You have no calculator link… you don’t even provide the tax rate. How is anyone supposed to know how much you’re paying Mercedes and how much you’re paying the state?
I added the tax rate. And sorry for not providing all the info, as I don’t have it. I have pulled the trigger and now a proud owner of C43. Thank you for all the help.
Year, Make, Model, and Trim: 2020 Mercedes Benz C43 sedan MSRP: $64175 Acquisition fee (if capitalized): 1095 Monthly Payment: $702.93 (includes everything) Drive-Off Amount: $1500 Months: 36 Annual Mileage: 12k MF: 0.00193 (from edmunds) Residual: $37,863.25 (59% from edmunds) Incentives: $2000 (edmunds says $1500 dealer incentive) Region: San Francisco, CA (9.5% tax rate)
I have following questions:
“Residual value” = “MSRP (sticker)” * “residual percentage”. If residual value is the value you pay to buy the car after lease term is over, Why is it calculated against MSRP? Why it’s not calculated against negotiated selling price?
I have attached my lease docs here, how do I fill these values in leasekackr calculator? In leasekackr calculator, what is “Selling Price”, is it “agreed upon value” or “gross cap cost” or “adjusted cap cost”?
I did not do any old car trade or anything, but still I see “capitalized cost reduction” of $1857.63, what is it? Also it’s added to calculated “total due at signing” and later removed to get “adjusted capitalized cost”. I did not understand this part.
I used my ADA member incentive i.e. “Executive Allowance Bonus (EAB) incentive” which is “C43W4/63W/63WS $2,000”. Does that mean I should get a “dealer incentive of $1500 + EAB of $2000”?
Please help me understand the lease deal. Also I hope others can benefit from this and can get better deal than mine .
Residual value is always off of MSRP, as that’s what the bank sets it as. Why do you feel it should be off of negotiated price?
Selling price is agreed on value.
Cap cost reduction is money applied to the cap cost. It’s generally your down payment, but it can include any money from a rebate applied beyond your drive off fees. In this case you have a $2000 rebate and $1500 das applied up front, for a total of $3500. This covers the drive off fees (title, registration, up front taxes, other fees) and the balance is applied to reduce the capitalized cost. $1857 is the balance of the $3500 after these up front expenses are covered.
Your eab incentive appears to not be stackable with the standard $1500 incentive. Basically, your ada member incentive gave you an extra $500 off.
Where does the incentive of $2000 goes in leasehackr calculator? Is it “untaxed” or “taxed” or “Post sales rebate”?
Why do you feel it should be off of negotiated price?
(Note that I am new so I may be wrong) Because let’s say MSRP is 100k and RV=60%. You contacted 100 different dealers and travelled 1000 miles to get a best deal i.e. 50% discount so selling price is 50k. Your lease is $600 per month (so you paid $600 * 36 = 21.6k). Now after lease term is over you want to buy the car, you will be paying 60% of MSRP so its 60k. Plus you also paid $21.6k as part of lease. So total is 81.6k. Then what was the use of negotiation? Instead if residual value is 60% of negotiated price, it will be 30k.
Untaxed or taxed will vary by state. I usually assume taxed. It is definitely not a post sale rebate.
Residual value is the value that the bank assumes the vehicle will be worth at the end of the lease term. In a lease, you’re paying the depreciation from your negotiated amount down to the residual. 3 years from now, the vehicle isn’t worth a different amount depending on if you paid MSRP or got $30k off.
As a hypothetical, let’s say the MSRP is 100k, the residual value for 36 months is 60%, the mf is .00001, and you negotiate the price to $70k. Your payment (ignoring taxes and fees) would be (70k-60k)/36=277 plus (70k+60k).0001=13 for rent charge for a total payment of $290. If you bought it at the end, you’d pay (36290+60000)=70440 for the 70000 negotiated price
and now a proud owner of C43. Thank you for all the help.
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