Risk with the car allowance is that if you end up not driving enough for work, that becomes taxable income. Reimbursing at the IRS rate always is simple and always untaxed. Of course, if the company considers the car allowance income and taxes it there is no issue except for you losing a bunch of money.
The following deal was closed a few days ago by another member @jayceee for 36mth/12k miles per year with 3 years of maintenence included.
Final deal.
MSRP $43,175
36mo. 12k miles
DAS $1,380
Including 3 years maintenance package
NO MSDs
$399 including tax(7.75%)
I used these numbers to try and negotiate a deal on one with an msrp that is $1880 higher and they quoted me $423 plus tax (7%).
Then I asked her to give me the same quote for 18k miles per year which is what I really needed and this is what they quoted me.
I am still waiting to hear back on whether these payments include tax or not. If it does, is this a great deal? If it does not include tax (7% where I live) is this a great deal?
Thanks in advance for your feedback.
Just confirmed. Taxes are included in that quote. Please let me know your thoughts on this deal.
Thoughts anyone?
First, letâs talk about the $1,380 cash due portion. Man your state has crazy high doc fee. CA is only $80 bucks. But it looks like they didnât charge you the acquisition fee. Thatâs real nice!
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$799+$6.50+$400+$149.00 = $1354.50 DAS. So why are they asking $1380 DAS? Whereâs the extra $25.50 going to? Their lunch money?
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What is the residual for 18K miles? Based on my own calculations, with 7% sales tax rate, total adj. cap cost being $39,095 and assuming market MF is .00052, the payment I got was $541.13 + tax = $579.01 vs. the $583. Close enough.
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I thought MBUSA says its $0.25 cents per mile overage. So you want an additional 6k miles a year, thatâs $4500 extra for 18k miles extra across 3 years. 6000 x $0.25 x 3 years.
The other way you can compare is by simply comparing total cents per mile. Add up the entire cost of the lease and divide it by 54,000 miles (your 3 year allowance). That is the cents per mile. Then take the 12k mile/year quote, add the entire cost of the lease, then add the $4,500 for the excess overage. Assuming the same DAS of $1380, then we have:
Buy miles after: $1380 + $423 * (36 months) = $16608 + $4,500 (excess milage) = $21,108 / 54k miles = $0.39 cents/mile
Buy miles up front: $1380 + $585 * (36 months) = $22,440 / 54k miles = $0.415 cents/mile
So it looks like buying afterwards is better in this particular case. People use the 1%:MSRP measurement rule but I like using the cents/mile because the 1%:MSRP does not factor mileage allowance. The cents/mile is the more accurate representation of who is truly paying for less and getting to drive more miles for less money. There is no point of claiming a victorious 0.5% to MSRP ratio when you can only drive 4000 miles a year. LOL.
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They used $1380 simply because That was the DAS on the deal I told them someone else got (on a lower priced msrp).
That is a great analysis. Never would I have imagined that paying for those additional 6k miles per year at the end of the lease would be more affordable than rolling them into the lease upfront.
Its supposed to be more cost effective to pay them upfront in the lease. That is strange.
Do you think it is because of the Maintenance? If you look at the quote they are actually charging the maintenance at $1520 but discounted off msrp so much that it pretty much matched @jayceeeâs deal.
The problem is that $1520 maintenance plan will not have me coverered for the 36 month lease when I am driving 18k miles per year. Just got this message from the sales personâŚ
The 3 year/30k maintenance package is for 3 maintenances - 10k, 20k, 30k. If you go to a 4yr/40k maintenance plan, you would receive 4 prepaid maintenances for a cost of 1835.
I guess I should have them do that one that cost about $300 more.
Please ignore me. I missed something in my calculation.
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When you sign the yellow slip in the finance room, make sure you find out where that $25.50 went to. Most likely it has to go the cap cost reduction. If the cap cost reduction is $0, then that became their lunch money.
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Ooopsies. Your $423/mo is before tax. Your $585 (according to your SA) is after tax. So my calculations are wrong since I didnât include tax to $423. Letâs do it again:
Buy miles after: $1380 + ($423+tax) * (36 months) = $17673.96 + $4,500 (excess milage) = $22,173.96 / 54k miles = $0.4106 cents/mile
Practically no difference.
Letâs compare my deal to yours. Remember mine was:
MSRP: $43,445
Monthly: $380.17 / mo
DAS: $2188 (incl. $1095 acq fee)
But in order to compare apples-to-apples, i will remove the acq fee from the DAS so my das is now: $2188-$1095 = $1093. Your DAS does not include 1st months payment but mine does, so I also need to subtract that out of my DAS later. At the bottom.
Iâm going to add your maintenance plan to my plan. Iâll use the same $1,520. Now my payments are bumped up from $380.17 to $426.68 including tax. Now I remove the 1st month payment from my DAS.
$1093 - $426.68 = $666.32 is my true DAS.
So now Iâm paying: ($426.68 x 36) + $666.32 = $16026.8 / 36,000 miles = $0.44 cents per mile
You were paying: ($423+tax) = ($452.61 x 36) + $1380 = $17,673.96 / 36,000 miles = $0.49 cents per mile
Again, weâre only comparing 36k miles to 36k miles. So all in all, youâre paying 5 more cents per mile for $1630 more of car. ($45,075MSRP - $43,445 MSRP ) Which means youâre paying 11% more per mile than I am for 3.7% more worth more of car ($1630 difference between MSRP)
Hope that makes sense. The point is to show what happens if you flew to CA and bought the same $45k car and drove it back.
BTW, Iâm still waiting for them to release the 2019 C300s. Iâm hoping that will put pressure on the 2018s.
Weâre just nearing the end of the 3rd quarter and many new models should be released. 2019 C class, BMW 3 series⌠Most of that should put a lot of forward pressure on competitive models. For example, I hope MB will include more incentives in October for 2018 C class as the 2019 sits on the lot shiny bright like a diamond next to a 2018. The face lift and new engine is intriguing. By December, hopefully, the new gen 3 series will also put forward pressure on the 2019 C class sedans. End of the year will be some exciting times.
Has anyone ever tried to payoff a lease early with Ford (actually purchase the vehicle)?
When I called Ford Credit they said that I have to purchase it from the actual dealer where I leased it and to call there to find our what my âfinal payoffâ is with taxes and fees.
Ford Credit has my payoff at $32,235 and the lease manager at the dealer told me the âfinal payoffâ would be $34,885.
Does that sound right? I am in Florida.
Carmax will only give me 29k for it and Carvana even less so Iâm in an ugly situation. Canât just pay off remaining 9 payments ($5625) and return because the front bumber needs to be replaced, rear bumper has a dent and its lifted 6 inches with bushwacker flairs, aftermarket XD wheels and off road tires.
Thoughts? Suggestions? Whatâs my best play?
Do you absolutely HAVE to dump the truck now? I know youâre putting mileage on it and itâs depreciating, but it really seems like you might benefit from making the payments and selling the truck near lease end after fixing it up?
Itâs a sticky situation to be in, but there really is no way out of it. Money is owed and it has to come from somewhere.
I donât have to sell it now but I purchased a brand new Honda Type R on Saturday (finally made up my mind lol - love it btw) and the big offroad tires on the truck are running pretty low on tread and will have to probably be replaced soon (maybe 5k miles pushing it).
I also have to factor in the cost of having both the truck and the Type R insured while I have them both which may be more than average because I had 2 at fault accidents close to each other in the last 18 months. The front damage it has now is from the 3rd at fault accident that was never reported and I repaired the other persons vehicle out of pocket.
I know I will be at a loss in any scenario however wanted to see if you can help me figure out in which scenario I can minimize my loss the most.
Wow. You should probably sit down and add everything up to see how much money you really just spent this month and will spend in the next 9 months.
You bought (what I assumed is a marked-up Type-R) an expensive FWD Hot-hatch in the high 30âs to low 40âs while having an expensive full-size truck that youâre upside down on and will be for the forseeable future. You didnât have an exit-strategy for the F-150 and youâre absolutely about to pay for it.
I donât see how this is salvageable without taking a several thousand-dollar out of pocket hit. I donât mean to be brash, but Iâm pretty sure the advice was to not go down this road.
Didnât you start this journey looking at MKZ Black Labels? The heart wants what it wants!
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I did look at MKZâs but pulled the trigger on the Type R because I finally found a dealer that would sell it to me at MSRP. I pretty much contacted every single dealer in the country that had one in white and got one that was only 4 hours away.
Again, I know what a sh***y situation I am in but I feel like I would have been in this situation whether I purchased a car this past weekend or not (minus the additional insurance cost of course).
Had I lived out the lease on the truck, I would have had to put brand new off road tires on it, fix the damage (front and rear bumper), and still sell at a loss vs payoff amount in 9 months with a crap load more of miles on it.
At this point I guess I am just looking at the least worse scenario so I can be done with it and hopefully not make the same mistakes again.
Have you called your insurance company and asked what difference in premiums will be for both cars versus selling the truck. Guess it doesnât matter now but that seems like something you might have wanted to know before buying the Type R.
Your options for truck are to fix it and sell it or not fix it and sell it. Pretty simple at this point. Figure out cost delta between the two and pick the one that has the smallest negative number.
Lease return is out of question since the truck has been modified. You would need to make remaining payments, undue the mods, insure the truck and repair damage. So that option is out.
Well, I get it, I Really do, and Iâve been down this road before just as you have⌠but now you have a modified truck that canât be turned in and it will just sit there while you rack up high-mileage on the Type R, shooting itâs value down.
It sounds like selling the car as is and just eating the 3 or 4k dollar difference is your best bet? I donât know how much itâs going to cost to fix the truck up and squeeze some more dollars out of it. Youâll need to look into that as well. If you get it in sell-ready condition, you might pull some more bucks doing a private-party sale.
I had called them to see what the cost was for replacing the truck with the Type R and it was a minimum bump but I forgot to ask about having them both on since at that moment I wasnât thinking about holding onto the truck as an option.
Thank you for helping me think this through. I am really appreciative.
Whether I fix and sell or donât fix and sell is there any reasonable option to sell a vehicle of that cost with those mods other than going through carmax, carvana, ect?
I anticipate that going through craigslist and autotrade may be rough and hard to determine how much and when it will actually sell.
Thanks for the advice. I think my biggest fear with this whole thing was ending up having to selling the car on the private market and stuggling to get it sold.
Btw, if I sell it to carmax my loss is not 3-4k. Its 6k.
35k payoff minus 29k Carmax offer (which expired a few days ago so may be even a little lower if I bring it back to be appraised).
Private party is your best bet. Dealer networks will give you less money for modified cars because modified cars are generally harder for them to sell to the general public.
Youâre most likely better off trying to offload the truck at a reasonable price to someone who cares about the mods you put on, since modifications are an intensely personal thing to do to a vehicle. There is no easy way out, either take the 6k hit selling it to Carmax, or put in the effort to sell it private party to re-coup some of those costs. Selling it private party is generally not head-ache free, but itâs supposed to be worth it in the long-run.
Just a matter of whatâs worth more to you, the money or your time. There is definitely a cost associated.
I like your strategic thinking. It is definetely very helpful for me as I am very strategic myself. Honestly I think my time is worth more than the headache of fixing it and selling it privately. I went through hell with the body shop that fixed the car for which I paid repairs on the last accident and it left a very bad taste in my mouth. Add to that the uncertainties of selling privately and I think I rather just take the hit.
I am sitting at Autonation Ford right now to see how much they will give me. Hopefully they can just purchase at the 32k payout and not pay taxes and they are willing to give me at least what carmax offered. Weâll see. Keep you posted.