Hello,
First of all, thanks for making the calculator, which is great and very helpful.
I was using the calculator the evaluate deal and discuss with dealers. I think one feature will be very helpful: Make a form including more details, such as Net cap cost, cap cost reduction, lease charge (interest), with similar format as the dealers use.
So that (1) It can educate user, to let us understand meaning of each table from the dealer; (2) this can help negotiate with dealer. It is not convenient to show the Calculator to dealer directly, but may be easier to show them a form with similar format as they proposed (but with numbers we want).
I hope I explain the idea clear enough. Just my two cents. And thanks again for making the Calculator.
I think that would have a lot less utility than youâre thinking. First off, showing the dealer your calculator/form from here never goes well.
From there, what your cap cost/cap cost reduction is will vary depending on how a dealer structures the lease. There isnât necessarily a right way.
For example, dealer A may structure a deal with all of the fees capitalized and then all your due at sale applied as a cap cost reduction. Dealer B may structure the deal by paying all the fees upfront rather than capitalizing them. These two deals would have very different gross caps and cap cost reductions displayed, but would be essentially identical.
Thereâs another part of this which is if youâre going to dive that far into the details of the calculations, you really need to understand what is going into the calculations. If you do, itâs easy to get all those values. If you donât, having those values without understanding the context behind them could lead you to walk in with dealer Aâs structure, be faced with dealer Bâs, and think youâre getting taken for a ride.
I do think having the calculator output total rent charge could have a little more value as a quick way to check for a hidden mf mark up.
I agree with âshowing the dealer your calculator/form from here never goes well.â. Thatâs the same thing I am worried about too
For âit vary depending on how a dealer structuresâ, thatâs totally right. But as we have options like âPay dealer fees upfrontâ or âCapitalize upfront taxâ in the calculator, I think it can be handled when making the form.
Anyway, thanks for your reply. Thatâs just my thoughts and may be not very helpful for other people.
This assume you know ahead of time how they structure their lease.
So whatâs the point? If the total cost of their offer matches the total cost of your calculations, does it matter how they get there?
Iâm all for educating the consumer, which is why the âhow to calculate a lease by handâ should be required reading. Having the calculator output that information out of context really only allows someone to skip the education part.
This is from my experiences. I have leased two cars and read a lot of posts here. However, sometimes I am still confused about some details, especially when dealer agrees with all the parameters (MF, residual, selling price âŚ) but said his estimation for monthly payment is much higher than my calculation. So thatâs why I proposed this idea to: (1) educate users like me (who has some knowledge but not many) to understand all the details; (2) May or may not show this fake offer sheet to dealer. But can use it to compare with dealerâs numbers to help negotiate with them.
Youâd be infinitely better off working through the âhow to calculate a lease payment by handâ section in the leasing 101 if trying to understand all the details.
Showing the breakdown would be a useful tool for hackrs, but I do agree that for regular users, the breakdown wonât help much in dissecting the dealerâs quote if the user doesnât understand the definitions (and the underlying math, but thatâs the easy part). For example, the biggest challenge for users isnât how the net cap cost is calculated, but what goes into each net cap cost input (e.g. which incentives are taxed and which are untaxed? Are the incentives included in the selling price? How do I categorize all the different fees?). Comparing the calculatorâs Net Cap Cost to the dealerâs Net Cap Cost would be helpful to reverse calculate what the dealer has capitalized â provided that you already have a good understanding of what generally goes into net cap cost and how to input the figures.
I think itâs a good suggestion nonetheless; we would definitely look into it. My only reservation with showing the nitty-gritty of the monthly payment calculation is that it would introduce more confusion.
I believe that putting in big bold text next to the output would help:
If your monthly payment does not match the dealer, your inputs are wrong
Personally it annoys me when people post about how a dealers calculation is wrong, they argued with them, bla bla bla. Literally every single time they have incorrect inputs. And it goes back to a basic misunderstanding of how a lease is calculated and what the inputs are. THAT, IMO, is the problem. Adding more outputs and more complexity is not going to fix that. If you canât calculate rent charge by hand, you havenât learned enough to make all of these outputs actually useful.
That said, I would like to see a basic breakdown of the payment in the calculator. E.g. base payment $X, rent charge $X, taxes $X. I think this would be useful. Just like how the DAS is broken out.
I donât understand how or why people think that a calculator will give the âright answerâ if they type the wrong numbers into it, but this seems to be a common issue
We already have a Leasing 101 guide for how to read a lease contract. My opinion is that if you donât understand how the numbers are calculated in a contract or even what they are and cannot double check them, you shouldnât be signing it in the first place.
Having a program similar to what dealerships use, that would allow you to create model deals, and learn how deals get structured, would be awesome. Seems like it would be different, or out of scope, for the calculator.
For the calculator a simple âinformationâ button next to the number showing how the calculator got there, would the trick. I would consider expanding on the information buttons, and maybe add a few more. So, under the pretax monthly for instance, you could put an information button showing the calculation detail, and also link it to the calculate by hand page detail. Helpful, interactive learning for the non finance peeps.
There is nothing needed that the current calculator doesnât show to put together a target deal with all the information required to communicate it.
The issue that I have here is that the value added by this information to someone that canât already get it is negative. The only thing it will serve to do is further confuse and complicate things.
Agreed. That is why I mentioned it as âout of scopeâ and âdifferentâ. However, personally, I would not mind having access to something like that, as a modeling tool, or for interactive learning. I think it could have some value. Again though different than the calculator here, and I would not confuse, or intermingle the two.
With the understanding that everyone doesnât learn things the same way (wife is visual, and gets lost in text, preferring video, for example), I think a well-thought,produced video presenting the info Matt and Chris have already collated (bang-up job to you both!) would go a long way to demystifying the contract, and could be linked in the Calc page.
This covers easily 99.9% of mismatched calculators. None of these are helped by having more details, except maybe having the expected rent charge to compare.
@michael is the pretty face of LH videos but yes thatâs a good idea. He already did a calculator video.
The problem I see is that people misuse the calculator due to not really understanding how a lease is calculated, and instead of understanding/learning/asking - they insist that their incorrect calculation is right and the dealer is wrong. This issue is 100% avoidable by just entering the simple info correctly.
Agree on all counts. Just that âwatch this vidâ may be more effective than âread How To Use LH Calcâ and âread Leasing 101â as endless copypasta responses. The two topics are intertwined enough that I think (optimist) a well-crafted vid would be a knockout punch to a lot of the recurring issues.
You need to be able to calculate the lease payment you want and the lease payment the dealer gives you. Once you call the dealer out on their lies, it can go either way.
but yes thatâs a good idea. He already did a calculator video.