A General Lease Question?

[TunTac]

Based on a recent lease promotion (non-Toyota model) advertisement I saw, the fine print stated, amongst many other details and restrictions, that there was $1000 lease cash and that the dealer may contribute up to $1430 towards the lease.

My question:

If this were a vehicle that (say) you could negotiate down to $500 over invoice, does the dealer contribution of $1430 listed in the ad mean that the dealer is being subsidized by the manufacturer and thus they could cap the cost essentially below invoice (~$500 below) before any customer cap reduction is made?

Then, the $1000 lease cash I'm assuming would just go towards a cap cost reduction?

Am I making sense?

[Cliffy1]

Originally Posted by TunTac

Based on a recent lease promotion (non-Toyota model) advertisement I saw, the fine print stated, amongst many other details and restrictions, that there was $1000 lease cash and that the dealer may contribute up to $1430 towards the lease.

My question:

If this were a vehicle that (say) you could negotiate down to $500 over invoice, does the dealer contribution of $1430 listed in the ad mean that the dealer is being subsidized by the manufacturer and thus they could cap the cost essentially below invoice (~$500 below) before any customer cap reduction is made?

Then, the $1000 lease cash I'm assuming would just go towards a cap cost reduction?

Am I making sense?

"Dealer contribution" means the amount the dealer must discount the vehicle in order to arrive at that payment. The lease payments you see on TV are examples. Dealers are not required to give you that payment. Manufacturers can't tell dealers how much they can or must sell cars for. Its a suggested "contribution" or discount off MSRP. In the example you have, you can choose to negotiate a larger discount or you might find that $1430 is already below your target of $500 over invoice. It depends on the vehicle.

[TunTac]

Originally Posted by Cliffy1

"Dealer contribution" means the amount the dealer must discount the vehicle in order to arrive at that payment. The lease payments you see on TV are examples. Dealers are not required to give you that payment. Manufacturers can't tell dealers how much they can or must sell cars for. Its a suggested "contribution" or discount off MSRP. In the example you have, you can choose to negotiate a larger discount or you might find that $1430 is already below your target of $500 over invoice. It depends on the vehicle.

Thanks... I think I understand now. I've heard the term "trunk money" before and wondered if "dealer contribution" was the same thing?

Thanks again for your wisdom.

[SFTundraMan]

Originally Posted by TunTac

Thanks... I think I understand now. I've heard the term "trunk money" before and wondered if "dealer contribution" was the same thing?

Thanks again for your wisdom.

Trunk money? that is a first, what is that supposed to be?

[TunTac]

Originally Posted by SFTundraMan

Trunk money? that is a first, what is that supposed to be?

I assumed it was slang for manufacturer-to-dealer cash? Not sure though...

[SFTundraMan]

Originally Posted by TunTac

I assumed it was slang for manufacturer-to-dealer cash? Not sure though...

trucks dont have trunks though, lol

[Cliffy1]

The funny thing is, I had to read it twice before I realized that he didn't say "trunk monkey". Now that is a real term but has nothing to do with leasing or even sales. Its from a series of car commercials where a trunk monkey pops out for various chorse such as changing a tire, clubbing a car thief and other such things. It now is used in the military to refer to the troops who pour out of transport vehicles to get the bad guys.