Last post on Apr 11, 2013 at 2:36 PM
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Dissecting the Deal - How To Spot a Good Lease
10 Steps to Leasing a New Car
The "Residual Value" of Leasing
Calculate Your Own Lease Payment
#121 of 173 Re: Trying to understand my leas payments [bsyah]
Oct 19, 2012 (11:37 am)
That's the way the dealer decided to do it. You gave them $1,949 in cash plus a $2,250 rebate. So, the dealer decided to allocate that money to pay the up front charges and the amount remaining was used as a CCR. You probably could have controlled that deal by creating a one-page lease proposal stipulating how the $2,250 rebate was to be allocated. Because you didn't do that, the dealer took it upon themselves to allocate thoses dollars in the manner described. Remember, they have a total of $4,199 to play with. The acq fee and taxes were capitalized in the lease but could have been paid upfront. Personally, I would have paid them upfront ($595 + $1218 + 407 + 85 + 87.50) and would have written a check for the balance owed (about $142) instead of giving them $1,949. Now, that would have given me a payment of $407 but I would not have parted with all that upfront CCR. Money down on a vehicle is not a good idea as it is a depreciating asset. If you total the vehicle, you necessarily risk losing all or part of the CCR.
Again, I'm not sure why you gave them $1,949 especially if you knew that you were entitled to a $2,250 rebate.
I've reconciled all the numbers except I can't account for the $29.35 of additional tax without seeing the dealer's worksheet.
#122 of 173 Re: Trying to understand my leas payments [delta737h]
Oct 19, 2012 (12:59 pm)
I wanted to do it basically the way you suggest but had only been researching lease structure for about a week and needed to get 2 cars quickly because my wife's engine had died in her previous car.
Unfortunately I was having a hard time finding out how taxes needed to be calculated and what did or did not have to be capitalized. It sounds like what you are saying is that nothing has to be capitalized if you don't want to except the negotiated price of the car.
I gave them 1,949 because that is what they told me the money needed for taxes and fees was and based on my calculations I felt the combo of the payments and cash was in the range of what made sense based on my calculations coming in. Now after the fact I am just trying to reconcile the numbers exactly (I know reconciling before signing would have been the way to go) so I can be in a better position to do this next time.
I have a question about your upfront numbers. With no cap adjustment (ie adj cap cost = base cap cost 29771.02) I get the 407.04 monthly but how do you arrive at the 1218 tax? is it based solely on the payments or is the incentive taxed?
Thanks for the help on this.
#123 of 173 Re: Trying to understand my leas payments [bsyah]
Oct 19, 2012 (3:54 pm)
Actually, I did the tax calc on the fly. The tax amount should be...
0.075 x (407.04 x 36 + 595) = 1143.63
Yup, the acq fee is taxable. However, there may be other taxable items that I haven't considered such as title/reg/tire fees and incentives. Don't know if these are taxable or not in NYS. Generally, manufacturer rebates/incentives are taxable. However, dealer discounts are not taxable in most if not all states. If the $2,250 rebate is taxable, add another $168.75 for a total of $1,312.38. The question I would ask the dealer is whether or not there are any manadates as to how that rebate is to be used. Can the dealer simply write a check to the lessee for $2,250? Or, must the rebate be used to fund the lease?
As you know, the selling price of the car has nothing to do with whether you capitalize items or not. You don't have to capitalize anything in a lease, except selling price of course. Two identities follow...
Negotiated Sell price + Capitalized Amounts = Gross Cap
Gross Cap - CCR = Adj. Cap.
As you can see, sell price and capitalized amounts are only used to determine the gross cap; one has nothing to do with the other. If there are no capped items, then sell price = gross cap.
#124 of 173 Re: How to Calculate Monthly Lease Payments [kirstie_h]
Nov 28, 2012 (6:21 pm)
The following is for a 2013 Acura MDX w/ Tech Package
Just left the dealership and for the sake of sleeping well, would like to know if the deal I got was a good one... Every lease calculator i tried says it's an excellent one but I'm a bit pessimistic! Please help! You think you have it all under control but yet they find a way to get you! I tried to perpetuate the situation by continually asking for numbers but they like to be vague and quick to walk away! Took a lot of back and forth w/ the sales rep going to the Finance guy - annoying. Keep in mind I like to have low monthly payments even if it means putting a bit more down in the beginning though I've noticed not to many are into that. I'll write the final deal at the end;
MSRP - 47890
Cap Cost - 42321 (negotiated price only)
Residual value - 26317
Bank Money Factor - .0012 or 2.9 APR'
Lease Term - 36/mo 10K miles
I also had a 2010 TL w/ Tech w/ 4 payments left totaling $1796 I wanted to trade in.
End of day, I walked out w/ 5K down and $465 per month inclusive of tax, first month payment, dmv and other misc fees.
Also, in NY w/ a tax rate of 8.875%
#125 of 173 Re: How to Calculate Monthly Lease Payments [lazo23]
by Kirstie@Edmunds HOST
Nov 30, 2012 (7:29 am)
Hello to you!
I'm not a leasing expert - I just moderate the forums. Hopefully one of our knowledgeable members will drop by and let you know how you did.
Dec 20, 2012 (7:39 am)
This is probably going to make no sense, but this is the deal I'm trying to work
2013 ACURA ILX PREMIUM 6 SPEED
NEG PRICE $28402
NY TAX 8.75%
AQUISITION FEE $595
DMV FEES $430.27
Should come to $299 a month with a $1,000 down. Now since the first months payment is included in the $1,000 in reality I'm only putting $700 towards my cap cost correct? So if I am techincally only putting $700 towards the cap cost then the monthly price would go up by $9 making a grand total of $308 per month...right?
#127 of 173 Re: First month payment [brooklynaudi]
Dec 20, 2012 (7:49 am)
I don't know how many months you are talking about, but what about the acquisition and DMV fees? Sounds to me like, with $1k due at signing, you aren't applying anything to the car itself. If paying first month up front, you are actually adding several hundred bucks to your cap cost, no?
#128 of 173 Re: First month payment [qbrozen]
Dec 20, 2012 (8:05 am)
Ok now I'm officially lost. It's 36 months, 12,000 miles. If I put all those numbers in the lease calculator (including $1,000 down) I get
Total Loan Amount $28,427
Monthly Payment (tax included) $299
I thought that the DMV fees and the first month had to be paid up front? I would need to put down at least $700 to pay those off to drive off. If I rolled those in wouldn't my monthly payment go up? Or are you saying I should negotiate the price of the car lower?
#129 of 173 Re: First month payment [qbrozen]
Dec 20, 2012 (8:18 am)
Ok I see what your saying. The final neg. price would be $28402. You would have to add DMV ($450) and ACQUISITION ($595) fee to this which would make the cap cost $29,427.
I want to pay first month, DMV fees which is $730 and add the $280 as a cap reduction totaling $1000 down. I'm doing this to get my payment to be $300, I don't want to go much higher then that.
That's what I'm asking though I want to put $1,000 down, the first month is going to have to come out of that or they are going to roll it into the payments so technically I'm only putting $700 down right? Which means at that negotiated price, my monthly is going to go up by $9 correct?
#130 of 173 Re: First month payment [brooklynaudi]
Dec 20, 2012 (9:09 am)
Well, I THINK you could tack the first month onto the end. I could be wrong. So, in other words, instead of first month up front and 35 payments, you actually make 36 payments, starting 30 days after you get into the car. Again, I could be totally off base here, but worth looking into.
In any case, yes, $300 additional cap cost should be roughly $9.
I haven't run your numbers through a lease calculator, but don't forget tax on the monthly payment.
edit: oK, ran it through calculator. Looks like you are right on the money. It is still telling me, however, that you should be at $300/mo with tax after just $1k down. That's probably calculating like I did above, that you would make 36 payments, not the first payment up front.
Heckuva deal on a $30k car.