In leasing, the amount financed is called the adjusted capitalized cost. I do see a problem with the 47898.45. How did you get it? It seems that there is a mystery fee missing. There is little transparency even when requesting a dealer worksheet. But I usually get them anyway as there is some useful info. You’re not very clear as to how the amount financed was determined. Let’s take a look…
Sell price … 51186.00
Diamond… 499.00
Tax… 585.00 … 9% x 6500.00
Fees… 1254.75
Mystery Fee… 873.70 ??? Needs to be itemized.
Gross Cap… 54398.45
Rebate- CCR… 6500.00
Adj. Cap… 47898.45
I did confirm all the calculations manually. Although, I got 47898.54 for the adj. cap… .09 difference… maybe you transposed the numbers? No big deal.
Don’t ever ask the dealer to do anything. If you do, you’re allowing them to control the deal.
Research selling prices in your market coupled with reasonable expectations. Sometimes, dealers embed rebates in their discount. Keep them separate. Get a list of customer rebates, incentives, and credits (e.g., electric chargers) including VIN-specific discounts, if any.
Secure a copy of the factory window sticker. Check for non-factory add-ons or dealer-installed options. If possible, eliminate those you don’t want or need.
Organize all researched and vetted data with the goal of creating a one-page professional-looking lease proposal that reflects your target deal. The idea is to create your own deal, not replicate or reverse engineer the dealer’s deal.
Rebates can be treated in one of two ways: (1) Use the entire rebate as a CCR. (2) Allocate a portion of the rebate to cover lease inception fees with any remaining balance used as a capitalized cost reduction (CCR).
No need to pay large out of pocket cash upfront especially when given large rebates. If cash is used as a cap reduction, you could lose most or all of it in the event the vehicle is stolen or totaled. Remember, a car is a depreciating asset and an expense, not an investment. Use the cash to invest in goods and services or other more meaningful and productive investments.
It’s nonproductive to waste hours sitting in a dealership negotiating especially if you’re not thoroughly prepared. You’ll get dizzy watching some salesperson running back and forth to their SM as they are not empowered to make decisions. This can be a huge distraction. You need time to think, prepare, and formulate questions within the privacy of your own home. This leads me to suggest…
Once you’ve performed all calculations having gathered, vetted, and organized all data, craft a lease proposal and email it to the sales manager (SM), not a floor salesperson as they often lack knowledge and are tethered to their SM. Be sure to contact the SM first to let them know you’re emailing them a one-page lease proposal because you want to close the deal today or, at the very latest, tomorrow. Send the proposal as soon as you hang up. It must be comprehensive, authoritative, professional-looking, and flawless otherwise, you’ll lose credibility. Below is an example of a lease proposal…
Negotiate via phone/email. I prefer the phone. Be nice but firm. Explain to them that it is your practice not to deal with multiple dealers simultaneously and that you refuse to play games like “can you match or beat this”. Above all, say what you mean and mean what you say. Remember that local dealers know each other. Speak in a commanding and business-like voice that exudes confidence and knowledge. Unless they’re very stupid, once they see your fabulous proposal it will speak volumes. They’ll immediately know it’s time to put away their toys and board games and get down to business absent all the BS.
Once an agreement is reached, ask the dealer for a review copy of the lease agreement and all contract addenda BEFORE you go to the dealer and sign. Moreover, it’s helpful to know the terms and conditions of the lease contract such as early termination liability criteria and purchase option criteria as well as excess wear/tear criteria. If all the terms are mutually agreed, tell the SM that you’ll come in to sign in an hour or two. You don’t want any surprises or dealer excuses like …. Oh, we made a mistake. That’s unacceptable and shouldn’t be tolerated.
If the dealer isn’t transparent or is uncooperative or showing signs of incompetence, WALK AWAY AND MOVE ON!
Leasing is time-consuming and requires a good deal of study and attention to detail. If you don’t have the time or interest to commit, perhaps your best alternative is a good broker. There are some outstanding brokers on the LH website. However, if you’re willing to commit your time and resources, be sure to always control the deal. That can only be achieved with education which breeds confidence and increases the likelihood of success.
