Calculations behind the Lease Calculator

Ask the Hackrs
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Hi Hackrs, I’m trying to manage my lease deals in a spreadsheet, but my numbers are slightly different to the Lease Calculator and I’m curious about the difference. I have used a fictitious lease to compare values. Can anyone see a mistake in my calculation?

As you can see, with the same inputs, I get the following:

  • My Spreadsheet: Post-Tax Monthly = $125
  • Lease Calculator: Post-Tax Monthly = $131

The total lease cost is also off:

  • My Spreadsheet: Pre-Tax Monthly = $3594
  • Lease Calculator: Post-Tax Monthly = $3692

I’ve read most of the forum and blog posts about the calculation on LH, but cannot figure out the difference. I have included a screenshot and link of my spreadsheet with an explanation of exactly how I calculate each figure. I have also included the LH Calculator link to see the comparison.

My Spreadsheet:

spreadsheet
spreadsheet1704×1000 146 KB

Here is a Google Sheets link to a copy of the spreadsheet. Feel free to edit if that helps.

Lease Calculator:

Any help would be very much appreciated. Thanks.
Todd

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Why are you subtracting .gov fees back out of the total lease cost?

Where are you capturing the upfront tax on the incentives?

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I take back what I said about subtracting .gov fees. The LH calculator does subtract these out, but it does not subtract out the tax/rent charge as a result from them being included. Weird.

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Yeah, I think the Calculator just does that to make it like-for-like across states. So I did it too to get my spreadsheet as close as possible. But of course actual total lease cost includes those fees too.

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Yes, but if you’re trying to match the LH calculator numbers, you do need to include the tax/rent charge from those fees, even if the fees aren’t themselves included. Which is a very peculiar calculation.

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Can I be a jerk for a second? Why recreate what already exists?

Why not just screenshot the calculator and put it in a doc?

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LH
LH437×656 100 KB

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I agree with @Bostoncarconcierge. Incorrect spreadsheets just cause more headaches for everyone. On that note, I don’t see where this spreadsheet takes into account the taxes on the taxed incentive.

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Sometimes it isn’t about understanding the product but rather about understanding the process. Making your own spreadsheet and figuring out how to make it correct goes a long way into helping cement that understanding of the process. Hell, we’d be better off here if everyone tried to do the same rather than just incorrectly use the calculator without any concept of what goes where or why.

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Leasematic is my go to for double checking the LH calculator, or heaven forbid I’ll calculate a lease by hand, with the help of a calculator :wink:

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You did not roll in the tax on the taxed incentive so your Net Cap Cost is $100 less than the Calculator’s ($1000*10%=$100).

Do note that each state treats taxes differently.

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Screenshots are a good idea, but I also like the idea of quickly adjusting numbers and comparing scenarios and reversing engineering dealership deals, etc. It’s certainly not necessary; I guess I just want to understand the exact numbers and know where I’m making a mistake.

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Thanks @littleviolette and @Jon for finding the mistake with the tax on taxed incentives. However, I don’t think that affects the pre-tax number, which is off.

I’ll work on that now, but I think there’ll still be a discrepancy.

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It most definitely affects the pay-tax payment if it’s capped.

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Pre-tax in the context of the calculator is pre-monthly sales tax on the payment. There is still tax applied to the upfronts that are rolled into your cap cost.

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Thanks. I’ve changed that now.

Update: we have the spreadsheet matching LH Calculator perfectly when Zero Drive-Off is NOT checked, but we’re $2 off when it is checked. So we’re getting closer. Looks like the tax treatment for Zero Drive-Off is the issue.

17

Okay, after lots of testing, I think I’ve discovered the Leasehackr Calculator has errors.

You can confirm this by entering the most basic test data (eg. no tax, 100% or 0% residual, no fees, etc) and you’ll see it returns rounding errors. The errors are small-ish, but significant enough to throw off monthly payment and total lease payment. Not a big issue, but an interesting exercise nonetheless.

Many thanks for all the help. I learned a TON about leasing in such a short period.

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Calculator isn’t perfect. Micheal and LittleViolette have made an amazing community, and if the calculator is a little off okay.

Personally I acknowledge and alert a LeaseHackr that payments might be slightly off by a dollar at most, if 30-40 bucks at most in a deal is off putting to people, I don’t know what to say.

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The Calculator is not coded to round to 2 decimal places in every step of the calculation so it would result in minor differences. We will look into refining it.

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Hi @littleviolette, totally understandable. And definitely not criticizing your efforts; this was more an exercise to understand how leasing works, which was a screaming success. I made a ton of mistakes in the beginning, but working those out was an amazing way to learn. I was actually working on this in-person with another Leasehackr, so we were having fun trying to reverse engineer it :smiley:

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