with this in hand or you're going to email it to them beforehand and say, "Hey, this is what I'm shooting for, can we make this deal happen?" You're leaving very little wiggle room here and you're going in there with clean numbers. And they're gonna know looking at this that you talked to a dealer, because you know what they're paying for this vehicle 'cause you just got this number from a broker. So, you're not shooting blindly here, you know exactly what you're going for. And that is how you calculate those numbers. So now that you understand where to get those numbers from, you should be in a position where you're confident to go into this dealership looking to lease a car. Now, I wanna talk about what happens after the lease is up and what options you may have available to you. Well, first of all, I want to encourage you to evaluate your options two to three months before the least ends, because you don't wanna be making a last minute decision where you don't have time to research. You basically have four different options. Number one, you can just simply return the vehicle. You're gonna need to do a vehicle inspection with the dealership one month prior. And they're just gonna make sure you didn't totally destroy the car or crash it and screw up the bumper or burn a hole in the seat. They're just gonna make sure there's nothing like above and beyond normal wear and tear in the vehicle that you might have to pay for. At that point, you can just return it and buy a different car or lease a different vehicle. Your second option is to just buy the car, where you're basically buying a used car where you know the previous owner. So, if you know that you were very nice to this vehicle and you didn't abuse it, maybe you just wanna buy it at that point and just buy it from the dealer. 'Cause if not, they're just gonna take it from you and they're gonna sell it as a pre-owned vehicle, anyway. The third option you have is you can ask for an extension on that lease. Maybe you wanna lease it for another 12 months, and it would pretty much be the same negotiation process. And this may make sense if you're waiting for a good deal to come around, or maybe you're saving up for a down payment on purchasing a vehicle, not leasing a vehicle. Lastly, your final option is you might be able to trade it in, especially if you're way under on your mileage, which would mean it has a higher residual value than expected. So you might actually have some positive equity there which you could potentially roll into another vehicle. So, pretty much, those are your four options with leasing a car when the lease ends. So the last thing I wanna cover here, guys, is what you need to watch out for when leasing a car, or the major red flags, or things that could result in a little bit of trouble. Number one, the first thing is ending the lease early. Oftentimes, there is an early termination fee which could be anywhere from 200 to $500 or more. And it's also going to include any remaining depreciation that you've already agreed to pay for. So, ending the lease early, not a good thing. Sometimes you can get somebody to take over the lease for you. If you can get someone to agree to those terms and replace you in that lease, that is an option that you have. But generally speaking, ending the lease early is not going to end out in a favorable situation for you. Just like if you're trying to terminate the lease of an apartment, you're probably gonna get screwed out of your security deposit. You're on the hook, you agreed to this, and if you're trying to get out early, it's going to cost you money. Second of all, the big thing you got to watch out for is going over your mileage. Oftentimes, it's around 20 cents per mile that you're paying if you go over, and that's above and beyond what you've already agreed to pay for, and that's going to be a balloon payment at the end of your lease. So, try to avoid this. But if you know you're gonna go over with your mileage. As I mentioned, buy more miles upfront and negotiate at the beginning, not at the end. You'll also be able to keep an eye on this. And if your mileage gets high, you might be able to end your lease early. That's something to consider where you would just basically would pay whatever is outstanding, as far as the balance for depreciation, and just walk away from it if you've reached your mileage limit. Also, this is kind of a different strategy here. But if you plan on buying the vehicle at the end of your lease, it might not be such a bad idea if it's higher mileage, because you're essentially lowering that residual value, which means you might have to pay less for the vehicle. So sometimes if you're in a situation where you've gone way over your mileage, you might be able to just make a deal with that dealership and say, "Hey, I just wanna buy the vehicle now, so let's figure out some kind of deal that works here." Another thing you have to watch out for is damaging the vehicle. Because when you're leasing it, you don't own it. You're borrowing that car, and it's expected that you're only gonna have normal wear and tear on that vehicle. And if it goes above and beyond that, that's your responsibility to have that vehicle back in a saleable condition. So you've got to pay for it or fix it yourself. Now, this is really only an issue if you plan on returning your lease and not buying the car yourself. If you damage it but then you agree to buy it, you're probably gonna be fine there, you just have to figure out some kind of negotiation with the dealer on those numbers. If you get into a crash and you total that vehicle, you'll go through insurance and that shouldn't impact your lease. You're probably just gonna walk away from it if it's totaled. The only thing you have to watch out for is if you have a down payment, you're not getting that back if you total that vehicle. If there's a medium level of damage which is above and beyond normal wear and tear, you're going to have to pay for that. Now, some dealerships are going to sell you excessive wear insurance. It's an insurance policy against above and beyond normal wear and tear. So, if you spill a coffee on the seat or burn a hole in it, or you scrape up a bumper, that's above and beyond normal wear and tear, and you would normally have to pay that out of pocket. But if you want, you may purchase this insurance policy that covers it. That just comes down to your tidiness as a person. If you're pretty clean and you don't eat or drink in your vehicles, you're probably okay without that. But if you're somebody who is always eating and drinking in your car, or smoking in your car, or if you tend to run into stuff all the time 'cause you're not the best driver, that might be something that's worthwhile. And to be honest with you guys, this excessive wear insurance is probably one of the few upsells that it actually makes sense to purchase. I don't know, the maintenance package, that depends on you. If you wanna have your maintenance prepaid in your plan, that just depends on whether or not you like having random costs or fixed costs. But the excessive wear insurance, for certain people, definitely a good idea. So anyways guys, there, you have it. That is exactly how to lease a car from A to Z, and hopefully do it with as little money out of pocket as possible. The main thing that you may have to pay is whatever taxes and registration fees that you have upfront, but you don't wanna put money on the line for no reason. Hopefully you have a good idea of the general circumstances where it may make sense to lease a car. And if you are dead set on leasing, you now know how to get those numbers, take all the guesswork out of the equation, and get the best deal possible. If you guys enjoyed this video, please go ahead and smash that like button and show your support. And feel free to leave me a comment down below if you have any thoughts, feedback, or suggestions, or if you wanna share some good deals on potential leases, I would love to hear that down below as well. But thank you guys so much for watching. If you enjoyed it and you wanna see more videos, subscribe and hit that bell for future notifications. That being said, I hope to see you in the next video.