GenVibe - Community for Pontiac Vibe Enthusiasts

I use a couple of auto loan calculators such as the KBB one and Getauto.com's one. They are all about the same but when I go in to look at cars the dealer presents me with the same info I put into the calculators online but the payment the dealerships come up with is way higher? Like 75-100 higher??

When you used the online calculators, did you account into your loan amount the cost of taxes and fees? The dealer just lumps all that in with the cost of the car for financing purposes. The payment calculators should be fine as long as you are entering the correct numbers. I've used them before after running some figures by hand and they gave the same results. Take a closer look at the numbers that the dealer is using for the purposes of making their calculations and see if they are fleecing you. If something doesn't look right, question it right away. In my experience, they are much less likely to try and pull things over on you if you give the appearance that you are right on top of the whole situation.

Quote, originally posted by fuel4soul »I use a couple of auto loan calculators such as the KBB one and Getauto.com's one. They are all about the same but when I go in to look at cars the dealer presents me with the same info I put into the calculators online but the payment the dealerships come up with is way higher? Like 75-100 higher??I did the same thing and couldn't understand what was going on. The dealership told me that they include something they call residuals. With all of the great car deals and everyone going crazy trading in cars, the residual amount went up....thereby making your payment higher. The on-line calculator does not take into account the residual values - not even the ones GM has out there.

The residuals only apply to leases. It is a calculation to determine the value of a leased car on the date the lease expires. The formula and the values plugged into it are determined by the bank that enters into the lease with you, not the dealer or the manufacturer. That is why leasing values in these calculators may be way off. Since everyone is trading in used cars, the used car market is flooded with supply and little demand, driving down the value of used cars. That means that the bank must recover more of the value of the car from you, the lessee, to make up for the lower value of the car when you turn it in. That makes your payments higher.For anyone who doesn't understand the fundamentals of leasing, this is it in a nutshell. When you go to lease a car, the dealer is actually selling the car to a bank, who it turn agrees to let you use the car for a specific period of time for a specific price. The price they charge you over the span of the lease will include any fees or costs incurred by the purchase of the vehicle, the amount that the bank estimates the car to depreciate over the length of the lease, an allowance for reconditioning the vehicle for the normal wear and tear that occurs to it, and a little profit for themselves. The vehicle remains the legal property of the bank throughout the entire term of the lease. Most leases will allow you to "buyout" the car from the bank at the end of the lease for a preset price that is stated in the lease agreement. That price is generally what the bank determines that the car is worth at the end of the lease (called the residual value). They are stuck to that price and must offer the car to you for that price at the end of the lease if it is in your agreement. If the car holds it's value better than what the bank anticipated, then you would win by buying the car at the end of the lease. You could then turn around and sell it for more than what you paid for it. If the car has depreciated more than what the bank anticipated, you would lose out by buying the car because you would be paying more than what the car is worth. It would be better to just go buy or lease another car. From what I understand, it is very rare to beat the bank at their guess on what the car will be worth at the end of the lease and that they are pretty accurate. They should be, or else they'd be losing a lot of money. So I guess it always pays to do a little research and number crunching near the end of your lease to see if the buyout option is worth taking.

Thanks for the info, Stang. I leased my previous car from Pontiac and thought the residual value was applied to all cars. I am buying my Vibe because the purchase payments were less than the lease payments. Not only that, but I hope my Vibe goes as long as a Toyota!!!!!

Quote, originally posted by Charlievibe »I leased my previous car from Pontiac and thought the residual value was applied to all cars.The residual value is applied to all cars, but it will be a different amount for every different make and model. It will also vary depending on the options on it as well, I'm sure. The residual value is a non-negoitable number, but the price of the car IS negotiable. So if you can negotiate a lower buying price for the car from the dealer, you will lower your monthly payments. Since you are only paying the bank for the value of the car that you are "using", a lower purchase price will bring the purchase price closer to the residual value and you will therefore be "using" less value of the car. I just read an article last night on how leasing a new Mercedes with a sticker of over $60K can cost only relatively a little more than leasing a new Chevy Tracker with a sticker of about $17.5K. I never really thought it out that far, but I can see how it could be true.