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Jeep Liberty Lease Questions

102 messages,  Last post on Aug 27, 2008 at 3:20 AM

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What is this discussion about? Jeep Liberty, Car Leasing, SUV

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#100 of 102 property tax by vsp Aug 11, 2008 (7:38 am)
Replying to: kyfdx (Jun 13, 2008 12:53 pm) Hi: I was under the impression that once we signed the lease, the monthly lease payment includes any taxes. This month I got a bill, which they charged me extra $300 for the property tax. Is it common? or I misled about it. Since actual owner is leasing company, I thought they are supposed to be responsible for the property taxes, Well being the first time lease holder learning along the way.
#101 of 102 Re: Please explain lease "rent charge" [kyfdx] by citivas Aug 26, 2008 (7:02 pm)
Replying to: kyfdx (Jun 13, 2008 1:12 pm) Repeated your post here to make it easier to follow my reply...   Take your rent charge... $4331 Divide by the term.. 48 months. Result: $90.23/month    Add your net cap cost and your residual amount. Just as an example.. $20K + $11K = $31,000    Divide $90.23 by $31,000 = .0029.. This is your money factor    Multiply .0029 X 2400 = approx. 6.96%.. This is the equivalent APR of your lease, assuming your CAP and residual are the same as above..    regards, kyfdx   What I want to understand in your example is what is the 6.96% applied against? In other words, what value exactly are you being computed the equivilent of interest against? II would have thought you should owe interest on the part of the car you are buying, or the depreaciation and amortization (i.e. the adjusted cap cost MINUS the residual value).   But in your example, for instance, that would be 20K-11K = 9K, But if I use a compound interest calculator against 9K over 48 months the monthly interest payment should be less than $30/month of the total payment, far less than the $90.23. So the "interest" must be calculated against something far larger than the amount being the equivilent of "borrowed" or used. The interest is larger even than if applied to the residual amount, but smaller than if applied to the entire value of the new vehicle.   Your help is appreciated. Replies to this message: kyfdx (Aug 27, 2008 3:20 am)
#102 of 102 Re: Please explain lease "rent charge" [citivas] by kyfdx HOST Aug 27, 2008 (3:20 am)
Replying to: citivas (Aug 26, 2008 7:02 pm) It's $20K + $11K   The amount that is financed is an average of those two numbers.. You start out borrowing $20K (the cap cost), and end up owing the residual amount (which is satisfied by giving the car back).   You owe interest on the whole car.. because, after all, you can't borrow just the part you use... you have to borrow the whole car... then, give back the part you didn't use.. Since you pay for the car as you use it, that amount gradually drops to the residual over the life of the lease.   So, technically, it is ($20K + $11K) divided by two.. But, the division calculation is accounted for in the money factor..   Hope that helps, kyfdx

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