24 month lease $4500 cap cost reduction, 15000 miles per year.
$1331.03 monthly payment. 1st payment is takeout of $4500 cap reduction.
Residual $47,355
First time leaser. Is this a good deal?
My plan is to buy out the lease within a month if possible. Looking through the forums, it looks like there is a 4% penalty on remaining lease payment balance minus unearned interest at time of buyout. Is that close to 4% of (78351+1095+495+70-8000-4500-47355) = 0.04 x 21487.03 = $859.48? Additional fees turn in fee, documentation fee etc.
Lease buy out language in contract:
“Purchase Option. If you purchase the vehicle at any time, you agree to re-register and re-title the vehicle in your name no later than 30 days om the time you purchase it. If you fail to do so, we reserve the right to cancel the registration.
Scheduled Termination. At the end of the scheduled Lease Term, you may purchase the vehicle “as is” for the amount set forth in section 9 of this ease plus any lease payments or other amounts due under the lease at the time of termination.
Before Scheduled Termination. At any time before the scheduled Lease End, you have an option to purchase the vehicle “as is” for the Early Purchase Option Price (described below).
Standard Lease - Early Purchase Option Price. If this is a Standard Lease as indicated on page 1 of the lease, the Early Purchase Option Price is the sum of: (a) any lease payments or other amounts due under the lease at the time of termination; plus (b) all fees and taxes assessed on or billed in connection with this lease or the vehicle; plus (c) an amount equal to the Vehicle Turn-In Fee on page 2 of this lease; plus (d) the Adjusted Lease Balance (explained below); plus (e) 4% of the Adjusted Lease Balance.
The Adjusted Lease Balance is calculated by reducing the Adjusted Capitalized Cost each month, on each monthly payment due date, by the difference in the base monthly payment and the part of the rent charge earned in that month calculated on a constant yield basis.
Single Payment Lease - Early Purchase Option Price. If this is a Single Payment Lease as indicated on page 1 of this lease, the Early Purchase Option Price is: (a) any lease payments or other amounts due under the lease at the time of termination; plus (b) an amount equal to the Vehicle Turn-In Fee on page 2 of this lease; plus (c) all fees and taxes assessed on or billed in connection with this lease or the vehicle; plus (d) the Residual Value printed on page 2 of this lease; plus (e) 4% of the Residual Value; less (f) the unearned rent charges you paid calculated on a constant yield basis.”
Questions:
Would there be a clawback from MB on the $7500 EV credit if I buy out early as planned?
If the $7500 credit is given as a rebate up front, any chance of “losing it” to the dealer or MBFS with an early buy out. I think that if it is structured to somehow reflect in the residual value, then it can be a concern?
Are the penalties likely to be significantly higher than $859.48?
Good overall lease deal? Am Ibcorrect in assuming I will come out several thousand dollars ahead with the lease and early buy out rather than buying outright because of capturing a portion of the EV rebate. Purchase price is $78416 point the door.
Generally, the lender needs to have gained possession of your title to execute a buyout. I’m not sure how long this can take in your state, but in NJ this can be anywhere from 30 to 100-day delay. I would plan on making up to 3 payments.
I set adjusted lease balance = capitalized cost $21487. It’ll likely be lower if I make some payments. I think the penalty percentage doesn’t apply to the residual value $47355.
When I buy out the lease, I’m assuming I’ll owe 4% of adjusted lease balance + adjusted lease balance + residual value ($47355) + any lease amounts due ($0 if I turn around and buy out the lease and car) + fees.
Not sure how correct I am in my assumptions above.
If they’re capitalizing all those fees, your gross cap cost is going to be $80011.
Your adjusted cap cost would be the gross cap cost minus all the CCRs, in this case the $8k rebate and $3169 CCR ($4500 minus first month), so your adjusted cap cost is about $68850.
That means your 4% penalty on a buyout is about $2750.
Basically, but your adjusted lease balance would be the adjusted cap cost minus the unearned rent charge, so starts out quite a bit lower than the residual value
Adjusted cap cost can’t be lower than the residual, so putting down enough to get the adjusted cap cost almost equal to the residual would be the best you can do.
Single Payment Lease - Early Purchase Option Price. If this is a Single Payment Lease as indicated on page 1 of this lease, the Early Purchase Option Price is: (a) any lease payments or other amounts due under the lease at the time of termination; plus (b) an amount equal to the Vehicle Turn-In Fee on page 2 of this lease; plus (c) all fees and taxes assessed on or billed in connection with this lease or the vehicle; plus (d) the Residual Value printed on page 2 of this lease; plus (e) 4% of the Residual Value; less (f) the unearned rent charges you paid calculated on a constant yield basis.”
Most I can put down in standard lease is 20% of selling price to bring adjusted cap cost down. Penalty is then 4% of adjusted cap cost (80% of sales price essentially)
With a single pay lease, penalty is 4% of residual value. I can lower that by going for more miles and lengthening the lease term to a point.
Best option might be 4 year single pay lease with 19999 miles per year. This reduces the 4% penalty the most. I get unearned interest back at buy out. Key is to turn around and buy the car as soon as possible?
Thanks for the help. Just completed the deal. I got 9% off MSRP + $500 AMEX cash + $7500 EV lease credit. It’s a good deal based on what I could get after speaking to a few dealers.
