would be sold right now! 
FMC Red Carpet Leases did something similar to 5th 3rd Bank about 20 years ago. They used a pair of annuity factors predicated, of course, on an interest rate. They used a capfactor and a residual factor. They added 0.0011 to the capfactor to account for their industry high acquisition fee. This meant that for every $1,000 of cap cost, the lessee would pay $1.10 each month. So, if the adjusted cap was $30,000, the monthly acquisition charge amounted to $1.10 x 30 = $33.00. On a 36 month lease with an interest rate of 1.5%, the present value of the $33 recurring charge is a whopping $1,162; the cost of the acq fee!
At 1.5% and an adjusted cap of $30,000 with a residual of, say, 18,000; the FMC payment was calculated as followsā¦
(0.02839 + 0.0011) x 30,000 - 0.02714 x 18,000 = 396.18
Later, FMC changed to an MF. So now, theyāre back to using an interest rate?
I believe Ally Bank took over leasing operations for GMAC. GMAC did something similar to FMC only they discounted the residual one month nearer to the present which effectively increased the payment by a few dollars. My best guess is that their reason for doing this was due to the fact that they didnāt charge a disposal fee at that time.
Initially thought OP was talking about a Honda thinking that edmunds converted their MF to an interest rate which seemed very strange. They do use an MF as you know.
At the bottom of OPās post, heās talking about a Ford Fusion Hybrid. Didnāt realize Ford uses an intereste rate. They must have switched back after examining several Fusion posts at edmundsā¦
kyfdx Posts: 86,882
July 26
mikeset said:
Hey guys, may I please have the info for Hybrid SE - 36/10 MF, RV and incentives in 96804.
36/10 - .001 and 53%?
$5025 lease cash?
Thanks from ahead of time!
0.10% APR
44% residual
$1025 lease cash
My fault for not being clear
No, itās my fault for not having read the whole post.
Ally IS GMAC. Once GMAC split from GM during the Bankruptcy, they changed their name to Ally.
1 Like
Question everyone.
Sorry for being a newbie.
Trying to calculate the correct price for a lease that Iām currently working on.
State: CA - Tax rate is 7.75%
The quote I received for example
MSRP: 50000
Sales Price 45000
Sub total is 45000
Fees: 700
Sales Tax: 3,487.50
Net Sales Price is 49,187.50
My question - is the sales tax added on the total? or does that apply to the monthly rate? it seems like the dealer should not be adding the sales tax but instead, it should be added on the monthly payments?
Post a picture of that sheet.
If itās CA, tax should be on the monthly (except for any tax on rebatesā¦7.75% of a few thousand shouldnāt be that much).
You are looking at the purchase/financing portion that lists the sales tax. Itās not applicable for leases.
Ha, a FWD x county, doesnāt that defy the point. Oh and thatās not a good lease.
You should probably edit this pic to remove your personal info
Sorry about that. Complete newbie. However, back to my question, he tax shouldnāt be in that quote. Am I wrong? Should the price be at 48040 and do the math from there? Everything about the quote looks off. Even down to the msds
Tax is tax, they canāt screw you on that. Allot of times these print outs show tax as if it were a sale. Whatās the MF and residual? Get that and you can put it in the calculator
MF is .00035, residual is 58%, per the agent, no payments till Jan 2019.
This is the r design model not the momentum.
Do I even push back? The way Iām doing it, Iām basing it on the 48040 sales price, which isnāt much if a discount. But Volvoās are hard to lease it seems. Not even sure what the 1386 amount, Iām assuming itās due at signing. So then itās not really free till Jan 2019. Lol
The tax quoted is for retail. It isnāt charged for a lease. XC60s still seem to be very popular and will not lease well.
Thank you Jon. (lexus guy!).
So, If I should push back, I would start on the 48,040 Sales price and forget about the Net sales price - right?
Pretty sure the dealer is basing the lease on a sale price of $48040. You need to get a better lease worksheet that shows cap cost, RV, MF, etc.
Take a look at this. Not sure if a deal like this would be possible in SoCal.