Please be gentle. I read the calculator 101 and appear to still be doing something wrong. Here’s how I came up with selling price based on instructions: Dealer price is $34319 including incentive. I added back in $1250 incentive (and put it in the incentive area) giving me $35569 and then since I have $4k in positive equity, I subtracted that and came up with $31569 for the selling price. Everything is rolled in for a $0 drive off. Dealer says payment is $290. I was hoping to get a score from the calculator but since I’m coming up with a drastically different payment amount ($236), I’m not sure what my real score is. Residual and MF are correct. Thank you for your time.
Score is irrelevant.
If you have $4k in equity, then don’t manipulate the sales price or anything like that. Your calculator should show as having $4000 DAS. This is not a $0 drive off. This is a $4000 drive off, you’re just paying for it with your current vehicle instead of cash.
What Honda deals have you seen at 21% off? That should be a big red flag that you’re doing it wrong.
Honda direct to dealer incentives are untaxed
Have the dealer cut you a check for $4k, or sell it to anyone else (whoever gives you the most $$$) separate from the deal.
I put $4k in taxed incentives (since any cap cost reduction is taxed), I get $244, so your inputs are wrong;
Thank you. I changed as you specified:
Still coming up with much lower payment.
Are you in Chicago proper?
Have you verified any dealer add ons? Honda dealers love big add ons, especially dealers advertising exceptionally large dealer discounts.
Thank you Chris. Sorry for the overlap, we were replying at the same time. The $4k is the best offer I’ve been given on my car and I will want to apply it to the lease. I cannot for the life of me tell which inputs could be wrong as I have the numbers in front of me. I’ll go back to the dealer I guess and have them go over in more detail and ask them to show me the math.
Nope, far far west suburbs
To get $290/mo it’s like $2500 of equity.
Or your other inputs at wrong
Why do you want to apply positive equity to the lease?
I guess it’s just hard to get past the mindset of financing something that doesn’t need to be financed. The MF is very low though so maybe I should get over that. I’d also need to see if they’d give me the extra $4k selling to them outright. Other dealers and Carvana/Carmax were around $3-3.3k, not going to mess with selling private party. Their selling price still beat other dealers in addition to the increased positive equity.
Here’s where I am if I take the trade out of the picture completely
Maybe I should just evaluate if this is good independently of whether or not they’re giving me a fair offer for my car
That’s exactly what you should do.
You should always evaluate the deal and the equity in the old vehicle separately
Thanks everyone. I was following the guidance that said this…:
Selling price is the agreed on value + any non-residualized extras - any trade equity (positive or negative)
The agreed on value is
The trade value is
As this is positive trade equity, we subtract it from the agreed on value. $35304-$3000=$32304
…but I can see now that your advice makes sense. I’ll update after I go back to the dealer after work.
It depends on if you’re trying to calculate your costs or verify a contract. By subtracting it from the selling price, you’ll get an output that accurately reflects your cash flow, but not your actual cost.
By treating the trade as cash, you’ll get an output that reflects your cost, but not your cash flow. Both are applicable uses of the calculator, but showing cash flow vs cost does a much better job of hiding a bad deal.
Don’t. Keep the negotiating remote … over phone and/or email.
NTM you need to take a step back and figure out your target for selling price (which will drive everything else) independent of the trade.
They haven’t seen my car yet. Their offer was remote and they want to confirm the condition is as I specified.
As far as selling price: when I took the trade out of the equation, I was at 10.3 for score. I intend to keep negotiating but need some leverage to go between dealers. Initially since I was using the calculator wrong, I didn’t know if I was at a good starting point. Now I know my pre-tax is $343 and MSRP is $39985 with a true 0 down. I feel like that’s a pretty solid start but please correct me if I’m wrong.
I also just looked up selling price for my trade. Dealers are selling comparable for very close to what they’re giving me so I think I feel good about that. Not wanting to mess with trying to sell myself to make an extra $500.
Your LH score is irrelevant.
Your monthly payment is the output of the equation. Comparing other offers on the basis of monthly payment is irrelevant.
You need to go off of researched pre-incentive discount targets from shared deals and the market place listings here, with the current lease programs as they apply to you factored in. Without that information, there is no way to know if $343 pre-tax is good or not.
What did carvana, shift, vroom, etc offer for your trade?
Where in what I posted does it say what you are saying that it says?
Selling price is selling price AKA agreed upon value.
I think that you’re confusing selling price/agreed upon value with cap cost.
What’s being posted above is out of the calculator FAQ as a means of getting the calculator to accommodate vehicle equity or add ons when you’re trying to match cash flow with the dealer offer.
I thought the score became relevant once I took out the trade. I guess I’m still not fully understanding. I was also kind of going with the 1% rule and I’m well under that.
Vroom was $2,200 and carvana/carmax were about $3k.
I didn’t see much on the passport in the forums.