Hi Hackrs! I’m having trouble with my first lease. I’ve read many websites and have used the LeaseHackr Calculator as well as Edmunds Calculators. Armed with this knowledge, I strolled into a dealership this weekend and I was off by $100/month. I don’t know where I went wrong with my math. Here’s the information below:
Now I know VIN-Etching can be waived and Reg and Title should be $250. I also know it’s advised to put nothing down on a lease. All that aside, I can’t figure out how they got to $481/m. I calculated $389/m with everything rolled in, Leasehackr calculated $370/m with taxes ($941) Dealer/Gov Fees ($600, $300, $300) and first month’s payment ($370) in drive-off costs. Although with “zero-drive off” it’s $440/m. Still not $481/m.
This is my math below:
MSRP: $41,930.00
Residual Value: $25,996.60
Negotiation Sales Price: $41,430.00
Gross Capitalized Cost: $43,230.00 (Doc Fee, Bank Rate, Reg & Title + Negotiated Sales Price)
Adjusted Capitalized Cost: $35,230.00 (Gross Capitalized Cost - Trade-in ($8,000)
Depreciation Amount: $9,233.40 (Adjusted Capitalized Cost - Residual Value)
Base Payment: $256.48 (Depreciation Amount / 36)
Rent Charge: $108.49 (Adjust Capitalized Cost + Depreciation Amount) x MF (.00244))
Pre-Tax Payment: $364.97 (Base Payment + Rent Charge)
Total Payment: $389.15 (Pre-Tax Payment + $24.18 (6.625% Tax))
Is my math correct? What am I missing? I understand in NJ taxes are paid up front, but a trade-in is not taxable and will reduce the tax burden on the lease. If someone could help explain this I’d really appreciate it! Thanks!
You are missing to tax your cap cost reduction. But that still won’t take it to 481. Where is the dealer worksheet? Actually, it doesn’t matter. Don’t do this.
Great catch! I’m seeing the same–still not $481. But that makes a little more sense compared to the calculator. Yeah, I’m not really interested in people’s opinion on the car. I’m more concerned that the math is correct. Thank you for catching that error.
Thanks for the link! Yeah the way NJ taxes work with leases is funny. I also thought it was weird when I saw there was $1,600 in taxes on their work sheet, after I applied my trade-in, and they wouldn’t explain why.
Looks like in NJ you either pay taxes up-front or somehow roll them into your monthly payment. But according to consumer affairs, a trade-in can reduce tax burden. Everything is so complicated lol.
You’d have to pay interest on tax that’s rolled in. But, given your trade, part of that should be paying the tax (less than $1k) and all the fees ($1500 after you do away with VIN etching, which is complete BS). $500 discount is pretty sad. Actually $0 discount due to the inflated doc fee. Are these cars really still demanding full MSRP?
ANYWAY, as I was saying, after the taxes and fees, your cap cost reduction is approx $5550.
Yeah, I’m planning on paying the tax, doc fee, bank rate, and title and reg up front to avoid the interest. Should come to around $2,000 out of pocket. I agree the doc fee is inflated. NJ average doc fee is $355, but there is no max. I heard this is difficult to negotiate and it’s better to ask for, say free rubber mats, or something. I didn’t get too deep into price negotiation as the monthly numbers seemed so high. I’ve seen people get between 500 to 1,200 off MSRP lately. It is what it is.
The Golf R is a far more liveable car as a daily than an STi. Source: I’ve driven both significantly.
The STi is the better analog experience/drivers car, hands down. The R is more comfortable day to day. The interior on the R and the technology is superior as well.
If he’s getting these quotes in Jersey on the R, I can almost promise they’ll be worse for the STi.
Jersey/NY/CT are big demand markets for the cars and dealers tend to mark those cars up in the area. That’s been my experience shopping in the tri-state area for those.
I just don’t really understand why OP is throwing away $8k, (probably closer to $10k if sold privately, whatever the vehicle is?) if you’re putting that much down then isn’t it easier to just buy it?
That’s a good point. Well I’m not going back to that dealer. The next dealer’s doc fee is $475. Still high, but a lot more manageable going in. I didn’t know there was tax on the rent charge too. So many taxes. I calculated an additional $9.45 on $142.72 (6.625%).
I was actually between the STi, the Golf R, and Audi S3. I believe the STi is a lot more affordable and definitely more of a driver’s car. But I like the practicality of the hatchback and as others have mentioned, the interior is much more livable. They updated the 2018/19 with some nice new additions too.
Time is money, I think I could get about 9.5k on the open market after all negotiations, but then I’d lose about $500-700 in tax benefits by turning my trade-in to a down payment, so really I’m throwing away an extra $700 bucks. The best loan I could do was 3.74% over 72 months with $8,000 trade and say $2,500 down payment so same as my lease option. My monthly payment would be $520/m. To make a long story, short you essentially break even over 6 years. Basically $48k for each (barring that I lease the same car with the same options etc. for another 3 years). There are pros and cons to this. I can either have a new car every 3 years and treat it as an expense or 1 car over 6 years and maybe get a few years in the black once it’s paid off, but I don’t usually keep cars longer than 4 or 5 years and don’t drive too much, so a lease seemed preferable. To each their own, I guess.
