It wouldn’t shock me if it’s even more than 10% for a T8.
I genuinely mean no disrespect, but I think the way you are conceptualizing how the numbers work is not actually how they work, and the way you’re using words is also confusing (not offense intended, if you are not a native English speaker). And I think that’s why all of us are having difficulty understanding exactly what you are talking about and how to answer the question in a way that will be accessible to you.
If you buy out the car immediately after leasing, you will only accrue an infinitesimally small amt of interest (if any at all). So, yeah, I guess you might save a few dollars if you put a huge amount down. But then you also have a huge amount of risk if you total the car before buying out the lease.
@hedgefund presumably means if you buy out immediately, not if you finance to begin w/.
You seem not to believe that you can buy out the lease immediately. You can.
You definitely are.
The question to ask yourself here is “how is putting money down changing the net cost?”
The only change it’s making to net cost is the rent charge the higher financed amount. If we assume that entire $19k is going to cap cost (it isn’t, since you have to pay tax on it), and the MF is .00375, then you’re talking maybe $75/mo in rent charge savings. Over 4 months, that pockets you about $300 in total savings. There isn’t any way for that $19k to save you $2500 over 4 months, so you’re definitely doing something wrong in your calculation… in this case, likely not accounting for things properly on the buyout amount.
What are you assuming the lease buyout amount is after 4 months in both situations?
Ya, sorry about that. This is certainly not in my wheelhouse. That said, all I am trying to do is figure out the cheapest way to purchase an XC60 Recharge Plus. It seems to me that the cheapest way would involve getting the $9500 lease rebate, but leasing is cryptic (to me), so I’m having a difficult time calculating the total amount of money I will have to pay before I own the vehicle.
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You’re most likely correct. The downpayment makes next to no difference though.
Got it, thanks for that.
This is likely where I am going off the rails. I tried to “show my work” in the original post, I’ll paste it here to make it easier to see:
67425 - 3000 - 9500 + 995 + 250 + 950 + (950 * 3) + 575 + 580 + 450 = $61575
Basically, I’m just subtracting the rebate and discount amounts from the MSRP, then adding in all of the fees (including early buyout fee), taxes, and 4 lease payments (this part is questionable, as others pointed out already). It sounds like this isnt the correct thing to do.
A good chunk of the payments you make go towards lowering the buyout amount. That’s what you’re not accounting for there.
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Ok, so similar to paying down the principle on a mortgage? That’s fair. If that’s the case though, wouldn’t that just mean that the total cost of the leasing route would be lower than what I have calculated? If so, then that’s great news, and I guess that would explain why my numbers were way off calculating the savings with a down payment.
Your benefit of leasing first is basically the difference in incentives minus the acq fee and buyout fee. So roughly $8000
Thanks, that seems to roughly line up with the numbers I had calculated, so it seems I’m not far off.
Apologies in advance here, I’m likely not understanding something else about leasing… I just tried using the NerdWallet Auto Lease Buyout Calculator, and shows that the cost would actually be $73k. It seems like they are just multiplying the lease payment ($951) by the number of remaining payments (36) and adding the residual value ($38428) and the buyout fee ($450) to arrive at this number. Is this correct? That would mean that no matter when you buy out a lease, you have to pay the rent for the full term (36 months) even if you buy out early. Seems like this would be the more costly route then, even with a $9500 rebate.
You may find this thread helpful.
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Nope, that is incorrect for how early lease buyouts are calculated. What that includes is all of the rent charge that doesnt ever get earned on an early buyout.
Ok, phew. That makes much more sense. Thanks for that link @CarRhino and the confirmation @mllcb42 ! The calculation used by NerdWallet appears to be used in multiple other sites as well. Very confusing.
So, if the Adjusted Cap Cost is $58274, the MF is 0.0038 and the lease payment is $951, then the adjusted lease balance after 30 days should be ~$57758 ((58274 - 951) * (1 + 0.0038 * 2)), so then I think my total cost of purchasing the vehicle would be about $61108. Does that seem correct?
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I dont think i have seen anywhere in this thread where you specified your due at signing amount
I assume you are referring to the amount of the first payment? If so, that’s $950.56. I assumed that was the same as the monthly payment, which is $951, so I thought they were just rounding up.
If thats the case, if you buyout immediately, your cost is just your due at sale amount plus the buyout plus any taxes.
Got it. Thanks, everyone, for all of the help!
Unicorn should be 12-14%
Thats the goal
Forget about unicorn for someone who thinks 4.4% is good.