# Lexus GX460 Deal? Am I missing something

After negotiation, I’ve been told that its
MSRP 57,199
Selling Price 51,699
Rebate 4,000 (Lexus Lease Cash)
MF 0.0018
9 MSD’s at \$4500
Tax here is 5% on the leased portion only.
I’d like to pay Drive Off’s up front

Please see the attached lease worksheet and my calculator. Can someone help me out with the difference?

they claim .0018 MF after MSDs, you claim it before MSDs

Don’t use the LH calculator. You’re better off doing it manually. The advantage is that you gain insight into lease calculations. The worksheet is garbage as it’s unnecessarily confusing. Here’s what’s happening…

MSRP = 57199
Sell Price = 51699
Acq Fee = 795
Tax = 169.05 (tax levied on the 2785.96 cap reduc and the 595 dealer fee @5%)
Fee = 5 (I have no idea what this is for)
Gross Cap = 52764.05
Cap Reduc = 2785.96
Net Cap = 49978.09
Term = 36
RF = 60%
Res = MSRP x 60% = 34319.40
MF = 0.00180

Base Pay = 0.0018 x (49978.09 + 34319.40) + (49978.09 - 34319.40) / 36 = 586.70
Tax = 5% x 586.70 = 29.34
Payment = 616.04

DAS…
1st pay = 616.04
Dealer Fee = 598 (should be 595 but still seems very high)
9 MSD’s = 4500 (highly questionable)
Cap Reduc = 2785.96
Total = 8500
less non-taxed incentive = 4000
DAS= 4500

A few things…
I would question the 0.00180 MF. It looks way off to me especially with 9 MSD’s. This leads me to ask, why are you only paying 4500 for 9 MSD’s? That reflects a 500 security deposit yet, the payment is 616. Usually, fund providers round the sec dep up to the next whole 50 (650 in your case).
I would not make a 2985.96 cap reduction. A car is a depreciating asset. Use that money for other more productive things. Also, if you car is totaled, that cap reduction is at risk meaning you may not get all of it back. As such, I would pay very little upfront especially if the MF is much lower than 0.00180. Lastly, research the sell price. I think you can do better.

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THANK you very much! I will say…many of your other posts I read previously even got me this far! So thank you for sharing the knowledge. The 9 MSDs were supposed to get me down to 0.00108. Obviously, there was “a misunderstanding” on their part. I’m gonna run those numbers at 0.00108 and see where I come out using your example above. I thought I was at a decent selling price based on other posts for that model (approaching 10% MSRP). Thanks again!

When I also posted a horrid GX lease worksheet, haha, they had my money factors listed. Not sure where you are located, I’m in the Seattle area. With NO MSD’s the money factor for me was .0018 (confirmed with Edmunds- make sure you do that!) With 5 MSD’S, \$775 a piece, brought my MSD’s to \$3875 which lowered my MF to .0014. The break down is each MSD should take .00008 off the MF. So my MSD’s brought the MF down .0004. Not sure if that’s helpful, things may vary by area, but that’s the nutshell of how they work. My issue was the dealership would not go lower than \$3k under MSRP so I didn’t even give them a second thought, they were so ridiculous. Check Edmunds for the MF and Residual for your Zip Code, that way you know what they should be. If you can’t navigate to it let me know I’ll help direct you there good luck!

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See if this looks any better (different dealer).

56990 MSRP
51490 Sales Price
RV 34194 (60% per Edmunds)
4000 Rebate, Lexus Lease Cash
No MSD
500 Dealer Fee
795 Acquisition

Gross Cap Cost (51,490 + 500 + 795) = 52, 785
Cap Cost Reduction \$4,000 rebate

Payment ((48,785-34,194)/36) + ((48,785+34,194)) * 0.00180 = \$554.67 * 1.05 = \$582.

Only part I missed were up-front taxes. I get confused where those are calculated

And to my best understanding, if I did MSD’s, these should be 9 * 600 (rounded up from the anticipated payment of \$554) = \$5400

MF would then be reduced as follows:
0.00180 - (9 * 0.00008) = 0.00108

And Payment would then be (correct me if I’m wrong here…do MSD’s get added into the cap cost reduction and reduce the adjusted cap cost?—I did NOT do that here. Instead I only made them reduce the MF:

Payment ((48,785-34,194)/36) + ((48,785+34,194)) * 0.00108 = \$494.93 * 1.05 = \$519.67

Thanks again everyone! Cheers

Looks good. Ordinarily, MSD’s are paid upfront but can be capped in the lease. One other thing… You have…

Payment ((48,785-34,194)/36) + ((48,785+34,194)) * 0.00180 = \$554.67 * 1.05 = \$582.

The expression on the left of the = sign does not = the expression on the right of the = sign. I see this all too often and cringe when I see it being a math teacher… So,here’s my suggestion as to how to deal with this…

Payment ((48,785-34,194)/36) + ((48,785+34,194)) * 0.00180 = \$554.67.
\$554.67 * 1.05 = \$582

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You should be able to get a better discount. I just leased a 2019 GX460 luxury a couple days ago and the dealer discounted it \$9000 plus I got the \$4000 Lexus rebate.

That doesn’t seem right. Would a captive really allow you to cap MSDs? Doesn’t make sense to borrow at .00108 to reduce the MF by .00072 anyways.

I guess it depends on the captive. They can do whatever hey want subject to fed and state laws, of course. I know it has happened where the lessee received the lower MF some years ago. Can’t remember the captive involved.

Many years ago, I capped a security deposit with Huntington Bank.