Break down is wrong when Cap all Payments is checked and Pay Dealer Fees Upfront was previously checked.
This calculator has Captialize All Payments checked
Notice 150+107+0 does not equal $332?
Without that box checked is correct
I found this little bug if the Pay Dealer Fees Upfront is checked and someone just checks Capitalize All Payments.
I imagine it’s the fees
We figured out the bug where the monthly breakdown does not get recalculated when “zero drive-off” is checked. We wrote the formulas to calculate the monthly depreciation and rent charge breakdown in a zero driveoff scenario, but would like to check the math with @delta737h .
The monthly payment in a zero drive-off scenario is calculated using the below formula previously provided by @delta737h :
Calculate new monthly payment using the following formula:
C = Net Cap Cost
A = All capitalized fees (taxable and non-taxable)
T = All capitalized taxes
D = Cap cost reduction
R = Residual value
N = Number of months
F = Money factor
p = monthly payment before tax
t = tax rate
FORMULAS
C = S + A + T - D + p(1+t)
p = (C + R) * F + (C - R) / N
FINAL FORMULAS
Q = S + A + T - D (technically NCC plus capped tax)
P = [FN(Q+R) + Q - R] / [N – (1+t)(FN+1)]
Our new formulas to calculate the monthly depreciation and rent charge break down
Monthly Depreciation = (Net Cap Cost - Residual Value) / (Months - (1+Tax Rate)*(Money Factor * Month + 1));
Monthly Rent Charge = (Money Factor * Months *(Net Cap Cost + Residual Value)) / (Months - (1+Tax Rate)*(Money Factor * Months + 1));
Expressed in abbreviated terms:
Monthly Depreciation = (Q - R) / ( N - (1 + t) * (F * N + 1))
Monthly Rent Charge = (F * N * (Q + R) ) / (N - (1+t)*(F*N +1)
@delta737h Are the above formulas correct?
Thank you! 
Yes, your formulas are correct except, you’re missing a parenthesis in the last formula far right…
Monthly Rent Charge = (F * N * (Q + R) ) / (N - (1+t)(FN +1))
Just to make sure that we’re on the same page…
We’re considering zero drive-off (ALL fees are capped including 1st payment). We’re also considering only those states (e.g., CA, PA, FL, WA, NC) that tax the monthly base payment streams where both taxable and non-taxable fees are capped when computing the base payment and so, tax is levied on tax which is an undesirable consequence of levying tax on payment streams. I think you taught me that!
NOTE: As you know, the formula below will be different for those states the levy tax on the sum of the base payments (e.g., Ohio, NJ). And, as you are keenly aware, NY and Illinois also tax the sum of the base payments. However, they require the use of a rather unusual formula that accounts for their unique taxing methodology that utilizes a “gross-up” tax factor. The formula is also different for those states that tax depreciation (e.g., GA). as well as sell price (e.g., VA, TX).
The following formula and example assumes that tax is levied on the monthly base payment streams (not the sum of the base payments) with zero drive-off…
PB = base payment
Contractual Payment = PB(1 + Ň)
S = sell price = 65295.00
D = cap reduction = 7500.00
X = Sales tax on the cap reduction = 675.00
K = all fees capped both taxable and non-taxable = 1794.00 (acq, doc, gov., ect.)
R = Residual Value = 37786.35
N = term =36
F = money factor = .00295
Ҭ = sales tax rate = 9.00%
Note: You can combine X and K. I just prefer to itemize them separately.
Contractual Payment = 945.29 x 1.09
= 1030.37
Calculating the monthly depreciation and rent charge components, we have
??? Please let me know.
One more thing… Below is proof of the above…
Sell Price … 65295.00
Capped Fees
All Fees … 1794.00 (acq, doc, gov)
1st Payment… 1030.37
CCR Tax… 675.00
Gross Cap … 68794.37
CCR … 7500.00
Adj. Cap … 61294.37
RV … 37786.35
MF .00295
Term… 36
Sales Tax Rate… 9.00%
Base Payment = .00295 x (61294.37 + 37786.35) + (61294.37 - 37786.35)/36
= 945.29
Contract Payment = 945.29 x 1.09
= 1030.37
EDIT: Consumer Leasing (Reg. M) definition of depreciation and rent charge…
Monthly Depreciation = (61294.37 – 37786.35)/36 = 653.00
Monthly Rent Charge = .00295 x (61294.37 + 37786.35) = 292.29
Base Payment = 653.00 + 292.29 = 945.29
This is what you see in lease contracts. For this reason and for sake of consistency, I would use the Reg. M definition of depreciation and rent charge. Notice that the monthly depreciation and monthly rent charge are different from that which was obtained in my previous post using a complex formula. However, both sum to 945.29 which is what matters as the depreciation and rent charge only reflect an average that is totally meaningless within the context of creating a lease amortization schedule. I’ll refrain from a long-winded discussion as to why the two are different. Suggest that you don’t use the complex formula to compute depreciation and rent charge as your LH Calc will reflect a disparity from that which is disclosed in the lease contract.
@delta737h Thank you so much for the detailed explanations! I am implementing these formulas for monthly depreciation and rent charge for zero drive-off where tax is levied on monthly payment.
Do you know the formulas for monthly depreciation and monthly rent charge in these two scenarios:
I haven’t figured out the formulas yet and the monthly payment breakdown (monthly depreciation + rent charge) are not adding up perfectly (off by $2 usually). 
This is the current formula used to calculate monthly payment when zero drive-off is elected:
p = ((Q + R)FN + Q - R) / (N - FN -1)
Thank you!
Yes. Because my response is somewhat detailed, I decided it would be practical to post my explanation as a pdf…
Zero drive-off when tax levied on payments sum or sell price.pdf (450.2 KB)
??? Please let me know.
Thank you so much – you are super!
It will take a while for me to digest, but I will reach out if I have questions!
Thank you. Glad to help.
Not sure if you want to include the case where tax is levied on depreciation as Georgia is the only state that I’m aware of that does it. There may be a few more. The pdf below is an update of the above posted pdf to include such a scenario. Also, I tweaked some of the other content.
Zero drive-off scenarios.pdf (509.4 KB)
FYI- The term “Leasing Woes” was part of the title of another document that I used to edit the posted pdf. It was created many years ago long before LH existed. It was in no way meant to demean the LH Calculator which, IMO, is the best online lease calculator that exists today.
