I’ll be signing a one-pay lease this week for a 2025 Ioniq 5. The salesperson provided a lease proposal sheet for a monthly payment (36 months), and said in writing “when I keep everything the same the one pay is coming out to $XXXXX.”
The one-pay lease number he provided was good – but I’m a little suspicious that he calculated it incorrectly. I just wanted to confirm I generally understand the math and what’s included in a total one-pay lease payment, so that if the official numbers they provide are way off, I can try to figure out what’s happening.
I’m in MA where down payments (and state EV rebate of $3500) are taxed at 6.25% MA sales tax rate, and lease payments are taxed monthly at 6.25% sales tax. Lease cash or rebates applied as a capitalized cost reduction is not taxed in MA.
I’ve tried to find some example one-pay lease agreements for Hyundai to see how to the numbers are entered. Specifically how Hyundai lease cash is accounted for.
My understanding was that this was applied as a capitalized cost reduction, but I’ve seen some lease agreements where they take it off from “total due at lease signing.”
Here’s a spreadsheet I made to try to wrap my head around the numbers at each step:
This matches exactly what I get on the Leasehackr calculator, but it doesn’t match what the dealer is offering, I think because they’re marking up the money factor (based on the monthly payment numbers they’ve also provided, I think it’s about 0.00034 mark up).
Is there dealer discretion on how they can apply the lease cash?
Honestly, if they can hit the one-pay number he quoted in his email to me, I’ll go with it and I’m less concerned about how it’s all actually calculated. But I’m sensing that there may be something off in his calculation.
That discount is way too light. In CA I am doing $3500-$4000 off MSRP. Nationwide bare minimum is $2,500 off and buy rate money factor. Not a good deal.
You may want to post your LH calc as your inputs may be incorrect. It may be that LH computed sales tax on the CCR. I computed your one-pay manually and it matches the dealer’s calculations precisely.
According to the dealer’s WS, the MF discount is 0.00040. The .00131 MF may be the buy rate (no markup). Check Edmunds for MF buy rate and residual factor.
This is by far the best one-pay dealer WS that I’ve seen. It provided everything I needed to know. All I did was confirm all calculations and they are all dead on accurate.
Not sure. It depends on Hyundai underwriting criteria. However, IF the 13500 was not used as a CCR, your one-pay would have been 23195.25. So, the amount due at signing would amount to…
23195.25 + 1449.70 + 1315 + 290.31 - 13500 = 12750.26 instead of 11436.62, a difference of 1313.64. As such, it’s much cheaper to use the lease cash/rebates as a CCR.
That WS spreadsheet/picture was made by me in Excel so that I could understand the calculations better – the dealer has only provided me the lease proposal for the monthly numbers:
That lease proposal is annoying because “Sale Price” is definitely not what would be used as the “agreed upon value of the vehicle” in the lease contract.
But the dealer claims that (in writing) “when I keep everything the same the one pay is coming out to $12137” which I’ve not been able to understand how he’s getting that. But I’d take that offer.
I know for sure that our state EV rebate of $3500 is applied as a capitalized cost reduction, because it’s treated as cash (and then the dealer submits the application on my behalf).
It seems like it’s better for me if the $10000 lease cash is also treated as a capitalized cost reduction – reduces the adjusted capitalized cost and thus total depreciation, a few hundred off the total rent charge, and a decent amount in MA sales tax.
My understanding is that the dealer gets cut a check for $10000 from Hyundai Motor Financing after the submission of lease sale.
Is there any way to push them to use the lease cash as a capitalized cost reduction? Seems like there should be standard rules about how this is treated.
Looks like they added the acquisition fee into the gross capitalized cost and then took the $15500 rebates off the total due off signing.
For CA, lease incentives are taxable right? I’ve seen some other CA one pay lease agreements, but I haven’t been able to figure out where they are accounting for that tax. Are they just eating that cost when they do the accounting on the back end?
You’re allowing the dealer to control the deal. There is a much better approach…
Don’t waste time trying to decipher a dealer’s worksheet or chasing after them. Otherwise, you’re allowing them to control the deal. They often omit a lot of relevant detail and sometimes make mistakes. You need to rely on credible outside sources (e.g., LH marketplace and signed deals, Edmunds, etc.). Do your own research and establish a reasonable selling price in your market. Be sure to get a copy of the factory window sticker. Check for non-factory add-ons or dealer-installed options. And, if possible, eliminate those you don’t need or want. Get a list of all customer and dealer rebates/incentives including VIN#-specific discounts/incentives, if any. And, yes, the dealer has such a list.
The only thing useful about dealer lease worksheets is the input data. All data should be vetted such as acquisition fee, doc fee (regulated by some states), cost of money (e.g., money factor), gov fees, residual, rebates/incentives, sales tax rate, etc. Make sure the residual matches the term and annual mileage requirement. Check available tax credits/incentives via the fund provider who may cover taxes or, at minimum, may assess a lower sales tax rate to energize sales for some models.
Organize all relevant data in tabular format with the goal of creating a lease proposal that reflects your target deal. The idea is to create your own target deal (proposal), not replicate the dealer’s deal. Looks like you’re off to a great start and have done an outstanding job with your spreadsheet. The dealer’s WS seems to be missing (MF, acq fee). Based on your info and dealer info, this is what the LH Calc is giving me.
I know, I feel like I’ve let this deal get away from me a little bit.
The inventory for the car (in the right trim level, exterior and interior color combo) is a bit limited on the east coast – only two that are arriving before the end of February, so not a lot of dealers to shop around. Considering an out-of-state lease, but don’t trust the dealer to figure out the MA registration/title/taxes correctly.
I originally sent the dealer a proposal worksheet (like the one included in my first post), that had a proposed dealer discount of $1500 (and one-pay MF of 0.00116 – still unclear about the exact one-pay MF discount) for a total one pay of ~$11,000. They countered with their monthly lease WS and a written confirmation of the one-pay total of $12,137. I’ve put a small deposit down, and car should arrive to the dealer this week. I’m honestly fine with that one-pay number (assuming they’ve calculated it correctly!). Might not end up being the best deal I could have gotten, but it works with our budget.
Yes, this was a 13 month deal. Don’t know how they did on the back end etc. but I only paid $1317 and rent charge plus tax and registration on the deal is way more than that… so have no clue how/why it was done this way.
From the picture BYGFEET posted, the dealer didn’t do any cap cost reduction (line 7B). Is it just the dealer gets a check from the customer, and they figure out all the real accounting math on the back end in financing?
I’ve always thought “math is math” to be true, although the lease world is making me second guess this.
You’re right I just looked at it, I did that deal for him and I did 3 other deals that day and on some of them I saw the rebate as a cap cost reduction…odd.
I see they used the rebate to cover the due at signing, sort of cash at signing.
Check Edmunds for the MF buy rate and then, deduct .00015 per @CoastalMotorGroup You’re not going to get accurate calculations unless your input data (MF, fees, lease cash/rebates, etc) are accurate. Once you’ve gotten all the vetted input data, use your magnificent spreadsheet to do all the calcs. Finally, craft a professional-looking one-page lease proposal. Below is a lease proposal recently crafted for an Ohio lease (yours will be different)…
Email it to the sales manager (SM), not a floor salesperson as they’re often Mickey D order takers and lack knowledge. All numbers should be accurate otherwise, you’ll lose credibility. Negotiate via phone/email. Once an agreement is reached, ask the dealer for a review copy of the lease agreement and all contract addenda BEFORE you go to the dealer and sign. Moreover, it’s helpful to know the terms and conditions of the lease contract such as early termination liability criteria and purchase option criteria as well as lease amortization methodology and excess wear/tear criteria. If all is as agreed, tell the SM that you’ll come in to sign asap. You don’t want any surprises or dealer excuses like …. Oh, we made a mistake. That’s unacceptable and shouldn’t be tolerated.
If the dealer isn’t transparent or is uncooperative or showing signs of incompetence, WALK AWAY AND MOVE ON!
