Sorry, will do.
On the score part of this, thereâs a funny pun (not sure if itâs intended):
âThis is the lease important output.â
Can you describe why this is not useful, yet it is still there? If this has been discussed, if anyone has a sec and can point me to a link on the discussion, Iâd appreciate it. I searched but didnât see it.
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I wish I could claim it was a pun, but no, just a typo.
Rather that describe why itâs not useful, letâs go through the scenarios of how one would want it to be useful and see if it actually does that.
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Should I buy or lease? - The LH score basically breaks down to the number of years that it would take to pay off the MSRP of the vehicle at the lease payment amount. Surely that means that thereâs a number then that represents itâs cost advantageous to lease vs purchase, right? Maybe itâs when the number of years the lease is for divided by the LH score is less than the residual value? But that doesnât take into account any differences in financing rates available, differences in incentives being applied to purchasing vs leasing, taxes, etc. For it to be a useful number for comparing against purchasing, youâd need to know the actual info for purchasing. It skips all that, so canât be useful there.
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Is this a good deal? - What most people want this score to be is an indicator if something is a good deal or not. They want to look and see âif I have a score of 10+, I know Iâm getting a great deal!â. The problem with that approach is the LH score doesnât tell you if youâre getting a good deal or if the lease is a good value. Letâs look at a couple of examples⌠last year, when the Hyundai Ioniqs were the hot deal, a really good deal for someone that was able to stack all of the incentives and rebates might have had a LH score over 30 (I think I saw one deal with a LH score of 132). So John Smith walks into a dealership unprepared and finds himself with an offer, plugs it into the calculator and sees that he has a LH score of 20. Now, if 10+ is the metric for a âgreat dealâ, he thinks heâs getting an AMAZING deal. Instead, heâs overpaying significantly. Likewise, letâs look at something like the Acura TLX. Hereâs a car thatâs out of date, has a new model on its way, and the manufacturer is throwing huge stacks of cash at. A high LH score is almost a definite on any lease on one, but is it a good value? You may be getting a good price compared to MSRP, but is the car actually worth MSRP or does it lag compared to the competition? Iâd argue that the current gen TLX isnât worth anywhere near the MSRP, so while a the lease may be inexpensive, the LH score is based on an inflated MSRP. Further, some manufacturers like to price their vehicles with a high MSRP and then throw a lot of incentives at them to give the perception of a good deal. Other manufacturers just set the MSRP lower to start with, but then donât offer big incentives. The first will naturally have a higher LH score, but that doesnât actually tell you anything.
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How does my deal compare to this other deal someone else posted? - Part of having a repository of shared deals is it gives you a lot of data to search through to baseline what deals are possible, particularly, what one is able to achieve for a pre-incentive discount. For any given current situation, the best deal that youâre going to get is going to be when you maximized the pre-incentive discount, when normalized for other add ons (marked up MF, excess dealer fees, BS add ons, etc). So letâs say that during your searching, you come across a deal from two months ago, across country, on the same vehicle that youâre looking for. The person posting the deal got a 5% pre-incentive discount, qualified for loyalty, costco, and a high regional incentive, and the deal had a LH score of 11. Now, youâre a Samâs club user, regional incentives have changed because itâs two months later and youâre in a different region, and you only qualify for conquest, but you got an 8% pre-incentive discount. Running it through the calculator, you have a LH score of 8. In that situation, who has the better deal in front of them? You do. Yah, their LH score may be higher, but thatâs because their personal situation is different. Their deal may have been a better value due to how the stars aligned for them, but yours is the better deal. The LH score isnât an indicator of what is a better deal between two non-comparable deals.
So what is it useful for? Well, letâs say youâre shopping for a car and youâve found two at different dealers. One has a couple thousand more in options than the other, but both meet your needs. You like the extra options, but your goal is to get the best deal possible. All the other lease terms, other than the MSRP, between the two cars is the same. You plug in the deal you have in front of you for both and one has a higher LH score than the other. Now youâre in a situation where that number has some value to you. Itâs normalizing the payments between the two different MSRPs to give you an idea of which one is a better deal between the two. This is a rather limited use case, but it does give you some info here. This is also the only use case where looking at the lease price in terms of % of MSRP offers you a useful comparison.
As for why itâs still there? My opinion is that people like to have a metric to poke with a stick and look at, even if they donât use it properly.
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Hi, thanks for the great resources. I am trying to use the calculator, but cannot for the life of me get the numbers on my lease to match the calculator output. The lease number from calculator says $309, the dealer says $351.
Please see attached. For what itâs worth I am living in Washington DC, leasing from VA.
I would appreciate any assistance you can provide!
Please share your LH Calculation.
Can you provide the link to it rather than screenshots?
I suspect your acquisition fee is part of the problem.
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Youâre doing funky stuff with the fees there. The dealer sheet doesnât include the acquisition fee. No need to change that value from what the calculator sets it to.
Your non-tax fees will be your gov fees. The $81.90 is tax and is auto included in the calculator.
Thanks, but that doesnt seem to solve me problem. Were you able to get the LH calculator to spit out $351/month?
That gets it a lot closer. I do wonder if part of the issue here is that the dealer is in VA, where the whole vehicle price is taxed.
Did they include wear and tear or anything like that in their quote?
If she lives in a true DC zip code and drives DC plates, sheâs taxed on payment.
True calc; assuming dealer wrote it right thereâs got to be wear and tear.
Sure, if the dealer wrote the sheet correctly. Mix ups can happen, especially with things like different taxing structures.
More than fair, Iâve made mixups before. But s(he was excluding Acq. fee, so that means the delta is only like 430 bucks now.
Where did you get the $595 aquisition fee from?
And what is this âwear and tearâ fee?
Subaruâs bank (Chase) charges this fee for every single lease, you canât avoid it, so I included it.
Theoretical Dealer add on to make extra profit, explaining the difference in lease calculation and your price, might not exist just a plausible explanation to the difference in pricing.
Probably not since it is not 6% sales tax and there is nothing in taxable incentives. He needs to find out what it is. Some locations in VA have extra sales tax (I paid something like $143 on top of normal sales tax). Heâs around $288 total off of dealerâs number.
This information is so helpful. Where can you find out the money factor on a particular vehicle? I am looking to lease a 2021 chevy tahoe. Thank u
Having current, accurate information for residual value, money factor, and incentives is important in understanding you deal. As such, going directly to a source that has access to that data from the captive banks is your best option. The forums at Edmunds are where we go to get that information, as they have direct access to it from the captive banks. Youâll want to post of the model specific thread for the vehicle youâre interested in and request the most current numbers for your zip code. It is often easiest to find that thread by searching Google for âEdmunds leaseâ followed by the model of vehicle youâre interested in.
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