MSD calculation

Ask the Hackrs
1

Sorry, I searched but can’t find definitive answers:

  1. If car is totaled, you lose the MSD’s?
  2. How are they calculated? is the base monthly payment including or excluding tax; can you put money down to reduce the MSD?*

*For example base will all tax and fees, so just first month DAS is $720 so the MSD is $750 or can you pay $1k towards the taxes say reducing the monthly to DAS to $690 so the MSD is $700

Thanks for help in advance.

2

  1. Depends on the car. Most do return the MSDs but it really depends on what you are looking at.

  2. I believe it’s based on Payment before Tax. And yes more down can reduce the MSD’s but Down is NEVER returned on a Total Loss.

3
  1. Brand dependent
  2. MSD’s are based on the post-MF reduction total payment. So if your MF is .0021 pre-MSD with a 630/mo payment (with tax) and then you’re .0017 post-MSD, whatever the monthly is post-MSD with tax is what the deposit will be based on.
4

I guess what im trying to clarify is..

Is base payment including all fees and taxes? OR can I pay tax upfront reducing the monthly payment therefore reducing the MSD cost.

So instead of 9x$500 I can pay taxes upfront and then pay 9x$450 because the basement is lower?

5

You’ll likely get a more accurate answer if you focus on a specific brand.

But yes, if the payment including (any monthly payment) taxes is $500, your MSD is a multiple of that. If you reduce the payment by applying a cap cost reduction (boo :-1:t2::-1:t2:), or paying any of the upfront taxes and/or fees so the payment is at-or-below the next lowest interval (e.g. $450) then the MSD is a multiple of that.

You can do the math on how much that saves you in upfront payment of MSDs (9 x $50 in your example) less the upfront payment of taxes/fees, compared to what you’ll pay in additional taxes/rent by rolling that in.

On my last lease I did all the math to shave about $17 off my payment to save $500 in upfront MSD, the answer was close to $1000 and the additional finance charge for what I rolled-in (all upfronts) was ~$30 over the lease. I ended up $0 DAS and maxxing the MSDs :man_shrugging:t2: