I have gone over these numbers so many times it not funny. I cant wrap my head around how they are coming up with the sales tax on cap reduction, Nor the gross capitalized cost. Nor the… heck I must be losing it because I dont understand any of it. I hate it but I have to be that guy so im not longer that guy. Please help me make sense of these numbers. I dont care about the deal I just cant sleep not being able to understand how it is being calculated. I am in Ohio and the tax rate is 7.25%.
$2437.04 * 7.25% = $176.69
how do you get to the 2437.04?
The CCR is listed in your contract. They applied your $3k DAS towards 1st month payment, tax on the CCR and the rest as the CCR.
Im sorry boss, and I appreciate the time. I still dont know how they came to that number, if you take 3000 down and subtract the first payment, how do you calculate 7.25% of a number you have yet to get to? Maybe I have starred at this too long lol
When you pay an even, round number at signing, the CCR will always be some odd number that their calculator has to come up with. You should have told the dealer to structure it as only 1st DAS or 1st plus fees DAS with no CCR.
You don’t have to. Figure out your target first.
Again, I dont care about the deal. I just wanted to know how they calculated these numbers and it doesnt seem like anyone knows which does make me feel better lol
Okay, here is how it is determined…
Plug in the assigned values. I get 2437.18. So, the contract is a little off by 0.14. No big deal. What’s happening is the customer cash of 3000 is allocated toward a cap reduction and the balance is used to cover the first payment and CCR tax.
The MF = .00296
Base payment = 355.66 which excludes capped tax and the 62.50 LTR. These fees are non-taxable in Ohio. The Ohio tax is levied on the sum of the base payments…
Tax = 7.25% x 36 x 355.66 = 928.27 (capped in the lease)
Monthly lease Payment = 386.12 and includes the LTR fee and the sales tax levied on the sum of the base payments.
Lease Inception Fees
CCR … 2437.18
CCR Tax …176.70
1st Payment… 386.12
DAS … 3000.00
Bottom line: DAS = 3000 followed by 35 monthly payments of 386.12 each.
Make sense? Let me know.
You are getting soft Prof…being off by 0.14 is now OK…lol! 
WOW, i’m lucky today is my day off!! I am going to work through the way you have explained. You have no idea how much my brain appreciates you right now. I will come back once I have ran through the formula
I respect that you want to learn all the math and details etc. But at the end of the day, if they hit your target, what does it really matter how they got there?
Use your favorite AI tool to walk you through how to put together and calculate a lease or look at Prof’s pdf in this thread.
How do you come up with a target/DAS if you don’t at least know how to use a lease calc?
I mean you can look at somebody else’s deal and copy 100 but if any parameter changes you need to know how to re-calculate…and what happens when people get in finance and get talked into something? Those numbers need to be re-run because the finance manager can wreak havoc with a payment!
I have tried several times to get chatgpt to accurately calculate a lease and have never been successful
I guess I’ve mellowed in my old age.
I will try right now as I normally just use my own spreadsheet!
He can at least get Lease 101 equations and build his own spreadsheet…or use your calculator tutorial in the Wiki to get a better idea.
Chat had wrong equation for finance fee portion…I actually corrected…LOL!
It matches my spreadsheet now.
You’re absolutely right — thanks for catching that.
The finance (rent) charge in a lease is calculated using:
Finance Charge=(Cap Cost+Residual)×Money Factor\text{Finance Charge} = (\text{Cap Cost} + \text{Residual}) \times \text{Money Factor}Finance Charge=(Cap Cost+Residual)×Money Factor
So let’s do the corrected math using:
- Cap Cost (Selling Price): $50,000 (MSRP for example was 55000 with 57% res)
- Residual Value: $31,350
- Money Factor: 0.00158
- Term: 36 months
1. Depreciation
50,000−31,350=18,650⇒18,65036=518.0650,000 - 31,350 = 18,650 \Rightarrow \frac{18,650}{36} = 518.0650,000−31,350=18,650⇒3618,650=518.06
2. Finance (Rent) Charge
(50,000+31,350)×0.00158=81,350×0.00158≈128.53(50,000 + 31,350) \times 0.00158 = 81,350 \times 0.00158 \approx 128.53(50,000+31,350)×0.00158=81,350×0.00158≈128.53
Corrected Monthly Lease Payment
518.06+128.53=$646.59518.06 + 128.53 = \boxed{$646.59}518.06+128.53=$646.59
Optional: With 8% Sales Tax
646.59×1.08≈$698.32/monthincludingtax646.59 \times 1.08 \approx \boxed{$698.32/month including tax}646.59×1.08≈$698.32/monthincludingtax
Let me know your actual tax rate or if you want to include acquisition or disposition fees for a full-picture estimate.
Jon already explained it to you 
TBH a formula for how any DAS can be distributed to first, CCR and CCR tax is so far down the list of things you need to understand right now but you do you