Is customer cash of $3500 a downpayment? This is a lease right? You should always have $0 downpayment on a lease if you can. If that is the downpayment, then $317 seems very expensive. $9000 in rebates includes $7500 federal ev tax credit right?
Where is the residual amount? How is the $11.766.10 cap reduction figured?
3500 is down payment. Residual is 34,472
Cap reduction is Down payment + rebate - first payment + up front charges.
I dont know it the 7500 is included. That is a great question
Near as I can tell the Kia does not qualify for the federal tax credit.
- Dealer is selling for 8% off MSRP
- Money factor is .0005
- Residual is 62%
- 3500 down is not a requirement. I could go up to around $460 per month with 0 down. I am definitely going with a lower DP
**Where do you see that I could do better on this lease?
It 100% qualifies for the federal tax credit that is relevant to a lease.
That’s why you get a $9000 incentive on it.
Perfect example of where establishing a target deal upfront is hugely in your favor.
24 ev6 wind awd on a 24/15 has a 62% rv, buy rate is .00095, has $9900 in incentives and an additional $1500 vin specific incentive for aged inventory available.
You also have a .0009 mf reduction available on a one pay.
The move here is to identify a unit that qualifies for the vin specific incentive and then do a single pay.
According to the dealer these are the available rebates:
Kia customer cash - $7500
Select Vin Summer sticker sales - $1500
I couldn’t agree more! As such, I restructured the lease. Don’t recommend paying 3500 upfront. A car is a depreciating asset, not an investment. If you total the car, the 3500 is at risk… you may lose all or some portion of it. Here is what I suggest…
MSRP 55600.00
Dealer Disc 4511.00 (8%) you might be able to do better.
Sell Price 51089.00
Kia Acq Fee 650.00
Gross Cap 51739.00
CCR 8097.64
Adj. Cap 43641.36
RV 34472.00
RF 62%
Term 24
MF .00054
Rebates 9000.00
Sales Tax Rate 6.00%
Base Payment 424.24
Payment 449.69
Lease Inception Fees
CCR 8097.64
CCR Tax 485.86
Fees 416.50 needs to be itemized- this is the only fixed inception
1st Payment 449.69
TOTAL 9449.69
Rebate Credit 9000.00
DAS 449.69 (1st. payment)
Bottom line: DAS = 449.69 followed by 23 payments of 449.69 each
Well, ya got it! I believe you can even do better than this. Continuing with my discussion…
For leases in which the payment streams are taxed and DAS = 1st. payment, the CCR is computed as follows
CCR = (C – K)/(1 + t)
C = total rebates/credits/customer cash = 9000.00
K = Fixed lease inception fees = 416.50
t = sales tax rate = 6.00%
Substituting the assigned values in the above equation yield CCR = 8097.64
The 3500-customer cash was allocated as follows…
11766.10 – 9000.00 = 2766.10 of the 3500 is allocated toward a cap reduction. The balance of 733.90 is allocated toward paying lease inception fees….
Upfront Fees 416.50 (itemize)
!st Payment 317.40
TOTAL 733.90
The dealer’s worksheet does contain some mistakes which is why I don’t chase after dealers. I extract only useful hard data. Next, I create a professional-looking lease proposal (target deal). You have to like @mllcb42 statement…
Agree with the $0 DAS. If you’re ok with the risk then go for it but not worth it for me personally. You can prob get around 9%-10%. I think someone here got 10% the other week
I really appreciate the thorough response. I am trying really hard to learn and help myself but still struggling a bit.
I went to the LH wiki to look up your acronyms. What is CCR?
CCR is Capitalized Cost Reduction i.e. any downpayment money you use or if you have a trade-in. But honestly you want to try and find deals on an apples to apples basis with $0 down. You don’t want to put money down because if you wreck the vehicle in a few months, you’d be out the $3500 with no recourse from insurance or the dealer.
Sorry for the oversight… CCR = Capital Cost Reduction.
I have been figuring my total expense by amortizing the downpayment. For instance I divided the 3500 by 24 = 145.83 I added that to the quoted payment (317) and got a total of $462
My fuzzy brain suggests that any combo of DP and monthly payment equaling $462 is all the same.
Am I correct?
That’s about right. You’re viewing the 462 as an effective payment over the term of the lease.
The federal tax credit on a lease goes to the bank that owns the car not to you. You would receive whatever the bank passes on as rebates/incentives. From what I have read $9900 rebates and a bonus $1500 for aged inventory are the correct incentives for now (for 24 months leases). As have been stated above. You should try to get as much incentives as you can for a lower payment.
Fortunately, a little advanced research shows that they’re giving you incorrect information
Where do you see 9900 + 1500 in incentives?
I am not seeing anything over 9K total
Thank you! Can you provide a link which I could show the dealer?
Where exactly are you searching for this info? Your best bet right now is formulate a deal based on the info @mllcb42 has shared. At the minimum, you should be getting $9900 in incentives before the dealer discount.